|
EXHIBIT 10.1
EMPLOYMENT AGREEMENT made as of the 1st day of January, 2007 by
and
between ARROW ELECTRONICS, INC., a New York corporation with its
principal
office at 50 Marcus Drive, Melville, New York 11747 (the
"Company"), and KEVIN
GILROY, residing at 329 Old Bailey Lane, West Chester, Pennsylvania
19382 (the
"Executive").
WHEREAS, the Company desires to employ the Executive, and the
Executive
desires to be employed by the Company, as a Senior Vice President
of the Company
and Co-President, Arrow Enterprise Computing Solutions, with
the
responsibilities and duties of an executive officer of the Company;
and
WHEREAS, the Company and the Executive wish to provide for the
employment
of the Executive as an employee of the Company and for him to
render services to
the Company on the terms set forth in, and in accordance with the
provisions of,
this Employment Agreement (the "Agreement"), which Employment
Agreement shall
supersede and replace any agreement pertaining to the Executive's
employment by
the Company, written or oral, entered into prior to the date
hereof;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements
herein contained, the parties agree as follows:
1. Employment and Duties.
----------------------
(a) Employment. The Company hereby employs the Executive for
the
Employment Period defined in Paragraph 3, to perform such duties
for the Company
and its subsidiaries and affiliates and to hold such offices as may
be specified
from time to time by the Company's Board of Directors, subject to
the following
provisions of this Agreement. The Executive hereby accepts such
employment.
(b) Duties and Responsibilities. It is contemplated that the
Executive
will be a Senior Vice President of the Company and Co-President,
Arrow
Enterprise Computing Solutions, but the Board of Directors shall
have the right
to adjust the duties, responsibilities, and title of the Executive
as the Board
of Directors may from time to time deem to be in the interests of
the Company
(provided, however, that during the Employment Period, without the
consent of
the Executive, he shall not be assigned any titles, duties or
responsibilities
which, in the aggregate, represent a material diminution in, or are
materially
inconsistent with, his prior title, duties, and responsibilities as
a Senior
Vice President of the Company and Co-President, Arrow Enterprise
Computing
Solutions).
If the Board of Directors does not either continue the Executive in
the
office of a Senior Vice President of the Company and Co-President,
Arrow
Enterprise Computing Solutions or elect him to some other executive
office
satisfactory to the Executive, the Executive shall have the right
to decline to
give further service to the Company and shall have the rights and
obligations
1
<PAGE>
which would accrue to him under Paragraph 6 if he were discharged
without cause.
If the Executive decides to exercise such right to decline to give
further
service, he shall within forty-five days after such action or
omission by the
Board of Directors give written notice to the Company stating his
objection and
the action he thinks necessary to correct it, and he shall permit
the Company to
have a forty-five day period in which to correct its action or
omission. If the
Company makes a correction satisfactory to the Executive, the
Executive shall be
obligated to continue to serve the Company. If the Company does not
make such a
correction, the Executive's rights and obligations under Paragraph
6 shall
accrue at the expiration of such forty-five day period.
(c) Time Devoted to Duties. The Executive shall devote all of his
normal
business time and efforts to the business of the Company, its
subsidiaries and
its affiliates, the amount of such time to be sufficient, in the
reasonable
judgment of the Board of Directors, to permit him diligently and
faithfully to
serve and endeavor to further their interests to the best of his
ability.
2. Compensation.
-------------
(a) Monetary Remuneration and Benefits. During the Employment
Period, the
Company shall pay to the Executive for all services rendered by him
in any
capacity:
(i) a minimum base salary of $400,000 per year (payable in
accordance with the Company's then prevailing practices, but in no
event less
frequently than in equal monthly installments), subject to increase
if the Board
of Directors of the Company in its sole discretion so determines;
provided that,
should the Company institute a Company-wide pay cut/furlough
program, such
salary may be decreased by up to 15%, but only for as long as said
Company-wide
program is in effect;
(ii) such additional compensation by way of salary or bonus or
fringe benefits as the Board of Directors of the Company in its
sole discretion
shall authorize or agree to pay, payable on such terms and
conditions as it
shall determine; and
(iii) such employee benefits that are made available by the
Company to its other executives generally.
(b) Annual Incentive Payment. The Executive shall participate in
the
Company's Management Incentive Plan (or such alternative,
successor, or
replacement plan or program in which the Company's principal
operating
executives, other than the Chief Executive Officer, generally
participate) and
shall have a targeted incentive thereunder of not less than
$240,000 per year;
provided, however, that the Executive's actual incentive payment
for any year
shall be measured by the Company's performance against goals
established for
that year and that such performance may produce an incentive
payment ranging
from none to 200% of the targeted amount. The Executive's incentive
payment for
any year will be appropriately pro-rated to reflect a partial year
of
employment.
2
<PAGE>
(c) Supplemental Executive Retirement Plan. The Executive shall
participate in the Company's Unfunded Pension Plan for Selected
Executives (the
"SERP").
(d) Automobile. While the Executive is actively working for the
Company,
the Company will pay the Executive a monthly automobile allowance
of $850.
(e) Expenses. During the Employment Period, the Company agrees
to
reimburse the Executive, upon the submission of appropriate
vouchers, for
out-of-pocket expenses (including, without limitation, expenses for
travel,
lodging and entertainment) incurred by the Executive in the course
of his duties
hereunder.
(f) Office and Staff. The Company will provide the Executive with
an
office, secretary and such other facilities as may be reasonably
required for
the proper discharge of his duties hereunder.
(g) Indemnification. The Company agrees to indemnify, defend and
hold
harmless the Executive for any and all liabilities to which he may
be subject as
a result of his employment hereunder (and as a result of his
service as an
officer or director of the Company, or as an officer or director of
any of its
subsidiaries or affiliates), as well as the costs of any legal
action brought or
threatened against him as a result of such employment, to the
fullest extent
permitted by law.
(h) Participation in Plans. Notwithstanding any other provision of
this
Agreement, the Executive shall have the right to participate in any
and all of
the plans or programs made available by the Company (or it
subsidiaries,
divisions or affiliates) to, or for the benefit of, executives
(including the
annual stock option and restricted stock grant programs) or
employees in
general, on a basis consistent with other senior executives.
(i) Initial Bonus and Equity Awards. The Company will pay the
Executive
$100,000 within the first 30 days of his employment with the
Company, which
amount shall be repaid in full by the Executive if he resigns for
any reason
(other than a permitted resignation described in subparagraph 1(b)
of this
Agreement) during the first 12 months of his employment with the
Company. In
addition, as soon as practical following the commencement of the
Executive's
employment, the Company's Compensation Committee will award the
Executive 10,000
shares of restricted stock of the Company and 20,000 non-qualified
stock
options, each pursuant to the terms of the Company's 2004 Omnibus
Incentive
Plan, which shares and options will both vest separately at the
rate of 25% on
each anniversary of the date of the award (until fully vested in
the year 2010)
while the Executive is employed by the Company.
3. The Employment Period.
----------------------
The "Employment Period," as used in the Agreement, shall mean the
period
beginning as of the date hereof and terminating on the last day of
the calendar
month in which the first of the following occurs:
3
<PAGE>
(a) the death of the Executive;
(b) the disability of the Executive as determined in accordance
with
Paragraph 4 hereof and subject to the provisions thereof;
(c) the termination of the Executive's employment by the Company
for
cause in accordance with Paragraph 5 hereof; or
(d) December 31, 2008; provided, however, that, unless sooner
terminated
as otherwise provided herein, the Employment Period shall
automatically be
extended for one or more twelve (12) month periods beyond the then
scheduled
expiration date thereof unless between the 18th and 12th month
preceding such
scheduled expiration date either the Company or the Executive gives
the other
written notice of its or his election not to have the Employment
Period so
extended.
4. Disability.
-----------
For purposes of this Agreement, the Executive will be deemed
"disabled"
upon the earlier to occur of (i) his becoming disabled as defined
under the
terms of the disability benefit program applicable to the
Executive, if any, and
(ii) his absence from his duties hereunder on a full-time basis for
one hundred
eighty (180) consecutive days as a result of his incapacity due to
accident or
physical or mental illness. If the Executive becomes disabled (as
defined in the
preceding sentence), the Employment Period shall terminate on the
last day of
the month in which such disability is determined. Until such
termination of the
Employment Period, the Company shall continue to pay to the
Executive his base
salary, any additional compensation authorized by the Company's
Board of
Directors, and other remuneration and benefits provided in
accordance with
Paragraph 2 hereof, all without delay, diminution or proration of
any kind
whatsoever (except that his remuneration hereunder shall be reduced
by the
amount of any payments he may otherwise receive as a result of his
disability
pursuant to a disability program provided by or through the
Company), and his
medical benefits and life insurance shall remain in full force.
After
termination of the Employment Period as a result of the disability
of the
Executive, the medical benefits covering the Executive and his
family shall
remain in place (subject to the eligibility requirements and other
conditions
continued in the underlying plan, as described in the Company's
employee
benefits manual, and subject to the requirement that the Executive
continue to
pay the "employee portion" of the cost thereof), and the
Executive's life
insurance policy under the Management Insurance Program shall be
transferred to
him, as provided in the related agreement, subject to the
obligation of the
Executive to pay the premiums therefor.
In the event that, notwithstanding such a determination of
disability,
the Executive is determined not to be totally and permanently
disabled prior to
the then scheduled expiration of the Employment Period, the
Executive shall be
entitled to resume employment with the Company under the terms of
this Agreement
for the then remaining balance of the Employment Period.
5. Termination for Cause.
In the event of any malfeasance, willful misconduct, active
fraud or gross negligence by the Executive in connection with his
employment
hereunder, the Company shall have the right to terminate the
Employment Period
by giving the Executive notice in writing of the reason for such
proposed
termination. If the Executive shall not have corrected such conduct
to the
satisfaction of the Company within thirty days after such notice,
the Employment
Period shall terminate and the Company shall have no further
obligation to the
Executive hereunder but the restriction on the Executive's
activities contained
in Paragraph 8 and the obligations of the Executive contained in
Paragraphs 9(b)
and 9(c) shall continue in effect as provided therein.
4
<PAGE>
6. Termination Without Cause.
--------------------------
In the event that the Company discharges the Executive without
cause
prior to the expiration of the Employment Period, the Executive's
post-discharge
compensation and benefits will be as follows, subject to the
Executive's
execution of a release as set forth in Paragraph 7 below:
(a) The Executive will be placed on inactive or "RA" status
beginning on
the day following his last day of active work and ending on the
earliest of (i)
the date the Employment Period was scheduled to expire, (ii) the
day the
Executive begins employment for a person or entity other than the
Company, or
(iii) the day the Executive fails to observe any provision of this
Agreement,
including his obligations under Paragraphs 8 and 9 (the "RA
Period), during
which time he will be paid the salary provided in
|
