EXHIBIT 10.1
EMPLOYMENT
AGREEMENT made as of the 12th day of September 2005 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 J.
EDWARD COLEMAN, residing at 1829 Hidden
Point Road, Annapolis, MD 21409 (the
"Executive").
WHEREAS, the
Company wishes to employ the Executive as Senior Vice
President and President of North American
Computer Products, with the
responsibilities and duties of an officer
of the Company; and
WHEREAS, the
Executive wishes to accept such employment and to render
services to the Company on the terms set
forth in, and in accordance with the
provisions of, this Employment Agreement
(the "Agreement");
NOW, THEREFORE,
in consideration of the mutual covenants and agreements
herein contained, the parties agree as
follows:
1. Employment and Duties.
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a) Employment.
The Company hereby employs the Executive for the
Employment Period defined in Paragraph 3,
to perform such duties for the
Company, 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 Senior Vice President of
the Company and President of
North American Computer Products, 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 Senior Vice President and President of
North American Computer Products).
If the Board of Directors does not either continue the Executive in
the office of Senior Vice President and
President of North American Computer
Products 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 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.
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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.
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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 annum;
provided, however, that the Executive's
actual incentive payment in 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 twice the targeted amount. The
Executive's incentive payment for
any year will be appropriately pro-rated to
reflect a partial year of
employment.
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c) Supplemental Executive Retirement Plan. The Executive shall
participate in the Company's Unfunded
Pension Plan for Selected Executives
(the "SERP").
d) Automobile. During the Employment Period, 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 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 performance share
programs) or employees in general, on
a basis consistent with other senior
executives.
3. The Employment Period.
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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:
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) September 11, 2007; 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.
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4. Disability.
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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.
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In the event of any malfeasance, willful misconduct,
