AMENDED AND RESTATED EMPLOYMENT AGREEMENT made as of the 22nd day of
December 1999 by and between ARROW ELECTRONICS, INC., a New York corporation
with its principal office at 00 Xxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the
"Company"), and XXXXXX X. XXXXXXX, residing at 000 XxXxx, Xxx Xxxxx,
Xxxxxxxxxx 00000 (the "Executive").
WHEREAS, the Executive is now and has been employed by the Company as a
Senior Vice President, with the responsibilities and duties of a principal
executive officer of the Company; and
WHEREAS, the Executive and the Company are parties to that certain
Amended and Restated Employment Agreement made as of the 1st day of April
1996; and
WHEREAS, the Company and the Executive wish to provide for the continued
employment of the Executive as an employee of the Company and for him to
continue to render services to the Company on the terms set forth in, and in
accordance with the provisions of, this Amended and Restated 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.
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. The
Executive hereby accepts such employment.
b) Duties and Responsibilities. It is contemplated that the
Executive will be Senior Vice President of Corporate Marketing of the Company
until December 31, 1999 and President of the Company's Asian operations
thereafter, 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, and except as contemplated hereunder, 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.
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. It is understood and agreed, however, that the Executive is
expected to reduce his time committed to the Company to 50% of his normal
business time (approximately 120 working days per year, excluding holidays
and vacation days) commencing January 1, 2000.
d) Location of Office. Commencing January 1, 2000, the Executive
may continue to maintain his residence and office in the San Xxxx area or
relocate to the Phoenix area. The Company will not be responsible for any
relocation support or expense if the Executive chooses to relocate.
Thereafter, the Company shall not require the Executive to locate his office
more than fifty miles from his current residence address in the San Xxxx area
(or from his then residence in the Phoenix area if he chooses to relocate),
without his prior written consent.
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 $340,000 per year through December
31, 1999 and $370,000 per year thereafter (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;
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(it being understood, however, that the
Executive and the Company do not contemplate that the Executive will receive
any incentive compensation or bonus in respect of periods after December 31,
1999); and
iii. such employee benefits that are made available by the
Company to its other principal executives.
b) Automobile. During the Employment Period, the Company will pay
the Executive a monthly automobile allowance of $850.
c) 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.
d) 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.
e) 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.
f) 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
or employees in general.
g) Supplemental Executive Retirement Plan. The Executive is
currently a participant in the Company's Unfunded Pension Plan for Selected
Executives (the "SERP"). Effective January 1, 2000, the Executive's
participation in the SERP will be modified so as to provide him with an
annual retirement benefit of $80,000 per year if he retires after December
31, 2001, an annual retirement benefit of $92,000 if he retires after
December 31, 2002, an annual retirement benefit of $104,000 if he retires
after December 31, 2003, and an annual retirement benefit of $115,000 if he
retires after December 31, 2004. If the Employment Period is terminated at
June 30, 2001 as a result of an election under Paragraph 3(d) of this
Agreement, the Executive's annual SERP benefit would be reduced to $60,000
(or pro-rated appropriately if the Employment Period terminates pursuant to
such an election between July 1, 2001 and December 31, 2001). Except for the
foregoing, the rights, terms, privileges, and conditions of the Executive's
participation in the SERP remain unchanged.
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:
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, 2001; provided, however, that, unless sooner
terminated as otherwise provided herein, (i) either the Company or the
Executive may, after January 1, 2001, elect to terminate the Employment
Period earlier than December 31, 2001 by giving the other at least six (6)
months notice of its or his election to do so and specifying the effective
date of such early termination of the Employment Period and (ii) prior to
July 1, 2001 the Company and the Executive will agree on whether they wish to
continue the Employment Period beyond December 31, 2001 and, if so, upon what
terms and for what additional period.
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).
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 7 and the obligations of the Executive
contained in Paragraphs 8(b) and 8(c) shall continue in effect as provided
therein.
6. Termination Without Cause.
In the event that the Company discharges the Executive during the
Employment Period without cause, the Executive shall be entitled to
continuation of the salary provided in Paragraph 2(a), two-thirds of any
targeted incentive compensation, the full vesting of any restricted stock
awards and the immediate exercisability of any stock options, all for the
full Employment Period (which, in that event, shall continue until the then
scheduled expiration of the Employment Period unless sooner terminated by the
Executive's disability or death), and the Company shall have no right to set
off payments due the Executive with any amounts he may earn from gainful
employment elsewhere. It is expressly agreed and understood that the
Executive shall be under no obligation to seek such employment. The
provisions of Paragraph 7 restricting the Executive's activities and the
Executive's obligations under Paragraphs 8(b) and 8(c) shall continue in
effect. The provisions of this Paragraph 6 shall not act to limit the
Executive's ability to recover damages from the Company for breaching this
Agreement by terminating the Employment Period without cause, except as
otherwise permitted by Paragraph 3.
7. Non-Competition; Trade Secrets.
During the Employment Period and for a period of one year after the
termination of the Employment Period, the Executive will not, directly or
indirectly:
a) Disclosure of Information. Use, attempt to use, disclose or
otherwise make known to any person or entity (other than to the Board of
Directors of the Company or otherwise in the course of the business of the
Company, its subsidiaries or affiliates and except as may be required by
applicable law):
i. any knowledge or information, including, without limitation,
lists of customers or suppliers, trade secrets, know-how, inventions,
discoveries, processes and formulae, as well as all data and records
pertaining thereto, which he may acquire in the course of his employment, in
any manner which may be detrimental to or cause injury or loss to the
Company, its subsidiaries or affiliates; or
ii. any knowledge or information of a confidential nature
(including all unpublished matters) relating to, without limitation, the
business, properties, accounting, books and records, trade secrets or
memoranda of the Company, its subsidiaries or affiliates, which he now knows
or may come to know in any manner which may be detrimental to or cause injury
or loss to the Company, its subsidiaries or affiliates;
b) Non-Competition. Engage or become interested in the United
States, Canada or Mexico (whether as an owner, shareholder, partner, lender
or other investor, director, officer, employee, consultant or otherwise) in
the business of distributing electronic parts, components, supplies or
systems, or any other business that is competitive with the principal
business or businesses then conducted by the Company, its subsidiaries or
affiliates (provided, however, that nothing contained herein shall prevent
the Executive from acquiring or owning less than 1% of the issued and
outstanding capital stock or debentures of a corporation whose securities are
listed on the New York Stock Exchange, American Stock Exchange, or the
National Association of Securities Dealers Automated Quotation System, if
such investment is otherwise permitted by the Company's Human Resource and
Conflict of Interest policies);
c) Solicitation. Solicit or participate in the solicitation of any
business of any type conducted by the Company, its subsidiaries or
affiliates, during said term or thereafter, from any person, firm or other
entity which was or at the time is a supplier or customer, or prospective
supplier or customer, of the Company, its subsidiaries or affiliates; or
d) Employment. Employ or retain, or arrange to have any other
person, firm or other entity employ or retain, or otherwise participate in
the employment or retention of, any person who was an employee or consultant
of the Company, its subsidiaries or affiliates, at any time during the period
of twelve consecutive months immediately preceding such employment or
retention.
The Executive will promptly furnish in writing to the Company,
its subsidiaries or affiliates, any information reasonably requested by the
Company (including any third party confirmations) with respect to any
activity or interest the Executive may have in any business.
Except as expressly herein provided, nothing contained herein is
intended to prevent the Executive, at any time after the termination of the
Employment Period, from either (i) being gainfully employed or (ii)
exercising his skills and abilities outside of such geographic areas,
provided in either case the provisions of this Agreement are complied with.
8. Preservation of Business.
a) General. During the Employment Period, the Executive will use
his best efforts to advance the business and organization of the Company, its
subsidiaries and affiliates, to keep available to the Company, its
subsidiaries and affiliates, the services of present and future employees and
to advance the business relations with its suppliers, customers and others.
b) Patents and Copyrights, etc. The Executive agrees, without
additional compensation, to make available to the Company all knowledge
possessed by him relating to any methods, developments, inventions,
processes, discoveries and/or improvements (whether patented, patentable or
unpatentable) which concern in any way the business of the Company, its
subsidiaries or affiliates, whether acquired by the Executive before or
during his employment hereunder.
Any methods, developments, inventions, processes, discoveries
and/or improvements (whether patented, patentable or unpatentable) which the
Executive may conceive of or make, related directly or indirectly to the
business or affairs of the Company, its subsidiaries or affiliates, or any
part thereof, during the Employment Period, shall be and remain the property
of the Company. The Executive agrees promptly to communicate and disclose
all such methods, developments, inventions, processes, discoveries and/or
improvements to the Company and to execute and deliver to it any instruments
deemed necessary by the Company to effect the disclosure and assignment
thereof to it. The Executive also agrees, on request and at the expense of
the Company, to execute patent applications and any other instruments deemed
necessary by the Company for the prosecution of such patent applications or
the acquisition of Letters Patent in the United States or any other country
and for the assignment to the Company of any patents which may be issued.
The Company shall indemnify and hold the Executive harmless from any and all
costs, expenses, liabilities or damages sustained by the Executive by reason
of having made such patent applications or being granted such patents.
Any writings or other materials written or produced by the
Executive or under his supervision (whether alone or with others and whether
or not during regular business hours), during the Employment Period which are
related, directly or indirectly, to the business or affairs of the Company,
its subsidiaries or affiliates, or are capable of being used therein, and the
copyright thereof, common law or statutory, including all renewals and
extensions, shall be and remain the property of the Company. The Executive
agrees promptly to communicate and disclose all such writings or materials to
the Company and to execute and deliver to it any instruments deemed necessary
by the Company to effect the disclosure and assignment thereof to it. The
Executive further agrees, on request and at the expense of the Company, to
take any and all action deemed necessary by the Company to obtain copyrights
or other protections for such writings or other materials or to protect the
Company's right, title and interest therein. The Company shall indemnify and
hold the Executive harmless from any and all costs, expenses, liabilities or
damages sustained by the Executive by reason of the Executive's compliance
with the Company's request.
c) Return of Documents. Upon the termination of the Employment
Period, including any termination of employment described in Paragraph 6, the
Executive will promptly return to the Company all copies of information
protected by Paragraph 7(a) hereof or pertaining to matters covered by
subparagraph (b) of this Paragraph 8 which are in his possession, custody or
control, whether prepared by him or others.
9. Separability.
The Executive agrees that the provisions of Paragraphs 7 and 8
hereof constitute independent and separable covenants which shall survive the
termination of the Employment Period and which shall be enforceable by the
Company notwithstanding any rights or remedies the Executive may have under
any other provisions hereof. The Company agrees that the provisions of
Paragraph 6 hereof constitute independent and separable covenants which shall
survive the termination of the Employment Period and which shall be
enforceable by the Executive notwithstanding any rights or remedies the
Company may have under any other provisions hereof.
10. Specific Performance.
The Executive acknowledges that (i) the services to be rendered
under the provisions of this Agreement and the obligations of the Executive
assumed herein are of a special, unique and extraordinary character; (ii) it
would be difficult or impossible to replace such services and obligations;
(iii) the Company, its subsidiaries and affiliates will be irreparably
damaged if the provisions hereof are not specifically enforced; and (iv) the
award of monetary damages will not adequately protect the Company, its
subsidiaries and affiliates in the event of a breach hereof by the Executive.
The Company acknowledges that (i) the Executive will be irreparably damaged
if the provisions of Paragraphs 1(b) and 6 hereof are not specifically
enforced and (ii) the award of monetary damages will not adequately protect
the Executive in the event of a breach thereof by the Company. By virtue
thereof, the Executive agrees and consents that if he violates any of the
provisions of this Agreement, and the Company agrees and consents that if it
violates any of the provisions of Paragraphs 1(b) and 6 hereof, the other
party, in addition to any other rights and remedies available under this
Agreement or otherwise, shall (without any bond or other security being
required and without the necessity of proving monetary damages) be entitled
to a temporary and/or permanent injunction to be issued by a court of
competent jurisdiction restraining the breaching party from committing or
continuing any violation of this Agreement, or any other appropriate decree
of specific performance. Such remedies shall not be exclusive and shall be
in addition to any other remedy which any of them may have.
11. Miscellaneous.
a) Entire Agreement; Amendment. This Agreement constitutes the
whole employment agreement between the parties and may not be modified,
amended or terminated except by a written instrument executed by the parties
hereto. It is specifically agreed and understood, however, that the
provisions of (i) that certain letter agreement dated as of November 1, 1990
granting to the Executive extended separation benefits in the event of a
change in control of the Company, (ii) that certain memorandum, dated August
18, 1995, from Xxxxxxx X. Xxxxxxx, Chairman and Chief Executive Officer of
the Company, to the Executive, and (iii) the Executive's current incentive
compensation agreement (i.e., for 1995), except as the same may be modified
by the memorandum referred to in (ii) above, shall survive and shall not be
affected hereby. All other agreements between the parties pertaining to the
employment or remuneration of the Executive not specifically contemplated
hereby or incorporated or merged herein are terminated and shall be of no
further force or effect.
b) Assignment. Except as stated below, this Agreement is not
assignable by the Company without the written consent of the Executive, or by
the Executive without the written consent of the Company, and any purported
assignment by either party of such party's rights and/or obligations under
this Agreement shall be null and void; provided, however, that,
notwithstanding the foregoing, the Company may merge or consolidate with or
into another corporation, or sell all or substantially all of its assets to
another corporation or business entity or otherwise reorganize itself,
provided the surviving corporation or entity, if not the Company, shall
assume this Agreement and become obligated to perform all of the terms and
conditions hereof, in which event the Executive's obligations shall continue
in favor of such other corporation or entity.
c) Waivers, etc. No waiver of any breach or default hereunder
shall be considered valid unless in writing, and no such waiver shall be
deemed a waiver of any subsequent breach or default of the same or similar
nature. The failure of any party to insist upon strict adherence to any term
of this Agreement on any occasion shall not operate or be construed as a
waiver of the right to insist upon strict adherence to that term or any other
term of this Agreement on that or any other occasion.
d) Provisions Overly Broad. In the event that any term or
provision of this Agreement shall be deemed by a court of competent
jurisdiction to be overly broad in scope, duration or area of applicability,
the court considering the same shall have the power and hereby is authorized
and directed to modify such term or provision to limit such scope, duration
or area, or all of them, so that such term or provision is no longer overly
broad and to enforce the same as so limited. Subject to the foregoing
sentence, in the event any provision of this Agreement shall be held to be
invalid or unenforceable for any reason, such invalidity or unenforceability
shall attach only to such provision and shall not affect or render invalid or
unenforceable any other provision of this Agreement.
e) Notices. Any notice permitted or required hereunder shall be
in writing and shall be deemed to have been given on the date of delivery or,
if mailed by registered or certified mail, postage prepaid, on the date of
mailing:
i. if to the Executive to:
Xxxxxx X. Xxxxxxx
000 XxXxx
Xxx Xxxxx, XX 00000
ii. if to the Company to:
Arrow Electronics, Inc.
00 Xxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Executive Vice President
and General Counsel
Either party may, by notice to the other, change his or its address for
notice hereunder.
f) New York Law. This Agreement shall be construed and governed
in all respects by the internal laws of the State of New York, without giving
effect to principles of conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
Attest: ARROW ELECTRONICS, INC.
/s/ Xxxxxx X. Xxxxxxx
----------------------- ------------------------
Secretary Executive Vice President
THE EXECUTIVE
/s/ Xxxxxx X. Xxxxxxx
------------------------
Xxxxxx X. Xxxxxxx
