EMPLOYMENT AGREEMENT made as of the 1st day of September
1997 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 XXX X. XXXXXXXXX, residing at
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Executive").
WHEREAS, the Executive is now and has been employed by the
Company as a Vice President, with the responsibilities and
duties of an executive officer of the Company; 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 her to continue 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 a Vice President of the Company, 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, she
shall not be assigned any titles, duties or responsibilities
which, in the aggregate, represent a material diminution in, or
are materially inconsistent with, her prior title, duties, and
responsibilities as a Vice President).
If the Board of Directors does not either continue
the Executive in the office of Vice President or elect her 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 her under Paragraph 6 if she
were discharged without cause. If the Executive decides to
exercise such right to decline to give further service, she
shall within forty-five days after such action or omission by
the Board of Directors give written notice to the Company
stating her objection and the action she thinks necessary to
correct it, and she 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 her 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 her diligently
and faithfully to serve and endeavor to further their interests
to the best of her 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 her in any capacity:
i. a minimum base salary of $300,000 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.
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 $200,000 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.
c) Supplemental Executive Retirement Plan. The
Executive shall continue to 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
$800.
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 her
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 her
duties hereunder.
g) Indemnification. The Company agrees to indemnify
the Executive for any and all liabilities to which she may be
subject as a result of her employment hereunder (and as a result
of her 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 her 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.
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) December 31, 2000; 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 her
election not to have the Employment Period so extended.
4. Disability.
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For purposes of this Agreement, the Executive will be
deemed "disabled" upon the earlier to occur of (i) her becoming
disabled as defined under the terms of the disability benefit
program applicable to the Executive, if any, and (ii) her
absence from her duties hereunder on a full-time basis for one
hundred eighty (180) consecutive days as a result of her
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 her 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 her remuneration hereunder
shall be reduced by the amount of any payments she may otherwise
receive as a result of her disability pursuant to a disability
program provided by or through the Company), and her 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 her 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 her, 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,
active fraud or gross negligence by the Executive in connection
with her 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
without cause, the Executive shall be entitled to the salary
provided in Paragraph 2(a), two-thirds of the targeted incentive
provided in Paragraph 2(b), the vesting of any restricted stock
awards and the immediate exercisability of any stock options, as
well as her rights under Paragraph 4, which would have vested or
become exercisable during the full Employment Period (which, in
that event, shall continue until December 31, 2000 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 she 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 Paragraph 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.
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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 she
may acquire in the course of her 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 she
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 her skills and
abilities outside of such geographic areas, provided in either
case the provisions of this Agreement are complied with.
8. Preservation of Business.
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a) General. During the Employment Period, the
Executive will use her 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, distributors, customers
and others.
b) Patents and Copyrights, etc. The Executive
agrees, without additional compensation, to make available to
the Company all knowledge possessed by her 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 her 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 her 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 her possession, custody or
control, whether prepared by her 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 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 she violates any of the provisions of this
Agreement, and the Company agrees and consents that if it
violates any of the provisions of Paragraphs 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.
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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 that certain letter agreement dated as of October 24, 1989
granting to the Executive extended separation benefits in the
event of a change in control of the Company 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:
Xxx X. Xxxxxxxxx
000 Xxxx 00xx Xxxxxx
Apartment 29D
Xxx Xxxx, Xxx Xxxx 00000
ii. if to the Company to:
Arrow Electronics, Inc.
00 Xxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Executive Vice President
Either party may, by notice to the other, change her 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/Xxxxx Xxxxx By:/s/Xxxxxx X. Xxxxxxx
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Assistant Secretary Executive Vice President
THE EXECUTIVE
/s/Xxx X. Xxxxxxxxx
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