EXHIBIT 10-0
Arrow Electronics, Inc.
Stock Option Award Agreement
Grant Recipient: _________________________________________________
Date of Grant: _________________________________________________
Number of Shares Covered by this Option:___________________________
Exercise Price Per Share:__________________________________________
Expiration Date: _________________________________________________
THIS AGREEMENT, effective as of the date of the grant, sets out the terms
of Arrow's grant to you of a non-qualified stock option (the "option") under the
Arrow Electronics, Inc. 2004 Omnibus Incentive Plan (the "plan").
The plan and this agreement together provide a complete description of the
terms and conditions governing this option. If there is any inconsistency
between the terms of this agreement and the terms of the plan, the plan's terms
will replace the conflicting terms of this agreement. You can only accept and
receive the option by signing this agreement and returning it to us by
____________. By signing this agreement, you accept all of its terms. If you do
not sign and return this agreement by the date indicated, your stock option will
be forfeited.
1. The Option. Arrow hereby grants you an option to purchase the number of
shares set forth above, at the stated exercise price per share, which is 100% of
the fair market value of a share on the date of the grant. The term of this
option begins as of the date of grant and continues through the expiration date
stated above, unless it terminates sooner for one of the reasons set out in this
agreement or the plan.
2. Vesting Period: You do not have any rights or interests in this option until
it vests, as follows:
(a) Twenty-five percent (25%) of the option (rounded to a whole share) will
vest on each of the first, second, third, and fourth anniversaries of the date
of grant, but only if you are still employed by Arrow (or one of its
subsidiaries or affiliates) on the applicable anniversary.
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(b) Any unvested part of this option will vest immediately upon your death,
disability, or retirement, and the entire option will remain exercisable until
the expiration date, but only if you are still employed by Arrow (or one of its
subsidiaries or affiliates) at the time of your death, disability or retirement.
(c) Any unvested portion of this option will vest immediately, and the
entire option will remain exercisable until the expiration date, upon the
termination of your employment by Arrow, or by you for good reason, within two
years after a change of control of Arrow. This section (c) will not apply,
however, if (1) you are terminated by Arrow for cause, or (2) this option's
exercise price is greater than the share price as at the close of business on
the date of your termination.
(d) If your employment terminates during the option term by reason of a
reduction in force or restructuring as determined by the Compensation Committee
of Arrow's Board of Directors or its designee (the "committee"), any unvested
portion of the option shall be forfeited immediately and any vested portion of
the option shall remain exercisable until the earlier of: (i) twelve months
after the end of your employment, or (ii) the expiration date.
(e) Any unvested portion of this option will continue to vest and any
vested portion will remain exercisable during any military leave of absence (as
that term is defined in the then current applicable Arrow Employee Handbook.)
(f) The terms, "cause", "change of control", "disability", "good reason",
and "retirement", as used in this Section 2, are defined in Section 8, below.
3. Exercise: You (or your representative, upon your death), may exercise any
vested portion of this option at any time prior to the expiration date by giving
written notice to Arrow's stock administrator and making payment to Arrow in an
amount equal to the per share exercise price times the number of shares you wish
to exercise, plus applicable taxes.
4. Termination of Option: Except in the situations described in paragraphs 2(b),
2(c), 2(d), and 2(e) above, the vested and unvested portion of this option will
terminate immediately and be of no force or effect (a) at the close of business
in New York on the expiration date or, (b) if your employment with Arrow, its
subsidiaries or affiliates terminates for any reason, with or without cause, or
c) your employer ceases to be a subsidiary or affiliate of Arrow.
5. No Transfers or Pledges. This option may only be transferred or assigned by
will or by the laws of descent and distribution. No other assignment or
transfer, or pledge or sale of any kind, whether voluntary or involuntary, by
operation of law or otherwise, will vest in the assignee, buyer or transferee
any right, title or interest whatsoever, except as the committee may, in their
discretion, expressly permit.
6. Changes to this Agreement, the Plan, or Your Rights Under Them. This
agreement and your rights under it are subject to all the terms and conditions
of the plan, and the rules and regulations the Compensation Committee may adopt
to administer it, as both the plan and those rules or regulations may be amended
by the Committee from time to time. You expressly acknowledge that the Committee
is authorized to administer, construe, and make all determinations necessary or
appropriate to the administration of the plan and this agreement, all of which
will be binding upon you. With the approval of Arrow's Board of Directors, the
Committee may terminate, amend, or modify the plan itself, but no such
termination, amendment, or modification of the plan may in any way adversely
affect your rights under this Agreement without your written consent. In the
event there is a change to Arrow's stock, whether as a result of dividend
payments, recapitalization, stock splits, merger, consolidation, exchange of
shares, or otherwise, the number and class of shares subject to this option, as
well as the exercise price, may (but need not be) equitably adjusted by the
Committee, in its sole discretion, to prevent dilution or enlargement of rights.
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7. Miscellaneous.
(a) All of Arrow's obligations under the plan and this agreement will be
binding on any successor to Arrow, whether the succession is the result of a
direct or indirect purchase, merger, consolidation, a transfer of all or
substantially all of the business and/or assets of Arrow, or otherwise.
(b) Arrow may deduct or withhold, or require you to remit to Arrow as part
of the exercise process, funds sufficient to satisfy federal, state, and local
taxes (including your FICA obligation) required by law to be withheld in
connection with any grant or exercise under this agreement.
(c) You will have no rights as a stockholder of Arrow with respect to any
of the shares subject to this option agreement unless and until you have
exercised the option as to those shares and the shares have been issued and
delivered to you.
(d) This is not an employment contract, and it does not create or evidence
any right to continued employment by Arrow. Unless you have a separate, specific
agreement, in writing, expressly on the subject, you remain employed at will,
which means that either you or Arrow can terminate your employment at any time
(e) The provisions of this agreement are severable and if any one or more
provisions are determined to be illegal or otherwise unenforceable, in whole or
in part, the remaining provisions will nevertheless be binding and enforceable,
and the unenforceable provision may be modified by a court of competent
jurisdiction to most nearly effectuate its intent.
(f) To the extent not preempted by federal law, this agreement will be
governed by, and construed in accordance with the laws of the State of New York.
The parties to this agreement (including any successor, assignee or heir) hereby
waive to the fullest extent permitted by applicable law any right to a trial by
jury with respect to any litigation directly or indirectly arising out of,
under, or in connection with the plan or this agreement.
(g) The provisions contained in this agreement and the plan shall supercede
any prior agreement entered into between us regarding the treatment or vesting
of this option following a change of control and termination of employment, but
only when the exercise price of this option is greater than the share price as
at the close of business on the date of your termination.
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8. Definitions For purposes of this agreement, the following terms will have the
meanings set forth below:
(a) It will be deemed to have been for "cause" if the committee determines,
in its sole discretion, that you are terminated because you: (i) intentionally
fail to perform your duties for Arrow and that failure continues after you
receive written warning concerning your failure to perform (this does not mean a
mere failure to attain financial goals); (ii) engage in illegal conduct or gross
misconduct which is significantly and demonstrably injurious to Arrow; or (iii)
you have violated any provision of Arrow's Worldwide Code of Business Conduct
and Ethics or of any other written agreement you may have with Arrow. With
respect to Non-employee Directors, "cause" is as defined by Arrow's bylaws.
(b) "Change of Control" means any of the following events: (i) any Person
(as defined in the plan) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 30% or more of
the combined voting power of Arrow's outstanding shares or other securities
ordinarily having the right to vote at elections of the directors of Arrow
("Voting Securities"), without the prior express approval of Arrow's then
incumbent Board of Directors; or (ii) individuals who constitute the Board on
the date of this agreement (and/or individuals whose subsequent nomination or
election received the approval of at least three quarters of the then incumbent
Board) cease for any reason to constitute at least a majority of the Board; or
(iii) any other transaction determined by the Committee to constitute a Change
of Control. In no event, however, will a change in control be deemed to have
occurred for purposes of this Agreement by virtue of any transaction which
results in one or more executive officers of Arrow (as defined in Rule 3b-7
under the Exchange Act), or a group of Persons which includes one or more
executive officers of Arrow, acquiring, directly or indirectly, 30% or more of
the combined voting power of Arrow's Voting Securities.
(c) "Disability" means your total and permanent disability as determined by
the Committee.
(d) Arrow may add to, subtract from, or otherwise change your duties and
responsibilities, or change your title, or relocate you at any time. You will
have "good reason" to terminate your employment only if such action is taken
during the two year period following a Change of Control and only if any such
action substantially lessens your responsibilities or compensation, or involves
a move of more than 50 miles, and Arrow does not rescind any such changes within
thirty days after your written request
(e) "Retirement" means your retirement under a retirement plan of Arrow, or
one of its subsidiaries or affiliates, at or after your normal retirement age
or, with the written consent of the Committee, at an early retirement date.
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The parties acknowledge their acceptance of all of the terms of this
agreement by signing where indicated below.
Arrow Electronics, Inc. Grant Recipient
By:________________________ By:________________________
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