UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. )

 

Filed by the Registrant þ

 Filed by a Party other than the Registrant  o

Check the appropriate box:

o  Preliminary Proxy Statement

o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

þ  Definitive Proxy Statement

o  Definitive Additional Materials

o  Soliciting Material Pursuant to §240.14a-12

 

ARROW ELECTRONICS, INC

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael J. Long
Chairman of the Board

March 25, 2010

Dear Shareholder:

You are invited to Arrow’s Annual Meeting of Shareholders, on Tuesday, May 4, 2010, at the Royal Palms Hotel, 5200 East Camelback Road, Phoenix, Arizona at 10:00 a.m. Mountain Standard Time. The formal notice of the meeting and the proxy statement soliciting your vote at the meeting appear on the following pages.

The three matters being put to a vote at the meeting are the election of directors, a proposal to ratify the appointment of our independent registered public accounting firm, and a proposal to re-approve and amend the Company’s Omnibus Incentive Plan in certain respects, including an increase in the number of shares which can be issued thereunder. These matters are discussed more fully in the proxy statement.

Arrow’s Board of Directors recommends the approval of the proposals as being in the best interests of Arrow, and urges you to read the proxy statement carefully before you vote. Your vote is important, regardless of the number of shares you own.

Under the rules adopted by the Securities and Exchange Commission, we are now furnishing proxy materials to our shareholders online rather than mailing printed copies of those materials to each shareholder. Accordingly, you will not receive a printed copy of the proxy materials unless you request one. The Notice of Internet Availability includes instructions on how to access and review the materials, and how to access your proxy card and vote online. If you would like to receive a printed copy of our proxy materials please follow the instructions included in such Notice.

Please make sure you vote, whether or not you plan to attend the meeting. You can cast your vote at the meeting, online by following the instructions on either the proxy card or the Notice of Internet Availability, by mailing your proxy card in the postage-paid return envelope, or by telephone.

Sincerely yours,

Michael J. Long
Chairman of the Board

ARROW ELECTRONICS, INC.

50 Marcus Drive
Melville, New York 11747

TIME AND DATE

10:00 a.m. Mountain Standard Time on Tuesday, May 4, 2010

PLACE

Royal Palms Hotel
5200 East Camelback Road
Phoenix, Arizona 85018

ITEMS OF BUSINESS

     The annual meeting will be held:

	1.		To elect directors of Arrow for the ensuing year.
	2.		To act upon a proposal to ratify the appointment of Ernst & Young LLP as Arrow’s independent registered public accounting firm for the fiscal year ending December 31, 2010.
	3.		To re-approve and amend the Arrow Electronics, Inc. 2004 Omnibus Incentive Plan, including an increase in the aggregate number of shares of Arrow common stock available for issuance to plan participants.

RECORD DATE

     Only shareholders of record at the close of business on March 12, 2010 are entitled to notice of and to vote at the meeting or any postponements or adjournments thereof.

PROXY MATERIALS AND ANNUAL REPORT

     If you wish to receive a printed copy of the proxy materials and our annual report you must request a copy. The Notice of Internet Availability has instructions for access to and review of our proxy materials online, as well as instructions for online voting.

     Arrow’s 2009 Annual Report (which is not a part of the proxy soliciting material) and this proxy statement were made available through www.proxyvote.com on or about March 25, 2010, and are also available at the Company’s website at www.arrow.com/annualreport2009.

PROXY VOTING

     Shareholders can vote by attending the meeting, by completing and returning the proxy card, online, or by telephone. The Notice of Internet Availability and the proxy card itself have detailed instructions for voting.

     Shareholders may revoke a proxy (change or withdraw the vote) at any time prior to its exercise at the meeting by following the instructions in the proxy statement.

By Order of the Board of Directors

     Peter S. Brown
     Secretary

ARROW ELECTRONICS, INC.

ANNUAL MEETING OF SHAREHOLDERS

To be Held May 4, 2010

TABLE OF CONTENTS

Proxy Statement			1
The Purpose of this Statement			1
Invitation to the Annual Meeting			1
Voting Instructions			1
Shareholders Entitled to Vote			1
Revocation of Proxies			2
Cost of Proxy Solicitation			2
Certain Shareholders			2
Holders of More than 5% of Common Stock			2
Shareholding of Executive Officers and Directors			3
Proposal 1: Election of Directors			4
The Board and Its Committees			9
Lead Independent Director			9
Chief Executive Officer and Chairman Positions			9
Committees			10
Enterprise Risk Management			11
Compensation Risk Analysis			12
Independence			12
Compensation Committee Interlocks and Insider Participation			13
Meetings and Attendance			13
Director Compensation			13
Audit Committee Report			16
Principal Accounting Firm Fees			17
Proposal 2: Ratification of Appointment of Auditors			17
Proposal 3: Proposal to Re-Approve and Amend the Arrow Electronics, Inc. 2004 Omnibus Incentive Plan			18
Summary Description of the Plan			19
Purpose of the Plan			19
Duration			19
Administration			19
Plan Share Limits			20
Participant Award Limits			20
Eligibility and Participation			21
Stock Options			21
Stock Appreciation Rights			21

Restricted Stock Units and Restricted Shares			21
Performance Stock Units and Performance Shares			22
Performance Measures			22
Covered Employee Annual Incentive Awards			23
Non-Employee Director Awards			23
Other Awards			24
Other Provisions of Awards and Individual Award Agreements			24
Treatment of Awards Upon a Corporate Event			24
Amendment of Awards or Plan and Adjustment of Awards			24
Tax Withholding			25
Rights of Participants			25
New Plan Benefits			25
Federal Tax Effects			25
Incentive Stock Options			25
Non-Qualified Stock Options			26
Section 162(m) of the Internal Revenue Code			26
Equity Compensation Plan Information			26
Compensation Committee Report			27
Compensation Discussion and Analysis			28
Overview			28
Executive Compensation Objectives			28
Total Compensation Process			28
Competitive Benchmarking and Use of Consultants			29
Elements of Total Compensation			30
Base Salary			30
Performance-Based Compensation			31
Annual Incentives			32
Long-Term Incentives			34
Retirement Programs and Other Benefits			38
Deferred Compensation			38
Qualified Plans			38
Supplemental Executive Retirement Plan			38
Management Insurance Plan			39
Employment and Change of Control Agreements			39
Stock Ownership Requirements			39
Tax and Accounting Considerations			40
Compensation of the Named Executive Officers			41
Summary Compensation Table			41
All Other Compensation – Detail			42
Grants of Plan-Based Awards			44
Outstanding Equity Awards at Fiscal Year-End			45
Options Exercised and Stock Vested in Last Fiscal Year			49
SERP			49
Deferred Compensation Plans			51

Agreements and Potential Payments Upon Termination or Change of Control			51
Employment Agreements			51
Change of Control Agreements			52
Impact of Internal Revenue Code Section 409A			53
Potential Payouts Upon Termination			53
Narrative Explanation of the Calculation of Amounts			56
Stock Option, Restricted Share and Performance Share Award Agreements			57
Related Persons Transactions			57
Section 16(a) Beneficial Ownership Reporting Compliance			58
Availability of More Information			58
Multiple Stockholders With The Same Address			58
Submission of Shareholder Proposals			59
Omnibus Incentive Plan, as amended		Annex A

ARROW ELECTRONICS, INC.

50 Marcus Drive
Melville, New York 11747

PROXY STATEMENT

in connection with the
2010 Annual Meeting of Shareholders

The Purpose of this Statement

     The Board of Directors of Arrow Electronics, Inc., a New York corporation (“Arrow” or the “Company”), is furnishing this proxy statement to all shareholders of record to solicit proxies to be voted at the 2010 Annual Meeting of Shareholders. By returning the completed proxy card, or voting over the telephone or internet, you are giving instructions on how your shares are to be voted at the Annual Meeting. The proxy statement was made available through www.proxyvote.com on or about March 25, 2010.

Invitation to the Annual Meeting

     Shareholders of record are invited to attend the 2010 Annual Meeting of Shareholders on Tuesday, May 4, 2010, beginning at 10:00 a.m. Mountain Standard Time. The meeting will be held at the Royal Palms Hotel, 5200 East Camelback Road, Phoenix, Arizona 85018.

Voting Instructions

     Please vote your shares by telephone or through the internet or complete, sign, and date your proxy card, and return it promptly in the postage-paid return envelope provided. Whether or not you plan to attend the meeting, your prompt response will assure a quorum and reduce solicitation expense.

     If shares are held in “street name” (that is, in the name of a bank, broker or other holder of record), such holder should receive instructions from the record shareholder that must be followed in order for such shares to be voted. Internet and/or telephone voting also will be offered to shareholders owning shares through most banks and brokers.

Shareholders Entitled to Vote

     Only shareholders of record of Arrow’s common stock at the close of business on March 12, 2010 (the “record date”) are entitled to notice of and to vote at the meeting or any postponements or adjournments thereof. As of the record date, there were 121,423,841 shares of Arrow common stock outstanding. Each share of common stock is entitled to one vote on each matter properly brought before the meeting. The presence in person or by proxy of a majority of the shares entitled to vote at the meeting shall constitute a quorum.

Revocation of Proxies

     The person giving the proxy may revoke it at any time prior to the time it is voted at the meeting by giving written notice to Arrow’s Secretary. If the proxy was given by telephone or through the internet, it may be revoked in the same manner. You may also revoke your proxy by attending the Annual Meeting and voting in person.

Cost of Proxy Solicitation

     Arrow pays the cost of soliciting proxies. Arrow has retained D.F. King & Co., Inc. to assist in soliciting proxies at an anticipated cost of $10,500 plus expenses. Arrow will supply soliciting materials to the brokers and other nominees holding Arrow common stock in a timely manner so that the brokers and other nominees may send the material to each beneficial owner and Arrow will reimburse the brokers and other nominees for their expenses in so doing. In addition to this solicitation by mail, employees of the Company may solicit proxies in person or by telephone.

CERTAIN SHAREHOLDERS

Holders of More than 5% of Common Stock

     The following table sets forth certain information with respect to the only shareholders known to the Company to own beneficially more than 5% of the outstanding common stock of Arrow as of March 12, 2010.

Name and Address		Number of Shares				Percent of
of Beneficial Owner		Beneficially Owned				Class
Wellington Management Company, LLP (1)
75 State Street
Boston, Massachusetts 02109			11,849,452				9.8	%
FMR LLC (2)
82 Devonshire Street
Boston, Massachusetts 02109			11,180,478				9.2	%
BlackRock Inc. (3)
40 East 52nd Street
New York, NY 10022			7,384,877				6.1	%
Artisan Partners Holdings LP (4)
875 East Wisconsin Avenue
Milwaukee, Wisconsin 53202			7,243,436				6.0	%

Shareholding of Executive Officers and Directors

     As of March 12, 2010, all of the executive officers and directors of Arrow as a group were the beneficial owners of 2,987,973 shares of the Company’s common stock, which is 2.5% of the total shares of common stock outstanding. This amount includes 1,923,002 shares, 1.6% of the Company’s outstanding common stock, held by the Arrow Electronics Stock Ownership Plan (the “ESOP”) of which Paul J. Reilly, Executive Vice President, Finance and Operations, and Chief Financial Officer of Arrow, and Peter S. Brown, Senior Vice President, General Counsel and Secretary of Arrow, are the trustees. As trustees, they have shared power to vote the shares held by the ESOP, and for that reason are deemed to be beneficial owners of them under SEC regulations. The ESOP total also includes shares allocated to the individual accounts of each of the trustees.

     As of March 12, 2010, the “Named Executive Officers” (the Chief Executive Officer, the Chief Financial Officer, and each of the other three most highly compensated executive officers of the Company other than the Chief Executive Officer and the Chief Financial Officer) and directors had beneficial ownership of the Company’s common stock as follows:

Shares of Common Stock Beneficially Owned

		Currently				Common				Acquirable				% of Outstanding
		Owned (1)				Stock Units (2)				w/in 60 Days				Common Stock
Michael J. Long			253,298				—				—				*
Paul J. Reilly (3)			2,158,345				—				—				1.8	%
Peter S. Brown (3)			2,023,991				—				—				1.7	%
Peter T. Kong			108,555				—				—				*
John P. McMahon			65,244				—				5,750				*
Daniel W. Duval			40,200				25,731				—				*
Gail E. Hamilton			—				6,840				—				*
John N. Hanson			19,500				23,528				—				*
Richard S. Hill			—				12,698				—				*
M.F. (Fran) Keeth			—				15,736				—				*
Roger King			19,000				23,821				—				*
Stephen C. Patrick			15,000				22,916				—				*
Barry W. Perry			16,000				25,392				—				*
John C. Waddell			16,035				13,395				—				*
Total Executive Officers’ and Director’s Beneficial Ownership (3)			2,812,166				170,057				5,750				2.5	%

PROPOSAL 1: ELECTION OF DIRECTORS

     Each nominee for election as a member of the Board of Directors of Arrow (the “Board”) is to be elected to hold office until the next Annual Meeting of Shareholders and until his or her successor has been duly elected and qualified.

     William E. Mitchell retired from the Board effective December 31, 2009, and on April 3, 2009 Karen Gordon Mills resigned from the Board upon her confirmation as Administrator of the U.S. Small Business Administration. The Chairman, together with his colleagues on the Board, for themselves and on behalf of Arrow, gratefully acknowledge Mr. Mitchell’s and Ms. Mills’ years of service and their many valuable contributions to the Company.

     By resolution of the Board of Directors adopted in accordance with the Company’s bylaws, the Board consists of ten directors unless and until that number is changed by a resolution of

the then current Board. Shareholder proxies solicited under this proxy statement cannot be voted for more than ten directors.

The Board recommends a vote for all of the nominees named below.

     The ten nominees receiving a plurality of votes cast at the meeting will be elected directors. Consequently, any shares not voted (whether due to abstention or broker non-votes) have no effect on the election of directors.

     An uncontested election of directors is no longer considered a “routine” item under the New York Stock Exchange rules. As a result, if a shareholder holds shares in “street name” through a broker or other nominee, the broker or nominee is not permitted to exercise voting discretion with respect to this proposal. For this reason, if a shareholder does not give his or her broker or nominee specific instructions, the shareholder’s shares will not be voted on this proposal.

     The Board does not contemplate that any of the nominees named below will be unable or unwilling to serve as a director. If any nominee should refuse or be unable to serve, an event which is not anticipated, the proxy will be voted for such person as shall be designated by the Board to replace such nominee, or in lieu thereof, the Board may reduce the number of directors.

     In accordance with Arrow’s corporate governance guidelines, members of the Board should have the education, business experience, and insight necessary to understand Arrow’s business. Further, members of the Board should be able to evaluate and oversee its direction and performance for Arrow’s continued success. The directors should also possess such functional skills, corporate leadership, and international experience as to contribute to the development and expansion of the Board’s knowledge and capabilities. Moreover, the directors should have the willingness and ability to objectively and constructively appraise the performance of executive management and, when necessary, recommend appropriate changes. In addition, the guidelines specifically state that diversity can be an important factor for the committee to consider in evaluating Board candidates. Indeed, the entire Board values diversity in all of its relevant forms, and believes that it promotes the highest level of efficiency and effectiveness. Based on the nominees’ experiences, attributes and skills, which exemplify the sought after characteristics set forth above, the Board has concluded that each nominee possesses the appropriate qualifications to serve as a director of Arrow. All of the following nominees are currently directors of Arrow and were elected at Arrow’s last annual meeting.

Daniel W. Duval, 73, director since 1987

Mr. Duval has been the Lead Independent Director of Arrow since May 2006. He was Chairman of the Board from June 2002 to May 2006. He also served as Arrow’s interim Chief Executive Officer from September 15, 2002 to February 2, 2003 while the company performed a search to find a permanent Chief Executive Officer. He served as interim President and Chief Executive Officer of Robbins & Myers, Inc., a manufacturer of fluids management systems, from December 2003 through July 2004.

Mr. Duval does not currently serve on any other boards. However, within the past five years, he has served as a director of Robbins & Myers, Inc., The Manitowoc Company, Inc., Miller-Valentine Group, and Gosiger, Inc. As a result of Mr. Duval’s previous experience as Chief Executive Officer at Robbins & Myers, Inc., he is experienced in overseeing and directing public companies.

Gail E. Hamilton, 60, director since 2008

Ms. Hamilton was Executive Vice President of Symantec Corporation, an infrastructure software and services provider, from March 2000 to January 2005. Previously, she served as the General Manager of the Communications Division of Compaq Computer Corporation and as the General Manager of the Telecom Platform Division for Hewlett-Packard Company. She is currently a director of OpenText Corp., Ixia, and Surgient, Inc. In the last five years, Ms. Hamilton has also served as a director of Washington Group International.

Ms. Hamilton has been responsible for designing, manufacturing and selling electronic systems for over 20 years. While at Symantec, Ms. Hamilton oversaw the operations of the enterprise and consumer business. In that role, she was responsible for budgeting and helped steer the company through an aggressive acquisition strategy. We believe Ms. Hamilton’s experience at Symantec, a leading software company, makes her particularly valuable in providing guidance to our Enterprise Computing Solutions business with regard to its direction and strategy.

John N. Hanson, 68, director since 1997

Mr. Hanson has been the Non-Executive Chairman of the Board of Joy Global Inc., a manufacturer of mining equipment for both underground and surface applications, since February 2007. He was Chairman, Chief Executive Officer and President of Joy Global Inc. (formerly known as Harnischfeger Industries, Inc.) for more than five years prior thereto. He is Chairman of the American Coal Foundation.

Within the past five years, Mr. Hanson also served as a director of the Milwaukee Symphony Orchestra and the Boys & Girls Clubs of Milwaukee. Immediately upon his appointment in 1999 as Chief Executive Officer of Harnischfeger Industries, Inc., Mr. Hanson provided the required guidance and leadership to bring it through its Chapter 11 bankruptcy reorganization. In so doing, the company became a more efficient, profitable organization. During this process, Mr. Hanson was responsible for leading that company’s direction by developing and implementing a long-term strategy and assessing risks and opportunities. Mr. Hanson has run multiple businesses throughout his career, several of which used distribution as their principle sources of products and services.

Richard S. Hill, 58, director since 2006

Mr. Hill has been Chief Executive Officer and Chairman of the Board of Novellus Systems, Inc., a maker of devices used in the manufacture of advanced integrated circuits, for more than five years. He is currently a director of LSI Corporation and Chairman of the University of Illinois Foundation. Also, within the past five years, Mr. Hill served as a director of Agere Systems, Inc.

Mr. Hill has had a broad base of experience as the Chief Executive Officer of Novellus. In that role, Mr. Hill sets the strategy by evaluating market risks to determine the ultimate direction of that company. Novellus is in the business of developing, manufacturing, and selling equipment used in the fabrication of integrated circuits. As a result, Mr. Hill has a thorough understanding of the semiconductor market in which Arrow operates.

M.F. (Fran) Keeth, 63, director since 2004

Mrs. Keeth was Executive Vice President of Royal Dutch Shell, plc, and Chief Executive Officer and President of Shell Chemicals Limited, a services company responsible for Royal Dutch Shell’s global petrochemical businesses, from January 2005 to December 2006. She served as Executive Vice President of Customer Fulfillment and Product Business Units for Shell Chemicals Limited from July 2001 to January 2005 and was President and Chief Executive Officer of Shell Chemical LP, a U.S. petrochemical member of the Royal Dutch/ShellGroup, from July 2001 to July 2006. Mrs. Keeth also serves as a director of Verizon Communications Inc. and Peabody Energy Corporation.

Mrs. Keeth rose to the level of Chief Executive Officer and President of Shell Chemicals Limited. Her knowledge and expertise helped guide the direction, culture, and operational excellence of Shell. Further, during her career, Mrs. Keeth has held a number of senior accounting positions, including Principal Accounting Officer and Controller. As a result of such experience and associated expertise, Mrs. Keeth is considered an “audit committee financial expert” as the term is defined in Item 407(d)(5) of Regulation S-K.

Roger King, 69, director since 1995

Dr. King served as Chief Executive Officer of Sa Sa International Holdings Limited, a retailer of cosmetics listed on the Hong Kong Exchange, from 1999 until 2002. He is currently an Adjunct Professor of Finance at Hong Kong University of Science and Technology. He also serves as a Director of Orient Overseas (International) Limited, an international shipping and logistics company, and Sincere Watch (Hong Kong) Limited, a distributor of fine watches, both of which are listed on the Hong Kong Stock Exchange, and serves on the Supervisory Board of TNT N.V., which is listed on Euronext Amsterdam. Within the past five years, Mr. King served on the boards of China Lot Synergy Holdings Ltd. (formerly World Metal Holdings Ltd.) and Prime Credit, Ltd. Hong Kong.

In addition, Dr. King was a standing committee member of the Chinese People’s Consultative Conference of the Zhejiang Provincial Committee. His knowledge of the Asian market, including the expertise he developed during his twenty years as the Chief Executive Officer of one of the largest distributors/resellers in Hong Kong, is highly valuable as the Company expands its efforts to grow in that region.

Michael J. Long, 51, director since 2008

Mr. Long was appointed Chief Executive Officer of Arrow in May 2009, and Chairman of the Board effective January 1, 2010. He was appointed President (and currently holds this position) and Chief Operating Officer of Arrow in February 2008. He served as Senior Vice President of the Company from January 2006 to February 2008, and, prior thereto, he served as Vice President of the Company for more than five years. He was appointed President, Arrow Global Components in September 2006. Mr. Long served as President, North America and Asia/Pacific Components from January 2006 until September 2006; President, North America from May 2005 to December 2005; and President and Chief Operating Officer of Arrow Enterprise Computing Solutions from July 1999 to April 2005. Mr. Long also serves as a Director of AmerisourceBergen Corporation.

As a result of his numerous years in leadership roles at the Company and in the distribution industry, Mr. Long understands the competitive nature of the business, has an in-depth knowledge of the Company, strong management background and broad executive experience.

Stephen C. Patrick, 60, director since 2003

Mr. Patrick has served as the Chief Financial Officer of the Colgate-Palmolive Company, a global consumer products company, for more than 13 years. In his more than 25 years at Colgate-Palmolive he has also held positions as Vice President, Corporate Controller and Vice President of Finance for Colgate Latin America.

Mr. Patrick’s experience and education make him an expert in financial matters. As the Chief Financial Officer of a successful public company, Mr. Patrick is responsible for assuring that all day-to-day financial transactions are accurately depicted in all public filings. All of this requires a thorough understanding of finance, treasury and risk management functions. Mr. Patrick is considered an “audit committee financial expert” as the term is defined in Item 407(d)(5) of Regulation S-K.

Barry W. Perry, 63, director since 1999

Mr. Perry was Chief Executive Officer and Chairman of the Board of Engelhard Corporation, a surface and materials science company, for more than five years prior to his retirement in June 2006. Mr. Perry is also currently a director of the Cookson Group plc and Ashland Inc.

While he was Chief Executive Officer of Engelhard Corporation, Mr. Perry established his company’s vision and strategy, selected key management personnel and evaluated the risks of participating in various markets. Further, his experience as a director of a number of public multinational companies, provides him with the skills to objectively and accurately evaluate the financial performance and corporate strategies of a large company.

John C. Waddell, 72, director since 1969

Mr. Waddell retired as the Chairman of the Board of Arrow in May 1994 and since that time has served as the non-executive Vice Chairman. As one of the Company’s founders and a director for more than four decades, Mr. Waddell has an in-depth knowledge of the Company and its culture. He is an expert in electronic component distribution.

THE BOARD AND ITS COMMITTEES

     The Board meets in general sessions with the Chairman of the Board presiding, in meetings limited to non-management directors (which are led by the Lead Independent Director) and in various committees. Committee meetings are open to all members of the Board. Committee memberships and chair assignments are reviewed annually by the Corporate Governance Committee.

     The table below reflects committee memberships for calendar year 2009.

Audit

Compensation

Corporate Governance

Jan 2009-May 2009

May 2009-Dec 2009

Jan 2009-May 2009

May 2009-Dec 2009

Jan 2009-May 2009

May 2009-Dec 2009

Daniel W. Duval

•

•

•

•

Gail E. Hamilton

•

•

•

•

John N. Hanson

•

•

•

•

Richard S. Hill

•

•

•

•

M.F. (Fran) Keeth

•

•

•

•

Roger King

•

•

•

•

Michael Long

Karen Gordon Mills (1)

5

•

William E. Mitchell (2)

Stephen C. Patrick

5

5

•

Barry W. Perry

•

•

5

John C. Waddell

•

5

5

Lead Independent Director

     In accordance with Arrow’s corporate governance guidelines, the Board has determined that Mr. Duval will serve as the Lead Independent Director. The Lead Independent Director chairs Board meetings when the Chairman is not present. He also chairs the sessions of the non-management directors held in connection with each Board meeting. The Lead Independent Director serves as a liaison between the Chairman and the independent non-management directors, and approves Board agendas and meeting schedules. The Lead Independent Director has the authority to call meetings of the non-management directors.

Chief Executive Officer and Chairman Positions

     As is common practice among many public companies, the Company’s Chief Executive Officer currently serves as Chairman of the Board. In his position as Chief Executive Officer, Mr. Long has primary responsibility for the day-to-day operations of the Company and provides consistent leadership on the Company’s key strategic objectives. In his role as Chairman, he sets the strategic priorities for the Board, presides over its meetings and communicates its strategic findings and guidance to management. The Board believes that the combination of these two roles provides more consistent communication and coordination throughout the organization, which results in a more effective and efficient implementation of corporate strategy

and is important in unifying the Company’s strategy behind a single vision. In addition, we have found that our Chief Executive Officer is the most knowledgeable member of the Board regarding risks the Company may be facing and, in his role as Chairman, is able to facilitate the Board’s oversight of such risks.

Committees

     Each of the committees of the Board operates under a charter, copies of which are available at the “Corporate Governance” link on the investor relations section of the Company’s website, www.arrow.com. As a matter of practice, beginning in May 2009, the Board determined that a director that acts as a Chair for a committee will not serve as a member of any other committee.

     The audit committee reviews and evaluates Arrow’s financial reporting process and other matters including its accounting policies, reporting practices, and internal accounting controls. The committee also monitors the scope and reviews the results of the audit conducted by Arrow’s independent registered public accounting firm. The committee reviews with the corporate audit department (which reports to the audit committee) and management the scope of the annual corporate audit plan, and the results of the audits carried out by the corporate audit department, including its assessments of the adequacy and effectiveness of internal controls, and the sufficiency of the department’s resources. The Board has determined that Mr. Patrick is an “audit committee financial expert.” The Board has also determined that Mrs. Keeth qualifies as an “audit committee financial expert.”

     The compensation committee is responsible for developing and reviewing Arrow’s executive compensation philosophy. It implements that philosophy through compensation programs and plans designed to further Arrow’s strategy, drive long-term profitable growth and increase shareholder value. The committee reviews and approves the corporate goals and objectives relevant to executive compensation, and, subject to review and ratification by the other non-management members of the Board, reviews and approves the base salary, annual incentives, performance and stock-based awards and retirement and other benefits for the Chief Executive Officer (in executive session) and the Company’s other principal executives. In establishing the foregoing, the committee reviews the performance of each of the Named Executive Officers and the Company as a whole. Under its charter, the committee may delegate its authority to a subcommittee consisting of one or more members.

     In 2009, the committee once again directly engaged Pearl Meyer & Partners as a consultant to examine and report exclusively to the committee on best practices in the alignment of compensation programs for the Chief Executive Officer and other members of senior management with corporate goals by providing competitive and benchmarking data, analyses, and recommendations with regard to plan design and target compensation. Pearl Meyer & Partners does not provide any other services to the Company.

     The corporate governance committee has primary responsibility for developing the corporate governance guidelines for Arrow, to identify and recommend new candidates for nomination to fill existing or expected director vacancies, and for making recommendations with respect to committee assignments and other governance issues. In addition, the committee evaluates the performance of individual Board members and determines if each of them should be recommended for re-election to the Board. The committee annually reviews and makes recommendations to the Board regarding the compensation of non-employee directors.

     The committee will consider shareholder recommendations of nominees for membership on the Board as well as those recommended by current directors, Company officers, employees, and others. Such recommendations may be submitted to Arrow’s Secretary, Peter S. Brown, at Arrow Electronics, Inc., 50 Marcus Drive, Melville, New York 11747, who will forward them to the committee. Possible candidates suggested by shareholders are evaluated by the corporate governance committee in the same manner as other possible candidates.

     The committee’s initial review of a potential candidate is typically based on any written materials provided to the committee. In connection with the evaluation of potential nominees, the committee determines whether to interview the nominee, and if warranted, the committee, the Chairman of the Board and Chief Executive Officer, the Lead Independent Director and others as appropriate, interview the potential nominees. The committee retains the services of a third-party executive recruitment firm to assist committee members in the identification and evaluation of potential nominees for the Board.

     The committee’s expectations as to the specific qualities and skills required for directors including those nominated by shareholders are set forth in Section 4 of Arrow’s corporate governance guidelines (available at the “Corporate Governance” link on the investor relations section of the Company’s website, www.arrow.com).

Enterprise Risk Management

     The role of the Board is to promote the best interests of the Company and its shareholders by overseeing the management of Arrow’s business, assets and affairs. Management is ultimately responsible for the day-to-day management of the risks facing the Company, including timely identifying, monitoring, mitigating, and managing those risks that could have a material impact on the Company. To this end, Arrow’s Chief Executive Officer has the ultimate management authority for enterprise risk management including responsibility for capability development, risk identification and assessment, and for policies, governance, and strategies and actions to address enterprise risk.

     The following chart lists how the Board and its committees allocate the Board’s risk oversight function. This chart is not meant to be comprehensive and may change based upon facts and circumstances.

     The Chief Executive Officer, or his designee, periodically reports to the Board (or the applicable committees as set forth above) on the work carried out in connection with enterprise risk management.

Compensation Risk Analysis

     We believe that our executive compensation program reflects an appropriate mix of compensation elements and balances current and long-term performance objectives, cash and equity compensation, and risks and rewards associated with executive roles. The following features of our executive incentive compensation program illustrate this point:

	•		Our performance goals and objectives reflect a balanced mix of performance measures to avoid excessive weight on a certain goal or performance measure;
	•		Our annual and long-term incentives provide a defined range of payout opportunities (ranging from 25% to 200% of target);
	•		Total direct compensation levels are heavily weighted on long-term, equity-based incentive awards with vesting schedules that fully materialize over a number of years;
	•		Equity incentive awards are granted annually so executives always have unvested awards that could decrease significantly in value if our business is not managed for the long term;
	•		We have implemented meaningful executive stock ownership guidelines so that their personal wealth is significantly tied to the long-term success of our Company; and
	•		The Compensation Committee retains discretion to adjust compensation based on the quality of Company and individual performance and adherence to the Company’s ethics and compliance programs, among other things.

     Based on the above combination of program features, we believe that (i) our executives are encouraged to manage the Company in a prudent manner, and (ii) our incentive programs are not designed in a manner to encourage our senior business leaders to take risks that are inconsistent with the Company’s best interests.

Independence

     The Company’s corporate governance guidelines provide that the Board should consist primarily of independent, non-management directors. For a director to be considered independent under the guidelines, the Board must determine that the director does not have any direct or indirect material relationships with the Company and that he or she is not involved in any activity or interest that conflicts with or might appear to conflict with his or her fiduciary duties.

     To be deemed independent, a director must also meet the independence standards in the New York Stock Exchange listing rules. The Board has adopted the New York Stock Exchange listing rules for independence. The Company has determined that all non-management directors are independent.

     In addition to applying these guidelines, the Board will consider all relevant facts and circumstances in making an independence determination. In making this determination regarding Mr. Hill, the Board considered that Mr. Hill is an independent director of LSI Corporation, a semiconductor manufacturer (for which the Company is an authorized distributor), and Chairman and Chief Executive Officer of Novellus Systems, Inc. In 2009, the Company purchased approximately $65,000,000 of LSI products worldwide, which is 2.9% of LSI’s total sales, and .5% of Arrow’s total purchases. The Board determined that this relationship did not impair Mr. Hill’s independence because he is an independent director of LSI, and receives compensation from LSI only in connection with his services as such. With respect to Novellus Systems, Inc., the Board determined that this relationship did not impair Mr. Hill’s independence because Novellus purchased approximately $16,000 of product from Arrow in 2009.

     Further, the Board has considered the fact that Mr. Waddell was previously a member of upper management and the Chairman of the Board of the Company. However, he retired from employment with the Company sixteen years ago in 1994. Notwithstanding Mr. Waddell’s former management role within the Company, the Board has determined that Mr. Waddell is currently independent.

     The Board has determined that all of its directors and nominees, other than Mr. Long, satisfy both the New York Stock Exchange’s independence requirements and the Company’s guidelines.

     As required by the Company’s corporate governance guidelines and the New York Stock Exchange’s listing rules, all members of the audit, compensation and corporate governance committees are independent, non-management directors and all members of the audit committee also satisfy the SEC independence requirements.

Compensation Committee Interlocks and Insider Participation

     No member of the compensation committee is a present or former employee of the Company, except for Mr. Duval, who served as interim Chief Executive Officer from September 15, 2002 to February 2, 2003. Under the rules of the New York Stock Exchange, Mr. Duval’s interim service does not alter his status as an independent, non-management director. No member of the compensation committee is an employee or director of any company where any employee or director of the Company serves on the compensation committee.

Meetings and Attendance

     Consistent with the Company’s corporate governance guidelines, it is the practice of the Board for all of its non-management directors to meet separately (without Company management present) following each Board meeting, with the Lead Independent Director presiding. In 2009, these non-management director meetings totaled five in number.

     During 2009, there were six meetings of the Board, nine meetings of the audit committee, seven meetings of the compensation committee, and five meetings of the corporate governance committee. All of the current directors attended 75% or more of all of the meetings of the Board and the committees on which they served. It is the policy of the Board that all of its members attend the Annual Meeting of Shareholders and all the members of the Board did so in 2009.

Director Compensation

     The independent, non-management members of the Board (that is, all members except Mr. Long) receive the following fees in cash:

Annual fee		$	50,000
Fee for each Board or committee meeting attended		$	2,000
Annual fee for service as committee chair		$	10,000
Additional annual fee for service as compensation or audit committee chair		$	5,000

     In addition to the cash fees, each non-employee director receives an annual grant of restricted stock units valued at $90,000 based on the fair market value of Arrow common stock on the date of grant. Those restricted stock units were fully vested on the date of grant. However, the units are not transferable into Arrow common stock, salable or available to be used as collateral until one year after the director leaves the Board, when each vested unit is

settled with the issuance of one share of Arrow common stock. Based on the closing market price of $23.00 on May 1, 2009, the 2009 grant resulted in 3,913 restricted stock units being awarded to each such director. For his service as Lead Independent Director, Mr. Duval received an additional grant of restricted stock units valued at $30,000 (1,304 units in 2009, based on the grant-date closing market price of $23.00).

     Neither Mr. Mitchell nor Mr. Long received compensation for Board service during 2009. Ms. Mills resigned on April 3, 2009 upon her confirmation as Administrator of the U.S. Small Business Administration. As a result, the total fees she earned as a director in 2009 were $24,831 as reflected in the table below.

     The following table shows the total dollar value of compensation received by all non-employee directors in or in respect of 2009.

Non-Employee Director Compensation
		Fees Earned				Stock Awards				Total
Name		($)				($)(1)				($)
Daniel W. Duval			96,000				120,000				216,000
Gail E. Hamilton			88,000				90,000				178,000
John N. Hanson			82,000				90,000				172,000
Richard S. Hill			92,000				90,000				182,000
M.F. (Fran) Keeth			88,000				90,000				178,000
Roger King			82,000				90,000				172,000
Karen Gordon Mills			24,831				—				24,831
Stephen C. Patrick			99,000				90,000				189,000
Barry W. Perry			91,500				90,000				181,500
John C. Waddell			92,000				90,000				182,000

     The Company no longer uses stock options as a part of the compensation of non-management directors. The following table reflects the number of unexercised options held by each non-management director as of December 31, 2009. Because the restricted stock unit grants are fully vested, they are not shown on this table. The dollar values of the 2009 restricted stock unit grants are shown under the heading “Stock Awards” on the table above.

Outstanding Equity Awards at Fiscal Year-End
Option Awards

		Number of Securities				Option
		Underlying				Exercise				Option
		Unexercised Options				Price				Expiration Date
Name		(#)(1)				($)(2)				(2)
Daniel W. Duval			4,000				33.69				5/23/2010
			4,000				26.52				5/11/2011
			4,000				26.23				5/23/2012
			4,000				16.51				5/23/2013
Gail E. Hamilton			—				—				—
John N. Hanson			4,000				33.69				5/23/2010
			4,000				26.52				5/11/2011
			4,000				26.23				5/23/2012
			4,000				16.51				5/23/2013
Richard S. Hill			—				—				—
M.F. (Fran) Keeth			—				—				—
Roger King			4,000				33.69				5/23/2010
			4,000				26.52				5/11/2011
			4,000				26.23				5/23/2012
			4,000				16.51				5/23/2013
Stephen C. Patrick			15,000				17.27				7/16/2013
Barry W. Perry			4,000				33.69				5/23/2010
			4,000				26.52				5/11/2011
			4,000				26.23				5/23/2012
			4,000				16.51				5/23/2013
John C. Waddell			4,000				33.69				5/23/2010
			4,000				26.52				5/11/2011
			4,000				26.23				5/23/2012
			4,000				16.51				5/23/2013

     Under the terms of the Non-Employee Director Deferred Compensation Plan, non-employee directors may defer the payment of all or a portion of their annual retainers and meeting fees until the end of their service on the Board. Unless a different amount is chosen by the director, 50% of the director’s annual retainer fee is automatically deferred and converted to units of Arrow common stock. When the director leaves the Board, each whole stock unit credited to his or her account will be settled with the issuance of one share of common stock. Other amounts that are deferred may be invested for the benefit of the director, or should a director so choose, be converted into the stock units. The units held by each director are included under the heading “Common Stock Units” in the Shares of Common Stock Beneficially Owned table above. The amounts deferred by each director for 2009 are included under the heading “Fees Earned” on the Non-Employee Director Compensation table above. For deferrals made during 2005-2007 and 2009, the deferral will be paid upon termination of Board service. For deferrals during 2008, payments will be made thirty days after the director’s service ends for those 72 or older at the time of resignation, and for those less than 72, one year after

termination of service on the Board. For deferrals during 2010 and later, payment will be made on the one-year anniversary after termination of service.

AUDIT COMMITTEE REPORT

     The audit committee represents and assists the Board by overseeing the Company’s financial statements and internal controls; the independent registered public accounting firm’s qualifications and independence; and the performance of the Company’s corporate audit function and of its independent registered public accounting firm.

     The audit committee currently consists of five directors, all of whom are independent in accordance with New York Stock Exchange listing standards and other applicable regulations. The Board has determined that Mr. Patrick is an “audit committee financial expert” as defined by the SEC. The Board has also determined that Mrs. Keeth qualifies as an “audit committee financial expert.”

     Company management has the primary responsibility for financial statements and for the reporting process, including the establishment and maintenance of Arrow’s system of internal control over financial reporting. The Company’s independent registered public accounting firm is responsible for auditing the financial statements prepared by management, expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, and auditing the Company’s internal control over financial reporting.

     In fulfilling its oversight responsibilities, the audit committee reviewed and discussed with both management and the independent registered public accounting firm the Company’s quarterly earnings releases, quarterly reports on Form 10-Q and the 2009 Annual Report on Form 10-K. Such reviews included a discussion of critical or significant accounting policies, the reasonableness of significant judgments, the quality (not just the acceptability) of the accounting principles, the reasonableness and clarity of the financial statement disclosures, and such other matters as the independent registered public accounting firm is required to review with the audit committee under the standards promulgated by the Public Company Accounting Oversight Board. Also discussed with both management and the Company’s independent registered public accounting firm were the design and efficacy of the Company’s internal control over financial reporting.

     In addition, the audit committee received from and discussed with representatives of the Company’s independent registered public accounting firm the written disclosure and the letter required by the applicable requirements of the Public Company Accounting Oversight Board (regarding the independent registered public accounting firm’s communications with the audit committee concerning independence) and considered the compatibility of non-audit services rendered to Arrow with the independence of the Company’s independent registered public accounting firm. The committee also discussed with the independent registered public accounting firm the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended, and as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

     The audit committee also discussed with the independent registered public accounting firm and Arrow’s corporate audit group the overall scope and plans for their respective audits. The committee periodically met with the independent registered public accounting firm, with and without management present, to discuss the results of their examinations, their evaluations of Arrow’s internal controls, and the overall quality of Arrow’s financial reporting.

     In reliance on these reviews and discussions, the audit committee recommended to the Board that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2009 for filing with the SEC.

Stephen C. Patrick, Chair
Daniel W. Duval
Richard S. Hill
M.F. (Fran) Keeth
Roger King

PRINCIPAL ACCOUNTING FIRM FEES

     The aggregate fees billed by Arrow’s principal accounting firm, Ernst & Young LLP, for auditing the annual financial statements and the Company’s internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, as amended, and related regulations included in the Form 10-K, the reviews of the quarterly financial statements included in the Forms 10-Q, statutory audits, assistance with and review of documents filed with the SEC and consultations on certain accounting and reporting matters for each of the last two fiscal years are set forth as “Audit Fees” in the table below.

     Also set forth for the last two fiscal years are “audit-related” fees. Such fees are for services rendered in connection with business acquisitions, employee benefit plan audits, and other accounting consultations. Tax fees relate to assistance in tax return preparation and tax audits, and tax interpretation and compliance, in various tax jurisdictions around the world. Ernst & Young did not provide any services related to financial information systems design or implementation, personal tax work, or other services for any of the Company’s executive officers or members of the Board.

		2009				2008
Audit Fees		$	6,217,400			$	7,269,800
Audit-Related Fees			347,200				183,600
Tax Return and Compliance Fees			487,006				605,877
Other Tax Related Fees			215,561				64,298
Total		$	7,267,167			$	8,123,575

     The amounts in the table above do not include fees charged by Ernst & Young to Marubun/Arrow, a joint venture between the Company and the Marubun Corporation, which totaled $233,800 (audit-related fees) and $1,783 (tax-related fees) in 2009 and $247,080 (audit-related fees) and $1,654 (tax fees) in 2008.

     Consistent with the audit committee charter, audit, audit-related, tax return and compliance and other tax related services were approved by the audit committee, or by a designated member thereof. The audit committee has determined that the provision of the non-audit services described above is compatible with maintaining Ernst & Young’s independence.

PROPOSAL 2: RATIFICATION OF APPOINTMENT OF AUDITORS

     Shareholders will be asked to ratify the appointment of Ernst & Young as Arrow’s independent registered public accounting firm for 2010. Arrow expects that representatives of Ernst & Young will be present at the meeting with the opportunity to make a statement if they

desire to do so and that they will be available to answer appropriate inquiries raised at the meeting.

The Board recommends that the shareholders vote for the ratification of the appointment of Ernst & Young LLP.

PROPOSAL 3: PROPOSAL TO RE-APPROVE AND AMEND THE
ARROW ELECTRONICS, INC. 2004 OMNIBUS INCENTIVE PLAN

     The Board believes that the future growth and profitability of Arrow depends, in large measure, on its ability to retain and motivate outstanding employees, directors, advisors, consultants and others providing services to the Company. To further this goal, in 2004 the Board adopted the Arrow Electronics, Inc. 2004 Omnibus Incentive Plan (the “Plan”), which was approved by Arrow’s shareholders in May 2004. The Plan was amended by shareholder vote on May 2, 2008 in order to increase the number of shares under the Plan by 5,000,000. It was further amended in December 2008 to bring it into compliance with Section 409A of the Internal Revenue Code.

     The Plan provides the compensation committee of the Board the ability to provide a wide variety of compensation and incentive vehicles. Key among these are the equity-based programs: incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock and restricted stock units, performance units and performance shares. Equity-based compensation is critical to the Company’s effort to insure that the interests of its managers are aligned with the interests of its shareholders and to focus its managers’ efforts on the creation of long-term value.

     The amendments to the Plan contained in this proposal were adopted, subject to shareholder approval, by the Compensation Committee and ratified by the Board on February 26, 2010. The amendments to the Plan are described below:

	•		Increase in Share Limit: The number of shares which remain available for issuance under the Plan after giving effect to all grants through February 28, 2010, is 166,079. At current and projected rates of utilization, without an increase, there will be insufficient shares available to meet the Company’s needs with respect to grants and awards expected to be made early in 2011, prior to the Company’s annual meeting of shareholders for that year. In light of the continued growth of the Company and the importance of the share-based incentive vehicles facilitated by the Plan, and in order for Arrow to have a sufficient number of shares available for future grants (including projected grants expected to be made in accordance with the Company’s annual practice), the proposed amendment would increase the aggregate number of shares of Arrow common stock available for issuance to Plan participants by 8,500,000 shares.
	•		Awards to Lead Independent Director: Under the current terms of the Plan, a non-employee director may not be granted awards under the Plan covering more than 20,000 shares in any year, except that this annual limit is increased to 40,000 shares for any non-employee director serving as Chairman of the Board (currently, the Chairman is the Chief Executive Officer and is not eligible for the increased limit). In light of the additional roles and responsibilities of the Lead Independent Director, the proposed amendment to the Plan would increase the annual limit to 40,000 shares with respect to awards granted to any non-employee director serving as Lead Independent Director.

	•		Shares Withheld/Tendered for Exercise or Tax Withholding: Under the current terms of the Plan, shares subject to an award that are withheld by the Company or tendered by the participant either in connection with the exercise of an award or to satisfy tax-withholding obligations do not reduce the number of shares available for issuance under the Plan. The proposed amendment to the Plan would provide that all such withheld/tendered shares will be counted against the Plan share limit such that they will reduce the number of shares available for issuance under the Plan.
	•		Limitation on Dividend Equivalents: Under the current terms of the Plan, the Compensation Committee, in its discretion, may grant dividend equivalents to participants based on the dividends declared on shares that are subject to an award. The proposed amendment to the Plan would limit the Compensation Committee’s discretion in this regard by providing that, for awards granted after May 4, 2010, dividend equivalents may only be granted with respect to vested portions of awards.

     The last two items listed above have been approved by the Board in order to bring Arrow’s compensation programs in line with corporate governance best practices. Shareholders are asked to approve the proposed amendments and the complete text of the Plan incorporating the proposed amendments, which is attached as Annex A. The principal provisions of the Plan are summarized below, and qualified in their entirety by the attached Plan.

SUMMARY DESCRIPTION OF THE PLAN

Purpose of the Plan

     The Plan is intended to strengthen the Company’s ability to attract, motivate and retain the employees, directors, and third-party service providers upon whose judgment, initiative and efforts the financial success and growth of the Company largely depends, and to provide additional incentive for such individuals through stock ownership and other rights that promote and recognize the successful efforts of these individuals and thereby enhance shareholder value.

Duration

     The Plan became effective on May 22, 2004, when Arrow’s shareholders approved the Plan. Unless sooner terminated in accordance with the terms of the Plan, it will terminate (i) on May 22, 2014 with respect to the shares initially authorized for issuance under the Plan, and (ii) with respect to any shares subsequently authorized for issuance, ten years from the date of such issuance. The Plan was amended by a shareholder vote on May 2, 2008 to increase the number of shares for issuance by 5,000,000. Any award granted prior to Plan termination will remain outstanding post-termination in accordance with the applicable terms and conditions of the Plan and the award.

Administration

     The compensation committee (also referred to herein as the “committee”) is responsible for administering the Plan and has the discretionary power to interpret it (including any Plan-related documentation), to determine eligibility for awards and the terms and conditions of awards (including, without limitation, the amount of the awards), and to adopt rules, regulations, forms, instruments, and guidelines. Determinations of the committee made under the Plan are final and binding. The committee may delegate administrative duties and powers to one or more of

its members or to one or more officers, agents, or advisors. The committee may also delegate to one or more Company officers the power to designate employees (other than executive officers of the Company) and third-party service providers to be recipients of awards and the amount of such awards. Notwithstanding the foregoing, only the full Board may determine the type and amount of awards granted under the Plan to the Company’s non-employee directors.

Plan Share Limits

     The maximum number of shares of common stock authorized for issuance under the Plan is 13,300,000, subject to adjustment upon the occurrence of various corporate events as described in the Plan. Of the total authorized, only 166,079 shares remain available for grant as of February 28, 2010. The proposed amendment to the Plan adds another 8,500,000 shares with respect to which grants may be made.

     Generally, shares are counted against the authorization only to the extent they are actually issued. Each share issued under “full value” awards (e.g., restricted stock and performance shares, as described below) count against the authorization at a rate of 1.69:1; each share issued under all other awards (e.g., stock options and stock appreciation rights (“SARs”)) count against the authorization at a rate of 1:1. Shares which are the subject of awards that terminate by expiration, forfeiture, cancellation, or otherwise, or are settled in cash in lieu of shares, or exchanged for awards not involving shares, shall again be available for grant, including those awards granted under prior plans. Also, if the option price or tax withholding requirements of any award are satisfied by the Company’s withholding of shares or the participant’s tendering of shares to the Company, or if a SAR is exercised, only the number of shares issued, net of the shares withheld or tendered, will be deemed issued under the Plan. Under the proposed amendment, however, the shares withheld or tendered will be deemed issued under the Plan. The maximum number of shares shall not be reduced to reflect dividends or dividend equivalents that are reinvested into additional shares or credited as additional restricted stock, restricted stock units, performance shares, or other stock-based awards, but may be adjusted by the committee to reflect certain corporate events or transactions.

Participant Award Limits

     Under the Plan, participants may receive a) stock options, b) SARs, c) restricted stock or restricted stock units, d) performance units or performance shares, e) other stock-based awards, f) cash-based awards, and g) covered employee annual incentive awards. The Plan imposes annual per-participant award limits on such awards. For each of the stock-based awards (“a” to “e” above), the maximum award to any participant (other than a non-employee director) in any calendar year is 500,000 shares (or the cash value of 500,000 shares at the time of vesting or payout, if applicable) plus any unused annual limit from prior years. For each of the cash-based awards (“f” and “g” above), the maximum amount awarded or credited to any participant in any year may not exceed $5,000,000 (determined as of the date of vesting or payout) plus the amount of any unused annual limit from prior years. The maximum number of shares of common stock of the Company that may be issued to each non-employee director is 400,000 shares, and no non-employee director may receive an award covering more than 20,000 shares in any calendar year, or 40,000 shares for a non-employee director serving as Chairman or, if the proposed amendment is approved, Lead Independent Director. However, in the year in which a new non-employee director joins the Board, he or she may receive an award covering no more than an additional 40,000 shares. The number and kind of shares that may be issued, the number and kind of shares subject to outstanding awards, the option price or grant price applicable to outstanding awards, the annual per-participant award limits, and other value determinations and terms of awards are subject to adjustment by the committee in order

to prevent dilution or enlargement of participants’ rights under the Plan in the case of a corporate event or transaction such as a merger, reorganization, stock dividend, stock split, reverse stock split, or other similar event. The committee shall also, as it deems necessary or appropriate, make adjustments to reflect unusual or non-recurring events.

Eligibility and Participation

     The committee may select from and grant awards to employees and third party service providers of the Company, its subsidiaries and its affiliates. Awards to non-employee directors will be made by the Board. In addition to the nine non-employee directors, there are approximately 11,300 employees of the Company eligible to receive grants under the Plan. While the number of eligible third party service providers is not determinable, to date, none have received any awards under the Plan, and the committee has no intention of granting any such awards.

Stock Options

     The committee may grant both incentive stock options (“ISOs”) and non-qualified stock options (“NQSOs”) under the Plan, which may be subject to vesting and other conditions as determined by the committee. ISOs may be granted only to employees of the Company or of any parent or subsidiary corporation. The exercise price for options cannot be less than the fair market value of Arrow’s common stock on the date of grant. The options may have terms of up to ten years from grant except in the case of participants outside of the United States, which period may extend beyond ten years. To date, no options have been granted with terms exceeding ten years. The exercise price may be paid with cash, with previously acquired shares of common stock, a combination of both, or by other means approved by the committee. The committee may substitute SARs paid only in stock (or SARs paid in stock or cash at the committee’s discretion) for outstanding stock options.

Stock Appreciation Rights

     The committee may grant SARs under the Plan either alone or in tandem with stock options on such terms and conditions as they may determine. The grant price of a SAR cannot be less than the fair market value of the common stock at the time of grant. The grant price and term of a tandem SAR will be the same as the price and term of the option with which it was granted. SARs may have terms of up to ten years from grant, except that SARs granted to participants outside of the United States may have a term greater than ten years. To date, no SARs have been granted with terms exceeding ten years.

     Freestanding SARs may be exercised on such terms as the committee determines. Tandem SARs may be exercised by relinquishing the related portion of the tandem option. Upon exercise of a SAR, the holder will receive cash, shares of common stock, or a combination of the two, as determined by the committee, equal in value to the difference between the fair market value of the common stock subject to the SAR at the exercise date and the grant price.

Restricted Stock Units and Restricted Shares

     The committee may award restricted stock and restricted stock units, subject to vesting schedules and limitations on transfer and such other restrictions as the committee may determine. A holder of restricted stock is a shareholder, entitled to dividend and voting rights,

whereas the holder of a restricted stock unit is not entitled to dividends and does not have voting rights.

Performance Stock Units and Performance Shares

     Performance unit and performance share awards may be granted under the Plan. Performance unit awards have an initial value determined by the committee at the time of grant, while performance shares will have an initial value based on the fair market value of the stock on the date of grant. The committee sets performance goals, the achievement of which will determine the value and/or number of performance units or performance shares that will be paid to the participant. The performance goals and periods may vary from participant to participant, group to group, and time to time. Performance shares and performance units may be paid in the form of cash and/or shares (such shares may be subject to restrictions as determined by the committee). Performance shares may entitle the participant to dividend equivalents; however, under the proposed amendment, with respect to grants made after May 4, 2010, participants may only be entitled to receive dividend equivalents with respect to the vested portion of the award.

Performance Measures

     The performance goals for awards that are intended to constitute performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) will be based upon one or more of the following performance measures for any business unit:

	•		net income;
	•		earnings per share;
	•		sales growth;
	•		income before taxes;
	•		net operating profit;
	•		return measures (including, but not limited to, return on assets, capital, equity, or sales);
	•		cash flow (including, but not limited to, operating cash flow and free cash flow);
	•		earnings before, interest, taxes, depreciation, and/or amortization;
	•		operating margins including gross profit, operating expenses and operating income as a percentage of sales;
	•		productivity ratios;
	•		share price (including, but not limited to, growth measures and total shareholder return);
	•		expense targets;
	•		operating efficiency;
	•		customer satisfaction;

	•		working capital targets; and
	•		economic value-added.

     However, except as provided below in the section entitled Covered Employee Annual Incentive Awards, the committee may determine, in its sole discretion, to grant awards that do not constitute performance-based compensation under Section 162(m) of the Internal Revenue Code, and may base vesting on performance measures in addition to, or other than, those set forth above.

     The committee will determine whether the performance targets or goals that have been chosen for a particular performance award have been met and may provide in an award that any evaluation of performance may include or exclude any of the following that are objectively determinable and that occur during the performance period to which the award is subject: asset write-downs; litigation, claims, judgments, or settlements; the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reporting results; any reorganization and restructuring programs; extraordinary items (as defined by generally accepted accounting principles), as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders; acquisitions or divestitures; and foreign exchange gains and losses.

     Awards that are designed to qualify as performance-based compensation may not be adjusted upward. However, the committee has the discretion to adjust these awards downward. Awards may be paid in the form of cash, shares of common stock, or in any combination, as determined by the committee.

     If applicable tax and/or securities laws change to permit committee discretion to alter the governing performance measures without obtaining shareholder approval of such changes, the committee shall have sole discretion to make such changes without obtaining shareholder approval.

Covered Employee Annual Incentive Awards

     Each year, the committee will decide who among the Company’s executive officers is likely to be a “covered” employee for purposes of Section 162(m) of the Internal Revenue Code. Within ninety days of the beginning of each year, the committee will determine performance goals for each such covered employee taken from among the measures listed under the heading “Performance Measures,” above, and the amount of the annual incentive award which could be earned based on the attainment of such goals. At the end of the year, the committee will set, in its discretion, the amount actually to be paid under each award up to but not in excess of the maximum potential award for that year. With respect to these awards, the committee does not have the discretion to act in any manner that would disqualify the award as performance-based compensation under, or would otherwise be inconsistent with the purposes of, Section 162(m) of the Internal Revenue Code.

Non-Employee Director Awards

     Under the Plan, the Board may grant awards of any kind other than ISOs to non-employee directors. From time to time, the Board, on the recommendation of the Corporate Governance Committee, sets the amount and type of equity awards to be granted to non-employee directors on a periodic, non-discretionary basis, based on the number of committees the director serves on, service as the chair of a committee, service as Chairman of the Board or Lead Independent Director, or the first selection or appointment of the director. Non-employee directors currently

receive annual awards of restricted stock units valued at $90,000. The restricted stock units will vest fully upon grant and are subject to further restrictions until up to one year after the director’s separation from the Board. All restricted stock units are settled in common stock after the restriction period.

     Unless a director gives written notice setting forth a different percentage, 50% of each director’s annual retainer fee is deferred and converted into units based on the fair market value of the Company’s stock as of the date it would have been payable. Upon a director’s retirement from the Board (and not before then, except in the case of death or unforeseeable emergency need), each unit in his or her deferral account will be converted into shares and any fractional units are converted into cash.

Other Awards

     Subject to the terms of the Plan including, without limitation, Plan share limits, the committee may develop sub-plans or grant other equity or cash-based or related awards on such terms as they may determine, including, but not limited to, awards designed to comply with or take advantage of applicable local laws of jurisdictions outside of the United States.

Other Provisions of Awards and Individual Award Agreements

     For each manner of award, and each individual agreement granting an award, the committee shall determine, in its discretion, whether or not, and to what extent, the participant’s receipt of cash or stock under the Plan may or shall be deferred; the impact of the termination of the participant’s employment or service on any award (including variations, if any, based on the reason for such termination); the voting rights of any stock or stock equivalent granted or delivered thereunder; the transferability of any stock, stock equivalent or other right of any participant during his or her lifetime; and whether or not dividend equivalents will be paid with respect to any shares of common stock subject to an award (under the proposed amendment, however, dividend equivalents may only be credited with respect to awards granted after May 4, 2010 to the extent the awards are vested).

     Except as the committee otherwise expressly determines, neither ISOs nor other awards may be transferred other than by will or by the laws of descent and distribution. During a recipient’s lifetime, an ISO and, except as the committee may determine, other non-transferable awards requiring exercise, may be exercised only by the recipient.

Treatment of Awards Upon a Corporate Event

     If the Company is dissolved or liquidated, or if substantially all of its assets are sold (or there is a merger or consolidation) and the acquiring or surviving entity does not substitute equivalent awards for the awards then outstanding, each award granted under the Plan will become fully vested and exercisable and all restrictions on each award will lapse. All options and SARs not exercised upon the occurrence of such a corporate event will terminate, and the Company may, in its discretion cancel all other awards then outstanding and pay the award holder its then current value as determined by the committee.

Amendment of Awards or Plan and Adjustment of Awards

     The committee may at any time alter, amend, modify, suspend, or terminate the Plan or any form of award in whole or in part. No amendment may adversely affect the rights of any participant under an outstanding award without his or her consent.

     No option granted under the Plan will be repriced or replaced without shareholder approval, except to prevent an unintended dilution or enlargement of participants’ rights or benefits under the Plan in the event of a corporate transaction or event such as a merger or acquisition, a stock split or recapitalization, a change in accounting rules or applicable laws or regulations or other matter having such an impact. No amendment of the Plan of any kind will be made without shareholder approval if shareholder approval is required by law, regulation or stock exchange rule.

     The committee may grant awards under terms differing from those provided for in the Plan, and without regard to the Plan’s share limits, where such awards are granted in substitution for awards held by employees of other corporations who become Company employees as the result of a merger or other transaction provided that the maximum number of shares that may be granted under ISO and NQSO awards in such circumstances is currently 13,300,000.

Tax Withholding

     Awards under the Plan may be subject to tax withholding. If so, the Company may require the participant to remit the necessary taxes to the Company or may allow participants to satisfy their tax withholding requirements by causing shares of common stock to be withheld.

Rights of Participants

     Nothing in the Plan or any award agreement will give any participant any right to continued employment (or provision of service as a director or third party service provider) or prevent or limit the Company from terminating the participant as permitted by law. No individual in any position has the right to an award. No participant will have rights as a shareholder until he or she becomes the record holder of any such shares.

New Plan Benefits

     The future benefits or amounts that would be received under the Plan by executive officers, non-executive directors and non-executive officer employees are discretionary and are therefore not determinable at this time. In addition, the benefits or amounts that would have been received by or allocated to such persons for the last completed fiscal year if the plan had been in effect cannot be determined.

Federal Tax Effects

     The following discussion summarizes certain federal income tax consequences of the issuance and exercise of options under the Plan under the law as in effect on the date of this proxy statement. The summary does not purport to cover all federal employment tax or other federal tax consequences that may be associated with the Plan, nor does it cover state, local, or non-U.S. taxes.

Incentive Stock Options

     In general, an optionee realizes no taxable income upon the grant or exercise of an ISO. However, the exercise of an ISO may result in an alternative minimum tax liability to the optionee. With some exceptions, a disposition of shares purchased under an ISO within two (2) years from the date of grant or within one (1) year after exercise produces ordinary income to the optionee equal to the value of the shares at the time of exercise less the exercise price; the same amount is generally deductible by the Company as compensation. Dispositions of shares by optionees after such periods typically result in long-term capital gains or losses, if

any, equal to the difference between the sale price and the exercise price, and Arrow will not receive a deduction.

     In general, an ISO that is exercised by the optionee more than three months after termination of employment is treated as an NQSO. ISOs are also treated as NQSOs to the extent they first become exercisable by an individual in any calendar year for shares having a fair market value (determined as of the date of grant) in excess of $100,000.

Non-Qualified Stock Options

     In general, in the case of a NQSO, the optionee has no taxable income at the time of grant but realizes income in connection with exercise of the option in an amount equal to the excess of the fair market value (at the time of exercise) of shares acquired upon exercise over the exercise price. For employee optionees, the same amount is deductible by Arrow as compensation, provided that income taxes are withheld from the employee. Upon a subsequent sale or exchange of the shares, any recognized gain or loss after the date of exercise is treated as capital gain or loss for which the Company is not entitled to a deduction.

Section 162(m) of the Internal Revenue Code

     In general, under Section 162(m) of the Internal Revenue Code, remuneration paid by a public corporation to its Chief Executive Officer or any of its other top three Named Executive Officers (other than the Chief Financial Officer), ranked by pay, is not deductible to the extent it exceeds $1,000,000 for any year. Taxable payments or benefits under the Plan may be subject to this deduction limit. However, under Section 162(m) of the Internal Revenue Code, qualifying performance-based compensation, including income from stock options and other performance-based awards that are made under shareholder approved plans and that meet certain other requirements, is exempt from the deduction limitation. The Plan has been designed so that the committee in its discretion may grant exempt performance-based awards under the Plan.

Equity Compensation Plan Information

     The table below provides information as of December 31, 2009, prior to the proposed amendment of the Omnibus Incentive Plan.

		Number of securities to				Weighted-average
		be issued upon				exercise price of				Number of securities
		exercise of outstanding				outstanding				remaining available for
		options, warrants and				options, warrants				future issuance
Plan Category		rights				and rights				(1)
Equity compensation plans approved by security holders			6,464,861			$	27.30				3,715,621
Equity compensation plans not approved by security holders			—				—				—
Total			6,484,861			$	27.30				3,715,621

     The amounts in the above table do not reflect the 8,500,000 shares that are proposed for approval by the shareholders under Proposal 3 or grants and awards made between December 31, 2009 and the date of this proxy. After giving effect to all grants through February 28, 2010, a total of 166,079 shares remain available for future issuance under the Plan.

     The Omnibus Incentive Plan is intended to offer the variety of incentive and compensation tools to the compensation committee it requires to achieve the strategic objectives discussed under the heading “Compensation Discussion and Analysis,” below. In order to effectively utilize those tools and programs over the years to come, the committee must be able to issue additional shares under the Plan.

     Accordingly, the Board recommends that the shareholders approve Proposal 3 regarding the Arrow Electronics, Inc. 2004 Omnibus Incentive Plan.

     The affirmative vote of the majority of the shares of Arrow common stock voting on this proposal are required for the adoption of the amendments to the Plan, so long as the total number of shares voted represent the majority of the shares of Arrow common stock outstanding.

     If a shareholder holds shares in “street name” through a broker or other nominee, the broker or nominee is not permitted to exercise voting discretion with respect to this proposal. For this reason, if a shareholder does not give its broker or nominee specific instructions, the shareholder’s shares will not be voted on this proposal and will not have an effect on this proposal. In addition, abstentions will not have an effect on this proposal.

COMPENSATION COMMITTEE REPORT

     The substantive discussion of the material elements of all of the Company’s executive compensation programs and the determinations by the compensation committee with respect to compensation and executive performance for 2009 are contained in the Compensation Discussion and Analysis that follows this report. The compensation committee has reviewed and discussed the Compensation Discussion and Analysis with the management representatives responsible for its preparation and the compensation committee’s compensation consultants. In reliance on these reviews and discussions, the compensation committee recommended to the Board that the Compensation Discussion and Analysis be included in the Definitive Proxy Statement on Schedule 14A for Arrow’s 2010 annual shareholder meeting for filing with the SEC and be incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009.

Barry W. Perry, Chair
Daniel W. Duval
Gail E. Hamilton
John N. Hanson
Richard S. Hill

COMPENSATION DISCUSSION AND ANALYSIS

Overview

     As a large, global provider of technology solutions operating in a highly competitive market, Arrow views its people as the key driver of success. As discussed more fully below, the Company’s executive compensation program, under the direction of the compensation committee, is designed to motivate, attract and retain talented executives who are capable of successfully leading the Company’s complex global operations and creating long-term shareholder value. The program is structured to support Arrow’s strategic goals and reinforce high performance with a clear emphasis on accountability and performance-based pay for achievement of stated goals. Following is a detailed discussion of the Company’s executive compensation program and how it is applied to the Named Executive Officers listed in the Summary Compensation Table of this Proxy Statement.

Executive Compensation Objectives

Arrow’s executive compensation program is designed to:

	•		Drive performance in support of the business strategy;
	•		Attract and retain strong talent;
	•		Vary pay based on Company and individual performance; and
	•		Align the interests of executives with those of shareholders.

     The use of compensation to drive and reward performance is reflected in Arrow’s emphasis on performance-based compensation, while the importance of alignment with shareholder interests in long-term value creation is reflected in the equity-based components of the total compensation mix. Arrow’s pay-for-performance focus is evident in the substantially greater weight given to performance-based compensation versus fixed compensation.

Total Compensation Process

     The Committee reviews the target total compensation of our Named Executive Officers, including salaries, target annual incentives, target long-term incentive values, retirement benefits and severance arrangements to ensure that all of its elements are appropriate based on historical and potential contribution, market conditions, competitive benchmarking data and the furtherance of the Company’s strategic objectives. The Committee also reviews the historical detail of each executive’s prior-year compensation and performance.

     The Committee considers performance reviews prepared by the Chief Executive Officer for his direct reports, and conducts its own performance review of the Chief Executive Officer. The Committee reviews the Company’s performance on the metrics relevant to the execution of its strategy and evaluates the Chief Executive Officer’s performance in light of that execution. For Named Executive Officers other than the Chief Executive Officer, the Committee’s review includes input provided to the Committee by the Chief Executive Officer.

     Committee meetings are regularly attended by the Company’s Chief Executive Officer, the General Counsel (who also serves as secretary), the Senior Vice President of Human Resources, and the Chief Financial Officer. Each of the management attendees provides the Committee with his or her specific expertise and the business and financial context necessary to understand and properly target financial and performance metrics. None of the members of management has, or is delegated, any decision-making authority as to the compensation of the Company’s executive officers, and none of the management invitees are present during the Committee’s deliberations regarding his or her compensation.

     Additionally, the Committee’s external compensation consultant provides the Committee with competitive data regarding market compensation levels at the 25^th, 50^th, 65^th, and 75^th percentiles for total compensation and each element of pay. The Committee also considers the compensation of other Company executives, levels of responsibility, prior experience, breadth of knowledge, and job performance in reviewing target total compensation levels.

Competitive Benchmarking and Use of Consultants

     To ensure that executive compensation plans and levels are appropriate and competitive, the Committee reviews analyses on peer company practices at various times throughout the year. Information on total compensation levels is considered in the context of peer performance analyses in order to effectively link compensation to relative performance. Through this process, and with input from its external compensation consultant and management, the Committee determines appropriate benchmarking targets each year. For 2009, the Committee concluded that generally targeting total direct compensation (the sum of base salary, cash incentives and long-term incentives) at the market 65^th percentile was appropriate based on its review of relevant compensation and performance analyses. The Committee evaluates the appropriateness of each Named Executive Officer’s compensation as positioned against the market 65^th percentile based on factors that include Company and business unit performance, job scope and individual performance. To the extent the Committee deems that a Named Executive Officer’s position versus the market is not appropriate based on the relevant factors, the Committee may choose to modify one or more of the compensation components.

     The Committee utilizes three distinct peer groups. They separately include Arrow’s direct technology distribution competitors, electronic manufacturing services companies, and other global technology companies with market capitalizations similar to that of Arrow. The use of multiple peer groups allows the Committee to recognize that there may be different relevant markets for each of our executive positions, and to understand pay patterns and practices among multiple peer groups. The technology distributor peer companies represent the primary focus for executives with operating responsibilities, whereas a somewhat more evenly weighted mix of the companies is considered for executives with corporate responsibilities. For purposes of clarity, operating responsibilities are those typically associated with the sales and sales support functions. Corporate responsibilities are those typically associated with non-sales support functions, such as legal, finance, human resources, and information technology. The Committee, together with its external compensation consultant and management, annually reviews and approves the peer groups to ensure they continue to meet its benchmarking objectives.

The companies used for 2009 compensation benchmarking included the following:

     As part of its annual peer group review, for 2009, the Committee eliminated two of five peer groups it had previously used for competitive benchmarking purposes. The two groups eliminated, “Other Distributors” and “Revenue Relevant Technology Companies” included “non-core” peers that the Committee believed provided limited value in making compensation decisions. The reduction to three groups will create a more relevant view of the market.

     The Committee has selected and engaged Pearl Meyer & Partners as its external compensation consultant to provide it with expertise on various compensation matters, including competitive practices, market trends and specific program design. Pearl Meyer & Partners reports directly to the Committee and does not perform any other business for the Company or its management.

Elements of Total Compensation

     The following summarizes the compensation elements used to reward, motivate and retain Arrow’s executives.

Base Salary

     To attract the necessary executive talent and maintain a stable executive team, the Committee generally targets executive officer base salaries at approximately the 50^th percentile paid for similar jobs at companies in our peer groups. Decisions regarding base salaries are made annually based on a number of factors, including:

	•		Individual performance;
	•		Company or business unit performance;
	•		Job responsibilities;
	•		Peer benchmarking data; and
	•		Internal budget guidelines.

     For Named Executive Officers other than the Chief Executive Officer, the Committee, in consultation with its external compensation advisor, reviews base salary recommendations provided by the Chief Executive Officer. The Committee then makes a final determination of

base salaries for the Named Executive Officers. The Chief Executive Officer’s base salary is determined by the Committee in executive session based on its evaluation of his individual performance, the Company’s performance, and relevant peer benchmarking data. Additionally, as discussed under the heading “Employment Agreements,” each of the Named Executive Officers, including the Chief Executive Officer, has an employment agreement, which provides for a minimum base salary.

     The Committee met in February 2009 to conduct its annual review of base salaries for Arrow’s Named Executive Officers. In consideration of the challenging business conditions facing the Company, the Committee accepted management’s recommendation that there would be no salary increases at that time. In addition, the Committee also accepted management’s recommendation that the Named Executive Officers would participate in a mandatory two-week unpaid leave program as part of the Company’s 2009 expense reduction initiatives.

     At the 2009 annual meeting of shareholders, William Mitchell retired as the Company’s Chief Executive Officer and was replaced by Michael Long. Mr. Mitchell remained Chairman of the Board and Executive Chairman until December 31, 2009 and his base salary remained unchanged at $1,100,000. Mr. Long became President and Chief Executive Officer effective May 1, 2009, and his salary was increased from $575,000 to $750,000 in recognition of his increased responsibilities and based on a review of peer group proxy data.

     Effective June 1, 2009, the Committee awarded base salary increases to Paul Reilly and Peter Kong of 7% and 8%, respectively. These increases were based on market survey data and took into account the additional responsibilities assumed by both Mr. Reilly, as a result of his promotion to Executive Vice President, Finance and Operations, and Chief Financial Officer, and Mr. Kong, as a result of his promotion to President, Arrow Global Components.

Performance-Based Compensation

     Annual performance-based cash incentives and long-term equity-based incentives play a significant role in executives’ overall compensation. They are essential to linking pay to performance, aligning compensation with organizational strategies and financial goals, and rewarding executives for the creation of shareholder value. All of the Named Executive Officers participate in each of the following programs.

     The following chart shows that 77% of the Company’s Named Executive Officers’ target compensation was performance-based, including 58% delivered in the form of Arrow equity. Tying pay to the Company’s and the individual’s performance reflects the Committee’s emphasis on “at-risk” compensation and accountability in support of the Company’s strategic initiatives. The Committee has weighted the pay components to establish a total compensation package that effectively motivates the Company’s leaders to drive superior performance in a manner that benefits the interests of shareholders. Each form of performance-based compensation is discussed below.

Named Executive Officers (active members*)
2009 Target Total Compensation Distribution

Annual Incentives

     Arrow’s annual incentives are designed to reward individuals for performance against pre-established targets that are set by the Committee at the beginning of the year. Each of the Company’s Named Executive Officers is assigned an annual incentive target opportunity expressed as a percentage of base salary. Annual incentive targets are established based on peer analysis in the context of targeting total direct compensation at the 65^th percentile. For 2009, annual incentive targets as a percentage of base salary were 100% for Mr. Long and Mr. Mitchell, 81% for Mr. Reilly, 61% for Mr. Brown, 73% for Mr. Kong, and 60% for Mr. McMahon. As part of the Company’s 2009 expense reduction initiatives, the Committee accepted a recommendation from management to reduce 2009 target bonuses for the Named Executive Officers by 10%.

     In order to provide consistency among management levels, the annual incentive for each of the Named Executive Officers follows the structure of the Company’s Management Incentive Compensation Plan (MICP). The MICP is based on a combination of financial and non-financial goals, which are weighted 70% and 30% respectively (except for Mr. Mitchell). Of the 70% financial component, executives can earn from 0% if performance falls below the pre-established threshold up to 200% of their targeted annual incentives for performance at or above the maximum levels. Executives can also earn between 0% and 200% of the non-

financial component based on the Committee’s evaluation of each individual’s performance against their pre-established non-financial goals. The non-financial goals may be strategic or tactical, but all are designed to be specific and measurable and to further the objectives of the Company. For 2009, the primary non-financial goal of MICP was to profitably increase the Company’s supplier market share. In order to sufficiently emphasize the importance of this goal, the Committee modified its mix of financial and non-financial goals from 80% and 20%, respectively, in 2008 to the 70% financial and 30% non-financial weighting used for 2009.

     Named Executive Officers with Corporate-Wide Responsibilities. For 2009, the financial component was comprised of one performance metric, earnings per share (“EPS”), for Named Executive Officers with corporate-wide responsibilities (Messrs. Long, Mitchell, Reilly, Brown, and McMahon). The Committee selected EPS to reinforce the Company’s overall profit objectives in expectation of continued global economic uncertainty through 2009. The Committee recognized EPS as a significant driver of shareholder value.

     For the non-financial goal component, the Committee selected profitable supplier market share expansion as the single goal for Messrs. Reilly, Brown and McMahon. The Company chose profitable supplier market share expansion in order to emphasize the importance of growing the Company’s market reach, and to capitalize on the Company’s strong franchise in a difficult market environment.

     The 2009 annual incentive metrics and results against those metrics for Messrs. Reilly, Brown and McMahon are set forth in the following table:

Performance		Performance		Achievement						Weighted
Metric		Range		Percentage		Weighting				Achievement %
Arrow Earnings Per Share		$0.75 - $1.56		200% (180% after the 10% target reduction)			70	%		126%*
Arrow Profitable Supplier Market Share Expansion		N/A		100% (90% after the 10% target reduction)			30	%		27%*
TOTAL		—		—			100	%		153%*

     For Mr. Long, the Committee applied the same basic methodology described above, including the same 70% financial component based on the above EPS performance range. However, the Committee tied the 30% non-financial component for Mr. Long’s annual incentive to his performance in navigating the Company through the challenging global economic downturn of 2009. Mr. Long attained 200% achievement (180% after the 10% target reduction) on the EPS-based financial goal, consistent with the above. Based on the Committee’s subjective assessment of Mr. Long’s successful performance in leading Arrow through the 2009 economic downturn, it awarded him 175% achievement (157.5% after the 10% target reduction) on the non-financial component of his annual incentive. This resulted in a total weighted achievement percentage of 173.25% for Mr. Long after incorporating the 10% target bonus reduction.

     In recognition of the transition of Mr. Mitchell to Executive Chairman, the Committee reduced the weighting of his financial component from 70% to 50% and increased the weighting of his non-financial goals component from 30% to 50%. The financial component for Mr.

Mitchell was again the same EPS-based goal described above. However, the non-financial goals component was based on individual goals focused on facilitating a seamless Chief Executive Officer transition in 2009. Consistent with the other Named Executive Officers with corporate responsibility, Mr. Mitchell attained 200% achievement (180% after the 10% target reduction) on his EPS-based financial goal. Based on the Committee’s evaluation of Mr. Mitchell’s performance on his transition-related non-financial goals, he attained a 100% achievement level (90% after the 10% target reduction). This resulted in a total weighted achievement percentage of 135% for Mr. Mitchell after incorporating the 10% target bonus reduction.

     Named Executive Officer with Business Unit Responsibilities. The 70% financial component for Mr. Kong, the President of Arrow Global Components, focused on gross profit dollars, operating income as a percentage of sales, net working capital as a percentage of sales, and selling, general and administrative expenses as a percentage of gross profit. The Company selected these metrics because they reward executives for achieving an appropriate balance between maximizing operating income and prudently deploying capital. Profitable supplier market share expansion was selected by the Company as the single goal underlying the 30% non-financial component of Mr. Kong’s annual incentive.

     In recognition of Mr. Kong’s responsibility for both Global Components and the Asia Pacific region during 2009, financial goals and non-financial goals were based on the performance of both entities. Mr. Kong’s 2009 annual incentive plan financial metrics were allocated at 42.5% based on performance of the Asia Pacific region and 57.5% based on the performance of Global Components. Mr. Kong attained 92.7% achievement (83.4% after the 10% target reduction) on his combined financial goals and 108.3% achievement (97.5% after the 10% target reduction) on his combined non-financial goals. This resulted in a total weighted achievement percentage of 87.7% for Mr. Kong after incorporating the 10% target bonus reduction.

Long-Term Incentives

     The Company’s long-term incentives (“LTIP”) are designed to promote a balanced focus on driving performance, retaining talent and aligning the interests of our executives with those of our shareholders. Under the LTIP structure described below, awards are established as aggregate total long-term incentive dollar amounts and granted annually. The program delivers a mix of performance shares, restricted shares, and stock options through one integrated long-term incentive structure. Following is an overview of the long-term incentive program components.

2009 LONG-TERM INCENTIVE PLAN (LTIP) STRUCTURE

Equity-Based Long-		Target Weighting as a
Term Instrument		% of Long-Term Award		Purpose		Award Terms
Performance Shares		50% •    25% based on one-year performance •    25% based on two-year performance		Reward for maximizing returns on invested capital and cash flow Align long-term interests with those of shareholders Further supports pay for performance – awards earned are directly related to performance		The number of shares awarded is determined at the end of each performance period subject to the following vesting: §    Shares earned based on the one-year performance period vest in four equal annual installments beginning on first anniversary of grant §    Shares earned based on the two-year performance period become 100% vested on the second anniversary of grant
Restricted Shares		25%		Align long-term interests with those of shareholders Further supports pay for performance – awards earned are directly related to performance		Vest in four equal annual installments beginning on first anniversary of grant contingent upon the Company achieving 2009 Net Income greater than zero
Stock Options		25%		Reward for stock price appreciation Promote retention		Vest in four equal annual installments beginning on first anniversary of grant Exercise price is equal to 100% of closing price on grant date Options expire ten years from grant date

     The Committee makes long-term incentive award decisions for executives based on input from the Chief Executive Officer, prior grant history, the Committee’s own assessment of each executive’s contribution, potential contribution, performance during the prior year, peer compensation benchmarking analysis and on the long-term incentive award practices of the peer companies discussed above.

     The Committee also evaluates the Chief Executive Officer in light of the factors discussed above to determine his annual long-term incentive award. That grant and those for the other Named Executive Officers are as set forth below. For more detail, including the expense to the Company associated with each grant, see the Grant of Plan-Based Awards table below.

     It is the practice of the Committee to make annual equity grants at the first regularly scheduled Board meeting of the calendar year. Grants associated with the hiring or promotion of participants are made at the next regularly scheduled meeting of the Board that follows such an event. All stock option grants are made with exercise prices based on the fair market value at the grant date to ensure that participants will derive benefits only as shareholders realize corresponding gains over an extended time period. None of the options granted by the Company discussed throughout this proxy statement, have been repriced, replaced or modified in any way since the time of the original grant.

     Performance Shares. The 2009 performance share awards, representing 50% of the total LTIP award value, are tied to Arrow’s one-year and two-year performance against Return on Invested Capital (“ROIC”) and Cash Flow targets. Performance against each metric represents

one-half of the performance share award. The Committee chose ROIC and Cash Flow as the basis for performance share awards to reward participants for successfully balancing profit maximization, efficient use of capital, and positive generation of cash, which are all key drivers of shareholder value.

     Following are the ROIC and Cash Flow performance metrics for the 2009 performance share awards:

		One-Year (2009) Performance												Two-Year (2009-2010 average)
		Shares												Performance Shares
		Threshold				Target				Maximum				Threshold				Target				Maximum
Return on Invested Capital			4.5	%			7.5	%			9.0	%			4.5	%			7.5	%			9.0	%
Payout as % of Target			25	%			100	%			200	%			25	%			100	%			200	%

		One-Year (2009) Performance												Two-Year (2009-2010 average)
		Shares												Performance Shares
		Threshold				Target				Maximum				Threshold				Target				Maximum
Cash Flow (in millions)		$	360			$	600			$	720			$	233			$	388			$	465
Payout as % of Target			25	%			100	%			200	%			25	%			100	%			200	%

     Restricted Shares. Grants of restricted shares represent 25% of the LTIP value and vest in 25% increments on each of the next four anniversaries following grant. Restricted shares are intended to provide the Named Executive Officers with a direct ownership interest in the Company and provide the Company with significant retention security regardless of post-grant share price volatility.

     Stock Options. Stock option grants also represent 25% of the LTIP value and vest in 25% increments on each of the next four anniversaries following grant, subject to the individual’s continued employment as of the applicable vesting date. The Company grants stock options to provide Named Executive Officers with a strong incentive to drive long-term stock appreciation for the benefit of our shareholders. Each stock option allows the holder to acquire shares of the Company at a fixed exercise price (fair market value on grant date) over a ten year term, providing profits only to the extent that the Company’s share price appreciates over that period.

2009 LTIP Awards. The 2009 long-term incentive awards are listed in the following table.

		Performance Shares
		Awarded								Restricted				Stock Options
		One-Year				Two-Year				Shares Awarded				Awarded
Michael J. Long			37,336				37,336				37,335				89,967
William E. Mitchell			—				—				222,949				—
Paul J. Reilly			20,980				20,981				20,980				50,556
Peter S. Brown			12,263				12,263				12,262				29,548
Peter T. Kong			12,501				12,501				12,500				30,122
John P. McMahon			10,702				10,702				10,701				25,788

     In anticipation of Mr. Mitchell’s planned transition to Executive Chairman and subsequent December 31, 2009 retirement, the Committee decided to award his long-term incentive exclusively in the form of restricted shares that vest 25% per year over four years subject to a non-compete provision. The Committee agreed that an award of all restricted shares was most

appropriate in recognition of Mr. Mitchell’s transition from the day-to-day operational responsibilities of Chief Executive Officer and into his role as Executive Chairman.

     Performance Share Payments. Three performance share cycles concluded with the 2009 fiscal year. Following are descriptions of the percentages of target shares actually earned under these plans based on the applicable performance goals established at the beginning of each respective cycle. Also described below is a special restricted share grant with succession-related performance criteria that was paid to Mr. Mitchell.

     Based on the completion of the 2009 performance period, performance share awards were determined for Named Executive Officers based on 2009 ROIC and Cash Flow. Consistent with the plan, the Committee adjusted the financial results to exclude the impact of acquisitions and restructurings which occurred after the original targets were established to arrive at a 2009 ROIC of 8.6%. Based on this level of ROIC and 2009 Cash Flow of $729 million each of the Named Executive Officers received 186.7% of the target number of shares awarded. Of the final number of shares awarded, 25% vested at the completion of the performance period and the remainder will vest in equal installments upon each of the next three anniversaries. The actual number of shares awarded to each of the Named Executive Officers with respect to this cycle is set forth below.

		Performance Shares Earned
		2009 Performance
		Period
Michael J. Long			69,706
Paul J. Reilly			39,170
Peter S. Brown			22,895
Peter T. Kong			23,339
John P. McMahon			19,981

     The terms of the 2008 LTIP two-year performance cycle required that the Company achieve an average two-year (2008-2009) ROIC of 11.7% in order for participants to receive 100% of their targeted awards. The Company achieved a 2008-2009 average ROIC of 8.5% (reflecting adjustments per plan terms), resulting in awards equaling 27.3% of the target number of performance shares granted to each of the Named Executive Officers. All of these performance shares vested at the completion of the performance cycle.

		Performance Shares Earned
		2008-2009 Performance
		Period
Michael J. Long			3,385
William E. Mitchell			7,848
Paul J. Reilly			2,430
Peter S. Brown			1,474
Peter T. Kong			1,365
John P. McMahon			1,256

     For 2008, the Committee also granted Mr. Mitchell a number of restricted shares that included succession-related performance conditions. Dependent upon the Committee’s

evaluation of his effectiveness in managing the Chief Executive Officer transition, the 57,498 target number of restricted shares awarded to Mr. Mitchell could be increased or decreased by 50%. Based on Mr. Mitchell’s role in coordinating a highly successful transition of his Chief Executive Officer responsibilities to Mr. Long, the Committee approved a payout of 86,000 shares to Mr. Mitchell.

     Awards under the 2007-2009 Medium-Term Incentive Program were made subject to the Company achieving an average ROIC of 12.5% over the final two years of the three-year performance period. Because the Company’s average ROIC of 8.7% (reflecting adjustments per plan terms) fell below the performance threshold, Named Executive Officers participating in this plan received 0% of their awards.

Retirement Programs and Other Benefits

     In keeping with its total compensation philosophy and in light of the need to provide a total compensation and benefit package that is competitive with those offered at the benchmarked companies, the Committee believes that the retirement and other benefit programs discussed below are critical elements of the compensation package made available to the Company’s executives.

Deferred Compensation

     In order to encourage long-term retention and facilitate executive retirement and financial planning, the Company maintains a compensation deferral plan pursuant to which executives may defer pre-tax compensation including up to 80% of salary and 100% of bonuses, incentive compensation and performance shares.

     Of the Named Executive Officers, only Mr. Mitchell participated in the deferral plan. The deferred compensation plan is discussed in more detail under the heading “Deferred Compensation Plans” below.

Qualified Plans

     The Named Executive Officers also participate in the Arrow 401(k) Savings Plan and the ESOP, qualified plans available to most of Arrow’s U.S. employees. Company contributions to these plans on behalf of the Named Executive Officers are included under the heading “All Other Compensation” in the Summary Compensation Table and detailed in the All Other Compensation — Detail table below. In light of the worldwide recession and management’s desire to preserve employee jobs, the Committee accepted management’s recommendation that, in order to reduce expenses, no ESOP contribution be made for 2009.

Supplemental Executive Retirement Plan

     The Company maintains the Arrow Electronics, Inc. Supplemental Executive Retirement Plan (the “SERP”), an unfunded retirement plan in which, as of December 31, 2009, twelve current and thirteen former executives selected by the Board participate. The Committee believes that the SERP encourages long-term retention and maintains management stability. All of the Named Executive Officers participate in the SERP, the details of which are discussed below under the heading “Supplemental Executive Retirement Plan.”

Management Insurance Plan

     All of the Named Executive Officers participate in Arrow’s Management Insurance Plan. In the event of the death of the executive, the Company provides a life insurance benefit to the executive’s named beneficiary equal to four times the executive’s final planned total annual cash compensation.

     Current death benefits for each executive are set forth on the Potential Payouts Upon Termination table below. Premiums paid by the Company on behalf of each executive are included under the heading “All Other Compensation” in the Summary Compensation Table and specified under the heading “Management Insurance Plan” on the All Other Compensation Table — Detail below.

Employment and Change of Control Agreements

     Employment agreements for senior management are used by the Company to establish key elements of the agreement between the Company and the executive, including the promised minimum periods of employment and the fundamental elements of compensation, as well as the details of the individual arrangement which differ from the Company’s standard plans and programs. The agreements also facilitate the creation of covenants, such as those prohibiting post-employment competition or hiring by executives or limitations on the reasons for which an executive may be terminated without compensation, which would not otherwise be part of the employment relationship.

     Arrow has entered into employment and change of control agreements with each of the Named Executive Officers that are discussed in detail below, in the section entitled “Agreements and Potential Payouts upon Termination or Change of Control.” Also detailed in that section are the potential payouts for each of the officers under the variety of potential termination scenarios covered by the agreements. Those potential payouts are part of the total compensation package for each executive reviewed by the Committee each year.

     None of the employment agreements or change of control agreements include tax gross-up provisions of any kind.

Stock Ownership Requirements

     The Committee recognizes the importance of equity ownership by delivering a significant portion of the executives’ total compensation in the form of equity. To further align the interests of our key executives with those of shareholders, we require them to hold specified amounts of Arrow stock. Executives, including the Named Executive Officers, are required to hold Arrow equity valued at a multiple of base salary, as set forth in the following table. Until specified levels of ownership are achieved, covered executives are required to hold 50% of all vested equity-based awards net of estimated taxes.

		Multiple of Base
		Salary
Chief Executive Officer		5X
Other Named Executive Officers		3X
Other Key Executives		2X

Tax and Accounting Considerations

     A variety of tax and accounting considerations influence the Committee’s development and implementation of the Company’s compensation and benefit plans. Among them are Section 162(m) of the Internal Revenue Code, which limits to $1 million the amount of non-performance-based compensation that Arrow may deduct in any calendar year for its Chief Executive Officer and the three highest paid Named Executive Officers other than the Chief Financial Officer. Compensation that meets the IRS requirements of “performance-based” is not subject to this limit.

     The Company’s annual incentive awards and restricted stock grants described above that were awarded to Messrs. Long, Mitchell, Reilly, Brown, and McMahon are designed to meet these requirements so that Arrow can continue to deduct the related expenses. Shareholders have approved the basis for performance goals for awards made to Named Executive Officers.

	•		For the annual incentive, these performance goals limit the annual incentive amount to a maximum established based on a formula approved by the Committee to comply with the regulations of Section 162(m). The formula is based on a net income above a pre-established target level and sales divided by net working capital. Once this maximum annual incentive amount was determined, the Committee exercised negative discretion to reduce the amounts actually to be paid to Messrs. Long, Mitchell, Reilly, Brown, and McMahon based on the methodology described above.
	•		Restricted stock grants made to Messrs. Long, Mitchell, Reilly, Brown, and McMahon were subject to performance criteria that required that the Company achieve a Net Income as adjusted greater than zero or they would be canceled.

     These performance-based terms have been established to maximize tax deductibility. Actual award levels for annual incentives have been significantly less based on the factors and methodology described in this report.

     The Committee’s policy, in general, is to maximize the tax deductibility of compensation paid to executive officers under Section 162(m). The Committee recognizes, however, that in order to effectively support corporate goals, in some instances compensation may be delivered such that amounts may not qualify for deductibility. All compensation decisions for executive officers are made with full consideration of the Section 162(m) implications.

     As discussed under the heading “Agreements and Potential Payments Upon Termination or Change of Control,” below, the Company’s change of control agreements, and the related sections of the various executive employment and award agreements, are designed not to exceed the limitations of Section 280G of the Internal Revenue Code, avoiding excise taxes for executives under Section 4999 of the Internal Revenue Code. As is also discussed, the Company has modified all of such agreements in order to avoid penalties to executives under Section 409A. The Company’s current policy is not to provide tax gross-ups in the event of a change of control.

COMPENSATION OF THE NAMED EXECUTIVE OFFICERS

Summary Compensation Table

     The following table provides certain summary information concerning the compensation of the Named Executive Officers for 2009 and, to the extent an officer was a Named Executive Officer in prior years, for 2008 and 2007.

Summary Compensation Table

																										Change in
																										Pension
																		Stock				Non-Equity				Value &				All
														Stock				Option				Incentive				NQDC				Other
						Salary				Bonus				Awards				Awards				Compensation				Earnings				Compensation				Total
		Year				($)				($) (1)				($) (2)				($) (3)				($) (4)				($) (5)				($) (6)				($)
Michael J. Long			2009				666,186				326,813				2,025,028				579,474				871,500				554,737				39,715				5,063,453
Chief Executive Officer			2008				575,000				143,750				1,213,082				404,654				376,250				450,652				31,069				3,194,457
(effective May 1, 2009)			2007				550,000				130,900				541,152				325,299				419,100				614,099				62,957				2,643,507
William E. Mitchell			2009				1,057,692				495,000				3,750,002				—				990,000				1,327,202				126,467				7,746,363
Chief Executive Officer			2008				1,100,000				275,000				3,750,002				—				700,000				1,293,262				185,931				7,304,195
(until May 1, 2009)			2007				1,050,000				252,000				2,136,638				542,165				986,160				1,229,537				144,399				6,340,899
Paul J. Reilly			2009				514,263				117,225				1,080,015				310,083				547,051				453,100				30,285				3,052,022
Executive Vice			2008				515,000				82,400				870,677				288,361				260,575				347,122				49,280				2,413,415
President, Finance &			2007				500,000				84,300				325,067				195,179				315,700				483,347				47,362				1,950,955
Operations & Chief Financial Officer
Peter S. Brown			2009				471,154				81,000				618,774				175,702				378,000				430,980				32,672				2,188,282
Senior Vice President			2008				490,000				54,000				528,272				175,627				191,000				266,039				55,911				1,760,849
& General Counsel			2007				475,000				57,930				270,576				162,650				257,070				279,394				53,141				1,555,761
Peter T. Kong			2009				442,820				98,716				645,021				185,420				197,272				289,784				518,665				2,377,698
President, Arrow Global Components
John P. McMahon			2009				375,000				63,180				540,006				153,344				294,840				167,129				69,039				1,662,538
Senior Vice President,			2008				390,000				51,480				450,028				150,707				48,520				121,409				57,119				1,369,263
Human Resources

     Each of the Named Executive Officers has an employment agreement which impacts or defines certain of the elements of the compensation shown above. The material terms of those agreements are discussed below under the heading “Employment Agreements.”

All Other Compensation – Detail

     This table sets forth each of the elements comprising each Named Executive Officer’s 2009 “All Other Compensation” from the Summary Compensation Table, above.

All Other Compensation

		Perquisites
		Managements
		Insurance				Car
		Program				Allowance				Other				ESOP				401(k) Company				Total
Name		($)				($)				($)(1)				($)				Contribution ($)				($)
Michael J. Long			22,030				10,200				48				87				7,350				39,715
William E. Mitchell			70,000				—				49,030				87				7,350				126,467
Paul J. Reilly			12,600				10,200				48				87				7,350				30,285
Peter S. Brown			12,940				10,200				2,095				87				7,350				32,672
Peter T. Kong			25,060				—				487,570				87				5,948				518,665
John P. McMahon			15,471				10,200				37,044				75				6,249				69,039

Grants of Plan-Based Awards

     The following table provides information regarding the 2009 annual incentives and awards of performance shares and restricted stock in 2009.

		Grants of Plan-Based Awards
																																All Other
																																Option Awards:
				Estimated Possible Payouts Under												Estimated Future Payouts												All Other Stock				Number of				Exercise or				Grant Date Fair
				Non-Equity Incentive Plan Awards												Under Equity Incentive Plan												Awards: Number				Securities				Base Price				Value of Stock
				(1)												Awards (2)												of Shares of				Underlying				of Option				and Option
		Grant		Threshold				Target				Maximum				Threshold				Target				Maximum				Stock or Units				Options				Awards				Awards
Name		Date		($)				($)				($)				(#)				(#)				(#)				(#)(3)				(#)(4)				($/Sh)				($)(5)
Michael J. Long		2009			121,042				484,167				968,334				—				—				—				—				—				—				—
		2/26/09			—				—				—				7,432				29,727				59,454								—				16.82				500,008
		2/26/09			—				—				—				7,432				29,727				59,454								—				16.82				500,008
		2/26/09			—				—				—				—				—				—				29,726				—				16.82				499,991
		2/26/09			—				—				—				—				—				—				—				71,632				16.82				425,945
		5/01/09			—				—				—				1,902				7,609				15,218								—				23.00				175,007
		5/01/09			—				—				—				1,902				7,609				15,218								—				23.00				175,007
		5/01/09			—				—				—				—				—				—				7,609				—				23.00				175,007
		5/01/09			—				—				—				—				—				—				—				18,335				23.00				153,526
William E. Mitchell		2009			137,500				550,000				1,100,000				—				—				—				—				—				—				—
		2/26/09			—				—				—				—				—				—				222,949				—				16.82				3,750,002
Paul J. Reilly		2009			75,979				303,917				607,834				—				—				—				—				—				—				—
		2/26/09			—				—				—				5,017				20,066				40,132								—				16.82				337,510
		2/26/09			—				—				—				5,017				20,066				40,132								—				16.82				337,510
		2/26/09			—				—				—				—				—				—				20,065				—				16.82				337,493
		2/26/09			—				—				—				—				—				—				—				48,352				16.82				287,515
		7/27/09			—				—				—				229				914				1,828								—				24.60				22,484
		7/27/09			—				—				—				229				915				1,830								—				24.60				22,509
		7/27/09			—				—				—				—				—				—				915				—				24.60				22,509
		7/27/09			—				—				—				—				—				—				—				2,204				24.60				22,566
Peter S. Brown		2009			52,500				210,000				420,000				—				—				—				—				—				—				—
		2/26/09			—				—				—				3,066				12,263				24,526								—				16.82				206,264
		2/26/09			—				—				—				3,066				12,263				24,526								—				16.82				206,264
		2/26/09			—				—				—				—				—				—				12,262				—				16.82				206,247
		2/26/09			—				—				—				—				—				—				—				29,548				16.82				175,701
Peter T. Kong		2009			59,063				236,250				472,500				—				—				—				—				—				—				—
		2/26/09			—				—				—				2,973				11,891				23,782								—				16.82				200,007
		2/26/09			—				—				—				2,973				11,891				23,782								—				16.82				200,007
		2/26/09			—				—				—				—				—				—				11,890				—				16.82				199,990
		2/26/09			—				—				—				—				—				—				—				28,653				16.82				170,379
		7/27/09			—				—				—				153				610				1,220								—				24.60				15,006
		7/27/09			—				—				—				153				610				1,220								—				24.60				15,006
		7/27/09			—				—				—				—				—				—				610				—				24.60				15,006
		7/27/09			—				—				—				—				—				—				—				1,469				24.60				15,040
John P. McMahon		2009			40,950				163,800				327,600				—				—				—				—				—				—				—
		2/26/09			—				—				—				2,676				10,702				21,404								—				16.82				180,008
		2/26/09			—				—				—				2,676				10,702				21,404								—				16.82				180,008
		2/26/09			—				—				—				—				—				—				10,701				—				16.82				179,991
		2/26/09			—				—				—				—				—				—				—				25,788				16.82				153,343