exv10w1



 






Exhibit 10.1




SEVERANCE AGREEMENT

Dated as of January 13, 2005 between

Bell Industries, Inc., a California corporation

(the “Company”), and Mitchell I. Rosen (“Executive”)




     This Agreement sets forth the severance compensation, which the Company agrees it will pay
Executive if Executive’s employment with the Company should terminate for any reason other than for
death, Disability, Retirement or Cause.




	 	1.  	Severance Compensation upon Termination of Employment. If the Company shall terminate
Executive’s employment other than by reason of death, Disability, Retirement or Cause, then
the Company shall pay to Executive as severance pay, in cash, on the tenth business day
following the date of termination, an amount equal to six months of Executive’s
then-current base compensation (excluding any bonuses, stock option grants, stock grants,
fringe benefits and like compensation). In addition, for a period of six months following
the date of termination, the Company shall continue to provide Executive and Executive’s
eligible family members with group health insurance coverage at least equal to that which
would have been provided to them if Executive’s employment had not been terminated (or at
the Company’s election, pay the applicable COBRA premium for such coverage); provided,
however, that if Executive becomes re-employed with another employer and is eligible to
receive group health insurance coverage under another employer’s plans, the Company’s
obligations under this Section 1 shall terminate and any such coverage shall be
reported by Executive to the Company.
	 
	 	2.  	Certain Definitions.






	 	a.  	Disability. The term “Disability” shall mean Executive’s inability by reason of
physical or mental illness to perform his employment duties for 90 consecutive days or
a total of 150 days in any 12-month period, and which, in the reasonable opinion of an
independent physician selected by the Company or its insurers, renders Executive unable
to fulfill the essential functions of his job.
	 
	 	b.  	Retirement. The term “Retirement” shall mean termination by the Company or
Executive of Executive’s employment based upon Executive having reached the age of 65
or such other age as shall have been fixed in any arrangement established with
Executive’s consent.
	 
	 	c.  	Cause. The term “Cause” shall mean (i) Executive’s commission of an act of
fraud or dishonesty in the performance of his duties, (ii) Executive’s improper use or
disclosure of the confidential or proprietary information of the Company or any
subsidiary; (iii) any breach by Executive of his fiduciary duty or duty of loyalty to
the Company;(iv) Executive’s repeated failure or inability to perform any reasonable
assigned duties for the Company after the Board has provided the individual adequate
notice of, and has given the individual a reasonable opportunity to cure, such failure
or inability; or (v) Executive’s conviction




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	 	   	(including any plea of guilty or nolo contendere) of any felony, any misdemeanor
involving dishonesty or fraud, or any other criminal act that impairs or could
impair Executive’s ability to perform his duties.






	 	   	Notwithstanding the foregoing definitions, Executive’s employment with the Company is
“at-will” and the Company may terminate the employment relationship at any time, for any
reason, with or without Cause or notice, subject only to the obligations set forth herein.






	 	3.  	Arbitration. To the fullest extent allowed by law, any controversy, claim or
dispute between Executive and the Company (and/or any of its owners, directors, officers,
employees, affiliates, or agents) relating to or arising out of Executive’s employment or
the cessation of that employment will be submitted to final and binding arbitration in the
county in which Executive work(ed) for determination in accordance with the American
Arbitration Association’s (“AAA”) National Rules for the Resolution of Employment Disputes,
as the exclusive remedy for such controversy, claim or dispute. In any such arbitration,
the parties may conduct discovery in accordance with the applicable rules of the
arbitration forum, except that the arbitrator shall have the authority to order and permit
discovery as the arbitrator may deem necessary and appropriate in accordance with
applicable state or federal discovery statutes. The arbitrator shall issue a reasoned,
written decision, and shall have full authority to award all remedies which would be
available in court. The parties shall share the filing fees required for the arbitration,
provided that Executive shall not be required to pay an amount in excess of the filing fees
required by a federal or state court with jurisdiction. The Company shall pay the
arbitrator’s fees and any AAA administrative expenses. Any judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
Possible disputes covered by the above include (but are not limited to) unpaid wages,
breach of contract, torts, violation of public policy, discrimination, harassment, or any
other employment-related claims under laws including but not limited to, Title VII of the
Civil Rights Act of 1964, the Americans With Disabilities Act, the Age Discrimination in
Employment Act, the California Fair Employment and Housing Act, the California Labor Code,
and any other statutes or laws relating to an employee’s relationship with his/her
employer, regardless of whether such dispute is initiated by the employee or the Company.
Thus, this bilateral arbitration agreement applies to any and all claims that the Company
may have against an employee, including but not limited to, claims for misappropriation of
Company property, disclosure of proprietary information or trade secrets, interference with
contract, trade libel, gross negligence, or any other claim for alleged wrongful conduct or
breach of the duty of loyalty by an employee. However, notwithstanding anything to the
contrary contained herein, the Company and Executive shall have their respective rights to
seek and obtain injunctive relief with respect to any controversy, claim or dispute to the
extent permitted by law. Claims for workers’ compensation benefits and unemployment
insurance (or any other claims where mandatory arbitration is prohibited by law) are not
covered by this arbitration agreement, and such claims may be presented by either Executive
or the Company to the appropriate court or government agency. BY AGREEING TO THIS BINDING
ARBITRATION PROVISION, BOTH EXECUTIVE AND THE COMPANY GIVE UP ALL RIGHTS TO TRIAL BY JURY.
This arbitration agreement is to be construed as broadly as is permissible under applicable
law.






	  	4.  	Notice. Notices and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered in person or mailed by
US registered mail, return receipt requested, postage prepaid, as follows:




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	 	If to the Company:
	 
	 	 
	

	 	Bell Industries

1960 E. Grand Ave., Suite 560

El Segundo, CA 90245

Attn: Chairman
	 
	 	 
	

	 	with a copy to:
	 
	 	 
	

	 	Manatt, Phelps & Phillips, LLP

11355 West Olympic Blvd.

Los Angeles, CA 90064

Attn: Mark J. Kelson
	 
	 	 
	

	 	If to Executive:
	 
	 	 
	

	 	Bell Industries

1960 E. Grand Ave., Suite 560

El Segundo, CA 90245

Attn: Mitchell I. Rosen







	 	  	or such other address as either party may have furnished the other, except that notices of
change of address shall be effective only upon receipt.
	 
	 	5.  	Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which will constitute one and the same instrument.
	 
	 	6.  	Confidentiality. Executive will not at any time during or after his employment use,
disclose or disseminate any confidential information, or any other information of a secret,
proprietary, confidential or generally undisclosed nature, relating to the Company, its
subsidiaries or any of their respective products, services, clients, methods or procedures.
Executive shall deliver to the Company any and all copies of confidential information, or
other Company property, upon the termination of the employment relationship, or at any
other time upon the Company’s request.
	 
	 	7.  	Successor to the Company. The Company will require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in form and
substance satisfactory to Executive, to assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform it.
	 
	 	8.  	Consultation With Counsel. Executive acknowledges that Executive has had a
full and complete opportunity to consult with counsel and other advisors of Executive’s own
choosing concerning the terms, enforceability and implications of this Agreement, and that
the Company has not made any representations or warranties to Executive concerning the
terms, enforceability or implications of this Agreement other than as reflected in this
Agreement.




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	 	9.  	Withholding. The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
	 
	 	10.  	Attorneys’ Fees. If any party to this Agreement institutes any action, suit,
counterclaim, appeal, arbitration or mediation for any relief against another party,
declaratory or otherwise to enforce the terms hereof or to declare rights hereunder, then
the prevailing party in such action shall be entitled to recover from the other party all
costs and expenses of the action, including reasonable attorneys’ fees and costs (at the
prevailing party’s attorneys’ then-prevailing rates) incurred in bringing and prosecuting
or defending such action and/or enforcing any judgment, order, ruling or award granted
therein.
	 
	 	11.  	Miscellaneous. No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by Executive
and the Company. No waiver by either party hereto at any time of any breach by the other
party hereto of, or failure to comply with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, expressed or implied, with respect to the subject
matter hereof have been made by either party which are not expressly set forth in this
Agreement. This Agreement may be executed simultaneously in two counterparts, each of
which shall be deemed an original but which together shall constitute one and the same
instrument. This Agreement shall be governed by and construed in accordance with the laws
of the State of California.





[signature page follows]




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     IN WITNESS WHEREOF, the parties have signed this Agreement in Los Angeles, California as of
the date first above written.



	 	 	 	 	 
	 	 	Bell Industries, Inc.
	 
	 	 	 	 
	

	 	By:
	 	/s/ Mark E. Schwarz
	

	 	 	 	 
	

	 	 	 	Mark E. Schwarz,

Chairman of the Board of Directors
	 
	 	 	 	 
	 	 	Executive
	 
	 	 	 	 
	

	 	By:
	 	/s/ Mitchell I. Rosen
	

	 	 	 	 
	

	 	 	 	Mitchell I. Rosen







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