Avnet 2002 Annual Report Download - page 21

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individual customer speciÑcations and business needs such as point of use replenishment, testing, assembly,
supply chain management and materials management.
Number of Employees
At August 23, 2002, Avnet had approximately 11,000 employees.
Item 2. Properties
Currently, the Company owns and leases approximately 1,265,236 and 4,344,963 square feet of space,
respectively, of which approximately 56% is located in the United States. EM's principal facilities for
warehousing and value-added operations are located in Chandler, AZ, Poing, Germany, Tongeren, Belgium,
Oxford, NC, and Grapevine, TX, where EM has approximately 395,000, 230,000, 217,000, 201,000 and
181,000 square feet of space, respectively. CM's principal facilities for warehousing and value-added
operations are located in Chandler, AZ where CM has approximately 196,000 square feet of space. CM also
utilizes a portion of the Tongeren, Belgium facility discussed above for warehousing and value added
operations. CM leases a 132,000 square foot building in Tempe, AZ for use as the CM headquarters and EM
and CM share leased oÇce facilities of approximately 48,000 square feet in Diegem, Belgium as the
administrative headquarters for their respective European operations. AC's principal facilities for integration
and warehousing are located in Phoenix, AZ and Nettetal, Germany, where AC has approximately 87,000 and
146,000 square feet of space, respectively. AC leases approximately 35,000 square feet of space in Phoenix,
AZ for use as the AC headquarters. The Company leases a 176,000 square foot building in Phoenix, AZ for
use as the EM headquarters as well as the Company's corporate headquarters.
Item 3. Legal Proceedings
The Company and/or its subsidiaries are parties to various legal proceedings arising in the normal course
of business. While litigation is subject to inherent uncertainties, management currently believes that the
ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse
eÅect on the Company's Ñnancial position, cash Öow or overall results of operations. The following is a
description of certain proceedings:
The Company and the former owners of a Company-owned site in Oxford, North Carolina have entered
into a Consent Decree and Court Order with the Environmental Protection Agency (the ""EPA'') for the
environmental clean-up of the site, the cost of which, according to the EPA's remedial investigation and
feasibility study, was estimated to be approximately $6.3 million, exclusive of the $1.5 million in past costs
paid to the EPA by the potentially responsible parties (""PRPs''). Pursuant to a Consent Decree and Court
order entered into between the Company and the former owners of the site, the former owners have agreed to
bear at least 70% of the clean-up costs of the site, and the Company will be responsible for not more than 30%
of those costs.
Sterling Electronics Corp., (""Sterling'') a subsidiary of the Company acquired as a part of the Marshall
Industries acquisition, has entered into a Settlement Agreement and Release with Westbase, Inc. Sterling
once owned 92.46% of the capital stock of Phaostron, Inc. (""Phaostron''). In August 1995, Sterling sold the
interest in Phaostron to Westbase, Inc. At the time of the sale, Sterling and Westbase entered into several
agreements, including a promissory note, and an agreement related to environmental costs resulting from
alleged contamination at a facility leased by Phaostron that is a part of the San Gabriel Valley Superfund Site.
The environmental agreement provided that Sterling may be required to pay up to $800,000 for environmental
costs associated with the site. A dispute arose, however, between Westbase and Sterling regarding the amount
Westbase owed to Sterling pursuant to the promissory note, as well as the amount of any reimbursements
Sterling owed to Westbase pursuant to the environmental agreement. Sterling commenced arbitration
proceedings to resolve the dispute. As of June 30, 2002, the parties entered into the Settlement Agreement
and Release resolving the dispute. Pursuant to the Settlement Agreement and Release, each party released the
other from current and future claims regarding the arbitrated matters and Westbase paid a settlement amount
to Sterling.
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