Avnet 2007 Annual Report Download - page 70

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401(k) Plan
The Company has a 401(k) plan that covers substantially all domestic employees. Employees are eligible to
participate in the 401(k) plan on the first month after completing 90 days of service. The expense, including
matching contributions, relating to the 401(k) plan for fiscal 2007, 2006 and 2005 totaled $3,251,000, $1,651,000
and $1,448,000, respectively.
11. Long-term leases
The Company leases many of its operating facilities and is also committed under lease agreements for
transportation and operating equipment. Rent expense charged to operations during the last three years is as follows:
June 30,
2007
July 1,
2006
July 2,
2005
Years Ended
(Thousands)
Buildings............................................ $43,063 $46,436 $39,720
Equipment........................................... 5,423 5,715 5,240
$48,486 $52,151 $44,960
The aggregate future minimum operating lease commitments, principally for buildings, in 2008 through 2012
and thereafter (through 2014), are as follows (in thousands):
2008 ............................................................... $ 61,363
2009 ............................................................... 45,577
2010 ............................................................... 36,082
2011 ............................................................... 25,125
2012 ............................................................... 19,545
Thereafter ........................................................... 19,688
Total ............................................................. $207,380
12. Stock-based compensation plans
Effective in the first quarter of fiscal 2006, the Company adopted SFAS 123R which revises SFAS 123 and
supersedes APB No. 25. SFAS 123R requires all share-based payments, including grants of employee stock options,
be measured at fair value and expensed in the consolidated statement of operations over the service period
(generally the vesting period). Upon adoption, the Company transitioned to SFAS 123R using the modified
prospective application, whereby compensation cost is only recognized in the consolidated statements of operations
beginning with the first period that SFAS 123R is effective and thereafter, with prior periods’ stock-based
compensation for option and employee stock purchase plan activity still presented on a pro forma basis. The
Company continues to use the Black-Scholes option valuation model to value stock options. During fiscal 2007 and
2006, the Company expensed $24,250,000 and $18,096,000, respectively, for all stock-based compensation awards.
In fiscal 2005, prior to the adoption of SFAS 123R, the Company recorded $1,135,000 related to stock-based
compensation recognized in accordance with APB 25.
70
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)