Avnet 2007 Annual Report Download - page 74

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Employee stock purchase plan
The Company has an Employee Stock Purchase Plan (“ESPP”), which was amended effective January 2006.
Under the terms of the amended ESPP, eligible employees of the Company are offered options to purchase shares of
Avnet common stock at a price equal to 95% of the fair market value on the last day of each monthly offering period.
Previously the plan offered employees options to purchase shares of Avnet stock at a price equal to 85% of the fair
market value on the first or last day, whichever was lower, of each monthly offering period. As a result of these
amended terms, Avnet is not required to record expense in the consolidated statements of operations related to the
ESPP subsequent to the second quarter of fiscal 2006. Therefore, the Company did not recognize any pre-tax
compensation expense under the ESPP plan during fiscal 2007 or the third or fourth quarters of fiscal 2006. The pre-
tax compensation expense recognized under the ESPP during fiscal 2006 with the adoption of SFAS 123R was
$465,000.
The Company has a policy of repurchasing shares on the open market to satisfy shares purchased under the
ESPP, and expects future repurchases during fiscal 2008 to be similar to the number of shares repurchased during
fiscal 2007, based on current estimates of participation in the program. During fiscal 2007, 2006 and 2005, there
were 96,013, 175,454 and 289,241 shares of common stock issued under the ESPP program.
13. Contingent liabilities
From time to time, the Company may become liable with respect to pending and threatened litigation, taxes
and environmental and other matters. The Company has been designated a potentially responsible party or has
become aware of other potential claims against it in connection with environmental clean-ups at several sites. Based
upon the information known to date, the Company believes that it has appropriately reserved for its share of the
costs of the clean-ups and it is not anticipated that any contingent matters will have a material adverse impact on the
Company’s financial condition, liquidity or results of operations.
14. Earnings per share
Basic earnings per share is computed based on the weighted average number of common shares outstanding
and excludes any potential dilution. Diluted earnings per share reflect potential dilution from the exercise or
conversion of securities into common stock.
June 30,
2007
July 1,
2006
July 2,
2005
Years Ended
(Thousands, except per share data)
Numerator:
Net income for basic and diluted earnings per share ....... $393,067 $204,547 $168,239
Denominator:
Weighted average common shares for basic earnings per
share ........................................ 148,032 145,942 120,629
Net effect of dilutive stock options and restricted stock
awards ....................................... 1,197 1,208 840
Net effect of 2% Convertible Debentures due March 15,
2034......................................... 384 — —
Weighted average common shares for diluted earnings per
share ........................................ 149,613 147,150 121,469
Basic earnings per share .............................. $ 2.65 $ 1.40 $ 1.39
Diluted earnings per share ............................ $ 2.63 $ 1.39 $ 1.39
74
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)