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Table of Contents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
industries. The Plan assets do not include any material investments in Avnet common stock. The Plan’s investments
in debt securities are also diversified across both public and private fixed income portfolios. The Company’s current
target allocation for the investment portfolio is for equity securities, both domestic and international, to represent
approximately 76% of the portfolio with a policy for minimum investment in equity securities of 60% of the portfolio
and a maximum of 92%. The majority of the remaining portfolio of investments is to be invested in fixed income
securities.
401(k) Plan
The Company has a 401(k) plan that covers substantially all domestic employees. During fiscal 2008, 2007 and
2006, the expense relating to the 401(k) plan were not material.
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:
The aggregate future minimum operating lease commitments, principally for buildings, in 2009 through 2013
and thereafter (through 2018), are as follows (in thousands):
Effective in the first quarter of fiscal 2006, the Company adopted SFAS 123R which revised 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. During fiscal 2008, 2007 and 2006, the Company
expensed $25,389,000, $24,250,000 and $18,096,000, respectively, for all stock-based compensation awards.
The fair value of options granted is estimated on the date of grant using the Black-Scholes model based on the
assumptions in the following table. The assumption for the expected term is based on evaluations of historical and
expected future employee exercise behavior. The risk-free interest rate is based on the US Treasury rates at the date
66
11.
Long
-
term leases
Years Ended
June 28,
June 30,
July 1,
2008
2007
2006
(Thousands)
Buildings
$
53,377
$
43,063
$
46,436
Equipment
5,799
5,423
5,715
$
59,176
$
48,486
$
52,151
2009
$
71,280
2010
58,029
2011
42,682
2012
33,654
2013
24,385
Thereafter
29,409
Total
$
259,439
12.
Stock
-
based compensation plans