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AVNET INC
FORM 10-K
(Annual Report)
Filed 08/10/12 for the Period Ending 06/30/12
Address 2211 SOUTH 47TH STREET
PHOENIX, AZ 85034
Telephone 4806432000
CIK 0000008858
Symbol AVT
SIC Code
5065 - Electronic Parts and Equipment, Not Elsewhere Classified
Industry Electronic Instr. & Controls
Sector Technology
Fiscal Year 07/01
http://www.edgar-online.com
© Copyright 2012, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    AVNET INC FORM 10-K (Annual Report) Filed 08/10/12 for the Period Ending 06/30/12 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 2211 SOUTH 47TH STREET PHOENIX, AZ 85034 4806432000 0000008858 AVT 5065 - Electronic Parts and Equipment, Not Elsewhere Classified Electronic Instr. &...

  • Page 2
    ... file number 1-4224 3 Avnet, Inc. (Exact name of registrant as specified in its charter) New York 11-1890605 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 2211 South 47th Street, Phoenix, Arizona 85034 (Address of principal executive offices...

  • Page 3
    ... 2. Properties Item 3. Legal Proceedings PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Item 6. Selected Financial Data Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 7A...

  • Page 4
    ... - Electronics Marketing ("EM") and Technology Solutions ("TS"). Both operating groups have operations in each of the three major economic regions of the world: the Americas; Europe, the Middle East and Africa ("EMEA"); and Asia/Pacific, consisting of Asia, Australia and New Zealand ("Asia" or "Asia...

  • Page 5
    ... and Africa. EM Asia goes to market with sales and marketing divisions within China, South Asia, Australia, New Zealand, Taiwan and Japan. All regions within EM provide the design chain services and supply chain services described above. Technology Solutions As a global IT solutions distributor, TS...

  • Page 6
    ... Analysis of Financial Condition and Results of Operations in Item 7 of this Report. Acquisitions Avnet has historically pursued a strategic acquisition program to grow its geographic and market coverage in world markets for electronic components and computer products, services and solutions. This...

  • Page 7
    ... and services. The Company has more than 300 locations worldwide as well as a limited number of instances where Avnet-owned product is stored in customer facilities. Some of these locations contain sales, warehousing and administrative functions for multiple sales and marketing units. The electronic...

  • Page 8
    ... to liquidity and higher financing costs. The electronics component and computer industries are highly competitive and if the Company fails to compete effectively, its revenues, gross profit margins and prospects may decline. The market for the Company's products and services is very competitive and...

  • Page 9
    ..., financial condition and liquidity. The electronic components and computer products industries are subject to rapid technological change, new and enhanced products, changes in customer needs and changes in industry standards, which can contribute to a decline in value or obsolescence of inventory...

  • Page 10
    ... include, but are not limited to, risks relating to expanding into emerging markets and business areas, adding additional product lines and services, incurring unanticipated costs or liabilities associated with the companies acquired and diverting management's attention from existing business...

  • Page 11
    ... the accurate and timely recording and reporting of financial data. In addition, the Company's information technology is subject to security breaches, computer hacking or other general system failures. Maintaining and operating these systems requires continuous investments. A data privacy breach may...

  • Page 12
    ... property rights allegedly held by others relating to the Company's business or the products or services it sells. Litigation with respect to patents or other intellectual property matters could result in substantial costs and diversion of management and other resources and could have an adverse...

  • Page 13
    ...Belgium Grove City, Ohio Poing, Germany Atlanta, Georgia Chandler, Arizona Tsuen Wan, Hong Kong Phoenix, Arizona Coppell, Texas Groveport, Ohio Tempe, Arizona Nogales, Mexico Doral, Florida Loyang, Singapore Item 3. Legal Proceedings Primary Use EM warehousing, value-added operations and offices EM...

  • Page 14
    ... The Company is also party to various other lawsuits, claims, investigations and other legal proceedings arising from time to time in the normal course of business. While litigation is subject to inherent uncertainties, management currently believes that the ultimate outcome of these proceedings...

  • Page 15
    ... PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market price per share The Company's common stock is listed on the New York Stock Exchange under the symbol AVT. Quarterly high and low sales closing prices (as reported...

  • Page 16
    ...June 30, 2012 under the share repurchase program, which is part of a publicly announced plan, and purchases made on the open market to obtain shares for the Company's Employee Stock Purchase Plan ("ESPP"), which is not part of a publicly announced plan: Period April May June Total Number of Shares...

  • Page 17
    ...share repurchase program. Item 6. Selected Financial Data Years Ended July 2, July 3, June 27, 2011 2010 2009 (a) (Millions, except for per share and ratio data) June 30, 2012 June 28, 2008 (a) Income: $ 25,707.5 $ 26,534.4 $ 19,160.2 $ 16,229.9 $ 17,952.7 Sales Gross profit 3,050.6 3,107.8 2,280...

  • Page 18
    ...increase (decrease) Selling, general and administrative expenses Interest expense Income tax provision Net income Basic EPS Diluted EPS Prepaid and other current assets Other assets Long term debt Shareholders' equity _____ (b) Includes the impact of (i) restructuring, integration and other charges...

  • Page 19
    ...and (iii) the transfer of the existing embedded business from TS Americas to EM Americas that occurred in the first quarter of fiscal 2011. Sales taking into account the combination of these adjustments are referred to as "pro forma sales" or "organic sales." Operating income excluding restructuring...

  • Page 20
    ... market conditions. Three-Year Analysis of Sales: By Operating Group and Geography Years Ended July 2, % of July 3, 2011 Total 2010 (Dollars in millions) Percent Change 2012 to 2011 to 2011 2010 June 30, 2012 Sales by Operating Group: EM Americas EM EMEA EM Asia Total EM TS Americas TS EMEA TS Asia...

  • Page 21
    ... EM EMEA EM Asia/Pac EM Asia/Pac TS EMEA April 2012 April 2012 January 2012 January 2012 January 2012 January 2012 January 2012 November 2011 August 2011 August 2011 July 2011 Fiscal 2011 itX Group Ltd. Center Cell Eurotone Broadband Unidux Tallard Technologies Bell Microproducts Inc. Fiscal 2010...

  • Page 22
    ... both organic and reported revenue, as a result of weaker demand amid concerns surrounding economic conditions in Europe. Asia organic revenue declined 7.5%, primarily due to slowing growth in China, and the Americas was flat as compared with fiscal 2011. TS sales of $10.77 billion for fiscal 2012...

  • Page 23
    ... TS EMEA product lines. Although the Bell business had a lower gross profit margin profile due to its product mix, the Company estimates it realized the full impact of over $60 million in annualized synergies in the first quarter of fiscal 2012. Selling, General and Administrative Expenses Selling...

  • Page 24
    ...550 employees in administrative, finance and sales functions primarily in connection with the integration of the acquired Bell business into the existing EM Americas, TS Americas and TS EMEA regions and, to a lesser extent, other cost reduction actions in other regions. Facility exit costs consisted...

  • Page 25
    ... gross profit margins in the EMEA region which includes lower operating margins of the acquired businesses as compared with the other TS businesses. Corporate operating expenses were $112.0 million in fiscal 2011 as compared with $82.3 million in fiscal 2010 primarily due to net periodic pension...

  • Page 26
    ... year. Gain on Bargain Purchase and Other During fiscal 2012, the Company recognized a gain on bargain purchase of $4.3 million pre- and after tax and $0.03 per share on a diluted basis. In January 2012, the Company acquired Unidux Electronics Limited, a Singapore publicly traded company, through...

  • Page 27
    ... stages of two audits by the U.S. Internal Revenue Service, one of which relates to the Company and one relates to the pre-acquisition period of an acquired entity. As a result, it is reasonably possible that within the next twelve months, the Company may record a tax benefit of $30.0 million to $35...

  • Page 28
    ... certain product lines can impact the decision to write-down inventories. If assumptions about future demand change or actual market conditions are less favorable than those projected by management, management would evaluate whether additional write-downs of inventories are required. In any case...

  • Page 29
    ... to cover the cost of severance, facility consolidation and closure, lease termination fees, inventory adjustments based upon acquisition-related termination of supplier agreements and/or the re-evaluation of the acquired working capital assets (inventory and accounts receivable), and write-down...

  • Page 30
    ...109.6 million for the 3.75% Notes acquired in the Bell acquisition which were tendered during fiscal 2011. The Company also received proceeds of $8.9 million, net of repayments, related to bank credit facilities and other debt. During fiscal 2010, the Company received proceeds of $291.9 million from...

  • Page 31
    ... excess tax benefit. Cash Flows from Investing Activities During fiscal 2012, the Company used $313.2 million of cash for acquisitions, net of cash acquired, and $128.7 million for capital expenditures primarily related to system development costs and computer hardware and software purchases. During...

  • Page 32
    ... lines of credit in various locations to fund the short-term working capital, foreign exchange, overdraft and letter of credit needs of its wholly owned subsidiaries in Europe, Asia and Canada. Avnet generally guarantees its subsidiaries' obligations under these facilities. Covenants and Conditions...

  • Page 33
    ...of management, subject to strategic considerations, market conditions and other factors. The Company may terminate or limit the stock repurchase program at any time without prior notice. The timing and actual number of shares purchased will depend on a variety of factors such as price, corporate and...

  • Page 34
    ... by a decrease in receivables and inventory, also a result of the impact of the change in foreign currency exchange spot rates and the decline in sales. Current liabilities increased 7.2% primarily due to an increase in short-term borrowings, which was partially offset by a decrease in payables. As...

  • Page 35
    ...(1) Excludes discounts on long-term notes. $ $ 1,152.8 $ 6.1% 994.1 $ 1.5% Fair Value at June 30, 2012 1,285.6 994.1 Carrying Value at July 2, 2011 $ $ 1,154.3 $ 6.1% 365.3 $ 2.2% Fair Value at July 2, 2011 1,261.1 365.3 Many of the Company's subsidiaries, on occasion, purchase and sell products in...

  • Page 36
    ... of America. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Management conducted an...

  • Page 37
    ... Contents PART III Item 10. Directors, Executive Officers and Corporate Governance The information called for by Item 10 is incorporated in this Report by reference to the Company's definitive proxy statement relating to the Annual Meeting of Stockholders anticipated to be held on November 2, 2012...

  • Page 38
    ... documents are filed as part of this Report: Page 1. Consolidated Financial Statements: Report of Independent Registered Public Accounting Firm Avnet, Inc. and Subsidiaries Consolidated Financial Statements: Consolidated Balance Sheets at June 30, 2012, and July 2, 2011 Consolidated Statements...

  • Page 39
    ...duly authorized. AVNET, INC. (Registrant) By: /s/ RICHARD HAMADA Richard Hamada Chief Executive Officer and Director Date: August 10, 2012 KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby authorizes and appoints each of Richard Hamada and Raymond Sadowski his or...

  • Page 40
    /s/ WILLIAM P. SULLIVAN William P. Sullivan /s/ RAYMOND SADOWSKI Raymond Sadowski 38 Director Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

  • Page 41
    ... designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies...

  • Page 42
    Table of Contents AVNET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, July 2, 2012 2011 (Thousands, except share amounts) ASSETS Current assets: Cash and cash equivalents Receivables, less allowances of $106,319 and $107,739, respectively (Note 3) Inventories Prepaid and other current...

  • Page 43
    ... Sales Cost of sales Gross profit Selling, general and administrative expenses Restructuring, integration and other charges (Note 17) Operating income Other income (expense), net Interest expense Gain on bargain purchase and other (Note 2) Gain on sale of assets (Note 2) Income before income taxes...

  • Page 44
    ... related tax benefits of $2,100 Balance, July 3, 2010 Net income Translation adjustments (Note 4) Pension liability adjustment, net of tax of $12,022 (Notes 4, 10 and 15) Comprehensive income (Note 4) Stock option and incentive programs, including related tax benefits of $4,689 Balance, July 2, 2011...

  • Page 45
    ... and amortization Deferred income taxes (Note 9) Stock-based compensation (Note 12) Gain on sale of assets (Note 2) Gain on bargain purchase and other (Note 2) Other, net (Note 15) Changes in (net of effects from businesses acquired): Receivables Inventories Accounts payable Accrued expenses and...

  • Page 46
    ... based test to Avnet's six reporting units, defined as each of the three regional businesses, which are the Americas, EMEA (Europe, Middle East and Africa), and Asia, within each of the Company's operating groups. The Company conducts its periodic test for goodwill impairment annually , on the first...

  • Page 47
    ... from product Avnet purchases from a supplier and holds in inventory. A portion of the Company's sales are shipments of product directly from its suppliers to its customers. In such circumstances, Avnet negotiates the price with the customer, pays the supplier directly for the product shipped and...

  • Page 48
    ... cash equivalents and trade accounts receivable. The Company invests its excess cash primarily in overnight Eurodollar time deposits and institutional money market funds with quality financial institutions. The Company sells electronic components and computer products primarily to original equipment...

  • Page 49
    Table of Contents AVNET, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Adoption of accounting standard - The Financial Accounting Standards Board ("FASB") issued authoritative guidance that requires the issuer of certain convertible debt instruments that may be ...

  • Page 50
    ... entity Pinnacle Data Systems Canvas Systems Unidux Electronics Limited (Singapore) Round 2 Tech DE2 SAS JC Tally Trading Co. & Shanghai FR International Trading Prospect Technology Amosdec SAS Fiscal 2011 itX Group Ltd. Center Cell Eurotone Broadband Unidux Tallard Technologies Bell Microproducts...

  • Page 51
    ... 2011, the Company completed the divestiture of New ProSys Corp. ("ProSys"), a value-added reseller and provider of IT infrastructure solutions. Avnet acquired ProSys as part of the Bell acquisition on July 6, 2010. Total consideration included a cash payment at closing, a short-term receivable...

  • Page 52
    ...of management, subject to strategic considerations, market conditions and other factors. The Company may terminate or limit the stock repurchase program at any time without prior notice. The timing and actual number of shares purchased will depend on a variety of factors such as price, corporate and...

  • Page 53
    ... of previously acquired businesses from TS Americas to EM Americas. The following table presents the gross amount of goodwill and accumulated impairment as of July 2, 2011 and June 30, 2012 . All of the accumulated impairment was recognized in fiscal 2009. Electronics Marketing Gross goodwill at...

  • Page 54
    ...,079 Bank credit facilities Borrowings under the accounts receivable securitization program (see Note 3) Other debt due within one year Short-term debt Bank credit facilities consist of various committed and uncommitted lines of credit with financial institutions utilized primarily to support the...

  • Page 55
    ... based upon quoted market prices. 8. Accrued expenses and other Accrued expenses and other consist of the following: July 2, 2011 June 30, 2012 (Thousands) $ 279,454 $ 320,958 85,025 72,495 331,004 279,563 $ 695,483 $ 673,016 Payroll, commissions and related accruals Income taxes (Note 9) Other...

  • Page 56

  • Page 57
    ... feasible tax planning strategies. Excluding the benefit in both fiscal years related to the release of the tax valuation allowance associated with the EMEA legal entity, the effective tax rate for fiscal 2012 would have been 31.1% as compared with 30.6% for fiscal 2011. Avnet's effective tax rate...

  • Page 58
    ...'s accounting policy, accrued interest and penalties, if any, related to unrecognized tax benefits are recorded as a component of income tax expense. The accrual for unrecognized tax benefits included accrued interest expense and penalties of $24,664,000 and $24,640,000 , net of applicable state tax...

  • Page 59
    ... Singapore Hong Kong United States (federal and state), United Kingdom and Taiwan Netherlands Belgium and Germany Fiscal Year 2005 - 2012 2006 - 2012 2007 - 2012 2008 - 2012 2010 - 2012 10. Pension and retirement plans Pension Plan The Company's noncontributory defined benefit pension plan...

  • Page 60
    ... effective June 1, 2012 to improve pre-retirement death benefits so that the pre-retirement death benefits will be payable without regard to marital status, and will be based on 100% of the participant's vested cash account. The increase in liability is recognized as a prior service cost and will be...

  • Page 61
    ... average assumptions used to determine net benefit costs are as follows: 2012 5.25% 8.50% 2011 5.25% 8.50% Discount rate Expected return on plan assets The Company bases its discount rate on a hypothetical portfolio of bonds rated Aa by Moody's Investor Services or AA by Standard & Poor's. The...

  • Page 62
    ... AVNET, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The general investment objectives of the Plan are to maximize returns through a diversified investment portfolio in order to earn annualized returns that meet the long-term cost of funding the Plan's pension...

  • Page 63
    ...-based compensation plans The Company measures all share-based payments, including grants of employee stock options, at fair value and recognizes related expense in the consolidated statement of operations over the service period (generally the vesting period). During fiscal 2012 , 2011 , 2010 , the...

  • Page 64
    ... values of shares vested during fiscal 2012 , 2011 and 2010 were $19,516,000 , $15,916,000 , $14,301,000 , respectively. Performance shares Eligible employees, including Avnet's executive officers, may receive a portion of their long-term equity-based incentive compensation through the performance...

  • Page 65
    ... stock at a later date. During fiscal 2012 , 2011 and 2010 , compensation cost associated with the outside director stock bonus plan was $1,110,000 , $1,050,000 , $1,020,000 , respectively. Employee stock purchase plan The Company has an Employee Stock Purchase Plan ("ESPP") under the terms of which...

  • Page 66
    ... for doubtful accounts Periodic pension (income) costs (Note 10) Other, net Total Interest and income taxes paid during the last three years were as follows: Years Ended June 30, 2012 Interest Income taxes $ $ 89,529 192,717 July 2, 2011 (Thousands) $ 91,946 $ 158,372 July 3, 2010 $ $ 60,556...

  • Page 67
    ... markets and sells mid- to high-end servers, data storage, software, and the services required to implement these products and solutions to the value-added reseller channel. TS also focuses on the worldwide original equipment manufacturers ("OEM") market for computing technology, system integrators...

  • Page 68
    ... & amortization expense: Electronics Marketing Technology Solutions Corporate Sales, by geographic area, are as follows: Americas (1) EMEA (2) Asia/Pacific (3) Property, plant and equipment, net, by geographic area: Americas (4) EMEA (5) Asia/Pacific _____ (1) (2) $ July 3, 2010 $ $ $ 14,933...

  • Page 69
    ...Includes sales of $1.3 billion , $2.0 billion and $1.0 billion in Taiwan, China (including Hong Kong) and Singapore, respectively, for fiscal 2010 . Includes property, plant and equipment, net, of $266.7 million , $231.3 million and $178.2 million in the United States for fiscal 2012 , 2011 and 2010...

  • Page 70
    .... Integration costs incurred related to the integration of acquired businesses and incremental costs incurred as part of the consolidation and closure of certain office and warehouse locations. Integration costs included IT consulting costs for system integration assistance, facility moving costs...

  • Page 71
    ...of over 550 employees in administrative, finance and sales functions primarily in connection with the integration of the acquired Bell business into the existing EM Americas, TS Americas and TS EMEA regions and, to a lesser extent, other cost reduction actions. Facility exit costs consisted of lease...

  • Page 72
    ... taken in response to market conditions as well as integration costs associated with acquired businesses in addition to a value-added tax exposure and acquisition-related costs partially offset by a credit related to prior restructuring reserves. Year Ended July 3, 2010 (Thousands) $ 15,991 2,931...

  • Page 73
    ... costs, facility exit costs and other charges resulting from acquisition related integration activities. In addition, the Company recognized a gain on bargain purchase of $31.0 million pre- and after tax, and $0.20 per share on a diluted basis in connection with its Unidux acquisition. Second...

  • Page 74
    ... for restructuring and purchase accounting reserves determined not to be needed. In addition, fourth quarter results included a tax benefit of $52.7 million , or $0.34 per share on a diluted basis, primarily related to the release of a tax valuation allowance for which the tax asset was determined...

  • Page 75
    ... of Contents SCHEDULE II AVNET, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS Years Ended June 30, 2012, July 2, 2011 and July 3, 2010 Column A Column B Column C Additions Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts - Describe (Thousands) $ - (35...

  • Page 76
    ..., 2008 between the Company and each of the Executive Officers (other than Roy Vallee and Richard Hamada) (incorporated herein by reference to the Company's Current Report on Form 8-K dated December 22, 2008, Exhibit 10.3). Avnet 1995 Stock Option Plan (incorporated herein by reference to the Company...

  • Page 77
    ... herein by reference to the Company's Registration Statement on Form S-8, Registration No. 333-17271, Exhibit 99). Amended and Restated Avnet 1997 Stock Option Plan (incorporated herein by reference to the Company's Current Report on Form 8-K dated August 29, 2006, Exhibit 10.1). 10.8 73

  • Page 78
    ... to the Company's Current Report on Form 8-K dated August 13, 2010, Exhibit 10.2). * * Avnet Supplemental Executive Officers' Retirement Plan (2012 Restatement). Avnet Restoration Plan (Effective Generally as of January 1, 2012). Avnet 1999 Stock Option Plan (incorporated herein by reference...

  • Page 79
    (incorporated herein by reference to the Company's Current Report on Form 8-K dated August 10, 2012, Exhibit 10.1). 74

  • Page 80
    ...'s Current Report on Form 8-K dated September 1, 2010, Exhibit 10.2). (j) Second Amended and Restated Receivables Purchase Agreement dated as of August 26, 2010 among Avnet Receivables Corporation, as Seller, Avnet, Inc., as Servicer, the Financial Institutions party thereto and JPMorgan Chase Bank...

  • Page 81
    (k) Amendment No. 1, dated as of December 28, 2010, to the Second Amended and Restated Receivables Purchase Agreement in 10.25(j) above (incorporated herein by reference to the Company's Quarterly Report on Form 10-Q dated January 28, 2011, Exhibit 10.2). 75

  • Page 82
    ... among Avnet, Inc., Bank of America, N.A., as Administrative Agent, and each lender thereto (incorporated herein by reference to the Company's Current Report on Form 8-K dated November 22, 2011, Exhibit 10.1 Ratio of Earnings to Fixed Charges. List of subsidiaries of the Company as of June 30, 2012...

  • Page 83
    Exhibit 10.11 AVNET SUPPLEMENTAL EXECUTIVE OFFICERS' RETIREMENT PLAN (2012 Restatement)

  • Page 84
    AVNET SUPPLEMENTAL EXECUTIVE OFFICERS' RETIREMENT PLAN (2012 Restatement) TABLE OF CONTENTS Page ARTICLE 1 HISTORY, PURPOSE AND EFFECTIVE DATE ARTICLE 2 DEFINITIONS iii 2 2 8 8 9 9 9 10 10 11 12 12 13 13 13 17 17 17 17 17 18 18 18 18 19 19 2.1 Definitions . ARTICLE 3 PARTICIPATION 3.1 ...

  • Page 85
    7.6 Compensation, Expenses and Indemnity. 7.7 Disputes. ARTICLE 8 MISCELLANEOUS 19 19 22 22 8.1 Unsecured General Creditor. i

  • Page 86
    .... 8.3 Withholding. 8.4 Amendment, Modification, Suspension or Termination. 22 22 22 23 23 23 23 23 23 23 24 8.5 Governing Law. 8.6 Receipt or Release. 8.7 Notices. 8.8 Headings and Gender. 8.9 Plan Not a Contract of Employment. 8.10 Construed as a Whole. 8.11 Severability. 8.12 Successors. ii

  • Page 87
    ... SUPPLEMENTAL EXECUTIVE OFFICERS' RETIREMENT PLAN (2012 Restatement) ARTICLE 1 HISTORY, PURPOSE AND EFFECTIVE DATE Avnet, Inc., a New York corporation (the "Company" ), previously established a program to provide supplemental life insurance and retirement income benefits for Eligible Executives (as...

  • Page 88
    ... apply under such Code sections. (d) " Avnet Pension Plan " shall mean the Avnet Pension Plan, as amended and in effect from time to time, and any successor qualified retirement plan thereto as designated by the Company from time to time. " Beneficiary " or " Beneficiaries " shall mean the person or...

  • Page 89
    ...) and, in either case, the consummation of such transaction. (h) " Code " shall mean the Internal Revenue Code of 1986, as amended. (i) " Committee " shall mean the Committee appointed by the Board to administer the Plan in accordance with Article 7. As of the date hereof, the Committee is...

  • Page 90
    ... providing supplemental life insurance and/or nonqualified retirement benefits other than pursuant to the Avnet Deferred Compensation Plan. No individual shall become an Eligible Executive after December 31, 2011. (r) Board. (s) " ERISA " shall mean the Employee Retirement Income Security Act...

  • Page 91
    ... under the terms of the Plan. (dd) " Plan " shall mean the Avnet Supplemental Executive Officers' Retirement Plan, as set forth herein and amended from time to time. (ee) " Plan Year " shall mean the fiscal year of the Company. (ff) " Present Value Interest Factor " means an annual discount rate...

  • Page 92
    ... Rules " mean regulations issued under Code Section 409A or other official and general guidance issued by the Secretary of the Treasury, the Commissioner of the Internal Revenue Service or either of their delegates interpreting Code Section 409A. (jj) " Separation From Service " means the date when...

  • Page 93
    ... for all full Years of Service completed prior to the Termination of Employment. If a Participant ceases to be an Active Participant prior to incurring a Termination of Employment, he or she will not accumulate any additional Years of Service under the Plan prior to becoming an Active Participant...

  • Page 94
    ... require, and passing any physical examination required for a life insurance policy relating to the Participant. A Participant who no longer meets the definition of an Eligible Executive shall become an "Inactive Participant" in the Plan if he or she is vested under Section 5.1. Notwithstanding any...

  • Page 95
    ...'s Basic Annual Retirement Benefit is calculated as the total amount payable over a 12-month period. The timing and methods of paying a Participant's Total Retirement Benefit shall be determined in accordance with the foregoing applicable provisions of this Plan document. 4.2 Normal Retirement; Form...

  • Page 96
    ...for at least five (5) years after that date and the election applies to both this Plan and any Offset Plan. A Participant's Total Retirement Benefit payable in connection with his or her Early Retirement Date shall be payable in accordance with the applicable provisions of subparagraph (a) or (b) of...

  • Page 97
    ...of Service as a full-time employee of an Employer; (b) ceased working for the Company due to Disability before his or her Normal Retirement Date or, if applicable, Early Retirement Date; and (c) filed an application for disability benefits under the Avnet Pension Plan, any disability plan sponsored...

  • Page 98
    ...day prior to the actual payment date, on a per annum basis and based on a 365 day year (with the actual number of days elapsed). 4.7 Minimum and Maximum Benefits Payable Under the Plan . Effective June 1, 2012, notwithstanding any other provision of the Plan, the sum of (i) the Actuarial Equivalent...

  • Page 99
    ... Years of Service. 5.2 Impact of Confidentiality, Non-Compete and Non-Solicitation Provisions . (a) Application of Employment Agreement Provisions . If at any time before or after Termination of Employment, the Committee determines that a Participant has violated any of the terms and conditions of...

  • Page 100
    ... product design and configuration, market strategies, profit and loss information, sources of supply, product cost, gross margins, credit and other sales terms and conditions. Confidential Information shall also include, but not be limited to, information contained in manuals, memoranda, price lists...

  • Page 101
    ... patentable, relating to present and prospective activities and products of the...execute and deliver any documents that the Company deems necessary to effect such transfer on the demand of the Company. (ii) Restrictions on Use and Disclosure . The Participant shall not to use or disclose at any time...

  • Page 102
    customer lists and related documents, price and procedure manuals and guides, catalogs, records, notebooks and similar repositories of or containing Confidential Information and/or Developments, including all copies then in his possession or control whether prepared by him or others. 16

  • Page 103
    ... is imminent), a Participant may direct that the Company establish a Trust with a financial institution or trust company and deposit into the Trust cash, marketable securities or insurance policies in an amount sufficient to fund his or her vested Total Retirement Benefit. The Company may establish...

  • Page 104
    ... the Committee . The Committee shall enforce the Plan in accordance with its terms, shall be charged with the general administration of the Plan and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following: (a) to construe and interpret the...

  • Page 105
    ... to them such powers and duties in connection with the administration of the Plan as the Committee may from time to time prescribe; (g) to take all actions, and provide any necessary consents or directions, with respect to any insurance policies obtained by an Employer relating to the Plan; and...

  • Page 106
    ... be addressed directly to the Appeals Committee or to a senior executive officer of the Company designated to act on behalf of the Appeals Committee (and who is a person other than the Claimant). The Claimant or his or her duly authorized representative may, but need not, review the pertinent Plan...

  • Page 107
    ...allegedly supporting the claim or right which is the basis of his or her claim or assertion for benefits or payments under, or relating to, the Plan; ...latest date, the Claimant may take further enforcement measures to collect payments which the Claimant asserts are owed to him or her under the Plan; ...

  • Page 108
    ... of the Code and Title I of ERISA. 8.2 Restriction Against Assignment . The Company shall pay all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or corporation. No part of a Participant's benefits hereunder shall be liable for the debts...

  • Page 109
    ... given when received by the Secretary of the Company or by any other person designated by the Company for the receipt of such notices or other communications, in the form and at the location specified by the Company. 8.8 Headings and Gender . The headings to Sections in the Plan have been included...

  • Page 110
    ... a select group of management or highly compensated employees is held to be invalid or unenforceable by a court of competent jurisdiction, such holding shall not impact the validity or enforceability of the remaining provisions of the Plan. 8.12 Successors . The terms and condition of the Plan and...

  • Page 111
    Exhibit 10.12 Avnet Restoration Plan Effective as of January 1, 2012

  • Page 112
    ... Vesting and Payment Upon Termination Article 8. Miscellaneous 8.01 Plan Not a Contract of Employment 8.02 Governing Law 8.03 Section 409A of the Internal Revenue Code 8.04 Severability 8.05 Successors 8.06 Complete Statement of Plan Avnet Restoration Plan January 1, 2012 Table of Contents Page i

  • Page 113
    ...(a) Avnet, Inc., a New York corporation, wishes to establish the Avnet Restoration Plan effective January 1, 2012, to restore certain retirement benefits that cannot be provided under the Avnet Pension Plan, by reason of the limits required by Sections 401(a)(17) and 415 of the Code. (b) The Plan is...

  • Page 114
    ...(2) (3) (g) "Code" means the Internal Revenue Code of 1986, as amended. "Company" means Avnet, Inc., a New York corporation, and any successor thereto. "Eligible Employee" means an individual who (1) is an "eligible employee" under the Avnet (h) (i) Avnet Restoration Plan January 1, 2012 Page 2

  • Page 115

  • Page 116
    Pension Plan and (2) is part of a select group of management and highly compensated employees who are designated by the Plan Committee as eligible to accrue benefits under the Plan. (j) (k) (l) "Employer" means the Company and any Affiliate that has adopted this Plan with the consent of the Board. ...

  • Page 117
    ... from Service for such individual unless the Company, with the buyer's written consent, so provides in writing 60 or fewer days before the closing of such sale. (w) "SERP" means the Avnet Supplemental Executive Officers' Retirement Plan, as in effect and amended from time to time. "Trust" means...

  • Page 118
    ... the later of (i) the last day of the calendar year in which the relevant date or event occurs or (ii) the 90th day following the occurrence of the relevant date or event. To the extent that any payment under the Plan may be made within a specified number of days, or as soon as practicable, on...

  • Page 119
    ...), a Participant shall be vested in his benefit under the Plan only if his Retirement Income under the Avnet Pension Plan is vested. If the Participant is not vested at the time of his Separation from Service, his Restoration Account shall be forfeited. If a Participant's employment with the Company...

  • Page 120
    ... the Eligible Employee is both an Eligible Employee and a Participant in the Plan. Such Restoration Contribution Credit shall be added as of the same time as the Contribution Credit for such Plan Year is added to the Eligible Employee's Cash Balance Account under the Avnet Pension Plan, and shall...

  • Page 121
    ..., the benefit under this Plan shall also be paid in 120 monthly installments, and each installment shall be equal to the amount required by paragraph (1), above.) (2) (3) Rehired Employees The time of payment of benefits to any Participant who has had a Separation from Service shall not...

  • Page 122
    ... related to participation or benefits under the Plan shall be filed and resolved in accordance with the procedures that apply for claims and appeals under the Avnet Pension Plan. Such procedures are referred to herein collectively as the "claims procedure." (b) Litigation . (1) No Applicable...

  • Page 123
    ... begin on the following date (the "Limitations Start Date"): (A) In the case of an Applicable Claim to recover benefits allegedly due to the claimant from the Plan or to clarify the claimant's rights to future benefits from the Plan, the Avnet Restoration Plan January 1, 2012 Table of Contents...

  • Page 124
    ... (iii) may be made in the form of a direct communication to the Participant or claimant ( e.g. , denial of a claim under the administrative review referenced in Section 5.03(a)) or a more general oral or written communication related to benefits payable under the Plan (for example, summary of the...

  • Page 125
    ...Trust, cash, marketable securities, or insurance policies in an amount equal to the sum of the balances of all Restoration Accounts under the Plan as of the date of the Change of Control (whether or not vested). No Assignment or Alienation (a) No benefit payable under this Plan shall be voluntarily...

  • Page 126
    ... the Code ( e.g. , withholding income taxes at the time of each deemed payment, and depositing the amount withheld with the Internal Revenue Service). For purposes of the preceding sentence, notice by registered mail sent to such person's most recent address (as reflected in the Plan records) shall...

  • Page 127
    ...not provide benefits other than as required to restore amounts that cannot accrue under the Avnet Pension Plan by reason of the Qualified Plan Limits, no amendment, modification, suspension, or termination shall have any retroactive effect to reduce the balance of a Participant's Restoration Account...

  • Page 128
    ... of the State of Arizona, without regard to its conflict of law provisions and except to the extent that its laws are preempted by the laws of the United States of America. Section 409A of the Internal Revenue Code (a) Intent to Comply With Section 409A . This Plan shall be construed and interpreted...

  • Page 129
    ..., based on his understanding of the intent of the Company as the settlor of the Plan, and taking into account such evidence, written or oral, as he deems appropriate or helpful. The General Counsel of the Company is authorized to correct any scrivener's error that he discovers in this instrument...

  • Page 130
    ... Fixed Charges June 30, 2012 Earnings: Income (loss) from continuing operations before tax Add fixed charges Total Earnings (loss) Fixed charges: Interest on indebtedness Amortization of debt expense Interest component of rent expense Total fixed charges July 2, 2011 July 3, 2010 (in thousands) June...

  • Page 131
    ...es Ltda. Avnet Components Israel Limited Avnet de Mexico, S.A. de C.V. Avnet de Puerto Rico, Inc. Avnet Delaware Holdings, Inc. Avnet Delaware LLC Avnet do Brasil LTDA Avnet Electronics Marketing (Australia) Pty Ltd Avnet EM Avnet EM Holdings Japan Kabushiki Kaisha Avnet EM Sp. z.o.o. Avnet EMG AG...

  • Page 132
    ...Corporation Avnet S.r.l. Avnet s.r.o Avnet Solutions Pte. Ltd. Avnet Solutions Sdn. Bhd Avnet Sp. z.o.o. 2 Germany Italy United Kingdom Germany Belgium Netherlands France Turkey Netherlands Belgium Germany South Africa Australia United Kingdom Delaware Spain India Brazil Canada Delaware Italy Japan...

  • Page 133
    ...Systems UK Limited Canvas Systems, LLC Chinatronic Technology Limited Client Solutions Limited CM Satellite Systems, Inc. Dritte TENVA Property GmbH Nettetal EBV Beteiligungs-Verwaltungs GmbH EBV Elektronik ApS 3 Hong Kong Thailand Taiwan Hong Kong Singapore Australia China India Malaysia Singapore...

  • Page 134
    ... Group Holdings Limited Memec Group Limited Memec Holdings Limited Memec Pty Limited Mexico Holdings LLC Net Storage Computers, Ltda PDSI B.V. PDSI Singapore Pte. Ltd. Pinnacle Data Systems, Inc. Pride Well Limited Procurement Hub Pte Ltd Prospect Technology Corp. 4 France Germany Hungary Hong Kong...

  • Page 135
    ...(Shanghai) Limited YEL Electronics (Shenzhen) Ltd YEL Electronics Hong Kong Limited YEL Electronics Pte Ltd YEL Electronics Sdn Bhd ZWEITE TENVA Property GmbH Im Technologiepark Indonesia Delaware Texas New Hampshire China France Mexico Hong Kong Hong Kong Delaware Belgium Belgium Germany Hong Kong...

  • Page 136
    ... in the three-year period ended June 30, 2012, the related financial statement schedule, and the effectiveness of internal control over financial reporting as of June 30, 2012 which report appears in the June 30, 2012 annual report on Form 10-K of Avnet, Inc. /s/ KPMG LLP Phoenix, Arizona August 10...

  • Page 137
    ... and report financial information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. b. Date: August 10, 2012 /s/ RICHARD HAMADA Richard Hamada Chief Executive Officer

  • Page 138
    ... and report financial information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. b. Date: August 10, 2012 /s/ RAYMOND SADOWSKI Raymond Sadowski Chief Financial Officer

  • Page 139
    ... 15(d), as applicable, of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 2. Date: August 10, 2012 /s/ RICHARD HAMADA Richard Hamada Chief Executive Officer

  • Page 140
    ... as applicable, of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 2. Date: August 10, 2012 /s/ RAYMOND SADOWSKI Raymond Sadowski Chief Financial Officer