Avnet 2012 Annual Report Download - page 63

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Table of Contents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
12. Stock-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 Company
expensed $35,737,000 , $28,931,000 and $28,363,000 , respectively, for all stock-based compensation awards.
Stock plan
The Company currently has one stock compensation plan pursuant to which it can issue new awards. The 2010 Stock Compensation Plan
(“2010 Plan”) was approved by the shareholders in fiscal 2011. The 2010 Plan has a termination date of November 4, 2020 and 4,956,183
shares
were available for grant at June 30, 2012 . At June 30, 2012 , the Company had 11,047,000
shares of common stock reserved for stock option
and stock incentive programs.
Stock options
Option grants under the 2010 Plan have a contractual life of ten years , vest 25% on each anniversary of the grant date
, commencing with
the first anniversary, and provide for a minimum exercise price of 100%
of fair market value at the date of grant. Compensation expense
associated with stock options during fiscal 2012 , 2011 and 2010 were $3,147,000 , $3,499,000 and $3,558,000 , respectively.
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 U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at the
grant date. The historical volatility of Avnet’s stock is used as the basis for the volatility assumption.
The following is a summary of the changes in outstanding options for fiscal 2012:
The weighted-average grant-date fair values of stock options granted during fiscal 2012 , 2011 , and 2010 were $9.67 , $8.72 and $9.58
,
respectively. There were no intrinsic values of share options outstanding or exercisable at June 30, 2012 , July 2, 2011 or July 3, 2010.
60
Years Ended
June 30,
2012
July 2,
2011
July 3,
2010
Expected term (years)
6.00
6.00
6.00
Risk-free interest rate
1.2
%
1.8
%
3.0
%
Weighted average volatility
33.7
%
33.7
%
34.3
%
Dividend yield —
—
—
Shares
Weighted
Average
Exercise Price
Weighted
Average
Remaining
Contractual Life
Outstanding at July 2, 2011
3,059,215
$
21.79
59 Months
Granted
332,476
$
27.94
109 Months
Exercised
(486,302
)
$
14.09
6 Months
Forfeited or expired
(23,471
)
$
23.90
73 Months
Outstanding at June 30, 2012
2,881,918
$
23.78
61 Months
Exercisable at June 30, 2012
1,994,623
$
22.69
45 Months