Avnet 2013 Annual Report Download - page 64

Table of Contents AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The fixed income investments provide a steady return with medium volatility and assist with capital preservation and income generation.
The equity investments have higher expected volatility and return than the fixed income investments.
11. Operating 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:
The aggregate future minimum operating lease commitments, principally for buildings, in fiscal 2014 through 2018
and thereafter (through
2029), are as follows (in thousands):
The preceding table includes operating lease commitments that have been reserved for as part of the Company’
s restructuring activities
(see Note 17).
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 2013 , 2012 , 2011
, the
Company expensed $43,677,000 , $35,737,000 and $28,931,000 , respectively, for all stock-based compensation awards.
Stock plan
At June 29, 2013 , the Company had 8,988,130 shares of common stock reserved for equity awards, which consisted of 2,579,188
for
options granted that have not yet been exercised, 2,995,588 available for future awards under plans approved by shareholders, 2,980,565
for
stock incentive and performance shares granted but not yet vested, and 432,789
shares available for future award under the Company's Employee
Stock Purchase Plan ("ESPP").
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 2013 , 2012 and 2011 was $3,989,000 , $3,147,000 and $3,499,000 , 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.
61
Years Ended
June 29, 2013
June 30, 2012 July 2, 2011
(Thousands)
Buildings
$
86,884
$
84,531
$
78,371
Equipment
7,203
8,093
8,332
$
94,087
$
92,624
$
86,703
2014
$
86,100
2015
58,165
2016
41,901
2107
29,088
2018
18,468
Thereafter
38,514
Total
$
272,236