Avnet 2015 Annual Report Download - page 74

TableofContents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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Performance share units
Certain eligible employees, including Avnet’s executive officers, may receive a portion of their long-term stock-based
compensationthroughtheperformanceshareprogram,whichallowsforthevestingofsharesbaseduponachievementofcertain
marketandperformance-basedcriteria(“PerformanceShareProgram”).ThePerformanceShareProgramprovidesforthevesting
toeachgranteeof anumberof sharesofAvnet’scommonstock attheendofathree-year performanceperiodbased uponthe
Company’sachievementofcertainperformancegoalsestablishedbytheCompensationCommitteeoftheBoardofDirectorsfor
eachPerformanceShareProgramthree-yearperformanceperiod.Theperformancegoalsconsistofmeasuresofeconomicprofit
andtotalshareholderreturn.
Duringeachoffiscal2016,2015and2014,theCompanygranted0.2millionperformanceshareunits,ofwhichtherewas
nomaterialforfeituresofperformanceawards.Theactualamountofperformanceshareunitsvestedattheendofeachthree-year
periodismeasuredbasedupontheactuallevelofachievementofthedefinedperformancegoalsandcanrangefrom0%to200%
oftheawardgrant.Duringfiscal2016,2015and2014,theCompanyrecognizedstock-basedcompensationexpenseassociated
withthePerformanceShareProgramof$7.6million,$6.8millionand$5.8million,respectively.
Director stock-based compensation
Non-employeeindependentdirectorsareawardedsharesequaltoafixeddollaramountofAvnetcommonstockeachyear
aspartoftheirdirectorcompensation.Directorsmayelecttoreceivethiscompensationintheformofcommonstockortheymay
electtodefertheircompensationtobepaidincommonstockatalaterdate.Duringfiscal2016,2015and2014,compensation
expense associated with the independent director stock-based compensation awards was $1.2 million, $1.1 million and $1.0
million,respectively.
Employee stock purchase plan
The Company has an Employee Stock Purchase Plan (“ESPP”) under the terms of which eligible employees of the
Companyareallowedtopurchasesharesofcommonstockatapriceequalto95%ofthefairmarketvalueonthelastdayofeach
monthlyofferingperiod.TheESPPisnotcompensatoryforaccountingpurposesbasedonitsterms.
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13. Commitments and contingencies
From time to time, the Company may become a party to, or be otherwise involved in various lawsuits, claims,
investigationsandotherlegalproceedingsarisingintheordinarycourseofconductingitsbusiness.Whilelitigationissubjectto
inherent uncertainties, management does not anticipate that any such matters will have a material adverse effect on the
Company’sfinancialcondition,liquidityorresultsofoperations.
The Company also is currently subject to various pending and potential legal matters and investigations relating to
compliance with governmental laws and regulations, including import/export and environmental matters. For certain of these
mattersitisnotpossibletodeterminetheultimateoutcome,andtheCompanycannotreasonablyestimatethemaximumpotential
exposureortherangeofpossiblelossforsuchmattersdueprimarilytobeinginthepreliminarystagesoftherelatedproceedings
andinvestigations.TheCompanycurrentlybelievesthattheresolutionofsuchmatterswillnothaveamaterialadverseeffecton
the Company’s financial position or liquidity, but could possibly be material to its results of operations in any one reporting
period.
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