Avnet, Inc. (the Company), hereby grants to the Participant named below an award of restricted
stock units (the Performance Stock Units or PSUs) covering the number of shares of its common
stock (the Stock), as specified below, upon the terms and conditions set forth in the Avnet, Inc.
2003 Stock Compensation Plan (the Plan) and these Standard Terms and Conditions (the Standard
Terms and Conditions).
Name of Participant:
Number of Shares of Stock covered by PSUs:
The Performance Stock Units are subject to vesting upon the achievement of performance goals
set forth in these Standard Terms and Conditions.
By accepting this award, the Participant acknowledges that he or she has received and read, and
agrees that these Performance Stock Units shall be subject to, the terms of the Plan and these
Standard Terms and Conditions.
STANDARD TERMS AND CONDITIONS FOR
PERFORMANCE STOCK UNITS
These Standard Terms and Conditions apply to any Performance Stock Units granted under the
Avnet, Inc. 2003 Stock Compensation Plan (the Plan) that are identified as performance stock
units and are evidenced by an action of the Committee.
TERMS OF PERFORMANCE STOCK UNITS
Avnet, Inc, (the Company), has granted to the Participant restricted stock units (the
Performance Stock Units or PSUs) covering the number of shares of its common stock (the
Stock) and upon the other terms set forth on the cover page hereto, and subject to the
conditions set forth in these Standard Terms and Conditions and the Plan.
The PSUs shall vest based on a 3-year cumulative performance cycle, beginning as of July 1,
20___and ending on June 30, 20___(the Performance Period). The vesting of the Performance
Stock Units shall be subject to the Company achieving by the end of the 3-year cumulative
performance cycle both Absolute Economic Profit (EP) Improvement and Relative EP Improvement (each as defined
herein and as determined by the Committee) equal to at least the Threshold levels set forth below. The Absolute EP
Improvement means the cumulative increase in the Companys
economic profit during the
Performance Period as compared with the cumulative EP over the prior
three-year period. The Relative EP Improvement means the cumulative increase in the
Companys economic profit during the Performance Period as
compared with the cumulative increase
during the Performance Period in the economic profit of an
index of peer companies consisting of the corporations listed on Exhibit A hereto, adjusted
for size, and expressed as the percentage by which the Companys economic profit increase
exceeds or is exceeded by that of the index.
For purposes hereof, economic profit means operating income after tax less a capital
charge on the amount of capital invested in the business. For purposes hereof, operating
income excludes certain items as determined by the Committee such as restructuring charges,
asset writedowns, impairments, financial impacts of accounting, tax or regulatory rule
Subject to the forgoing, and provided that the Participant has remained continuously
employed by or in the service of the Company from the Grant Date through the last day of the
Performance Period, the number of PSUs that will vest based on the Companys level of
achievement with respect to the Absolute and Relative EP Improvement goals set forth above,
which vesting shall occur as of the last day of the Performance Period (the Vest Date),
shall be determined in accordance with the following matrix:
Percentage of Performance Stock Units Vesting
Absolute EP Improvement
In the event that the Companys actual Absolute and/or Relative EP Improvement is between
the achievement levels set forth in the table above, the percentage vesting shall be
determined by interpolation.
Following the end of the Performance Period and the collection of relevant data necessary to
determine the extent to which the performance goals set forth in this Paragraph 2 have been
satisfied, the Committee will determine: (a) the amount of Absolute EP Improvement and
Relative EP Improvement that was achieved by the Company over the Performance Period; and
(b) the percentage of the Performance Stock Units that vested as of the last day of the
Performance Period. The Committee shall make these determinations in its sole discretion.
The level of achievement of Absolute EP Improvement and Relative EP Improvement shall be
evidenced by the Committees written certification, in accordance with Code Section 162(m).
For the avoidance of doubt, any Performance Stock Units that do not vest in accordance with
the forgoing on the Vest Date shall expire without consideration on the Vest Date.
Upon the vesting of all or a portion of the PSUs, one share of Stock shall be issuable for
each Performance Stock Unit that vests on the Vest Date (the PSU Shares). Thereafter, the
Company will transfer such PSU Shares to the Participant upon the Committees written
certification as set forth in this Paragraph 2 and the satisfaction of any required tax
withholding obligations, securities law registration or other requirements, and applicable
stock exchange listing. No fractional shares shall be issued with respect to vesting of
Performance Stock Units. The Participant shall not acquire or have any rights as a
shareholder of the Company by virtue of these Standard Terms and Conditions (or the Award
evidenced hereby) until the certificates representing shares of Stock issuable pursuant to
this Award are actually issued and delivered to the Participant in accordance with the terms
of the Plan and these Standard Terms and Conditions.
TERMINATION OF EMPLOYMENT OR SERVICE
Except as provided below in the case of death, disability, retirement, or change in control,
in the event that the Participant shall cease to be employed by or in the service of the
Company for any reason before the Performance Stock Units have fully vested pursuant to
Paragraph 2, Participant shall immediately forfeit the unvested portion of the Performance
DEATH; DISABILITY OF PARTICIPANT
If Participants employment or service with the Company is terminated by reason of the
Participants death or disability (as determined by the Committee in its sole discretion),
the Participant shall vest (on the Vest Date) in a pro-rata share of the PSUs equal to the
number of PSUs that would have become vested had Participant remained continuously employed
by the Company through the end of the Performance Period, multiplied by a fraction, the
numerator of which is the number of full calendar quarters completed as of the date of death
or disability, and the denominator of which is 12. One share of Stock shall be issued for
each vested PSU in accordance with Paragraph 2 above, and any non-vested PSU shall be
If Participants employment or service with the Company is terminated by reason of
Retirement (as defined herein), the Participant shall vest (on the Vest Date) in the PSUs
equal to the number of PSUs that would have become vested had Participant remained
continuously employed by the Company through the end of the Performance Period. For
purposes hereof, a qualifying Retirement
shall have occurred if at the time of cessation of employment all of the following
conditions are satisfied: (a) Participant is at least age 55 and has at least five years of
service with the Company, (b) the combination of Participants age plus years of service
equals at least 65, and (c) Participant has signed a non-competition agreement in a form
acceptable to the Company in the period of time from Retirement through the normal vesting
period for each award, or two years, whichever is greater. One share
of Stock shall be issued for
each vested PSU in accordance with Paragraph 2 above, and any non-vested PSU shall be
CHANGE IN CONTROL
Notwithstanding any other provision of these Standard Terms and Conditions to the contrary,
in the event of a Change in Control (as defined in the Plan), all restrictions on the
Performance Stock Units shall lapse, the Performance Stock Units shall become immediately
and fully vested and payable, and one share of Stock shall be issued for each Performance
Stock Unit in accordance with Paragraph 2 above.
If Participant is an employee, Participant acknowledges that the delivery of unrestricted
shares of Stock following vesting of a Performance Stock Unit will give rise to a
withholding tax liability, and that no shares of Stock are issuable hereunder until such
withholding obligation is satisfied in full. The Participant agrees to remit to the Company
the amount of any taxes required to be withheld. The Committee, in its sole discretion, may
permit Participant to satisfy all or part of such tax obligation through withholding of the
number of shares of Stock otherwise issued to the Participant, with the amount of the
withholding to be credited based on the current Fair Market Value of the Stock.
In addition to these Terms and Conditions, the Performance Stock Units shall be subject to
the terms of the Plan, which are incorporated into these Standard Terms and Conditions by
this reference. In the event of a conflict between the terms of these Standard Terms and
Conditions and the Plan, the Plan shall control. Capitalized terms not otherwise defined
herein shall have the meaning set forth in the Plan.
These Standard Terms and Conditions and the Plan constitute the entire understanding between
the Participant and the Company regarding the Performance Stock Units. Any prior agreements,
commitments or negotiations concerning the Performance Stock Units are superseded.
RESTRICTIONS ON RESALES
The Company may impose such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by the Participant or other
subsequent transfers by the Participant of any shares of Stock issued pursuant to the
Performance Stock Units, including without limitation (a) restrictions under an insider
trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner
of sales by Participant and other holders of awards granted under the Plan and (c)
restrictions as to the use of a specified brokerage firm for such resales or other
Performance Stock Units granted under the Plan may not be sold, transferred, pledged,
assigned, exchanged, encumbered or otherwise alienated or hypothecated until the Performance
Stock Units have vested and the corresponding shares of Stock have been issued, except as
specifically provided in the Plan.
In the event that any provision of these Standard Terms and Conditions is declared to be
illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such
provision shall be reformed, if possible, to the extent necessary to render it legal, valid
and enforceable, or otherwise deleted, and the remainder of these Standard Terms and
Conditions shall not be affected except to the extent necessary to reform or delete such
illegal, invalid or unenforceable provision.
The headings preceding the text of the sections hereof are inserted solely for convenience
of reference, and shall not constitute a part of these Standard Terms and Conditions, nor
shall they affect its meaning, construction or effect.
These Standard Terms and Conditions shall inure to the benefit of and be binding upon the
parties hereto and their respective permitted heirs, beneficiaries, successors and assigns.
The Participant acknowledges that a copy of the Plan, the Plan prospectus and a copy of the
Companys most recent annual report to its shareholders has been delivered to the
Neither the Plan nor these Standard Terms and Conditions shall confer upon the Participant
any right with respect to continuance of employment by the Company and/or service on the
Companys Board of Directors, nor shall it interfere in any way with the Participants
right, or the Companys right, to terminate the Participants employment or service at any
Neither this Award nor any Stock issuable hereunder shall be considered compensation for
purposes of any Company employee benefit plan, unless such plan expressly so provides
The Plan and these Standard Terms and Conditions shall be governed, construed, interpreted
and administered solely in accordance with the laws of the state of New York, without regard
to principles of conflicts of law.
All questions arising under the Plan or under these Standard Terms and Conditions shall be
decided by the Committee in its total and absolute discretion. It is expressly understood
that the Committee is authorized to administer, construe and make all determinations
appropriate to the administration of the Plan and these Standard Terms and
Conditions, all of which shall be binding upon the Participant to the maximum extent permitted by the Plan.