Business Context and Reporting Period
Company: AVNET, INC.
Filing Type: Form 8-K (Current Report)
Date of Report: November 11, 2005
Subject: Entry into a Material Definitive Agreement regarding changes to non-employee director compensation effective January 1, 2006.
Key Financial Metrics
This filing does not report operational financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on governance and compensation adjustments.
Material Changes Versus Prior Period
The Board of Directors approved the following changes to the director compensation program effective January 1, 2006:
- Annual Cash Retainers:
- Directors elected prior to January 1997: $60,000.
- Directors elected in or after January 1997: $65,000.
- Annual Equity Compensation: $75,000 valued in restricted shares or phantom stock units (PSUs) for directors elected in or after January 1997.
- Committee Chair Retainers:
- Audit Committee Chair: $10,000.
- Compensation Committee Chair: $7,500.
- Corporate Governance and Finance Committee Chairs: $5,000 each.
- Discontinued Items: Per diem meeting attendance fees, stock options, the Charitable Award Program, and the Matching Gifts program have been terminated.
Guidance, Outlook, and Management Commentary
Deferral Options: Under the Avnet Deferred Compensation Plan for Outside Directors, directors may defer cash retainers or elect to receive PSUs in lieu of restricted shares. The number of shares/PSUs is calculated by dividing $75,000 by the average of the high and low stock price on the first business day of January.
Effective Dates: Elections are effective January 1, 2006, and remain in effect through December 31, 2006, and future years until superseded. New elections must be received by November 30 of the preceding calendar year.
Risks and Contingencies: The filing text does not provide specific risk factors or contingencies beyond the standard governance changes.
Important Facts for Investor Verification
- Verify the total annual cost of the new director compensation package compared to the prior year's structure.
- Confirm the impact of eliminating stock options and per diem fees on the overall equity dilution and cash burn for the company.
- Review the specific terms of the Phantom Stock Units (PSUs) to understand vesting and payout conditions.
- Check subsequent filings to ensure the compensation changes were implemented as scheduled on January 1, 2006.