EX-10.1






Exhibit 10.1




2008 AMENDED AND RESTATED

EMPLOYMENT AGREEMENT




This 2008 Amended and Restated Employment Agreement (“Agreement”) is made by and between ROY
VALLEE, having offices at 2211 South 47th Street, Phoenix, AZ 85034 (the “Executive”)
and AVNET, INC., a New York corporation, with its principal executive offices at 2211 South
47th Street, Phoenix, AZ 85034 (the “Company”), as of this 19th day of
December, 2008, but to be effective as of June 29, 2008 (the “Effective Date”).



WHEREAS, Executive is now and has been employed by the Company as Chairman and Chief Executive
Officer pursuant to a certain Employment Agreement dated June 29, 2002, (referred to herein as the
“Prior Employment Agreement”); and



WHEREAS, the Company and Executive desire to amend and restate the Prior Employment Agreement
primarily for compliance with Section 409A of the Internal Revenue Code of 1986, as amended
(“Code”), and the guidance issued thereunder by the United States Department of Treasury and/or the
Internal Revenue Service (collectively “Section 409A”) and Internal Revenue Service Revenue Ruling
2008-13; and



WHEREAS, the Company wishes to provide for the continued employment of Executive in the role
of Chairman and Chief Executive Officer; and



WHEREAS, Executive wishes to accept such continued responsibilities and employment and to
render services to the Company in accordance with the provisions of this Agreement;



NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this
Agreement, the parties agree as follows:




	1.	 	Employment, Duties and Responsibilities





a. Employment. The Company hereby employs Executive, and Executive hereby accepts
employment upon the terms and conditions set forth in this Agreement, which shall supercede and
replace the Prior Employment Agreement.



b. Duties and Responsibilities. Executive is currently the Chairman and Chief
Executive Officer of the Company and is hereby engaged to continue such duties as Chairman and
Chief Executive Officer for the term of this Agreement. Executive shall serve without additional
compensation as a member of the Board of Directors of the Company (the “Board”) and as an officer
or director of subsidiaries, divisions or affiliates if elected or appointed to such offices. In
the event that Executive is not elected to serve as Chairman and Chief Executive Officer of the
Company or is otherwise relieved of his duties as such, he shall not be required to perform other
duties in lieu thereof except as otherwise specifically provided herein.



c. Performance of Duties. Executive agrees to devote his full time attention and best
efforts to the business and affairs of the Company. Executive shall perform all duties and
responsibilities commensurate with his position as Chairman and Chief Executive Officer and shall
follow the reasonable directions of the Board. Executive may serve on civic, charitable or
corporate boards or committees, fulfill speaking engagements and manage his personal affairs, so
long as the Company, in its sole discretion, reasonably determines that such activities do not
interfere, compete with or otherwise pose a conflict of interest with respect to the performance of
Executive’s duties and responsibilities. Executive shall comply with Company policies and
procedures as adopted from time to time, including the Company’s Code of Conduct.




	2.	 	Term of Agreement





This Agreement shall be effective beginning on the Effective Date, and, subject to earlier
termination as provided in Section 5 below, shall continue through June 28, 2009, and thereafter,
shall automatically be extended for additional one-year increments until terminated pursuant to the
provisions of Section 5.




	3.	 	Compensation





For all services to be rendered by Executive and for all covenants undertaken by him, the
Company shall pay and Executive shall accept the following compensation:



a. Base Salary. Subject to adjustment as provided in Section 3.b., Executive shall be
paid a base salary of One Million and Fifty Thousand Dollars (US $1,050,000) for the fiscal year
beginning on June 29, 2008, as determined by the Compensation Committee of the Board or the full
Board (referred to as the “Compensation Committee”), payable in equal bi-weekly installments or in
other installment frequencies as may be used from time to time by the Company to pay its other
employees located in the United States. The Compensation Committee shall review the base salary of
Executive on no less than an annual basis.



b. Incentive Programs and Bonuses.




(i) Incentive Programs. For each fiscal year of the Company during the term of the
Agreement, beginning with the Company’s fiscal year beginning June 29, 2008,
Executive shall be eligible to receive incentive payments for services rendered
during the fiscal year pursuant to the Company’s Executive Incentive Plan (the
“Incentive Plan”). The amount of any actual incentive payment in any fiscal year
shall be measured by the Company’s performance against goals established in
accordance with the Incentive Plan and may range from zero to any maximum
established pursuant to the Incentive Plan. Notwithstanding the foregoing, if as a
result of the consummation of a business combination event (whether in the form of a
merger, consolidation, transfer of substantial assets, or otherwise) that
constitutes a “change of ownership or control,” within the meaning of Treasury
Regulation Section 1.162-27(e)(2)(v) (an “Ownership Change”), in which the Company
has not been the acquiring and/or surviving entity, Executive’s annual incentive
payment for the Company’s fiscal year that includes the Ownership Change shall be
equal to the highest amount of incentive compensation paid to Executive during the
previous three fiscal years and shall be payable after the end of the fiscal year of
the Company during which the Ownership Change takes place. If after an Ownership
Change the Incentive Plan is terminated or Executive’s participation therein is
otherwise eliminated or discontinued and, in either case, Executive is not
immediately thereafter covered by a substantially equivalent incentive compensation
plan, then in lieu of any such incentive payment, the annual base salary payable to
Executive under Section 3.a. above shall be increased in each such fiscal year,
beginning with the fiscal year after Executive is no longer covered by the Incentive
Plan or such similar plan, by the highest aggregate incentive compensation paid to
Executive by the Company in any fiscal year during the three (3) year period
completed most recently prior to the date of the Ownership Change. For purposes of
this paragraph, the fiscal year of the Company shall be determined without regard to
any Ownership Change.




(ii) Bonus Payments. In addition to any incentive payments under the Incentive
Plan, Executive shall be eligible to receive such additional bonuses as may be
awarded by the Committee or the Board. In the event Executive is employed for only
part of a fiscal year, Executive’s incentive payment pursuant to the Incentive Plan
for the applicable fiscal year will be paid at the end of the performance period and
appropriately pro-rated, based upon actual achievement of performance goals;
provided that, (i) if Executive is then a “specified employee” within the meaning of
Section 409A and the Company’s specified employee identification policy, if any (a
“Specified Employee”), (ii) if the incentive payment is “nonqualified deferred
compensation” within the meaning of Section 409A (and determined by taking into
account the applicable provisions of Section 5.k.) and (iii) the incentive payment
has not been deferred under the terms of the Avnet Deferred Compensation Plan, as
amended (the “DCP”), payment will be made in a lump sum on the first day of the
seventh month following the month of Executive’s “Separation From Service,” within
the meaning of Section 409A (“Six Month Delay Rule”).



c. Participation in Equity Plans. Executive shall participate in the Company’s
various stock option plans and equity incentive plans as may be in effect from time to time;
provided, however, that the grant of any stock options, restricted stock, phantom stock or other
grant or award of equity shall be made by the committee acting under such plans.



d. Employee Benefits. Executive shall be entitled to participate, on terms no less
favorable than the terms offered to other senior executives of the Company, in any group and/or
executive life, hospitalization or disability insurance plan, health program, profit sharing,
deferred compensation plan, employee stock purchase plan, 401(k) plan, pension plan and similar
benefit plans (qualified, non-qualified and supplemental) and other fringe benefits of the Company
and similar programs in effect from time to time. Executive also currently participates in the
Company’s Executive Officers’ Supplemental Life Insurance and Retirement Program (the “Program”).
Executive acknowledges and agrees that the Company may amend the Program in any manner that it
deems appropriate to comply with Section 409A (including, but not limited to, amending distribution
provisions thereunder); provided, however, that the Company may not decrease Executive’s benefits
under the Program without the Executive’s written consent. Notwithstanding any other provision of
the benefit plans, the Program or any other policy of the Company providing for reimbursement of
expenses incurred by Executive or the payment of in-kind benefits, in compliance with Section 409A,
to the extent that such payments are not made under the Short-Term Deferral Exception (as defined
herein):




(i) They will be made pursuant to an arrangement providing for an objectively
determinable and non-discretionary definition of the expenses eligible for
reimbursement or of the in-kind benefits to be provided and during an objectively
and specifically prescribed period;




(ii) The amount of expenses eligible for reimbursement and the provision of in-kind
benefits during any calendar year shall not affect the amount of expenses eligible
for reimbursement or the provision of in-kind benefits in any other calendar year
(other than medical benefits described in Section 105(b) of the Code);




(iii) The reimbursement of an eligible expense shall be made on or before December
31 of the calendar year following the calendar year in which the expense was
incurred; and




(iv) The right to reimbursement or right to in-kind benefit shall not be subject to
liquidation or exchange for another benefit.



e. Vacation and Other Absences. Executive shall be entitled to paid vacations each
year in accordance with the Company’s then-current vacation policy for senior executives.
Executive shall be subject to the policies and procedures relating to other absences from regular
duties for holidays, sick or disability leave, leave of absence without pay, or leave for other
reasons, as those customarily provided to the Company’s senior executives.



f. Expenses. The Company shall reimburse Executive’s travel, entertainment and other
business expenses that are reasonably and necessarily incurred by him in the course of performing
his duties and properly documented; all in accordance with the Company’s policies as in effect from
time to time. In compliance with Section 409A and notwithstanding the terms of any such Company
policy to the contrary, to the extent that such payments are not made under the Short-Term Deferral
Exception:




(i) The amount of expenses eligible for reimbursement during any calendar year shall
not affect the amount of expenses eligible for reimbursement in any other calendar
year;




(ii) The reimbursement of an eligible expense shall be made on or before December 31
of the calendar year following the calendar year in which the expense was incurred;
and




(iii) The right to reimbursement shall not be subject to liquidation or exchange for
another benefit.




	4.	 	Restrictive Covenants





a. Non-Competition. Executive agrees that during the term of this Agreement,
including all renewals, and for any period thereafter during which Executive is engaged and paid by
the Company as a consultant, Executive will not engage directly or indirectly, either as principal,
agent, proprietor, director, officer, employee, or as a ten percent (10%) or more shareholder of
any company (inclusive of the direct or indirect shareholdings of his spouse, child or parent) or
participate in the ownership, management, operation or control or have any other significant
financial interest in any business which is competitive with the business of the Company, including
its subsidiaries and affiliates, or any part thereof.



b. Confidential Information. Executive agrees that he will not, at any time during
the term of this Agreement or thereafter, disclose to another or use for any purpose other than
performing his duties and responsibilities, trade secrets or confidential information of the
Company and its subsidiaries and affiliates including, but not limited to, the Company’s unique
business methods, processes, operating techniques and “know-how” (all of which have been developed
by the Company or its subsidiaries and affiliates through substantial effort and investment),
profit and loss results, market and supplier strategies, customer identity and needs, information
pertaining to employee effectiveness and compensation, inventory strategy, product costs, gross
margins or other information relating to the affairs of the Company and its subsidiaries and
affiliates that he shall have acquired during his employment with the Company.



c. Non-Solicitation of Employees. Executive agrees that he will not, at any time
during the term of this Agreement, including all renewals and at any time thereafter, directly or
indirectly, solicit or induce any of the employees of the Company or its subsidiaries and
affiliates to terminate their employment with their employer.




	5.	 	Termination Rights and Responsibilities





The Company may terminate Executive’s employment with or without cause, and Executive may
voluntarily terminate his employment, at any time during the term of this Agreement, subject to the
provisions of this Section 5 and Section 6.



a. Executive Voluntary Termination of Agreement. Executive may terminate his
employment under this Agreement one (1) year from the date when Executive provides written notice
of termination to the Company. Following such termination, Executive shall be paid base salary
through the termination date and will be eligible for any annual incentive payment (or pro-rata
portion earned through the termination date) paid at the end of the performance period (except as
otherwise provided below or as provided under the DCP) based on actual achievement of performance
goals. If Executive fails to provide one (1) year written notice of termination to the Company, he
shall be paid base salary through the last day worked, but shall not be eligible for any bonus or
annual incentive payments for any partial fiscal year worked and may also be subject to damages
and/or injunctive relief pursuant to Section 7 below for breach of the Agreement. Notwithstanding
any other provision of this Agreement or any plan, program, or arrangement of the Company to the
contrary, (i) if Executive is a Specified Employee and (ii) to the extent any payment to be made to
Executive is “nonqualified deferred compensation” within the meaning of Section 409A (and
determined by taking into account the applicable provisions of Section 5.k.), no payment upon a
Separation From Service will be made before the first day of the seventh month following the month
of Executive’s Separation From Service. If the Company is advised by outside legal counsel that it
must restrict Executive’s participation in retirement and savings type benefits referred to in
Section 3.d of this Agreement under applicable law during the one (1) year period referred to in
the first sentence of this paragraph, then in lieu of participation in those benefits during such
period, the Company shall pay Executive within 30 days after the end of such period (or, if later,
on the first day of the month following the end of the Six Month Delay Rule) an amount equal to the
Company-provided contributions or benefits Executive would have otherwise accumulated under those
retirement or savings type benefits during such period (determined: (a) without regard to any
pre-tax or after-tax contributions that would have otherwise been made by Executive (but by
including the maximum amount of matching contributions that Executive would have otherwise
received) or any lost investment or future tax-deferral opportunities and (b) by assuming that
distributions relating to such retirement or savings type benefits would have been made to
Executive at the end of such one (1) year period) plus a gross-up for any federal, state or local
incomes taxes imposed on Executive on such payment (as determined by the Company).



b. Executive Termination Upon Change in Office and Duties. If during the term hereof
the Company does not continue Executive in the office of Chairman and Chief Executive Officer or he
is elected to some other principal executive office that is unsatisfactory to Executive, Executive
shall not be required to continue to serve the Company in such modified office and may terminate
his employment under this Agreement upon written notice. In accordance with Section 409A,
Executive shall give such notice within ninety (90) days of the Company’s action, and the Company
shall have the opportunity to remedy its action within thirty (30) days. If the Company does not
remedy its action within such thirty (30) day period, Executive may terminate this Agreement and
separate from service no later than two (2) years after the Company’s action that was not cured
within such thirty (30) day period, and such termination will be treated as constructive
termination by the Company as if it were a “Company Termination Without Cause” under Section 5.f.
below.



c. Retirement. Executive’s termination of his employment under this Agreement by
reason of retirement shall be treated as a voluntary termination by Executive pursuant to Section
5.a. above.



d. Death of Executive. This Agreement shall terminate immediately in the event of the
death of Executive. Upon such termination, the Company shall pay to Executive’s legal
representative as soon as practicable all accrued and unpaid base salary and shall pay the
pro-rated portion of any other compensation otherwise due under Section 3 above in a lump sum
within ninety (90) days of Executive’s death; provided that if such ninety (90-) day period begins
in one calendar year and ends in another, the legal representative shall have no right to designate
the year of payment. The Company shall also pay any benefits that are payable pursuant to Section
3(d) pursuant to the terms of the applicable plan or program.



e. Disability of Executive. If Executive becomes Disabled (as defined below) during
the term of this Agreement, his employment shall terminate. For and during the entire period of
such Disability, commencing with the onset of such Disability through the earlier of the date of
cessation of such Disability or the date of Executive’s death, the Company shall pay to Executive
(in lieu of its other obligations hereunder) an annual disability benefit of Three Hundred Thousand
Dollars (US $300,000), to be paid in arrears in equal monthly installments. “Disabled” and
“Disability” shall mean that Executive has been totally disabled by injury or illness, mental or
physical, as a result of which he is prevented from further performance of his duties as Chairman
and Chief Executive Officer of the Company, and that such disability is likely to be permanent and
continuous during the remainder of Executive’s life.



Any required determination as to whether Executive has become Disabled shall, in the event of
a dispute, be made by the American Arbitration Association in Phoenix, Arizona. Once a
determination is made, either by agreement of the parties or by the American Arbitration
Association, that Executive is Disabled or became Disabled during the term of the Agreement, the
disability benefits shall begin two (2) months after such determination; provided, however, that,
to the extent Executive is a Specified Employee at the time of his Separation From Service, the
first six (6) months of payments to Executive of “nonqualified deferred compensation” (within the
meaning of Section 409A and determined by taking into account the applicable provisions of Section
5.k.) that have been postponed under the Six Month Delay Rule shall be accumulated and paid to
Executive on the first day of the seventh month following the month of Executive’s Separation From
Service; and, provided further, that to the extent permissible under Section 409A, Executive’s
disability benefits may begin sooner if Executive is also considered to be “disabled” under Section
409A and did not incur a Separation From Service for some other reason. Disability benefits
hereunder shall be in addition to any disability payments or benefits Executive may be entitled to
under other Company sponsored insurance plans made available to its employees generally. Prior to
his Separation From Service, the Company shall continue to pay Executive as set forth in Section 3.



f. Company Termination Without Cause. The Company may terminate Executive’s
employment as Chairman and Chief Executive Officer of the Company, this Agreement and Executive’s
employment at any time, without cause and without prior notice.



g. Company Termination With Cause. The Company may terminate this Agreement and
Executive’s employment as Chairman and Chief Executive Officer without notice for cause including,
but not limited to, Executive’s gross misconduct, breach of any material term of this Agreement,
willful breach, habitual neglect or wanton disregard of his duties, or conviction of any criminal
act. Upon such termination (and within thirty (30) days thereafter) the Company will pay to
Executive any compensation due prorated to the date of termination pursuant to Section 3.a. above,
and any compensation due pursuant to Section 3.b. above shall be prorated to the date of
termination and paid, pursuant to Section 3.b., at the end of the performance period based upon
actual achievement of performance goals.



h. Executive Termination Upon Change in Control. Upon a Change of Control as defined
in the Change of Control Agreement (the “COC”) separately entered into between Employer and
Employee during the term of this Agreement, the provisions of the COC shall apply. Executive shall
not be entitled to receive any payments under Section 5.a. above relating to his one (1) year
termination notice period under Section 3.b. or be engaged as a consultant under Section 5.f. if he
has incurred a Separation From Service under the COC and has become entitled to payment thereunder;
provided, however, that the Executive shall be entitled to any payments and benefits if he becomes
a consultant under Section 6.a.



i. Resignation as Director. It is contemplated that at all times during the term of
this Agreement that Executive shall continue to serve as a member of the Company’s Board. Upon any
termination of this Agreement, Executive agrees that he shall immediately submit his written
resignation as a member of the Board, which may choose to either accept or reject such resignation
in its discretion.



j. Section 409A. It is intended that each installment of the payments and benefits
provided under this Section 5 shall be treated as a separate payment for purposes of Section 409A,
and that neither the Company nor Executive shall have the right to accelerate or defer the delivery
of any such payments or benefits except to the extent specifically permitted or required by Section
409A.



k. Application of Short-Term Deferral and Separation Pay Plan Exceptions. The
application of the Six Month Delay Rule under this Agreement shall not apply to any installment of
payments and benefits if and to the maximum extent that such installment is deemed to not
constitute nonqualified deferred compensation under Section 409A by virtue of either: (A) the
Executive’s right to the payment was previously subject to a substantial risk of forfeiture under
Section 409A and the payment is thereafter paid within the time periods prescribed under the
short-term deferral exception under Treasury Regulation Section 1.409A-1(b)(4) (“Short-Term
Deferral Exception”) or (B) the payment being made upon involuntary Separation from Service under a
separation pay plan that meets the requirements of Treasury Regulation Section 1.409A-1(b)(9)(iii)
(and any installments that qualify for the exception under Treasury Regulation Section
1.409A-1(b)(9)(iii) must be paid no later than the last day of the Executive’s second taxable year
following the taxable year when the Executive incurred such involuntary Separation from Service)
(“Separation Pay Plan Exception”). The Separation Pay Plan Exception shall be applied, first, to
any installments payable within six months after Separation from Service that does not otherwise
qualify for the Short-Term Deferral Exception and, next, to the latest installments payable within
the permitted payment period for this exception.




	6.	 	Engagement of Executive as Consultant





a. Company Election; Engagement. The Company has the option to engage Executive as a
consultant for a period of up to twenty-four (24) consecutive months immediately following the
termination for any reason of this Agreement or of Executive’s employment with the Company;
provided, however, that the Company only has the option to engage Executive as a consultant for up
to twelve (12) consecutive months after the events described in Sections 5.a. or 5.c.. If the
Company elects to exercise such option, it shall so notify Executive in writing within ten (10)
days after such termination. The consulting engagement shall commence three (3) days after the
giving of such notice or at such other time as mutually agreed. The Company shall engage the
Executive as a consultant for a period of up to twenty-four (24) months following the termination
of this Agreement or of Executive’s employment with the Company under Sections 5.b or 5.f;
provided, however, that the Executive so notifies the Company of his willingness to serve as a
consultant within ten (10) days after such termination.



b. Purpose. The purpose of the consulting engagement shall be to allow for the
orderly transition of Executive’s duties to a successor. Executive’s duties as a consultant would
include, but not necessarily be limited to (i) evaluating and reporting upon the progress of the
Company’s business development; (ii) analyzing the Company’s operating results, (iii) analyzing and
reporting upon proposed operations and the anticipated financial results therefrom; (iv) evaluating
and advising with respect to the effectiveness of the Company’s employees and (v) advising with
respect to supplier relationships and marketing strategies. It is contemplated that the consulting
services shall not exceed nineteen percent (19%) of the average level of bona fide services
performed (whether as an employee or an independent contractor) over the immediately preceding
36-month period.



c. Compensation as Consultant. During any consulting engagement, Executive shall be
an independent contractor (except for purposes of Federal and state income tax withholding and
payroll tax obligations and for benefits specifically mentioned in this paragraph) and shall be
compensated at an annual rate (generally to be paid monthly in arrears) equal to the highest
aggregate base salary and incentive compensation paid to Executive by the Company in any one (1)
fiscal year during the three (3) fiscal years most recently completed prior to the beginning of the
consulting engagement; provided, however, that, (i) if Executive is a Specified Employee and (ii)
to the extent the payment is “nonqualified deferred compensation” within the meaning of Section
409A (and determined by taking into account the applicable provisions of Section 5.k.), payments
will not commence until the first day of the seventh month following the month of Executive’s
Separation From Service, with all missed installment payments paid with such payment; provided,
however, that the preceding delay provisions of this Section 6.c. shall not apply to any
installment of payments and benefits if and to the maximum extent that such installment is deemed
to be paid under a separation pay plan that does not provide for a deferral of compensation by
reason of the application of Treasury Regulation Section 1.409A-1(b)(9)(iii) relating to separation
pay upon an involuntary separation from service (and any installments that qualify for the
exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last
day of Executive’s taxable year following the taxable year of Executive in which such involuntary
separation from service occurs). In addition, during such consulting engagement, Executive shall
receive substantially equivalent benefits with respect to life insurance and with respect to the
use of a Company furnished automobile as he received while an employee. Executive shall also
receive substantially equivalent medical and dental benefits as he received as an employee, and
such benefits shall also be provided to Executive’s eligible spouse and dependents under rules
generally applicable to the Company’s group medical plan; provided, however, that if Executive is
not then otherwise eligible to participate in a self-insured group medical plan maintained by the
Company or such participation would violate nondiscrimination rules under Section 105 of the Code
and the Company is unable to provide such benefits through a fully insured plan, such benefits
shall only be provided through the Executive’s COBRA coverage period under Section 4980B of the
Code, in which case the Company shall reimburse Executive for a percentage of his share of the
COBRA premium equal to the highest percentage of the annual premium that the Company pays on behalf
of other senior executive officers generally under its group medical plans plus a gross-up payment
for any federal, state or local income taxes incurred by Executive on such reimbursement payment.
After the Executive’s COBRA coverage has ended, the Company shall reimburse Executive for a portion
of any medical insurance coverage secured on his own behalf (and on behalf of his spouse and any
dependents otherwise eligible under the Company’s group medical plan) through the balance of his
consulting engagement (plus any gross-up payment for federal, state or local income taxes)
consistent with the percentage specified above, but such reimbursement shall not exceed the amount
of the COBRA premium reimbursement that would otherwise apply under the preceding sentence.
Notwithstanding the foregoing, if Executive is a Specified Employee and to the extent such benefits
are “nonqualified deferred compensation” within the meaning of Section 409A (and determined by
taking into account the applicable provisions of Section 5.k.), Executive shall pay for such
benefits until the first day of the seventh month following the month of Executive’s Separation
From Service, at which time the Company shall reimburse Executive for such payment. Also, in
compliance with Section 409A and notwithstanding any other provision of the plans and programs, to
the extent that such payments are not made under the Short-Term Deferral Exception:




(i) The amount of expenses eligible for reimbursement and the provision of
in-kind benefits during any calendar year shall not affect the amount of expenses
eligible for reimbursement or the provision of in-kind benefits in any other
calendar year (other than medical benefits described in Section 105(b) of the Code);




(ii) The reimbursement of an eligible expense shall be made on or before
December 31 of the calendar year following the calendar year in which the expense
was incurred; and




(iii) The right to reimbursement or right to in-kind benefits shall not be
subject to liquidation or exchange for another benefit.



d. Consultant Obligations. During any such consulting engagement, Executive shall
observe and be bound by each of the covenants set forth in Section 4 of this Agreement and
Executive acknowledges that in the event of his violation of such covenants the Company shall be
entitled to the relief described in Section 7 of this Agreement.



e. Severance Offset. If Executive is engaged as a consultant for any reason following
the termination of this Agreement or his employment with the Company, the amount of compensation
received as a consultant shall offset the Company’s monetary obligations to Executive, if any,
under Sections 3 and 5 of this Agreement or any Company severance policy for employees generally
that is then in effect.



f. Section 409A. It is intended that each installment of the payments and benefits
provided under this Section 6 shall be treated as a separate payment for purposes of Section 409A,
and that neither the Company nor Executive shall have the right to accelerate or defer the delivery
of any such payments or benefits except to the extent specifically permitted or required by Section
409A. Moreover, application of the Six Month Delay Rule under this Section 6 may be subject to the
applicable provisions of Section 5.k.




	7.	 	Specific Performance





Executive acknowledges that (a) the services to be rendered under this Agreement and the
obligations of Executive assumed herein are of a special, unique and extraordinary character; (b)
it would be difficult or impossible to replace such services and obligations; (c) the Company, its
subsidiaries and affiliates will be irreparably damaged if the provisions hereof are not
specifically enforced; and (d) the award of monetary damages will not adequately protect the
Company, its subsidiaries and affiliates in the event of a breach hereof by Executive. As a
result, Executive agrees and consents that if he violates any of the provisions of this Agreement,
the Company shall, without any bond or other security being required and without the necessity of
proving monetary damages, be entitled to a temporary and/or permanent injunction to be issued by a
court of competent jurisdiction restraining Executive from committing or continuing any violation
of this Agreement, or any other appropriate decree of specific performance. Such remedies shall
not be exclusive and shall be in addition to any other remedy the Company may have.




	8.	 	Governing Law





This Agreement shall be construed, interpreted and governed by the law of the State of
Arizona, without giving effect to Arizona principles regarding conflict of laws and, where
applicable, the Code. Reference to any provision of the Code or any regulation issued thereunder
shall be deemed to include any successor provision.




	9.	 	Miscellaneous Provisions





a. Tax Withholding. Notwithstanding anything in this Agreement to the contrary, the
Company shall withhold from any amounts payable under this Agreement all federal, state and local
taxes and all other amounts relating to tax or other payroll deductions as the Company may
reasonably determine should be withheld.



b. Succession. This Agreement shall extend to and be binding upon Executive, his
legal representatives, heirs and distributees and upon the Company, its successors and assigns.



c. Entire Agreement. This Agreement is the entire agreement of the parties with
respect to its subject matter and no waiver, modification or amendment of any of its provisions
shall be valid unless in writing and signed by both parties. This Agreement supersedes the Prior
Employment Agreement, which is hereby canceled and is of no further effect.



d. Waiver of Breach. The waiver of breach of any term or condition of this Agreement
shall not be deemed to constitute a waiver of any other term or condition of this Agreement.



e. Severability. If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.



f. Section 409A Compliance. The parties intend that any “nonqualified deferred
compensation” within the meaning of Section 409A payable to Executive under this Agreement (or
under any plan or program maintained by the Company in which Executive participates), be paid in
compliance with Section 409A such that there are no adverse tax consequences, interest, or
penalties as a result of the payments. To the extent permitted by law, the parties agree to modify
this Agreement to the extent necessary to comply with Section 409A.



Anything in this Agreement to the contrary notwithstanding and except as set forth in this
Section 9.f., if in connection with any payment or distribution by the Company to or for the
benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise) (a “Payment”), Executive is subject to, or is notified by the
Internal Revenue Service that he is or will be subject to, penalty taxes imposed by Section 409A or
if any interest or penalties are incurred by Executive with respect to such penalty taxes (such
penalty taxes together with any such interest and penalties, are hereinafter collectively referred
to as the “Section 409A Tax”), then Executive shall be entitled to receive an additional payment (a
“Section 409A Gross-Up Payment”) in an amount such that after payment by Executive of all Section
409A Tax and all income taxes (and any interest and penalties imposed with respect thereto) imposed
upon the Section 409A Gross-Up Payment, Executive retains an amount of the 409A Gross-Up Payment
equal to the Section 409A Tax imposed upon the Payment; provided, however, that the Company shall
only be responsible to make a Section 409A Gross-Up Payment with respect to the Section 409A Tax if
the Section 409A Tax relates to or results from (i) the Company’s failure to operate a
“nonqualified deferred compensation plan” (as such term is defined in Section 409A) (a “NQDC”) in
compliance with Section 409A on and after January 1, 2005; or (ii) the lack of compliance of any
Company NQDC document or documentation with Section 409A; or (iii) the payment or distribution by
the Company (or by any Company NQDC) of any NQDC amount if such payment or distribution is not in
compliance with Section 409A. For the avoidance of doubt, the Company shall not be responsible to
make any Section 409A Gross-Up Payment if, (1) after a timely notice or request by the Company to
Executive, Executive refuses or fails to make a timely election to alter the timing of payment or
distribution or (2) Executive, in his capacity as an officer of the Company, causes the Company to
take any action, or causes the Company to fail to take any action, which causes Executive to be
subject to a Section 409A Tax.



Determinations required to be made under this Section 9.f. regarding the amount of the Section
409A Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall
be made by a certified public accounting firm selected by the Company (the “Accounting Firm”) which
shall provide detailed supporting calculations both to the Company and Executive within thirty (30)
business days of the receipt of notice from Executive that he is subject to a Section 409A Tax, or
such earlier time as is reasonably requested by the Company. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Section 409A Gross-Up Payment, as
determined pursuant to this Section 9.f., shall be paid by the Company to Executive within thirty
(30) days of the receipt of the Accounting Firm’s determination, but in no event later than the
last day of the year following the year in which Executive remits the related taxes. Any
determination by the Accounting Firm shall be binding upon the Company and Executive.



g. Excise Taxes on Parachute Payments. In the event that Executive is deemed to have
received a parachute payment (as such term is defined in Section 280G(b)(2) of the Code) that is
subject to excise taxes (“Excise Taxes”) imposed by Section 4999 of the Code with respect to
compensation paid to Executive pursuant to this Agreement, the Company shall make an additional
payment equal to the sum of (i) all Excise Taxes payable by Executive plus (ii) any additional
Excise Tax or federal, state or local income taxes imposed with respect to such payments. In
compliance with Section 409A, the payment shall be made on or before the last day of Executive’s
taxable year next following the taxable year in which Executive remits the Excise Tax.



h. Survival. The provisions of Sections 4, 6, 7, 8 and 9 of this Agreement shall
survive the termination of the Executive’s employment hereunder.



i. Interpretation. If any court of competent jurisdiction or duly constituted
arbitration panel shall refuse to enforce any or all of the provisions hereof because they are more
extensive (whether as to geographic scope, duration, activity, subject or otherwise) than is
reasonable, it is expressly understood and agreed that such provisions shall not be void, but that
for the purpose of such proceedings and in such jurisdiction, the restrictions contained herein
shall be deemed reduced or limited to the extent necessary to permit enforcement of such
provisions.



j. Interest on Payments Subject to Six Month Delay Rule. Any payment that is delayed
to Executive under the Six Month Delay Rule shall accrue interest based on the prime rate of
interest in effect at Bank of America, N.A. (or another bank designated by the Company that is one
of its principal banks) on the date when Executive has incurred a Separation From Service with the
Company. Interest shall accrue daily on the unpaid amount due to Executive beginning with such
date at the prime rate then in effect on a per annum basis, based on a 365 day year period with the
actual number of days elapsed up through the day before the actual payment date. Notwithstanding
the foregoing, interest on payments delayed due to the Six Month Delay Rule under the Program shall
be determined under the terms of the Program.



k. Headings. The headings of the sections and subsections are inserted for
convenience only and shall not be deemed to constitute a part hereof or to affect the meaning
thereof.



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IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the
Effective Date.



	 	 	 
	AVNET, INC.	 	EXECUTIVE
	By:

	 	

	Raymond Sadowski

Title: Senior Vice President

	 	

Roy Vallee







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