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|
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|
SOUTH CAROLINA
|
|
57-0965380
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(State or other jurisdiction of
incorporation or organization)
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|
(I.R.S. Employer
Identification No.)
|
|
|
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
|
¨
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Class
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|
Outstanding at October 31, 2012
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Common Stock, no par value per share
|
|
27,650,282 shares
|
|
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Page #
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|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
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Item 1A.
|
||
Item 6.
|
||
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|
|
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Item 1.
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Financial Statements
|
|
September 30,
2012 |
|
June 30,
2012 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
38,731
|
|
|
$
|
29,173
|
|
Accounts receivable, less allowance of $28,744 at September 30, 2012
and $27,349 at June 30, 2012
|
468,718
|
|
|
470,808
|
|
||
Inventories
|
471,014
|
|
|
475,479
|
|
||
Prepaid expenses and other current assets
|
38,730
|
|
|
41,846
|
|
||
Deferred income taxes
|
15,138
|
|
|
14,624
|
|
||
Total current assets
|
1,032,331
|
|
|
1,031,930
|
|
||
Property and equipment, net
|
48,328
|
|
|
48,785
|
|
||
Goodwill
|
54,187
|
|
|
53,885
|
|
||
Other non-current assets, including identifiable intangible assets
|
73,244
|
|
|
67,206
|
|
||
Total assets
|
$
|
1,208,090
|
|
|
$
|
1,201,806
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
—
|
|
|
$
|
4,268
|
|
Current portion of contingent consideration
|
9,816
|
|
|
4,976
|
|
||
Accounts payable
|
384,111
|
|
|
419,683
|
|
||
Accrued expenses and other current liabilities
|
62,210
|
|
|
67,776
|
|
||
Income taxes payable
|
10,058
|
|
|
1,698
|
|
||
Total current liabilities
|
466,195
|
|
|
498,401
|
|
||
Deferred income taxes
|
3,318
|
|
|
—
|
|
||
Long-term debt
|
5,429
|
|
|
5,429
|
|
||
Borrowings under revolving credit facility
|
12,215
|
|
|
—
|
|
||
Long-term portion of contingent consideration
|
7,526
|
|
|
11,677
|
|
||
Other long-term liabilities
|
37,271
|
|
|
33,988
|
|
||
Total liabilities
|
531,954
|
|
|
549,495
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, no par value; 3,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, no par value; 45,000,000 shares authorized, 27,650,282 and 27,604,840 shares issued and outstanding at September 30, 2012 and June 30, 2012, respectively
|
142,604
|
|
|
139,557
|
|
||
Retained earnings
|
552,086
|
|
|
534,445
|
|
||
Accumulated other comprehensive income (loss)
|
(18,554
|
)
|
|
(21,691
|
)
|
||
Total shareholders’ equity
|
676,136
|
|
|
652,311
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,208,090
|
|
|
$
|
1,201,806
|
|
June 30, 2012 results are derived from audited consolidated financial statements.
|
|
See accompanying notes to these condensed consolidated financial statements.
|
|
Quarter ended
|
||||||
|
September 30,
|
||||||
|
2012
|
|
2011
|
||||
Net sales
|
$
|
733,605
|
|
|
$
|
770,259
|
|
Cost of goods sold
|
659,565
|
|
|
691,169
|
|
||
Gross profit
|
74,040
|
|
|
79,090
|
|
||
Selling, general and administrative expenses
|
47,061
|
|
|
46,569
|
|
||
Change in fair value of contingent consideration
|
764
|
|
|
894
|
|
||
Operating income
|
26,215
|
|
|
31,627
|
|
||
Interest expense
|
124
|
|
|
486
|
|
||
Interest income
|
(633
|
)
|
|
(450
|
)
|
||
Other (income) expense, net
|
(15
|
)
|
|
3,530
|
|
||
Income before income taxes
|
26,739
|
|
|
28,061
|
|
||
Provision for income taxes
|
9,097
|
|
|
9,681
|
|
||
Net income
|
$
|
17,642
|
|
|
$
|
18,380
|
|
Per share data:
|
|
|
|
||||
Weighted-average shares outstanding, basic
|
27,618
|
|
|
27,138
|
|
||
Net income per common share, basic
|
$
|
0.64
|
|
|
$
|
0.68
|
|
|
|
|
|
||||
Weighted-average shares outstanding, diluted
|
27,901
|
|
|
27,551
|
|
||
Net income per common share, diluted
|
$
|
0.63
|
|
|
$
|
0.67
|
|
See accompanying notes to these condensed consolidated financial statements.
|
|
Quarter ended
|
||||||
|
September 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(in thousands)
|
||||||
Net income
|
$
|
17,642
|
|
|
$
|
18,380
|
|
Unrealized gain on hedged transaction, net of tax
|
—
|
|
|
139
|
|
||
Foreign currency translation adjustment
|
3,137
|
|
|
(11,981
|
)
|
||
Comprehensive income (loss)
|
$
|
20,779
|
|
|
$
|
6,538
|
|
See accompanying notes to these condensed consolidated financial statements.
|
|
Quarter ended
|
||||||
|
September 30,
|
||||||
|
2012
|
|
2011
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
17,642
|
|
|
$
|
18,380
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
2,314
|
|
|
2,582
|
|
||
Provision for accounts and notes receivable
|
2,039
|
|
|
1,447
|
|
||
Share-based compensation and restricted stock
|
1,716
|
|
|
1,772
|
|
||
Deferred income taxes
|
(1,288
|
)
|
|
(1,483
|
)
|
||
Excess tax benefits from share-based payment arrangements
|
(608
|
)
|
|
(1,175
|
)
|
||
Change in fair value of contingent consideration
|
764
|
|
|
894
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
2,236
|
|
|
(27,603
|
)
|
||
Inventories
|
6,685
|
|
|
(22,575
|
)
|
||
Prepaid expenses and other assets
|
2,835
|
|
|
(6,205
|
)
|
||
Other non-current assets
|
(2,792
|
)
|
|
3,508
|
|
||
Accounts payable
|
(36,457
|
)
|
|
(8,668
|
)
|
||
Accrued expenses and other liabilities
|
(1,636
|
)
|
|
(2,148
|
)
|
||
Income taxes payable
|
8,949
|
|
|
7,710
|
|
||
Net cash provided by (used in) operating activities
|
2,399
|
|
|
(33,564
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(2,006
|
)
|
|
(2,339
|
)
|
||
Net cash provided by (used in) investing activities
|
(2,006
|
)
|
|
(2,339
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings (repayments) on short-term borrowings, net
|
(4,452
|
)
|
|
1,151
|
|
||
Borrowings (repayments) on revolving credit, net of debt issuance costs
|
12,053
|
|
|
43,433
|
|
||
Exercise of stock options
|
759
|
|
|
719
|
|
||
Excess tax benefits from share-based payment arrangements
|
608
|
|
|
1,175
|
|
||
Net cash provided by (used in) financing activities
|
8,968
|
|
|
46,478
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
197
|
|
|
(2,070
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
9,558
|
|
|
8,505
|
|
||
Cash and cash equivalents at beginning of period
|
29,173
|
|
|
28,747
|
|
||
Cash and cash equivalents at end of period
|
$
|
38,731
|
|
|
$
|
37,252
|
|
See accompanying notes to these condensed consolidated financial statements.
|
|
Quarter ended
|
||||||
|
September 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(in thousands, except per share data)
|
||||||
Numerator:
|
|
|
|
||||
Net Income
|
$
|
17,642
|
|
|
$
|
18,380
|
|
Denominator:
|
|
|
|
||||
Weighted-average shares, basic
|
27,618
|
|
|
27,138
|
|
||
Dilutive effect of share-based payments
|
283
|
|
|
413
|
|
||
Weighted-average shares, diluted
|
27,901
|
|
|
27,551
|
|
||
|
|
|
|
||||
Net income per common share, basic
|
$
|
0.64
|
|
|
$
|
0.68
|
|
Net income per common share, diluted
|
$
|
0.63
|
|
|
$
|
0.67
|
|
|
September 30,
2012 |
|
June 30,
2012 |
||||
|
(in thousands)
|
||||||
Foreign currency translation adjustment
|
$
|
(18,554
|
)
|
|
$
|
(21,691
|
)
|
Accumulated other comprehensive income (loss)
|
$
|
(18,554
|
)
|
|
$
|
(21,691
|
)
|
|
North American
Distribution
Segment
|
|
International
Distribution
Segment
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance as of June 30, 2012
|
$
|
20,081
|
|
|
$
|
33,804
|
|
|
$
|
53,885
|
|
Foreign currency translation adjustment
|
—
|
|
|
302
|
|
|
302
|
|
|||
Balance as of September 30, 2012
|
$
|
20,081
|
|
|
$
|
34,106
|
|
|
$
|
54,187
|
|
|
September 30,
2012 |
|
June 30,
2012 |
||||
|
(in thousands)
|
||||||
Short-term borrowings
|
$
|
—
|
|
|
$
|
4,268
|
|
|
September 30,
2012 |
|
June 30,
2012 |
||||
|
(in thousands)
|
||||||
Borrowings under revolving credit facility
|
$
|
12,215
|
|
|
$
|
—
|
|
|
September 30,
2012 |
|
June 30,
2012 |
||||
|
(in thousands)
|
||||||
Industrial Development Revenue Bond, monthly payments of interest only, 1.08% variable interest rate at September 30, 2012 and maturing on September 1, 2032
|
$
|
5,429
|
|
|
$
|
5,429
|
|
|
Quarter ended
|
||||||
|
September 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(in thousands)
|
||||||
Net foreign exchange derivative contract (gains) losses
|
$
|
1,223
|
|
|
$
|
1,212
|
|
Net foreign currency transactional and re-measurement (gains) losses
|
(1,150
|
)
|
|
2,361
|
|
||
Net foreign currency (gains) losses
|
$
|
73
|
|
|
$
|
3,573
|
|
|
As of September 30, 2012
|
||||||
|
Fair Value of
Derivatives
Designated as Hedge
Instruments
|
|
Fair Value of
Derivatives
Not Designated as Hedge
Instruments
|
||||
|
(in thousands)
|
||||||
Derivative assets:
(a)
|
|
|
|
||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
10
|
|
Derivative liabilities:
(b)
|
|
|
|
||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
30
|
|
(a)
|
All derivative assets are recorded as prepaid expenses and other current assets in the condensed consolidated balance sheet.
|
(b)
|
All derivative liabilities are recorded as accrued expenses and other current liabilities in the condensed consolidated balance sheet.
|
•
|
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; and
|
•
|
Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
|
•
|
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).
|
|
Total
|
|
Quoted
prices in
active
markets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
12,737
|
|
|
$
|
12,737
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
12,747
|
|
|
$
|
12,737
|
|
|
$
|
10
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
12,737
|
|
|
$
|
12,737
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
30
|
|
|
—
|
|
|
30
|
|
|
—
|
|
||||
Liability for contingent consideration, current and non-current portion
|
17,342
|
|
|
—
|
|
|
—
|
|
|
17,342
|
|
||||
Total liabilities at fair value
|
$
|
30,109
|
|
|
$
|
12,737
|
|
|
$
|
30
|
|
|
$
|
17,342
|
|
|
Total
|
|
Quoted
prices in
active
markets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
11,635
|
|
|
$
|
11,635
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
21
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
11,656
|
|
|
$
|
11,635
|
|
|
$
|
21
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan investments, current and non-current portion
|
$
|
11,635
|
|
|
$
|
11,635
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward foreign currency exchange contracts
|
110
|
|
|
—
|
|
|
110
|
|
|
—
|
|
||||
Liability for contingent consideration, current and non-current portion
|
16,653
|
|
|
—
|
|
|
—
|
|
|
16,653
|
|
||||
Total liabilities at fair value
|
$
|
28,398
|
|
|
$
|
11,635
|
|
|
$
|
110
|
|
|
$
|
16,653
|
|
|
Contingent consideration for the quarter ended
|
||||||
|
September 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(in thousands)
|
||||||
Fair value at beginning of period
|
$
|
16,653
|
|
|
$
|
23,794
|
|
Change in fair value of contingent consideration
|
764
|
|
|
894
|
|
||
Foreign currency translation adjustment
|
(75
|
)
|
|
(3,435
|
)
|
||
Fair value at end of period
|
$
|
17,342
|
|
|
$
|
21,253
|
|
•
|
estimated future results, net of pro forma adjustments set forth in the Share Purchase and Sale Agreement;
|
•
|
the probability of achieving these results; and
|
•
|
a discount rate reflective of the Company’s creditworthiness and market risk premium associated with the Brazilian market.
|
|
Quarter ended
|
||||||
|
September 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(In thousands)
|
||||||
Sales:
|
|
|
|
||||
North American distribution
|
$
|
565,298
|
|
|
$
|
583,582
|
|
International distribution
|
187,792
|
|
|
196,787
|
|
||
Less intersegment sales
|
(19,485
|
)
|
|
(10,110
|
)
|
||
|
$
|
733,605
|
|
|
$
|
770,259
|
|
Depreciation and amortization:
|
|
|
|
||||
North American distribution
|
$
|
1,008
|
|
|
$
|
1,043
|
|
International distribution
|
1,306
|
|
|
1,539
|
|
||
|
$
|
2,314
|
|
|
$
|
2,582
|
|
Operating income:
|
|
|
|
||||
North American distribution
|
$
|
24,983
|
|
|
$
|
29,274
|
|
International distribution
|
1,232
|
|
|
2,353
|
|
||
|
$
|
26,215
|
|
|
$
|
31,627
|
|
Capital expenditures:
|
|
|
|
||||
North American distribution
|
$
|
1,889
|
|
|
$
|
2,190
|
|
International distribution
|
117
|
|
|
149
|
|
||
|
$
|
2,006
|
|
|
$
|
2,339
|
|
|
September 30, 2012
|
|
June 30, 2012
|
||||
|
(in thousands)
|
||||||
Assets:
|
|
|
|
||||
North American distribution
|
$
|
799,858
|
|
|
$
|
813,889
|
|
International distribution
|
408,232
|
|
|
387,917
|
|
||
|
$
|
1,208,090
|
|
|
$
|
1,201,806
|
|
|
September 30, 2012
|
June 30, 2012
|
||||
|
(in thousands)
|
|||||
Assets
|
|
|
||||
Prepaid expenses and other current assets
|
$
|
3,869
|
|
$
|
3,886
|
|
Other non-current assets
|
$
|
5,089
|
|
$
|
5,112
|
|
Liabilities
|
|
|
||||
Other current liabilities
|
$
|
3,869
|
|
$
|
3,886
|
|
Other long-term liabilities
|
$
|
5,089
|
|
$
|
5,112
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Quarter ended September 30,
|
||||
|
2012
|
|
2011
|
||
Return on invested capital ratio, annualized
|
17.0
|
%
|
|
18.2
|
%
|
|
Quarter ended September 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(in thousands)
|
||||||
Reconciliation of EBITDA to net income:
|
|
||||||
Net income
|
$
|
17,642
|
|
|
$
|
18,380
|
|
Plus: income taxes
|
9,097
|
|
|
9,681
|
|
||
Plus: interest expense
|
124
|
|
|
486
|
|
||
Plus: depreciation & amortization
|
2,314
|
|
|
2,582
|
|
||
EBITDA (numerator)
|
$
|
29,177
|
|
|
$
|
31,129
|
|
|
Quarter ended September 30,
|
||||||
|
2012
|
|
2011
|
||||
|
(in thousands)
|
||||||
Invested capital calculations:
|
|
||||||
Equity – beginning of the quarter
|
$
|
652,311
|
|
|
$
|
587,394
|
|
Equity – end of the quarter
|
676,136
|
|
|
597,658
|
|
||
Average equity
|
664,224
|
|
|
592,526
|
|
||
Average funded debt
(a)
|
16,563
|
|
|
86,780
|
|
||
Invested capital (denominator)
|
$
|
680,787
|
|
|
$
|
679,306
|
|
|
|
|
|
||||
Return on invested capital (annualized)
(b)
|
17.0
|
%
|
|
18.2
|
%
|
(a)
|
Average funded debt is calculated as the daily average amounts outstanding on our short-term and long-term interest-bearing debt.
|
(b)
|
The annualized EBITDA amount is divided by days in the quarter times 365 days per year (366 during leap years). There were 92 days in the current and prior year quarters.
|
|
Quarter ended September 30,
|
|
|
|||||||||||
|
2012
|
|
2011
|
|
$ Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
North American distribution
|
$
|
545,813
|
|
|
$
|
573,472
|
|
|
$
|
(27,659
|
)
|
|
(4.8
|
)%
|
International distribution
|
187,792
|
|
|
196,787
|
|
|
(8,995
|
)
|
|
(4.6
|
)%
|
|||
Net sales
|
$
|
733,605
|
|
|
$
|
770,259
|
|
|
$
|
(36,654
|
)
|
|
(4.8
|
)%
|
|
Quarter ended September 30,
|
|
|
|
|
|
% of Net Sales
September 30,
|
|||||||||||||
|
2012
|
|
2011
|
|
$ Change
|
% Change
|
2012
|
|
2011
|
|||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
North American distribution
|
$
|
54,808
|
|
|
$
|
56,853
|
|
|
$
|
(2,045
|
)
|
|
(3.6
|
)%
|
|
10.0
|
%
|
|
9.9
|
%
|
International distribution
|
19,232
|
|
|
22,237
|
|
|
(3,005
|
)
|
|
(13.5
|
)%
|
|
10.2
|
%
|
|
11.3
|
%
|
|||
Gross profit
|
$
|
74,040
|
|
|
$
|
79,090
|
|
|
$
|
(5,050
|
)
|
|
(6.4
|
)%
|
|
10.1
|
%
|
|
10.3
|
%
|
|
Quarter ended September 30,
|
|
|
|
|
|
% of Net Sales
September 30,
|
|||||||||||||
|
2012
|
|
2011
|
|
$ Change
|
% Change
|
2012
|
|
2011
|
|||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Selling, general and administrative expense
|
$
|
47,061
|
|
|
$
|
46,569
|
|
|
$
|
492
|
|
|
1.1
|
%
|
|
6.4
|
%
|
|
6.0
|
%
|
Change in fair value of contingent consideration
|
764
|
|
|
894
|
|
|
(130
|
)
|
|
(14.5
|
)%
|
|
0.1
|
%
|
|
0.1
|
%
|
|||
Operating expense
|
$
|
47,825
|
|
|
$
|
47,463
|
|
|
$
|
362
|
|
|
0.8
|
%
|
|
6.5
|
%
|
|
6.2
|
%
|
|
Quarter ended September 30,
|
|
|
|
|
|
% of Net Sales
September 30,
|
|||||||||||||
|
2012
|
|
2011
|
|
$ Change
|
% Change
|
2012
|
|
2011
|
|||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
North American distribution
|
$
|
24,983
|
|
|
$
|
29,274
|
|
|
$
|
(4,291
|
)
|
|
(14.7
|
)%
|
|
4.6
|
%
|
|
5.1
|
%
|
International distribution
|
1,232
|
|
|
2,353
|
|
|
(1,121
|
)
|
|
(47.6
|
)%
|
|
0.7
|
%
|
|
1.2
|
%
|
|||
|
$
|
26,215
|
|
|
$
|
31,627
|
|
|
$
|
(5,412
|
)
|
|
(17.1
|
)%
|
|
3.6
|
%
|
|
4.1
|
%
|
|
Quarter ended September 30,
|
|
|
|
|
|
% of Net Sales
September 30,
|
|||||||||||||
|
2012
|
|
2011
|
|
$ Change
|
% Change
|
2012
|
|
2011
|
|||||||||||
|
(in thousands)
|
|
|
|
|
|
|
|||||||||||||
Interest expense
|
$
|
124
|
|
|
$
|
486
|
|
|
$
|
(362
|
)
|
|
(74.5
|
)%
|
|
0.0
|
%
|
|
0.1
|
%
|
Interest income
|
(633
|
)
|
|
(450
|
)
|
|
(183
|
)
|
|
40.7
|
%
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
|||
Net foreign exchange (gains) losses
|
73
|
|
|
3,573
|
|
|
(3,500
|
)
|
|
(98.0
|
)%
|
|
0.0
|
%
|
|
0.5
|
%
|
|||
Other, net
|
(88
|
)
|
|
(43
|
)
|
|
(45
|
)
|
|
104.7
|
%
|
|
(0.0
|
)%
|
|
(0.0
|
)%
|
|||
Total other (income) expense, net
|
$
|
(524
|
)
|
|
$
|
3,566
|
|
|
$
|
(4,090
|
)
|
|
(114.7
|
)%
|
|
(0.1
|
)%
|
|
0.5
|
%
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1A.
|
Risk Factors
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
Description
|
10.1
|
Amended and Restated Employment Agreement, effective June 6, 2011, between the Registrant and Michael L. Baur (incorporated by reference from Exhibit 10.18 to the Registrant's Form 10-K for the year ending June 30, 2011).
*
|
|
|
10.2
|
First Amendment to Amended and Restated Employment Agreement, effective as of July 1, 2012, between the Registrant and Michael L. Baur.
*
|
|
|
10.3
|
Employment Agreement, effective as of July 25, 2012, between the Registrant and Gerald Lyons.
*
|
|
|
10.4
|
ScanSource, Inc. Amended and Restated Directors Equity Compensation Plan, as amended and restated on August 21, 2012.
|
|
|
10.5
|
ScanSource, Inc. Nonqualified Deferred Compensation Plan, as amended and restated.
*
|
|
|
31.1
|
Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.2
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101
|
The following materials from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) the condensed consolidated balance sheets as of September 30, 2012 and June 30, 2012; (ii) the condensed consolidated income statements for the quarters ended September 30, 2012 and 2011; (iii) the condensed consolidated statements of comprehensive income for the quarters ended September 30, 2012 and 2011; (iv) the condensed consolidated statements of cash flows for the quarters ended September 30, 2012 and 2011; and (v) the notes to the condensed consolidated financial statements.
**
|
*
|
Executive compensation plan or agreement.
|
**
|
Pursuant to Rule 406T of Regulation S-T the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
|
|
ScanSource, INC.
|
|
|
|
|
|
/s/ MICHAEL L. BAUR
|
|
|
Michael L. Baur
|
Date:
|
November 2, 2012
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
/s/ RICHARD P. CLEYS
|
|
|
Richard P. Cleys
|
Date:
|
November 2, 2012
|
Chief Financial Officer
(Principal Financial Officer)
|
|
|
/s/ GERALD LYONS
|
|
|
Gerald Lyons
|
Date:
|
November 2, 2012
|
Senior Vice President of Finance and Principal Accounting Officer
(Principal Accounting Officer)
|
Exhibit
Number
|
Description
|
10.1
|
Amended and Restated Employment Agreement, effective June 6, 2011, between the Registrant and Michael L. Baur (incorporated by reference from Exhibit 10.18 to the Registrant's Form 10-K for the year ending June 30, 2011).
*
|
|
|
10.2
|
First Amendment to Amended and Restated Employment Agreement, effective as of July 1, 2012, between the Registrant and Michael L. Baur.
*
|
|
|
10.3
|
Employment Agreement, effective as of July 25, 2012, between the Registrant and Gerald Lyons.
*
|
|
|
10.4
|
ScanSource, Inc. Amended and Restated Directors Equity Compensation Plan, as amended and restated on August 21, 2012.
|
|
|
10.5
|
ScanSource, Inc. Nonqualified Deferred Compensation Plan, as amended and restated.
*
|
|
|
31.1
|
Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.2
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101
|
The following materials from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) the condensed consolidated balance sheets as of September 30, 2012 and June 30, 2012; (ii) the condensed consolidated income statements for the quarters ended September 30, 2012 and 2011; (iii) the condensed consolidated statements of comprehensive income for the quarters ended September 30, 2012 and 2011; (iv) the condensed consolidated statements of cash flows for the quarters ended September 30, 2012 and 2011; and (v) the notes to the condensed consolidated financial statements.
**
|
*
|
Executive compensation plan or agreement.
|
**
|
Pursuant to Rule 406T of Regulation S-T the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
1.
|
Section 4(e)
. The Agreement is hereby amended by deleting Section 4(e) in its entirety and replacing Section 4(e) in its entirety as follows:
|
2.
|
Miscellaneous
. Other than as set forth herein, the terms and conditions of the Agreement shall remain in full force and effect. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
|
EXECUTIVE:
/s/ Michael L. Baur
Michael L. Baur
|
SCANSOURCE, INC.:
/s/ John J. Ellsworth
John J. Ellsworth
General Counsel, VP, & Corporate Secretary
|
To Company:
|
ScanSource, Inc.
|
|
6 Logue Court
Greenville, SC 29615
Attn: Chief Executive Officer
|
|
|
To Executive:
|
To the address specified on Exhibit A
|
|
|
|
Days of Paid Vacation per Fiscal Year
:
|
|
Approving Person
:
|
|
|
|
15 (per Company policy)
|
|
Chief Financial Officer
|
1.
|
Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991;
|
2.
|
Section 1981 of the Civil Rights Act of 1866, as amended;
|
3.
|
Executive Orders 11246, 13496 and 11141;
|
4.
|
the Equal Pay Act of 1963;
|
5.
|
the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA);
|
6.
|
the Americans with Disabilities Act of 1990 and any amendments thereto, including the ADA Amendments Act of 2008;
|
7.
|
the Rehabilitation Act of 1973;
|
8.
|
the Employee Retirement and Income Security Act of 1974;
|
9.
|
the Sarbanes-Oxley Corporate Reform Act of 2002;
|
10.
|
whistle-blower and/or retaliation claims or suits under the Sarbanes-Oxley Act of 2002;
|
11.
|
the Family and Medical Leave Act of 1993, as amended;
|
12.
|
the Health Insurance Portability and Accountability Act of 1996 (HIPAA);
|
13.
|
the Fair Labor Standards Act of 1938, as amended;
|
14.
|
the Occupational Safety and Health Act;
|
15.
|
the Uniformed Services Employment and Re-employment Act of 1994;
|
16.
|
the Worker Adjustment and Retraining Notification Act;
|
17.
|
the Lilly Ledbetter Fair Pay Act of 2009;
|
18.
|
the Fair Credit Reporting Act;
|
19.
|
state workers’ compensation law
;
|
20.
|
Consumer Credit Protection Act
|
21.
|
Immigration Reform and Control Act of 1986;
|
22.
|
National Labor Relations Act;
|
23.
|
the Genetic Information Nondiscrimination Act of 2008;
|
24.
|
the Age Discrimination in Employment Act;
|
25.
|
the South Carolina Payment of Wages Act;
|
26.
|
the South Carolina Human Affairs Law;
|
27.
|
claims arising under the United States and/or South Carolina Constitutions;
|
28.
|
claims for wages and overtime pay and commissions, bonuses, vacation pay or any express or implied contracts;
|
29.
|
any common law claims or claims founded in tort (including negligence) for wrongful discharge, negligence, negligent hiring, negligent training or negligent supervision, assault or battery,
|
30.
|
claims that the Company treated or dealt with me unfairly; and
|
31.
|
any claims arising under any other federal, state or local law, statute, regulation, ordinance, treaty or law of any other type, or any other cause of action or theory of recovery arising by virtue of my employment relationship and/or affiliation with ScanSource or any public policy, tort or common law.
|
|
|
|
|
|
|
|
|
||||||
Executive:
|
||||||
Date:
|
|
|
Section 1
|
|
(a)
|
Authority
. The Plan Administrative Committee shall have full authority and power to administer and construe the Plan, subject to applicable requirements of law. Without limiting the generality of the foregoing, the Plan Administrative Committee shall have the following powers and duties:
|
(i)
|
To make and enforce such rules and regulations as it deems necessary or proper for the administration of the Plan;
|
(ii)
|
To interpret the Plan and to decide all questions concerning the Plan;
|
(iii)
|
To designate persons eligible to participate in the Plan, subject to the approval of the Board;
|
(iv)
|
To determine the amount and the recipient of any payments to be made under the Plan;
|
(v)
|
To designate and value any investments deemed held in the Accounts;
|
(vi)
|
To appoint such agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan; and
|
(vii)
|
To make all other determinations and to take all other steps necessary or advisable for the administration of the Plan.
|
(b)
|
Authority of Board of Directors
. Notwithstanding anything in this Plan to the contrary, the Board shall have the power
|
(i)
|
to review and approve the persons who will be eligible to participate in the Plan; and
|
(ii)
|
to make determinations with respect to the participation and benefits of to any member of the Plan Administrative Committee who is a participant in the Plan.
|
(c)
|
Delegation of Duties
. The Plan Administrative Committee may delegate such of its duties and may engage such experts and other persons as it deems appropriate in connection with administering the Plan. The Plan Administrative Committee shall be entitled to rely conclusively upon, and shall be fully protected in any action taken by the Plan Administrative Committee, in good faith in reliance upon any opinions or reports furnished to it by any such experts or other persons.
|
(d)
|
Expenses
. All expenses incurred prior to the termination of the Plan that shall arise in connection with the administration of the Plan, including, without limitation, administrative expenses and compensation and other expenses and charges of any actuary, counsel, accountant, specialist, or other person who shall be employed by the Plan Administrative Committee in connection with the administration of the Plan shall be paid by the Participating Employers.
|
(e)
|
Indemnification of Plan Administrative Committee
. The Participating Employers agree to indemnify and to defend to the fullest extent permitted by law any person serving as a member of the Plan Administrative Committee, and each employee of a Participating Employer or any of their affiliated companies appointed by the Plan Administrative Committee to carry out duties under this Plan, against all liabilities, damages, costs and expenses (including attorneys’ fees and amounts paid in settlement of any claims approved by the Company) occasioned by any act or omission to act in connection with the Plan, if such act or omission is in good faith.
|
(f)
|
Liability
. To the extent permitted by law, neither the Plan Administrative Committee nor any other person shall incur any liability for any acts or for any failure to act except for liability arising out of such person’s own willful misconduct or willful breach of the Plan.
|
(a)
|
“In-Service Distribution Sub-Account(s)” means the Account(s) established under a Participant’s Account in connection with the Participant’s election of one or more scheduled In-Service Distribution Dates pursuant to Section 6.1.
|
(b)
|
“Separation from Service Distribution Sub-Account” means the Account established under a Participant’s Account in connection with the Participant’s Separation from Service distribution pursuant to Section 6.2.
|
(a)
|
Prior to January 1, 2009, the date on which a Participant separates from service after reaching age 65; and
|
(b)
|
On and after January 1, 2009, the date on which a Participant separates from service after reaching 55 and completing at least 10 years of service as an employee of a Participating Employer.
|
(a)
|
For this purpose, the employment relationship is treated as continuing intact while the individual is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed six (6) months, or if longer, so long as the individual’s right to reemployment with the ScanSource Controlled Group is provided either by statute or by contract. If the period of leave exceeds six (6) months and the individual’s right to reemployment is not provided either by statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period.
|
(b)
|
The determination of whether a Participant has separated from service shall be determined based on the facts and circumstances in accordance with the rules set forth in Code Section 409A and the regulations thereunder.
|
(a)
|
Prior to January 1, 2005, a Participant shall be considered to be “Totally Disabled” or to have a “Total Disability” if he or she becomes entitled to receive disability benefits under a Participating Employer’s long-term disability insurance plan.
|
(b)
|
On and after January 1, 2005, a Participant shall be considered to be “Total Disabled” if he or she meets one of the following requirements:
|
(i)
|
The Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.
|
(ii)
|
The Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of a Participating Employer.
|
(iii)
|
The Participant is determined to be totally disabled by the Social Security Administration.
|
(g)
|
An Eligible Employee shall become a Participant in the Plan by (i) completing and submitting to the Company a Deferral Election in accordance with Section 4 below, and (ii) complying with such terms and conditions as the Board and/or the Plan Administrative Committee may from time to time establish for the implementation of the Plan, including, but not limited to, any condition the Board and/or the Plan Administrative Committee may deem necessary or appropriate for the Participating Employers to meet their obligations under the Plan.
|
(h)
|
An employee shall only be a Participant eligible to have compensation deferred under this Plan only while he or she is employed by a Participating Employer and is designated as an Eligible Employee. If an employee subsequently ceases to be a designated Eligible Employee after becoming a Participant, he or she shall remain a Participant for the other purposes of the Plan to the extent of any existing Account balance subject to Section 14.1.
|
(i)
|
General Rule
. Except as otherwise provided in this Section, an election to defer receipt of Compensation for services to be performed during a calendar year must be made no later than the December 31 preceding the calendar year during which the Participant will perform services.
|
(j)
|
Performance-Based Compensation
. In the case of Compensation that qualifies as “performance-based compensation” for purposes of Code Section 409A, an election to defer receipt of such compensation must be made no later than the date that is six (6) months before the end of the performance period for such performance-based compensation.
|
(k)
|
First Year of Eligibility
. In the case of the first year in which an employee becomes eligible to participate in the Plan, an initial deferral election must be made not later than thirty (30) days after the date the employee becomes eligible to participate in the Plan. Such election shall apply only with respect to compensation paid for services to be performed subsequent to the election.
|
(a)
|
The maximum percentage Compensation that can be deferred for a Plan Year will be determined by the Plan Administrative Committee at least thirty (30) days prior to the beginning of the Plan Year.
|
(b)
|
The amount of the deferral elected for the Plan Year cannot reduce the Participant’s cash compensation below the amount the Participating Employer determines necessary to satisfy applicable federal, state and local income and employment withholding taxes and any obligations to make benefit plan contributions.
|
(a)
|
The Plan Administrative Committee may permit a Participant to cancel a Deferral Election during a calendar year if it determines either of the following circumstances has occurred:
|
(i)
|
The Participant has an “unforeseeable emergency” as defined in Section 7.03 below or a hardship distribution (pursuant to Treasury Regulation §1.401(k)-1(d)(3)) from a 401(k) plan sponsored by a Participating Employer. If approved by the Plan Administrative Committee, such cancellation shall take effect as of the first payroll period next following approval by the Plan Administrative Committee.
|
(ii)
|
The Participant incurs a disability. If approved by the Plan Administrative Committee, such cancellation such cancellation shall take effect no later than the end of the calendar year or the 15th day of the third month following the date Participant incurs a disability. Solely for purposes of this clause (ii), a disability refers to any medically determinable physical or mental impairment resulting in the Participant’s inability to perform the duties of his or her position or any substantially similar position, where such impairment can be expected to result in death or can be expected to last for a continuous period of not less than six months.
|
(b)
|
If a Participant cancels a Deferral Election during a calendar year, he or she will not be permitted to make a new deferral election with respect to Compensation relating to services performed during the same calendar year.
|
(a)
|
The amount of Compensation deferred by a Participant shall be credited to the Participant’s Account as of the Valuation Date coincident with or immediately following the date such Compensation would, but for the Participant’s Deferral Election, be payable to the Participant.
|
(b)
|
The Compensation Deferrals, and the earnings thereon, credited to the Participant’s Compensation Deferral Account shall be immediately 100% vested and nonforfeitable at all times.
|
(c)
|
For any Plan Year, a Participating Employer may credit to the Deferred Compensation Account of any Participant employed by that Participating Employer with a Discretionary Matching Contribution in such amount as may be determined by the Participating Employer in its sole discretion at least thirty (30) days prior to the beginning of the Plan Year.
|
(d)
|
The amount of the Discretionary Matching Contribution to be credited to a Participant’s Account for a Plan Year shall be equal to such dollar amount, such percentage of a Participant’s Compensation Deferrals, or any combination thereof, as may be determined by the Participating Employer in its sole discretion.
|
(e)
|
Any Discretionary Matching Contribution will be credited to a Participant’s Account as of the Valuation Date specified by the Participating Employer.
|
(a)
|
Except as otherwise provide in paragraph (b) below and subject to Section 10, the Discretionary Matching Contribution credited to a Participant’s Account with respect to a particular Plan Year shall become vested in accordance with the following schedule:
|
Years of Service Completed Following Plan Year for which Contribution is Credited
|
Vested Percentage
|
Less than 3 Years of Service
|
0%
|
3 Years of Service
|
50%
|
4 Years of Service
|
75%
|
5 or more Years of Service
|
100%
|
(i)
|
he or she is actively employed by a Participating Employer for a continuous period of at least 6 full months during a Plan Year
and
is actively employed by a Participating Employer as of the last day of the Plan Year, or
|
(ii)
|
he or she fails to meet the active employment requirement in clause (i) above solely as a result of an approved leave of absence.
|
(b)
|
Notwithstanding the foregoing vesting schedule –
|
(i)
|
Solely for purposes of determining the vesting of Discretionary Matching Contributions credited to a Participant’s Account with respect to the Plan Year ended December 31, 2005, the number of Years of Service completed by such Participant will be determined during the period beginning as of July 1, 2005.
|
(ii)
|
The balance credited to a Participant’s Participating Employer Contribution Account shall be become fully vested if the Participant remains continuously employed by a Participating Employer or an Affiliate until his or her death, Total Disability, Retirement Date or the occurrence of a Change in Control.
|
(c)
|
The specified in-service distribution date cannot be earlier than the end of the five (5) Plan Year period following the Plan Year for which such Compensation Deferrals and Discretionary Matching Contributions are credited to his or her Account.
|
(d)
|
If a Participant fails to make an in-service distribution election with respect to Compensation Deferrals and Discretionary Matching Contributions for a calendar year, then such Compensation Deferrals or Discretionary Matching Contributions will be allocated to the Participant’s Separation from Service Distribution Sub-Account.
|
(e)
|
Such election shall be made at the same time the Participant makes the Deferral Election in accordance with Section 4 for that Plan Year. Except as otherwise provided in paragraph (e) below, any such election shall be irrevocable.
|
(f)
|
A separate In-Service Distribution Sub-Account will be established and maintained as part of the Participant’s Account for each In-Service Distribution Date elected by the Participant. Such Account shall be credited or charged with (i) the amounts of Compensation Deferrals and Discretionary Matching Contributions designated by the Participant to be distributed as of the In-Service Distribution Date, (ii) a portion of the income, gains, losses, and expenses of investments deemed held in the Participant’s Account as allocated based on the Compensation Deferrals and Discretionary Matching Contributions credited to such Sub-Account and (iii) distributions from such Sub-Account.
|
(g)
|
A Participant may change his or her specified in-service distribution date only in accordance with the following rules:
|
(i)
|
Such election may not take effect until at least twelve (12) months after the date on which the election is made.
|
(ii)
|
The new distribution date cannot be less than five (5) years from the date such payment otherwise would have been paid but for the new election.
|
(iii)
|
Such election must be at least twelve (12) months prior to the date the first payment is scheduled to be paid.
|
(a)
|
Unless a Participant elects otherwise, the vested balance credited to his or her Separation from Service Distribution Sub-Account will be distributed in a single lump sum payment.
|
(b)
|
A Participant may elect to have the vested balance credited to his or her Separation from Service Distribution Sub-Account distributed in substantially equal monthly installment payments for a period of 36, 48 or 60 months. Notwithstanding the foregoing, the installment payment option will become effective only if the Participant Separates from Service after his or her Retirement Date.
|
(c)
|
Except as otherwise provided in Appendix A to this Plan, a Participant may change his or her retirement distribution election only in accordance with the following rules:
|
(i)
|
Such election may not take effect until at least twelve (12) months after the date on which the election is made.
|
(ii)
|
The new distribution date cannot be less than five (5) years from the date such payment otherwise would have been paid but for the new election.
|
(iii)
|
Such election must be at least twelve (12) months prior to the date the first payment is scheduled to be paid.
|
(d)
|
A separate Separation from Service Distribution Sub-Account will be established and maintained as part of the Participant’s Account. Such Account shall be credited or charged with (i) the amount of Compensation Deferrals and Discretionary Matching Contributions to be distributed following the Participant’s Separation from Service, (ii) a portion of the income, gains, losses, and expenses of investments deemed held in the Participant’s Account as allocated based on the Compensation Deferrals and Discretionary Matching Contributions credited to such Sub-Account and (iii) distributions from such Sub-Account.
|
(a)
|
The amount credited to a Participant’s Account shall be deemed to be invested and reinvested in mutual funds, stocks, bonds, securities, and any other assets or investment vehicles, as may be selected by the Plan Administrative Committee in its sole discretion; provided that in no event shall such Accounts be deemed to be invested in securities issued by the Company.
|
(b)
|
A Participant may elect the manner in which his or her Account is deemed to be invested and reinvested among the deemed investment options selected by the Plan Administrative Committee. A Participant’s investment election shall remain in effect until the Participant properly files a change of election with the Plan Administrative Committee. In the event that any Participant fails to make an election with respect to the investment of all or a portion of the balance in his or her account at any time, the Participant shall be deemed to have elected that such balance be deemed to be invested in a money market (or equivalent) fund and such assets shall remain in such investment fund until such time as the Participant directs otherwise.
|
(c)
|
A Participant’s investment direction (or any change in his or her investment direction) shall be made in the form, manner, and in accordance with the notice requirements, prescribed by the Plan Administrative Committee.
|
(d)
|
A Participant, by electing to participate in this Plan, agrees on behalf of himself or herself and his or her designated beneficiaries, to assume all risk in connection with any increase or decrease in value of the investments which are deemed to be held in his or her account. Each Participant further agrees that the Plan Administrative Committee and the Participating Employer shall not in any way be held liable for any investment decisions or for the failure to make any investments by the Plan Administrative Committee.
|
(e)
|
Commencement of Payment
. Subject to paragraph (c), payment of a Participant’s In-Service Distribution Sub-Account will be paid in a lump sum distribution within the calendar month following the calendar month of the In-Service Distribution Date applicable to such Sub-Account.
|
(f)
|
Amount of Payment
. The amount of the lump sum payment will be equal to the value of the In-Service Distribution Account as of the last valuation date preceding the date of payment.
|
(g)
|
Separation from Service Prior to In-Service Distribution Date
. If the Participant Separates from Service prior to the commencement of distribution of an In-Service Distribution Sub-Account, then such In-Service Distribution Sub-Account shall be distributed at the same time and in the same manner as the Participant’s Separation from Service Distribution Sub-Account.
|
(a)
|
For purposes of this Section, an “unforeseeable emergency” is a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.
|
(b)
|
The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved:
|
(iii)
|
Through reimbursement or compensation by insurance or otherwise;
|
(iv)
|
By liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; or
|
(v)
|
By cessation of Compensation Deferrals under the Plan.
|
(c)
|
Commencement of Payment
. Payment of a Participant’s Separation from Service Distribution Sub-Account will commence as of the first calendar month following the calendar month of the Participant’s Separation from Service date.
|
(d)
|
Form of Payment
.
|
(iv)
|
Separation from Service Prior to Retirement Date. In the event that a Participant Separates from Service for any reason other than death or Total Disability prior to reaching his or her Retirement Date, then notwithstanding any election made under Section 7.02 above, the amount credited to the Participant’s Separation from Service Distribution Sub-Account will be distributed to the Participant in a single lump sum payment.
|
(v)
|
Separation from Service at or after Retirement Date. If a Participant Separates from Service at or after reaching his or her Retirement Date, his or her Separation from Service Distribution Sub-Account will be distributed to the Participant in accordance with his or her election of a lump sum payment or installment payments under Section 7.02 above.
|
(e)
|
Amount of Payment
.
|
(i)
|
Lump Sum Amount
. The amount of the lump sum payment will be equal to the value of the Separation from Service Distribution Account as of the last valuation date preceding the date of payment.
|
(ii)
|
Installment Payments
. Each annual installment payment shall be in the amount equal to (A) the value of the Separation from Service Distribution Sub-Account, as of the last valuation date preceding the date of payment, divided by (B) the number of installment payments not yet distributed.
|
(c)
|
In the event that a Participant’s employment is terminated by reason of his or her death, the balance credited to his or her Account will be distributed to the Participant’s designated beneficiary in a single lump payment within the calendar month following the calendar month of the Participant’s death.
|
(d)
|
In the event a Participant dies after the commencement of installment payments, but prior to the completion of all such payments due and owing hereunder, the remaining balance credited to his or her Account will be distributed to the Participant’s designated beneficiary in a single lump payment within the calendar month following the calendar month in which the Plan Administrative Committee receives satisfactory proof of the Participant’s death.
|
(a)
|
The Participant may name a beneficiary or beneficiaries to receive the balance of the Participant’s Deferred Compensation Account in the event of the Participant’s death prior to the payment of the Participant’s entire Deferred Compensation Account. To be effective, any beneficiary designation must be filed in writing with the Plan Administrative Committee in accordance with rules and procedures adopted by the Plan Administrative Committee for that purpose.
|
(b)
|
A Participant may revoke an existing beneficiary designation by filing another written beneficiary designation with the Plan Administrative Committee. The latest beneficiary designation received by the Plan Administrative Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Plan Administrative Committee prior to the Participant’s death.
|
(c)
|
If no beneficiary is named by a Participant, or if the Participant survives all of the Participant’s named beneficiaries and does not designate another beneficiary, the Participant’s Deferred Compensation Account shall be paid in the following order of precedence:
|
(i)
|
The Participant’s spouse;
|
(ii)
|
The Participant’s children (including adopted children) per stirpes; or
|
(iii)
|
The Participant’s estate.
|
(c)
|
the Participant’s employment with the Participating Employer has been terminated for Good Cause or,
|
(d)
|
if at any time during which a Participant is entitled to receive payments under the Plan, the Participant has breached any of his or her post-employment obligations, including, but not limited to, any restrictive covenants or obligations under any agreement and general release,
|
(a)
|
Such trust(s) shall be an irrevocable grantor trust containing provisions which are the same as, or are similar to, the provisions contained in the model “rabbi trust” set forth in Internal Revenue Service Revenue Procedure 92-64 (or any successor guidance issued by the IRS).
|
(b)
|
The Participating Employers shall make contributions to the trust(s) equal to the amount of the Compensation Deferrals and Discretionary Matching Contributions as soon as practicable, but in no event later five (5) business days, following the date on which such contributions are credited to Participants’ Accounts.
|
(c)
|
The Participating Employers shall pay all costs relating to the establishment and maintenance of the trust(s) and the investment of funds held in such trust(s).
|
(d)
|
Acceleration of Payments. The Plan Administrative Committee may, its discretion, accelerate the payment of all or a portion of a Participant’s vested Account prior to the time specified in this Plan to the extent such acceleration is permitted by Treasury Regulation Section 1.409A-3(j)(4). Such permitted accelerations shall include payments to comply with domestic relations orders, payments to comply with conflicts of interest laws, payment of employment taxes, payment upon income inclusion under Code Section 409A, and/or such other circumstances as are permitted by the regulations.
|
(e)
|
Delay of Payments. The Plan Administrative Committee may, in its discretion, delay the payment of all or a portion of a Participant’s Account in such circumstances as may be permitted under Code Section 409A.
|
1.
|
Notwithstanding anything in the Plan to the contrary, a Participant who has made a deferral election with respect to Compensation earned or payable on or after January 1, 2005, may reduce or revoke any current deferral election prior to December 31, 2005 or such earlier date as may be specified by the Plan Administrative Committee.
|
2.
|
Notwithstanding anything in the Plan to the contrary, a Participant may choose a new distribution date for the payment of his or her In-Service Distribution Sub-Account(s) and/or may make a new election with respect to the form of payment of the Account portion of his or her Separation from Service Sub-Account in accordance with the following rules:
|
(a)
|
An election to change a time and form of payment of payment made on or after January 1, 2005 and on or before December 31, 2005 may apply only to amounts that would not otherwise be payable in 2005 and may not cause an amount to be paid in 2005 that would not otherwise be payable in 2005;
|
(b)
|
An election to change a time and form of payment of payment made on or after January 1, 2006 and on or before December 31, 2006 may apply only to amounts that would not otherwise be payable in 2006 and may not cause an amount to be paid in 2006 that would not otherwise be payable in 2006;
|
(c)
|
An election to change a time and form of payment of payment made on or after January 1, 2007 and on or before December 31, 2007 may apply only to amounts that would not otherwise be payable in 2007 and may not cause an amount to be paid in 2007 that would not otherwise be payable in 2007; and
|
(d)
|
An election to change a time and form of payment of payment made on or after January 1, 2008 and on or before December 31, 2008 may apply only to amounts that would not otherwise be payable in 2008 and may not cause an amount to be paid in 2008 that would not otherwise be payable in 2008.
|
3.
|
Any election pursuant to this Appendix shall be made in such form and manner as may be required by the Plan Administrative Committee.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of ScanSource, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Michael L. Baur
|
|
Michael L. Baur, Chief Executive Officer(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of ScanSource, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Richard P. Cleys
|
|
Richard P. Cleys,Vice President and Chief Financial Officer(Principal Financial Officer)
|
1)
|
The Report fully complies with the requirements of §13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
November 2, 2012
|
/s/ Michael L. Baur
|
|
|
Michael L. Baur,
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1)
|
The Report fully complies with the requirements of §13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
November 2, 2012
|
/s/ Richard P. Cleys
|
|
|
Richard P. Cleys,
|
|
|
Vice President and Chief Financial Officer
(Principal Financial Officer)
|