form11knonqual2008.htm



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549



FORM 11-K




ANNUAL REPORT
Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For The Year Ended December 31, 2008
 
Commission file number: 1-10431





AVX NONQUALIFIED
SUPPLEMENTAL RETIREMENT PLAN







IRS Employer Identification Number:  33-0379007




AVX CORPORATION
P.O. Box 867
Myrtle Beach, SC 29578






 
 
 


AVX NONQUALIFIED
SUPPLEMENTAL RETIREMENT PLAN
INDEX



 
Page No.
   
Report of Independent Registered Public Accounting Firm
2
   
Statement of Financial Condition with Fund Information as of December 31, 2008 and 2007
3-4
   
Statement of Income and Changes in Plan Equity with Fund Information for the years ended December 31, 2008, 2007 and 2006
5-7
   
Notes to Financial Statements
8-13
   
Signature
14
   
Schedule I – Investments
15
   
Exhibit:
  
 
   






 












 
 
 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
To the Participants and Administrator of the
 
AVX Nonqualified Supplemental Retirement Plan
 
We have audited the accompanying statement of financial condition with fund information of the AVX Nonqualified Supplemental Retirement Plan (the Plan) as of December 31, 2008 and 2007, and the related statements of income and changes in plan equity with fund information for each of the three years in the period ended December 31, 2008.  Our audits of the basic financial statements included the financial statement schedule listed in the index appearing under Schedule I.  These financial statements and financial statement schedule are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Plan as of December 31, 2008 and 2007, and the results of its operations for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
 
 
/s/ GRANT THORNTON LLP
___________________________________________
 
Columbia, South Carolina
March 26, 2009


 
-2-
 

AVX NONQUALIFIED SUPPLEMENTAL RETIREMENT PLAN
STATEMENT OF FINANCIAL CONDITION WITH FUND INFORMATION
As of December 31, 2008

 
Total
  
AVX Stock Fund
  
Kyocera Stock Fund
  
Seligman Large Cap Value Fund
  
T. Rowe Price Spectrum Income Fund
  
MainStay Cash Reserves Fund
  
MainStay S&P 500 Index Fund
  
Janus Balanced Fund
  
Janus Fund
  
Lord Abbett Mid Cap Value Fund
  
PIMCO Total Return Fund
  
American Funds - EuroPacific Growth Fund
ASSETS:
                                              
Investments at fair value:
                                              
Other investments            
(cost $6,423,011)
 $6,043,485
  
$14,456
  
 $21,808
  
 $709,621
  
 $673,350
  
 $3,479,395
  
 $197,181
  
 $196,942
  
 $174,407
  
 $134,159
  
 $ 294,902
  
 $ 147,264
AVX Corporation Common Stock  (cost $1,225,661)
       733,823
  
       733,823
  
             -
  
                  -
  
                -
  
                 -
  
              -
  
               -
  
              -
  
                -
  
              -
  
              -
Kyocera Corporation American Depositary Shares (cost $803,485)
       790,063
  
                -
  
   790,063
  
                  -
  
                -
  
                 -
  
              -
  
               -
  
              -
  
                -
  
              -
  
              -
Total investments
    7,567,371
  
       748,279
  
   811,871
  
         709,621
  
      673,350
  
    3,479,395
  
    197,181
  
     196,942
  
    174,407
  
      134,159
  
    294,902
  
    147,264
                                               
Receivable:
                                              
Employer contribution
         67,630
  
           3,650
  
       5,433
  
           10,716
  
                -
  
         25,968
  
        2,837
  
         2,978
  
        3,901
  
          1,348
  
        9,117
  
        1,682
Employee contribution
           2,252
  
              189
  
          168
  
                114
  
                -
  
           3,047
  
             60
  
            (48)
  
             44
  
             (80)
  
         (950)
  
         (292)
Total Contribution
    receivable
         69,882
  
           3,839
  
       5,601
  
           10,830
  
                -
  
         29,015
  
        2,897
  
         2,930
  
        3,945
  
          1,268
  
        8,167
  
        1,390
                                               
Plan equity
 $7,637,253
  
 $752,118
  
 $817,472
  
 $720,451
  
 $673,350
  
 $3,508,410
  
 $200,078
  
 $199,872
  
 $178,352
  
 $135,427
  
 $ 303,069
  
 $ 148,654
                                               
















The accompanying notes are an integral part of these financial statements.

 
-3-
 

AVX NONQUALIFIED SUPPLEMENTAL RETIREMENT PLAN
STATEMENT OF FINANCIAL CONDITION WITH FUND INFORMATION
As of December 31, 2007


 
Total
  
AVX Stock Fund
  
Kyocera Stock Fund
  
Seligman Large Cap Value Fund
  
T. Rowe Price Spectrum Income Fund
  
MainStay Cash Reserves Fund
  
MainStay S&P 500 Index Fund
  
Janus Balanced Fund
  
Janus Fund
  
Lord Abbett Mid Cap Value Fund
  
PIMCO Total Return Fund
  
American Funds - EuroPacific Growth Fund
ASSETS:
                                              
Investments at fair value:
                                              
Other investments            
(cost $5,933,436)
 $ 6,587,037
  
 $      26,003
  
 $  18,373
  
 $   1,079,288
  
 $   743,544
  
 $ 3,187,821
  
 $ 319,299
  
 $  226,388
  
 $ 277,382
  
 $   210,845
  
 $ 192,308
  
 $ 305,786
AVX Corporation Common Stock  (cost $1,096,670)
    1,070,125
  
    1,070,125
  
             -
  
                  -
  
                -
  
                 -
  
              -
  
               -
  
              -
  
                -
  
              -
  
              -
Kyocera Corporation American Depositary Shares (cost $745,273)
       887,202
  
                -
  
   887,202
  
                  -
  
                -
  
                 -
  
              -
  
               -
  
              -
  
                -
  
              -
  
              -
Total investments
    8,544,364
  
    1,096,128
  
   905,575
  
      1,079,288
  
      743,544
  
    3,187,821
  
    319,299
  
     226,388
  
    277,382
  
      210,845
  
    192,308
  
    305,786
                                               
Receivable:
                                              
Employer contribution
         92,561
  
           6,651
  
       5,158
  
           12,557
  
                -
  
         22,551
  
        5,023
  
         5,265
  
        7,874
  
          7,905
  
        9,944
  
        9,633
                                               
Plan equity
 $ 8,636,925
  
 $ 1,102,779
  
 $910,733
  
 $   1,091,845
  
 $   743,544
  
 $ 3,210,372
  
 $ 324,322
  
 $  231,653
  
 $ 285,256
  
 $   218,750
  
 $ 202,252
  
 $ 315,419
                                               


 












The accompanying notes are an integral part of these financial statements.
 
-4-
AVX NONQUALIFIED SUPPLEMENTAL RETIREMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY WITH FUND INFORMATION
For the year ended December 31, 2008

   
Total
  
AVX Stock Fund
  
Kyocera Stock Fund
  
Seligman Large Cap Value Fund
  
T. Rowe Price Spectrum Income Fund
  
MainStay Cash Reserves Fund
  
MainStay S&P 500 Index Fund
  
Janus Balanced Fund
  
Janus Fund
  
Lord Abbett Mid Cap Value Fund
  
PIMCO Total Return Fund
  
American Funds - EuroPacific Growth Fund
Net investment income (loss):
                                              
 
 Dividends
 $      99,271
  
 $      13,473
  
 $   12,093
  
 $        5,748
  
 $      35,123
  
 $              -
  
 $      5,363
  
 $      5,314
  
 $     1,586
  
 $       3,298
  
 $   13,379
  
 $       3,894
 
 Interest
         68,460
                  
         68,460
                        
 
 Net appreciation (depreciation) in fair value of investments
  (1,603,620)
  
     (465,292)
  
  (155,351)
  
     (420,201)
  
     (105,317)
  
                 -
  
   (116,847)
  
     (39,733)
  
  (110,857)
  
       (83,431)
  
      (2,006)
  
     (104,585)
 
 Total income (loss)
  (1,435,889)
  
     (451,819)
  
  (143,258)
  
     (414,453)
  
       (70,194)
  
         68,460
  
   (111,484)
  
     (34,419)
  
  (109,271)
  
       (80,133)
  
      11,373
  
     (100,691)
                                                 
 Contributions:
                                              
 
 Employer
       209,308
  
         59,119
  
      10,607
  
         23,303
  
                 -
  
         48,549
  
         7,860
  
       11,241
  
      11,806
  
          3,368
  
      22,028
  
        11,427
 
 Employee
       421,233
  
         48,778
  
      39,523
  
         19,756
  
                 -
  
       181,029
  
       23,814
  
       23,640
  
      24,830
  
        21,260
  
      24,434
  
        14,169
 
 Total contributions
       630,541
  
       107,897
  
      50,130
  
         43,059
  
                 -
  
       229,578
  
       31,674
  
       34,881
  
      36,636
  
        24,628
  
      46,462
  
        25,596
                                                 
 Deductions:
                                              
 
 Benefit payments
     (194,324)
  
         (6,739)
  
         (133)
  
                 -
  
                 -
  
                 -
  
     (44,434)
  
     (20,240)
  
    (34,269)
  
       (28,291)
  
              -
  
       (60,218)
 Income (loss) and change in plan equity
     (999,672)
  
     (350,661)
  
    (93,261)
  
     (371,394)
  
       (70,194)
  
       298,038
  
   (124,244)
  
     (19,778)
  
  (106,904)
  
       (83,796)
  
      57,835
  
     (135,313)
                                                 
 Transfer of funds from employee investment elections, net
                 -
  
                 -
  
              -
  
                 -
  
                 -
  
                 -
  
              -
  
     (12,003)
  
              -
  
             473
  
      42,982
  
       (31,452)
                                                 
 Plan equity at beginning of year
    8,636,925
  
    1,102,779
  
    910,733
  
    1,091,845
  
       743,544
  
    3,210,372
  
     324,322
  
     231,653
  
    285,256
  
      218,750
  
    202,252
  
      315,419
                                                 
 Plan equity at end of year
 $ 7,637,253
  
 $    752,118
  
 $ 817,472
  
 $    720,451
  
 $    673,350
  
 $ 3,508,410
  
 $  200,078
  
 $  199,872
  
 $ 178,352
  
 $   135,427
  
 $ 303,069
  
 $   148,654
                                                 














The accompanying notes are an integral part of these financial statements.

 
-5-
 

AVX NONQUALIFIED SUPPLEMENTAL RETIREMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY WITH FUND INFORMATION
For the year ended December 31, 2007


   
Total
  
AVX Stock Fund
  
Kyocera Stock Fund
  
Seligman Large Cap Value Fund
  
T. Rowe Price Spectrum Income Fund
  
MainStay Cash Reserves Fund
  
Templeton Foreign Fund
  
MainStay S&P 500 Index Fund
  
Janus Balanced Fund
  
Janus Fund
  
Lord Abbett Mid Cap Value Fund
  
PIMCO Total Return Fund
  
American Funds - EuroPacific Growth Fund
Net investment income (loss):
                                                  
 
 Dividends
 $      84,422
  
 $      12,403
  
 $   10,087
  
 $           211
  
 $      33,866
  
 $              -
  
 $           -
  
 $      5,432
  
 $     6,137
  
 $       1,364
  
 $     1,006
  
 $       8,421
  
 $     5,495
 
 Interest
       136,680
  
                 -
  
              -
  
                 -
  
                 -
  
       136,680
  
              -
  
              -
  
              -
  
                -
  
              -
  
                -
  
              -
 
 Net appreciation (depreciation) in fair value of investments
         (2,299)
  
     (117,208)
  
    (75,603)
  
         82,019
  
           9,446
  
                 -
  
       (1,498)
  
         8,090
  
      18,905
  
        30,851
  
      (4,813)
  
          6,891
  
      40,621
 
 Total income (loss)
       218,803
  
     (104,805)
  
    (65,516)
  
         82,230
  
         43,312
  
       136,680
  
       (1,498)
  
       13,522
  
      25,042
  
        32,215
  
      (3,807)
  
        15,312
  
      46,116
                                                     
 Contributions:
                                                  
 
 Employer
       255,361
  
         86,537
  
      11,637
  
         25,937
  
                 -
  
         44,979
  
              -
  
       10,151
  
      11,069
  
        14,909
  
      15,972
  
        15,650
  
      18,520
 
 Employee
       753,550
  
         99,251
  
      87,515
  
         73,302
  
                 -
  
       295,969
  
         1,293
  
       36,279
  
      28,578
  
        42,756
  
      35,026
  
        23,458
  
      30,123
 
 Total contributions
    1,008,911
  
       185,788
  
      99,152
  
         99,239
  
                 -
  
       340,948
  
         1,293
  
       46,430
  
      39,647
  
        57,665
  
      50,998
  
        39,108
  
      48,643
                                                     
 Deductions:
                                                  
 
 Benefit payments
     (425,290)
  
       (41,427)
  
    (25,043)
  
                 -
  
                 -
  
                 -
  
     (51,943)
  
     (44,050)
  
    (94,620)
  
       (31,125)
  
  (137,082)
  
                -
  
              -
 Income (loss) and change in plan equity
       802,424
  
         39,556
  
        8,593
  
       181,469
  
         43,312
  
       477,628
  
     (52,148)
  
       15,902
  
    (29,931)
  
        58,755
  
    (89,891)
  
        54,420
  
      94,759
                                                     
 Transfer of funds from employee investment elections, net
                 -
  
                 -
  
              -
  
                 -
  
                 -
  
                 -
  
   (215,050)
  
              -
  
              -
  
                -
  
              -
  
                -
  
    215,050
                                                     
 Plan equity at beginning of year
    7,834,501
  
    1,063,223
  
    902,140
  
       910,376
  
       700,232
  
    2,732,744
  
     267,198
  
     308,420
  
    261,584
  
      226,501
  
    308,641
  
      147,832
  
        5,610
                                                     
 Plan equity at end of year
 $ 8,636,925
  
 $ 1,102,779
  
 $ 910,733
  
 $ 1,091,845
  
 $    743,544
  
 $ 3,210,372
  
 $           -
  
 $  324,322
  
 $ 231,653
  
 $   285,256
  
 $ 218,750
  
 $   202,252
  
 $ 315,419














The accompanying notes are an integral part of these financial statements.

 
-6-
 

AVX NONQUALIFIED SUPPLEMENTAL RETIREMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY WITH FUND INFORMATION
For the year ended December 31, 2006

   
 Total
  
 AVX Stock Fund
  
 Kyocera Stock Fund
  
 Seligman Large Cap Value Fund
  
 T. Rowe Price Spectrum Income Fund
  
 MainStay Cash Reserves Fund
  
 Templeton Foreign Fund
  
 MainStay S&P 500 Index Fund
  
 Janus Balanced Fund
  
 Janus Fund
  
 Lord Abbett Mid Cap Value Fund
  
 PIMCO Total Return Fund
  
 American Funds - EuroPacific Growth Fund
 Net investment income (loss):
                                                  
 
 Dividends
 $      76,631
  
 $      10,525
  
 $     7,856
  
 $           743
  
 $      30,400
  
 $              -
  
 $      5,348
  
 $      4,844
  
 $     5,085
  
 $          734
  
 $     1,593
  
 $       9,503
  
 $           -
 
 Interest
       102,514
  
                 -
  
              -
  
                 -
  
                 -
  
       102,514
  
              -
  
              -
  
              -
  
                -
  
              -
  
                -
  
              -
 
 Net appreciation (depreciation) in fair value of investments
       538,984
  
         19,688
  
    196,884
  
       109,214
  
         23,736
  
                 -
  
       57,623
  
       40,816
  
      29,666
  
        21,042
  
      43,619
  
         (3,304)
  
              -
 
 Total income (loss)
       718,129
  
         30,213
  
    204,740
  
       109,957
  
         54,136
  
       102,514
  
       62,971
  
       45,660
  
      34,751
  
        21,776
  
      45,212
  
          6,199
  
              -
                                                     
 Contributions:
                                                  
 
 Employer
       207,777
  
         77,171
  
      16,330
  
         18,822
  
                 -
  
         43,536
  
         1,302
  
         8,604
  
      12,197
  
        10,439
  
        5,098
  
          8,668
  
        5,610
 
 Employee
       623,923
  
         89,707
  
      80,819
  
         61,749
  
                 -
  
       272,844
  
       17,007
  
       24,373
  
      17,508
  
        23,227
  
      12,443
  
        24,246
  
              -
 
 Total contributions
       831,700
  
       166,878
  
      97,149
  
         80,571
  
                 -
  
       316,380
  
       18,309
  
       32,977
  
      29,705
  
        33,666
  
      17,541
  
        32,914
  
        5,610
                                                     
 Deductions:
                                                  
 
 Benefit payments
     (404,757)
  
       (45,543)
  
    (24,582)
  
                 -
  
                 -
  
                 -
  
     (44,777)
  
     (39,248)
  
    (86,664)
  
       (28,958)
  
  (134,985)
  
                -
  
              -
 Income (loss) and change in plan equity
    1,145,072
  
       151,548
  
    277,307
  
       190,528
  
         54,136
  
       418,894
  
       36,503
  
       39,389
  
    (22,208)
  
        26,484
  
    (72,232)
  
        39,113
  
        5,610
                                                     
 Transfer of funds from employee investment elections, net
                 -
  
                 -
  
              -
  
     (399,898)
  
                 -
  
    1,717,457
  
   (455,335)
  
   (143,381)
  
  (141,322)
  
                -
  
              -
  
     (577,521)
  
              -
                                                     
 Plan equity at beginning of year
    6,689,429
  
       911,675
  
    624,833
  
    1,119,746
  
       646,096
  
       596,393
  
     686,030
  
     412,412
  
    425,114
  
      200,017
  
    380,873
  
      686,240
  
              -
                                                     
 Plan equity at end of year
 $ 7,834,501
  
 $ 1,063,223
  
 $ 902,140
  
 $    910,376
  
 $    700,232
  
 $ 2,732,744
  
 $  267,198
  
 $  308,420
  
 $ 261,584
  
 $   226,501
  
 $ 308,641
  
 $   147,832
  
 $     5,610
                                                     












The accompanying notes are an integral part of these financial statements.

 
-7-
 

AVX NONQUALIFIED SUPPLEMENTAL RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS

1.  
Description of Plan

The following brief description of the AVX Nonqualified Supplemental Retirement Plan (the “Plan”) is provided for general information purposes only.  Participants should refer to the Plan document for more complete information.

General
The Plan was established August 1, 1994 to provide certain officers and highly compensated managers of AVX Corporation, (“AVX”) or (the "Company") with supplemental retirement benefits.  Effective January 1, 2005, the AVX Corporation SERP Plan (the “SERP Plan”), that was established January 1, 1998, was merged into the Plan.  All balances from the SERP Plan were transferred into the Plan.  Any employee eligible to participate in the AVX Corporation Retirement Plan is eligible to participate in the SERP portion of the plan and any employee eligible to participate in the AVX Corporation Retirement plan whose annual compensation is in excess of $220,000, $225,000 and $230,000 for the plan years 2006, 2007 and 2008, respectively (as such limit is defined by the Internal Revenue Code) is eligible to participate in the Supplemental Retirement portion of the Plan. An employee who, in prior years,  becomes an eligible participant in the Plan shall continue to be eligible to fully participate in the Plan regardless of whether such employee’s annual compensation falls below the annual compensation limit for the year. In December of 2007, the Plan was amended to comply with the final regulations under Internal Revenue Code Section 409A. The Company is the Plan’s sponsor and Plan administrator. New York Life Investment Management, LLC (the “Trustee”) is the Plan’s trustee and record keeper.

Deferred Compensation Contribution
The Plan is split into two parts. There is a SERP portion and a Supplemental Retirement portion. The SERP portion allows each participant to irrevocably elect to defer receipt of all or a portion of eligible compensation for that year prior to January l of each year.    The Supplemental Retirement portion allows participants to defer an amount from 1% to 3% of eligible compensation (currently between $230,000 and $600,000).  Beginning January 1, 2001, eligible compensation for employee contributions to the supplemental portion is determined based on total compensation less any amount deferred under the SERP portion of the Plan.

Company Matching Contribution
The Company will match contributions equal to 100% of the first 3% of the amount that is deferred under the SERP portion of the Plan contingent upon the participant initially investing their deferral in the AVX Stock Fund. The Company will also match contributions equal to 100% of the first 3% of the amount deferred that is related to eligible compensation (currently between $230,000 as indexed and $600,000) in the Supplemental portion of the Plan. This match to the Supplemental portion of the plan shall be invested in the AVX Stock Fund. Total Company match for any participant in the Plan can not receive more than 3% of eligible compensation for the Plan year.

Non-discretionary Contribution
The Company will make an annual contribution equal to 5% of eligible compensation.

Discretionary Contribution
The Company may make an annual contribution between 0% - 5% of eligible compensation.  The contribution amount is subject to approval by the Company’s Board of Directors.

Vesting
Each participant shall be fully vested and have a non-forfeitable interest in his account.

Payment of Benefits
Benefits under the Plan shall be payable to a participant or beneficiary upon the earlier of such participant's separation from service, disability, or death in a lump-sum payment or in installments over a period not to exceed 10 years.

-8-
2.  
Significant Accounting Policies

Basis of Accounting
The financial statements of the Plan are presented on the accrual basis of accounting.
 
Contributions
Employer contributions under the non-discretionary contribution feature include amounts equal to the aggregate that would have been contributed based on a participant’s eligible compensation under the non-discretionary contribution feature of the AVX Retirement Plan.  The employer contributions associated with the discretionary contribution feature of the Plan are not readily determinable until after the Company’s fiscal year ended March 31 and are included in the Plan in the year paid.

Payment of Benefits
Benefits are recorded when paid.

Income Recognition
For purposes of determining realized gains and losses, the Plan uses the average cost method to determine the cost basis of disposed assets.  Net appreciation (depreciation) in fair value of investments on the Statement of Income and Changes in Plan Equity with Fund Information represents realized gains (losses) and the cumulative change in unrealized appreciation (depreciation) for the respective years.

Administrative Expenses
The Plan invests in various mutual funds with revenue-sharing agreements that partially offset fees. Plan fees that are not offset with revenue from these agreements are paid by the Company. In addition, the Company pays Plan fees related to stock administration of the AVX Stock Fund and the Kyocera Stock Fund. These stock administration fees are based on the market value of these funds.

Use of Estimates
The preparation of the Plan’s financial statements in conformity with generally accepted accounting principles requires the plan administrator to make significant estimates and assumptions that affect the reported amounts of plan equity at the date of the financial statements and the changes in plan equity during the reporting period and, when applicable, disclosures of contingent assets and liabilities at the date of the financial statements.  Actual results could differ from those estimates.

Dividend and Interest Income Recognition
Interest income is accrued when earned.  Dividend income is recorded on the ex-dividend date.

New Accounting Standards
In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard No. 157, “Fair Value Measurements” (“SFAS 157”), which defines fair value, provides guidance for measuring fair value and requires additional disclosures.  This statement does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements.  For financial assets and liabilities, SFAS 157 is effective for financial statements issued for fiscal years beginning after December 31, 2007.  The Plan adopted these provisions of SFAS 157 effective January 1, 2008. The related disclosures are included in Note 4.

-9-
3.  
Investment Programs

As of December 31, 2008, the investment alternatives include the following:

MainStay Cash Reserves Fund: The MainStay Cash Reserves Fund, a money market fund, seeks a high level of current income while preserving capital and maintaining liquidity. This Fund invests in short-term dollar denominated securities. This fund had ten participants at December 31, 2008 and eleven participants at December 31, 2007.

T. Rowe Price Spectrum Income Fund: The T. Rowe Price Spectrum Income Fund, a mutual fund, seeks a high level of current income consistent with moderate share price fluctuation by investing primarily in domestic bond funds and also in a foreign bond fund. This fund had three participants at December 31, 2008 and four participants at December 31, 2007. This fund is no longer an investment alternative for future contributions.

Seligman Large Cap Value Fund: The Seligman Large Cap Value Fund, a mutual fund, seeks capital appreciation through a value-oriented, diversified portfolio comprised of high-quality stocks.  This fund had seven participants at December 31, 2008 and 2007.

Kyocera Stock Fund: This fund is primarily invested in shares of the Kyocera Corporation.  The objective is to give participants the opportunity to share in the success and growth of Kyocera and AVX by allowing participants to become part owners.  The fund’s value will fluctuate, based on the success of Kyocera, AVX and the stock market in general.  This fund had three participants at December 31, 2008 and four participants at December 31, 2007.

AVX Stock Fund: This fund is primarily invested in shares of AVX stock.  This fund also gives participants the opportunity to share in the success and growth of AVX.  The fund’s value will fluctuate, based on the success of AVX and the stock market in general.  This fund had twelve participants at December 31, 2008 and 2007.

Janus Balanced Fund: The Janus Balanced Fund, a mutual fund, seeks long-term growth of capital balanced by current income by normally investing 40% to 60% of assets in securities selected for their growth potential and 40% to 60% of assets in securities selected for their income potential.  This fund had six participants at December 31, 2008 and eight participants at December 31, 2007.

Janus Fund: The Janus Fund, a mutual fund, seeks long-term growth of capital, consistent with preservation of capital, by investing primarily in common stock of companies of any size. This fund had seven participants at December 31, 2008 eight participants at December 31, 2007.

MainStay S&P 500 Index Fund: The MainStay S&P 500 Index Fund, a mutual fund, seeks to provide investment results that correspond to the total return performance (reflecting reinvestment of dividends) of common stocks in the aggregate, as represented by the S&P 500 Index. This fund had six participants at December 31, 2008 and seven participants at December 31, 2007.

Lord Abbett Mid Cap Value Fund: The Lord Abbett Mid Cap Value Fund, a mutual fund, seeks capital appreciation.  Under normal circumstances, this Fund invests at least 65% of its total assets in middle capitalization companies having an aggregate market value between $200 million and $5 billion.  This fund had five participants at December 31, 2008 six participants at December 31, 2007.

PIMCO Total Return Fund: The PIMCO Total Return Fund, a mutual fund, seeks maximum total return by investing primarily in fixed income securities of varying maturities.  This fund had four participants at December 31, 2008 and 2007.

American Funds- EuroPacific Growth Fund:  The American Funds- EuroPacific Growth Fund, a mutual fund, seeks long-term growth of capital.  The fund normally invests at least 80% of assets in securities of issuers located in Europe and the Pacific Basin.  The fund may also hold cash, money market instruments and fixed-income securities.  This fund became available to participants in the Plan for investment on February 26, 2007. This fund had six participants at December 31, 2008 and eight participants at December 31, 2007.
 
-10-
    The Plan's realized and unrealized gains (losses) for the years ended December 31 are as follows:

 
2008
  
2007
  
2006
Proceeds
$ 305,505
  
$ 715,234
  
$ 2,502,750
Aggregate cost
255,354
  
612,962
  
2,374,296
Realized gains (losses)
50,151
  
102,272
  
128,454
Unrealized appreciation (depreciation)
(1,653,771)
  
(104,571)
  
410,530
Net appreciation (depreciation) in fair value of investments
$ (1,603,620)
  
  $  (2,299)
  
 $ 538,984

  The Plan’s unrealized appreciation (depreciation) for investments at December 31 2008, 2007, and 2006 were $(884,786), $768,985, and $873,556, respectively.
 
 
4.  
Fair Value:
 
Fair Value Hierarchy:
 
The fair value framework described in SFAS 157 requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to value the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:
 
§  
Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

§  
Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

§  
Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.


   
Based on
 
Fair Value at December 31, 2008
Quoted prices in active markets (Level 1)
Other observable inputs    
(Level 2)
Unobservable inputs
(Level 3)
Assets measured at fair value on a recurring basis:
        
Cash Reserves Fund
 $3,515,659
 $ 3,515,659
 $              -
 $                    -
Other Investments
       2,527,826
       2,527,826
                    -
                          -
AVX Stock
          733,823
          733,823
                    -
                          -
Kyocera Stock
          790,063
          790,063
                    -
                          -
Total
 $7,567,371
 $7,567,371
 $              -
 $                  -
         


Assets valued using Level 1 inputs in the table above represent assets from the Plan and are valued based on the number of shares in the funds using a closing price per share traded in an active market.

 
-11-
5.  
Non participant-Directed Investments:

Information about the net assets and the significant components of the changes in net assets relating to the non participant-directed investments is as follows:

   
December 31,
   
2008
  
2007
Net Assets:
        
      MainStay Cash Reserves Fund
$
4,688
$
8,002
      AVX Corporation Common Stock
  
237,973
  
329,310
     Total Assets
$
242,661
$
337,312


 
Year Ended
 
December 31, 2008
Changes in Net Assets:
      
    Contributions
$
48,802
  
    Dividends
  
4,369
  
    Net depreciation
  
(144,281)
  
    Benefits paid to participants
  
(3,541)
  
          Total
$
(94,651)
  
 
6.  
Plan Termination

Although the Company has not expressed any intent to do so, it has the right to terminate the Plan at any time.  However, termination of the Plan shall not, without the consent of a participant, adversely affect such participant’s rights with respect to amounts then accrued in his/her account.

7. Federal Income Taxes

The Plan is a grantor type trust and is not qualified under Section 401 of the Internal Revenue Code.  Under Section 671 of the Internal Revenue Code, items of income, deduction or credit in a grantor trust are treated as belonging to the grantor.  These items are reported on the income tax return of the grantor, AVX Corporation.  Participants must include distributions in taxable income at the time of withdrawal.

Certain participant contributions were made to the plan before all eligibility criteria was met. The compensation of these participants was not yet in excess of the amount determined under Section 401(a)(17) of the Code for the Plan year 2008. These amounts totaling $2,912 related to the employee contribution and $2,912 related to the employer match, net of any gains and losses, are to be transferred into a forfeiture account into the MainStay Cash Reserves Fund and reflected as net employee and employer receivables and payables between the funds in the accompanying statement of financial condition as of December 31, 2008. The gross amount of excess contribution will be distributed to the participants by the Company.

Certain participant contributions were not made to the Plan in accordance with participant elections. These amounts are reported as a receivable in the accompanying statement of financial condition as of December 31, 2008 and will be contributed by the participants to the plan.

 
-12-
8. Transactions with Related Parties

Amounts of American Depository Shares of Kyocera Corporation, the Company’s majority shareholder, held by the Plan at December 31 are as follows:

 
2008
  
2007
Shares
10,917
  
10,172
Market value per share
$72.37
  
$87.22
Market value
$790,063
  
$887,202

Amounts of AVX Corporation common stock held by the Plan at December 31 are as follows:


 
2008
  
2007
Shares
92,421
  
79,741
Market value per share
$7.94
  
$13.42
Market value
$733,823
  
$1,070,125



9. Risks and Uncertainties

The Plan provides for various investment options in common stocks and in registered investment companies which invest in combinations of stocks, bonds, fixed income securities, mutual funds, and other investment securities.  Investment securities are exposed to various risks, such as interest rate, market and credit risks.  Due to the level of risk associated with certain investment securities, it is at least reasonably possible that such changes could materially affect participants’ account balances and the amounts reported in the Statement of Financial Condition with Fund Information.  The market value of the Plan’s assets is included as an asset and a liability on the Company’s balance sheet because the Plan’s assets are available to AVX’s general creditors in the event of the Company’s insolvency.

10. Subsequent Event

The reported employer contribution receivable as of December 31, 2008 was subsequently received by the Plan on February 27, 2009.


 
-13-
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee has duly caused this annual report to be signed by the undersigned thereunto duly authorized.




















AVX NONQUALIFIED SUPPLEMENTAL RETIREMENT PLAN
               (Name of Plan)

         BY:
/s/ Kurt P. Cummings
 
Kurt P. Cummings
 
Member of Administrative Committee
 
 
 
Date: March 26, 2009








 
-14-
 

AVX NONQUALIFIED SUPPLEMENTAL RETIREMENT PLAN
SCHEDULE I - INVESTMENTS
As of December 31, 2008

Description
Number of shares/units
Market Value
Percentage of Net Assets
       
MainStay Cash Reserves Fund
             3,515,659
 $          3,515,659
46.5%
Seligman Large Cap Value Fund
72,633
709,621
9.4%
AVX Stock
92,421
733,823
9.7%
Kyocera Stock
10,917
790,063
10.4%
T. Rowe Price Spectrum Income Fund
65,184
673,350
8.9%
MainStay S&P 500 Index Fund
9,535
197,181
2.6%
American EuroPacific Growth Fund
5,343
147,264
1.9%
Janus Fund
9,074
174,407
2.3%
Janus Balanced Fund
9,837
196,942
2.6%
Lord Abbett Mid Cap Value Fund
12,863
134,159
1.8%
PIMCO Total Return Fund
29,083
294,902
3.9%
Total Investments
  
$7,567,371
  
       

 
 
-15-