<PAGE> 1
Schedule 14C Information
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Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
/ / Preliminary Information Statement
/ / Confidential for Use of the
Commission Only (as permitted by
Rule 14c-5(d)(2))
/X/ Definitive Information Statement
(Name of Registrant as Specified in Charter)
Graybar Electric Company, Inc.
- - ------------------------------------
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it is determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total Fee Paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE> 2
GRAYBAR ELECTRIC COMPANY, INC.
34 NORTH MERAMEC AVENUE
P.O. BOX 7231
ST. LOUIS, MISSOURI 63177
-------------------
INFORMATION STATEMENT
-------------------
This Information Statement is furnished to each holder of Common Stock
of Graybar Electric Company, Inc. (the "Company") and each holder of a Voting
Trust Certificate issued under the Voting Trust Agreement referred to below
in connection with the Annual Meeting of Shareholders of the Company to be
held at 9:30 A.M. on June 12, 1997 at 8000 Forsyth Boulevard, Clayton,
Missouri 63105.
As of April 23, 1997, 94% or 4,507,072 of the issued and outstanding
shares of Common Stock of the Company were held of record in the names of C.
L. Hall, R. H. Haney, G. W. Harper, R. L. Mygrant and R. D. Offenbacher, all
of 34 North Meramec Avenue, St. Louis, Missouri 63105, as Voting Trustees
under a Voting Trust Agreement dated as of April 1, 1997, relating to the
Common Stock of the Company. The Voting Trustees as a group possess the
voting power associated with the shares held of record under the Voting Trust
Agreement but do not have the power of disposition as to such shares. Such
voting power is sufficient to assure election of the persons nominated by the
Board of Directors for election as directors and approval of any other
matters brought before the meeting. The Voting Trustees have indicated that
they will vote the shares of Common Stock held by them in favor of the
persons nominated by the Board of Directors for election as directors. The
Voting Trust Agreement terminates on March 31, 2007, unless sooner terminated
by the vote of a majority of the Voting Trustees or the vote of the holders
of Voting Trust Certificates representing at least seventy-five percent of
the number of shares of Common Stock deposited thereunder.
The record holders of Common Stock outstanding at the close of business
on April 23, 1997 will be entitled to attend and to vote at the meeting. On
April 23, 1997, there were outstanding 4,814,638 shares of Common Stock. Each
share is entitled to one vote. This Information Statement will be sent to
holders of Common Stock and holders of Voting Trust Certificates on or about
May 14, 1997.
- - -------------------------------------------------------------------------------
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY.
- - -------------------------------------------------------------------------------
<PAGE> 3
DIRECTORS AND EXECUTIVE OFFICERS
NOMINEES FOR ELECTION AS DIRECTORS
Fifteen directors are to be elected to serve until the next Annual
Meeting of Shareholders and until their successors have been elected and
qualified. The persons nominated by the Board of Directors for election as
directors are presently directors of the Company and are named in the table
below. Certain additional information concerning them is set forth in the
table.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON
STOCK
YEAR IN BENEFICIALLY
WHICH OWNED ON
BECAME A APRIL 23,
NAME AGE BUSINESS EXPERIENCE LAST FIVE YEARS DIRECTOR 1997<F1><F2>
---- --- ----------------------------------- -------- ------------
<S> <C> <C> <C> <C>
A. A. Brzoski, Jr. 60 Employed by Company in 1954, District Manager 1991 to 1993, 1996 7,449
Vice President 1993 to present.
T. S. Gurganous 47 Employed by Company in 1973, District Manager 1990 to 1995, 1995 2,871
District Vice President 1995 to present.
C. L. Hall 59 Employed by Company in 1959, District Manager 1981 to 1994, 1989 6,501
Executive Vice President 1994 to 1995, President 1995 to present.
R. H. Haney 54 Employed by Company in 1962, District Manager 1985 to 1995, Senior 1991 5,101
Vice President 1995 to present.
G. W. Harper 60 Employed by Company in 1957, Vice President, Operations 1990 to 1990 5,474
present.
G. J. McCrea 57 Employed by Company in 1963, District Manager 1987 to 1995, District 1995 4,422
Vice President 1995 to present.
R. L. Mygrant 54 Employed by Company in 1964, District Manager 1982 to 1995, District 1991 5,153
Vice President 1995 to present.
2
<PAGE> 4
<CAPTION>
NUMBER OF
SHARES OF
COMMON
STOCK
YEAR IN BENEFICIALLY
WHICH OWNED ON
BECAME A APRIL 23,
NAME AGE BUSINESS EXPERIENCE LAST FIVE YEARS DIRECTOR 1997<F1><F2>
---- --- ----------------------------------- -------- ------------
<S> <C> <C> <C> <C>
R. D. Offenbacher 46 Employed by Company in 1968, District Manager 1990 to 1995, District 1994 3,607
Vice President 1995 to present.
I. Orloff 57 Employed by Company in 1972, Vice President 1991 to 1996, District 1990 4,285
Vice President 1996 to present.
R. A. Reynolds 48 Employed by Company in 1972, Vice President 1991 to 1994, Senior 1993 3,677
Vice President 1995 to present.
J. R. Seaton 62 Employed by Company in 1982, Comptroller 1982 to present, Vice 1982 6,497
President 1985 to present.
G. S. Tulloch, Jr. 64 Employed by Company in 1978, Secretary and General Counsel 1978 to 1978 7,699
present, Vice President 1985 to present.
C. R. Udell 53 Employed by Company in 1965, General Manager 1991 to 1993, Vice 1996 4,298
President 1993 to present.
J. F. Van Pelt 58 Employed by Company in 1985, Vice President, Human Resources 1986 1986 4,267
to present.
J. W. Wolf 57 Employed by Company in 1962, Vice President and Treasurer 1989 to 1989 6,370
present.
<FN>
- - --------------------------
<F1> All the shares of Common Stock listed are held of record by the Voting
Trustees under the Voting Trust Agreement dated as of April 1,
1997. No single director owned more than 1% of the outstanding
Common Stock or Voting Trust Certificates except for the Voting
Trustees who, as a group, possessed the voting power associated
with approximately 94% of the outstanding shares of Common Stock
but who possessed no power of disposition with respect to such
shares.
3
<PAGE> 5
<F2> As of April 23, 1997, all officers and directors as a group, including
those individuals listed above (30 persons), owned 119,374 shares of
Common Stock (approximately 2% of the outstanding).
</TABLE>
COMMITTEES
The Company has an Audit Committee, which met two times in 1996 and a
Compensation Committee, which met 25 times in 1996. Messrs. Gurganous,
McCrea, Mygrant, Offenbacher and Orloff are members of the Audit Committee.
Generally, this Committee meets with the Company's internal auditors,
corporate officers and, as necessary, the Company's independent auditors on
matters relating to corporate financial reporting and accounting procedures
and policies, the adequacy of the Company's financial accounting and
operating controls and systems and the scope of the audits of both the
independent auditors and internal auditors. The Audit Committee reviews and
reports to the Board of Directors on the results of such audits and its
recommendations relating to financial reporting and accounting practices and
policies. Messrs. Haney, Harper, Reynolds, Seaton and Van Pelt serve on the
Compensation Committee which in consultation with independent compensation
specialists reviews the Company's salary administration policy and makes
recommendations to the President with respect to program changes. The Company
has no nominating committee.
BOARD AND COMMITTEE ATTENDANCE
The Board of Directors met four times in 1996. All incumbent directors
attended more than 75% of the total of all Board and committee meetings of
which they were members.
DIRECTOR COMPENSATION
Directors are paid a meeting fee of $300 for each Board meeting
attended. Four meetings of the Board occur each year.
EXECUTIVE COMPENSATION
The following table summarizes the total compensation of the Chief
Executive Officer and the four other most highly compensated executive
officers of the Company for fiscal year 1996, as well as the total
compensation paid to each such individual for the Company's two previous
fiscal years.
4
<PAGE> 6
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION> Annual Compensation
Name and Principal --------------------------- All Other <F3>
Position Year Salary<F1> Bonus<F1><F2> Compensation
------------------ ---- ---------- ------------- --------------
<S> <C> <C> <C> <C>
C. L. Hall, 1996 278,340 289,474 62,434
President and Chief 1995 217,800 241,942 38,439
Executive Officer 1994 120,060 102,529 23,010
J. R. Seaton, 1996 182,290 154,036 41,997
Vice President 1995 176,700 167,688 41,088
1994 169,950 165,702 35,443
G. S. Tulloch, Jr., 1996 170,178 143,801 38,233
Vice President 1995 163,629 148,429 36,627
1994 157,332 141,599 31,733
R. H. Haney, 1996 150,282 126,988 33,692
Vice President 1995 137,500 130,488 24,704
1994 91,150 68,363 18,461
R. A. Reynolds, 1996 150,282 126,988 33,692
Vice President 1995 137,500 130,488 27,847
1994 105,068 94,562 21,110
<FN>
<F1> Includes amounts deferred pursuant to deferred compensation agreements
with certain employees who were not eligible to participate in the
employee contribution portion of the Profit Sharing and Savings Plan.
These agreements provide for deferral of from 2% to 10% of salary in
1994 and 1995; 2% to 15% of salary in 1996 and 1997; 2% to 10% of
bonus payments in 1994 and 1995; and 2% to 25% of bonus payments in
1996 and 1997. Payment of sums deferred will generally be made in
five or ten annual installments commencing on retirement or in a lump
sum on termination of service other than by retirement. Interest is
credited to sums deferred at the rate applicable to the fixed income
account of the Profit Sharing and Savings Plan at the end of each
calendar quarter.
<F2> Bonus paid on March 15th each year under the Company's Management
Incentive Plan with respect to services rendered during the prior
year. The Company's Management Incentive Plan covers all officers
of the Company and other management employees. In accordance with
this Plan, each participant has a guideline incentive, ranging from
20% to 80% of base salary. This guideline is subject to a year-end
adjustment based on performance against Plan goals. The adjustments
are based on objective measurements, such as sales and profits, but
may be varied at the discretion of the president and district vice
presidents. Participants may earn a maximum of 150% of the
applicable guideline.
5
<PAGE> 7
<F3> Profit sharing contributions made during the years indicated, except that
the contribution for 1996 was actually made on March 31, 1997.
Contributions by the Company under the Profit Sharing and Savings
Plan are made at the discretion of the Board of Directors for
eligible employees and, subject to certain exceptions, are made in
proportion to their annual earnings. Except as otherwise provided in
the Deed of Trust, the moneys held in trust thereunder are paid to
employees upon termination of employment for any reason including
their retirement or, in the event of their death prior to the
complete distribution of their interests, are paid to their estates
or designated beneficiaries. In addition, the column headed "All
Other Compensation" also includes payments made to the deferred
compensation accounts of the respective individuals based on
contribution limitations contained in Section 401 and 415 of the
Internal Revenue Code. In 1996, $36,739 was credited to Mr. Hall's
deferred compensation account in this regard. Similarly, $15,685,
$12,717, $10,638 and $9,072 were credited to the deferred
compensation accounts of Messrs. Seaton, Tulloch, Haney and
Reynolds, respectively.
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1996, the members of the
Compensation Committee of the Board of Directors were Messrs. Haney, Harper,
Reynolds, Seaton and Van Pelt, all of whom were officers and employees of the
Company.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee establishes the general compensation policies
of the Company and makes specific recommendations to the Board of Directors
with respect to the chief executive officer's salary.
The chief executive officer's salary and salary range, as well as the
salaries and ranges for all other employees, including those officers
identified in the Summary Compensation Table, are established in consultation
with retained professional compensation consultants after consideration of
data developed by the Company's Human Resources Department. The data examined
includes information collected from federal and state agencies, trade
associations, compensation specialists, employment consultants and
marketplace observations.
The chief executive officer's bonus, as well as bonuses for all other
exempt employees including those listed in the Summary Compensation Table, is
determined by reference to the Management Incentive Plan which has been an
integral part of the Company's compensation practice for over twenty years.
The Plan provides that employees can earn as much as 30% of salary as a bonus
at the lower end of the exempt salary scale to 120% of salary as a bonus at
the presidential level. The specific bonus level is determined by each
operating unit's performance measured against objectives established at the
beginning of each year. The president's bonus, as well as the bonuses of the
other officers named in the Summary Compensation Table, are determined by
aggregating the performance of each operating unit and measuring this total
against the aggregated objectives. Performance measures included in the Plan
are a percentage of budget attainment for net profit, sales growth over the
prior year and return on sales.
/s/ R. H. Haney J. R. Seaton
G. W. Harper J. F. Van Pelt
R. A. Reynolds
6
<PAGE> 8
PENSION PLAN
The Company has a qualified defined benefit pension plan covering all
eligible full-time employees. Employees become fully vested after 5 years of
service. After December 31, 1992, employees may retire and begin receiving
pensions at the age of 65, or earlier if they are at least age 60 with 20
years of credited service. Prior to January 1, 1993, employees could retire
and begin receiving pensions at age 55 with 20 years or more of credited
service, at age 50 with 25 years of credited service, or any age with 30
years of credited service under the plan. Employees who had completed 15
years of service on December 31, 1992 may still retire and receive their
entire benefit under the pre-1993 rule, but employees who had not completed
15 years of service on December 31, 1992 can receive only the benefit accrued
on December 31, 1992 under the old rule, and the benefit accrued after that
date under the new rule.
The following table sets forth annual benefits which would become payable
under the Company's pension plan or supplemental benefits plan based on
certain assumptions as to earnings and years of credited service without
giving effect to any applicable Social Security offset.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
Years of Service
---------------------------------------------------------
Compensation 20 25 30 35 40
- - ------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$200,000 $ 40,000 $ 50,000 $ 60,000 $ 70,000 $ 80,000
300,000 60,000 75,000 90,000 105,000 120,000
400,000 80,000 100,000 120,000 140,000 160,000
600,000 120,000 150,000 180,000 210,000 240,000
800,000 160,000 200,000 240,000 280,000 320,000
</TABLE>
An employee's annual pension income is based on the employee's average
earnings during the sixty consecutive months preceding retirement in which
earnings were highest, multiplied by one percent for each year of credited
service and offset by an amount which cannot exceed limitations imposed by
the Internal Revenue Code. As of December 31, 1996, the years of credited
service for the executive officers named in the Summary Compensation Table
were as follows: C. L. Hall - 37, J. R. Seaton - 14, G. S. Tulloch - 18, R.
H. Haney - 34 and R. A. Reynolds - 24. The amounts of salary and bonus in
the Summary Compensation Table are substantially equivalent to covered
compensation under the plan. To the extent that annual benefits exceed
limitations imposed by the Internal Revenue Code of 1986, as amended, such
benefits will be paid out of the general revenues of the Company by means of
a supplemental benefits plan.
COMPANY PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for the Company, the Standard & Poor's Composite Index of 500 Stocks
and the Standard & Poor's Electrical Equipment Index. The companies included
in the Electrical Equipment Index are AMP Incorporated, General
7
<PAGE> 9
Electric Company, General Signal Corp., W.W. Grainger, Inc., Honeywell Inc.,
Raychem Corporation, Thomas & Betts Corp., Westinghouse Electric Corporation
and Emerson Electric Co. The market value of Graybar stock, in the absence of
a public market, assumes continuation of the Company's practice of repurchasing
offered securities at $20.00 per share.
[Graph]
<TABLE>
<CAPTION>
===================================================================================================
1991 1992 1993 1994 1995 1996
- - ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Graybar Electric Co., Inc. $100.00 $110.32 $127.48 $140.64 $164.35 $181.31
- - ---------------------------------------------------------------------------------------------------
Electrical Equipment $100.00 $109.50 $132.12 $133.66 $187.57 $257.60
- - ---------------------------------------------------------------------------------------------------
S&P 500 Index $100.00 $107.62 $118.46 $120.03 $165.13 $203.05
===================================================================================================
</TABLE>
Assumes $100 invested on December 31, 1991 and reinvestment of dividends
(including the $1.10 cash dividend paid by the Company on January 2, 1992).
8
<PAGE> 10
RELATIONSHIP WITH INDEPENDENT AUDITORS
Ernst & Young audited the financial statements of the Company and its
subsidiaries in 1996 and will be considered for reappointment by the Board of
Directors in June 1997. A representative of Ernst & Young is not expected to
be present at the Annual Meeting of Shareholders.
MISCELLANEOUS
Effective October 1, 1996, the Company renewed insurance from the Federal
Insurance Company (a member of the Chubb Group), a portion of which insures
employees including directors and officers against liabilities imposed on
them as a result of their employment with the Company at an annual cost to
the Company through September 30, 1997 of $69,388.
The management of the Company knows of no other matters to be brought
before the meeting.
By Order of the Board of Directors
GEORGE S. TULLOCH, JR.
Secretary
May 14, 1997
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K FOR THE YEAR 1996 WILL BE MADE
AVAILABLE UPON WRITTEN REQUEST ADDRESSED TO THE SECRETARY OF THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
9
