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Schedule 14C Information
------------------------
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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(3) Filing Party:
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(4) Date Filed:
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GRAYBAR ELECTRIC COMPANY, INC.
34 NORTH MERAMEC AVENUE
CLAYTON, MISSOURI 63105
_________________
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 10, 1999 at 8000 Forsyth
Boulevard, Clayton, Missouri 63105.
The record holders of Common Stock outstanding at the close of
business on April 21, 1999 will be entitled to attend and to vote at the
meeting. On April 21, 1999, there were outstanding 5,789,826 shares of
Common Stock. Each share is entitled to one vote.
As of April 21, 1999, 94% or 5,459,170 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. D. Offenbacher
and R. A. Reynolds, Jr., all of 34 North Meramec Avenue, Clayton,
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 as a
group 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.
This Information Statement will be sent to holders of Common Stock
and holders of Voting Trust Certificates on or about May 12, 1999.
----------------------------------------------
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY.
----------------------------------------------
<PAGE>
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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 21,
NAME AGE BUSINESS EXPERIENCE LAST FIVE YEARS DIRECTOR 1999<F1><F2>
- ---- --- ----------------------------------- -------- ------------
<S> <C> <C> <C> <C>
R. A. Cole 49 Employed by Company in 1972, Branch 1998 2,955
Manager 1985 to 1994, District Manager
1994 to 1995, District Vice President
1995 to present.
T. F. Dowd 55 Employed by Company in 1997, Vice 1997 1,224
President, Secretary and General Counsel
September 1997 to present. Partner,
Bryan Cave (law firm) 1989 to 1997.
T. S. Gurganous 49 Employed by Company in 1973, District 1995 4,183
Manager 1990 to 1995, District Vice
President 1995 to present.
C. L. Hall 61 Employed by Company in 1959, District 1989 10,259
Manager 1981 to 1994, Executive Vice
President 1994 to 1995, President 1995
to present.
R. H. Haney 56 Employed by Company in 1962, District 1991 7,430
Manager 1985 to 1995, Senior Vice
President 1995 to present.
G. W. Harper 62 Employed by Company in 1957, Vice 1990 7,615
President, Operations 1990 to present.
W. L. King 63 Employed by Company in 1958, District 1998 6,785
Manager 1989 to 1995, District Vice
President 1995 to present.
2
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<PAGE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON
STOCK
YEAR IN BENEFICIALLY
WHICH OWNED ON
BECAME A APRIL 21,
NAME AGE BUSINESS EXPERIENCE LAST FIVE YEARS DIRECTOR 1999<F1><F2>
- ---- --- ----------------------------------- -------- ------------
<S> <C> <C> <C> <C>
J. C. Loff 49 Employed by Company in 1980, District 1998 2,983
Manager 1993 to 1995, District Vice
President 1995 to present.
G. J. McCrea 59 Employed by Company in 1963, District 1995 6,004
Manager 1987 to 1995, District Vice
President 1995 to present.
R. D. Offenbacher 48 Employed by Company in 1968, District 1994 5,129
Manager 1990 to 1995, District Vice
President 1995 to present.
R. A. Reynolds, Jr. 50 Employed by Company in 1972, Vice 1993 5,786
President 1991 to 1994, Senior Vice
President 1995 to present.
J. R. Seaton 64 Employed by Company in 1982, Comptroller 1982 9,124
1982 to present, Vice President 1985 to
present.
C. R. Udell 54 Employed by Company in 1965, Vice 1996 6,023
President 1993 to present.
J. F. Van Pelt 60 Employed by Company in 1985, Vice 1986 6,317
President, Human Resources 1986 to
present.
J. W. Wolf 59 Employed by Company in 1962, Vice 1989 8,725
President and Treasurer 1989 to 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 beneficially 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.
<F2> As of April 21, 1999, all officers and directors as a group,
including those individuals listed above (33 persons), owned
Voting Trust Certificates representing 151,522 shares of Common
Stock (approximately 3% of the outstanding). No officer or
director owns shares of Common Stock of record.
</TABLE>
3
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<PAGE>
COMMITTEES
The Company has an Audit Committee, which met two times in 1998,
and a Compensation Committee, which met 11 times in 1998. Messrs.
McCrea, Cole, Loff and King are the current members of the Audit
Committee. Generally, this Committee meets with the Company's internal
auditors, corporate officers and 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 compensation 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 1998. All incumbent
directors attended more than 75% of the total number of meetings of the
Board and all committees 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 1998, as well as the total
compensation paid to each such individual for the Company's two previous
fiscal years.
4
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<PAGE>
<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, 1998 336,798 366,436 88,364
President and Chief 1997 306,180 342,922 80,413
Executive Officer 1996 278,340 289,474 62,434
J. R. Seaton, 1998 191,502 169,289 46,945
Vice President 1997 186,386 169,611 45,957
1996 182,290 154,036 41,997
R. H. Haney, 1998 180,418 159,490 42,461
Senior Vice President 1997 160,666 146,206 38,833
1996 150,282 126,988 33,692
R. A. Reynolds, Jr., 1998 180,418 159,490 42,461
Senior Vice President 1997 160,666 146,206 38,833
1996 150,282 126,988 33,692
J. W. Wolf, 1998 165,114 145,962 39,888
Vice President 1997 155,730 141,715 37,865
1996 147,630 124,748 33,649
<FN>
- ---------
<F1> Includes amounts accrued and 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 15% of salary in 1996, 1997, 1998 and 1999
and 2% to 25% of bonus payments in 1996, 1997, 1998 and 1999.
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.
<F3> Profit sharing contributions accrued for the years indicated. The
profit sharing contribution for 1996 was made on March 31, 1997,
the profit sharing contribution for 1997 was made on March 31,
1998 and the profit sharing contribution for 1998 was made on
March 31, 1999. Contributions by the Company under
5
<PAGE>
<PAGE>
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
compensation. Except as otherwise provided in the Profit Sharing
and Savings Plan and the related Trust Agreement, the monies 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 Sections 401 and 415 of the Internal Revenue Code.
For 1998, $49,851 was credited to Mr. Hall's deferred compensation
account in this regard. Similarly, $16,898, $13,391, $13,391 and
$15,403 were credited to the deferred compensation accounts of
Messrs. Seaton, Haney, Reynolds and Wolf, respectively.
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1998, 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 such compensation, including 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, are determined by reference to the Management
Incentive Plan which has been an integral part of the Company's
compensation practice for over twenty-five 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 level of
president and chief executive officer. The specific bonus level is
determined by each operating unit's performance measured against
objectives established at the beginning of each year. The chief
executive officer'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 sales, gross margin and net
profit) and return on sales.
/s/ R. H. Haney J. R. Seaton
G. W. Harper J. F. Van Pelt
R. A. Reynolds, Jr.
6
<PAGE>
<PAGE>
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. Generally, 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 covered compensation and years of
credited service without giving effect to any applicable Social Security
offset.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
Years of Service
Covered ---------------------------------------------------------------------------
Compensation 20 25 30 35 40
- ------------ -------- -------- -------- -------- --------
<C> <C> <C> <C> <C> <C>
$ 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
$1,000,000 $200,000 $250,000 $300,000 $350,000 $400,000
</TABLE>
An employee's annual pension income is based on the employee's
average covered compensation 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, 1998, the years of credited service for the executive
officers named in the Summary Compensation Table were as follows: C. L.
Hall - 39, J. R. Seaton - 16, R. H. Haney - 36, R. A. Reynolds, Jr. -
26, and J. W. Wolf - 36. 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.
7
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<PAGE>
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 S&P Electrical Equipment Index are AMP
Incorporated, Emerson Electric Co., General Electric Company, Honeywell
Inc., Raychem Corporation, Rockwell International Corp., Solectron
Corporation and Thomas & Betts Corp. 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.
TOTAL SHAREHOLDERS' RETURNS
[GRAPH]
<TABLE>
<CAPTION>
=====================================================================================================================
1993 1994 1995 1996 1997 1998
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Graybar Electric Company, Inc. $100.00 $110.32 $128.93 $142.23 $164.34 $198.48
- ---------------------------------------------------------------------------------------------------------------------
S&P 500 Index $100.00 $101.32 $139.40 $171.40 $228.59 $293.91
- ---------------------------------------------------------------------------------------------------------------------
S&P Electrical Equipment Index $100.00 $101.17 $141.97 $194.98 $274.77 $368.77
=====================================================================================================================
</TABLE>
Assumes $100 invested on December 31, 1993 and reinvestment of
dividends (including the $1.10 cash dividend paid by the Company on
January 3, 1994).
8
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RELATIONSHIP WITH INDEPENDENT AUDITORS
Ernst & Young LLP audited the financial statements of the Company
and its subsidiaries in 1998 and will be considered for reappointment by
the Board of Directors in June 1999. A representative of Ernst & Young
LLP is not expected to be present at the Annual Meeting of Shareholders.
MISCELLANEOUS
Effective October 1, 1998, 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, 1999 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
THOMAS F. DOWD
Secretary
May 12, 1999
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K FOR THE YEAR 1998 WILL BE MADE
AVAILABLE UPON WRITTEN REQUEST ADDRESSED TO THE SECRETARY OF THE COMPANY
AT ITS PRINCIPAL EXECUTIVE OFFICES.
9
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_______
G R A Y B A R
ELECTRIC COMPANY, INC.
INFORMATION STATEMENT
MAY 12, 1999
<PAGE>
<PAGE>
APPENDIX
Page 8 of the printed information statement contains a Total Shareholders
Returns graph. The information contained within the graph is restated in the
table immediately following the graph.
