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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 record
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 8, 2000 at
8000 Forsyth Boulevard, Clayton, Missouri 63105.
The record holders of Common Stock outstanding at the close of
business on April 21, 2000 will be entitled to attend and to vote at the
meeting. On April 21, 2000, there were outstanding 5,837,243 shares of
Common Stock. Each share is entitled to one vote.
On April 21, 2000, 94% or 5,502,174 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, 2000.
---------------------------------------------------
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY.
---------------------------------------------------
<PAGE>
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
NOMINEES FOR ELECTION AS DIRECTORS
Fourteen 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 named in the table below and, with the
exception of J. H. Hinshaw, are presently directors of the Company.
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 2000<F1><F2>
- ---- --- ----------------------------------- -------- ------------
<S> <C> <C> <C> <C>
R. A. Cole 50 Employed by Company in 1972; District Manager 1994 1998 3,102
to 1995; District Vice President 1995 to present.
T. F. Dowd 56 Employed by Company in 1997; Vice President, Secretary 1997 1,285
and General Counsel September 1997 to present; Partner,
Bryan Cave (law firm) 1989 to 1997.
T. S. Gurganous 50 Employed by Company in 1973; District Manager 1990 to 1995 4,392
1995; District Vice President 1995 to present.
C. L. Hall 62 Employed by Company in 1959; Executive Vice President 1989 10,771
1994 to 1995; President 1995 to present.
R. H. Haney 57 Employed by Company in 1962; District Manager 1985 to 1991 7,801
1995; Senior Vice President-Electrical Business 1995 to
present.
G. W. Harper 63 Employed by Company in 1957; Vice President-Operations 1990 7,995
1990 to present.
2
<PAGE>
<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 2000<F1><F2>
- ---- --- ----------------------------------- -------- -----------
<S> <C> <C> <C> <C>
J. H. Hinshaw 55 Employed by Company in May 2000; Senior Vice President -- --
and Chief Financial Officer; Vice President and
Treasurer, Monsanto Company 1984 to 1999. Ms. Hinshaw
is a director of Insituform Technologies, Inc.
G. D. Hodges 57 Employed by Company in 1963; District Manager 1989 to 2000 5,964
1995; District Vice President 1995 to present.
J. C. Loff 50 Employed by Company in 1980; District Manager 1993 to 1998 3,132
1995; District Vice President 1995 to present.
G. J. McCrea 60 Employed by Company in 1963; District Manager 1987 to 1995 6,304
1995; District Vice President 1995 to present.
R. D. Offenbacher 49 Employed by Company in 1968; District Manager 1990 to 1994 5,385
1995; District Vice President 1995 to present.
R. A. Reynolds, Jr. 51 Employed by Company in 1972; Senior Vice President-Comm/ 1993 6,075
Data Business 1995 to present.
C. R. Udell 55 Employed by Company in 1965; Vice President 1993 to 1996 6,324
present.
J. F. Van Pelt 61 Employed by Company in 1985; Vice President-Human 1986 6,632
Resources 1986 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. On April 21, 2000, 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.
3
<PAGE>
<PAGE>
<F2> On April 21, 2000, all officers and directors as a group,
including those individuals listed above, with the exception of J.
H. Hinshaw (34 persons), owned Voting Trust Certificates
representing 140,148 shares of Common Stock (approximately 2% of
the outstanding). No officer or director owns shares of Common
Stock of record. In addition, at such date, J. W. Wolf, who
retired as an officer and director on April 1, 2000, owned Voting
Trust Certificates representing 9,161 shares of Common Stock, and
the estate of J. R. Seaton, who retired as an officer and director
on December 1, 1999, owned Voting Trust Certificates representing
9,580 shares of Common Stock.
</TABLE>
COMMITTEES
The Company has an Audit Committee, which met two times in 1999,
and a Compensation Committee, which met 10 times in 1999. The Company
has no nominating committee.
Messrs. McCrea, Cole, Hodges and Loff 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, Van Pelt and J. H. Kipper, who is
Vice President and Comptroller, 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.
BOARD AND COMMITTEE ATTENDANCE
The Board of Directors met four times in 1999. 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.
EXECUTIVE COMPENSATION
The following table summarizes the total compensation of the Chief
Executive Officer and the five other most highly compensated executive
officers of the Company for fiscal year 1999, 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, 1999 370,488 406,054 73,692
President and Chief 1998 336,798 366,436 88,364
Executive Officer 1997 306,180 342,922 80,413
R. H. Haney, 1999 199,172 177,363 35,866
Senior Vice President 1998 180,418 159,490 42,461
1997 160,666 146,206 38,833
R. A. Reynolds, Jr., 1999 199,172 177,363 35,866
Senior Vice President 1998 180,418 159,490 42,461
1997 160,666 146,206 38,833
J. R. Seaton, 1999 178,134 157,973 34,742
Vice President<F4> 1998 191,502 169,289 46,945
1997 186,386 169,611 45,957
J. W. Wolf, 1999 175,830 156,577 32,179
Vice President<F5> 1998 165,114 145,962 39,888
1997 155,730 141,715 37,865
G. W. Harper, 1999 168,000 149,604 30,284
Vice President 1998 152,536 134,841 36,797
1997 143,428 130,519 34,919
<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 1997, 1998, 1999 and 2000
and 2% to 25% of bonus payments in 1997, 1998, 1999 and 2000.
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>
<PAGE>
<F3> Profit sharing contributions accrued for the years indicated. The
profit sharing contribution for 1997 was made on March 31, 1998,
the profit sharing contribution for 1998 was made on March 31,
1999 and the profit sharing contribution for 1999 was made on
April 3, 2000. 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 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 1999,
$42,974 was credited to Mr. Hall's deferred compensation account
in this regard. Similarly, $12,891, $12,891, $11,838, $12,530 and
$8,393 were credited to the deferred compensation accounts of
Messrs. Haney, Reynolds, Seaton, Wolf and Harper, respectively.
<F4> Retired as an officer and director effective December 1, 1999.
<F5> Retired as an officer and director effective April 1, 2000.
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
At December 31, 1999, the members of the Compensation Committee of
the Board of Directors were Messrs. Haney, Harper, Kipper, Reynolds 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 policies and 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
6
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<PAGE>
in the Summary Compensation Table, are determined by aggregating the
performance of all operating units 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 R. A. Reynolds, Jr.
G. W. Harper J. F. Van Pelt
J. H. Kipper
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
------------ -------- -------- -------- -------- --------
<S> <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, 1999, the years of credited service for the executive
officers named in the Summary Compensation Table were as follows: C. L.
Hall - 40, R. H. Haney - 37, R. A. Reynolds, Jr. - 27, J. R. Seaton -
17, J. W. Wolf - 37 and G. W. Harper - 42. 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
<PAGE>
<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 Cooper
Industries, Inc., Emerson Electric Co., General Electric Company, Molex
Incorporated, 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>
1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Graybar Electric Company, Inc. $100.00 $116.86 $128.93 $148.98 $179.93 $207.91
- ----------------------------------------------------------------------------------------------------------------------
S&P 500 Index $100.00 $137.58 $169.17 $225.60 $290.08 $351.12
- ----------------------------------------------------------------------------------------------------------------------
S&P Electrical Equipment Index $100.00 $140.33 $192.73 $271.60 $364.51 $546.57
======================================================================================================================
</TABLE>
Assumes $100 invested on December 31, 1994 and reinvestment of
dividends (including the $1.10 cash dividend paid by the Company on
January 3, 1995).
8
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RELATIONSHIP WITH INDEPENDENT AUDITORS
Ernst & Young LLP audited the financial statements of the Company
and its subsidiaries in 1999 and will be considered for reappointment by
the Board of Directors in June 2000. A representative of Ernst & Young
LLP is not expected to be present at the Annual Meeting of Shareholders.
MISCELLANEOUS
Effective October 1, 1999, 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, 2000 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, 2000
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K FOR THE YEAR 1999 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, 2000
<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.
