Graybar Electric Company, Inc., strives to conduct its business in strict conformity with all applicable laws and the highest ethical standards.
1.1. Graybar Electric Company, Inc., strives to conduct its business in strict conformity with all applicable laws and the highest ethical standards. The Company expects each of its employees to abide by the policies stated in this instruction in all dealings with customers and suppliers of the Company, with all other third parties doing business (or interacting in some other fashion) with the Company, and with their fellow employees.
1.2. The general standards to be applied by employees conducting their activities as employees of the Company are:
a. Honesty – to be completely honest and not engage in any manipulation, concealment, deception, or misrepresentation of any kind.
b. Integrity – to do what is right and ethical and what has been promised.
c. Respect and Equal Treatment – to treat everyone with dignity and not engage in or tolerate harassment or discrimination of any kind, especially based on race, color, religion, creed, sex, national origin, age, disability, ancestry, family care status, pregnancy, veteran status, work-related injury, marital status, sexual orientation, gender identity or expression, genetic information, membership or activity in a local human rights commission, or status with regard to public assistance or any other lawfully protected status; and to support all efforts to eradicate human trafficking and any form of harsh or inhumane treatment including human trafficking, forced labor or child labor.
d. Compliance with Laws – to comply fully with all applicable laws and Governmental rules and regulations ("Applicable Laws").
e. Loyalty to the Company and Fellow Employees – to put the interests of the Company before personal interests when acting as an employee, including not taking personal advantage of opportunities that belong to the Company.
f. Fair Dealing – to deal fairly with the Company's customers and suppliers, fellow employees, and anyone else doing business or engaged in some other fashion with the Company and not to offer or accept any improper inducements or otherwise attempt to make or influence any decision improperly.
g. Protection of the Company's property – to protect the assets and property of the Company, including its confidential information, trade secrets and intellectual property, and to use those assets and properties only in the furtherance of the Company's business. Intellectual property assets include anything that is conceived or created by employees that pertains to the Company’s business and/or utilizes Company property including, but not limited to, pre-existing Company intellectual property like inventions, trade secrets, confidential information, works of authorship, resources and time.
h. Implementation of the Standards – to report to a supervisor, or other appropriate manager or Company personnel, any violations or possible violations of Applicable Laws or this Code of Business Conduct and Ethics and to seek guidance from a supervisor or other appropriate Company personnel when in doubt about the best course of action to take in a particular situation.
1.3. This instruction has been adopted by the Board of Directors of Graybar Electric Company, Inc., to deter wrongdoing, to promote honest and ethical conduct, to foster compliance with the letter and the spirit of Applicable Laws by all employees of the Company, to protect the value of Company assets, and to assure proper disclosure of financial information in the Company's financial statements, in the filings with, or submissions to, the Securities and Exchange Commission and in other public communications made by the Company.
1.4. The remainder of this instruction deals more specifically with (a) circumstances in which the personal interests of any employee may come into conflict with the Company's interest; (b) protection of confidential information; (c) treatment of Company opportunities; (d) fair dealing; (e) protection and proper use of Company assets; (f) compliance with Applicable Laws; (g) political activity, payments, and gifts; and (h) the Foreign Corrupt Practices Act. It also sets forth procedures to be followed to report any illegal, unethical, or dishonest behavior.
2. AVOIDANCE OF CONFLICTS OF INTEREST
2.1. No employee shall engage in any conduct that might result in or be perceived to result in a conflict between the personal interests of the employee and the best interests of the Company without first obtaining written approval from his/her immediate management supervisor. The supervisor should then refer the facts of the situation to the responsible Vice President in writing, who shall determine if a conflict exists and shall report the results of his/her determination in writing to the Company's Senior Vice President, Secretary and General Counsel. Any possible conflict of interest involving a Vice President or an officer, who is not a member of the Board of Directors, must be reviewed with and approved in writing by the President of the Company. Any possible conflict involving the President or any member of the Board of Directors must be reviewed with and approved by a majority of the disinterested members of the Board of Directors in writing. Each employee is expected to test his/her conduct and its probable effect on the Company in accordance with exacting personal standards of integrity and loyalty. Whenever any question of possible conflict arises, the employee is expected to follow the procedure described above.
2.2. This policy and review process also applies to possible conflicts resulting from the activities of members of an employee's family or household and the employee's close relatives.
2.3. It is impossible to describe precisely all situations which may give rise to a conflict with the best interests of the Company, but some of the more obvious circumstances in which conflicts may occur are:
a. Owning any significant direct or indirect interest in any supplier, customer, or other organization doing or seeking to do business with the Company, or any competitor of the Company. As a guideline, ownership of one percent or less of the securities of any such organization listed on a recognized United States stock exchange or otherwise publicly traded is regarded as an insignificant interest.
b. Acting as an officer, director, employee, consultant, or representative, or in any other comparable capacity, for any supplier, customer, or other organization doing or seeking to do business with the Company, or for any competitor of the Company, without specific Company approval.
c. Accepting from or offering to a supplier, customer, or any other organization doing or seeking to do business with the Company, any compensation, fees, commissions, or other payments, loans, services, or other items of value, including gifts, travel, or entertainment, except those of only nominal value that are commonly accepted as normal business courtesies or which are made available under Company-approved supplier promotional programs.
d. Acquiring, directly or indirectly, or turning to the employee's personal advantage, or to the advantage of any other person or organization, any business or financial opportunity learned about or encountered in the course of or as a result of activities as an employee, or any which ought to be available to the Company for some other reason.
e. Engaging as an individual in any significant sale, lease, or purchase transaction with the Company, either directly or indirectly.
2.4. When there is any question of possible conflict, all the pertinent facts must be disclosed promptly to the employee's immediate management supervisor in writing, who should follow the procedure outlined previously in this instruction. If it should then appear to the management supervisor that a conflict does in fact exist, every effort will be made to resolve it in a manner that is fair and reasonable for the employee and the Company. The final determination of the application of the Company's policy will be made by senior management or, if appropriate, by the Board of Directors.
3. PROTECTION OF CONFIDENTIAL INFORMATION
3.1. The Company expects every employee to treat as “confidential” any and all information about the Company and its business and financial affairs which is proprietary or otherwise not generally known by or revealed to third parties. An employee must not disclose, access or use such information other than to perform his or her responsibilities as an employee. Any disclosure of such information should be limited to authorized Company personnel or agents or persons with whom the Company is conducting business who need to know it. These obligations also apply to information received in confidence by the Company from suppliers, customers, and other third parties doing business or otherwise interacting with the Company.
3.2. Many kinds of confidential information exist. Among the most important examples are trade secrets. Simply put, trade secrets involve information (of whatsoever kind) that is not generally known which gives the Company a competitive advantage and include information, data, and analyses concerning: the Company's marketing and sales plans and activities (including details of sourcing, costs, pricing, and product or service offerings); the Company's financial and operating plans and practices, including distribution methods; the Company's customers and all past, present, and prospective transactions with them (including all contracts, quotations, bids, and proposals); the Company's suppliers and all past, present, and prospective transactions with them (including supplier pricing, quotations, or project information); other Company trade secrets; and any acquisition plans of the Company and related matters learned in the course of such transactions. Every precaution should be taken to preserve the confidentiality of all such information, data, and analyses unless and until specifically released in writing by senior management for general publication or otherwise made public by Company officials.
3.3. No employee shall, either directly or indirectly through family members or third parties, purchase or sell stock of publicly-traded companies on the basis of material, non-public information received or learned while acting as an employee or share such information with any person to use in connection with their purchase or sale of any publicly-traded security. Material information is any information which could reasonably be expected to either affect the price of, or the decision to buy or sell, the stock of any company. Non-public information is any information not available to the public generally and, although it clearly includes all confidential information, it may have broader application. This prohibition applies to any non-public information of suppliers, customers, other third parties doing business with or otherwise interacting with the Company, potential acquisition targets or competitors of the Company.
3.4. The obligations not to disclose or improperly use any information regarded as confidential by the Company (or by its suppliers, customers, or other third parties covered by this policy) continue even after the employee is no longer employed by the Company.
3.5. If an employee's service with the Company ends for any reason, he or she must deliver to the Company, prior to leaving, and may not continue to access, all correspondence, files, reports, memoranda, records, manuals, presentations, sales reports, customer lists, customer and supplier business cards, quotation, bid or proposal files or materials, job folders, notes, drawings, and any other material pertaining to the Company's business or financial affairs which may be in the employee's possession or under his or her control, and any information received from any supplier, customer, or third party which is subject to this policy. This obligation pertains to information, data, or material whether it is in writing, in electronic form, or encoded or recorded on some other media including without limitation cloud storage. Returning the items described does not in any way relieve the employee of the obligation of confidentiality set forth above.
4. OTHER GENERAL STANDARDS OF CONDUCT
4.1. Dealings with the Company's customers, suppliers, competitors, and other Company employees shall be undertaken with integrity and in a manner that is completely honest and that does not take unfair advantage of any person through manipulation, concealment, abuse of confidential or other privileged information, or misrepresentation of material facts.
4.2. Any such dealings shall be undertaken with professionalism and in a manner which will not prove an embarrassment to the Company or damage its reputation. This policy applies to all activities, including entertainment regardless of whether they occur during or after normal business hours. Company employees are not to engage in any conduct or attend any functions, including entertainment that may potentially embarrass or offend participants.
4.3. Each employee is charged with the responsibility of protecting and properly using the assets of the Company. Use of the Company's assets (including use of computers, phones, copiers, the electronic mail system, and Internet facilities) is limited to use that will further the business and other objectives of the Company. Incidental, personal use of Company assets may be permitted so long as it does not interfere with the employee's work or with the activities of fellow employees. Any employee found to be engaging in, or attempting, theft of any property of the Company, including documents, equipment, intellectual property, trade secrets, personal property of other employees, cash, or any other items of value will be subject to termination and to possible criminal proceedings. All employees have a responsibility to report any theft or attempted theft to the Company's management.
4.4. Consistent with other sections of this General Instruction, Graybar promotes an environment of open communication in which all employees' communications are respected. Accordingly, employees are prohibited from recording or videotaping any work-related meetings or conversations without the knowledge and consent of all persons present or involved.
4.5. Full-time employees are permitted to engage in employment opportunities outside of normal Company working hours. However, any such employment shall not compete with the Company, shall not constitute a conflict of interest, shall not interfere with the ability of the employee to devote full-time to his or her work, and shall not be furthered by using assets of the Company such as supplies, computers, telecommunications equipment, and copiers.
4.6. Sales or purchases of material, supplies, and service for the Company shall be accomplished in a manner that obtains the best value for the Company, while considering only merits such as quality, performance, and price. No attempt should be made to influence or affect purchase or sale decisions improperly. Solicitation of gifts in any amount is improper.
5. POLITICAL ACTIVITY: PAYMENTS AND GIFTS
5.1. In this country, and in many foreign countries, it is unlawful for corporations to contribute funds to political parties or candidates for office. Such contributions are not to be made by the Company and any lawful contributions shall only be made with the written approval of the President. While the Company recognizes personal political contributions by an employee on an individual basis as an exercise in good citizenship, the Company reaffirms that unlawful contributions must not be made with Company funds or be reimbursed from Company funds by any means. The Company also recognizes the right of employees to engage in political activities on a personal basis, including political party membership of the employee's choice, support of individual candidates for public office, nonpartisan service at the polls, and, if consistent with the employee's duties, seeking and holding elective or appointive public office. However, such activities shall not be carried out using Company facilities or resources or on Company property.
5.2. The giving of anything of value to secure favored treatment from a political or Governmental official of any kind is unlawful in any form. The offer to pay or payment of any such compensation, fee, gift, or other consideration of any kind, either directly or through an agent or other intermediary, is strictly prohibited. All employees are expected to report any requests of an official for such payments to his/her immediate supervisor, who should refer this information to the responsible Vice President.
6. COMPLIANCE WITH LAW
6.1. Each employee shall comply fully with all Applicable Laws, including without limitation, employment, discrimination, health, safety, antitrust (as more fully described in G. I. 7), securities, and environmental laws.
6.2. The Foreign Corrupt Practices Act (described more fully in G. I. 45) requires the Company to maintain books, records, and accounting controls designed to accurately reflect financial transactions as they occur and prohibits the Company and its employees from making payments directly or indirectly to officials of foreign Governments for the purpose of influencing such Governments in obtaining or retaining business. The Sarbanes-Oxley Act of 2002 imposes additional, far-reaching requirements on the Company and its employees with respect to the adequacy and accuracy of the Company's financial systems and controls and the manner in which the Company conducts its internal and external affairs. Violations of either Act can subject the Company to heavy fines and individuals to fines and imprisonment.
6.3. The Company's system of accounting records and controls has historically been reviewed by outside public accounting firms and will continue to be so in the future. Nevertheless, the integrity of these systems is dependent on the accuracy of initial entries made by Company employees. Accordingly, all reports, entries, or other communications, including those which form the basis for preparation of accounting records, shall completely, accurately, and honestly reflect transactions as they have occurred.
6.4. No employee shall engage in the practice of making improper payments to any person or organization for the purpose of obtaining or retaining business or for any other inappropriate purpose in violation of any Applicable Law. Specifically, this means that:
a. No employee shall, in violation of any Applicable Law, offer or make, directly or indirectly through any other person or firm, any payment of anything of value (in the form of compensation, gift, contribution, or otherwise) to any person or firm employed by or acting for or on behalf of any customer for the purpose of inducing or rewarding favorable action by the customer in any commercial transaction.
b. Employees who conduct business with federal, state or local Government entities shall not give government employees anything of value, including entertainment, gifts, or business courtesies of any kind.
6.5. All agreements with consultants, agents, or representatives shall be in writing, and payments thereunder shall be made by check, bank wire, or in any other manner satisfactory to the Company and consistent with internal auditing procedures. Each agency, consultant, or representative agreement shall include a covenant that the agent, consultant, or representative will comply with all Applicable Laws in acting on the Company's behalf and shall require the agent, consultant, or representative to submit a report describing the services he or she has rendered on behalf of the Company. For the purposes of this instruction, the terms "agent," "consultant," or "representative" shall mean any independent contractor retained by the Company to assist in procuring business, facilitating performance of obligations, or acting as liaison under sale contracts.
6.6. Agreements with consultants, agents, or representatives retained to act on the Company's behalf in a foreign country shall be handled in accordance with G. I. 45 Export Compliance Policy.
6.7. Except as noted in paragraph 6.6 above, for any agreement under which compensation may exceed $100,000, the proposed agency, consultant, or representative agreement and the report described above shall be submitted, prior to the signing of such agreement, to the Regional Vice President and the Senior Vice President, Secretary and General Counsel for their approval. All other such agreements shall be approved by the responsible Vice President.
6.8. If any officer or employee has reason to believe that the agent, consultant, or representative has breached any covenant of the applicable agreement or violated this instruction in any fashion, he or she shall report this information to the appropriate officer or department head and to the Senior Vice President, Secretary and General Counsel. Upon receiving such information, the Senior Vice President, Secretary and General Counsel shall be responsible for directing an investigation of the matter.
6.9. All employees must comply with applicable U.S. export control laws, embargo laws, and anti-boycott laws as described more fully in G. I. 45 Export Compliance Policy.
7. IMPLEMENTATION OF THIS INSTRUCTION
7.1. Responsibility for the compliance with this Code of Business Conduct and Ethics rests with all employees and their respective supervisors. The responsibility to communicate the requirements of this Code of Business Conduct and Ethics to employees rests with their respective supervisors. All employees are expected to review this Instruction and acknowledge by electronic signature upon employment and annually thereafter. In addition, certain Covered Officers (as defined in Appendix B) shall review and acknowledge Appendix B by electronic signature.
7.2. Vice Presidents are ultimately responsible for obtaining the required signatures within their organizations; the Senior Vice President-Human Resources is ultimately responsible for obtaining the required signatures of Corporate employees.
7.3. The senior operating officer of each subsidiary or affiliate of the Company is responsible for obtaining the required signatures of all employees within their organization.
7.4. Employees shall report all actual or potential violations of Applicable Laws or this Code of Business Conduct and Ethics as described in G. I. 8 Supplement 1.
7.5. Questions regarding this instruction shall be directed to the Company's Senior Vice President, Secretary and General Counsel.
7.6. Supervisors are strictly prohibited from retaliating against any employee who makes a good faith report of any actual or potential violation of any Applicable Law or this Code of Business Conduct and Ethics. Any such retaliatory action will subject the supervisor to disciplinary action. In addition, supervisors will be subject to disciplinary action for a violation of any Applicable Law or this Code of Business Conduct and Ethics by a subordinate employee to the extent such violation results from inadequate supervision or a lack of diligence on the part of the supervisor.
7.7. Supervisors should avoid conduct which would require, or seem to require, any subordinate to engage in conduct which would violate this Code of Business Conduct and Ethics.
7.8. Violations of any Applicable Law or the standards contained in this Code of Business Conduct and Ethics will result in disciplinary action, which may include termination of employment, referral for criminal prosecution, and reimbursement to the Company for any losses arising out of the violation. Any employee who fails to report a violation or deliberately withholds relevant and material information concerning a violation of Applicable Law or this Code of Business Conduct and Ethics will also be subject to disciplinary action.
7.9. No provision of this Code of Business Conduct and Ethics is intended to create any right in favor of any third party, including any stockholder, officer, director, or employee of the Company or any subsidiary thereof, in the event of any violation of any provision hereof.
7.10. References to the Company in this Code of Business Conduct and Ethics include its subsidiaries, affiliates and divisions. References to employees in this Code of Business Conduct and Ethics include all categories of employment.
The primary role of the Audit Committee is to oversee the Company's financial reporting process on behalf of the Board and report the results of its oversight to the Board.
Organization and Meetings
This charter governs the operations of the Audit Committee (the "Committee"). The Committee shall review and reassess this charter at least annually and report thereon to, and if any revisions are recommended obtain the approval of, the Board of Directors. The Committee shall be appointed by the Board of Directors and comprised of at least four directors. The Board of Directors shall designate one member as chairperson or delegate the authority to designate a chairperson to the Committee.
Members shall not serve on more than three public company audit committees simultaneously unless the Board of Directors determines that such simultaneous service would not impair the member’s ability to serve effectively on the Committee.
The Committee shall meet at least quarterly, or more frequently as circumstances dictate. The Committee shall meet separately and periodically with the Company's management, the personnel responsible for its internal audit function, and its independent registered public accounting firms (the "Independent Accountants"). The Committee shall report regularly to the Board of Directors with respect to its activities. The Committee shall prepare the Audit Committee report that SEC rules require to be included in the Company's annual Information Statement.
Purpose of the Audit Committee
The Audit Committee shall provide assistance to the Board of Directors in fulfilling the Board's oversight responsibility to the shareholders and others relating to the integrity of the Company's financial statements, the effectiveness of the Company's internal control over financial reporting, the performance of the internal audit function, the performance of the annual independent audit of the Company's financial statements, the qualifications and independence of the Independent Accountants, the Company's compliance with legal and regulatory requirements, and the legal compliance and ethics programs as established by management and the Board. In the course of performing these duties, it is the responsibility of the Committee to maintain free and open communication between the Committee, the Independent Accountants, the Company’s internal auditors and its management and to determine that all parties are aware of their responsibilities. In discharging its oversight role, the Committee shall have the right to retain and compensate such outside legal, accounting, or other advisors as it considers necessary or advisable to investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of the Company.
The primary role of the Audit Committee is to oversee the Company's financial reporting process on behalf of the Board and report the results of its oversight to the Board. Management is primarily responsible for the preparation, presentation, and integrity of the Company's financial statements, for the appropriateness of the accounting principles and reporting policies that are used by the Company and for establishing and maintaining internal control over financial reporting. The Independent Accountants are responsible for auditing the Company's financial statements, and for reviewing the Company's unaudited interim financial statements. The Committee, in carrying out its responsibilities, believes its policies and procedures should remain flexible, in order to best react to changing conditions and circumstances. The Committee should take the appropriate actions to set the overall corporate "tone" for quality financial reporting, sound business risk practices, and ethical behavior.
Responsibilities and Processes
The following shall be the current principal recurring processes of the Audit Committee in carrying out its oversight responsibilities. The processes are set forth as a guide with the understanding that the Committee may supplement or modify them as appropriate.
Independent Registered Public Accountants and Internal Audit
The Committee shall have a clear understanding with management and the Independent Accountants that the Independent Accountants are ultimately accountable to the Board and the Audit Committee, as representatives of the Company's shareholders. The Committee shall have complete authority and responsibility to evaluate and, where appropriate, recommend to the Board of Directors the replacement of the Independent Accountants. The Committee shall discuss with these accountants their independence from management and the Company including the matters in the written disclosures required by the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and shall consider the compatibility of nonaudit services with that independence. Annually, the Committee shall review and recommend to the Board the selection of the Company's Independent Accountants. The Committee shall pre-approve all audit and non-audit services to be performed by the Independent Accountants and the related fees.
The Committee shall discuss with the internal auditors and the Independent Accountants the overall scope and plans for their respective audits including the adequacy of staffing and compensation. Also, the Committee shall discuss with management, the internal auditors, and the Independent Accountants the adequacy and effectiveness of the Company's internal control over financial reporting, including the Company's system to monitor and manage business risk, and its legal and ethical compliance programs. Further, the Committee shall meet separately with the internal auditors and the Independent Accountants to discuss the results of their respective examinations.
At least annually, the Committee shall obtain and review a report by the Company's Independent Accountants describing: (i) the firm's internal quality control procedures; (ii) any material issues raised by the most recent internal quality control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues, and (iii) all relationships between the Independent Accountants and the Company (to assess their independence). After reviewing the foregoing report and the work of the Independent Accountants throughout the year, the Committee shall evaluate the qualifications, performance and independence of the Independent Accounting Firm. Such evaluation should include the review and evaluation of the lead audit partner and take into account the opinions of management and the Company's personnel responsible for the internal audit function. The Committee shall determine that the Independent Accounting Firm has a process in place to address the rotation of the lead audit partner and other audit partners serving the account as required by law.
The Committee shall regularly review with the Independent Accountants any audit problems or difficulties encountered during the course of the audit work, including any restrictions on the scope of their activities or their access to requested information, and management’s response thereto. The Committee shall have the right to inquire about and review any accounting adjustments that were noted or proposed by auditors but were "passed" (as immaterial or otherwise) by management; any communications between the audit team and the Independent Accountant’s national office respecting auditing or accounting issues or internal control-related issues presented by the engagement; and any "management" or "internal control" letter issued, or proposed to be issued, by the Independent Accountants to the Company.
The Committee shall review with management and the Independent Accountants the annual audited financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations, to be set forth in the Company's Annual Report on Form 10-K (or the Annual Report to Shareholders if distributed prior to the filing of Form 10-K), in the course of which the Committee, if applicable, shall: (1) address any major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company's selection or application of accounting principles; (2) discuss with management and the Independent Accountants any significant financial reporting issues and judgments made in connection with the preparation of the financial statements and the reasonableness of and rationale for those judgments, including analyses of the effects of alternative GAAP methods on the financial statements; (3) consider the effect of any material regulatory and accounting initiatives on the financial statements; (4) consider the judgment of both management and the Independent Accountants about the quality, not just the acceptability of significant accounting principles; and (5) assess the clarity of the disclosures in the financial statements. Also, the Committee shall discuss the results of the annual audit and any other matters required to be communicated to the Committee by the Independent Accountants under the standards of PCAOB and applicable generally accepted auditing standards. The Committee shall consider whether to recommend to the Board of Directors that the audited financial statements should be included in the Company’s annual report on Form 10-K.
The Committee also shall review the interim quarterly financial statements, including Management's Discussion and Analysis of Financial Condition and Results of Operations, with management and the Independent Accountants prior to the filing of each of the Company's Quarterly Reports on Form 10-Q. Also, the Committee shall discuss the results of the related quarterly review and any other matters required to be communicated to the Committee by the Independent Accountants under the standards of the PCAOB. The chair of the Committee may represent the entire Committee for the purposes of this review.
Controls, Compliance and Risk Management
The Committee shall discuss with management its process for performing its required quarterly certifications under Section 302 of the Sarbanes-Oxley Act. The Committee shall discuss with management, the internal auditors, and the Independent Accountants any (1) changes in internal control over financial reporting that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting that are required to be disclosed and (2) any other significant changes in internal control over financial reporting that were considered for disclosure in the Company's periodic filings with the SEC.
The Committee shall review with senior management the Company's overall anti-fraud programs and controls. The Committee periodically shall review the Company's compliance and ethics programs, including consideration of applicable legal and regulatory requirements, and management's evaluation of the effectiveness of the programs that Committee management has established to monitor compliance with such programs. The Committee shall receive any reports submitted by an attorney concerning evidence of a material violation of securities laws, fraud or breaches of fiduciary duty by the Company.
The Committee shall discuss the Company's policies with respect to risk assessment and risk management, including the risk of fraud and theft. The Committee also shall discuss the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures.
The Committee shall review, at least annually, the Company’s cybersecurity program and shall receive frequent updates on cybersecurity and the development of Company’s cyber strategy and the Company’s corresponding Information Technology Emergency Response Plan.
The Committee shall establish procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
The Committee shall determine the appropriate funding needed by the Committee for payment of: (1) compensation to the Independent Accountants engaged for the purpose of preparing or issuing audit reports or performing other audit, review, or attest services for the Company; (2) compensation to any advisers employed by the Committee; and (3) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
The Committee shall perform an evaluation of its performance at least annually to determine whether it is functioning effectively. The Committee also shall discuss with the Independent Accountants the accountants' observations related to the effectiveness of the Committee.
The purpose of the Committee is to advise the President and the Board of Directors on matters concerning corporate compensation policy and procedures with regard to salary administration, incentive plans, and any other related matters of interest or concern.
The Compensation Committee shall be comprised of those persons appointed by the Board of Directors. The President shall appoint the Chairman of the Committee.
Statement of Policy
The purpose of the Committee is to advise the President and the Board of Directors on matters concerning corporate compensation policy and procedures with regard to salary administration, incentive plans, and any other related matters of interest or concern.
Meetings of the Committee will be convened by the Chairman as required. The Committee will meet at least once each calendar year.
Duties and Responsibilities
The primary duties and responsibilities of the Committee are as follows:
• Review recommended changes in policies or procedures outlined in Graybar's Salary Administration Policy.
• Review salary expense trends and recommend changes in salary structures and merit increase guidelines.
• Review relevant data and recommend salary adjustments for the President, subject to the approval of the Board of Directors.
• Review incentive plans on a continuing basis to assure that the plans are administered in conformance with their stated purpose and plan guidelines, and that costs are within established expense parameters.
• Review proposed changes to existing incentive plans and proposals for new incentive plans.
• Make recommendations to the President and/or Board of Directors on plan changes.
The Committee shall have the resources and authority necessary to discharge its duties and responsibilities, including convening subcommittees and obtaining assistance and advice from professional consultants, as appropriate, on specific topics or issues.
• Actions of the Committee on salary administration matters are subject to approval of the President.
• Actions of the Committee on incentive plan matters are subject to the approval of the President and Board of Directors.
Graybar supports our customers' and suppliers' efforts to comply with section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Conflict minerals have been identified as those originating from the "Conflict Region," which includes the Democratic Republic of Congo and surrounding countries that were outside of the supply chain prior to January 31, 2013. The minerals in question are tin, tantalum, tungsten and gold.
Graybar does not manufacture or contract to manufacture any products. However, in our role as a distributor, some of our customers purchase products to be used for the manufacturing of other products, and thus, have their own reporting obligations under the conflict minerals rules. While we cannot certify the country of origin of the minerals contained in the products we sell, Graybar will work to obtain available information from our suppliers for products that are used as components of our customers' products.
Graybar will ask suppliers of these products to engage in a reasonable country of origin inquiry or to perform due diligence of their supply chains. These suppliers will be asked to identify the source of the metals used to manufacture their products and to confirm whether or not the producing mines and smelters have been certified by an independent third party as "DRC conflict free".
Graybar is committed to providing our customers with responsibly sourced products that meet their needs. We encourage our suppliers to source materials that are free from conflict minerals originating in the covered countries and, where appropriate, will work with our customers to obtain DRC conflict free sources of the products they need.
Graybar supports our suppliers’ and customers’ compliance with the CA Safe Drinking Water and Toxic Enforcement Act of 1986, Proposition 65 Clear and Reasonable Warnings (Section 25600 2).
California’s Proposition 65 requires businesses to provide consumers in California with clear and reasonable warnings regarding exposures to chemicals known to the State of California to cause cancer, birth defects or other reproductive harm. The new regulations which went into effect August 30, 2018 place the primary responsibility for providing such warnings on manufacturers, producers, packagers, importers, suppliers, and distributors of goods.
As a distributor of over one million SKUs from approximately 4,300 suppliers and manufacturers, Graybar relies on the information provided to us by the manufacturers of the products to determine whether a particular product is subject to Proposition 65 warning requirements, and we are committed to ensuring that all of the safety information provided to us by the manufacturers is provided to our customers.
Graybar will not cover, obscure or alter a warning that has been printed or affixed to the product or the product’s packaging. Graybar will also provide to customers all Safety Data Sheets and other safety and warning materials supplied by the manufacturer.
Additionally, as on online seller, Graybar has placed Proposition 65 warnings on the product pages of all products sold on Graybar.com which are known to Graybar to be subject to the Proposition 65 warning requirements.
If a customer requires additional information in order to comply with their obligations under Proposition 65, we will work with our customers to obtain available information from the particular manufacturer(s). Graybar is committed to providing our customers with the products they want and the information they need.