Determination of Target Awards. The Committee, in its sole discretion, will establish a Target Award for each Participant (which may be expressed as a percentage of a Participant’s average annual base salary for the Performance Period or a fixed dollar amount or such other amount or based on such other formula as the Committee determines).

Determination of Target Awards. The Administrator shall establish a Target Award for each Participant for each Performance Period, and the Administrator (or its designee) shall communicate the applicable Target Award to each Participant.

Target incentive awards are expressed as a percentage of each Participant’s Salary. These percentages may vary by position and reflect larger reward opportunity for positions having greater effect on the establishment and accomplishment of the performance objectives. A schedule showing the target awards as a percentage of Salary for eligible positions will be prepared for each Plan Year.

The Committee shall determine the actual Award payable to each Participant for each Year or other measurement period, taking into consideration, as it deems appropriate, the performance of the Company, Affiliate and/or a Business Unit, as the case may be, for the Year or other measurement period in relation to the Performance Goals theretofore established by the Committee, and the performance of the respective Participants during the Year or other measurement period. The fact that an Employee is selected as a Participant for any Year or other measurement period shall not mean that such Employee necessarily will receive an Award for that Year or other measurement period. The Committee may, in its discretion, increase or reduce the amount of an Award otherwise earned hereunder after considering such factors as it deems appropriate, including individual performance factors. Notwithstanding any other provisions of the Plan to the contrary, the Committee may grant discretionary Awards as it sees fit under the Plan.

Establishment of TARGET AWARDs. Each Participant shall have a target award, reflected as a specified amount or a percentage of his or her Base Salary, that will be awarded to the Participant for the designated Plan Year if the established Performance Objectives are achieved at the target level (the “Target Award”). Each Plan Year, # the Committee shall approve the Target Award for each Participant that is a [Section 16] Officer, # the CEO shall approve the Target Award for all Participants other than [Section 16] Officers, and # the Committee shall approve the aggregate cost of Target Awards for all Participants other than [Section 16] Officers. Each Participant’s Target Award percentage will be communicated in writing to the Participant upon such Participant’s initial participation in the Plan, and shall remain in effect until any change thereto is communicated to the Participant in writing. The actual Annual Incentive Award to a Participant may be greater or less than his or her Target Award, depending on the level of achievement of applicable Performance Objectives and such other objective or subjective factors as the Committee with respect to [Section 16] Officers or the CEO with respect to individuals who are not [Section 16] Officers, as applicable, shall deem relevant.

Each Participant shall have threshold, target, and maximum incentive compensation amounts that correspond to threshold, target and maximum Final Performance Scores. For each Participant, the target award amount shall be expressed as a fixed number or a percentage of his or her base salary as of April 1, 2016, as established by the Compensation Committee, and shall represent the amount of incentive compensation that the Participant will earn if his or her actual Final Performance Score is equal to that which would result from 100% achievement of all Participant Goals.

Determination of Individual Awards. Subject to achievement of any applicable minimum threshold objectives established under Section 7, fulfillment of the conditions set forth in Section 13, and compliance with the eligibility requirements set forth in Section 5(b), the Committee shall, as soon as practicable following, but not later than the December 31st immediately following, the end of a Performance Period, determine the amount of each Award to be made to a Participant under the Plan for the Performance Period, which amount shall, except as otherwise provided below, be the Business Performance Factor multiplied by the Target Award determined for such Participant for such Period pursuant to Section 9. The Committee may, in its sole discretion, reduce the amount of any Award that otherwise would be awarded to any Participant for any Performance Period. In addition, the Committee may, in its sole discretion, increase the amount of any Award that otherwise would be awarded to any Participant for a Performance Period to an amount that is higher than the applicable Business Performance Factor multiplied by the Target Award based on exceptional individual, unit, division, group or Company performance. A Participant’s final Award may be adjusted up or down by their management to reflect their individual performance, except that any matters affecting Section 16 Persons or Executive Participants shall remain with the Committee. Individual Award amounts may be less than (including $0) or greater than 100% of the related Target Award. Notwithstanding anything contained in the Plan to the contrary, the Committee may determine in its sole discretion not to make an Award to a particular Participant or to all Participants selected to participate in the Plan for any Performance Period.

Awards to Corporate participants will be based on their Guideline Incentive (eligible salary multiplied by the applicable guideline percentage) multiplied by the Corporate Final Performance Index. The Corporate Final Performance Index shall be based on the consolidated financial performance of the Company including Graybar Corporate, districts, zones and all subsidiaries as determined from time to time in accordance with guidelines adopted by the Board.

Each Participant’s Award for a Plan Year will be determined after the end of each Plan Year by multiplying the Participant’s Target Award by the Final Funding Percentage; and multiplying such amount by the applicable Individual Performance Modifier determined in accordance with Article VI.B. below. The O&C Committee shall determine each Award for Executive Officers and Additional Persons and the Executive Team shall determine each Award for other Participants.

Determination. The determination as to whether, and the extent to which, the performance vesting requirements of this paragraph # have been satisfied for the Performance Period shall be made as soon as practicable after the end of the Performance Period with an effective date of [date], and such results must be certified in writing by the Committee before settlement.