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 of Business Performance Factor. As soon as practicable following, but not later than the December 31st immediately following, the end of a Performance Period, the Committee shall determine the Business Performance Factor applicable for the Participant for the Performance Period against the accomplishment of the related Performance Goals for such Participant. The Business Performance Factor shall not exceed 200%. The Committee may, in its sole discretion, use a modified or adjusted Business Performance Factor for determining the amount of individual Awards.

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.

Excess elective deferrals shall be adjusted for any income or loss. For taxable years beginning on or after January 1, 2008, the income or loss allocable to excess elective deferrals allocated to each participant is the income or loss allocable to the participant's elective deferral account for the taxable year multiplied by a fraction, the numerator of which is such participant's excess elective deferrals for the year and the denominator is the participant's account balance attributable to elective deferrals without regard to any income or loss occurring during such taxable year. Effective solely for the taxable year beginning on or after January 1, 2007, and to the extent the excess elective deferrals were credited with gain or loss as of an accounting date within the gap period (i.e., the period after the close of the taxable year and prior to the distribution), allocable income or loss also includes 10% of the amount determined under the preceding sentence multiplied by the number of whole calendar months between the end of the participant’s taxable year and the date of distribution, counting the month of distribution if distribution occurred after the 15th of such month.

Notice of Initial Adverse Determination. A notice of an adverse determination shall set forth in a manner calculated to be understood by the claimant.

Determination of Supplemental Matching Contribution. The Supplemental Matching Contribution for a Participant for any Plan Year shall equal # the lesser of # 4% of the Participant’s “Compensation” (as defined in the 401(k) Plan) payable during the year (ignoring deferrals under the 401(k) Plan, this Plan, and Code Section 125) and # the total amount of Base Salary and Cash Bonus that the Participant deferred or contributed during the Plan Year (under the 401(k) Plan and this Plan), minus # the actual Company Matching Contribution that the Participant received under the 401(k) Plan for such Plan Year, as determined while applying the restrictions imposed by the Code. The first Supplemental Matching Contribution under the Plan shall be allocated in 2006 with respect to the 2005 Plan Year.

Any other provision of the Plan notwithstanding, this Article 18 shall apply to any Plan Year in which the Plan is a Top-Heavy Plan. The Plan shall be considered a “Top-Heavy Plan” for a Plan Year if, as of the Determination Date for such Plan Year, the Top-Heavy Ratio for the Aggregation Group exceeds 60 percent.

Determination of Actual Option Shares. This Award entitles Participant to the right to receive a grant of an option to purchase shares of Common Stock based upon the Company's performance during the Performance Period (the "Option Award"). The number of shares subject to the Option Award (the "Actual Option Shares") will equal the sum of the Sales Goal Shares, the EBITDA Goal Shares and the EBITDA Growth Goal Shares, determined in accordance with the following:

To the extent that Indemnitee shall have been successful on the merits or otherwise in defense of any Indemnifiable Claim or any portion thereof or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against all Indemnifiable Losses relating to, arising out of or resulting from such Indemnifiable Claim in accordance with Section 2 and no Standard of Conduct Determination (as defined in [Section 7(b)]) shall be required. In the event that a matter as to which there has been a dismissal without prejudice is later revived in the same or similar form, that matter will be treated as a new Claim for all purposes of this Agreement.

Acknowledgement; Determination by Accounting Firm ​ and Employee acknowledge that, following a change in ownership or control (as that term is defined in the Treasury Regulations published under Section 280G of the Internal Revenue Code), one or more payments or distributions to be made by ​ or an affiliated entity to or for the benefit of Employee (whether paid or payable or distributed or distributable pursuant to the terms of the Agreement to which this [Exhibit A] is attached, under some other plan, agreement, or arrangement, or otherwise) (a “Payment”) may be determined to be an “excess parachute payment” that is not deductible by ​ or any affiliated entity for Federal income tax purposes and with respect to which Employee will be subject to an excise tax because of [Sections 280G and 4999]9], respectively, of the Internal Revenue Code. If a change in ownership or control occurs, either Employee or ​ may direct the Accounting Firm, which, subject to any inconsistent position asserted by the Internal Revenue Service, will make all determinations required to be made under this Section A, to determine whether any Payment will be an excess parachute payment and to communicate its determination, together with detailed supporting calculations, to ​ and to Employee within 30 days after its receipt of the direction from Employee or ​, as the case may be. ​ and Employee will cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations.