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Exhibit 10b (xxv)

W.W. GRAINGER, INC.
INCENTIVE PROGRAM RECOUPMENT AGREEMENT

This Incentive Program Recoupment Agreement (this “Agreement”) is entered into
as of _____________ between W.W. Grainger, Inc., an Illinois corporation (the
“Company”) and the undersigned Company executive (the “Executive”).

Subject to the Executive’s acceptance of the terms and conditions of this
Agreement and the entry into an Unfair Competition Agreement concurrent herewith
(the “Unfair Competition Agreement”), Executive will be eligible for
participation in the 2010 management incentive program or any program paid on
the same basis such as a covered employee benefit program (collectively “Covered
Programs”) as set forth in either the Summary Description of the 2010 Company
Management Incentive Program (the “Summary Description”) or the Covered Employee
Annual Incentive Award Section of the 2005 Incentive Plan (the “Annual Incentive
Award Section”).  In turn, the Executive desires to enter into this Agreement
and the Unfair Competition Agreement and participate in the Covered Programs all
on the terms and conditions set forth in this Agreement and the Unfair
Competition Agreement and subject to the Summary Description or Annual Incentive
Award Section.

NOW, THEREFORE, in consideration of the mutual promises set forth below and in
the Unfair Competition Agreement, the parties hereto agree as follows:

1.  
 General.  The Covered Programs are based on the Company’s achievement of
certain established targets as set forth in the Summary Description or the
Annual Incentive Award Section.  Any payout made pursuant to the Covered
Programs are subject to terms and conditions as set forth on an annual
basis.  Participation in the Covered Programs do not guarantee a payout to the
Executive.

2.  
Recoupment of Incentive-based Compensation.

a.  
If the Board of Directors determines that the Executive has committed fraud
against the Company or has been engaged in any criminal conduct that involves or
is related to the Company and such Executive is entitled to receive performance
shares, stock options, restricted stock units or cash incentive compensation
(“Incentive Compensation”) then the Company shall recover from the Executive
such Incentive Compensation, in whole or in part, for any period of time, as it
deems appropriate under the circumstances.  The Board shall have sole discretion
in determining whether the Executive’s conduct was in compliance with the law or
Company policy and the extent to which the Company will seek recovery of the
Incentive Compensation notwithstanding any other remedies available to the
Company.

 
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b.  
In the event of a restatement of materially inaccurate financial results, the
Board has the discretion to recover cash incentive payments or the settlement of
performance shares (“Incentive Payments”) that were paid or settled to the
Executive during the period covered by the restatement as set forth herein.  If
the payment or settlement of Incentive Payments would have been lower had the
achievement of applicable financial performance goals been calculated based on
such restated financial results, the Board may, if it determines appropriate in
its sole discretion, recover the portion of the paid or settled Incentive
Payments in excess of the payment or settlement that would have been made based
on the restated financial results.  The Company will not seek to recover
Incentive Payments received or settled more than three years after the date of
the initial filing that contained the incorrect financial results.

3.  
Governing Law; Jurisdiction.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois. Any action arising under
or relating to this Agreement may be taken in a court of appropriate
jurisdiction, either state or federal, situated in Cook County, Illinois.  Each
party hereby consents to the jurisdiction of any court before which the action
has been brought in accordance with this Section and will accept service of
process by any method permitted by the rules of, or applicable to, such court,
whether or not such party then resides within such court’s jurisdiction.

IN WITNESS WHEREOF, the Company has caused this Incentive Program Recoupment
Agreement to be executed by a duly authorized Officer of the Company and the
Executive hereby agrees to all the terms and conditions set forth above.

 
W.W. GRAINGER, INC.

By:____________________________________
                        James T. Ryan
Chairman, President and Chief Executive Officer

 
_____________________________________                                                                       
Executive (Signature)
 
_____________________________________
Executive (Print Name)
 
_____________________________________
Date

 

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