Exhibit 10.3

W.W. GRAINGER, INC.
2015 Incentive Plan
Performance Share Agreement

This Performance Share Agreement (this “Agreement”), dated as of January 1, 2016
(the “Grant Date”), is entered into between W.W. Grainger, Inc., an Illinois
corporation (the “Company”), and you as the executive (the “Executive”), who is
employed by the Company or a Subsidiary of the Company (the “Employer”).

In consideration of the Executive’s agreement to enter into an Unfair
Competition Agreement with the Company concurrently with this Agreement on the
Grant Date (the “Unfair Competition Agreement”), the Company desires to grant
the Executive an award of performance shares (the “Performance Shares” or
“Award”), providing for the issuance of shares of the Company’s common stock
(“Shares”) pursuant to the W.W. Grainger, Inc. 2015 Incentive Plan (the “Plan”)
based upon the Company’s attainment of certain long-term performance goals and
the Executive desires to enter into the Unfair Competition Agreement and accept
such Award on the terms and conditions set forth in this Agreement, the Plan and
the Unfair Competition Agreement.

Capitalized terms used but not defined in this Agreement have the meanings
specified in the Plan.

In consideration of the mutual provisions set forth in this Agreement and in the
Unfair Competition Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

ARTICLE I
Grants
1.01    Grants. Subject to the terms and conditions of this Agreement, the Plan
and the Unfair Competition Agreement (the terms of which are hereby incorporated
herein by reference) and effective on the Grant Date, the Company hereby grants
to the Executive the number Performance Shares (the “Target Number”) as
specified in the January 1, 2016 Award grant in the Executive’s electronic
investment account maintained with the brokerage firm/third party service
provider engaged by the Company in connection with the operation of the Plan
(the “Administrator”). The actual number of Performance Shares subject to this
Agreement shall be determined based upon the Company’s achievement of: (a) the
net sales target for fiscal year 2018 (the “Net Sales Target”); and (b) the
Company’s average return on invested capital for fiscal years 2016, 2017 and
2018 (the “ROIC Target”), in each case, as further defined in Article II below.
For purposes hereof, “Measuring Period” means the period encompassing the
Company’s fiscal years ended 2016, 2017 and 2018. The Performance Share payout
will range from 0% to 200%. Each Performance Share represents a contractual
right to receive one (1) Share upon the Company’s achievement of the Net Sales
Target and the ROIC Target and the satisfaction of the terms and conditions of
this Agreement.

ARTICLE II
Provisions Relating to Performance Shares

2.01    Net Sales Target. A portion of the actual number of Performance Shares
subject to this Agreement shall be determined based upon the Company’s
achievement of the Net Sales Target as follows:

If the Company’s Net Sales
for fiscal year 2018 are:
Actual Number of
Performance Shares:
< $11.2 Billion
0% of the Target Number
$11.7 Billion
50% of the Target Number
$>12.2 Billion
100% of the Target Number

For purposes of the foregoing, the level of achievement of the Net Sales Target
shall be determined by the Committee in its sole discretion. Further, the actual
number of Performance Shares subject to this Agreement based upon the Company’s
achievement of the Net Sales Target shall be determined by applying
straight-line interpolation rounded down to the nearest whole number of
Performance Shares.

2.02    ROIC Target. A portion of the actual number of Performance Shares
subject to this Agreement also shall be determined based upon the Company’s
achievement of the ROIC Target as follows:

If the Company’s average ROIC
during the Measuring Period is:
Actual Number of
Performance Shares:
<21.6%
0% of the Target Number
23.8 %
50% of the Target Number
>26.0%
100% of the Target Number

For purposes of the foregoing, the level of achievement of the ROIC Target shall
be determined by the Committee in its sole discretion by calculating the
Company’s return on invested capital for each applicable fiscal year by dividing
(a) the Company’s operating earnings for the applicable fiscal year, by (b) the
Company’s net working assets for the applicable fiscal year. Further, the actual
number of Performance Shares subject to this Agreement based upon the Company’s
achievement of the ROIC Target shall be determined by applying straight-line
interpolation rounded down to the nearest whole number of Performance Shares.

2.03    Vesting of Performance Shares. If the Executive remains continuously
employed by the Employer (or any other Subsidiary or Affiliate) through the last
day of the Measuring Period (the “Performance Share Vesting Date”), the actual
number of Performance Shares as determined pursuant to Sections 2.01 and 2.02
shall become fully vested on such date and the Executive shall be entitled to
receive the underlying Shares as provided herein. The Performance Shares shall
not vest before the Performance Share Vesting Date unless otherwise provided or
permitted by the Plan or this Agreement, and any Performance Shares that do not
vest shall be forfeited in full and the Executive shall have no further rights
with respect to such Performance Shares. Each Performance Share that becomes
vested as provided herein shall be settled in accordance with Section 2.07.

2.04    Effect of Termination of Employment. If the Executive’s employment or
service is terminated prior to the Performance Share Vesting Date for any reason
whatsoever other than the Executive’s death, retirement or Disability (defined
below), the Performance Shares shall be forfeited in their entirety. If the
Executive is a resident of, or employed in, the United States, “Termination
Date” shall mean the effective date of termination of the Executive’s
employment. If the Executive is a resident of, or employed outside of, the
United States, “Termination Date” shall mean the earliest of (i) the date on
which notice of termination is provided to the Executive, (ii) the last day of
the Executive’s active service with the Employer or (iii) the last day on which
the Executive is an employee of the Employer, as determined in each case without
including any required advanced notice period and irrespective of the status of
the termination under local labor or employment laws.

2.05 Effect of Death or Retirement of the Executive. If the Executive’s
employment or service is terminated prior to the Performance Share Vesting Date
due to retirement of the Executive in accordance with the provisions of the
applicable retirement plan or death, the Executive’s estate or the Executive
will become vested in the number of Performance Shares (on the Performance Share
Vesting Date) equal to the product of (x) the number of Performance Shares, if
any, which subsequently become deliverable under Sections 2.01 and 2.02 above,
multiplied by (y) a fraction, the numerator of which is the number of months
during the Measuring Period that the Executive was employed by the Employer and
the denominator of which is the total number of months in the Measuring Period,
i.e., 36 months. For purposes of the foregoing calculation, the Executive will
be deemed to have been employed by the Employer during the month that his
employment terminates if, and only if, such termination occurs on or after the
fifteenth (15th) calendar day of that month. Each Performance Share that becomes
vested as provided herein shall be settled in accordance with Section 2.07.

2.06    Effect of Disability of the Executive. If the Executive’s employment or
service is terminated prior to the Performance Share Vesting Date due to the
Executive’s Disability, the Executive will become vested in the number of
Performance Shares (on the Performance Share Vesting Date) calculated in the
same manner prescribed by Section 2.05, provided, however, that if such
termination of employment occurs during fiscal year 2016, then for purposes of
such calculation the number of Performance Shares referred to in clause (x) of
such calculation shall be determined as though the Company had met, but not
exceeded, its sales growth target and one hundred percent (100%) of such
Performance Shares had vested. Each Performance Share that becomes vested as
provided herein shall be settled in accordance with Section 2.07. For purposes
of this Agreement, “Disability” shall have the same meaning as defined in the
Plan, subject to modification as may be required to conform to the laws of the
Executive’s country of residence (and country of employment, if different).

2.07 Settlement. Upon the Performance Share Vesting Date, the Company shall, as
soon as practicable, settle the Performance Shares by registering Shares in the
Executive’s name and delivering such Shares to the Executive’s electronic stock
plan account maintained by the Administrator. At the discretion of the
Committee, and subject to such policies and procedures as it may adopt from time
to time, the Executive’s Performance Shares may be settled in the form of: (i)
cash, to the extent settlement in Shares (a) is prohibited under applicable law,
(b) would require the Executive, the Company or the Employer to obtain the
approval of any governmental and/or regulatory body in the Executive’s country
of residence (and country of employment, if different), or (c) is
administratively burdensome or (ii) Shares, but the Company may require the
Executive to immediately sell such Shares if necessary to comply with applicable
law (in which case, the Executive hereby expressly authorizes the Company to
issue sales instructions in relation to such Shares on the Executive’s behalf).

ARTICLE III
Recoupment
3.01    Recoupment in Event of Misconduct. If the Board of Directors of the
Company (the “Board”) 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 applicable
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. If the Executive engages in misconduct or is believed to have engaged
in misconduct, including but not limited to any violation of any of Executive’s
obligations under the Unfair Competition Agreement, the Company shall be
entitled to recover from the Executive, and the Executive shall re-pay any
Awards received pursuant to the Plan and this Agreement, in whole or in part,
for any period of time, as the Company deems appropriate under the
circumstances.
3.02    Recoupment in Event of Materially Inaccurate Financial Results. If the
Company has publicly filed materially inaccurate financial results (the “Subject
Financials”), whether or not they result in a restatement, the Board has the
discretion to recover any Incentive Compensation that was paid or settled to the
Executive during the period covered by the Subject Financials as set forth
herein. If the payment or settlement of Incentive Compensation would have been
lower had the achievement of applicable financial performance goals been
calculated based on restated financial results with respect to the Subject
Financials, the Board may, if it determines appropriate in its sole discretion,
recover the portion of the paid or settled Incentive Compensation in excess of
the payment or settlement that would have been made based on restated financial
results. The Company will not seek to recover Incentive Compensation received or
settled more than three years after the date of the initial filing that
contained the Subject Financials.
3.03    Implementation. For purposes of this Article III, the Executive
expressly authorizes the Company to issue instructions, on behalf of the
Executive, to the Administrator (and/or any other brokerage firm/third party
service provider engaged by the Company to hold Shares and other amounts
acquired under the Plan) to reconvey, transfer or otherwise return to the
Company any Incentive Compensation subject to recoupment hereunder. Executive
acknowledges and agrees that the Company’s rights hereunder shall not be
affected in any way by any subsequent change in status, including retirement or
termination of employment.

3.04    Forfeiture. To the extent any of the events set forth in Sections 3.01
or 3.02 occur before the Executive receives any Award due hereunder, any such
Award shall be forfeited as determined by the Company in its sole discretion.

ARTICLE IV
Tax
4.01 Tax-Related Items. Regardless of any action the Company or the Employer
takes with respect to any or all income tax (including U.S. federal, state and
local taxes or non-U.S. taxes), social insurance, payroll tax, payment on
account or other tax-related withholding (“Tax-Related Items”), the Executive
acknowledges and agrees that the ultimate liability for all Tax-Related Items
legally due by the Executive is and remains the Executive’s responsibility and
that the Company and the Employer (i) make no representations or undertakings
regarding the treatment of any Tax-Related Items in connection with any aspect
of the Award, including the grant of the Award, the vesting of the Award, the
subsequent sale of any Shares acquired pursuant to the Award and the receipt of
any dividends and (ii) do not commit to structure the terms of the grant or any
aspect of the Award to reduce or eliminate the Executive’s liability for
Tax-Related Items.
4.02    Tax Withholding Obligations. Prior to the delivery of Shares upon the
vesting of the Award, if the Executive’s country of residence (and country of
employment, if different) requires withholding of Tax-Related Items, the Company
shall withhold a sufficient number of whole Shares otherwise issuable upon the
vesting of the Award that have an aggregate Fair Market Value sufficient to pay
the minimum Tax-Related Items required to be withheld with respect to the
Shares. In cases where the Fair Market Value of the number of whole Shares
withheld is greater than the minimum Tax-Related Items required to be withheld,
the Company shall make a cash payment to the Executive equal to the difference
as soon as administratively practicable. The cash equivalent of the Shares
withheld will be used to settle the obligation to withhold the Tax-Related
Items. Alternatively, the Company and the Employer may withhold the minimum
Tax-Related Items required to be withheld with respect to the Shares in cash
from the Executive’s regular salary and/or wages or any other amounts payable to
the Executive. In the event the withholding requirements are not satisfied
through the withholding of Shares by the Company or through the withholding of
cash from the Executive’s regular salary and/or wages or other amounts payable
to the Executive, no Shares will be issued to the Executive (or the Executive’s
estate) upon vesting of the Award unless and until satisfactory arrangements (as
determined by the Committee) have been made by the Executive with respect to the
payment of any Tax-Related Items that the Company or the Employer determines, in
its sole discretion, must be withheld or collected with respect to such
Performance Shares. If the obligation for the Executive’s Tax-Related Items is
satisfied by withholding a number of Shares as described herein, the Executive
shall be deemed to have been issued the full number of Shares issuable upon
vesting, notwithstanding that a number of the Shares is held back solely for the
purpose of paying the Tax-Related Items due as a result of the vesting or any
other aspect of the Award.
The Executive will pay to the Company or the Employer any amount of Tax-Related
Items that the Company or the Employer may be required to withhold as a result
of the Executive’s participation in the Plan or the Executive’s acquisition of
Shares that cannot be satisfied by the means described in this Article IV. The
Company may refuse to deliver any Shares due upon vesting of the Award if the
Executive fails to comply with his or her obligations in connection with the
Tax-Related Items as described herein. If the Executive is subject to taxation
in more than one jurisdiction, the Executive acknowledges that the Company, the
Employer or one or more of their respective Subsidiaries may be required to
withhold or account for Tax-Related Items in more than one jurisdiction. The
Executive hereby consents to any action reasonably taken by the Company and the
Employer to meet his or her obligation for Tax-Related Items. By accepting this
grant of the Award, the Executive expressly consents to the withholding of
Shares and/or withholding from the Executive’s regular salary and/or wages or
other amounts payable to the Executive as provided for hereunder. All other
Tax-Related Items related to the Award and any Shares delivered in payment
thereof are the Executive’s sole responsibility.

ARTICLE V
International Arrangements
5.01 Exchange Controls. As a condition to this grant Award, the Executive agrees
to comply with any applicable foreign exchange laws, rules and regulations and
hereby consents to any necessary, appropriate or advisable actions taken by the
Company, the Employer or any of their respective Subsidiaries as may be required
to comply with any applicable laws, rules and regulations of the Executive’s
country of residence (and country of employment, if different).
5.02    Foreign Asset and Account Reporting Requirements. The Executive
acknowledges that there may be certain foreign asset and/or account reporting
requirements which may affect the Executive’s ability to acquire or hold Shares
acquired under the Plan or cash received from participating in the Plan
(including from any dividends or dividend equivalent payments) in a brokerage or
bank account outside the Executive’s country of residence (and country of
employment, if different). The Executive may be required to report such
accounts, assets or transactions to the tax or other authorities in the
Executive’s country of residence (and country of employment, if different). The
Executive acknowledges and agrees that it is his or her personal responsibility
to be compliant with such regulations.
5.03    Country Specific Addendum. Notwithstanding any provisions of this
Agreement to the contrary, the Award shall be subject to any special terms and
conditions for the Executive’s country of residence (and country of employment,
if different) set forth in the addendum to this Agreement (“Addendum”). If the
Executive transfers residence and/or employment to another country reflected in
an Addendum at the time of transfer, the special terms and conditions for such
country will apply to the Executive to the extent the Company determines, in its
sole discretion, that the application of such special terms and conditions is
necessary or advisable in order to comply with local law, rules and regulations
or to facilitate the operation and administration of the Award and the Plan (or
the Company may establish alternative terms and conditions as may be necessary
or advisable to accommodate the Executive’s transfer). In all circumstances, any
applicable Addendum shall constitute part of this Agreement.
5.04    Controlling Language. The Executive acknowledges and agrees that it is
the Executive’s express intent that this Agreement, the Plan, the Unfair
Competition Agreement and all other documents, notices and legal proceedings
entered into, given or instituted pursuant to the Award be drawn up in English.
If the Executive has received this Agreement, the Plan, the Unfair Competition
Agreement or any other documents related to the Award translated into a language
other than English and the meaning of any translated version is different than
the English version, the English version will control.
ARTICLE VI
Miscellaneous
6.01 Restriction on Transferability. Except to the extent expressly provided in
the Plan or this Agreement, the Performance Shares may not be sold, transferred,
pledged, assigned, or otherwise alienated at any time other than by will or by
the laws of descent and distribution. Any attempt to do so contrary to the
provisions hereof shall be null and void.
6.02 Rights as Shareholder. The Executive shall not have voting or any other
rights as a shareholder of the Company with respect to the Shares issuable upon
the vesting of Performance Shares until the date of issuance of such Shares.
Upon settlement of the Award, the Executive will obtain, with respect to the
Shares received in such settlement, full voting and other rights as a
shareholder of the Company.
6.03 Administration. The Committee shall have the power to interpret the Plan
and this Agreement and to adopt such rules for the administration,
interpretation, and application of the Plan as are consistent therewith and to
interpret or revoke any such rules. All actions taken and all interpretations
and determinations made by the Committee shall be final and binding upon the
Executive, the Company, and all other Persons. No member of the Committee shall
be personally liable for any action, determination, or interpretation made in
good faith with respect to the Plan or this Agreement.
6.04 No Employment Rights. This Agreement and the Executive’s participation in
the Plan are not and shall not be interpreted to: (i) form an employment
contract or relationship with the Company, the Employer or any of their
respective Subsidiaries; (ii) confer upon the Executive any right to continue in
the employ of the Company, the Employer or any of their respective Subsidiaries;
or (iii) interfere with the ability of the Company, the Employer or any of their
respective Subsidiaries to terminate the Executive’s employment at any time.
6.05    Nature of Grant. In accepting the grant hereunder, the Executive
acknowledges and agrees that: (i) the Plan is established voluntarily by the
Company, it is discretionary in nature and it may be modified, amended,
suspended or terminated by the Company at any time; (ii) the Executive has read
the Plan and any Awards granted under it shall be subject to all of the terms
and conditions of the Plan, including but not limited to the exclusive right of
the Committee to interpret and determine the terms and provisions of the Plan
and this Agreement and to make all determinations necessary or advisable for the
administration of the Plan, all of which interpretations and determinations
shall be final and binding; (iii) the Award does not create any contractual or
other right to receive future grants of Awards, benefits in lieu of Awards, or
any other Plan benefits in the future; (iv) nothing contained in this Agreement
is intended to create or enlarge any other contractual obligations between the
Company or the Employer and the Executive; (vi) any grant under the Plan,
including any grant of Performance Shares, is not part of normal or expected
compensation for purposes of calculating any severance, resignation, redundancy,
end of service payments, bonuses, long service option, pension, or retirement
benefits or similar payments; (vii) the Executive is voluntarily participating
in the Plan; (viii) the future value of the Shares underlying the Award granted
hereunder is unknown and cannot be predicted with certainty; and (ix) neither
the Company, the Employer nor any of their respective Subsidiaries shall be
liable for any change in value of the Award, the amount realized upon settlement
of the Award or the amount realized upon a subsequent sale of any Shares
acquired upon settlement of the Award, resulting from any fluctuation of the
United States Dollar/local currency foreign exchange rate. Without limiting the
generality of the foregoing, the Committee shall have the discretion to adjust
the terms and conditions of any Award of Performance Shares to correct for any
windfalls or shortfalls in such Award which, in the Committee’s determination,
arise from factors beyond the Executive’s control; provided, however, that the
Committee’s authority with respect to any Award to a “covered employee,” as
defined in Section 162(m)(3) of the Code, shall be limited to decreasing, and
not increasing, such Award.
6.06 Compliance with Law. The Company shall not be required to issue or deliver
any Shares pursuant to this Agreement pending compliance with all applicable
securities and other laws, rules and regulations (including any registration
requirements or tax withholding requirements) and compliance with the rules and
practices of any stock exchange upon which the Shares are listed.
6.07 Amendment. This Agreement may be amended by a writing which specifically
states that it is amending this Agreement executed by (i) the Company and the
Executive, (ii) the Committee, so long as a copy of such amendment is delivered
to the Executive, and provided that no such amendment adversely affecting the
rights of the Executive hereunder may be made without the Executive’s written
consent or (iii) the Committee in any way it may deem necessary or advisable to
carry out the purpose of the grant as a result of any change in applicable laws
or regulations or any future law, regulation, ruling, or judicial decision.
6.08 Notices. Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary. Any notice
to be given to the Executive shall be addressed to the Executive at the address
listed in the Employer’s records or to the Executive’s electronic stock plan
account held at the Company’s third party provider. By a notice given pursuant
to this Section 6.08, either party may designate a different address for
notices. Any notice shall have been deemed given when actually delivered.
6.09 Severability. If all or any part of this Agreement or the Plan is declared
by any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not invalidate any portion of this Agreement or
the Plan not declared to be unlawful or invalid. Any provision of this Agreement
(or part of such provision) so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of such
provision (or part of such provision) to the fullest extent possible while
remaining lawful and valid.
6.10 Construction. The Performance Shares are being issued pursuant to Article 9
of the Plan. Performance Shares are subject to the terms of the Plan. The
Executive acknowledges receipt of the Plan booklet which contains the entire
Plan, and the Executive represents and warrants that the Executive has read the
Plan. Additional copies of the Plan are available upon request during normal
business hours at the principal executive offices of the Company. To the extent
that any provision of this Agreement violates or is inconsistent with an express
provision of the Plan, the Plan provision shall govern and any inconsistent
provision in this Agreement shall be of no force or effect. The words
“including,” “includes,” or “include” are to be read as listing non-exclusive
examples of the matters referred to, whether or not words such as “without
limitation” or “but not limited to” are used in each instance.
6.11 Waiver of Right to Jury Trial. EACH OF THE PARTIES KNOWINGLY, VOLUNTARILY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THE OPTION, THE PLAN OR THIS AGREEMENT.
6.12 Waiver; No Third Party Beneficiaries. A waiver by the Company of a breach
of any provision of this Agreement by the Executive shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any
subsequent breach by the Executive. This Agreement shall not be construed to
create any third party beneficiary rights.
6.13 Data Privacy.
(i) Pursuant to applicable personal Data (defined below) protection laws, the
collection, processing and transfer of the Executive’s personal Data is
necessary for the Company’s administration of the Plan and the Executive’s
participation in the Plan. The Executive expressly and voluntarily (a)
acknowledges, consents and agrees to the collection, use, processing and/or
transfer of personal Data as described herein; and (b) authorizes Data
recipients to receive, possess, use, retain and transfer the Data, in electronic
or other form, for purposes of implementing, administering and managing the
Executive’s participation in the Plan, including any requisite transfer of such
Data as may be required for the administration of the Plan and/or the subsequent
holding of Shares on the Executive’s behalf to a broker or other third party
with whom the Executive may elect to deposit any Shares acquired pursuant to the
Plan. For purposes of this Section 6.13, “Data” means certain personal
information about the Executive including (but not limited to) the Executive’s
name, home address and telephone number, date of birth, social security number
or other employee identification number, salary, nationality, job title, any
Share ownership and details of any Award or any other entitlement to Shares
awarded, canceled, purchased, vested, unvested or outstanding in the Executive’s
favor for the purpose of managing and administering the Plan.
(ii)    Data may be provided by the Executive or collected, where lawful, from
third parties, and the Company, the Employer and any third party service
providers will process the Data collected hereunder for the purpose of
implementing, administering and managing the Executive’s participation in the
Plan. The Company and the Employer will transfer Data as necessary for the
purpose of implementation, administration and management of the Executive’s
participation in the Plan, and the Company and the Employer may each further
transfer Data to any third parties assisting the Company in the implementation,
administration and management of the Plan. These recipients may be located
throughout the world. Data processing will take place through electronic and
non-electronic means in accordance with applicable law and the Company and the
Employer’s policies and procedures as in effect from time to time. The Executive
may, at any time, seek to exercise his or her rights provided under applicable
personal Data protection laws by contacting his or her local human resources
manager.
6.14    Private Placement. The grant of the Performance Shares is not intended
to be a public offering of securities in the Executive’s country of residence
(and country of employment, if different). The Company has not submitted any
registration statement, prospectus or other filing with the local securities
authorities (unless otherwise required under local law).
6.15    No Advice Regarding Grant. Neither the Company nor the Employer is
providing any tax, legal or financial advice, nor is the Company nor the
Employer making any recommendations regarding the Award, the Executive’s
participation in the Plan or the Executive’s acquisition or sale of the
underlying Shares. The Executive is hereby advised to consult with the
Executive’s own personal tax, legal and financial advisors regarding
participation in the Plan before taking any action related to the Plan.    
6.16     Securities Law Restrictions. The Executive acknowledges that, depending
on the Executive’s country of residence (and country of employment, if
different), the Executive may be subject to insider trading restrictions and/or
market abuse laws, which may affect the Executive’s ability to acquire or sell
Shares or rights to Shares (e.g., Performance Shares) under the Plan during such
times as the Executive is considered to have “inside information” regarding the
Company or its business (as defined by the laws in the Executive’s country of
residence and/or employment). Any restrictions under these laws or regulations
are separate from and in addition to any restrictions that may be imposed under
any applicable Company insider trading or other policy. The Executive solely is
responsible for ensuring compliance with any applicable restrictions and should
consult with his or her personal legal advisor on this matter.
6.17    Electronic Delivery. The Company may, in its sole discretion, deliver
any documents related to the Award granted to the Executive under the Plan by
electronic means. The Executive hereby expressly consents to receive such
documents by electronic delivery and agrees to participate in the Plan through
an on-line or electronic system established and maintained by the Company or a
third party designated by the Company.
6.18    Governing Law; Jurisdiction. This Agreement shall be exclusively
governed by, and construed in accordance with, the laws of the State of Illinois
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Illinois or of any other jurisdiction) that
would cause the application of the laws of a jurisdiction other than the State
of Illinois. All disputes and controversies arising between the parties are to
be submitted for determination exclusively to the federal or state courts of the
State of Illinois and by accepting the grant of Performance Shares, the
Executive expressly consents to the jurisdiction of such courts. Notwithstanding
the foregoing, the Company may at its option seek interim and permanent
injunctive relief before any competent court, tribunal or judicial forum, which
in the absence of the foregoing provision, would have jurisdiction to grant the
relief sought.
6.19    Entire Agreement. The Plan is incorporated by reference. The Plan, this
Agreement (including any applicable addendum) and the Unfair Competition
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede, in their entirety, all prior undertakings
and agreements of the Company and the Executive with respect to the subject
matter hereof.
[Signature Page Follows]
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a
duly authorized officer and the Executive acknowledges and agrees that by
clicking on the box next to this Agreement in the section “Read and Acknowledge
Award Documents” on the screen titled “Award Acceptance,” the Executive
expressly agrees to be bound by the terms and conditions of the Award, including
Executive’s electronic signature as the sole and exclusive means of executing
this Agreement.

W.W. GRAINGER, INC.

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

W.W. GRAINGER, INC.
2015 Incentive Plan
Addendum to Performance Share Agreement
In addition to the terms of the W.W. Grainger, Inc. 2015 Incentive Plan (the
“Plan”) and the Restricted Stock Unit Agreement (the “Agreement”), the
Performance Shares are subject to the following additional terms and conditions
as set forth in this addendum (this “Addendum”) to the extent the Executive
resides or is employed in one of the countries addressed herein. All capitalized
terms contained in this Addendum shall have the same meaning as set forth in the
Plan and the Agreement unless otherwise defined. If the Executive transfers
residence or employment to a country identified in this Addendum, the additional
terms and conditions for such country as reflected in this Addendum will apply
to the Executive to the extent the Company determines, in its sole discretion,
that the application of such terms and conditions is necessary or advisable in
order to comply with local laws, rules and regulations, or to facilitate the
operation and administration of the Performance Shares and the Plan (or the
Company may establish alternative terms and conditions as may be necessary or
advisable to accommodate the Executive’s transfer).
Canada

Performance Shares Payable in Shares Only
Notwithstanding any provision in the Agreement or the Plan to the contrary,
vested Performance Shares shall be payable in Shares only (and shall not be
settled in cash).
Accelerated Vesting upon Retirement
Notwithstanding anything in the Agreement or the Plan to the contrary, if the
Executive’s employment or service is terminated by reason of retirement, the
Performance Shares immediately shall fully vest. For purposes of the foregoing,
“retirement” shall have the definition prescribed by local law.
Use of English Language
If the Executive is a resident of Quebec, by accepting the Performance Shares,
the Executive acknowledges and agrees that it is the Executive’s wish that the
Agreement, this Addendum, the Plan, as well as all other documents, notices and
legal proceedings entered into, given or instituted pursuant to the Performance
Shares, either directly or indirectly, be drawn up in English.
Utilisation de l’anglais
Si l’exécutif est un résident du Québec, en acceptant le Performance Shares, l
l’exécutif reconnaît et accepte que ce est le souhait du l’exécutif que
l’Accord, le présent Addenda, ainsi que tous autres documents, avis et
procédures judiciaires, exécutés, donnés ou intentés en vertu de le Performance
Shares, liés directement ou indirectement, soient rédigés en anglais.
United Kingdom

Income Tax and Social Insurance Contribution Withholding
The following provision shall replace Article IV of the Agreement:
Regardless of any action the Company and the Employer take with respect to any
or all income tax, primary and secondary Class 1 National Insurance
contributions, payroll tax or other tax-related withholding attributable to or
payable in connection with or pursuant to the grant, vesting, or the release or
assignment of the Performance Shares for consideration, or the receipt of any
other benefit in connection with the Performance Shares (“Tax-Related Items”),
the Executive acknowledges that the ultimate liability for all Tax-Related Items
legally due by the Executive is and remains the Executive’s responsibility and
that the Company and the Employer: (i) make no representations or undertakings
regarding the treatment of any Tax-Related Items in connection with any aspect
of the Performance Shares, including the grant of the Performance Shares, the
vesting of the Performance Shares, and the sale of any Shares acquired pursuant
to the Performance Shares, and (ii) do not commit to structure the terms of the
Performance Shares or any aspect of the Performance Shares to reduce or
eliminate the Executive’s liability for Tax-Related Items.
As a condition to the settlement of the Performance Shares following the RSU
Vesting Date, the Company and/or the Employer shall be entitled to withhold and
the Executive agrees to pay, or make adequate arrangements satisfactory to the
Company and/or the Employer to satisfy, all obligations of the Company and/or
the Employer to account to HM Revenue & Customs (“HMRC”) for any Tax-Related
Items. In this regard, the Executive authorizes the Company or the Employer to
withhold all applicable Tax-Related Items legally payable by the Executive from
any wages/salary or other cash compensation payable to the Executive.
Alternatively, or in addition, if permissible under applicable law, the
Executive authorizes the Company, at its discretion and pursuant to such
procedures as it may specify from time to time, to satisfy the obligations with
regard to all Tax-Related Items legally payable by the Executive by one or a
combination of the following: (i) withholding otherwise deliverable whole
Shares; (ii) arranging for the sale of whole Shares otherwise deliverable to the
Executive (on the Executive’s behalf and at the Executive’s direction pursuant
to this authorization); or (iii) withholding from the proceeds of the sale of
any Shares acquired upon the vesting of the Performance Shares. If the
obligation for Tax-Related Items is satisfied by withholding a number of whole
Shares as described herein, the Executive shall be deemed to have been issued
the full number of whole Shares issued upon vesting of the Performance Shares,
notwithstanding that a number of Shares are held back solely for the purpose of
paying the Tax-Related Items due as a result of any aspect of the Performance
Shares. If, by the date on which the event giving rise to the Tax-Related Items
occurs (the “Chargeable Event”), the Executive has relocated to a country other
than the United Kingdom (the “U.K.”), the Executive acknowledges that the
Company or the Employer may be required to withhold or account for Tax-Related
Items in more than one country, including the U.K. The Executive also agrees
that the Company may determine the amount of Tax-Related Items to be withheld
and accounted for by reference to the maximum applicable rates, without
prejudice to any right which the Executive may have to recover any overpayment
from the relevant tax authorities.
The Executive shall pay to the Company or the Employer any amount of Tax-Related
Items that the Company or the Employer may be required to account to HMRC with
respect to the Chargeable Event that cannot be satisfied by the means previously
described. If payment or withholding is not made within 90 days after the end of
the U.K. tax year in which the Chargeable Event occurs or such other period
specified in section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions)
Act 2003 (the “Due Date”), the Executive agrees that the amount of any
uncollected Tax-Related Items shall (assuming the Executive is not a director or
executive officer of the Company (within the meaning of Section 13(k) of the
U.S. Securities and Exchange Act of 1934, as amended), constitute a loan owed by
the Executive to the Company or the Employer, as effective on the Due Date. The
Executive agrees that the loan will bear interest at the then-current HMRC
Official Rate and it will be immediately due and repayable, and the Company may
recover it at any time thereafter by any of the means referred to above. If any
of the foregoing methods of collection are not allowed under applicable laws or
if the Executive fails to comply with the Executive’s obligations in connection
with the Tax-Related Items as described in this Article IV, the Company may
refuse to deliver any Shares otherwise payable upon the vesting of the
Performance Shares.
Exclusion of Claim
The Executive acknowledges and agrees that the Executive will have no
entitlement to compensation or damages, insofar as such entitlement arises or
may arise from the Executive’s ceasing to have rights under or to be entitled to
vest in the Performance Shares as a result of such termination (whether the
termination is in breach of contract or otherwise), or from the loss or
diminution in value of the Performance Shares. Upon the grant of the Performance
Shares, the Executive shall be deemed to have irrevocably waived any such
entitlement.

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