Document:

Exhibit

Exhibit 10.2

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (“Agreement”) is made and entered into this 2nd day of April 2018, by and between W.W. Grainger, Inc. (“Grainger”) and Joseph High (the “Officer”).  The Officer understands and voluntarily enters into this Agreement with Grainger and, in consideration of the Separation Payments and benefit continuation described herein, agrees as follows:

		
	1.
	Resignation as Officer; Separation Date.  The Officer hereby acknowledges that he has voluntarily resigned effective April 30, 2018 (the “Resignation Date”) as an Officer of Grainger and of all corporations that are direct or indirect subsidiaries of or otherwise affiliated with Grainger (“Affiliates”), and as trustee, member or fiduciary of all trusts, committees or similar bodies of or otherwise affiliated with Grainger and the Affiliates.  In an effort to provide for an orderly transition, Officer has agreed to provide ongoing consultative services to Grainger for purposes associated with role and activity transition through August 31, 2018 (the “Separation Date”).  

		
	2.
	Compensation Continuation Payments.  Thereafter, during the formal Compensation Continuation period beginning September 1, 2018 and extending through August 31, 2020, the Officer shall be paid by way of Grainger’s normal payroll process an amount representing the equivalent of eighteen months’ pay.  Each payment shall be pro-rated and paid in bi-weekly installments less required deductions, beginning September 1, 2018 and thereafter running through August 31, 2020 (the “Termination Date”) in accordance with Grainger’s then existing payroll schedule.  Upon reaching my Termination Date, Officer shall be considered a Profit Sharing Trust Retiree of the Company, and shall thereafter receive all benefits associated with that status.  No Separation Payments shall be made to the Officer until at least the eight (8th) day following the day on which this Agreement is fully executed, and provided that the Agreement is not revoked by the Officer pursuant to Section 22 prior to that date.

		
	3.
	Benefits.

		
	a.
	Health, Dental, Life and Vision.  To the extent that the Officer currently participates, Grainger will continue to provide, through deductions from the Officer’s Compensation Continuation Payments at the same rate paid by employees, group health, dental and vision benefits and life insurance as currently maintained for the Officer, or as subsequently modified by Grainger, through the Termination Date.  Group Dental and Group Life Insurance will terminate earlier, however, on the date that the Officer becomes eligible for benefit coverage through a subsequent employer.  After the Officer’s Group Health benefit coverage ceases on August 31, 2020, the Officer may elect to continue group health and dental benefits under COBRA.

  
		
	b.
	Unemployment Benefits.   The Officer agrees that he will not apply for unemployment benefits while he continues to receive Compensation 

continuation Payments through the Officer’s Termination Date or at any time in the future that would otherwise be chargeable to Grainger’s unemployment insurance account.  Any amounts of unemployment insurance benefits received by the Office during this same time period shall be offset against the Officer’s Separation Payments.

		
	c.
	PTO Time.  The Officer understands that he will not be eligible for or accrue any additional PTO eligibility after the Separation Date.  Payment for any earned but unused 2018 PTO will be paid to the Officer once calculated and as soon as practical, by way of Grainger’s normal payroll process, following the Officer’s Separation Date. 

		
	d.
	Management Incentive Program (MIP).  As an additional Separation Payment to those provided for in Section 2 hereof, the Officer will participate, on an 8/12th pro-rata basis, in the 2018 MIP.  For such periods, the Officer’s payment shall be based upon the Officer’s current salary, target percentage level and Company performance.  This payment will be made to Officer during the first quarter of 2019 when 2018 MIP bonuses are paid.  Officer will not be eligible for any MIP or other cash incentive award other than the above referenced amounts or for any other periods following the Separation Date.

		
	e.
	Career Continuation - Outplacement Assistance.  Upon Officer’s request, Officer shall be eligible to receive professional Career Continuation - Outplacement services.  Officer shall have the opportunity to interview and then select a service provider from those designated firms made available to him for this purpose by Grainger.  In the alternative, Officer shall be eligible to receive a cash equivalent, established by Grainger so as to afford Officer the opportunity to independently manage his own Career Continuation Outplacement activities.

		
	f.
	Profit Sharing Contribution.   Officer shall be eligible to receive a Grainger Profit Sharing Contribution for the years 2018, 2019 and 2020 as well as a payout of any vested funds contained within Officer’s account pursuant to the provisions of the Plan then in effect.  Additionally, Officer shall also be eligible to receive a fully vested 401-K contribution for any compensation continuation payments that are attributable to term of this Agreement.          

 
		
	g.
	Cessation of Benefits.  All other benefits and the Officer’s eligibility to participate in any other Grainger employee programs will cease as of the Separation Date, except as provided or referenced in this Agreement.  The amounts and benefits payable to the Officer under this Agreement shall be in lieu of any amounts or benefits otherwise provided under any severance plan or policy of Grainger.

		
	4.
	LTIP - Stock Options, Restricted Stock Units and Restricted Performance Shares.  By way of this Agreement and pursuant to the provisions of the applicable Plans, Officer shall be eligible to receive a payout of all vested LTIP awards, as well as any vested portions of Performance Share Awards as described in the applicable Performance Share Award Agreement. 

    
		
	5.
	General Release and Waiver of Claims.  In exchange and in consideration for the promises, obligations, and agreements undertaken by Grainger herein, which the Officer agrees and acknowledges are adequate and sufficient consideration, the Officer, on behalf of himself, his spouse, agents, representatives, attorneys, assigns, heirs, executors, administrators, and other personal representatives, releases and forever discharges Grainger, the Affiliates, and all of their officers, employees, directors, agents, attorneys, personal representatives, predecessors, successors, and assigns (hereinafter collectively referred to as the “Releasees”) from any and all claims of any kind which he has, or might have, as of the date of this Agreement; or which are based on any facts which exist or existed on or before the date of this Agreement.  The claims the Officer is releasing include, but are not limited to, all claims relating in any way to his employment at Grainger or his separation from that employment; and all claims under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, 42 U.S.C. § 1981, the Equal Pay Act, the Employee Retirement Income Security Act, the Americans with Disabilities Act, the Federal Rehabilitation Act, the Age Discrimination in Employment Act (“ADEA”), the Older Worker Benefit Protection Act, the Equal Pay Act, as amended, the Illinois Fair Employment Practices Act, the Illinois Wage Payment and Collection Act, or any other federal, state or local law relating to employment, discrimination, retaliation, or wages, or under the common law of any state (including, without limitation, claims relating to contracts, wrongful discharge, retaliatory discharge, defamation, intentional or negligent infliction of emotional distress, and wrongful termination of benefits).  The Officer also releases and forever discharges Grainger and all other Releasees from any and all other demands, claims, causes of action, obligations, agreements, promises, representations, damages, suits, and liabilities whatsoever, both known and unknown, in law or in equity, which he has or might have as of the date of this Agreement.  The Officer understands that this Section 5 of this Agreement contains a complete and general release of any claim that he now has against Grainger and all other Releasees, or could ever have against Grainger and all other Releasees, based on any fact, event, or omission that has occurred up to the time at which he signs the Agreement.  

The Officer does not intend to nor is he waiving any rights or claims that may arise after the date that he signs this Agreement, or any right on the Officer’s part to challenge the knowing and voluntary nature of this release with respect to claims under ADEA.  Notwithstanding the foregoing, the Officer does not waive any rights he may have to benefits available after termination under any company-sponsored employee benefit plan, or any rights he may have to insurance protection and/or indemnification for actions taken by the Officer while an employee and or Officer of Grainger.  The Officer acknowledges that this is an individually negotiated agreement and he agrees that his termination of employment with Grainger is not pursuant to an employment termination program as that term is used in the ADEA.  

Excluded from this General Release and Waiver are any claims or rights which Officer cannot waive by law, including workers’ compensation claims, as well as 

any claims for breach of this Agreement.  Also excluded from this Agreement are Officer’s rights to file a charge with the Equal Employment Opportunity Commission or any other federal, state or local agency, and to participate in an agency investigation.  Officer, however, waives all rights to recover money or other individual relief if any administrative agency or another person or entity pursues any claim on Officer’s behalf arising out of or related to Officer’s employment with Grainger.  Officer represents that there is no lawsuit or other claim against Grainger pending in any federal, state, or municipal court or other tribunal which has not been addressed herein.  

The Officer understands and agrees that this waiver and release is an essential and material term of this Agreement and that, without such provision, no agreement would have been reached by the parties.

		
	6.
	Covenants Not to Sue.  a)  The Officer agrees not to pursue or permit to be filed or pursued against Grainger or any Releasee, any claim or action before any federal, state, or local, administrative, legislative or judicial body based on any claim or liability described in the foregoing section, or otherwise related in any way to the Officer’s employment with Grainger, and understands that the purpose of this waiver and release is to dispose of, with finality, any claims that the Officer may have against Grainger and all other Releasees so that there will be no disputes or controversies concerning any matters following the Separation Date.  The Officer has no such claim or lawsuit outstanding at this time, and the Officer does not know of any such potential claim or lawsuit that may be asserted by the Officer or any other person in connection with the Officer’s employment with Grainger.  The Officer understands that the terms of this section do not apply to a challenge to the knowing and voluntary nature of this release with respect to claims under ADEA.  b) In turn, except as otherwise provided in Section 13 below, Grainger agrees not to pursue any claim or sue Officer for any action or conduct that may otherwise be attributable to Officer during the term of his active employment and through the date that he executes this Agreement.   

		
	7.
	Unfair Competition.

		
	a.
	The Officer acknowledges that in connection with the performance of his duties for Grainger, he has either created, used or accessed confidential and trade secret information of Grainger and the Affiliates (as further described in Section 11 below).  The Officer further acknowledges that his employment with or other work on behalf of a Competitor (defined in Section 7(b) and 7(c)below) would necessarily and inevitably lead to his unauthorized use or disclosure of such confidential and trade secret information.  Accordingly, the Officer agrees that based upon the special consideration provided by way of this Agreement, and for a period beginning on the date hereof and continuing until the first anniversary of the Termination Date, and within one hundred (100) miles of any branch, office or distribution center of Grainger or an Affiliate to which he was assigned either physically or electronically within two years prior to ceasing active employment with the Company, as well as on behalf of any Competitor specifically identified on Exhibit A, 

anywhere in the United States (the “Restricted Area”), he will not directly or indirectly, whether as executive, officer, director, owner, shareholder, partner, associate, consultant, advisor, contractor, joint venturer, manager, agent, representative or otherwise, work for a Competitor at said location or within the above designated 100 mile radius in any capacity that would involve:

		
	i.
	the same or substantially similar functions or responsibilities to those the Officer performed for Grainger within two years of the Separation Date; or 

		
	ii.
	supervision over the same or substantially similar responsibilities to those the Officer performed for Grainger within two years of the Separation Date; or

		
	iii.
	assisting a Competitor in decisions that involve or affect the same or a substantially similar area of operations to those the Officer was involved in with Grainger within two years of the Separation Date.

The Officer may not circumvent the purpose of this restriction by engaging in business within the Restricted Area through remote means such as telephone, correspondence, electronic or any other form of computerized communication.

		
	b.
	A “Competitor” is any person or legal entity or branch, office or operation thereof (a “Firm”) that engages in business that is competitive with the business activities of Grainger through, but not limited to: (i) selling maintenance, repair and operating (MRO) supplies to North American businesses; (ii) providing indirect materials management services to North American businesses; (iii) aggregating information regarding indirect materials for the purpose of conducting business-to-business Internet commerce with North American businesses; or (iv) indirect materials procurement services to North American businesses.  Without limiting the generality of the foregoing, each of the Firms identified on Exhibit A hereto constitutes a Competitor.

		
	c.
	A Firm shall not be deemed a Competitor unless the aggregate revenue of such Firm for its most recently completed fiscal year that is attributable to the categories of products and services set forth in clauses (i) through (iv) of Section 7(b) above equals more than 5% of the aggregate amount of consolidated revenue that Grainger derived from such categories of products and services during its most recently completed fiscal year.

		
	d.
	The Officer may at any time, or from time to time, request Grainger to advise the Officer in writing whether or not Grainger considers a specified Firm to be a Competitor.  Any such request shall be made by written notice to Grainger that includes: (i) the name of the specific business unit for which the Officer proposes to work; (ii) the name or names of any parent companies of such business unit; (iii) a description of the specific services which the Officer proposes to perform for such business unit; (iv) a statement as to why the Officer believes that the performance of such 

services will not adversely affect Grainger’s legitimate protectible interests; and (v) the requested date of Grainger’s response (which date shall be at least 14 days after the date of Grainger’s receipt of the Officer’s request).

		
	e.
	The Officer specifically recognizes and affirms that Section 7(a) is a material and important term of this Agreement.  If any court of competent jurisdiction determines that the covenant set forth in Section 7(a), or any part thereof, would be unenforceable due to the stated duration or geographical scope of such covenant, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, as so reduced, such provision shall then be enforceable.  If the court does not modify such provision as aforeseaid, or if the provision is otherwise held or found invalid or unenforceable for any reason whatsoever, then (without limiting any other remedies which may be available to Grainger under this Agreement or otherwise, including, without limitation, Section 13 hereof), Grainger shall be entitled to cease making payments and furnishing benefits to the Officer pursuant to this Agreement and shall be further entitled to receive from the Officer reimbursement of all Compensation Continuation Payments and other payments and benefits theretofore furnished to the Employee pursuant to this Agreement.  

Pending such reimbursement, and without limiting Grainger’s rights under Section 13 hereof or any other rights and remedies of Grainger, Grainger shall have the right to offset the amount of such reimbursement against any amount or benefit otherwise payable to the Officer.

		
	8.
	Non-Disparagement.  The Officer agrees to take no action in derogation or disparagement of Grainger or the Affiliates, or their respective businesses or strategic interests, or the Releasees.  The Officer further agrees not to discuss or otherwise comment on Grainger or any Affiliate, or their respective businesses or strategic interests, or the Releasees, in public, for publication on electronic media (including but not limited to chat rooms, message boards, or the like), in similar public forums, or otherwise, other than communication of publicly available information.  In turn, Grainger agrees that its Senior Corporate Officers will make no public statements nor sanction any action in derogation or disparagement of the Officer.

		
	9.
	Non-Interference with Business Relationships.  The Officer agrees not to interfere with the employment of any Grainger employee or otherwise with the business relationships of Grainger, and to the extent required to enforce this promise, agrees not to induce, directly or indirectly, any Grainger customer or supplier to breach any contract with Grainger, and further agrees not to solicit, attempt to hire, or hire, directly or indirectly, any Grainger employee, or request, induce or advise any such employee to leave the employment of Grainger at any time before the Termination Date and for one year thereafter.  Should the Officer wish to hire a Grainger employee in contravention of this Section 9, or to perform work which is precluded by the Officer’s non-competition obligations set forth in Section 7 hereof, the Officer understands that he may request that Grainger agree that the Officer may perform such 

work or offer employment to such employee, and that with Grainger’s prior written agreement, which it may withhold at its sole discretion, the Officer may do so.

		
	10.
	Return of Property: Business Expenses.  The Officer shall promptly account for and return to Grainger all Grainger property, including but not limited to proprietary information, which is in the Officer’s possession or control.  This property includes (but is not limited to) Officer’s Grainger work computer along with related drives and peripherals, correspondence, financial materials, files, reports, minutes, plans, records, surveys, diagrams, computer print-outs, floppy disks, manuals, client/customer information and documentation, and any company research, goals, objectives, recommendations, proposals or other information relating to Grainger, its business, or its clients or customers, which is not generally known to the public, and which the Officer acquired in the course of his employment with Grainger.  Notwithstanding, Officer shall be permitted to retain his Grainger cell phone along with his current telephone number.  The Officer further agrees that all business expenses incurred prior to the Separation Date that are reimbursable in accordance with Grainger’s normal policies and procedures have been reimbursed to the Officer or submitted for reimbursement, and that other than as specifically provided in this Agreement, the Officer will not incur any additional business expenses after the Separation Date unless previously authorized and approved in writing by Grainger.

		
	11.
	Confidential Information.  The Officer agrees to refrain from ever disclosing to anyone outside the employment of Grainger any confidential or trade secret information, whether in oral, written and/or electronic form, including but not limited to information that (a) relates to Grainger’s or the Affiliates’ past, present and future research, development, technical and non-technical data and designs, finances, marketing, products, services, customers, suppliers, and other business activities of any kind or (b) has been identified, either orally or in writing, as confidential by Grainger or any Affiliate; provided that this limitation shall not apply to information that is part of the public domain through no breach of this Agreement or is acquired from a third party not under similar nondisclosure obligations to Grainger or such Affiliate.  The Officer acknowledges that his obligations under any confidentiality or nondisclosure or similar agreements or provisions that the Officer previously executed will remain in full force and effect.  Further, through the Termination Date, the Officer agrees to fully comply with all policies of Grainger regarding confidential or trade secret information.

		
	12.
	Cooperation with Company.  The Officer agrees, during the term of this Agreement as well as during the 6 month period immediately thereafter, to both make himself available and to provide reasonable cooperation to Grainger or its attorneys to assist Grainger or serve as a witness in connection with any matter, litigation, potential litigation, or other business matter in which the Officer may have knowledge, information, or expertise.  The Officer also agrees to provide Grainger or its designated representatives, upon request, with information and assistance about programs, processes, 

and projects related to the Officer’s job responsibilities while employed by Grainger; to answer any questions relating to the work to which the Officer was assigned; and to otherwise provide reasonable cooperation to Grainger regarding matters relating to this Agreement and the Officer’s employment with Grainger.  Grainger will reimburse the Officer for any reasonable expenses he incurs in activities which he undertakes at Grainger’s request pursuant to this Section 12.

		
	13.
	Breach of Agreement - Misconduct.  The Officer understands and agrees that if, after receiving all or any part of the payments and benefits described herein, the Officer breaches this Agreement, or commits or is discovered to have committed any act of misconduct including any violation of Company Policy, embezzlement, fraud or theft with respect to the property of Grainger, or causes or is discovered to have caused, any loss, damage, injury or other endangerment to Grainger’s property, reputation or past, present, or future directors, officers or employees, Grainger reserves the right to demand repayment of all such payments and benefits.  Grainger shall further be released from any future payment then or thereafter otherwise due and shall discontinue any and all benefit coverage (other than vested benefits under the PST and SPSP, and COBRA coverage.  To the extent permitted by law, the Officer further understands and agrees that Grainger reserves the right to pursue all other available remedies in an effort to preserve its legitimate business interests.  The Officer also agrees to indemnify and hold harmless Grainger from any loss, cost, damage, or expense, including fees, which Grainger may incur because of the Officer’s violation of this Agreement.  The Officer understands that this Section 13 does not apply to a challenge to the knowing and voluntary nature of this release with respect to claims under ADEA.  Should a dispute arise relative to any claim associated with this Section that is not otherwise privately resolved between Grainger and the Officer, it is understood and agreed that such dispute shall then be submitted for arbitration with an arbitrator mutually selected through the American Arbitration Association’s panel selection process. 

		
	14.
	Supersedes Other Agreements.  Other than any vested rights that the Officer may have under employee benefit plans subject to ERISA, the Officer understands that this Agreement supersedes any and all obligations (written or oral) which Grainger otherwise might have to the Officer for compensation or other expectations of remuneration or benefit on the Officer’s part.  The Officer specifically acknowledges that all of Grainger’s obligations under the Change in Control Employment Agreement entered into between Grainger and the Officer (the “Change in Control Agreement”) shall become null and void as of the Separation Date.  Notwithstanding the above and based upon the special consideration provided by way of this Agreement, all obligatory provisions relating to the Officer that are contained within any Grainger Non-Competition Agreement, Stock Option, Special RSU, or Performance Share Agreement entered into between the Officer and Grainger, or other Grainger Governance shall remain in full force and effect as originally executed and be incorporated by reference as being materials parts of this Agreement.  

		
	15.
	References.  At the Officer’s request, Grainger will provide appropriate references to prospective future employers of the Officer.  Those references will be provided by DG MacPherson or his designee on behalf of Grainger, with the specific content of such references to be mutually agreed between Grainger and the Officer in the future.  

		
	16.
	Continuation After Death.  The Officer understands that in the event of the Officer’s death, Grainger’s obligations under this Agreement will extend to the Officer’s beneficiaries, heirs, executors, administrators, personal representatives and assigns.

		
	17.
	Agreement Not Assignable.  The Officer may not assign, and the Officer represents that he has not assigned, this Agreement or any rights or Grainger’s obligations under this Agreement to any other person.  

		
	18.
	Entire Understanding.  The Officer understands and agrees that this Agreement, including Exhibit A hereto, contains the entire understanding between the parties and may not be amended except by mutual agreement in an amendment executed by both parties.

		
	19.
	Severability.  The provisions of this Agreement are declared to be severable, which means that if any provision of this Agreement or the application thereof is found to be invalid, the invalidity shall not affect other provisions or applications of this Agreement, which will be given effect without the invalid provisions or applications. In the event that a court of competent jurisdiction concludes that any term, provision or section of this Agreement is invalid or unenforceable (and, in the case of Section 7(a) of this Agreement, such provision is not modified by the court to be enforceable as described in Section 7(e) hereof), then said term, provision, or section shall be deemed eliminated from this Agreement to the extent necessary and in order to permit the remaining portions of the Agreement to be enforced.  Any such eliminations shall not affect Grainger’s entitlement, if any, to receive, pursuant to Sections 7(e) and 13 hereof, amounts paid and benefits provided to the Officer under this Agreement.  

		
	20.
	Confidentiality of Agreement.  The Officer represents and agrees, except as otherwise required by law, to keep the terms, amounts and facts surrounding this Agreement completely confidential, save claims involving workplace harassment, and that the Officer will not disclose any information concerning this Agreement to anyone; provided, however, that this section will not prevent the Officer from disclosing information concerning this Agreement to the Officer’s spouse, attorneys, accountants, financial or tax advisors, a designated Grainger official, or as required by law or spouse.  Notwithstanding, in accordance with U.S. Treasury Regulation 1.6011-4(b)(3)(iii), each party (and each employee, representative, or other agent of each party) to this Agreement may disclose to any and all persons, without limitation of any kind, the tax treatment, tax structure, and all materials of any kind provided to the other party relating to such tax treatment and tax structure.  Nothing in this confidentiality provision prohibits Officer from reporting possible violations of federal law or regulation to any governmental 

agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. Officer does not need the prior authorization of the Company to make any such reports or disclosures and Officer is not required to notify the Company that Officer has made such reports or disclosures. Officer may disclose Trade Secrets in confidence, either directly or indirectly, to a Federal, State, or local government official, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, Officer may file a lawsuit, to include retaliation, in conjunction with reporting a suspected violation of law and may disclose related Trade Secrets to his attorney and use them in related court proceedings, as long as the individual files documents containing the Trade Secret under seal and does not otherwise disclose the Trade Secret except pursuant to Court Order. 
  
		
	21.
	Jurisdiction and Governing Law.  The Officer acknowledges that for the purpose of this Agreement as well as his employment with Grainger, he is an Illinois employee.  This Agreement shall in all respects be interpreted, enforced and governed by and under the laws of the State of Illinois, without regard to its conflicts of law principles.

		
	22.
	Voluntary Agreement.  The Officer acknowledges that the payments and benefits that Grainger is providing hereunder exceed the compensation and benefits otherwise payable to the Officer or on the Officer’s behalf and that such Compensation Continuation Payments and benefits are provided by Grainger in exchange for execution of this Agreement.  The Officer acknowledges that he was given twenty-one (21) days to consider the terms of this Agreement, that the Officer may revoke this Agreement at any time within seven (7) days after the date that the Officer signs it, and that he has been advised to and has had the opportunity to seek out counsel of his own choice.  Any revocation must be communicated in writing, via personal delivery or overnight mail, to Henry F. Galatz, Labor Counsel, W.W. Grainger, Inc., 100 Grainger Parkway, Lake Forest, Illinois 60045.  The Officer further understands that this Agreement does not take effect until after the expiration of the seven (7) day period for revocation.  All referenced Separation Payments and applicable benefits identified in this Agreement will automatically cease on the 21st day should the Officer not return a fully executed copy of this Agreement to Grainger within the specified 21-day consideration period.  The Officer has read this Agreement and understands all of its terms.

I have read this Separation Agreement and General Release and I understand all of its terms.  I voluntarily execute this Separation Agreement and General Release with full knowledge of its meaning, on this 2nd day of April 2018.

W.W. GRAINGER, INC.

By:                        
Joseph High                          Name:
      Title:Exhibit

Exhibit 10.3

W.W. GRAINGER, INC.
2015 Incentive Plan
Stock Option Agreement
This Stock Option Agreement (this "Agreement"), dated as of April 2, 2018 (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 the right and option ("Option") to purchase shares of the Company's common stock ("Shares") pursuant to the W.W. Grainger, Inc. 2015 Incentive Plan (as may be amended from time to time, the "Plan") and the Executive agrees to enter into the Unfair Competition Agreement and accept such Option 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 Option to purchase all or a portion of the number of Shares specified in the April 2, 2018 award grant at the price per Share as specified in the grant notice posted to the Executive's electronic investment account maintained with the brokerage firm/third party service provider engaged by the Company in connection with the administration of the Plan (the "Administrator"). 
1.02  Term of Option.  The Option shall expire ten (10) years from the Grant Date (i.e., a grant on April 2, 2018 would expire on April 1, 2028), subject to the terms and conditions set forth in this Agreement, the Plan and the Unfair Competition Agreement.
ARTICLE II
Provisions Relating to Option
2.01  Vesting of Option.  If the Executive remains continuously employed by the Employer (or any other Subsidiary or Affiliate) until the vesting date specified in the grant notice (the "Option Vesting Date"), the Option shall become fully vested and exercisable on such date.  The Option shall not vest before the Option Vesting Date unless otherwise provided or permitted by the Plan or this 

Agreement, and any portion of the Option that does not vest shall be forfeited in full and the Executive shall have no further rights with respect to such Option.  
2.02 Effect of Termination of Employment.  Except as otherwise stated in the Plan, if the Executive's employment or service is terminated prior to the Option Vesting Date for any reason whatsoever other than the Executive's death or Disability (defined below), the Executive’s unvested Options as of the Executive's Termination Date (defined below) shall be forfeited in there entirety.  However, the Executive shall have three (3) months from the Termination Date to exercise vested Options.  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.  
2.03  Effect of Death or Disability of the Executive.  If the Executive's employment or service is terminated prior to the Option Vesting Date due to the Executive's death or Disability, the Option immediately shall fully vest, become exercisable and will expire on the earlier of (i) six (6) years from the Termination Date or (ii) the original expiration date of the Option.  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, rules and regulations (“Laws”) of the Executive's country of residence (and country of employment, if different).  
2.04  Exercise of Option.  The Executive may exercise the vested portion of the Option in accordance with such policies and procedures as shall be established by the Company and/or the Administrator from time to time.  
2.05  Payment of Option Price. The Executive shall at the time of exercise of the Option (except in the case of a cashless exercise, which) tender to the Company the full Option Price. At the discretion of the Committee, and subject to such policies and procedures as it may adopt from time to time, the Option Price may be paid (i) in cash, (ii) in Shares already owned by the Executive for at least six (6) months and having a Fair Market Value on the date of exercise equal to the Option Price, (iii) through a combination of cash and Shares, or (iv) through a cashless exercise through a broker-dealer approved for this purpose by the Company.  Notwithstanding anything to the contrary in this Agreement, if the Executive resides in a country where the local foreign exchange Laws either preclude the remittance of currency out of the country for purposes of paying the Option Price, or require the Company, the Employer and/or the Executive to secure any legal or regulatory approvals, complete any legal or regulatory filings, or undertake any additional steps for remitting currency out of the country, the Company may restrict the method of exercise to a form of cashless exercise or such other form(s) of exercise as it determines in its sole discretion.
ARTICLE III
Recoupment
3.01    Recoupment in Event of Misconduct.  If the Company determines that the Executive has committed fraud against the Company or has engaged in any criminal conduct that involves or is related to the Company, or any other conduct that violates Company policy, and such Executive has previously received or is entitled to receive performance stock units, performance restricted 

stock units, stock options, restricted stock units or cash incentive compensation (collectively, "Incentive Compensation"), then the Company shall have the right to cancel the Incentive Compensation, require the return of shares of Common Stock acquired under the Plan, recapture any gain realized upon the sale of shares of Common Stock acquired under the Plan or take any other action it deems appropriate under the circumstances with respect to recouping the Incentive Compensation. The Company 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 take the actions outlined above for recouping the Incentive Compensation, 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 Company 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 Company may, if it determines it 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 (3) 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 the Executive’s status, including retirement or termination of employment (including due to death or Disability).
3.04    Forfeiture.  To the extent any of the events set forth in Article 3 occur before the Executive receives any Incentive Compensation due hereunder, any such Incentive Compensation 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 Option, including the grant of the Option, the vesting of the Option, the exercise of the Option, the subsequent sale of any Shares acquired pursuant to 

the Option and the receipt of any dividends and (ii) do not commit to structure the terms of the grant or any aspect of the Option to reduce or eliminate the Executive's liability for Tax-Related Items.
4.02    Tax Withholding Obligations.  Prior to the delivery of Shares (or cash) upon the exercise of the Option, 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 exercise of the Option that have an aggregate Fair Market Value sufficient to pay the Tax-Related Items required to be withheld with respect to the Shares or the cash equivalent. Depending on the withholding method specified in the Plan, the Company may withhold or account for Tax-Related Items by considering applicable statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case the Company shall make a cash payment to the Executive equal to the over-withheld amount, if applicable, 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. In the event that the withholding of Shares is prohibited under applicable Law or otherwise may trigger adverse consequences to the Company or the Employer, the Company and the Employer may withhold the 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, or may require the Executive to personally make payment of the Tax-Related Items required to be withheld.  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 the exercise of the Option 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 Option.  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 exercise, 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 exercise 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 exercise of the Option 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 Option, 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 Option 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 of Options, the Executive agrees to comply with any applicable foreign exchange Laws 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 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 Laws.
5.03    Country Specific Addendum.  Notwithstanding any provisions of this Agreement to the contrary, the Option 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 Laws or to facilitate the operation and administration of the Option 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 Option 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 Option 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 Option 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 exercise of the Option until the date of issuance of such Shares. Upon exercise of the Option the Executive will obtain, with respect to the Shares received in such exercise, 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 Options granted under it shall be subject to all of the terms and conditions of the Plan, including but not limited to the power 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 Option does not create any contractual or other right to receive future grants of Options, benefits in lieu of Options, 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; (v) any grant under the Plan, including any grant of Options, 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; (vi) the Executive is voluntarily participating in the Plan; (vii) the future value of the Shares underlying the Option granted hereunder is unknown and cannot be predicted with certainty; and (viii) neither the Company, the Employer nor any of their respective Subsidiaries shall be liable for any change in value of the Option, the amount realized upon settlement of the Option or the amount realized upon a subsequent sale of any Shares acquired upon exercise of the Option, 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 Option to correct for any windfalls or shortfalls in such Option 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 Option to a "covered employee," as defined in Section 162(m)(3) of the Code, shall be limited to decreasing, and not increasing, such Option.
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 Laws (including any registration requirements or tax withholding requirements) and compliance with the Laws and practices of any stock exchange or quotation system upon which the Shares are listed or quoted. If the Executive resides or is employed outside of the United States, the Executive agrees, as a condition of the grant of the Option, to repatriate all payments attributable to the Shares and/or cash acquired under the Plan (including, but not limited to, dividends and any proceeds derived from the sale of Shares acquired pursuant to the Option) if required by and in accordance with local Laws in the Executive’s country of residence (and country of employment, if different).  In addition, the Executive also 

agrees to take any and all actions, and consent to any and all actions taken by the Company, its Subsidiaries and the Employer, as may be required to allow the Company, its Subsidiaries and the Employer to comply with local Laws in the Executive’s country of residence (and country of employment, if different).  Finally, the Executive agrees to take any and all actions as may be required to comply with the Executive’s personal legal and tax obligations under local Laws in the Executive’s country of residence (and country of employment, if different).
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 Company (at the discretion of the Committee), so long as a copy of such amendment is delivered to the Executive, and provided that no such amendment having a material adverse affect on the rights of the Executive hereunder may be made without the Executive's written consent or (iii) the Company (at the discretion of 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 any future Laws or judicial decisions.
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 Corporate 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 investment account held at the Administrator. 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 Option is being issued pursuant to Article 6 (Stock Option) of the Plan.  The Option is 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, use, 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;  (b) authorizes the Company, its Subsidiaries and the Employer to transfer Data, in electronic or other form, to each other and to any third parties, including 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, to assist the Company in the implementation, administration and management of the Plan. These recipients may be located throughout the world. 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, email address, 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. The Company, its Subsidiaries, 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. Data processing will take place through electronic and non-electronic means in accordance with applicable Law and the Company, its Subsidiaries 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.
(iii)     Upon request of the Company or the Employer, the Executive agrees to provide an executed data privacy consent form (or any other agreements or consents that may be required by the Company and/or the Employer) that the Company and/or the Employer may deem necessary to obtain from the Executive for the purpose of administering the Executive's participation in the Plan in compliance with the data privacy laws the Executive’s country of residence (and country of employment, if different), either now or in the future.  The Executive understands and agrees that the Executive will not be able to participate in the Plan if the Executive fails to provide any such consent or agreement requested by the Company and/or the Employer. 
6.14    Private Placement.  The grant of the Option 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 Laws).  
6.15    No Advice Regarding Grant.  The Company and the Employer are not providing any tax, legal or financial advice, nor is the Company or the Employer making any recommendations regarding the Option, 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 or the Agreement.
6.16    Securities Law Restrictions.  The Executive acknowledges that, depending on the Executive's country of residence (and country of employment, if different) or where the Company 

Shares are listed, the Executive shall be subject to insider trading restrictions and/or market abuse Laws, which may affect the Executive's ability to acquire, sell or otherwise dispose of Shares, rights to Shares (e.g., the Option) under the Plan or rights linked to the value of Shares during such times as the Executive is considered to have "inside information" regarding the Company or its business (as defined by the local Laws in the Executive's country of residence and/or employment).  Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Executive placed before the Executive possessed inside information.  Furthermore, the Executive could be prohibited from (i) disclosing the inside information to any third party (other than on a "need to know" basis) and (ii) "tipping" third parties (including other employees of the Company and its Subsidiaries) or causing them otherwise to buy or sell securities.  Any restrictions under these Laws 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    Stock Ownership and Retention Guidelines.  The exercise of any Options may be subject to the Company's Stock Ownership and Retention Guidelines, as in effect from time to time, in all respects. 
6.18    EU Age Discrimination Rules. If the Executive is a local national of, and employed in, a country that is a member of the European Union, the grant of the Option and the terms and conditions governing the Option are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework Directive, as implemented into local law (the "Age Discrimination Rules").  To the extent that a court or tribunal of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, in whole or in part, under the Age Discrimination Rules, the Company, in its sole discretion, shall have the power and authority to revise or strike such provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local Laws.
6.19    Electronic Delivery. The Company may, in its sole discretion, deliver any documents related to the Option or other Awards 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 online or electronic system established and maintained by the Company or a third party designated by the Company.
6.20    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 the Option, 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. 
6.21    Entire Agreement. 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 Options, including Executive's electronic signature constituting the sole and exclusive means of executing this Agreement.

W.W. GRAINGER, INC.

By:                                                                                     
Name:    DG Macpherson
Title:      Chairman &Chief Executive Officer

By:                                                                                         
Executive Signature            

Date:     April 2, 2018

W.W. GRAINGER, INC. 
2015 Incentive Plan
Addendum to Stock Option Agreement

In addition to the terms of the W.W. Grainger, Inc. 2015 Incentive Plan (as may be amended from time to time, the "Plan") and the Stock Option Agreement (the "Agreement"), the Option is 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 Option and the Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate the Executive’s transfer).  

	
	
	Belgium

Name: ________________________    Number of Shares: _____________________
Grant Date: ____________________    Option Price:   _______________________
Acceptance of Option  
In order for the Option to be subject to taxation at the time of grant, the Executive must affirmatively accept the Option in writing within 60 days of the Grant Date specified above by signing below and returning this original executed Addendum to:  
 Attn: Treasury Department
100 Grainger Parkway, Lake Forest, IL 60045, USA
mary.geraci@grainger.com
The Executive hereby accepts the Option granted by the Company on the Grant Date. The Executive acknowledges that the Executive has been advised to discuss the acceptance of the Option and the applicable tax treatment with a financial and/or tax advisor, and that the Executive’s decision to accept the Option is made in full knowledge.

Executive Signature:        _______________________________

Executive Printed Name:        _______________________________

Date of Acceptance:        _______________________________

If the Executive fails to affirmatively accept the Option in writing within 60 days of the Grant Date, the Option will not be subject to taxation at the time of grant but instead will be subject to taxation on the date the Executive exercises the Option (or such other treatment as may apply under Belgian tax law at the time of exercise).
Undertaking for Qualifying Option
If the Executive is accepting the Option in writing within 60 days of the Grant Date and wishes to have the Option subject to a lower valuation for Belgium tax purposes pursuant to article 43, §6 of the Belgian law of 26 March 1999, the Executive may agree and undertake to (a) not exercise the Option before December 31 of the third (3rd) calendar year following the calendar year in which the Grant Date falls, and (b) not transfer the Option under any circumstances (except upon rights the Executive’s heir might have in the Option upon the Executive’s death).  If the Executive wishes to make this undertaking, the Executive must sign below and return this executed Addendum to the address listed above. 
Executive Signature:        _______________________________
Executive Printed Name:        _______________________________
Payment of Exercise Price Limited to Cash Payment
Notwithstanding anything to the contrary in the Agreement or the Plan, the Executive shall be permitted to pay the Option Price only by means of a cash payment.
Foreign Asset Reporting Information
The Executive is required to report any security or bank account (including a brokerage account) opened and maintained outside Belgium on the Executive’s annual tax return.  In a separate report, the Executive is required to provide the National Bank of Belgium with the account details of any such foreign accounts (including the account number, bank name and country in which any such account was opened).  This report, as well as additional information on how to complete it, can be found on the website of the National Bank of Belgium, www.nbb.be, under the Kredietcentrales / Centrales des crédits caption.

	
	
	Canada

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 Option immediately shall fully vest, become exercisable and will expire on the earlier of (i) six (6) years from the Termination Date or (ii) the original expiration date of the Option. For purposes of the foregoing, "retirement" shall have the definition prescribed by local Laws.

No Exercise Using Previously Owned Shares
Notwithstanding any provision in the Agreement or the Plan to the contrary, the Executive may not pay the Option Price by tendering Shares already owned by the Executive. 
Securities Law Information 
The Executive is permitted to sell Shares acquired through the Plan through the designated broker appointed under the Plan, if any, provided that the resale of such Shares takes place outside of Canada through the facilities of a stock exchange on which the Shares are listed (i.e., the New York Stock Exchange).  
Foreign Asset Reporting Information  
Any foreign property (including Shares and Options acquired under the Plan) must be reported to the Canada Revenue Agency on form T1135 (Foreign Income Verification Statement) if the total cost of your foreign property exceeds C$100,000 at any time in the year.  The Options must be reported - generally at a nil cost - if the C$100,000 cost threshold is exceeded because of other foreign property held.  If Shares are acquired, their cost generally is the adjusted cost base ("ACB") of the Shares.  The ACB would normally equal the fair market value of the Shares at time of exercise, but if the Executive owns other Shares, this ACB may have to be averaged with the ACB of the other Shares.  The form must be filed by April 30 of the following year.  The Executive should consult with his or her personal tax advisor to determine the Executive’s reporting requirements.

The following provisions will apply if the Executive is a resident of Quebec: 
Data Privacy Notice and Consent
This provision supplements Section 6.13 of the Agreement:
The Executive hereby authorizes the Company, its Subsidiaries and the Employer to discuss with and obtain all relevant information pertaining to the Executive from all personnel involved in the administration and operation of the Plan.  The Executive further authorizes the Company, its Subsidiaries and the Employer to disclose and discuss the Executive's participation in the Plan with their advisors.  The Executive further authorizes the Company, its Subsidiaries and the Employer to record any information pertaining to the Executive’s participation in the Plan and to keep such information in his or her employee file.
Use of English Language
If the Executive is a resident of Quebec, by accepting the Option, 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 Option, either directly or indirectly, be drawn up in English. 
Utilisation de l’anglais
Si l’exécutif est un résident du Québec, en acceptant le Option, 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 Option, liés directement ou indirectement, soient rédigés en anglais.

	
	
	France

Use of English Language
By accepting the Award, you confirm having read and understood the Plan and the Agreement, which were provided in the English language.  You accept the terms of those documents accordingly.

Utilisation de l’anglais.  
En acceptant les Attributions, vous confirmez avoir lu et comprenez le Plan et ce contrat, incluant tous leurs termes et conditions, qui ont été transmis en langue anglaise. Vous acceptez les dispositions de ces documents en connaissance de cause.
Foreign Asset Reporting
French residents holding cash or Shares outside of France must declare all foreign bank and brokerage accounts (including any accounts that were opened or closed during the tax year) on an annual basis, together with their income tax return.  Failure to complete this reporting triggers penalties for the resident.

	
	
	Mexico

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 Option immediately shall fully vest, become exercisable and will expire on the earlier of (i) six (6) years from the Termination Date or (ii) the original expiration date of the Option. For purposes of the foregoing, "retirement" shall have the definition prescribed by local Laws.
Commercial Relationship
The Executive expressly recognizes that participation in the Plan and the Company’s grant of the Option does not constitute an employment relationship between the Executive and the Company.  The Executive has been granted the Option as a consequence of the commercial relationship between the Company and the Employer, and the Employer is the Executive’s sole employer.  Based on the foregoing, (a) the Executive expressly recognizes that the Plan and the benefits derived from participation in the Plan do not establish any rights between the Executive and the Company or the Employer, (b) the Plan and the benefits derived from participation in the Plan are not part of the employment conditions and/or benefits provided by the Company or the Employer, and (c) any modifications or amendments to the Plan by the Company, or a termination of the Plan by the Company, shall not constitute a change or impairment of the terms and conditions of the Executive’s employment with the Employer.
Extraordinary Item of Compensation 
The Executive expressly acknowledges and agrees that participation in the Plan is a result of the discretionary and unilateral decision of the Company, as well as the Executive’s free and voluntary decision to participate in the Plan in accord with the terms and conditions of the Plan, the Agreement, the Unfair Competition Agreement and this Addendum. As such, the Executive acknowledges and agrees that the Company may, in its sole discretion, amend and/or discontinue the Executive’s 

participation in the Plan at any time and without any liability.  The value of the Option is an extraordinary item of compensation outside the scope of the employment contract, if any.  The Option is not a part of the Executive’s regular or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits, or any similar payments, which are the exclusive obligations of the Employer.

	
	
	Netherlands

Waiver of Termination Rights
The Executive waives any and all rights to compensation or damages as a result of any termination of employment for any reason whatsoever, insofar as those rights result or may result from (a) the loss or diminution in value of such rights or entitlements under the Plan or (b) the Executive ceasing to have rights under, or ceasing to be entitled to any Awards under the Plan as a result of such termination.
Dutch Subsidiary Director Notice  
The Executive acknowledges and agree that the Option granted to the Executive in connection with the Executive’s participation in the Plan are not granted as consideration for, or otherwise in connection with the service the Executive may provide as a director ("statutair bestuurder") of a Subsidiary established under the laws of Netherlands or operating within the Netherlands. 

	
	
	Portugal

Termination of Service
The following provision shall supplement Section 2.02 of the Agreement:
In case of termination of service of the Executive triggering the payment of severance costs under applicable law, the Option shall not be taken into account in the calculation of such severance costs, to the extent permitted by applicable law.
Use of English Language
The Executive hereby expressly declares that the Executive has full knowledge of the English language and has read, understood and fully accepted and agreed with the terms and conditions established in the Plan, the Agreement, the Unfair Competition Agreement and this Addendum. 
Uso da Língua Inglesa
Por meio do presente, o Executivo declara que Executivo possui pleno conhecimento da língua inglesa e que leu, compreendeu, e livremente aceita e concorda com os termos e condiçoes estabelecidas no Plano, o Acordo, o Acordo de Concorrência Desleal e este Adendo.

	
	
	United Kingdom

Income Tax and Social Insurance Contribution Withholding  

The following provision shall replace Article IV of the Agreement:
Without limitation to Article IV of the Agreement, the Executive agrees that the Executive is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items as and when requested by the Company or the Employer or by Her Majesty’s Revenue and Customs ("HMRC") (or any other tax authority or any other relevant authority).  The Executive also agrees to indemnify and hold harmless the Company and the Employer against any taxes that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on the Executive’s behalf.
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 exercise the Option 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 Option.  Upon the grant of the Option, the Executive shall be deemed to have irrevocably waived any such entitlement.

	
	
	United States

Accelerated Vesting upon Retirement
Notwithstanding anything in the Agreement or the Plan to the contrary, if the Executive’s employment or service is terminated prior to the Option Vesting Date due to the Executive’s retirement, the Option immediately shall fully vest, become exercisable and will expire on the earlier of (i) six (6) years from the Termination Date or (ii) the original expiration date of the Option.  For purposes of the foregoing, "retirement" shall mean the Executive’s termination of service with (i) 25 years of service, (ii) 20 years of service and attainment of age 55, or (iii) attainment of age 60.
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