Exhibit 10(c)(viii) to the Annual
Report on Form 10-K of
W.W. Grainger, Inc. for the
year ended December 31, 1994
W.W. Grainger, Inc.
SUPPLEMENTAL PROFIT SHARING PLAN
(As Amended Effective January 1, 1995)
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W.W. Grainger, Inc.
SUPPLEMENTAL PROFIT SHARING PLAN
(As Amended Effective January 1, 1995)
Article Page
1 PURPOSE AND EFFECTIVE DATE 1
2 DEFINITIONS 1
3 ADMINISTRATION 2
4 ELIGIBILITY 2
5 BENEFITS AND ACCOUNTS 3
6 VESTING 4
7 AMENDMENT AND TERMINATION 5
8 MISCELLANEOUS 5
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W.W. Grainger, Inc.
SUPPLEMENTAL PROFIT SHARING PLAN
(As Amended Effective January 1, 1995)
ARTICLE ONE. PURPOSE AND EFFECTIVE DATE
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1.1 Purpose of Plan. The purpose of this W.W. Grainger, Inc.
Supplemental Profit Sharing Plan is to provide key executives with profit
sharing and retirement benefits commensurate with their current
compensation unaffected by limitations imposed by the Internal Revenue
Code on qualified retirement plans. The Plan is intended to constitute an
excess benefit plan, as defined in Section 3(36) of ERISA, and a "top hat"
plan, as defined in Section 201(2) of ERISA.
1.2 Effective Date. This Plan was originally established effective
as of January 1, 1983. It was subsequently amended and restated by action
of the Board of Directors on April 29, 1995. The effective date of the
Plan as amended and restated herein is January 1, 1995.
ARTICLE TWO. DEFINITIONS
-------------------------
2.1 Definitions. Whenever used herein, the following terms shall
have the respective meanings set forth below and, when intended, such
terms shall be capitalized.
(a) "Retirement" shall have the same meaning as defined in
paragraphs 7.1(a), (b), and (c) of the Profit-Sharing Plan.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(c) "Committee" shall mean the Compensation Committee of the
Board of Directors of the Company.
(d) 'Company' shall mean W.W. Grainger, Inc., a corporation
organized under the laws of the State of Illinois, and
subsidiaries thereof.
(e) "Disability" shall have the same meaning as defined in
paragraph 7.1(e) of the Profit-Sharing Plan.
(f) "Employee" shall mean any person who is employed by the
Company.
(g) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
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(h) "Participant" shall mean any Employee selected by the
Committee to participate in this Plan pursuant to Article
Four.
(i) "Plan" shall mean this W.W. Grainger, Inc. Supplemental
Profit Sharing Plan.
(j) "Profit-Sharing Plan" shall mean the W.W. Grainger, Inc.
Employees Profit-Sharing Plan as amended from time to time.
2.2 Gender and Number. Except when otherwise indicated by the
context, any masculine term used in this plan also shall include the
feminine; the plural shall include the singular and the singular shall
include the plural.
ARTICLE THREE. ADMINISTRATION
------------------------------
3.1 Administration by Committee. The Plan shall be administered by
the Committee which shall be appointed by the Board of Directors of the
Company from its own members. The membership of the Committee may be
reduced, changed, or increased from time to time in the absolute
discretion of the Board of Directors of the Company.
3.2 Authority of Committee. The Committee shall have the authority
to interpret the Plan, to establish and revise rules and regulations
relating to the Plan, to designate Participants, and to make all
determinations that it deems necessary or advisable for the administration
of the Plan.
ARTICLE FOUR. ELIGIBILITY
--------------------------
4.1 Participants. The Committee shall select the Employee or
Employees who shall participate in this Plan, subject to the limitations
set forth in Section 4.2. Once an Employee is designated a Participant,
he shall remain a Participant for the purposes specified in Section 5.1
and/or Section 5.2 until the earlier of his death, retirement, disability,
or termination of employment.
4.2 Limitations on Eligibility. The Committee may select as
Participants in this Plan only those Employees who are "Eligible
Employees" in the Profit-Sharing Plan (as defined therein) and whose share
of contributions and forfeitures under the Profit-Sharing Plan are limited
by:
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(a) Section 415 of the Code; or
(b) Any other provision of the Code or ERISA, provided that
the Employee is among "a select group of management or
highly compensated Employees" of the Company, within the
meaning of Sections 201, 301, and 401 of ERISA, such that
the Plan with respect to benefits attributable to this
subsection (b) qualifies for a "top hat" exemption from
most of the substantive requirements of Title I of ERISA.
ARTICLE FIVE. BENEFITS AND ACCOUNTS
------------------------------------
5.1 Accounts. An account shall be established for each Participant.
Each year there shall be credited to each Participant's account the
difference between (a) the aggregate amount of Company contributions and
forfeitures which would have been allocated to the account of the
Participant in the Profit-Sharing Plan without regard to the contribution
limitations described in Section 4.2 hereof; and (b) the amount of Company
contributions and forfeitures actually allocated to the account of the
Participant in the Profit-Sharing Plan.
5.2 Earnings Factor. In addition to the credit under Section 5.1, if
any, an earnings factor shall be credited to each Participant's account at
the end of each calendar quarter. Such earnings factor shall be equal to
the rate of return that the Participant's account earned under the Profit-
Sharing Plan for that calendar quarter; provided that the rate of return
for a Participant who no longer has a Profit-Sharing Plan account shall be
based upon the Participant's Profit-Sharing Plan investment allocation
immediately prior to final distribution of his Profit-Sharing Plan
account.
5.3 Disability or Retirement. In the event of a Participant's
termination of employment due to Disability or Retirement, the
Participant's account balance under this Plan shall become payable to the
Participant in the form of five annual installments, provided that an
account balance less than $50,000 shall be paid in a lump sum within
ninety (90) days after the end of the calendar quarter in which
termination occurs.
The amount of each annual installment shall be equal to the quotient
obtained by dividing the value of the Participant's account balance on the
effective date of the related employment termination (and on the date of
each subsequent installment, as appropriate) by the number of years
remaining in the distribution period including that installment. The
Participant's account balance shall continue to accrue earnings, as
specified in Section 5.2, until the entire account balance has been paid.
The first annual installment shall be paid to the Participant within
ninety (90) days after the end of the calendar quarter in which
termination of employment occurs. The remaining four installments shall
be paid in the first calendar quarter of each subsequent year.
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5.4 Termination Before Retirement. In the event of a Participant's
termination of employment for any reason other than death, Disability, or
Retirement, the Participant's vested account balance under this Plan shall
become payable to the Participant in the form of five annual installments,
in accordance with the payment provisions provided in Section 5.3,
provided that an account balance less than $50,000 shall be paid in a lump
sum within ninety (90) days after the end of the calendar quarter in which
termination occurs.
5.5 Death Benefit. In the event of a Participant's death, the
Participant's entire remaining account balance shall be paid in a lump
sum, within ninety (90) days after the end of the calendar quarter in
which such death occurs, to the Participant's beneficiary, as such
beneficiary was designated by the Participant in accordance with the
Company's beneficiary designation procedures.
In the event a Participant dies without having designated a
beneficiary, or with no surviving beneficiary, the Participant's account
balance shall be paid in a lump sum to the Participant's estate within
ninety (90) days after the end of the calendar quarter in which death
occurs.
5.6 Alternative Payment Form. Notwithstanding the payment form
provided in Sections 5.3 and 5.4, a Participant may at any time on or
after his termination of employment petition the Committee to request that
payment of his account balance be made in a form other than five annual
installments. The Committee, at its sole discretion, shall make a binding
determination as to whether such alternative form of payment will be
allowed.
5.7 Termination Before October 1, 1995. Notwithstanding the
foregoing provisions of this Article Five, the account balance of a
Participant who terminates employment for any reason before October 1,
1995 shall be paid at the same time and in the same method of payment as
the Participant's account balance under the Profit-Sharing Plan.
ARTICLE SIX. VESTING
---------------------
Vesting. Subject to Section 8.1, each Participant shall become vested
in his account balance under this Plan at the same rate and at the same
time as he becomes vested in his account balance in the Profit-Sharing
Plan.
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ARTICLE SEVEN. AMENDMENT AND TERMINATION
-----------------------------------------
7.1 Amendment. The Company shall have the power at any time and from
time to time to amend this Plan by resolution of its Board of Directors,
provided that no amendment shall be adopted the effect of which would be
to deprive any Participant of his vested interest in his account under
this Plan.
7.2 Termination. The Company reserves the right to terminate this
Plan at any time by resolution of its Board of Directors. Subject to
Section 8.1, upon termination of this Plan, each Participant shall become
fully vested in his account balance and such account balance shall become
payable at the same time and in the same manner as provided in Article
Five.
ARTICLE EIGHT. MISCELLANEOUS
-----------------------------
8.1 Funding. This Plan shall be unfunded. No contributions shall be
made to any separate funding vehicle. The Company may set up reserves on
its books of account evidencing the liability under this Plan. To the
extent that any person acquires an account balance hereunder or a right to
receive payments from the Company, such right shall be no greater than the
right of a general unsecured creditor.
8.2 Limitation of Rights. Nothing in the Plan shall be construed to:
(a) Give any Employee any right to participate in the Plan
except in accordance with the provisions of the Plan;
(b) Limit in any way the right of the Company to terminate an
Employee's employment; or
(c) Evidence any agreement or understanding, express or implied,
that the Company will employ an Employee in any particular
position or at any particular rate of remuneration.
8.3 Nonalienation. No benefits under this Plan shall be pledged,
assigned, transferred, sold or in any manner whatsoever anticipated,
charged, or encumbered by an Employee, former Employee, or their
beneficiaries, or in any manner be liable for the debts, contracts,
obligations, or engagements of any person having a possible interest in
the Plan, voluntary or involuntary, or for any claims, legal or equitable,
against any such person, including claims for alimony or the support of
any spouse.
8.4 Controlling Law. This Plan shall be construed in accordance with
the laws of the State of Illinois in every respect, including without
limitation, validity, interpretation, and performance.
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8.5 Text Controls. Article headings are included in the Plan for
convenience of reference only, and Plan is to be construed without any
reference to such headings. If there is any conflict between such
headings and the text of the Plan, the text shall control.
IN WITNESS WHEREOF, the Company has caused this Plan, as amended and
restated herein, to be signed and attested by its duly qualified officers
and caused its corporate seal to be hereunto affixed on this 29th day of
April, 1995. ----
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W.W. Grainger, Inc.
By: /s/ D.W. Grainger
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Chairman
Attest:
/s/ J.M. Baisley
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Secretary
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