8-KMaterial AgreementsCorporate Changes

W.W. GRAINGER, INC. 8-K Report, Material Agreement (Dec 14, 2005)

Filed December 14, 2005For Securities:GWW

Summary

W.W. Grainger, Inc. (GWW) filed a Form 8-K on December 14, 2005, reporting key updates related to employee compensation and corporate governance. The company's Compensation Committee approved the 2006 Management Incentive Program (MIP), which will cover approximately 1,200 employees, including senior management and key personnel. The details of this program are substantially similar to the 2005 MIP. Additionally, the Board of Directors approved a new Supplemental Profit Sharing Plan II (SPSP II), designed to align with new Internal Revenue Code Section 409A requirements. This plan introduces specific provisions for payout timing and irrevocable election of payout forms upon entry into the plan, while the existing plan continues to cover benefits earned and vested prior to January 1, 2005. In a separate but related development, the company amended its Business Conduct Guidelines, which serve as its code of ethics. The amendment explicitly incorporates compliance with the U.S. Foreign Corrupt Practices Act into the section addressing international business conduct. These updated guidelines, along with any future amendments or waivers, will be accessible on the company's website, reinforcing transparency in corporate ethics and compliance.

Key Highlights

  • 1Approval of the 2006 Management Incentive Program (MIP) for approximately 1,200 employees.
  • 2The 2006 MIP details are consistent with the summary description of the 2005 MIP.
  • 3The Board of Directors approved a new Supplemental Profit Sharing Plan II (SPSP II).
  • 4SPSP II is designed to comply with new Internal Revenue Code Section 409A requirements.
  • 5Key changes in SPSP II include delayed payouts (post-termination) and irrevocable payout elections.
  • 6The company amended its Business Conduct Guidelines (code of ethics) to include explicit compliance with the U.S. Foreign Corrupt Practices Act.
  • 7Amendments to the Business Conduct Guidelines will be posted on the company's website for transparency.

Frequently Asked Questions

The 2006 MIP is an incentive program approved by the Compensation Committee for approximately 1,200 employees, including senior management and key personnel. The program's structure and objectives are substantially the same as the 2005 MIP.

The SPSP II introduces provisions to comply with Internal Revenue Code Section 409A. The main changes are that payouts will begin no earlier than six months after a participant's termination of employment, and participants must make an irrevocable election regarding the payout form when they enter the plan. Benefits earned and vested before January 1, 2005, remain governed by the existing plan.

Yes, the company amended its Business Conduct Guidelines, which serve as its code of ethics. The amendment specifically adds language requiring compliance with the U.S. Foreign Corrupt Practices Act within the guideline that addresses international business conduct.

As per the filing, W.W. Grainger, Inc. intends to post any amendments to and waivers from its Business Conduct Guidelines on its website, ensuring transparency regarding the company's code of ethics.