EXHIBIT
10.17


 


 


 


 


 


 


 


 


W.
R. GRACE & CO.

SEVERANCE PAY PLAN FOR

SALARIED EMPLOYEES


 


 


 


 


 


 


 


 


Effective, as
amended, April 1, 2005













 


W. R. GRACE & CO.
SEVERANCE PAY PLAN

FOR SALARIED EMPLOYEES


SECTION 1


OVERVIEW


PREAMBLE


This
Plan was originally adopted on January 1, 1994. 
Effective July 1, 1996, the Plan was amended and restated to reflect
that the severance payable hereunder equals 1-1/2 weeks pay for each year of
service, and to cease the requirement that “Downsizing Events” must be declared
in order to apply the Plan.  Effective
February 1, 1999, the Plan was further amended and restated to reflect that no
Covered Employee is entitled to severance pay under this Plan, if he or she
ceases employment from the Company as a result of the 1999 Grace Productivity
Effectiveness Program, whether or not such cessation is a result of the
Employee’s election to not relocate with his or her position with the
Company.  Effective April 1, 2005, the
Plan was further amended and restated to reflect that no Covered Employee is
entitled to severance pay under this Plan, unless he or she signs and does not
revoke an agreement acceptable to the Company under which he or she releases
the Company, as well as its directors, officers, and employees (and other
related parties), from any liability related to his or her employment with or
termination from the Company.


1.1           Purpose


The
purpose of this Plan is to provide guidelines with respect to severance pay to
certain salaried employees of the Core Businesses (as hereinafter defined) of  W. R. Grace & Co., including its
affiliates and subsidiaries, (hereinafter the “Company”) whom the Company
permanently terminates from its employment because of job elimination or
reorganization.  This Plan shall not
apply to any employee of the Health Care Businesses (as hereinafter defined) or
any non-core business of the Company.



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1.2           Revocation Of Prior Severance
Policies And Plans:


Effective
as of July 1, 1996, the Company rescinds, revokes, and discontinues any other
policies, plans or practices regarding severance pay with respect to employees
of the Core Businesses, and no severance or similar payments shall be made by
the Company to an employee of any Core Business except as provided under the
terms of this Plan or another applicable written severance pay plan of the
Company with an effective date subsequent to the effective date of this
Plan.  The immediately preceding sentence
notwithstanding, the Company may also make severance or similar payments to
employees of Core Businesses pursuant to an arrangement not governed by this
Plan, if the requirements of subsection (a), (b) or (c) of this Section 1.2 are
satisfied.


(a)                                  The
Company may make severance or similar payments pursuant to, and in
consideration of, a properly executed written agreement that releases the
Company from all claims and potential claims of an employee; provided that the
terms of the severance pay arrangement are described in that agreement; and
provided further that the agreement is not part of an “employment termination
program” (within the meaning of the Age Discrimination In Employment Act)
offered to a group of employees (any such program shall not be implemented
without the approval of the Benefits Committee).



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(b)                                 The
Company may make severance or similar payments pursuant to a written employment
agreement that specifies the terms of a severance pay arrangement with respect
to an employee.


(c)                                  The
Company may make severance payments under the Grace Cost Management Program to
individuals who were identified for termination under that Program prior to its
expiration on June 30, 1996 (even if such termination occurs after that date).


The Plan shall not be
interpreted as requiring severance or similar payments in the circumstances
describe in this Section 1.2.


A Covered Employee shall
not receive severance pay under this Plan if the Plan Administrator determines
that the Covered Employee is entitled to severance or similar payments pursuant
to subsection (a), (b) or (c) of this Section 1.2.


SECTION 2


DEFINITIONS


The following words and
phrases as used herein shall be defined as follows unless a different
definition is plainly required by context.


2.1                                 Base
Salary:


The
regular earnings paid by the Company. 
Base Salary does not include (a) overtime, commission, incentive,
special, premium or bonus compensation or (b) any amount attributable to
Company sponsored employee benefit plans, whether or not such compensation or
amount is taxable as income.



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2.2                                 Benefits
Committee:


The
Investment and Benefits Committee of W. R. Grace & Co.


2.3                                 Continuous
Employment:


The period of employment with the Company commencing
on the Covered Employee’s (a) first day of employment with the Company or (b)
adjusted commencement of service date (as defined and administered by the
Covered Employee’s business unit), whichever is later.


2.4                                 Covered
Employee:


A
regular, full-time salaried employee of the Company employed in the United
States and who is directly employed in one of the Core Businesses; and
excluding any temporary or part-time employee, any employee of the “Health Care
Businesses” of the Company, and any employee covered by a collective bargaining
agreement.  “Health Care Businesses” mean
National Medical Care, Inc. and its direct and indirect subsidiaries.


2.5                                 Core
Businesses:


The following product lines of the Company:  Construction Products, Davison Products,
Packaging (including Container) and Emissions Control.  In addition, Grace Headquarters, Corporate
Technical Group, the Research Division (including Washington Research Center
and Lexington Research Laboratory), and Lexington Service Center Operations
shall be considered Core Businesses solely for purposes of this Plan.



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2.6                                 Effective
Date:


This
Plan was originally effective as of January 1, 1994.


2.8                           ERISA:


The
Employee Retirement Income Security Act of 1974, as now in effect or as
hereafter amended.


2.9                           Last Scheduled Employment
Date:


A Covered Employee’s final scheduled date of work with
the Company which is established by the Company.


2.10                       Layoff:


The discontinuance of active employment with the
Company which is initiated by the Company and which is expected by the Company
to be less than one year.


2.11                         Medical
Or Life Plan:


Each
Company-sponsored employee welfare benefit plan (as defined by ERISA section
3(1)) that provides medical or life insurance coverage to active employees.


2.12                       Plan:


The W. R. Grace & Co. Severance Pay
Plan for Salaried Employees, as set forth herein.


2.13                       Plan Administrator:


The W. R. Grace & Co. Corporate Human Resources
Division Vice President or his or her designee.


2.14                       Plan Sponsor:


W. R. Grace & Co.



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2.15                       Product Line/Business Unit
Executive:


A Company officer who has been designated by the Chief
Executive Officer of the Company as the head of a major product line or
business unit of the Company.


2.16                       Week’s Pay:


A Covered Employee’s annual Base Salary in effect on
his Last Scheduled Employment date, divided by 52.


2.17                       Year of Service:


During a Covered Employee’s period of
Continuous Employment, each twelve consecutive month period that commences on
(a) the first date of the Covered Employee’s employment with the Company or
adjusted commencement of service date (as defined and administered by the
Covered Employee’s business unit), whichever is later, and (b) the anniversary
of that date.


SECTION 3


ELIGIBILITY


3.1                                 A
Covered Employee shall qualify to receive severance pay up to an amount set
forth in Section 3.3 if (a) the Plan Administrator determines that the Covered
Employee was terminated by the Company and at the time of termination of employment
the employee was employed directly in one of the Core Businesses, (b) the
Covered Employee signs and does not revoke an agreement acceptable to the
Company under which he or



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she releases the Company
and its directors, officers, and employees (and other related parties) from any
liability related to his or her employment with or termination from the Company
and (c) no provision of Section 3.2 is applicable with respect to the employee.


3.2                                 The
provisions of Section 3.1 notwithstanding, a Covered Employee shall not qualify
to receive severance pay if the Plan Administrator determines that any of the
following circumstances are applicable with respect to the employee:


(a)                                  The
Covered Employee is on Layoff or leave of absence (paid or unpaid);


(b)                                 The
Covered Employee terminated his or her employment with the Company for any
reason, including resignation or retirement, prior to the employee’s Last
Scheduled Employment Date:


(c)                                  The
Covered Employee is terminated by the Company as a result of the Company’s sale
or transfer of all or a portion of the stock or assets of a business of the
Company to another person or entity, whether or not the Covered Employee
becomes an employee of, or is offered employment with, such other person or
entity;


(d)                                 The
Covered Employee is terminated by the Company before, or on, the employee’s
Last Scheduled Employment Date for (i) misconduct with respect of the employee’s
obligations to the Company, (ii) “cause” (as defined herein), (iii) violation
of any agreement between the employee and the Company, (iv) failure to



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                                                follow
policies, rules or procedures of the Company or of the employee’s business unit
or (v) similar reasons.  “Cause” means
the willful refusal by the employee to substantially carry out his or her
assigned duties and responsibilities, or the employee engaging in actions that
are injurious to the Company (monetarily or otherwise).  (No provision of this Plan shall be deemed
to, or interpreted to, in any way limit the Company’s authority or discretion
to terminate an employee for any reason.)


(e)                                  The
Covered Employee refuses to accept an offer to transfer to another position at
the Company for a Base Salary that is not less than the employee’s Base Salary
effective as of the employee’s Last Scheduled Employment Date, where the
principal work location of the position is within a reasonable commuting
distance of the Covered Employee’s residence.


(f)                                    The
Covered Employee (i) fails to follow policies, rules or procedures of the
Company or of the employee’s business unit or (ii) fails to adhere to any
agreement between the employee and the Company, through the Covered Employee’s
Last Scheduled Employment Date.


(g)                                 The
Covered Employee (i) is entitled to receive long term disability (“LTD”)
payments under any plan or program sponsored by the Company that provides LTD
payments to eligible employees, as of the employee’s Last Scheduled Employment
date or (ii) becomes



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                                                eligible
to receive such LTD payments as a result of a disability that commences prior
to or on the employee’s Last Scheduled Employment Date.  Any such Covered Employee shall be entitled
to LTD payments, in accordance with the terms of such plan or program.


(h)                                 The
Covered Employee is covered by any other severance plan of the Company.


(i)                                     The
Covered Employee does not sign or revokes an agreement acceptable to the
Company under which he or she releases the Company and its directors, officers,
and employees (and other related parties) from any liability related to his or
her employment with or termination from the Company.


3.3                                                     Amount
of Severance Pay:


If a Covered Employee qualifies for severance pay
under this Plan, the amount of severance to which he shall be entitled shall
not exceed 1-1/2 Weeks Pay for each Year of Service (subject to a minimum of 4
Weeks Pay and a maximum of 52 Weeks Pay).


3.4                                                     Time
and Form of Payment:


Severance pay shall be paid in regular payroll
installments where each such installment is equal to the Covered Employee’s
periodic Base Salary payment, until the total severance for which the Covered
Employee qualifies is paid (with the uneven balance, if any, added to the final
installment), commencing as soon as



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practicable following the employee’s Last Scheduled
Employment Date; provided that, at the option of the Company (upon the request of
the Covered Employee or otherwise) (a) severance pay may be paid in a lump sum
payment as soon as practicable following the employee’s Last Scheduled
Employment Date, and (b) the unpaid balance of severance pay that is being paid
in regular payroll installments may be paid in a lump sum payment at any time
during the installment payment period. 
Notwithstanding the foregoing, as soon as practicable after the Covered
Employee commences full-time employment as an employee of an employer, the
total remaining severance pay to which the Covered Employee is entitled shall
be paid in a lump sum payment.


3.5                                                     Deductions
From Severance Pay:


The Company shall deduct from severance payments (a)
any federal, state or local withholding or other taxes or charges which it is
required to deduct under applicable laws, (b) any amounts that the Covered
Employee owes the Company and (c) any required employee contributions with
respect to the continuation of benefits regarding the employee pursuant to
Section 9.


3.6                                                     Denial
Or Discontinuance of Severance/Similar Payments:


Any other provision of the Plan to the contrary
notwithstanding, the Plan Administrator may deny or discontinue severance or
similar pay to a Covered Employee if the Plan Administrator determines



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that the Covered Employee has engaged in “inappropriate
conduct” (as defined herein) before or after the Covered Employee’s Last
Scheduled Employment Date.  “Inappropriate
conduct” means any action that (a) violates any policy, rule or procedure of
the Company or the employee’s business unit, (b) violates any agreement between
the employee and Company, or (c) is otherwise detrimental to the Company.


3.7                                                     Reemployment
by the Company:


In the event that an individual who received severance
pay under any severance pay plan or policy of the Company becomes reemployed by
the Company thereafter, he shall not receive credit under any severance pay
plan or policy of the Company (including this Plan) for the years of service
for which Severance Pay had previously been paid to the employee.


3.8                                                     Death
of Covered Employee:


If a Covered Employee dies prior to the employee’s
Last Scheduled Employment Date, severance shall not be paid pursuant to this
Plan, with respect to the deceased employee. 
If a Covered Employee dies on or after the employee’s Last Scheduled
Employment Date, the unpaid amount of severance to which the employee was
entitled shall be paid in a lump sum payment to his or her spouse or, if the
employee is not married on the date of death, to the employee’s estate.



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SECTION 4


INTEGRATION WITH NOTICE REQUIREMENTS


To
the extent that the Company is required to make a payment to a Covered Employee
pursuant to a federal, state or local plant closing law (including, but not
limited to, the Federal Workers Adjustment and Retraining Notification Act) (a “Plant
Closing Payment”), any severance pay that might be payable to the employee
under this Plan shall be reduced by an amount equal to the Plant Closing
Payment; provided that any payments made pursuant to an applicable state or
local unemployment compensation law shall not be regarded as paid pursuant to a
plant closing law.


SECTION 5


ADMINISTRATION AND INTERPRETATION OF PLAN


The
Plan Administrator shall have general responsibility for the administration and
interpretation of the Plan.  The Plan
Administrator shall have full discretionary authority to determine if an
individual qualifies for severance pay and the amount, if any, of severance pay
payable under the Plan, and to otherwise interpret and construe the Plan.  The interpretations and determinations of the
Plan Administrator shall be binding and conclusive unless they are determined
by a court of law to be arbitrary and capricious.



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SECTION 6


SOURCE OF BENEFITS


This
Plan is unfunded and shall not be secured by any specific asset, account, or
fund of the Company.  To the extent that
any person acquires a right to receive payments from the Company hereunder,
such right shall be no greater than the right of an unsecured general creditor
of the Company.


SECTION 7


CLAIMS AND APPEALS


7.1                                 A
Covered Employee or former employee who believes that an event has occurred
which qualifies the employee for a benefit under this Plan, but who has not
been advised of such benefit or believes that the calculation of the benefit is
in error, shall file a claim with the Plan Administrator.  The claim must be filed within 30 days of the
date on which the employee had been advised of his or her Last Scheduled
Employment Date with the Company or, if later, within 30 days of the date that
the employee has learned the amount of his or her benefit under this Plan or
that the employee will not receive such a benefit.  The claim must be in a writing, signed and
dated by the employee, which includes an explanation of the claim specifying
the Section or Sections of this Plan upon which the claim is based.  A decision on the claim shall be made by the
Plan Administrator within 30 days of receipt of the claim, unless special
circumstances require an extension, in which case a decision shall be reached
as soon



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                                                as
possible but in no event more than 60 days after receipt of the claim.  Notice of the decision shall be given to the
employee in writing and sent by first class mail to the employee’s last known
address, and shall set forth the reasons for the decision.


7.2                                 If
any claim is denied in whole or in part, the claimant may appeal to the Plan
Administrator in writing within 60 days of the date notice of denial is
received by the claimant.  Such appeal
may include any additional information and statements which the claimant feels
support the claimant’s position.  A
decision on the appeal shall be made by the Plan Administrator within 30 days
of receipt of the appeal, unless special circumstances require an extension, in
which case a decision shall be reached as soon as possible but in no event more
than 60 days after receipt of the appeal. 
Notice of the decision on the appeal shall be given to the claimant in
writing and sent by first class mail to the claimant’s last known address, and
shall set forth the reasons for the decision.


SECTION 8


AMENDMENT AND TERMINATION


By
action of the Board of Directors of the Company or the Benefits Committee or
its designee, the Company may (a) amend or revise the Plan in any respect and
at any time or (b) terminate the Plan at any time.



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The
benefits provided under this Plan are not vested benefits and, therefore,
eligibility for such benefits may be changed at any time by amendment or
termination of the Plan.


SECTION 9


BENEFITS


9.1                                 If
a Covered Employee receives severance pay under this Plan in regular payroll
installments, the Covered Employee shall continue to participate in each
Medical Or Life Plan, under which the employee is covered on the employee’s
Last Scheduled Employment Date, until the end of the calendar month in which
the period that severance is paid to the employee expires; such participation
shall be under the same terms and conditions as would be applicable had the
employee continued to be an active employee of the employee’s business unit for
that period.


This Plan Section 9.1
shall not limit the Company’s ability to amend or terminate any Medical Or Life
Plan with respect to active employees, and such amendment or termination shall
also apply to each Covered Employee receiving severance who is covered by such
plan.


9.2                                 Under
no circumstances shall (a) severance pay be considered compensation for
purposes of any Company-sponsored defined benefit or defined contribution
employee pension benefit plan (as defined by ERISA section 3(2)(A)) or (b) the
period during which the Covered Employee receives severance be considered, or
counted as, service or credited service under any such plan; except as required
by applicable law or applicable regulation or by the terms of such plan.



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9.3                                 For
purposes of eligibility to elect coverage under a retiree medical or life
insurance plan (a “Retiree Medical Plan”), sponsored by the Company, which is
otherwise applicable to a Covered Employee who is eligible to receive severance
under this Plan:  (i) the employee shall
be credited with a period of service which is equal to the period for which he
or she could have received installment severance payments under the Plan
(whether or not he or she actually receives installment payments) and (ii) the
employee’s age at separation of service with the Company shall be deemed to be
his or her age on the date that the last installment severance payment would
have been made to the employee.  With
regard to a Covered Employee who would not be eligible to elect coverage under
a Retiree Medical Plan but for the immediately preceding sentence, the employee
shall be eligible to elect to commence participation under such Plan as of, or
after, the date he or she receives his or her last severance payment under the
Plan (even if that payment is a lump sum payment).  Notwithstanding the foregoing, if the
provisions of a Retiree Medical Plan conflict with the provisions of this
Section 9.3, the provisions of the Retiree Medical Plan shall control.


9.4                                 Except
as provided by Section 3.2(g), each Covered Employee’s participation in any
plan or program of the company that provides LTD payments to eligible employees
shall cease as of the employee’s Last Scheduled Employment Date, and no such
plan shall provide LTD payments to the Covered Employee with respect to
disabilities occurring after that date.



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SECTION 10


MISCELLANEOUS


10.1                           The
Company reserves the right to determine whether any employee or group of
employees qualifies for severance pay. 
The Company also reserves the right, whether in an individual case or
more generally, not to pay severance or to pay a lesser amount than is set
forth in this Plan.


10.2                           Any
other provision of this Plan to the contrary notwithstanding, a Covered
Employee’s business unit Product Line/Business Unit Executive may recommend, or
the Plan Administrator may approve, that the Covered Employee receive severance
pay that is less than the amount of severance calculated in accordance with
Section 3 of this Plan; and, in such a case, the Covered Employee shall be
entitled only to that lesser amount of severance pay.


10.3                           The
fact that a former employee has failed to qualify for a benefit under this Plan
shall not rescind or otherwise affect in any manner the employee’s termination
of employment from the Company, and such failure to qualify for a benefit shall
not establish any right (a) to a continuation or a reinstatement of employment
with the Company or (b) to receive any payment from the Company in lieu of such
benefit.



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10.4                           If an
employee or former employee is eligible for benefits under this Plan, together
with other cash termination benefits (other than benefits provided by a
qualified retirement plan) (“Total Benefits”), equal to or exceeding the
equivalent of twice the employee’s “annual compensation” (as herein defined)
during the year immediately preceding the employee’s Last Scheduled Employment
Date, the Plan Administrator shall reduce the benefits payable under this Plan
so that Total Benefits do not exceed that amount.  “Annual compensation” means the amount set
forth in section 2510.3-2(b)(2)(i) of the Department of Labor regulations
issued under ERISA.


10.5                           All
payments made to each Covered Employee under this Plan shall be completed no
later than 24 months after the termination of the employee’s service with the
Company.


10.6                           Any
other provision of this Plan or any provision of any other severance or similar
plan or policy of the Company notwithstanding: 
(a) a Covered Employee that qualifies for benefits under this Plan shall
not qualify, or be eligible, for severance pay or similar benefits under any
other plan or policy of the Company, including any severance plan covering
employees of the Health Care Businesses; and (b) a Covered Employee shall not
receive benefits under more than one severance or similar plan or program of
the Company.


10.7                           Notwithstanding
any other provision of this Plan, no Covered Employee shall be eligible for
benefits under this Plan as a result of ceasing employment under the Company’s
1999 Productivity Effectiveness Program, whether or not such cessation is a
result of his or her election to not physically relocate with his or her
position under the Program, or as a result of any other circumstance related to
the Program.



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