Exhibit
10.01


 


	
   

  	
   

  	
  W.
  R. Grace & Co.

  	
  T

  	
  410.531-4574

  
	
   

  	
   

  	
  7500
  Grace Drive

  	
  F

  	
  410.531-4414

  
	
   

  	
   

  	
  Columbia,
  MD 21044

  	
  E

  	
  fred.festa@grace.com

  
	
   

  	
   

  	
   

  	
  W

  	
  grace.com

  



 


Fred Festa


Chairman, President and Chief Executive Officer


 


 


 


February 28,
2008


 


 


 


Mr. Hudson
La Force III


 


 


 


Dear Hudson:


 


This letter agreement specifies the terms of
your employment with W. R. Grace & Co. (the “Company”), which were
presented and approved by the Board of Directors (the “Board’) of the Company
and/or the Compensation Committee of the Board, as applicable, on February 28,
2008. I am extremely pleased that you have agreed to join the Company and
believe that you will make a valuable contribution to the Company’s future.


 


If you agree with the terms of this letter
agreement, please sign where indicated below and return one fully executed copy
to me. An additional copy is also enclosed for your records.


 


Position and
Responsibilities


 


At its February 28, 2008, meeting, the
Board elected you to the position of Senior Vice President and Chief Financial
Officer of the Company (and of its subsidiary, W. R. Grace & Co. -
Conn.), to be effective as of your commencement of employment with the Company.


 


Your employment with the Company will commence
on April 1, 2008. Your title will be “Senior Vice President and Chief
Financial Officer.” (As all other Company employees, you will actually be
employed by W. R. Grace & Co. - Conn., a 100% owned subsidiary of the
Company, but will be elected an officer of both W. R. Grace & Co.
and    W. R. Grace & Co. -
Conn.)


 


You will be an employee of the Company “at will”
with no definite term of employment, and you will be subject to the same
requirements as other salaried employees of the Company, except as provided
under this letter agreement.


 


You will be head of, and responsible for, the
global financial organization of the Company, and you will report directly to
me, in my capacity as Chairman, President and Chief Executive Officer, of the
Company. Your office will be located at the company headquarters in Columbia,  Maryland.


 


Compensation


 


1.               Your initial annual base
salary as Senior Vice President and Chief Financial Officer will be
$410,000.00. Thereafter, your base salary will be subject to periodic reviews
on the same basis and at the same intervals as are applicable to other officers
of the Company.


 


 

















 


Your salary will
cease to accrue immediately upon your termination of employment with the
Company, regardless of the reason for such termination. (Note,
however, the provisions under “Severance Pay Arrangement.”)


 


2.               You will be eligible to
participate in the Company’s Annual Incentive Compensation Program. For the
2008 calendar year, your targeted award under the Program will be 75 percent of
your base salary earnings during 2008, based on the financial performance of
the Company and your personal achievement during that year. The cash payment
you actually receive under the Program for 2008 (the “2008 AICP Payment”) will
be paid to you in March 2009 at the same time other Program participants
receive their payments for 2008, subject to the requirements of the remainder
of this paragraph. You will receive your 2008 AICP Payment only if you are
employed by the Company on that March 2009 payment date.  You will not be entitled to that payment if
you terminate your employment with the Company, or are terminated by the
Company prior to that March 2009 payment date.


 


Under the Program,
awards for a calendar year are generally paid during March of the
following calendar year and are subject to Board approval. In general, the amount
of award paid to any participant may range from 0% to 200% of the participants
targeted award for the year, depending on individual performance and the extent
to which the Company (and any applicable business unit) achieves (or surpasses)
certain financial goals. Also, a Program participant is not entitled to payment
of an award for a calendar year, if the participant is not an active employee
of the Company on the date the award is actually paid. From time to time, the
individual incentive targets are reviewed and adjusted as necessary based on
competitive practice. These and the other provisions of the Program will apply
to you in the same manner as applicable to other Program participants, except
as specified in the above paragraph.


 


3.               You will be eligible
for a targeted award under the Company’s Long-Term Incentive Plan (the “LTIP”)
for the 2008 - 2010 performance period (subject to the Plan’s approval in
bankruptcy court) in the amount of $500,000, prorated for your actual time of
active employment during the performance period. You will also participate in
the 2007 - 2009 LTIP with a targeted award of $500,000 and in the 2006-2008
LTIP with a targeted award of $500,000, both to be prorated for your actual
time of active employment during the LTIP’s performance period. The terms of
your award under all LTIPs, shall be the same as the terms governing the awards
of the other participants under the applicable LTIP, including the requirement
of active employment with the Company on the date an LTIP payment is made to
the LTIP participants, in order to be entitled to such a payment.


 


4.               Consistent with your
election as an officer of the Company, the Board will be requested to authorize
the Company to enter into a written Executive Severance Agreement, or a
so-called “golden parachute,” with you. In general, the terms of that agreement
will provide for a severance payment of 3.00 times the sum of your annual base
salary plus your targeted annual incentive compensation award (adjusted in
accordance with the terms of that agreement), and certain other benefits, in
the event your employment terminates under certain conditions following a
change-in-control of the Company. The form and provisions of your Executive
Severance Agreement will be the same as applicable to other elected officers of
the Company. Please refer to the Executive Severance Agreement itself for
definition of “change in control”, “employment termination” and other
particulars of this arrangement.


 


 


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Severance
Pay Arrangement


 


If you are involuntarily
terminated by the Company under circumstances in which you would qualify for
severance pay under the terms of the Grace Severance Pay Plan for Salaried
Employees (the “Grace Severance Plan”), then you will be entitled to a
severance payment of 1.5 times a dollar amount equal to your annual base salary
at the time your employment is terminated. This severance pay arrangement shall
be governed by the terms of the Grace Severance Plan, except of course for the
calculation of the amount of  severance pay. Under
that Plan, the total severance payment would be made to you in installments, at
the same time and in the same manner as salary continuation payments, over a
period  of  18 months beginning as of the date you are
terminated. However, at your option, under the current terms of the Grace
Severance Plan, the entire severance payment may be paid to you in a single
lump sum as soon as practical after your termination. Notwithstanding the
foregoing, any election to receive such payments, as well as the timing of
those payments, must comply with the American Jobs Creation Act of 2004 (and
all other applicable law).


 


You will not, in any event,
however, be entitled to the severance payment described above if, at the time
your employment terminates, your employment terminates as the result of your
death, or you are entitled to payments under your Executive Severance Agreement
described above, or to disability income payments under the Grace “LTD Plan”
and/or “ESP Plan” mentioned below.  Also, if you receive a
severance payment under this offer, you  will not be entitled
to any other severance pay from the Company.


 


Sign-on
Bonus


 


The Company will pay you a
sign-on bonus of  $250,000
on
April 12, 2008 (which is the first regular Company pay date immediately
following your employment start date of April 1, 2008), subject to the
repayment provisions specified in the next sentence. You agree to repay to the
Company the full amount of this bonus if you voluntary terminate your
employment with the Company within the first 12 months of  your employment, i.e.,
anytime prior to April 1, 2009. In that event, such repayment must be made
in full, no later than your last day of active employment with the Company.


 


Other
Benefit Programs


 


As an officer of the
Company, you will also be eligible to participate in the following benefit
plans and programs (subject to the continuation and the actual provisions of
the plans and programs, as amended from time to time):


 


·                  The W. R. Grace & Co. Retirement
Plan for Salaried Employees (“Grace Salaried Retirement Plan”)


·                  The W. R. Grace & Co.
Supplemental Executive Retirement Plan


·                  The W. R. Grace & Co. Salaried
Employee Savings & Investment Plan


·                  The W. R. Grace & Co. Savings &
Investment Plan Replacement Payment Program


·                  The W. R. Grace & Co. Long-Term
Disability Income Plan (“LTD Plan”)


·                  Executive Salary Protection Plan (“ESP
Plan”)


·                  The W. R. Grace & Co. Voluntary
Group Accident Insurance Plan


·                  The W. R. Grace & Co. Business
Travel Accident Insurance Plan


·                  The W. R. Grace & Co. Group Term
Life Insurance Program


·                  Personal Excess Liability Insurance


 


 


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·                  The W. R. Grace & Co. Group
Medical Plan


·                  The W. R. Grace & Co. Dental
Plan


·                  Retiree Medical Coverage


 


In addition, during your employment with the
Company, you shall also be entitled to participate in all other
employee/executive perquisites, pension and welfare benefit plans and programs
made available to the Company’s executives or to its employees generally, as
such plans or programs may be in effect, and amended, from time to time.


 


Vacation


 


As an officer of the
Company, you will be entitled to four weeks paid vacation per full calendar year.


 


Indemnification


 


The Company shall, to the extent permitted by
applicable law, indemnify you and hold you harmless from and against any and
all losses and liabilities you may incur as a result of your performance of
your duties as an officer or employee of the Company. In addition, the Company
shall indemnify and hold you harmless against any and all losses and
liabilities that you may incur, directly or indirectly, as a result of any
third party claims brought against you (other than by any taxing authority)
with respect to the Company’s performance of (or failure to perform) any
commitment made to you under this agreement. The Company shall obtain such
policy or policies of insurance as it reasonably may deem appropriate to effect
this indemnification.


 


Confidentiality and Non-Compete
Agreements


 


As a condition of employment, you will be
required to sign the Company’s standard employment agreement (the “Standard
Agreement” copy attached), which includes agreements regarding the
confidentiality of Company information and non-competition, and similar
provisions. To the extent that the terms of the Standard Agreement differ from
the terms of this letter agreement, the terms of this letter agreement (and not
the Standard Agreement) shall control your employment relationship with the Company. In
addition, the provisions of item 5 of the Standard Agreement are not applicable
to the terms
of
this letter agreement, in that the Standard Agreement does not supersede any
terms of this agreement.


 


Miscellaneous


 


You and the Company acknowledge this letter
agreement, and the other written agreements referred to herein, contain the
entire understanding of the parties concerning the subject matter hereof. You
and the
Company acknowledge that this agreement supersedes any prior agreement between
you and the Company concerning the subject matter hereof. Except as expressly
otherwise provided herein, this agreement shall not adversely affect your
rights to participate in, or receive any benefit under, any incentive,
severance or other benefit plan or program in which you may from time to time
participate.


 


If any provision of this
agreement is held invalid or unenforceable in whole or in part, such provision,
to  the extent it is
invalid or unenforceable, shall be revised to the extent necessary to make the
provision, or
part
hereof, valid and enforceable, consistent with the intentions of the parties
hereto. Any provision of this
agreement that is held invalid or unenforceable, in whole or in part, shall not
affect the validity and enforceability of the other provisions of this
agreement, which shall remain in full force and effect.


 


 


 


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This letter agreement may be amended, superseded
or canceled only by a written instrument specifically stating that
it amends, supersedes or cancels this letter, executed by you and the Company.


 


If you have any questions regarding any
expectations of your new position, please call me.


 


Hudson, again, I am very
excited about your decision to join Grace and look forward to a productive and rewarding relationship.


 


Sincerely,


 


/s/ Alfred E. Festa


 


 


Alfred E. Festa


Chairman, President &
Chief Executive
Officer


W. R. Grace & Co.


 


Attachment


 


cc:   W.
B. McGowan


        M.
A Shelnitz


 


AGREED AND ACCEPTED:


 


 


	
  /s/ Hudson La Force III

  	
   

  
	
   

  	
   

  
	
  Date

  	
  March 3, 2008

  	
   

  
			



 


 


 


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