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                                                                   EXHIBIT 10.3


                                A. J. Costello
                                Chairman, President and Chief Executive Officer
                                CORPORATE HEADQUARTERS

GRACE

                                W. R. Grace & Co.
                                One Town Center Road
                                Boca Raton, FL 33486-1010


                               April 7, 1998

(Addressee)



Dear          :

         I am pleased to inform you that the Compensation Committee (the
"Committee") of the Board of Directors of W. R. Grace & Co. (sometimes called
the "Company"), at its meeting on April 1, 1998, granted you an award of
 .......... shares of the Company's Common Stock, par value $.01 per share
("Common Stock"), under the W. R. Grace & Co. 1998 Stock Incentive Plan (the
"Plan"). This letter sets forth the terms on which such shares (sometimes
called the "Restricted Shares") are being issued to you.

1.  The Restricted Shares are issued to you subject to the following
    restrictions:

         (a) As long as you are employed by the Company or a Subsidiary (as
defined in paragraph 10 below), you will not, except as otherwise specifically
required or permitted by this Agreement, sell, exchange, transfer, pledge,
hypothecate or otherwise dispose of any of the Restricted Shares, or any
interest therein, with respect to which the restrictions on transfer herein
imposed have not lapsed in accordance with paragraph 5 ("Non-vested Shares").

         (b) In any of the following events, you shall return all Non-vested
Shares to the Company promptly upon the Company's written request:

THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933.

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         (i) You shall at any time have disclosed to unauthorized persons trade
secrets, confidential information or data relative to the business of the
Company or Subsidiary.

         (ii) You shall at any time have engaged in any activities, whether as
owner, stockholder, partner, officer or employee of a business, or otherwise,
that constitute competition with the Company or a Subsidiary, and you shall
continue such activities at any time after the expiration of a period of thirty
(30) days from the receipt by you of written notice from the Company to refrain
from doing so; provided, however, that competition shall not include your
ownership of less than 2% of any outstanding class of security listed on a
national securities exchange or traded over-the-counter.

         (iii) You shall at any time have engaged in misconduct

              (A)  in the performance of your duties or

              (B)  in other activities relating to the business of the Company
                   or a Subsidiary.

         (iv) You shall at any time have attempted to sell, exchange, transfer,
pledge, hypothecate or otherwise dispose of any Non-vested Shares, or any
interest herein, in violation of the terms of this Agreement.

    (c) (i) The determination as to whether an event has occurred requiring the
return of any Non-vested Shares to the Company in accordance with this
paragraph 1 shall be made by the Committee in the reasonable exercise of its
discretion, and such determination of the Committee with respect thereto shall
in all respects be conclusive.

         (ii) If you shall at any time be required to return any Non-vested
Shares to the Company pursuant to this paragraph 1 or any other provision of
this Agreement, you shall, from and after the effective date of such return, no
longer have any rights as a stockholder with respect to the Non-vested Shares
so required to be returned, or any interest therein, and, without limitation,
you shall, commencing with the next following record date, no longer be
entitled to receive dividends upon such Non-vested Shares and in the event that
for any reason you shall have received such dividends upon such Non-vested
Shares, you shall repay an amount equal to such dividends to the Company.

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         (d) To evidence such restrictions, until such restrictions shall have
lapsed, the certificates for the Restricted Shares shall bear a legend, in form
and substance satisfactory to the Company's counsel, to the effect that they
were issued subject to, and may be sold or otherwise disposed of only in
accordance with, the terms of this Agreement.

2. Upon the issuance to you of the Restricted Shares, you shall for all
purposes be a stockholder of the Company with respect to the Restricted Shares
and shall have all rights of a holder of Common Stock with respect to such
shares (including the right to vote such shares at any meeting of holders of
Common Stock and the right to receive all dividends, if any, paid with respect
to such shares), subject only to the restrictions imposed by paragraph 1 of
this Agreement.

3. Under Section 83(b) of the Internal Revenue Code, you may, within 30 days
following the date of grant of the Restricted Shares, make an election that
would cause you to be taxed on an amount equal to the Fair Market Value (as
defined in the Plan) of such shares on the date of grant. In the absence of
such an election, you will be taxed, at the time or times of the lapse of the
restrictions on the Restricted Shares, on an amount equal to the Fair Market
Value at the time of the lapse of the Restricted Shares as to which the
restrictions have lapsed.

4. In the event that, as the result of a stock dividend, stock split,
recapitalization, merger, consolidation, reorganization, or other similar
event, you shall, as the owner of Restricted Shares, be entitled, under the
provisions of Section 8 of the Plan or otherwise, to new or additional or
different shares or securities, (a) such new or additional or different shares
or securities shall be deemed "Restricted Shares," (b) all the provisions of
this Agreement relating to restrictions and lapse of restrictions shall be
applicable thereto, and (c) the certificates or other instruments evidencing
such new or additional or different shares or securities shall bear the legend
referred to in

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paragraph 1(d). The foregoing restrictions shall apply to any fractional shares
resulting from any such event, or to any preemptive or other rights to purchase
securities to which you, as a holder of Restricted Shares, may become entitled
in connection with a public offering of Common Stock.

5. (a) The restrictions set forth in paragraph 1 above on the transfer of the
Restricted Shares shall lapse on April 2, 2001, subject to all provisions of
this Agreement then applicable.

   (b) If your employment with the Company or a Subsidiary shall, while you
hold any Non-vested Shares, terminate for any reason other than death, total
disability, retirement at age 65 or later, or termination by the Company or a
Subsidiary not for cause (including termination not for cause following a
change in control of the Company), such Non-vested Shares shall be forfeited by
you. If your employment with the Company or a Subsidiary shall, while you hold
any Non-vested Shares, terminate by reason of death, total disability,
retirement at age 65 or later, or termination by the Company or a Subsidiary
not for cause (including termination not for cause following a change in
control of the Company), the restrictions on transfer applicable to such
Non-vested Shares shall lapse in their entirety as of the date of such
termination of employment. If your employment with the Company or a subsidiary
shall, while you hold any Non-vested Shares, terminate by reason of voluntary
retirement under a retirement plan of the Company or a Subsidiary prior to age
65 with the consent of the Committee, the restrictions on transfer applicable
to such Non-vested Shares shall lapse pro rata.

   (c) If, as and when the restrictions lapse with respect to any Restricted
Shares pursuant to this paragraph 5, there will be delivered to you, promptly
upon your request, one or more certificates free of any legend for a like
number of shares in exchange for the certificate or certificates for such
Restricted Shares bearing the legend referred to in paragraph 2 of this
Agreement, subject to your payment of any tax required to be withheld in
connection with such lapse. 

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6. Except as otherwise expressly required or permitted by this Agreement, no
right, benefit or interest in the Restricted Shares or under this Agreement
shall be subject to anticipation, alienation, sale, assignment, encumbrance,
charge, pledge or hypothecation.

7. (a) Nothing in paragraph 1 or elsewhere in this Agreement shall preclude a
transfer to your legal representatives following your death or a distribution
to the persons provided for in paragraph 7(b) (iii) or shall preclude you, upon
not less than thirty (30) days' advance written notice to the Company, from
transferring any Restricted Shares, or any interest therein,

         (i) to one or more of your Immediate Family Members,

         (ii) to a trust of which the beneficiary or beneficiaries of the
corpus or of the income, or both, is either yourself or one or more of your
Immediate Family Members, or both, or

         (iii) to a corporation all of the stock of which is owned by you or
one or more of your Immediate Family Members, or both.

For the purpose of this provision, an "Immediate Family Member" shall be deemed
to be a spouse, child, stepchild, grandchild, parent, brother or sister or a
child of a brother or sister of yours, whether of the whole or half blood, and
whether or not the relationship arose by adoption.

   (b) The term "Donee," as used in this Agreement, shall be deemed to mean

         (i) the person, or collectively, all the persons (including a trust or
corporation), to whom a transfer or distribution permitted by paragraph 7(a)
has been made by you,

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         (ii) your legal representatives following your death, and

         (iii) the persons to whom Restricted Shares shall be distributed by
your legal representatives as the persons to whom they believe to be entitled
thereto under your will, or, in case of intestacy, under the laws relating to
intestacy.

    (c) In case of any transfer or distribution to a Donee,

         (i) the Restricted Shares so transferred or distributed shall continue
to be subject to all the restrictions and other provisions of this Agreement,

         (ii) the certificates for the Restricted Shares so transferred or
distributed shall bear the legend referred to in paragraph 2 of this Agreement,

         (iii) the Donee shall, with respect to the Restricted Shares so
transferred or distributed, have all the powers and shall be required to comply
with all the restrictions and other provisions of this Agreement requiring the
taking, or refraining from taking, of action to the same extent as you were
immediately prior to such transfer or distribution, except that the Donee need
not comply with the provisions of clauses (i), (ii), and (iii) of subparagraph
(b) of paragraph 1 (which shall, however, continue to apply to your conduct),
and

         (iv) the Donee shall confirm in writing, in form and substance
satisfactory to the Company, that he or she agrees to be bound by the
restrictions and other provisions of this Agreement.

8. The Company may take such steps as it believes necessary or desirable to
obtain sufficient funds from you to pay all taxes, if any, required by law to
be withheld in respect of the Restricted Shares, including, but not limited to,
requiring payments to the

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Company by you or on your behalf and/or taking deductions from amounts payable
by the Company to you or on your behalf.

9. Nothing in this Agreement shall be construed to affect in any way the power
of the Company to terminate your employment at any time for any reason, with or
without cause.

10. As used in this Agreement, the term "Company or a Subsidiary" shall mean
the Company, its divisions and units, and all corporations or other forms of
business association of which shares (or other ownership interests) having 50%
or more of the voting power regularly entitled to vote for directors (or
equivalent management) or regularly entitled to receive 50% or more of the
dividends (or their equivalents) paid on the Common Stock (or its equivalent)
are owned or controlled, directly or indirectly, by the Company.

11. "Change in Control of the Company" shall be defined as set forth in section
2 of the Plan.

12. Each of the parties hereto agrees to execute and deliver all consents and
other instruments and to take all other actions deemed necessary or desirable
by counsel for the Company to carry out each term of this Agreement. Without
limiting the generality of the foregoing, you shall, if and when requested by
the Company, deposit any or all certificates for the Restricted Shares,
together with a stock power or other appropriate instrument of transfer
executed in blank, with a bank and under a deposit agreement approved by the
Company and, following such deposit, certificates for the Restricted Shares
shall no longer carry the legend referred to in paragraph 2 of this Agreement,
and new certificates shall be issued in place thereof, in which event, each of
the parties agrees to give such instructions and to deliver or refrain from
delivering such notices to the bank acting under such deposit agreement as may
be necessary to carry out each term of this Agreement, to the end that all
property deposited under such deposit

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agreement shall be paid, transferred, released or otherwise disposed of in
accordance with the terms of this Agreement and each obligation thereunder.
Each party recognizes that the other party has no adequate remedy at law for
breach of this Agreement and recognizes, consents and agrees that the other
party shall be entitled to an injunction or decree of specific performance
directed to the other party and to the bank acting under any such deposit
agreement requiring that the provisions of this Agreement be carried out.

13. (a) Any notice to the Company under or pursuant to this Agreement shall be
deemed to have been given if and when delivered in person to the Secretary of
the Company or if and when mailed by certified or registered mail to the
Secretary of the Company at the Company's offices at One Town Center Road, Boca
Raton, Florida, 33486, or such other address as the Company may from time to
time designate in writing by notice to you given pursuant to paragraph 13(b)
hereof.

     (b) Any notice to you under or pursuant to this Agreement shall be deemed
to have been given if and when delivered to you in person or if and when mailed
by certified or registered mail to you at your address hereinabove given or
such other address as you may from time to time designate in writing by notice
to the Company given pursuant to paragraph 13(a) above.

14. Notwithstanding any remedy provided for in this Agreement, nothing in this
Agreement shall preclude the Company from taking any other action or enforcing
any other remedy available to the Company.

15. This Agreement has been executed pursuant to the Plan and is subject in all
respects to the Plan, and the Plan is hereby incorporated herein by reference.

16.  This Agreement shall be binding upon and inure to the benefit of

         (a) the Company, its successors and assigns, and

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         (b) you, and to the extent applicable, each Donee.

17. This Agreement has been executed, and it and the Restricted Shares have
been or are to be delivered, in accordance with the laws of the State of
Delaware, the state in which the Company is incorporated, and the validity,
interpretation, performance and enforcement of this Agreement shall be governed
by the laws of the State of Delaware applicable to contracts made and performed
in such State.

                                            Sincerely,
                                            W. R. GRACE & CO.

                                            /s/ 

                                            Chairman, President and
                                            Chief Executive Officer

Executed and agreed to:


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Date:
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