Exhibit 10.1


 


	
  GRACE 

  	
   

  	
  Personnel Policies

  
	
   

  	
   

  	
   

  
	
  Annual Incentive Compensation
  Program 

  	
   

  	
  Policy No. 8.40

  



 


PURPOSE:


 


The Annual Incentive
Compensation Program (AICP) is the bonus program for regular non-sales salaried
employees in Bands 1-4 who are not eligible for any other annual incentive plan.  Grace offers the AICP program as a way to
share in Grace’s financial success.


 


The AICP program
was designed to support:


1.               The focus of employees on achieving Grace’s
financial performance targets


2.               The concept of measurements as a way to
improve performance


3.               Grace’s “pay for performance” philosophy.


 


SCOPE:


 


The AICP covers all regular salaried
employees in Bands 1-4 who are not eligible to participate in other incentive
plans and whose individual performance rating is “good” or higher. Except as
specified below, eligible employees must be actively employed by Grace through
the payout date, which will typically be made in early March. Awards will be
prorated for eligible employees who did not work for Grace for the full year.


 


POLICY:


 


The pool is currently
designed so that it will be funded based on the performance metrics emphasizing
Adjusted Operating Cash Flow and Adjusted EBIT. 
The total incentive award pool is capped at 200% of the total of all
targeted awards.


 


Each year employees
eligible for the AICP receive a letter informing them of their target award
percentage (of base salary) for the current year. The grade that an employee’s
job is assigned to generally determines the target award percentage.


 


It is expected that any
employee whose performance is rated at the “Needs Improvement” or “Unsatisfactory”
performance level will not receive an AICP award payment. The actual award
payments are determined based on Grace’s performance and management’s evaluation
of the employee’s individual performance and contributions to Grace.


 


The maximum actual award payment
for any individual is 300% of the individual’s award target, excluding members
of the Grace Leadership Team who are capped at 200%.


 


The salary for non-US
employees is converted to US dollars based on the current Finance exchange rate
for incentive accrual. Their AICP payment recommendation,


 

















 


which is initially
determined in US dollars during the process, is then converted to a percent of
salary.  This percent is applied to their
salary in local currency and the payment is made through their country’s
payroll system in local currency.


 


New Hires/Promotions


 


A new hire may be
considered by management for a prorated award in the AICP program if the new hire
has more than three months’ service during the applicable year (i.e. the
employee commences employment prior to October 1st).


 


An employee who is
promoted from one eligible position to a higher-graded eligible position will
have his/her award calculated and determined on the basis of the time in each
position at the corresponding target award and base salary.


 


In the case of an employee
entering the program from a sales-incentive eligible job, his/her eligibility
will commence when the employee becomes ineligible to participate in a sales
incentive program as a result of the job change.


 


 


Terminations of Employment


 


An Employee whose
employment terminates prior to the date on which AICP awards are paid would generally
not be eligible for an AICP award payment except in the case of death or
disability.


 


 


	
  Policy No: 8.40

  	
  Last Modified: May 2010