Document:

EXHIBIT
10.2

 

	
  

  	
   

  	
  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

 

March 31,
2008

 

Robert
M. Tarola

8550 Leisure Hill Drive

Baltimore, MD 21208

 

Dear Bob:

 

This letter specifies the
terms of your continued employment with W. R. Grace & Co. (the “Company”),
as well as the agreed arrangements related to your transition from Senior Vice
President and Chief Financial Officer (“CFO”) to Senior Vice President (“SVP”) –
Corporate Strategy, and then to your retirement later this year.

 

Transition From CFO To
SVP – Corporate Strategy

 

You will resign your
position as CFO of the Company, effective April 1, 2008 (which is the same
date that your replacement will assume that position). In addition, effective
as of that date, you will resign all other director and officer positions that
you hold with the Company and its subsidiaries and affiliates, except that you
will remain a member of the executive committee of Advanced Refining
Technologies LLC (“ART”). In addition, you will remain a Senior Vice President
of the Company, and will assume the position of Senior Vice President –
Corporate Strategy, as of that date. You will also cease to be a member of the
Investment & Benefits Committee of the Grace Benefit Plans, as of April 1,
2008.

 

These arrangements will
be effectuated by a letter from you to the Company’s Secretary, dated March 31,
2008, a copy of which is attached hereto.

 

As you know, the Company’s
Board of Directors has resolved that, upon your resignation as CFO and your
successor’s assumption of that position, you will no longer be designated as an
“executive officer” of the Company for purposes of section 16 of the Securities
and Exchange Act of 1934. Keep in mind that following your resignation as CFO,
you will remain subject to Company Policy 515 “Insider Trading” and other
applicable law in connection with your transactions in Company securities. The
Company acknowledges your stated intention to contact your broker and terminate
your existing Rule 10b5-1 Trading Plan relative to your stock options that
expire in May 2009 and securities acquired upon the exercise thereof.

 

 

As Senior Vice President –
Corporate Strategy, you will continue to report directly to me and remain a
member of the Grace Leadership Team. Your duties will generally consist of
familiarizing your successor as CFO with issues that are relevant to that
position at the Company, as well as assisting in the resolution of the Company’s
Chapter 11 cases and assisting the Company in securing emergence-financing
arrangements with various financial institutions. You will perform these duties
based on any instructions or parameters that I (or my assigns) communicate to
you.

 

Your current annual
salary will not be reduced during the period you remain employed by the Company
as Senior Vice President – Corporate Strategy. In addition, you will continue
to be covered by your Executive Severance Agreement, dated May 11, 1999,
the so-called “golden parachute” (your “Change In Control Agreement”), for that
period.

 

For the period you
are employed as Senior Vice President – Corporate Strategy, the Company will
continue to provide you with office space and administrative support at its
Columbia, Maryland Headquarters. However, you will be moved from you current
office space at headquarters, on or around April 1, 2008.

 

Finally, for that
period, you will be permitted to accept consulting assignments and board
positions from entities unrelated to the Company, provided that you give me
advance notice of your intention to accept any such assignment or position and
that I consent; and my consent will be given unless it is reasonable to
conclude that your acceptance of any particular such assignment or position
would interfere with, or conflict with, your ongoing work or position at the
Company.

 

Transition
From SVP – Corporate Strategy To Retirement

 

Effective October 31,
2008 (or an earlier date selected by you, on at least 30 days prior notice to
me), you will resign as Senior Vice President – Corporate Strategy and retire
from employment with the Company. You will resign as a member of the executive
committee of ART, on a date designated by the Company (in order to provide a smooth
transition to a replacement for you on that committee), but in no event later
than your last date of employment with the Company. These resignations will be
effectuated by a letter (or letters) acceptable to the Company, sent by you to
the Secretary of the Company.

 

Notwithstanding
the foregoing, however, if I determine that your services to the Company should
cease before October 31, 2008, you understand and agree that you may be
placed on leave before that date. In that event, you will continue to be paid
your current salary as an employee on paid leave from the Company until October 31,
2008 (unless, as stated above, you resign before that date).

 

2

 

As of your last date of
employment (or paid leave, if later) with the Company, your salary will cease
to accrue. You will be entitled to all rights and benefits applicable to active
employees until your salary ceases to accrue.

 

2008
Annual Incentive Compensation Program (“AICP”) Bonus

 

You will be paid an AICP
bonus for the 2008 calendar year, at the same time that such bonuses are paid
to others who participate in the 2008 AICP, expected to be in March 2009. The
amount of that bonus will be as calculated under the applicable formula with a
target bonus of 78% (of annual salary), with no discretionary adjustment
upwards or downwards from the results of that calculation. However, the amount
of the bonus will be pro-rated to reflect only the portion of 2008 during which
you remain CFO. This means that you will receive 25% of the calculated bonus
(since your resignation as CFO will be effective on April 1, 2008; i.e.,
you will have been CFO for 25% (i.e., 3 months/12 months) of the 2008 calendar
year).

 

You will not be eligible
for any further AICP bonuses.

 

Long-Term
Incentive Programs (“LTIPs”)

 

As you know, you
currently participate in LTIPs for the 2006-2008 and the 2007-2009 performance
periods. Copies of the letters that have previously been sent to you specifying
your awards under these LTIPs are attached. You will be paid the amounts
calculated under the terms of these LTIPs, with no discretionary adjustment
upwards or downwards from the results of the calculations. Those payments will
be made at the same time that payments are made to others who participate in
these LTIPs, which is expected to be in March 2009 and March 2010. However,
the amount of each such payment will be pro-rated to reflect only the portion
of the applicable performance period during which you remain employed by the
Company. This means, for instance, if you retire on October 31, 2008, then
you will receive 94.4% (i.e., 34 months/36 months) of the last 2006-2008 LTIP
payment, payable in March 2009; 61.1% (i.e., 22 months/36 months) of the
interim 2007-2009 LTIP payment, payable that month; and 61.1% (i.e., 22
months/36 months) of the last payment under the 2007-2009 LTIP, payable in March 2010.
For clarification, the calculations to derive the payments to you under these
LTIPs are more fully described below; again assuming your last date of
employment is October 31, 2008 (and assuming that LTIP payments are
generated for LTIP participants in general, based on Company performance
results).

 

·      Your pro-rated last 2006-2008 LTIP payment (payable in
March 2009) would be derived as follows:

 

3

 

The 2006-2008 Company
results would be applied to your LTIP award for that performance period using
the applicable formula to produce a total, non-pro-rated cash amount for that
performance period (the “06-08 Non-Pro-Rated Cash Total”), then the following
formula would be applied:

 

(The 06-08 Non-Pro-Rated Cash Total x 94.4%) minus (The amount of the
payment you received in March 2008 related to the 2006-2008 performance
period)

 

·      Your interim 2007-2009 LTIP payment
(payable in March 2009) would be derived as follows:

 

(Your 2007-2009
LTIP award multiplied by 61.1%) x 66.67%) x 50%.

 

·      Your pro-rated last 2007-2009 LTIP payment (payable in
March 2010) would be derived as follows:

 

The 2007-2009 Company results would be applied to your LTIP award for
that performance period using the applicable formula to produce a total,
non-pro-rated cash amount for that period (the “07-09 Non-Pro-Rated Cash Total”),
then the following formula would be applied:

 

(The 07-09 Non-Pro-Rated
Cash Total x 61.1%) minus (The amount of the payment you received in March 2009
related to the 2007-2009 performance period, i.e., the interim payment
described above)

 

You will not participate
in any further LTIPs, and will not receive any LTIP payments after the last
payment is made for the 2007-2009 performance period.

 

Severance Arrangement

 

At the time you cease
employment with the Company, under your Retention Agreement dated December 18,
2000, you will be entitled to receive total severance pay equal to $888,000
(i.e., 2 times a dollar amount equal to 100% of your annual base salary). This
severance pay will be governed by, and paid in accordance with, the terms of
the Grace Severance Pay Plan for Salaried Employees (the “Grace Severance Plan”).
Under the terms of the Plan, in order to receive this severance pay, you are
required to agree to and sign an employment law release that is acceptable to
the Company. You will be asked to sign that release a few weeks before your
last day of employment. A copy of such a release is enclosed. After you (and
your attorney and other advisors) review the release, please call John Forgach
with any questions or comments. Severance will not be paid

 

4

 

until we receive a signed
copy of the release (and the revocation period has passed). If you also become
entitled to benefits under your Change In Control Agreement; you will only
receive benefits under the Agreement that provides the greater amount of
benefits to you; you will not receive benefits under both Agreements, in any
event.

 

Provided you return a
signed release on a timely basis, your severance pay will commence on the day
after your last date of employment with the Company. Under the terms of the
Grace Severance Plan, you may elect to receive your severance pay over a period
of 24 months in periodic payroll installments. Alternatively, you may receive
your severance pay in a lump sum at any time following termination (less any
installments previously paid). You should note, however, that you are entitled
to continue to participate in the Company’s medical, vision, dental and life
insurance plans, on the same basis as active employees, only during the period
you receive severance pay. Therefore, such entitlement ceases when and if you
elect to receive severance pay in a lump sum.

 

As provided under the
federal law commonly called “COBRA”, you may continue coverage under Grace’s
medical, vision and dental plans for up to 18 months following your final
severance payment. Prior to that date, more information regarding your rights
under COBRA will be sent to you at your home address.

 

You will be
eligible to convert any or all of your current basic, supplemental, and
dependent life insurance (as applicable) to a personal policy with Metropolitan
Life Insurance Company. If you are interested in obtaining cost information
from MetLife on this coverage, please contact the Grace Benefits Service Center
at 1-800-974-2363.

 

The above is only a brief
outline of how the terms of the Grace Severance Plan may affect your severance
arrangement. Please refer to the Plan’s summary plan description for further
explanation.

 

Special Retirement Pay
Arrangement

 

In addition to your
benefits entitlements under the Grace Salaried Retirement Plan (the Company’s
qualified defined benefit pension plan for salaried employees), and the Grace
Supplemental Executive Retirement Plan (the Company’s supplemental,
non-qualified defined benefit plan for executives), which are generally
applicable to all Company executives, you will also be entitled to the
retirement benefits provided by your Employment Agreement dated, May 6,
1999, under the heading “Special Supplemental Retirement Pay Arrangement” (your
“Special Retirement Arrangement”).

 

5

 

Under the terms of the
Salaried Plan and the SERP, your benefits will be calculated based on your
years of service with the Company, at the time you cease employment with the
Company. Assuming that you retire on October 31, 2008, you will be
credited with 9.5 years of service under those Plans.

 

In accordance with your
Special Retirement Arrangement, you will be credited with a number of years of
service that is equal to the years of service recognized under the Salaried
Plan and the SERP at the time you cease employment with the Company. In all
other respects, the benefits under your Special Retirement Arrangement will be
governed by the terms of the Salaried Plan and the SERP, and the elections you
make under those Plans.

 

This means that, if you
retire on October 31, 2008, you will be credited with 9.5 years of service
under the Salaried Plan and the SERP; as well as an additional 9.5 years of
service under your Special Retirement Arrangement; for a total of 19 years of
service for purposes of calculating your total retirement benefits. Benefits
will commence under your Special Retirement Arrangement at the same time, and
in the same form, that you elect under the Salaried Plan and SERP.

 

Since you have attained
the age of 55, you may commence benefits under these retirement arrangements at
the time you cease employment, or you may delay commencement until a later date
(but no later than the first of the month following the month you attain age
65). If you retire on October 31, 2008, you may elect to commence benefits
as of November 1, 2008 (i.e., the first of the month following your
retirement).

 

If you have any questions
regarding your pension entitlements, please call John Forgach or the Grace
Pension Service Center, as appropriate.

 

Other Grace Employee and
Executive Benefits

 

In general, under the
terms of the relevant plan or program, your active participation under the
Company’s employee and executive benefit plans and programs will cease as of
your last date of employment, except of course as provided above.

 

Specifically, your
participation in Grace Business Travel and Accident Coverage and Grace’s
Short-Term and Long-Term Disability Plans, as well as your coverage under the
Executive Salary Protection Plan and the Company’s group personal excess
liability program, will cease as of your last date of employment. Your active
participation under the Grace Savings & Investment Plan (i.e., the 401(k) plan)
will also cease on your last date of employment with the Company.

 

6

 

Also, your entitlement
under applicable Company policies to vacation time off while employed with the
Company, and to payment for unused vacation at retirement, shall continue in
accordance with such policies.

 

Emergence
Bonus Eligibility

 

As
we discussed, if the Company’s Chapter 11 cases are resolved, and the Company
emerges from Chapter 11 bankruptcy, on or before October 31, 2009, if the
then current senior officers of the Company are awarded cash bonuses related to
such resolution and emergence, then I will consider recommending you for such a
bonus, based upon my evaluation regarding whether such a bonus is appropriate
and my opinion of your contributions to such resolution and emergence. There
is, however, no guarantee that you will receive any such bonus, regardless of
the circumstances or timing of the Company’s emergence from Chapter 11.

 

Indemnification And Continuation To Defend

 

After the termination of your employment, the
Company shall, to the extent permitted by applicable law, continue to indemnify
you and hold you harmless from and against any and all losses and liabilities
you may incur as a result of your prior performance of your duties as an officer
or employee of the Company or any of its subsidiaries or affiliates. In
addition, the Company shall continue to 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 confirms
that the indemnifications specified in this paragraph would include, to the
extent permitted by applicable law, providing for your defense with respect to
any and all losses or liabilities specified in this paragraph, consistent with,
and in the same manner, the Company would provide defense to other defendants
who are (or were) employed by, or are (or were) officers of, the Company.)

 

In addition, the Company will, of course, after
the date you cease employment with the Company, continue to provide for your
defense with respect to law suits involving Company matters that are initiated
before that date. Specifically, with respect to Keri Evans v. John F. Akers,
et al., Siamis, et al. v. Akers, et al. and Lawrence W. Bunch, et
al. v. W. R. Grace & Co., et al., the so-called “401(k) cases”,
the Company will continue to provide for your defense consistent with, and in
the same manner, it provides defense to the other named individual defendants
who are (or were) employed by the Company, as specified in the retention
letters from Arent Fox previously delivered to you applicable those cases.

 

7

 

Dispute Resolution

 

Any dispute, controversy
or claim arising out of or relating to this letter agreement, or a breach
thereof, shall be settled by arbitration in accordance with the National Rules for
the Resolution of Employment Disputes of the American Arbitration Association
as such rules are in effect on the date of the delivery of a demand for
arbitration (the “National Resolution Rules”), which shall be effectuated by
the demanding party providing written notice to the other party. The parties
expressly acknowledge that they are waiving their rights to seek remedies in
court, including without limitation the right (if any) to a jury trial.

 

There shall be one arbitrator,
to be selected under the national Resolution Rules.

 

The decision of the
arbitrator shall be final and binding on the parties and their respective
heirs, executors, administrators, personal representatives, successors and
assigns. Judgment upon any award of the arbitrator may be entered in any court
of competent jurisdiction, or application may be made to any such court for the
judicial acceptance of the award and for an order of enforcement.

 

Legal Expenses

 

In order to help
you resolve any issues that you may have with respect to the terms of this
letter agreement, the Company will reimburse you for the costs of seeking legal
advice regarding those terms, up to a maximum of $4,000.

 

Bob, thanks for your past
service to Grace, and we look forward to continuing to work with you until your
retirement later this year.

 

	
  Sincerely,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Alfred E. Festa

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fred Festa

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Enclosures

  	
   

  	
  Agreed:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Robert M. Tarola

  
	
   

  	
   

  	
  Robert M. Tarola

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  March 31 . 2008

  
	
   

  	
   

  	
  Date

  

 

8Exhibit 10.1

 

Confidential Materials omitted
and filed separately with the

Securities and
Exchange Commission.  Asterisks denote omissions

 

AMENDMENT NO. 1 TO

COLLABORATION AND LICENSE AGREEMENT

 

THIS AMENDMENT NO. 1 TO COLLABORATION AND LICENSE AGREEMENT (this
“Amendment”) made effective as of the 25th day of April, 2008 (the “Amendment
Effective Date”) by and between Momenta
Pharmaceuticals, Inc., a Delaware corporation (“Momenta”)
with a principal place of business at 675 West Kendall Street, Cambridge, MA
02142, and Sandoz AG, a Swiss corporation (“Sandoz”) with a principal place of business at Lichtstraße 35, CH 4056 Basel BS, Switzerland.

 

WITNESSETH:

 

WHEREAS, Momenta and Sandoz are parties to
that Collaboration and License Agreement, dated as of the 13th day
of June, 2007 (the “Agreement”);

 

WHEREAS, pursuant to
Section 14.2 of the Agreement, the Agreement may be amended only by the
written agreement of Momenta and Sandoz;
and

 

WHEREAS, Momenta and Sandoz desire to
amend the Agreement to reflect mutually agreed upon revised terms in accordance
with the provisions of this Amendment.

 

NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, Momenta and Sandoz agree as
follows:

 

1.                                       Definitions.

 

Capitalized
terms used herein, but not otherwise defined, shall have the meanings ascribed
to them in the Agreement.

 

2.                                       Amendments.

 

2.1                                 Sandoz’ Right to Terminate [**]-Referenced Product for
Convenience.  Section 11.4.1
of the Agreement is hereby amended and restated in its entirety to read:

 

“11.4.1. for convenience upon ninety (90)
days’ prior written notice to Momenta, which notice
may be provided to Momenta no later than December 31,
2008; provided, however, that, this Section 11.4.1
shall only apply to the [**]-Referenced Product, not the [**]-Referenced
Product;”

 

2.2                                 Momenta’s Right to Terminate [**]-Referenced Product.  Section 11.5 of the Agreement is hereby
renumbered as Section 11.5.1 and all references in the Agreement to “Section 11.5”
shall be amended to refer to “Section 11.5.1”.  The following new Section 11.5.2 shall
be added to the Agreement:

 

 

“11.5.2.         Momenta Termination of [**]-Referenced Product.  Momenta may
terminate this Agreement with respect to the [**]-Referenced Product for
convenience upon ninety (90) days’ prior written notice to Sandoz,
which notice may be provided to Sandoz no later than December 31,
2008.”

 

2.3                                 General Effects of Termination.  The introductory paragraph of Section 11.7.3
of the Agreement is hereby amended and restated in its entirety to read as
follows:

 

“11.7.3.         With
respect to the Glycoprotein Products, in the event of termination of this
Agreement (in its entirety or with respect to a Glycoprotein Product, as
applicable), except as provided in Sections 11.7.4 or 11.7.5,”

 

2.4                                 Effects of Termination for Convenience.  The following new Section 11.7.5 is
hereby added to the Agreement:

 

“11.7.5.         With
respect to the [**]-Referenced Product, in the event of termination of this
Agreement with respect to the [**]-Referenced Product pursuant to Sections
11.4.1 or 11.5.2,

 

11.7.5.a.      all rights and licenses granted, or obligations
owed, by either Party to the other Party with respect to such terminated
Product shall terminate;

 

11.7.5.b.     each
Party shall promptly return to the other Party all materials and records in its
possession or control containing Confidential Information of such other Party
which solely relates to such terminated Product; and

 

11.7.5.c.      except for any payments owed to a Party as of the
relevant date of termination or expiration with respect to such terminated
Product, the other Party will not owe any further payments to such Party with
respect to such terminated Product.”

 

3.                                       Reference to and Effect on the Agreement.

 

3.1                                 On
and after the Amendment Effective Date, each reference to “this Agreement,” “hereunder,”
“hereof,” “herein,” or words of like import shall mean and be a reference to
the Agreement as amended hereby.  No
reference to this Amendment need be made in any instrument or document at any
time referring to the Agreement, a reference to the Agreement in any of such
instrument or document to be deemed to be a reference to the Agreement as
amended hereby.

 

3.2                                 Except
as expressly amended by this Amendment, the provisions of the Agreement shall
remain in full force and effect.

 

4.                                       Counterparts.

 

This Amendment may be executed in any number of counterparts, each such
counterpart shall be deemed to be an original instrument, and all such
counterparts together shall constitute but one agreement.  Any such counterpart may contain one or more
signature pages.  This Amendment may be
executed by facsimile signature pages.

 

 

IN WITNESS WHEREOF,
the undersigned have caused this Amendment to be executed and delivered on the
date first written above.

 

	
   

  	
  SANDOZ AG

  
	
   

  	
  By:

  	
  /s/ A. Rummelt

  
	
   

  	
  Name: A. Rummelt

  
	
   

  	
  Title: CEO

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ C.
  Ackermann

  
	
   

  	
  Name: C.
  Ackermann

  
	
   

  	
  Title:
  General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MOMENTA PHARMACEUTICALS, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig A.
  Wheeler

  
	
   

  	
  Name: Craig
  A. Wheeler

  
	
   

  	
  Title:
  President & CEO

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