Document:

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 2010Exhibit 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

 

Personal
and Confidential

 

May 11, 2010

 

Congratulations!  The Grace Board of Directors has approved the
2010 Annual Incentive Compensation Program (AICP) program and you will be
eligible to participate at a target of       % of
your annual base.

 

For
2010, we have aligned the AICP performance metrics with the Annual Operating
Plan (AOP) targets for Adjusted EBIT and Adjusted Operating Cash Flow.  The table below describes those targets.  At the end of the year, a pool will be set
aside for bonus payout based on Grace’s performance.

 

Threshold (80%)

Target (100%)

Maximum (135%)

 

1
– Performance that falls between threshold and maximum is interpolated.

2
– Company reserves the right to change, modify, or terminate compensation and
benefits plans at any time.

3
– Strictly confidential and proprietary information. Disclosure may result in
disciplinary action up to and including termination.

 

Your
payout is based on your individual performance against your stated objectives,
your contribution to the business and overall Grace performance.  Payouts can range from 0-2 times your
target.  In order to receive payment, you
have to be actively employed at the time bonuses are paid, no later than March 15,
2011.

 

Your
contribution, hard work and leadership in living the GRACE Vision and Values
are vital to the overall success of the company.

 

Thank
you for continuing to help build a better and safer Grace.

 

 

	
  

  	
   

  
	
  Alfred E. Festa

  	
   

  
	
  Chairman,
  President and CEOExhibit 10.3

 

2010-2012 Long-Term Cash Award

 

	
  Granted to:

  	
  «First» «Last»

  
	
  Effective Date of
  Grant:

  	
  May 2010

  
	
  Targeted Cash Award:

  	
  $

  
	
  Performance Period:

  	
  January 1, 2010 –
  December 31, 2012

  

 

Under the long-term
incentive program of W.R. Grace & Co (the “Company”), the Compensation
Committee (the “Committee”) of the Board of Directors of the Company has
granted you a Long-Term Cash Award under which you may earn a cash payout in an
amount equal to (or, in certain circumstances, greater or less than) the Targeted
Cash Award set forth above, over the Performance Period.

 

You will earn this
Targeted Cash Award if the performance objectives described in Annex B
for the Performance Period are met.  If
the performance objectives are only partially achieved or are over-achieved,
the amount you actually earn under this Award will be decreased (or eliminated)
or increased as set forth in Annex B.

 

The award will be
calculated and paid to you, net of the applicable taxes.

 

The consequences of a
change in or termination of your employment status during the Performance
Period are described in the attached Administrative Practices (Annex C).

 

In all matters regarding
the administration of the Long-Term Incentive Award, the Committee has full and
sole jurisdiction, subject to the provisions of Annex C.

 

Long-Term Incentive
Awards are being granted only to a limited number of key employees of the
Company and its subsidiaries.  This Award
should, consequently, be treated confidentially.

 

 

	
   

  	
  W.R. Grace &
  Co.

  
	
   

  	
   

  
	
   

  	
  

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  
	
   

  	
  Alfred Festa

  
	
   

  	
  Chairman, President and
  CEO

  
	
   

  	
   

  
	
   

  	
  Acceptance of the
  foregoing is acknowledged this
                          
  day of                               ,
  2010.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature of
  Participant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Please print full name)

  

 

 

Annex B

 

Calculation of 
2010-2012 LTIP- Cash Award

 

Your 2010-2012 Long Term
Cash award payout will be based on the 3-year compound annual growth rate
(CAGR) in total Grace core earnings before interest and taxes (core EBIT).  Payouts are contingent upon achievement of
target CAGR for the 3-year performance period. 
The target CAGR is 6%, using 2009
results as the base year.

 

The core earnings before
interest and taxes (core EBIT) in 2009 were $255.3 million.  The chart below details six scenarios at
different assumed growth rates.  The
target growth is highlighted.

 

	
  Assumed

  Growth

  	
   

  	
  Base

  Period

  	
   

  	
  Performance Period

  Growth Targets

  	
   

  	
  Total

  Growth

  	
   

  
	
  Rates

  	
   

  	
  2009

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  	
  2012

  	
   

  	
  10-12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.50

  	
  %

  	
  255.3

  	
   

  	
  259.1

  	
   

  	
  263.0

  	
   

  	
  267.0

  	
   

  	
  789.1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.00

  	
  %

  	
  255.3

  	
   

  	
  263.0

  	
   

  	
  270.8

  	
   

  	
  279.0

  	
   

  	
  812.8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.00

  	
  %

  	
  255.3

  	
   

  	
  270.6

  	
   

  	
  286.9

  	
   

  	
  304.1

  	
   

  	
  861.6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.00

  	
  %

  	
  255.3

  	
   

  	
  280.8

  	
   

  	
  308.9

  	
   

  	
  339.8

  	
   

  	
  929.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.00

  	
  %

  	
  255.3

  	
   

  	
  293.6

  	
   

  	
  337.6

  	
   

  	
  388.3

  	
   

  	
  1,019.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25.00

  	
  %

  	
  255.3

  	
   

  	
  319.1

  	
   

  	
  398.9

  	
   

  	
  498.6

  	
   

  	
  1,216.6

  	
   

  

 

Actual results for each
year of the performance period are adjusted for the change in pension expense
and LITP expense as compared to the base period.

 

The Long-Term Cash Award
payout will vary with actual results as shown in the chart below:

 

	
  CAGR Level Achieved

  	
   

  	
  Payout

  (rounded to the nearest whole

  percentage)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  25%

  	
   

  	
  200%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15%

  	
   

  	
  147%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10%

  	
   

  	
  121%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6%

  	
   

  	
  100%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3%

  	
   

  	
  50%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3%<

  	
   

  	
  Prorated

  	
   

  

 

For the 2010-2012 LTIP,
cash payments will be made in two installments – 50% of what is earned based on
performance for 2010 and 2011, but no more than 50% of your target for the
first two years, will be paid in March 2012, and the balance will be paid
in March 2013.

 

 

Example:

 

A sample calculation of
the Long-Term Cash Award Earned is provided below.  Assume that your Targeted Cash Award is
$20,400.  $13,600 would be earned after
Year 2 assuming a 6% growth per year. 
Therefore the payment in March 2012 would be $6,800, 50% of what is
earned.

 

	
  CAGR Level

  Achieved

  	
   

  	
  Payout in March

  2012

  	
   

  	
  Payout in March

  2013

  	
   

  	
  Total Payout

  	
   

  
	
  25

  	
  %

  	
  $

  	
  6,800

  	
   

  	
  $

  	
  34,000

  	
   

  	
  $

  	
  40,800

  	
   

  
	
  15

  	
  %

  	
  $

  	
  6,800

  	
   

  	
  $

  	
  23,188

  	
   

  	
  $

  	
  29,988

  	
   

  
	
  10

  	
  %

  	
  $

  	
  6,800

  	
   

  	
  $

  	
  17,885

  	
   

  	
  $

  	
  24,685

  	
   

  
	
  6

  	
  %

  	
  $

  	
  6,800

  	
   

  	
  $

  	
  13,600

  	
   

  	
  $

  	
  20,400

  	
   

  
	
  3

  	
  %

  	
  $

  	
  3,400

  	
   

  	
  $

  	
  6,800

  	
   

  	
  $

  	
  10,200

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