Document:

EXHIBIT 10.1

                                              PAUL J. NORRIS
                                              Chairman & Chief Executive Officer
[GRACE LOGO]
[GRAPHIC OMITTED]                             W. R. Grace & Co.
                                              7500 Grace Drive
                                              Columbia, MD 21044

                                              (410) 531-4404
                                              Fax: (410) 531-4414
                                              email paul.j.norris@grace.com

January 19, 2005

Mr. Alfred E. Festa
14713 Goddingham Court
Midlothian, VA 23113

Dear Fred:

The Board of Directors has approved this letter agreement which specifies the
terms of your continued employment with W. R. Grace & Co. (the "Company"). You
will assume the position of Chief Executive Officer of the Company, effective
June 1, 2005, in conjunction with my retirement from the Company effective the
day before that date (i.e., effective May 31, 2005). Thus, as of June 1, 2005,
you will be Chief Executive Officer and President of the Company (collectively,
the "CEO").

Also, as discussed, I will continue as Chairman of the Board of Directors of the
Company (the "Board") after my retirement, and, as agreed with the Board, will
provide consulting services related to the Company's Chapter 11 cases and other
matters.

As you know, the provisions of this letter agreement were previously approved by
the Board and the Compensation Committee of the Board. In addition, this letter
agreement will be submitted to the U. S. Bankruptcy Court with jurisdiction over
the Company's Chapter 11 cases.

Fred, I am extremely pleased that you have agreed to assume the position of CEO,
and we are confident that you will continue to make valuable contributions to
the success of the Company in your new position.

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 of
this letter is also enclosed for your records.

RESPONSIBILITIES

You will assume the position as CEO of the Company on June 1, 2005. (As all
other Company Headquarters employees, you will continue to be employed by W. R.
Grace & Co.-Conn., but will be CEO of both W. R. Grace & Co. and W. R. Grace &
Co.-Conn.) As of that date, your title will be "Chief Executive Officer and
President" of the Company, and you will report directly to the Board.

Alfred E. Festa                 January 19, 2005                         Page 2

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Your principal obligations, duties and responsibilities will be those generally
inherent in the office and title of CEO. Your office will continue to be located
at the Company's Headquarters in Columbia, Maryland.

EFFECTIVE DATE AND STATUS OF PRIOR AGREEMENT

Subject to Bankruptcy Court approval, this letter agreement shall be effective
as of June 1, 2005. Any other provision of this agreement notwithstanding,
should you cease to be an employee of the Company for any reason before that
date, you shall not become the CEO of the Company, and the provisions of this
letter agreement shall become void as of the date that your employment with the
Company ceases, which means that neither you nor the Company (nor any other
party) shall have any rights or obligations under this agreement, in that case.

As of the date you assume the position of CEO, your prior agreement with the
Company, dated November 17, 2003, shall become void, which means that neither
you nor the Company (nor any other party) will retain any rights or obligations
thereunder, as of that date. The rights and obligations related to your
employment with the Company as CEO on and after that date shall be governed by
the terms of this letter agreement (including any written amendments to this
agreement).

TERM OF AGREEMENT

The term of your employment as CEO under this letter agreement will be for a
period of four years, beginning on the date you assume that position, June 1,
2005, and ending on May 31, 2009 (such period is referred to in this agreement
as your "Initial CEO Employment Term").

If your employment as CEO of the Company (or in any other position) continues
after the Initial CEO Employment Term, and no other contrary arrangements have
been mutually agreed in writing between you and the Board, then the arrangements
described in this agreement will be discontinued and you will be an employee of
the Company "at will" subject to the same requirements as similarly situated
employees of the Company at that time, except as provided under the following
section entitled "Severance Pay Arrangement".

COMPENSATION

1.   Your initial annual base salary as CEO will be $760,000.00. Thereafter,
     your base salary will be subject to periodic reviews on the same basis and
     at the same intervals as are applicable to other senior officers of the
     Company.

     Your salary will cease to accrue immediately upon your termination of
     employment with the Company, even if your termination occurs during your
     Initial CEO Employment Term and whether or not your termination is
     voluntary. (Note, however, the provisions under "Severance Pay
     Arrangement.")

2.   As CEO, you will, of course, continue to be eligible to participate in the
     Company's Annual Incentive Compensation Program. For 2005, your targeted
     award under the Program will be 100% of your base salary earned during the
     applicable calendar year. For 2006 and thereafter, your targeted award will
     continue to be 100% (or greater, as determined by the Board) of your annual
     base salary earned during the applicable calendar year. Any payments to you
     under the Program will be made at the same

Alfred E. Festa                 January 19, 2005                         Page 3

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     time and in the same manner as payments to other participants in the
     Program. Under the Program, awards for a calendar year are generally paid
     during March of the following calendar year Awards under this Program are
     subject to Board approval and are contingent upon individual performance
     and financial results of the Company. In general, the amount of award paid
     to any participant may range from 0% to 200% of the participant's targeted
     award for the year, depending on individual performance and the extent to
     which the Company 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. 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 next sentence. Notwithstanding the
     prior provisions of this paragraph, if your employment is terminated by the
     Company without "Cause" (as defined below) or by you as a result of
     "Constructive Discharge" (as defined below) after the Company emerges from
     Chapter 11 but during your Initial CEO Employment Term, or as a result of
     your death or because you become entitled to disability income payments
     under the "Grace LTD Plan" and/or the "ESP Plan" (mentioned below) at any
     time during your Initial CEO Employment Term, then you (or your
     beneficiary, if applicable) will be entitled to a pro-rated award under the
     Program for the calendar year of your last day of employment with the
     Company. In that event, your pro-rated award for that calendar year will be
     calculated as follows: the amount you would have otherwise been awarded
     under the Program for that calendar year (but for your termination),
     calculated based solely on the applicable financial results of the Company
     for that calendar year, multiplied by the fraction whereby the numerator is
     the number of days that you were an active employee of the Company during
     that calendar year and the denominator is 365. The actual payment under the
     Program for that calendar year shall be made to you at the same time and in
     the same manner as payments are made to other Program participants (who
     were not terminated prior to the payment date) for that calendar year.

3.   You also will be eligible for a targeted award under the Company's
     Long-Term Incentive Plan (the "LTIP") for the 2005 - 2007 performance
     period in the amount of $1,690,000; or an equivalent value comprised of
     stock options or other equity and/or cash targets, as provided under the
     terms of that LTIP. The terms of your award under that LTIP, and your
     awards under all other 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; except as specified in the next sentence. Notwithstanding the
     prior provisions of this paragraph, if your employment is terminated by the
     Company without "Cause" (as defined below) or by you as a result of
     "Constructive Discharge" (as defined below) after the Company emerges from
     Chapter 11 but during your Initial CEO Employment Term, or as a result of
     your death or because you become entitled to disability income payments
     under the "Grace LTD Plan" and/or the "ESP Plan" (mentioned below) at any
     time during your Initial CEO Employment Term, then you will be entitled to
     a pro-rated award under each LTIP in which you participated prior to your
     termination. In that event, your pro-rated award under each such LTIP will
     be calculated as follows: the amount you would have otherwise been entitled
     to under the LTIP (but for your termination), multiplied by the fraction
     whereby the numerator is the number of days that you were an active
     employee of the Company during the performance period of

Alfred E. Festa                 January 19, 2005                         Page 4

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     the LTIP and the denominator is the total number of days of during such
     performance period. Each payment under each such LTIP shall be made to you
     at the same time and in the same manner as payments are made to other LTIP
     participants who were not terminated prior to the payment date.

4.   The Executive Severance Agreement you entered into with the Company upon
     your initial election as an officer will remain in effect during your term
     as CEO, subject to the actual terms of that agreement (including the
     Board's right to terminate that agreement in accordance with the procedures
     described therein). In general, the terms of that agreement would provide
     for a severance payment of 3 times the sum of your annual base salary plus
     your targeted annual incentive compensation award, and certain other
     benefits, in the event your employment terminates under certain conditions
     following a change-in-control of the Company.

SEVERANCE PAY ARRANGEMENT

If your employment is terminated by the Company without "Cause" (as defined
below) or by you as a result of "Constructive Discharge" (as defined below),
during your Initial CEO Employment Term, you will be entitled to the severance
payment described in the next sentence. The severance payment will be 2 times a
dollar amount equal to 175% of your annual base salary at the time your
employment is terminated. The severance payment may be made to you in
installments, at the same time and in the same manner as salary continuation
payments, over a period of 24 months beginning as of the date you are
terminated. However, at your option, the entire severance payment may be paid to
you in a single lump-sum as soon as practical after your termination (if
approved by the Compensation Committee). In all other respects, your severance
pay arrangement shall be governed by the terms of the W. R. Grace & Co.
Severance Pay Plan for Salaried Employees. 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 letter agreement, you will
not be entitled to any other severance pay from the Company.

DEFINITION OF CAUSE

"Cause", for purposes of this letter agreement, means:

(i)    Commission by you of a criminal act (i.e., any act which, if successfully
       prosecuted by the appropriate authorities would constitute a crime under
       State or Federal law) or of willful misconduct (including but not limited
       to violating written policies of the Company), either of which has had or
       will have a direct material adverse effect upon the business affairs,
       reputation, properties, operations or results of operations or financial
       condition of Company,

Alfred E. Festa                 January 19, 2005                         Page 5

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(ii)   Refusal or failure of you to comply with the mandates of the Board
       (unless any such mandates by the Board constitute Constructive Discharge,
       and you have determined to terminate your employment as a result
       thereof), or failure by you to substantially perform your duties as CEO,
       other than such failure resulting from your total or partial incapacity
       due to physical or mental illness, which refusal or failure has not been
       cured within 30 days after notice has been given to you, or

(iii)  Material breach of any of the terms of this agreement by you, which
       breach has not been cured within 30 days after notice has been given to
       you.

DEFINITION OF CONSTRUCTIVE DISCHARGE

 "Constructive Discharge," for purposes of this letter agreement, means the
occurrence of any of the following without your prior written consent:

(i)    any demotion from the position as CEO of the Company (provided that this
       provision shall not apply if you agree that any other individual should
       be elected as President and/or Chief Operating Officer of the Company);

(ii)   the relocation of your principle office to a location more than 35 miles
       away from the current site of the Company's Headquarters in Columbia,
       Maryland, without your prior consent;

(iii)  any material diminution in your level of authority from that of CEO or
       any assignment to you of any duties that are not consistent with the
       position of CEO; other than authority or duties that (a) may be
       appropriate to another position with the Company that you hold in
       addition to the position of CEO, (b) result from any requirement or
       request from the Board that is reasonably related to your position as CEO
       (or any other position you may hold with the Company at the time you
       retain your position as CEO), or (c) results from an inadvertent failure
       or oversight of the Board that is remedied within 30 days after your
       written notice thereof has been received by the Chairman of the
       Compensation Committee of the Company's Board of Directors;

(iv)   the Company imposes upon you compensation arrangements that do not comply
       with this letter agreement; or

(v)    any material breach of this letter agreement by the Company.

Notwithstanding the foregoing:

o      any termination of employment by you will not be deemed to be a
       termination as a result of Constructive Discharge, unless (i) you provide
       to the Chairman of the Compensation Committee written notice of your
       decision to terminate your employment that sets forth in reasonable
       detail the specific conduct or occurrence that you deem constitutes
       Constructive Discharge and the specific provision of this letter
       agreement upon which you rely and (ii) the Company does not cure such
       conduct or occurrence within 30 days after such notice has been received
       by the Chairman of the Compensation Committee;

Alfred E. Festa                 January 19, 2005                         Page 6

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o      your right to terminate your employment on the basis of Constructive
       Discharge shall be deemed waived by you if you do not provide such notice
       to the Chairman of the Compensation Committee within 60 days after you
       become aware of all material facts regarding the conduct or occurrence
       that you deem constitutes Constructive Discharge.

CHAPTER 11 RETENTION BONUS

You will be paid a "Chapter 11 retention bonus," as specified by this paragraph
(your "Retention Bonus"). The total amount of your Retention Bonus will be
$1,750,000 -- $750,000 of that amount will be paid 6 months after the Company
emerges from Chapter 11, and the remaining $1,000,000 will be paid to you 18
months after such emergence; or, if the Company does not emerge from Chapter 11
within 36 months of it (or another party) filing an initial plan of
reorganization with the Bankruptcy Court, you will instead be paid your
Retention Bonus as follows: $750,000 will be paid 36 months after the filing of
an initial plan of reorganization with the Court, and $1,000,000 will be paid 48
months after such filing (even if the Company emerges from Chapter 11 after such
36 month, but before such 48 month, period).

Notwithstanding the foregoing, you shall not be entitled to any payment
described in the immediate prior paragraph, if you are not employed by the
Company as of the date the payment is scheduled to be made as described above;
except as specified in the next sentence. Notwithstanding the prior provisions
of this paragraph, if your employment is terminated by the Company without
"Cause" (as defined above) or by you as a result of "Constructive Discharge" (as
defined above) or as a result of your death (or because you become entitled to
disability income payments under the "Grace LTD Plan" and/or the "ESP Plan"
mentioned below), and such event occurs after the Company emerges from Chapter
11 but before you actually receive all payments of your Retention Bonus, then
you (or your beneficiary, if applicable)will be paid the total remaining, unpaid
amount of your Retention Bonus no later than 30 days after your last date of
employment with the Company.

OTHER BENEFIT PROGRAMS

As a senior officer of the Company, you will also continue to 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):

o      The W. R. Grace & Co. Retirement Plan for Salaried Employees ("Grace
       Salaried Retirement Plan")
o      The W. R. Grace & Co. Supplemental Executive Retirement Plan
o      The W. R. Grace & Co. Salaried Employee Savings & Investment Plan
o      The W. R. Grace & Co. Savings & Investment Plan Replacement Payment
       Program
o      The W. R. Grace & Co. Long-Term Disability Income Plan ("LTD Plan")
o      Executive Salary Protection Plan ("ESP Plan")
o      The W. R. Grace & Co. Voluntary Group Accident Insurance Plan
o      The W. R. Grace & Co. Business Travel Accident Insurance Plan
o      The W. R. Grace & Co. Group Term Life Insurance Program
o      Personal Excess Liability Insurance
o      The W. R. Grace & Co. Group Medical Plan
o      The W. R. Grace & Co. Dental Plan
o      Retiree Medical Coverage

Alfred E. Festa                 January 19, 2005                         Page 7

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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 senior level
executives or to its employees generally, as such plans or programs may be in
effect, and amended, from time to time.

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 a director, 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; provided, however, that in no event
shall the Company modify its insurance coverage with respect to you in a manner
that renders such coverage less favorable to you than that in force as of the
date of this letter agreement.

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 notice to the other party
in accordance with the provisions below under the heading "Notices". 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.

AIR TRAVEL

In addition to the usual Company policies regarding air travel by senior
officers on Company business, the Company will provide you with travel by
chartered aircraft or with travel on an aircraft fractionally owned by the
Company, at times requested by you, including for reasonable personal travel
that will be included as taxable income to you.

RELOCATION

As specified above, your office as CEO will be located in Columbia, Maryland,
and you will relocate to the Columbia area in conjunction with assuming that
position (unless otherwise agreed by the Board). Therefore, you will be entitled
to receive principal residence

Alfred E. Festa                 January 19, 2005                         Page 8

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relocation assistance under the Company's relocation policy applicable to the
relocation of active employees. A copy of that policy has previously been
provided to you.

NOTICES

Except as otherwise provided herein, you and the Company agree that any notices
and other communications permitted or required under this letter agreement shall
be in writing and shall be given by hand delivery to the other party or sent by
registered or certified mail, return receipt requested, postage prepaid, or by
nationally recognized overnight courier service, addressed as follows:

         If to you:

         Alfred E. Festa
         W. R. Grace & Co.
         7500 Grace Drive
         Columbia, MD 21044

         If to the Company:

         W. R. Grace & Co.
         Attention: General Counsel
         7500 Grace Drive
         Columbia, MD 21044

or to such other addresses as either party furnishes to the other in writing in
accordance with this notice provision. Notices and communications shall be
effective when actually received by the addressee.

NO MITIGATION; NO SET OFF

In the event of any termination of employment hereunder, you shall be under no
obligation to seek other employment and there shall be no offset against any
amounts due to you under this letter agreement on account of any remuneration
attributable to any subsequent employment you may obtain. The amounts payable
hereunder shall not be subject to setoff, counterclaim, recoupment, defense or
other right which the Company may have against you.

SUCCESSORS

Except as otherwise provided herein, this letter agreement is personal to you,
and without the prior written consent of the Company shall not be assignable by
you other than by will or the laws of descent and distribution. This agreement
shall inure to the benefit of and be enforceable by your legal representatives.
This agreement shall inure to the benefit of and be binding upon the Company and
its successors and assigns. Except as provided herein, this agreement shall not
be assignable by the Company without your prior written consent. The Company
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this agreement in
the same manner

Alfred E. Festa                 January 19, 2005                         Page 9

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and to the same extent that the Company would be required to perform it if no
such succession had taken place. "Company" means the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid that
assumes and agrees to perform this agreement by operation of law or otherwise.

SURVIVORSHIP

The respective rights and obligations of the parties hereunder shall survive any
termination of your employment to the extent necessary to effect those rights
and obligations.

VACATION

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

CONFIDENTIALITY AND NON-COMPETE AGREEMENTS

Fred, of course, the Company's standard employment agreement (the "Standard
Agreement"), which includes agreements regarding the confidentiality of Company
information and non-competition, and similar provisions, which you signed in
order to commence employment with the Company shall remain in full force and
effect; except you and the Company agree that, to the extent that the terms 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, and that 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 supercede any terms of this letter
agreement. A copy of the Standard Agreement that you signed has previously been
provided to you.

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 right 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 provision of this
agreement, which shall remain in full force and effect.

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

Alfred E. Festa                 January 19, 2005                         Page 10

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

If you have any questions regarding the compensation and Company benefit plans
and programs, please feel free to call W. Brian McGowan, Senior Vice President,
Administration, at (410) 531-4191.

Fred, again, we are very excited about your election as CEO and look forward to
continuing our productive and rewarding relationship.

Sincerely,

Paul J. Norris
Chairman & Chief Executive Officer
W. R. Grace & Co.

Attachment

cc:   W. B. McGowan

AGREED AND ACCEPTED:

------------------------
Alfred E. Festa

------------------------
DateEXHIBIT 10.2

                                Thomas A. Vanderslice, Lead Independent Director
                                W. R. Grace & Co. Board of Directors

                                W. R. Grace & Co.
                                7500 Grace Drive
                                Columbia, MD  21044-4098

                                January 19, 2005

Mr. Paul Norris
W. R. Grace & Co.
7500 Grace Drive
Columbia, Maryland 21044

Dear Paul:

         As discussed, after you retire as CEO of W. R. Grace & Co. ("Grace"),
you have agreed to continue to monitor Grace's efforts to reorganize under
Chapter 11 of the U.S. Bankruptcy Code (the "Chapter 11 Process"), and to
provide consulting and advisory services to Grace's new CEO, Fred Festa, other
Grace officers and employees, and the Board, regarding that Process. You have
also agreed to assist Grace in the legislative process and to provide such other
limited transition consulting and advisory services as may be requested by
Grace, all in accordance with the terms specified in this letter agreement. If
you agree with the terms of this letter agreement, please sign where indicated
below and return a signed copy to W. Brian McGowan.

         With respect to the Chapter 11 Process, you will be responsible for
independently determining whether you need to attend certain meetings or Court
hearings to fulfill your obligations under this letter agreement. Also, of
course, you may receive specific assignments (e.g., to attend certain meetings
or Court hearings or to render advice on specific aspects of the Chapter 11
Process) from Mr. Festa or the Board with regard to the Chapter 11 Process.

         You will determine where, when and how you perform your monitoring
duties and consulting services hereunder (except for attending meetings
scheduled for the convenience of all parties and certain Court hearings, and the
requirement that you satisfy any deadlines imposed regarding the completion of
specific services hereunder).

         You will provide services hereunder as an independent contractor, with
no authority to bind the Company to any agreement or arrangement. As a
consultant hereunder, you will work closely with Grace's Chief Restructuring
Officer and other

Mr. Paul Norris
January 19, 2005
Page 2

persons performing roles related to the consulting services provided hereunder;
but you will not supervise any Grace employee and no Grace employee will report
to you. Also, except as specifically requested by Grace, you will not be
required to provide services related to Grace's ongoing businesses or other
Grace matters..

         In consideration for your services pursuant to this agreement, you will
be paid a monthly retainer (your "Consulting Retainer"). Initially, your
Consulting Retainer will be $35,416.67 per month (i.e., $425,000 annually),
subject to adjustment as provided in the next paragraph. (You will, of course,
also receive the usual director fees paid to the Company's Board members, to the
extent you are entitled to such fees as a member of the Board.)

         At this time, it is anticipated that you may be required to dedicate an
amount of time that is equal to approximately 1/2 of a regular 40 hour per week
work schedule ("1/2 Time") to your duties under this agreement. You also agree,
however, that your Consulting Retainer will be adjusted downward to the extent
that the time that you are required to dedicate to providing services hereunder
is, or later becomes, substantially less than 1/2 Time.

         Your Consulting Retainer will be paid to you as an independent
contractor, and you will be responsible for all tax reporting and payments
generally associated with payments to independent contractors in accordance with
the Federal Self-Employment Contributions Act and other applicable laws. Also,
you will not receive any employee benefits or other employee or officer
prerequisites from Grace in conjunction with your services hereunder or as a
result of your receipt of your Consulting Retainer.

         While you are a consultant hereunder, Grace will provide you with
office space in its Columbia Maryland headquarters (along with secretarial and
business telephone services, as well as other office work assistance, which
would generally be helpful to you in performing your duties as a consultant).
You will not, however, be required to perform your consulting services from that
office space, and there will be no specified standard hours that you will need
to be present at the Columbia headquarters or any other location.

         If you are required to travel away from home and the Columbia
headquarters in order to attend meetings or otherwise perform any duties
pursuant to this agreement, Grace will of course reimburse you for reasonable
business expenses related to such travel.

         The term of this agreement will commence the first business day after
you retire from Grace (unless you and the Board agree to a later date); and it
is anticipated that you will continue to provide consulting services hereunder
only for a temporary period.

Mr. Paul Norris
January 19, 2005
Page 3

However, you may voluntarily cease providing such services at any time, upon at
least 30 days written notice to the Chairman of the Compensation Committee of
the Board. In addition, the Board may terminate this consulting arrangement at
any time, upon 30 days written notice to you. In any event, however, this
consulting arrangement shall be terminated no later than 90 days after the date
that Debtors emerge from Chapter 11 protection. Thus, unless your service
terminates earlier, you will cease providing consulting services under this
Agreement 90 days after such emergence. Your Consulting Retainer shall cease to
accrue immediately upon your ceasing to provide services hereunder, regardless
of the reason for such cessation.

         The Board understands that at the same time you are providing services
hereunder, you will most likely also be providing consulting or other services
to other business organizations. Nothing in this agreement shall prevent you
from performing consulting or other services for other businesses at any time
during or after the term of this letter agreement.

         Notwithstanding the forgoing or any other provision of this letter
agreement, however, you agree that, without the prior written consent of Mr.
Festa or the Board, you shall not at any time (during the term of this letter
agreement or thereafter) disclose, or use for your own benefit or purposes, or
for the benefit or purposes of any other person or business organization, any
information or data belonging to, or relating to, the affairs of Grace (or its
affiliates or subsidiaries), including (but not limited to) information related
to the Chapter 11 Process, which you receive pursuant to your performance of
duties and services under this letter agreement ("Confidential Information").
(Information that is in, or hereafter enters, the public domain through no fault
of yours is not, however, to be considered Confidential Information under this
letter agreement.) Finally, this provision regarding Confidential Information
shall not supercede, but shall be in addition to, any other confidentiality
agreement or understanding between you and Grace (or any of its affiliates or
subsidiaries) as a result of your status as a former employee of any such entity
or otherwise.

         Grace will, to the maximum 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 monitoring the Chapter 11 Process
and your performing consulting and advisory services, under this letter
agreement. Such indemnification shall be in addition to any indemnification
granted to or available to you as a director or former employee or executive of
Grace.

         Finally, in order to resolve any dispute that may arise with respect to
the obligations, duties and responsibilities of the parties under this letter
agreement, you and the Board agree to adopt the terms of your prior employment
agreement with

Mr. Paul Norris
January 19, 2005
Page 4

Grace, dated January 1, 2001 (and amended November 6, 2002), under the heading
"Governing Law and Dispute Resolution".

         Paul, please let me again thank you on behalf of the Board for agreeing
to assist Fred and the Board in their efforts to manage Grace's Chapter 11
Process and assisting with transition issues after you retire from Grace.

                                   Sincerely,

                                   Thomas A. Vanderslice

AGREED:

-----------------------------
PAUL NORRIS

-----------------------------
Date:

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