Document:

exv10w10

 

Exhibit 10.10

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AGREEMENT (this “Agreement”) is made and entered into effective as of the 30th day of
June, 2005 by and among International Wire Group, Inc., a Delaware corporation (“Group”), Camden
Wire Co., Inc., a New York corporation (“Camden Wire”), Omega Wire, Inc., a New York corporation
(“Omega Wire”), Wire Technologies, Inc., an Indiana corporation (“WTI”), IWG-Philippines, Inc, a
Philippines legal entity (“Philippines”), IWG Services Co., S de RL de CV, a Mexican legal entity
(“Services”), IWG Durango, S de RL de CV, a Mexican legal entity (“IWG Durango”), Cables Durango S
de RL de Cv, a Mexican legal entity (“Cables Durango”), International Wire Rome Operations, Inc., a
Delaware corporation (“Rome”), Italtrecce-Societa Italian Trecce Affini S.r.l., an Italian legal
entity (“Italtrecce”), International Wire SAS, a French legal entity (“SAS”), Tresse Metallique J.
Forissier, S.A., a French legal entity (“Forissier”), Cablerie E. Charbonnet, S.A., a French legal
entity (“Charbonnet”), and OWI Corporation, a New York corporation (“OWI” and, together with
Holding, Group, Camden Wire, Omega Wire, WTI, Philippines, Services, IWG Durango, Cables Durango,
Rome, Italtrecce, SAS, Forissier and Charbonnet, the “Employer”), and Glenn J. Holler (“Employee”).

W I T N E S S E T H :

     WHEREAS, Employee and Group entered into an Executive Employment Agreement as of November 13,
1999 (the “Original Agreement”); and

     WHEREAS, Employee and the Employer entered into an Amended and Restated Employment Agreement
as of July 16, 2001 (the “First Amended and Restated Employment Agreement” or “Prior Agreement”);
and

     WHEREAS, the Employee’s position with the Employer has not changed; and

     WHEREAS, the Employer desires to continue to retain the services of the Employee upon the
terms set forth herein;

     WHEREAS, the Employee desires to continue to be employed by Employer and to appropriately
memorialize the terms and conditions of such employment.

     NOW, THEREFORE, Employee and Employer, in consideration of the agreements, covenants and
conditions herein, hereby agree as follows:

     1. BASIC EMPLOYMENT PROVISIONS.

          (a) Employment and Term. Employer hereby agrees to employ Employee (hereinafter
referred to as the “Employment”) as Chief Financial Officer (the “Position”) and

 

 

Employee agrees to be employed by Employer in such Position for a period of two (2) years
ending on the 30th day of June, 2007 (the “Termination Date”), unless terminated earlier as
provided herein (the “Employment Period”). In the event that termination (as hereinafter provided)
has not occurred prior to the last day of the Employment Period, unless either party shall have
given written notice to the contrary at least thirty (30) days prior to the end of the Employment
Period or any extension thereof, the Employment Period shall annually renew for a successive two
(2) year periods until terminated.

          (b) Duties. Employee in the Position shall be subject to the direction and
supervision of the Chief Executive Officer or his designee and shall have those duties and
responsibilities which are assigned to him during the Employment Period by the Chief Executive
Officer consistent with the Position, provided that the Chief Executive Officer shall not assign
any greater duties or responsibilities to the Employee than are necessary for the Employee’s
faithful and adequate performance of the duties and responsibilities assigned. The parties
expressly acknowledge that the Employee shall devote all of Employee’s business time and attention
to the transaction of the Employer’s businesses as is reasonably necessary to discharge Employee’s
responsibilities hereunder. Employee agrees to perform faithfully the duties assigned to the best
of Employee’s ability. The services to be rendered by the Employee hereunder shall be rendered
primarily in St. Louis, Missouri. If Employee consents, the services may be performed at the
principal executive offices of Employer located outside of the St. Louis area.

     2. COMPENSATION.

          (a) Salary. During the employment period, Employer shall pay to Employee a salary as
basic compensation for the services to be rendered by Employee hereunder. The initial amount of
such basic compensation shall be Two Hundred Seventy Nine Thousand Nine Hundred Dollars
($279,900.00) per year. Such salary shall be reviewed from time to time by the CEO and may be
increased in the CEO’s sole discretion. Such salary shall accrue and be payable in accordance with
the payroll practices of Employer in effect from time to time. All such payments shall be subject
to deductions and withholdings authorized or required by applicable law.

          (b) Bonus. During the Employment Period, Employee shall be eligible to receive an
annual bonus (payable by the Employer) in an amount to be determined by the CEO of Employer, in the
CEO’s sole discretion, of up to fifty percent (50%) of Employee’s annual basic compensation as set
forth above.

          (c) Benefits. During the Employment Period, Employee shall be entitled to such other
benefits as are determined by the CEO, including without limitation, group life, health, executive
medical supplement and other insurance, paid vacations of four (4) weeks per year, annual executive
physical, reimbursement for tax preparation costs and executive lunches.

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          (d) Auto Allowance. Employer shall pay Employee an allowance to own and maintain an
automobile in an amount sufficient so that, after the effect of federal and state income taxes,
Employee shall net One Thousand Hundred Dollars ($1,000.00) per month.

          (e) Country Club Membership. Employer shall reimburse Employee for the initiation fee
and monthly dues expense for Employee to belong to a country club in St. Louis, Missouri area
reasonably acceptable to Employer and for the initiation fee and monthly dues expense for that
Club, but not for any charges made by Employee at the club, unless such qualify as reimbursable
business entertainment expenses.

     3. TERMINATION.

          (a) Death or Disability. This Agreement shall terminate automatically upon the death
or total disability of Employee. For the purpose of this Agreement, “total disability” shall be
deemed to have occurred by Employee shall have been unable in perform the assigned duties due to
mental or physical incapacity for a period of three (3) consecutive months or for any sixty (60)
working days out of a six (6) month consecutive period.

          (b) Cause. Employer may terminate the employment of Employee under this Agreement for
Cause. For the purpose of this Agreement, “Cause” shall be deemed to be fraud, dishonesty,
competition with Employer, unauthorized use of any of Employer’s trade secrets or confidential
information, or a substantial failure to properly perform the duties assigned to Employee, in the
reasonable judgment of Employer, after giving Employee written notice of such failure and a thirty
(30) day period within which to cure such failure. Refusal by the Employee to perform services
outside of the St. Louis area shall not be considered a reason to terminate the Employee for Cause.

          (c) Without Cause. Employer may terminate the employment of Employee under this
Agreement without Cause, subject to the continuing rights of Employee pursuant to Section 4(c)
below.

     4. COMPENSATION UPON TERMINATION.

          (a) Death or Disability. If the Employment Period is terminated pursuant to the
provisions of Section 3(a) above, this Agreement shall terminate and no further compensation shall
be payable to Employee, except that Employee or Employee’s estate, heirs or beneficiaries, as
applicable, shall be entitled, in addition to any other benefits specifically provided to them or
Employee under any benefit plan, to receive Employee’s then current salary for a period of twelve
(12) months from the date the Employment Period terminates.

          (b) Termination for Cause or Voluntary Termination by Employee. If the employment of
Employee under this Agreement is terminated for Cause pursuant to the provisions of Section 3(b) or
the Employee voluntarily terminates his employment with the

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Employer other than due to a breach of
this Agreement by Employer, no further compensation shall be paid to Employee after the date of
termination.

          (c) Termination Without Cause. If the Employment of Employee under this Agreement is
terminated pursuant to Section 3(c) above, Employee shall be entitled to continue
to receive from Employer the current basic compensation hereunder [which shall not be less than the
amount specified in Section 2(a) above] until the longer of eighteen (18) months or the Termination
Date, such amount to be paid in accordance with the payroll practices of Employer, and shall
further be entitled to continue to receive the benefits to which Employee would otherwise be
entitled pursuant to Section 2(c) above, but no other benefits.

     5. EXPENSE REIMBURSEMENT. Upon submission of properly documented expense account reports, Employer
shall reimburse Employee for all reasonable travel and entertainment expenses incurred by Employee
in the course of his employment with Employer.

     6. ASSIGNMENT. This Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned
by any of the parties hereto, except that this Agreement and all of the provisions hereof may be
assigned by Employer to any successor to all or substantially all of its assets (by merger or
otherwise) and may otherwise by assigned upon the prior written consent of Employee.

     7. CONFIDENTIAL INFORMATION.

          (a) Non-Disclosure. During the Employment Period or at any time thereafter,
irrespective of the time, manner or cause of the termination of employment, Employee will not
directly or indirectly reveal, divulge, disclose or communicate to any person or entity, other than
authorized officers, directors and employees of the Employer, in any manner whatsoever, any
Confidential Information (as herein defined) of Employer without the prior written consent of the
CEO.

          (b) Definition. As used herein, “Confidential Information” means information
disclosed to or known by Employee as a direct or indirect consequence of or through the Employment
about Employer or its respective businesses, products and practices, which information is not
generally known in the business in which Employer is or may be engaged. However, Confidential
Information shall not include under any circumstances any information with respect to the foregoing
matters which is (i) available to the public from a source other than Employee, (ii) released in
writing by Employer to the public or to persons who are not under a similar obligation of
confidentiality to Employer and who are not parties to this Agreement, (iii) obtained by Employee
from a third party not under a similar obligation of confidentiality to Employer, (iv) required to
be disclosed by any court process or any government or agency or department of any government, or
(v) the subject of a written waiver executed by Employer for the benefit of Employee.

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          (c) Return of Property. Upon termination of the Employment, Employee will surrender
to Employer all Confidential Information, including without limitation, all lists, charts,
schedules, reports, financial statements, books and records of the Employer, and all copies
thereof, and all other property belonging to the Employer shall be accorded reasonable access to
such Confidential Information subsequent to the Employment Period for any proper purpose as
determined in the reasonable judgment of Employer.

     8. AGREEMENT NOT TO COMPETE.

          (a) Employee agrees:

               (i) To give the Employer thirty (30) days written advance notice of voluntary termination of
employment with the Employer. Such notice shall include Employee’s future employment or
self-employment intentions, identification of the prospective employer and the general nature of
the prospective employment or self-employment, if known.

               (ii) To participate in an exit interview conducted by a member of the personnel department of
the Employer and/or by a representative of the Employer, at the time of or prior to the termination
of Employment with the Employer.

               (iii) That for two (2) years following the termination of the Employment, Employee shall
promptly notify the Employer of any change in the identification of Employee’s employer or the
nature of such employment or of self-employment.

               (iv) In consideration of the benefits granted under the Group Insulated Wire Division
Retention Plan, a copy of which is attached hereto as Exhibit A, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and subject to the
conditions hereinafter stated, the Employee agrees he will not, within two (2) years after leaving
the employ of the Employer, engage or enter into employment by, or into self-employment or gainful
occupation as, a Competing Business or act directly or indirectly as an advisor, consultant, sales
agent or broker for a Competing Business. As used herein, “Competing Business” means (1) any
business that is engaged in the manufacture, or sale to other wire suppliers or original equipment
manufacturers, of bare or tin-plated copper wire or that otherwise competes with the Bare Wire
Division of the Group, as such operations are currently conducted, and (2) in the event the
Insulated Wire Division of the Group is not sold, any business that is engaged in the manufacture,
or sale to other wire suppliers or original equipment manufacturers, of insulated copper wire
products for the automotive or appliance end-user markets or that otherwise competes with the
Insulated Wire Division of the Group, as such operations are currently conducted. The Employee
acknowledges that the Employer does not have an adequate remedy at law in the event the Employee
violates this provision and, therefore, the Employee agrees that, in such event, the Employer shall
be entitled to equitable relief including, but not limited to, injunctive relief. The Employer
acknowledges and agrees that this covenant is granted in substitution and replacement for the
covenant contained in Section 8 of the Prior Agreement.

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               (v) The terms of Paragraphs 8(a)(i)-8(a)(iv) shall not apply if the termination is pursuant to
Section 3(c).

          (b) The Employer agrees:

               (i) That within fifteen (15) business days after receiving identification of the prospective
employer, the nature of the employment or self-employment pursuant to Paragraph 8(a)(i) above, or
any change therein pursuant to Paragraph 8(a)(iii) above, the Employer will advise Employee as to
whether such employment constitutes a Competing Business as defined in Paragraph 8(a)(iv) above.

               (ii) In the event the Employer advises Employee that such employment constitutes a Competing
Business and that the Employer is electing to enforce the provision of Paragraph 8(a)(iv), to
forward a check in the amount equal to one-half (1/2) of the monthly salary of Employee (exclusive
of extra compensation of any kind) as of the termination date of Employee’s employment. If notice
is received pursuant to Paragraph 8(b) and the Employer advised Employee that such employment
constitutes a Competing Business, the aforementioned monthly checks shall be forwarded for the
remaining number of the aforesaid twenty-four (24) successive calendar months. Provided, however,
that all payments due under this Paragraph 8(b)(ii) shall not be required during any periods that
Employee is receiving payments under Section 4(a) or providing services to a Competing Business.

     9. WAIVER OF AGREEMENT NOT TO COMPETE. The Employer, based on the facts revealed to it by the
Employee regarding the new employment and in its discretion upon written notification to Employee,
may at any time waive or elect not to enforce the provisions of Paragraph 8(a)(iv), in which event
the obligations of Paragraph 8(b)(ii) above shall thereafter not apply and Employee may be engaged
by or enter into the employment of the identified Competing Business, but only such identified
Competing Business.

     10. AGREEMENT NOT TO SOLICIT EMPLOYEES. Employee agrees that, for a period of one (1) year
following the termination of the Employment Period, Employee shall not, on behalf of any business,
solicit or induce, or in any manner attempt to solicit or induce, either directly or indirectly,
any person employed by, or any agent of, Employer to terminate such employment or agency, as the
case may be, with Employer. In the event of violation hereof, Employer may terminate any payments
due to Employee hereunder.

     11. NO VIOLATION. Employee hereby represents and warrants to Employer that the execution, delivery
and performance of this Agreement or the passage of time, or both, will not conflict with, result
in a default, right to accelerate or loss of rights under any provision of any agreement or
understanding to which the Employee or, to the best knowledge of Employee, any of Employee’s
affiliates are a party or by which Employee, or to the best knowledge of Employee, Employee’s
affiliates may be bound or affected.

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     12. CAPTIONS. The captions, headings and arrangements used in this Agreement are for convenience
only and do not in any way affect, limit or amplify the provisions hereof.

     13. NOTICES. All notices required or permitted to be given hereunder shall be in writing and shall
be deemed delivered, whether or not actually received, two days after being
deposited in the United States mail, postage prepaid, registered or certified mail, return receipt
requested, addressed to the party to whom notice is being given at the specified address or at such
other address as such party may designate by notice:

	 	 	 
	Employer:

	 	International Wire Group, Inc.
	 

	 	101 South Hanley Road
	 

	 	St. Louis, Missouri 63105
	 

	 	Attn: Chief Executive Officer
	 
	 	 
	Employee:

	 	Glenn J. Holler
	 

	 	12606 Jane Denny Lane
	 

	 	St. Louis, Missouri 63128

     14. INVALID PROVISIONS. If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws, such provisions shall be fully severable, and this
Agreement shall be construed and enforced as if such illegal, invalid and unenforceable provision
had never comprised a part of this Agreement; the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance of this Agreement. In lieu of each such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this Agreement a provision
as similar in terms to such illegal, invalid or unenforceable provisions as may be possible and be
legal, valid and enforceable.

     15. ENTIRE AGREEMENT AMENDMENTS. This Agreement, along with the International Wire Group, Inc.
Insulated Wire Division Retention Plan (the “Retention Plan”), a copy of which is attached hereto
as Exhibit A, contains the entire agreement of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings, if any, relating to the
subject matter hereof, including the Prior Agreement, which is fully replaced hereby. This
Agreement may be amended, in whole or in part only, by an instrument in writing setting forth the
particulars of such amendment and duly executed by an officer of Employer expressly authorized by
the CEO to do so and by Employee. The rights and benefits provided under this Agreement are
cumulative of, and are in addition to, all of the other rights and benefits provided to the
Employee under any agreement between such Employee and the other parties to this Agreement
including, but not limited to, the aforesaid Retention Plan.

     16. WAIVER. No delay or omissions by any party hereto to exercise any right or power hereunder
shall impair such right or power to be construed as a waiver thereof. A waiver by any of the
parties herein of any of the covenants to be performed by any other party or any

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breach thereof shall not be construed to be a waiver of any succeeding breach thereof or of any other covenant
herein contained. Except as otherwise expressly set forth herein, all remedies provided for in
this Agreement shall be cumulative and in addition to and not in lieu of any other remedies
available to any party at law, in equity or otherwise.

     17. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall
constitute an original, and all of which together shall constitute one and the same agreement.

     18. GOVERNING LAW. This Agreement shall be construed and enforced according to the laws of the
state of Missouri.

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of this
date first above written:

	 	 	 	 	 	 	 
	EMPLOYEE:	 	 	 	 
	 

	 	 	 	 	 	 
	/s/
Glenn J. Holler 

	 	 	 	 
	 	 	 	 	 
	Glenn J. Holler	 	 	 	 
	 

	 	 	 	 	 	 
	EMPLOYERS:	 	 	 	 
	 

	 	 	 	 	 	 
	INTERNATIONAL WIRE GROUP, INC.	 	CAMDEN WIRE CO., INC.
	 

	 	 	 	 	 	 
	By:

	 	/s/ Rodney D. Kent	 	By:	 	/s/ Rodney D. Kent
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	 
	OMEGA WIRE, INC.	 	WIRE TECHNOLOGIES, INC.
	 

	 	 	 	 	 	 
	By:

	 	/s/ Rodney D. Kent	 	By:	 	/s/ Rodney D. Kent 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	 
	IWG-PHILIPPINES, INC	 	IWG SERVICES CO.
	 

	 	 	 	 	 	 
	By:

	 	/s/ Rodney D. Kent 	 	By:	 	/s/ Rodney D. Kent 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	 
	IWG DURANGO	 	CABLES DURANGO
	 

	 	 	 	 	 	 
	By:

	 	/s/ Rodney D. Kent 	 	By:	 	/s/ Rodney D. Kent 
	 

	 	 
	 	 	 	 

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	INTERNATIONAL WIRE ROME OPERATIONS, INC.	 	ITALTRECCE-SOCIETA ITALIANA
	 

	 	 	 	 	 	 
	By:

	 	/s/ Rodney D. Kent 	 	By:	 	/s/ Rodney D. Kent 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	 
	INTERNATIONAL WIRE SAS	 	TRESSE METALLIQUE J. FORISSIER, S.A.
	 

	 	 	 	 	 	 
	By:

	 	/s/ Rodney D. Kent 	 	By:	 	/s/ Rodney D. Kent 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	 
	CABLERIE E. CHARBONNET S.A.	 	OWI CORPORATION
	 

	 	 	 	 	 	 
	By:

	 	/s/ Rodney D. Kent 	 	By:	 	/s/ Rodney D. Kent 
	 

	 	 
	 	 	 	 

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Exhibit A

Insulated Wire Division Retention Plan

See Exhibit 10.16 (Registration Statement on Amendment No. 1 to Form S-1 of International Wire
Group, Inc. filed May 10, 2005)2005-2007 LONG-TERM CASH AWARD

Granted to:                   [First name] [Last name]
Effective Date of Grant:
Targeted Award:               [Target]
Performance Period:           January 1, 2005 - December 31, 2007

         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 Award set forth above, over the Performance
Period.

         You will earn this Targeted 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 Cash
Award, the Committee has full and sole jurisdiction, subject to the provisions
of Annex C.

         Long-Term Cash 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
                               CEO, President

                               Acceptance of the foregoing is acknowledged this
                               ____________ day of _______________, 2005.

                               ---------------------------------------
                               (Signature of Participant)

                               ---------------------------------------
                               (Please print full name)

                                     Annex B

                          CALCULATION OF 2005-2007 LTIP

Your 2005-2007 LTIP 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 2004 results as the base year.

The core earnings before interest and taxes (core EBIT) in 2004 was $179.3
million. The chart below details six scenarios at different assumed growth
rates. The target growth is highlighted.

--------------------------------------------------------------------------------
                              PERFORMANCE PERIOD
                                GROWTH TARGETS
 ASSUMED     BASE                                   TOTAL    LTIP    CUMULATIVE
 GROWTH     PERIOD     2005     2006      2007     GROWTH    POOL     REPORTED
  RATES      2004                                  05-07(1)          EARNINGS(2)
--------------------------------------------------------------------------------
  1.50%      179.3    182.0    184.7     187.5      554.2     2.9       551.3
  3.00%      179.3    184.7    190.2     195.9      570.8     5.9       564.9
--------------------------------------------------------------------------------
  6.00%      179.3    190.1    201.5     213.5      605.1    11.8       593.3
--------------------------------------------------------------------------------
 10.00%      179.3    197.2    217.0     238.6      652.8    14.3       641.0
 15.00%      179.3    206.2    237.1     272.7      716.0    17.3       704.2
 25.00%      179.3    224.1    280.2     350.2      854.5    23.6       842.7
--------------------------------------------------------------------------------

(1) All results include full recognition/accrual of Annual Incentive
Compensation Program and, for achievement levels above 6% (i.e., 10%, 15%, and
25%), all totals include accruals for Long-Term Incentive Program Payments

 (2) Cumulative Reported Earnings represent the 3 year core EBIT earnings
required at the respective assumed growth rates. Up to the first $11.8 million
(target CAGR 6%) is deducted from reported results. Payouts over target ($11.8
million) must be accrued as part of reported earnings.

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 2005-2007 LTIP, cash payments will be made in two installments - 50% of
what is earned based on current performance at the end of 2006, but no more than
50% of target for the first two years, will be paid in March 2007, and the
balance will be paid in March 2008.

Example:

A sample calculation of the Long-Term Cash Award Earned is provided below.
Assume that your Targeted Award is $20,400. $13,600 would be earned after Year 2
assuming a 6% growth per year. Therefore the payment in March 2007 would be
$6,800, 50% of what is earned.

------------------------------------------------------------------------------
    CAGR LEVEL        PAYOUT IN         PAYOUT IN
     ACHIEVED         MARCH 2007        MARCH 2008         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
------------------------------------------------------------------------------

                                    Annex C

                                W. R. GRACE & CO.
             Administrative Practices - Long-Term Cash Award Program
             -------------------------------------------------------
                          2005-2007 Performance Period
                          ----------------------------

Definitions
-----------

"Award Payment": An Interim Long-Term Cash Award Payment or Remaining Long-Term
Award Payment, as applicable.

"Board of Directors": The Board of Directors of the Company

"Committee": The Compensation Committee of the Board of Directors.

"Company": W. R. Grace & Co., a Delaware Corporation and/or, if applicable in
the context, one or more of its Subsidiaries.

"Incomplete Long-Term Cash Awards": A Long-Term Cash Award for which the
Performance Period has not been completed as of the date referenced.

"Interim Long-Term Cash Award Payment": As defined on page 4, provided that such
payment will not exceed 50% of the Participant's Targeted Award for the first
two years, regardless of Company performance at the time of payment.

"Key Employee": An officer or other senior, full-time employee of the Company,
who, in the opinion of the Company, can contribute significantly to the growth
and successful operations of the Company.

"Long-Term Cash Award Program": An undertaking by the Company to financially
reward a Key Employee at the end of a Performance Period, which undertaking is
contingent upon or measured by the attainment over the Performance Period of
specified performance objectives determined (on a consolidated or unconsolidated
basis) by changes in the 3-year compound annual growth rate (CAGR) in Total
Grace's core earnings before interest and taxes (core EBIT).

"Long-Term Cash Award": A cash award, to be paid in the future, which is granted
to Key Employees under the Company's long-term incentive program.

"Long-Term Cash Award Earned": The amount of cash earned by a Participant
pursuant to the terms of a Long-Term Cash Award.

"Participant": A Key Employee who is, or who is proposed to be, a recipient of a
Long-Term Cash Award.

"Performance Period": Except as provided herein, a period of three calendar
years over which a Long-Term Cash Award may be earned, as approved by the
Committee. The first Performance Period under this Plan will commence effective
January 1, 2005 and

will end on December 31, 2007. Performance Periods with respect to different
Long-Term Cash Awards to the same individual may overlap.

"Total Grace Core EBIT": The core earnings before interest and taxes (core
EBIT)" of the Company as reported on (and calculated in accordance with) the
statement of W. R. Grace & Co. Continuing Operations- Segment Basis.

"Remaining Long-Term Cash Award Payment": As defined on Page 4, the second
installment of the Long-Term Cash Award that may be paid after the end of the
Performance Period, based on Company performance for the entire Performance
Period.

"Subsidiary": A corporation, partnership, limited liability company or other
form of business association of which shares of common stock or other ownership
interests (i) having more than 50% of the voting power regularly entitled to
vote for directors (or equivalent management rights) or (ii) regularly entitled
to receive more than 50% of the dividends (or their equivalents) paid on the
common stock (or other ownership interests), are owned, directly or indirectly,
by the Company.

"Targeted Award": The amount of cash award specified in writing for a
Participant as his or her "Targeted Award" for a Performance Period and which is
subject to and covered by the terms and conditions of a Long-Term Cash Award.
This amount may be different from the Long-Term Cash Award Earned by an
individual.

Plan Administration
-------------------

The Plan shall be administered by the Committee, provided that no member of the
Committee shall be eligible to receive a Long-Term Cash Award while serving on
the Committee.

The Committee shall approve (i) the performance measurements and objectives for
each Long-Term Cash Award and (ii) the Performance Period over which a Long-Term
Cash Award is to be earned.

The Committee shall approve (i) the Key Employees who are to be granted
Long-Term Cash Awards and (ii) the Targeted Award subject to each Long-Term Cash
Award.

Long-Term Cash Awards
---------------------

The Committee may, at any time or from time to time, grant Long-Term Cash Awards
to Key Employees.

Each Long-Term Cash Award shall be evidenced by a written instrument containing
such terms and conditions as the Committee shall approve, provided the
instrument is consistent with these practices.

                                      (2)

No Long-Term Cash Award, nor any payment or right thereunder, shall be subject
in any manner to alienation, sale, transfer, assignment, pledge, encumbrance or
charge, except by will or the laws of descent and distribution, or by the terms
of a Participant's Designation of Beneficiary, if any, on file with the Company.

In the case of a Key Employee who becomes a Participant after the beginning of a
Performance Period, the Committee may ratably reduce the amount of the Targeted
Award covered by such Employee's Long-Term Cash Award or otherwise appropriately
adjust the terms of the Long-Term Cash Award to reflect the fact that the Key
Employee is to be a Participant for only part of the Performance Period.

It is the intention of the Committee that Long-Term Cash Awards be related to
the results of the core operations affected by the management actions taken by
the Participants. Subject to the administrative practices that apply to
termination or change in employment status and to the amendment or
discontinuance of Long-Term Cash Awards, the performance objectives applicable
to Long-Term Cash Awards will remain unchanged during the Performance Period
except as follows:

o    In the event of the divestment of a Business prior to completion of the
     Performance Period, both the performance objectives and results pertaining
     to that Business shall be eliminated for the full year in which the
     divestment occurs and for any subsequent years.

o    In general, acquisitions will be included in the performance results.

Termination or Change in Employment Status
------------------------------------------

A Participant shall forfeit all rights to any Award Payment, if, prior to the
date of payment of such Award Payment, the Participant (1) resigns without the
consent of the Committee, (2) retires under a retirement plan of the Company or
Subsidiary before age 62 without the consent of the Committee, or (3) is
terminated for cause.

If a Participant retires under a retirement plan of the Company or Subsidiary at
or after age 62, or ceases employment as a result of death or disability, or
ceases employment as a result of an involuntary termination after a Change in
Control of the Company (as defined herein), during a Performance Period, then
his rights in any Incomplete Long-Term Cash Award related to that Performance
Period shall thereupon vest, and he shall be entitled to receive any Award
Payment of any Long-Term Cash Award Earned he would otherwise have received (at
the time he would have otherwise received the Award Payment), except that the
amount of any Long-Term Cash Award Earned shall be reduced ratably in proportion
to the portion of the Performance Period during which the Participant was not an
employee. If a Participant ceases employment with the Company for any of the
reasons specified in this paragraph, after the completion of any Performance
Period (but before the payment of the Remaining Long-Term Cash Award Payment
related to the completed Performance Period), then his rights to any Long-Term
Cash Award Earned and to such Award Payment related to the completed Performance
Period shall thereupon vest, and he shall be entitled to receive such Award
Payment at the time he would have otherwise received the Payment.

                                      (3)

If a Participant ceases employment with the Company for any reason other than
those indicated in the previous two paragraphs (including by reason of
involuntary termination not for cause, except as provided above with respect to
involuntary termination after a Change in Control of the Company, or transfer of
employment to a buyer of any business unit of the Company), then his rights in
any Incomplete Long-Term Cash Award, and any Award Payment that is unpaid as of
the date the Participant ceases such employment, shall be determined by the
Committee (or the designee of the Committee, which may include the Chief
Executive Officer of the Company) as soon as practicable after the Participant
ceases such employment. All such determinations shall be final and binding on
all parties.

Except as modified by the provisions of the second and third paragraphs of this
section, payments due to Participants pursuant to the applicable preceding
paragraphs, above, shall be calculated and made in accordance with the
provisions described under the section entitled "Calculation of Long-Term Cash
Awards Earned: Form of Payment".

A leave of absence, if approved by the Committee, shall not be deemed a
termination or change of employment status for the purposes of this section,
but, unless the Committee otherwise directs, any Long-Term Cash Award Earned
that a Participant would otherwise have received under a Long-Term Cash Award
Program shall be reduced ratably in proportion to the portion of the Performance
Period during which the Participant was on such leave of absence.

Any consent, approval or direction which the Committee may give under this
section in respect of an event or transaction may be given before or after the
event or transaction.

Calculation of Long-Term Cash Awards Earned: Form of Payment
------------------------------------------------------------

Long-Term Cash Awards Earned will be paid to a Participant in two installments
(1) the first installment shall be paid in March of the third and final year of
the Performance Period and shall be equal to 50% of what is earned based on the
Company's performance for the first two calendar years of the applicable
Performance Period, but no more than 50% of the Participant's Targeted Award for
the first two years (the "Interim Long-Term Cash Award Payment"), and (2) the
balance, if any, of the Long-Term Cash Award Earned will be paid in March after
the end of the third and final year of the Performance Period (the "Remaining
Long-Term Cash Award Payment").

The Committee shall determine the extent to which the performance objectives of
a Long-Term Cash Award have been achieved during the Performance Period and the
amount of any Long-Term Cash Awards Earned (and the amount of any Award
Payment). All calculations in this regard shall be made in accordance with the
generally accepted accounting principles customarily applied by the Company and
shall be submitted to the Committee for its review and approval. The
determination of the Committee shall be final and binding.

                                      (4)

General
-------

Nothing in this document nor in any instrument executed pursuant hereto shall
confer upon a Participant any right to continue in the employ of the Company or
a Subsidiary, or shall affect the right of the Company or a Subsidiary to
terminate his or her employment with or without cause.

The Company or a Subsidiary may make such provisions as it may deem appropriate
for the withholding or any taxes that the Company or a Subsidiary determines it
is required to withhold in connection with any Long-Term Cash Award Earned.

Nothing in a Long-Term Cash Award is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other plan,
practice, or arrangement for the payment of compensation or benefits to
employees generally, or to any class or group of employees, which the Company or
a Subsidiary now has or may hereafter lawfully put into effect, including,
without limitation, any retirement, pension, group insurance, annual bonus,
stock purchase, stock bonus or stock option plan; provided, however, that no
amounts awarded or paid pursuant to any Long-Term Cash Award shall be included
or counted as compensation for the purposes of any employee benefit plan of the
Company or a Subsidiary where contributions to the plan, or the benefits
received from the plan, are measured or determined in whole or in part, by the
amount of the employee's compensation.

The grant of a Long-Term Cash Award to an employee of a Subsidiary shall be
contingent on the approval of the Long-Term Cash Award by the Subsidiary and the
Subsidiary's agreement that (i) the Company may administer such Award on its
behalf and (ii) the Subsidiary will make, or reimburse the Company for, the
payments called for by the Long-Term Cash Award. The provisions of this
paragraph and the obligations of the Subsidiary so undertaken may be waived, in
whole or in the part, from time to time by the Company.

Amendments and Discontinuance
-----------------------------

In the event acquisitions, divestments, substantial changes in tax or other laws
or in accounting principles or practices, natural disasters or other
extraordinary events render fulfillment of the performance objectives of a
Long-Term Cash Award impossible or impracticable, or result in the achievement
of the performance objectives without appreciable effort by the Participant, the
Committee may, but shall not be obligated to, amend any such Long-Term Cash
Award in any appropriate manner so that the Participant may earn Long-Term Cash
Awards comparable to those that might have been earned if the extraordinary
event had not occurred.

The Chief Executive Officer of the Company may approve such technical changes
and clarifications to the Long-Term Cash Award Program as necessary, provided
such

                                      (5)

changes or clarifications do not vary substantially from the terms and
conditions outlined in this description.

In the event a Change in Control of the Company (as defined herein) shall occur
or the Board of Directors has reason to believe that a Change of Control may
occur, the Committee may, with respect to any one or more Long-Term Cash Awards,
(i) reduce the length of a Performance Period to not less than one year, (ii)
make ratable adjustments to performance objectives and Targeted Awards, (iii)
change the methods of measuring the performance objectives, (iv) accelerate the
payment of any Long-Term Cash Awards Earned or any Award Payment, and (v) take
other action deemed by it to be appropriate and in the best interests of the
Company under the circumstances. For the purposes of this paragraph:

(A)  "Change in Control of the Company" means and shall be deemed to have
     occurred if (a) the Company determines that any "person" (as such term is
     used in Section 13(d) and 14 (d) of the Securities Exchange Act of 1934),
     other than a trustee or other fiduciary holding securities under an
     employee benefit plan of the Company or a corporation owned, directly or
     indirectly, by the stockholders of the Company in substantially the same
     proportions as their ownership of stock of the Company, has become the
     "beneficial owner" (as defined in Rule 13d-3 under such Act), directly or
     indirectly, of 20% or more of the outstanding common stock of the Company
     (provided, however, that a Change in Control shall not be deemed to have
     occurred if such person has become the beneficial owner of 20% or more of
     the outstanding Common Stock as the results of a sale of Common Stock by
     the Company that has been approved by the Board of Directors); or pursuant
     to a plan of reorganization which has been confirmed by the U.S. District
     Court or Bankruptcy Court having jurisdiction of the Company's Chapter 11
     case, Case No. 01-01139 (JJF), pursuant to an order of such Court which is
     final and nonappealable, and becomes effective); (ii) individuals who are
     Continuing Directors cease to constitute a majority of any class of
     directors of the Board; (iii) there occurs a reorganization, merger,
     consolidation or other corporate transaction involving the Company (a
     "Corporate Transaction"), in each case, with respect to which the
     stockholders of the Company immediately prior to such Corporate Transaction
     do not, immediately after the Corporate Transaction, own 50% or more of the
     combined voting power of the corporation resulting from such Corporate
     Transaction, provided that this clause (iii) shall not apply to a Corporate
     Transaction which is pursuant to section 363 of the Bankruptcy Code, or is
     pursuant to a plan of reorganization which has been confirmed by the U.S.
     District Court or Bankruptcy Court having jurisdiction of the Company's
     chapter 11 case, Case No. 01-01139 (JJF), pursuant to an order of such
     Court which is final and nonappealable, and becomes effective, or (iv) the
     shareholders of the Company approve a complete liquidation or dissolution
     of the Company.

(B)  "Continuing Director" means any member of the Board of Directors who was
     such a member on the date on which this Program was approved by the Board
     of Directors, and any successor to a Continuing Director who is approved as
     a nominee or elected

                                      (6)

     to succeed to a Continuing Director by a majority of Continuing Directors
     who are then members of the Board of Directors.

The granting of Long-Term Cash Awards may be amended or discontinued by the
Committee at any time.

No amendment or discontinuance of Long-Term Cash Awards shall, without a
Participant's consent, adversely affect his rights in any Long-Term Cash Awards
theretofore granted to him, except that, if the Committee so directs, all
Incomplete Long-Term Cash Awards may be terminated prospectively with the same
effect as a termination of employment under the second paragraph of the section
entitled "Termination or Change in Employment Status".

                                      (7)

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