8-K

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 8-K


                             CURRENT REPORT PURSUANT
                          TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


     Date of report (Date of earliest event reported)       APRIL 25, 2005
                                                     --------------------------

                                W. R. GRACE & CO.
- --------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


                                    DELAWARE
- --------------------------------------------------------------------------------
                 (State or Other Jurisdiction of Incorporation)


          1-13953                                        65-0773649
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 (Commission File Number)                     (IRS Employer Identification No.)


            7500 GRACE DRIVE
           COLUMBIA, MARYLAND                                          21044
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)                             (Zip Code)


                                 (410) 531-4000
- --------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


- --------------------------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

     [ ] Written communications pursuant to Rule 425 under the Securities Act
         (17 CFR 230.425)

     [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
         CFR 240.14a-12)

     [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
         Exchange Act (17 CFR 240.14d-2(b))

     [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
         Exchange Act (17 CFR 240.13e-4(c))






                                W. R. GRACE & CO.

                                    FORM 8-K
                                 CURRENT REPORT



Item 1.01         Entry into a Material Definitive Agreement

Alfred E. Festa Employment Agreement

         On April 25, 2005, the U.S. Bankruptcy Court for the District of
Delaware approved an employment agreement dated January 19, 2005 between W. R.
Grace & Co. and Alfred E. Festa (the "Festa Agreement"), providing for Mr.
Festa's service as President and Chief Executive Officer of W. R. Grace & Co.
effective June 1, 2005. The term of the Festa Agreement is for four years,
ending on May 31, 2009. Under the Festa Agreement, Mr. Festa is entitled to an
initial base annual salary of $760,000. His targeted award under Grace's annual
incentive compensation plan for 2005 and each calendar year thereafter is 100%
of his base salary earned during the applicable year (or greater, as determined
by the Grace Board of Directors). He will also continue to participate in the
Grace long-term incentive programs ("LTIPs"). Under a proposed 2005 LTIP (which
would cover the 2005-2007 performance period), Mr. Festa's targeted award would
be $1,690,000.

         If Mr. Festa's employment is terminated by Grace without cause, or by
him as a result of constructive discharge, prior to the expiration of the Festa
Agreement, he would be entitled to a severance payment equal to 2 times a dollar
amount equal to 175% of his annual base salary at the time of his termination.

         The Festa Agreement also provides that Mr. Festa will be entitled to a
retention payment of $1,750,000, payable in two installments. The first
installment in the amount of $750,000 would be paid on November 13, 2007, and
$1,000,000 would be paid November 13, 2008. Mr. Festa would not be entitled to
any installment of the retention payment if his employment with Grace is
terminated prior to the date the installment is scheduled for payment, except in
the case where his termination occurs after Grace emerges from Chapter 11 and is
the result of (i) his resignation as a result of constructive discharge, (ii)
termination by Grace not for cause, or (iii) his death or disability. In the
event Grace emerges from its Chapter 11 bankruptcy prior to May 13, 2007, the
Festa Agreement provides for $750,000 of the retention payment to be paid six
months after the date Grace emerges from Chapter 11, and the remaining
$1,000,000 of the retention payment to be paid 18 months after such emergence.
The Festa Agreement is attached as Exhibit 10.1 to this Report.


Paul J. Norris Consulting Agreement

         On April 25, 2005, the U.S. Bankruptcy Court for the District of
Delaware approved an agreement dated January 19, 2005 between W. R. Grace & Co.
and Paul J. Norris, (the "Norris Agreement") providing for Mr. Norris to perform
consulting services to Grace on Chapter 11





reorganization matters following his retirement as Chief Executive Officer on
May 31, 2005. (Mr. Norris will remain as non-executive Chairman of the Board of
Directors.) Under the Norris Agreement, Mr. Norris would initially be paid a
monthly retainer equal to $35,416.67 (i.e., $425,000 per year), provided that
the retainer would be subject to adjustment downward if Mr. Norris dedicates
significantly less than one-half of a regular 40 hour work week to perform his
duties under the Norris Agreement. It is anticipated that Mr. Norris will
continue to provide services under the Norris Agreement until Grace emerges from
Chapter 11 protection, provided that the Agreement may be terminated by the
Grace Board of Directors or Mr. Norris at any time upon 30 days' written notice,
without the obligation to make any post-termination payments, and in any event
will terminate 90 days after Grace emerges from Chapter 11. During the period of
the Norris Agreement, Mr. Norris will have access to office space and
administrative services at Grace's Columbia headquarters. In addition, during
this period and so long as he remains a director, Mr. Norris would be eligible
to receive the same compensation payable to other non-employee directors of the
Company. The Norris Agreement is attached as Exhibit 10.2 to this Report.


Richard C. Brown Employment Agreement

         On April 26, 2005 W. R. Grace & Co. and Richard C. Brown entered into
an agreement (the "Brown Agreement") dated April 22, 2005 providing for Mr.
Brown's employment as a Vice President of W. R. Grace & Co. and President of its
Performance Chemicals business segment effective May 1, 2005. Under the terms of
the Brown Agreement Mr. Brown will receive a "sign-on" bonus of $350,000 payable
on May 12, 2005 (which he agrees to re-pay if he terminates his employment with
the Company anytime before May 1, 2006). He will receive an initial base salary
of $375,000. He will also be entitled to participate in Grace's annual incentive
compensation program; for the 2005 calendar year he will be guaranteed a minimum
payout of $285,000 under such program. In addition, he will receive targeted
awards under the Company's long-term incentive programs (the "LTIPs") as
follows: $335,000 for the 2005-2007 performance period (subject to approval by
the Bankruptcy Court of the Company's 2005-2007 LTIP), $400,000 for the
2004-2006 performance period and $400,000 for the 2003-2005 performance period.
Any awards under the LTIPs will be prorated to reflect the actual time during
the applicable performance period that Mr. Brown was an employee of the Company.

         The agreement also provides that Mr. Brown will receive a severance
payment equal to 1.5 times his annual base salary, if he is involuntarily
terminated by the Company under conditions that would entitle him to severance
under the general severance pay plan for the Company's salaried employees.

         In addition, the agreement provides that Mr. Brown will receive a
supplemental pension benefit (in addition to any pension benefit that he may
otherwise accrue under the Grace Salaried Retirement Plan and Grace Supplemental
Retirement Plan (the "Grace Retirement Plans")), which will be calculated by
applying the benefit formula of the Grace Retirement Plans to additional years
of credited service, as follows: Mr. Brown will be credited with an additional
year of credited service for each year he remains an employee of the Company for
the first four years of his employment, and with six additional years of service
as of his fifth anniversary of employment with the Company (provided he is still
employed by the Company as of that





anniversary), for a maximum total of 10 additional years of credited service. If
Mr. Brown is terminated not for cause prior to such fifth anniversary, he will
be entitled to a prorated portion of the supplemental pension benefit. The
supplemental pension benefit will be paid to Mr. Brown from the general assets
of the Company. The Brown Agreement is attached as Exhibit 10.3 to this report.


Annual Incentive Compensation Plan Targeted Awards

         On April 27, 2005 the Board of Directors of Grace approved 2005 annual
incentive compensation award targets for the executive officers and other
management employees. The targets for the executive officers (other than Fred
Festa and Richard Brown, whose annual incentive compensation awards are governed
by their respective employment agreements) range from 65% to 78% of base salary
and may not exceed twice such amounts. In order to achieve the targeted awards,
Grace's 2005 pretax operating income, after certain adjustments, must be 10%
higher than 2004 pretax operating income (after applying the same types of
adjustments). No awards will be earned if 2005 pretax operating income is less
then 80% of 2004 pretax operating income.


Item 5.03         Amendments to Articles of Incorporation or By-laws; Change in
                  Fiscal Year

         On April 27, 2005 the Board of Directors of Grace approved amendments
to Grace's By-laws to provide that the Chairman need not be the Chief Executive
Officer of the company. These amendments were adopted in contemplation of the
May 31, 2005 retirement of Paul J. Norris as Chief Executive Officer of Grace;
Mr. Norris will remain a non-executive Chairman.


Item 9.01         Financial Statements and Exhibits

       (c)        Exhibits

       Exhibit No.

       3.1        Amended and Restated By-laws of W. R. Grace & Co.
       10.1       Alfred E. Festa Employment Agreement
       10.2       Paul J. Norris Consulting Agreement
       10.3       Richard C. Brown Employment Agreement








                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed by the undersigned,
thereunto duly authorized.

                                                      W. R. GRACE & CO.
                                                ----------------------------
                                                        (Registrant)



                                                By    /s/ Mark A. Shelnitz
                                                   -------------------------
                                                        Mark A. Shelnitz
                                                         Secretary

Dated:  April 29, 2005

EX-3.1

                                                                    EXHIBIT 3.1


                                               Adopted on April 27, 2005

                              AMENDED AND RESTATED
                                     BY-LAWS
                                       OF
                                W. R. GRACE & CO.

              INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE


                                    ARTICLE I
                               OFFICES AND RECORDS

         Section 1.1. Delaware Office. The principal office of the Corporation
in the State of Delaware shall be located in Wilmington, Delaware, and the name
and address of its registered agent is The Prentice-Hall Corporation System,
Inc., 1013 Centre Road, Wilmington, Delaware.

         Section 1.2. Other Offices. The Corporation may have such other
offices, either within or without the State of Delaware, as the Board of
Directors may designate or as the business of the Corporation may from time to
time require.

         Section 1.3. Books and Records. The books and records of the
Corporation may be kept outside the State of Delaware at such place or places as
may from time to time be designated by the Board of Directors.


                                   ARTICLE II
                                  STOCKHOLDERS

         Section 2.1. Annual Meeting. The annual meeting of the stockholders of
the Corporation shall be held annually (a) on the tenth day of May, or (b) if
such day be a Saturday, Sunday or a holiday at the place where the meeting is to
be held, on the last business day preceding or on the first business day after
such tenth day of May, as may be fixed by the Board of Directors, or (c) on such
other date as may be fixed by the Board of Directors.

         Section 2.2. Special Meeting. Subject to the rights of the holders of
any series of stock having a preference over the Common Stock of the Corporation
as to dividends or upon liquidation ("Preferred Stock") with respect to such
series of Preferred Stock, special meetings of the stockholders may be called
only by the Chairman, by the President or by the Board of Directors pursuant to
a resolution adopted by a majority of the total number of directors which the
Corporation would have if there were no vacancies (the "Whole Board").





         Section 2.3. Place of Meeting. The Chairman, the President or the Board
of Directors, as the case may be, may designate the place of meeting for any
annual meeting or for any special meeting of the stockholders called by the
Chairman, the President or the Board of Directors. If no designation is so made,
the place of meeting shall be the principal office of the Corporation.

         Section 2.4. Notice of Meeting. Written or printed notice, stating the
place, date and time of the meeting and the purpose or purposes for which the
meeting is called, shall be delivered by the Corporation not less than ten (10)
days nor more than sixty (60) days before the date of the meeting, either
personally or by mail, to each stockholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the U.S. mail with postage thereon prepaid, addressed to the stockholder at
his address as it appears on the stock transfer books of the Corporation. Such
further notice shall be given as may be required by law. Only such business
shall be conducted at a special meeting of stockholders as shall have been
brought before the meeting pursuant to the Corporation's notice of meeting.
Meetings may be held without notice if all stockholders entitled to vote are
present, or if notice is waived by those not present in accordance with Section
6.4 of these By-laws. Any previously scheduled meeting of the stockholders may
be postponed, and (unless the Certificate of Incorporation otherwise provides)
any special meeting of the stockholders may be cancelled, by resolution of the
Board of Directors upon public notice given prior to the date previously
scheduled for such meeting of stockholders.

         Section 2.5. Quorum and Adjournment. Except as otherwise provided by
law or by the Certificate of Incorporation, the holders of a majority of the
outstanding shares of the Corporation entitled to vote generally in the election
of directors (the "Voting Stock"), represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders, except that when specified
business is to be voted on by a class or series of stock voting as a class, the
holders of a majority of the voting power of the shares of such class or series
shall constitute a quorum of such class or series for the transaction of such
business. The chairman of the meeting or a majority of the shares so represented
may adjourn the meeting from time to time, whether or not there is a quorum. No
notice of the time and place of adjourned meetings need be given except as
required by law. The stockholders present at a duly called meeting at which a
quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.

         Section 2.6. Proxies. At all meetings of stockholders, a stockholder
may vote by proxy executed in writing (or in any other manner permitted by law)
by the stockholder, or by his duly authorized attorney-in-fact.

         Section 2.7.  Notice of Stockholder Business and Nominations.



                                      -2-




         (A) Annual Meetings of Stockholders. (1) Nominations of persons for
election to the Board of Directors of the Corporation and the proposal of
business to be considered by the stockholders may be made at an annual meeting
of stockholders (a) pursuant to the Corporation's notice of meeting, (b) by or
at the direction of the Board of Directors or (c) by any stockholder of the
Corporation who was a stockholder of record at the time of giving of the notice
provided for in this Section 2.7, who is entitled to vote at the meeting and who
complies with the notice procedures set forth in this Section 2.7.

         (2) For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of
this Section 2.7, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation, and such other business must
otherwise be a proper matter for stockholder action. To be timely, a
stockholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on the
60th day nor earlier than the close of business on the 90th day prior to the
first anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is more than 30 days
before or more than 60 days after such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the close of
business on the 90th day prior to such annual meeting and not later than the
close of business on the later of the 60th day prior to such annual meeting or
the 10th day following the day on which public announcement of the date of such
meeting is first made by the Corporation. In no event shall the public
announcement of an adjournment of an annual meeting commence a new time period
for the giving of a stockholder's notice as described above. Such stockholder's
notice shall set forth (a) as to each person whom the stockholder proposes to
nominate for election or re-election as a director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors in an election contest, or is otherwise required, in each
case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and Rule 14a-11 thereunder (including such
person's written consent to being named in the proxy statement as a nominee and
to serving as a director if elected); (b) as to any other business that the
stockholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (c) as to the stockholder giving the notice and the beneficial owner,
if any, on whose behalf the nomination or proposal is made (i) the name and
address of such stockholder, as they appear on the Corporation's books, and of
such beneficial owner and (ii) the class and number of shares of the Corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner.

         (3) Notwithstanding anything in the second sentence of paragraph (A)(2)
of this Section 2.7 to the contrary, in the event that the number of directors
to be elected to the Board of Directors of the Corporation is increased and
there is no public announcement by the Corporation naming all of the nominees
for election as director or specifying the size of the increased Board of
Directors at least 70 days prior to the first anniversary of the



                                      -3-



preceding year's annual meeting, a stockholder's notice required by this Section
2.7 shall also be considered timely, but only with respect to nominees for any
new positions created by such increase, if it shall be delivered to the
Secretary at the principal executive offices of the Corporation not later than
the close of business on the 10th day following the day on which such public
announcement is first made by the Corporation.

          (B) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this Section 2.7, who shall be entitled to vote at the meeting
and who complies with the notice procedures set forth in this Section 2.7. In
the event the Corporation calls a special meeting of stockholders for the
purpose of electing one or more directors to the Board of Directors, any such
stockholder may nominate a person or persons (as the case may be), for election
to such position(s) as specified in the Corporation's notice of meeting, if the
stockholder's notice required by paragraph (A)(2) of this Section 2.7 shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the close of business on the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement of an adjournment of a special meeting
commence a new time period for the giving of a stockholder's notice as described
above.

         (C) General. (1) Only such persons who are nominated in accordance with
the procedures set forth in this Section 2.7 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 2.7. Except as otherwise provided by law, the
Certificate of Incorporation or these By-laws, the chairman of the meeting shall
have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made or proposed, as the case may
be, in accordance with the procedures set forth in this Section 2.7 and, if any
proposed nomination or business is not in compliance with this Section 2.7, to
declare that such defective proposal or nomination shall be disregarded.

         (2) For purposes of this Section 2.7, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or a comparable national news service or in a document publicly filed by
the Corporation with the Securities and Exchange Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act.



                                      -4-



         (3) Notwithstanding the foregoing provisions of this Section 2.7, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this by-law. Nothing in this Section 2.7 shall be deemed to affect any
rights (i) of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under
specified circumstances.

         Section 2.8. Procedure for Election of Directors; Required Vote.
Election of directors at all meetings of the stockholders at which directors are
to be elected shall be by ballot, and, subject to the rights of the holders of
any series of Preferred Stock to elect directors under specified circumstances,
a plurality of the votes cast thereat shall elect directors. Except as otherwise
provided by law, the Certificate of Incorporation, or these By-laws, in all
matters other than the election of directors, the affirmative vote of a majority
of the shares present in person or represented by proxy at the meeting and
entitled to vote on the matter shall be the act of the stockholders.

         Section 2.9. Inspectors of Elections; Opening and Closing the Polls.
The Board of Directors by resolution shall appoint one or more inspectors, which
inspector or inspectors may include individuals who serve the Corporation in
other capacities, including, without limitation, as officers, employees, agents
or representatives, to act at meetings of stockholders and make written reports
thereof. One or more persons may be designated as alternate inspectors to
replace any inspector who fails to act. If no inspector or alternate has been
appointed to act or is able to act at a meeting of stockholders, the chairman of
the meeting shall appoint one or more inspectors to act at the meeting. Each
inspector, before discharging his or her duties, shall take and sign an oath
faithfully to execute the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspectors shall have the
duties prescribed by law.

         The chairman of the meeting shall fix and announce at the meeting the
date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote at a meeting.



                                      -5-




                                   ARTICLE III
                               BOARD OF DIRECTORS

                  Section 3.1. General Powers. The business and affairs of the
         Corporation shall be managed under the direction of the Board of
         Directors. In addition to the powers and authorities by these By-laws
         expressly conferred upon them, the Board of Directors may exercise all
         such powers of the Corporation and do all such lawful acts and things
         as are not by statute or by the Certificate of Incorporation or by
         these By-laws required to be exercised or done by the stockholders. The
         Board of Directors may choose one of its members to be Chairman, and
         shall fill any vacancy in the position of Chairman at such time and in
         such manner as the Board of Directors shall determine. The Chairman
         shall preside at all meetings of the Board of Directors and of
         stockholders. The Chairman shall not be an officer of the Corporation
         unless the Board of Directors shall elect him an officer pursuant to
         Section 4.1 of these By-laws.

         Section 3.2. Number, Tenure and Qualifications. Subject to the rights
of the holders of any series of Preferred Stock to elect directors under
specified circumstances, the number of directors shall be fixed from time to
time exclusively pursuant to a resolution adopted by a majority of the Whole
Board. The directors, other than those who may be elected by the holders of any
series of Preferred Stock under specified circumstances, shall be divided, with
respect to the time for which they severally hold office, into three classes, as
nearly equal in number as is reasonably possible, designated Class I, Class II
and Class III, with the initial term of office of the Class I directors to
expire at the 1999 annual meeting of stockholders, the initial term of office of
the Class II directors to expire at the 2000 annual meeting of stockholders and
the initial term of office of the Class III directors to expire at the 2001
annual meeting of stockholders, with each director to hold office until his or
her successor shall have been duly elected and qualified. At each annual meeting
of stockholders, commencing with the 1999 annual meeting, directors elected to
succeed those directors whose terms then expire shall be elected for a term of
office to expire at the third succeeding annual meeting of stockholders after
their election, with each director to hold office until his or her successor
shall have been duly elected and qualified.

         Section 3.3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this Section 3.3 immediately
after, and at the same place as, the Annual Meeting of Stockholders. The Board
of Directors may fix the time and place for the holding of additional regular
meetings without notice.

         Section 3.4. Special Meetings. Special meetings of the Board of
Directors shall be called at the request of the Chairman, the President or a
majority of the directors then in office. The person or persons authorized to
call special meetings of the Board of Directors may fix the place and time of
such meetings.

         Section 3.5. Notice. Notice of any special meeting or notice of a
change in the time or place of any regular meeting of the Board of Directors
shall be given to each director at his or her business or residence in writing
by hand delivery, first-class or overnight mail or courier service,


                                      -6-




telegram or facsimile transmission, or orally by telephone. If mailed by
first-class mail, such notice shall be deemed adequately delivered when
deposited in the U.S. mails so addressed, with postage thereon prepaid, at least
five (5) days before such meeting. If by telegram, overnight mail or courier
service, such notice shall be deemed adequately delivered when the telegram is
delivered to the telegraph company or the notice is delivered to the overnight
mail or courier service company at least twenty-four (24) hours before such
meeting. If by facsimile transmission, such notice shall be deemed adequately
delivered when the notice is transmitted at least twelve (12) hours before such
meeting. If by telephone, the notice shall be communicated to the director or
his or her representative or answering machine. If by telephone or by hand
delivery, the notice shall be given at least twenty-four (24) hours prior to the
time set for the meeting. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice of such meeting, except for amendments to these By-laws,
as provided under Section 8.1. A meeting may be held at any time without notice
if all the directors are present or if those not present waive notice of the
meeting in accordance with Section 6.4 of these By-laws.

                  Section 3.6. Action by Consent of Board of Directors. Any
         action required or permitted to be taken at any meeting of the Board of
         Directors or of any committee thereof may be taken without a meeting if
         all members of the Board of Directors or committee, as the case may be,
         consent thereto in writing, and the writing or writings are filed with
         the minutes of proceedings of the Board of Directors or committee.

                  Section 3.7. Conference Telephone Meetings. Members of the
         Board of Directors, or any committee thereof, may participate in a
         meeting of the Board of Directors or such committee by means of
         conference telephone or similar communications equipment by means of
         which all persons participating in the meeting can hear each other, and
         such participation in a meeting shall constitute presence in person at
         such meeting.

                  Section 3.8. Quorum. Subject to Section 3.9, a number of
         directors equal to at least a majority of the Whole Board shall
         constitute a quorum for the transaction of business. If at any meeting
         of the Board of Directors there shall be less than a quorum present, a
         majority of the directors present may adjourn the meeting from time to
         time without further notice. The act of the majority of the directors
         present at a meeting at which a quorum is present shall be the act of
         the Board of Directors. The directors present at a duly organized
         meeting may continue to transact business until adjournment,
         notwithstanding the withdrawal of enough directors to leave less than a
         quorum.

                  Section 3.9. Vacancies. Subject to applicable law and the
         rights of the holders of any series of Preferred Stock with respect to
         such series of Preferred Stock, and unless the Board of Directors
         otherwise determines, vacancies resulting from death, resignation,
         retirement, disqualification, removal from office or other cause, and
         newly created directorships resulting from any increase in the
         authorized number of directors, may be filled only by the affirmative
         vote of a majority of the remaining directors, though less than a
         quorum of the Board of Directors, and directors so chosen shall hold
         office for a term


                                      -7-



         expiring at the annual meeting of stockholders at which the term of
         office of the class to which they have been elected expires and until
         such director's successor shall have been duly elected and qualified.
         No decrease in the number of authorized directors constituting the
         Whole Board shall shorten the term of any incumbent director.

                  Section 3.10. Committees. The Board of Directors may establish
         one or more committees. Each Committee shall consist of two or more
         directors of the Corporation designated by the Board of Directors. The
         Board of Directors may designate one or more directors as alternate
         members of any committee, who may replace any absent or disqualified
         member at any meeting of the committee. Any such committee may to the
         extent permitted by law exercise such powers and shall have such
         responsibilities as shall be specified in the designating resolution.
         In the absence or disqualification of any member of such committee or
         committees, the member or members thereof present at any meeting and
         not disqualified from voting, whether or not constituting a quorum, may
         unanimously appoint another member of the Board of Directors to act at
         the meeting in the place of any such absent or disqualified member.
         Each committee shall keep written minutes of its proceedings and shall
         report such proceedings to the Board of Directors when requested.

                  A majority of any committee may determine its action and fix
         the time and place of its meetings, unless the Board of Directors shall
         otherwise provide. Notice of such meetings shall be given to each
         member of the committee in the manner provided for in Section 3.5 of
         these By-laws. The Board of Directors shall have the power at any time
         to fill vacancies in, to change the membership of, or to dissolve any
         such committee. Nothing herein shall be deemed to prevent the Board of
         Directors from appointing one or more committees consisting in whole or
         in part of persons who are not directors of the Corporation; provided,
         however, that no such committee shall have or may exercise any
         authority of the Board of Directors.

                  The term of office of a committee member shall be as provided
         in the resolution of the Board designating him or her but shall not
         exceed his or her term as a director. If prior to the end of his term,
         a committee member should cease to be a director, he or she shall cease
         to be a committee member. Any member of a committee may resign at any
         time by giving written notice to the Board of Directors, the Chairman,
         the President or the Secretary. Such resignation shall take effect as
         provided in Section 6.6 of these By-laws in the case of resignations by
         directors. Any member of a committee may be removed from such
         committee, either with or without cause, at any time, by resolution
         adopted by a majority of the whole Board. Any vacancy in a committee
         shall be filled by the Board of Directors in the manner prescribed by
         these By-laws for the original designation of the members of such
         committee.

                  Section 3.11. Committee on Officers' Compensation. Pursuant to
         Section 3.10 of these By-laws, the Board of Directors shall designate a
         committee to evaluate the performance of, and to recommend the
         appropriate level of compensation for, officers of


                                      -8-



         the Corporation. Such committee shall have access to an advisor not
         otherwise serving the Corporation. Each member of such committee shall
         be an "independent director," as that term is defined in the following
         sentence. For purposes of this Section 3.11, an "independent director"
         shall mean a person who (a) has not been employed by the Corporation
         within the past five years; (b) is not, and is not affiliated with, a
         firm that is an advisor or consultant to the Corporation; (c) is not
         affiliated with any customer or supplier of the Corporation whose
         purchases from and/or sales to the Corporation exceed 3% of the sales
         and revenues of such customer or supplier for its most recently
         completed fiscal year; (d) has no personal services contract with the
         Corporation; (e) is not affiliated with a tax-exempt entity, not
         otherwise affiliated with the Corporation, that receives contributions
         from the Corporation that exceed 3% of such entity's gross
         contributions for its most recently completed fiscal year; and (f) is
         not a member of the "immediate family" (as defined in Item 404(a) of
         Securities and Exchange Commission Regulation S-K) of any person
         described in clauses (a) through (e).

                  Section 3.12. Removal. Subject to the rights of the holders of
         any series of Preferred Stock with respect to such series of Preferred
         Stock, any director, or the entire Board of Directors, may be removed
         from office at any time by the stockholders, but only for cause.

                  Section 3.13. Records. The Board of Directors shall cause to
         be kept a record containing the minutes of the proceedings of the
         meetings of the Board of Directors and of the stockholders, appropriate
         stock books and registers and such books of records and accounts as may
         be necessary for the proper conduct of the business of the Corporation.


                                   ARTICLE IV
                                    OFFICERS

                  Section 4.1. Elected Officers. The elected officers of the
         Corporation shall be a President, a Secretary, a Treasurer, and such
         other officers (including, without limitation, a Chairman and a Chief
         Financial Officer) as the Board of Directors may deem proper from time
         to time. If the Board of Directors elects a Chairman as an officer, the
         Chairman shall be chosen from among the directors. Each officer elected
         by the Board of Directors shall have such powers and duties as
         generally pertain to his or her respective office, subject to the
         specific provisions of this ARTICLE IV. Such officers shall also have
         such powers and duties as may be conferred from time to time by the
         Board of Directors. The Board of Directors may from time to time elect,
         or the Chairman (if an elected officer) or President may appoint, such
         assistant officers (including one or more Assistant Vice Presidents,
         Assistant Secretaries, Assistant Treasurers and Assistant Controllers)
         as may be necessary or desirable for the conduct of the business of the
         Corporation. Such assistant officers shall have such duties and shall
         hold their offices for such terms as shall be


                                      -9-



         provided in these By-laws or as may be prescribed by the Board of
         Directors or by the Chairman (if an elected officer) or President, as
         the case may be.

                  Section 4.2. Election and Term of Office. The elected officers
         of the Corporation shall be elected annually by the Board of Directors
         at the regular meeting of the Board of Directors held after the annual
         meeting of the stockholders or at any other time as the Board of
         Directors may deem proper. Each officer shall hold office until his
         successor shall have been duly elected and shall have qualified or
         until his death or until he shall resign, but any officer may be
         removed from office at any time by the affirmative vote of a majority
         of the Whole Board or, except in the case of an officer elected by the
         Board of Directors, by the Chairman (if an elected officer) or
         President. Such removal shall be without prejudice to the contractual
         rights, if any, of the person so removed.

                  Section 4.3. Chairman. The Chairman shall preside at all
         meetings of the stockholders and of the Board of Directors and may be
         designated as the Chief Executive Officer of the Company. If elected as
         Chief Executive Officer, the Chairman shall be responsible for the
         general management of the affairs of the Corporation and shall perform
         all duties incidental to his office which may be required by law and
         all such other duties as are properly required of him by the Board of
         Directors. In such capacity, he shall make reports to the Board of
         Directors and the stockholders, and shall see that all orders and
         resolutions of the Board of Directors and of any committee thereof are
         carried into effect. The Chairman may also serve as President, if so
         elected by the Board of Directors.

                  Section 4.4. President. The President may be designated as the
         Chief Executive Officer of the Corporation. If elected as Chief
         Executive Officer, the President shall be responsible for the general
         affairs of the Corporation and shall perform all duties incidental to a
         chief executive officer and all such other duties as may be required by
         law or as are properly required of him by the Board of Directors. In
         such capacity, he shall make reports to the Board of Directors and the
         stockholders, and shall see that all orders and resolutions of the
         Board of Directors and of any committee thereof are carried into
         effect. If the President is not elected as Chief Executive Officer, the
         President shall act in a general executive capacity and shall assist
         the Chief Executive Officer in the administration and operation of the
         Corporation's business and the general supervision of its policies and
         affairs. In the absence of or the inability to act of the Chairman, the
         President shall perform all duties of the Chairman and preside at all
         meetings of stockholders and of the Board of Directors.

                  Section 4.5. Vice Presidents. Each Vice President shall have
         such powers and shall perform such duties as shall be assigned to him
         by the Board of Directors.

                  Section 4.6. Chief Financial Officer. The Chief Financial
         Officer (if any) shall be a Vice President and act in an executive
         financial capacity. He shall assist the Chairman and the President in
         the general supervision of the Corporation's financial policies and
         affairs.


                                      -10-



                  Section 4.7. Treasurer. The Treasurer shall exercise general
         supervision over the receipt, custody and disbursement of corporate
         funds. The Treasurer shall cause the funds of the Corporation to be
         deposited in such banks as may be authorized by the Board of Directors,
         or in such banks as may be designated as depositaries in the manner
         provided by resolution of the Board of Directors. He shall have such
         further powers and duties and shall be subject to such directions as
         may be granted or imposed upon him from time to time by the Board of
         Directors, the Chairman or the President.

                  Section 4.8. Secretary. The Secretary shall keep or cause to
         be kept in one or more books provided for that purpose, the minutes of
         all meetings of the Board of Directors, the committees of the Board of
         Directors and the stockholders; he shall see that all notices are duly
         given in accordance with the provisions of these By-laws and as
         required by law; he shall be custodian of the records and the seal of
         the Corporation and affix and attest the seal to all stock certificates
         of the Corporation (unless the seal of the Corporation on such
         certificates shall be a facsimile, as hereinafter provided) and affix
         and attest the seal to all other documents to be executed on behalf of
         the Corporation under its seal; and he shall see that the books,
         reports, statements, certificates and other documents and records
         required by law to be kept and filed are properly kept and filed; and
         in general, he shall perform all the duties incident to the office of
         Secretary and such other duties as from time to time may be assigned to
         him by the Board of Directors, the Chairman or the President.

                  Section 4.9. Controller. The Controller shall have general
         control, charge and supervision of the accounts of the Corporation. He
         shall see that proper accounts are maintained and that all accounts are
         properly credited from time to time. He shall prepare or cause to be
         prepared the financial statements of the Corporation.

                  Section 4.10. Removal. Any officer elected by the Board of
         Directors may be removed by the affirmative vote of a majority of the
         Whole Board whenever, in their judgment, the best interests of the
         Corporation would be served thereby. Any assistant officer appointed by
         the Chairman or the President may be removed by him whenever, in his
         judgment, the best interests of the Corporation would be served
         thereby. No elected officer shall have any contractual rights against
         the Corporation for compensation by virtue of such election beyond the
         date of the election of his successor, his death, his resignation or
         his removal, whichever event shall first occur, except as otherwise
         provided in an employment contract or under an employee deferred
         compensation plan.

                  Section 4.11. Vacancies. A newly created elected office and a
         vacancy in any elected office because of death, resignation, or removal
         may be filled by the Board of Directors for the unexpired portion of
         the term at any meeting of the Board of Directors.


                                      -11-


                                    ARTICLE V
                        STOCK CERTIFICATES AND TRANSFERS

                  Section 5.1. Stock Certificates and Transfers. The interest of
         each stockholder of the Corporation shall be evidenced by certificates
         for shares of stock in such form as the appropriate officers of the
         Corporation may from time to time prescribe. The shares of the stock of
         the Corporation shall be transferred on the books of the Corporation by
         the holder thereof in person or by his attorney, upon surrender for
         cancellation of certificates for at least the same number of shares,
         with an assignment and power of transfer endorsed thereon or attached
         thereto, duly executed, with such proof of the authenticity of the
         signature as the Corporation or its agents may reasonably require.

                  The certificates of stock shall be signed, countersigned and
         registered in such manner as the Board of Directors may by resolution
         prescribe, which resolution may permit all or any of the signatures on
         such certificates to be in facsimile. In case any officer, transfer
         agent or registrar who has signed or whose facsimile signature has been
         placed upon a certificate has ceased to be such officer, transfer agent
         or registrar before such certificate is issued, it may be issued by the
         Corporation with the same effect as if he were such officer, transfer
         agent or registrar at the date of issue.

                  Section 5.2. Lost, Stolen or Destroyed Certificates. No
         certificate for shares of stock in the Corporation shall be issued in
         place of any certificate alleged to have been lost, destroyed or
         stolen, except on production of such evidence of such loss, destruction
         or theft and on delivery to the Corporation of a bond of indemnity in
         such amount, upon such terms and secured by such surety, as the Board
         of Directors or any financial officer may in its or his discretion
         require.



                                   ARTICLE VI
                            MISCELLANEOUS PROVISIONS

                  Section 6.1. Fiscal Year. The fiscal year of the Corporation
         shall begin on the first day of January and end on the thirty-first day
         of December of each year.

                  Section 6.2. Dividends. The Board of Directors may from time
         to time declare, and the Corporation may pay, dividends on its
         outstanding shares in the manner and upon the terms and conditions
         provided by law and the Certificate of Incorporation.

                  Section 6.3. Seal. The corporate seal shall have enscribed
         thereon the words "Corporate Seal," the year of incorporation and
         around the margin thereof the words "W. R. Grace & Co."



                                      -12-



                  Section 6.4. Waiver of Notice. Whenever any notice is required
         to be given to any stockholder or director of the Corporation under the
         provisions of the General Corporation Law of the State of Delaware (the
         "GCL") or these By-laws, a waiver thereof in writing, signed by the
         person or persons entitled to such notice, whether before or after the
         time stated therein, shall be deemed equivalent to the giving of such
         notice. The attendance of any stockholder at a meeting in person or by
         proxy, without protesting at the beginning of the meeting the lack of
         notice of such meeting, shall constitute a waiver of notice of such
         stockholder. Neither the business to be transacted at, nor the purpose
         of, any annual or special meeting of the stockholders or the Board of
         Directors or committee thereof need be specified in any waiver of
         notice of such meeting.

                  Section 6.5. Audits. The accounts, books and records of the
         Corporation shall be audited upon the conclusion of each fiscal year by
         an independent certified public accountant selected by the Board of
         Directors, and it shall be the duty of the Board of Directors to cause
         such audit to be done annually.

                  Section 6.6. Resignations. Any director or any officer or
         assistant officer, whether elected or appointed, may resign at any time
         by giving written notice of such resignation to the Chairman, the
         President, or the Secretary, and such resignation shall be deemed to be
         effective as of the close of business on the date said notice is
         received by the Chairman, the President, or the Secretary, or at such
         later time as is specified therein. No formal action shall be required
         of the Board of Directors or the stockholders to make any such
         resignation effective.

                  Section 6.7. Indemnification and Insurance.

                  (A) Each person who was or is made a party or is threatened to
         be made a party to or is involved in any action, suit, or proceeding,
         whether civil, criminal, administrative or investigative (hereinafter,
         a "proceeding"), by reason of the fact that he or she or a person of
         whom he or she is the legal representative is or was a director or
         officer of the Corporation or is or was serving at the request of the
         Corporation as a director, officer, employee or agent of another
         corporation or of a partnership, joint venture, trust or other
         enterprise, including service with respect to employee benefit plans
         maintained or sponsored by the Corporation, whether the basis of such
         proceeding is alleged action in an official capacity as a director,
         officer, employee or agent or in any other capacity while serving as a
         director, officer, employee or agent, shall be indemnified and held
         harmless by the Corporation to the fullest extent authorized by the GCL
         as the same exists or may hereafter be amended (but, in the case of any
         such amendment, only to the extent that such amendment permits the
         Corporation to provide broader indemnification rights than said law
         permitted the Corporation to provide prior to such amendment), against
         all expense, liability and loss (including attorneys' fees, judgments,
         fines, ERISA excise taxes or penalties and amounts paid or to be paid
         in settlement) reasonably incurred or suffered by such person in
         connection therewith, and such indemnification shall continue as to a
         person who has ceased to be a director, officer, employee or agent and
         shall inure to the


                                      -13-



         benefit of his or her heirs, executors and administrators; provided,
         however, that except as provided in paragraph (C) of this Section 6.7,
         the Corporation shall indemnify any such person seeking indemnification
         in connection with a proceeding (or part thereof) initiated by such
         person only if such proceeding (or part thereof) was authorized by the
         Board of Directors. The right to indemnification conferred in this
         Section 6.7 shall be a contract right and shall include the right to be
         paid by the Corporation the expenses incurred in defending any such
         proceeding in advance of its final disposition, such advances to be
         paid by the Corporation within 20 days after the receipt by the
         Corporation of a statement or statements from the claimant requesting
         such advance or advances from time to time; provided, however, that if
         the GCL requires, the payment of such expenses incurred by a director
         or officer in his or her capacity as a director or officer (and not in
         any other capacity in which service was or is rendered by such person
         while a director or officer, including, without limitation, service to
         an employee benefit plan) in advance of the final disposition of a
         proceeding, shall be made only upon delivery to the Corporation of an
         undertaking by or on behalf of such director or officer, to repay all
         amounts so advanced if it shall ultimately be determined that such
         director or officer is not entitled to be indemnified under this
         Section 6.7 or otherwise.

                  (B) To obtain indemnification under this Section 6.7, a
         claimant shall submit to the Corporation a written request, including
         therein or therewith such documentation and information as is
         reasonably available to the claimant and is reasonably necessary to
         determine whether and to what extent the claimant is entitled to
         indemnification. Upon written request by a claimant for indemnification
         pursuant to the first sentence of this paragraph (B), a determination,
         if required by applicable law, with respect to the claimant's
         entitlement thereto shall be made as follows: (1) if requested by the
         claimant, by Independent Counsel (as hereinafter defined), or (2) if no
         request is made by the claimant for a determination by Independent
         Counsel, (i) by the Board of Directors by a majority vote of a quorum
         consisting of Disinterested Directors (as hereinafter defined), or (ii)
         if a quorum of the Board of Directors consisting of Disinterested
         Directors is not obtainable or, even if obtainable, such quorum of
         Disinterested Directors so directs, by Independent Counsel in a written
         opinion to the Board of Directors, a copy of which shall be delivered
         to the claimant, or (iii) if a quorum of Disinterested Directors so
         directs, by the stockholders of the Corporation. In the event the
         determination of entitlement to indemnification is to be made by
         Independent Counsel at the request of the claimant, the Independent
         Counsel shall be selected by the Board of Directors unless there shall
         have occurred within two years prior to the date of the commencement of
         the action, suit or proceeding for which indemnification is claimed a
         "Change of Control" (as defined below) in which case the Independent
         Counsel shall be selected by the claimant unless the claimant shall
         request that such selection be made by the Board of Directors. If it is
         so determined that the claimant is entitled to indemnification, payment
         to the claimant shall be made within 10 days after such determination.

                  (C) If a claim under paragraph (A) of this Section 6.7 is not
         paid in full by the Corporation within 30 days after a written claim
         pursuant to paragraph (B) of this Section


                                      -14-



         6.7 has been received by the Corporation, the claimant may at any time
         thereafter bring suit against the Corporation to recover the unpaid
         amount of the claim and, if successful in whole or in part, the
         claimant shall be entitled to be paid also the expense of prosecuting
         such claim. It shall be a defense to any such action (other than an
         action brought to enforce a claim for expenses incurred in defending
         any proceeding in advance of its final disposition where the required
         undertaking, if any is required, has been tendered to the Corporation)
         that the claimant has not met the standard of conduct which makes it
         permissible under the GCL for the Corporation to indemnify the claimant
         for the amount claimed, but the burden of proving such defense shall be
         on the Corporation. Neither the failure of the Corporation (including
         its Board of Directors, Independent Counsel or stockholders) to have
         made a determination prior to the commencement of such action that
         indemnification of the claimant is proper in the circumstances because
         he or she has met the applicable standard of conduct set forth in the
         GCL, nor an actual determination by the Corporation (including its
         Board of Directors, Independent Counsel or stockholders) that the
         claimant has not met such applicable standard of conduct, shall be a
         defense to the action or create a presumption that the claimant has not
         met the applicable standard of conduct.

                  (D) If a determination shall have been made pursuant to
         paragraph (B) of this Section 6.7 that the claimant is entitled to
         indemnification, the Corporation shall be bound by such determination
         in any judicial proceeding commenced pursuant to paragraph (C) of this
         Section 6.7.

                  (E) The Corporation shall be precluded from asserting in any
         judicial proceeding commenced pursuant to paragraph (C) of this Section
         6.7 that the procedures and presumptions of this Section 6.7 are not
         valid, binding and enforceable and shall stipulate in such proceeding
         that the Corporation is bound by all the provisions of this Section
         6.7.

                  (F) The right to indemnification and the payment of expenses
         incurred in defending a proceeding in advance of its final disposition
         conferred in this Section 6.7 shall not be exclusive of any other right
         which any person may have or hereafter acquire under any statute,
         provision of the Certificate of Incorporation, these By-laws,
         agreement, vote of stockholders or Disinterested Directors or
         otherwise. No repeal or modification of this Section 6.7 shall in any
         way diminish or adversely affect the rights of any director, officer,
         employee or agent of the Corporation hereunder in respect of any
         occurrence or matter arising prior to any such repeal or modification.

                  (G) The Corporation may maintain insurance, at its expense, to
         protect itself and any director, officer, employee or agent of the
         Corporation or another corporation, partnership, joint venture, trust
         or other enterprise against any expense, liability or loss, whether or
         not the Corporation would have the power to indemnify such person
         against such expense, liability or loss under the GCL. To the extent
         that the Corporation maintains any policy or policies providing such
         insurance, each such director or officer, and each such agent or
         employee to which rights to indemnification have been granted as
         provided


                                      -15-



         in paragraph (H) of this Section 6.7, shall be covered by such policy
         or policies in accordance with its or their terms to the maximum extent
         of the coverage thereunder for any such director, officer, employee or
         agent.

                  (H) The Corporation may, to the extent authorized from time to
         time by the Board of Directors, grant rights to indemnification, and
         rights to be paid by the Corporation the expenses incurred in defending
         any proceeding in advance of its final disposition, to any employee or
         agent of the Corporation to the fullest extent of the provisions of
         this Section 6.7 with respect to the indemnification and advancement of
         expenses of directors and officers of the Corporation.

                  (I) If any provision or provisions of this Section 6.7 shall
         be held to be invalid, illegal or unenforceable for any reason
         whatsoever: (1) the validity, legality and enforceability of the
         remaining provisions of this Section 6.7 (including, without
         limitation, each portion of any paragraph of this By-law containing any
         such provision held to be invalid, illegal or unenforceable, that is
         not itself held to be invalid, illegal or unenforceable) shall not in
         any way be affected or impaired thereby; and (2) to the fullest extent
         possible, the provisions of this Section 6.7 (including, without
         limitation, each such portion of any paragraph of this By-law
         containing any such provision held to be invalid, illegal or
         unenforceable) shall be construed so as to give effect to the intent
         manifested by the provision held invalid, illegal or unenforceable.

                  (J) For purposes of this Section 6.7:

                           (1) "Disinterested Director" means a director of the
                  Corporation who is not and was not a party to the matter in
                  respect of which indemnification is sought by the claimant.

                           (2) "Independent Counsel" means a law firm, a member
                  of a law firm, or an independent practitioner, that is
                  experienced in matters of corporation law and shall include
                  any person who, under the applicable standards of professional
                  conduct then prevailing, would not have a conflict of interest
                  in representing either the Corporation or the claimant in an
                  action to determine the claimant's rights under this Section
                  6.7.

                           (3) "Change of Control" has the meaning given such
                  term in the Corporation's 1998 Stock Incentive Plan, as the
                  same may be amended or superseded from time to time.

                  (K) Any notice, request or other communication required or
         permitted to be given to the Corporation under this Section 6.7 shall
         be in writing and either delivered in person or sent by telecopy,
         telex, telegram, overnight mail or courier service, or certified or
         registered mail, postage prepaid, return receipt requested, to the
         Secretary of the Corporation and shall be effective only upon receipt
         by the Secretary.



                                      -16-




                                   ARTICLE VII
                            CONTRACTS, PROXIES, ETC.

                  Section 7.1. Contracts. Except as otherwise required by law,
         the Certificate of Incorporation or these By-laws, any contracts or
         other instruments may be executed and delivered in the name and on the
         behalf of the Corporation by such officer or officers of the
         Corporation as the Board of Directors may from time to time direct.
         Such authority may be general or confined to specific instances as the
         Board of Directors may determine. The Chairman (if an elected officer),
         the President or any Vice President may execute bonds, contracts,
         deeds, leases and other instruments to be made or executed for or on
         behalf of the Corporation. Subject to any restrictions imposed by the
         Board of Directors or the Chairman (if an elected officer), the
         President or any Vice President of the Corporation may delegate
         contractual powers to others under his jurisdiction, it being
         understood, however, that any such delegation of power shall not
         relieve such officer of responsibility with respect to the exercise of
         such delegated power.

                  Section 7.2. Proxies. Unless otherwise provided by resolution
         adopted by the Board of Directors, the Chairman (if an elected
         officer), the President or any Vice President may from time to time
         appoint an attorney or attorneys or agent or agents of the Corporation,
         in the name and on behalf of the Corporation, to cast the votes which
         the Corporation may be entitled to cast as the holder of stock or other
         securities in any other corporation, any of whose stock or other
         securities may be held by the Corporation, at meetings of the holders
         of the stock or other securities of such other corporation, or to
         consent in writing, in the name of the Corporation as such holder, to
         any action by such other corporation, and may instruct the person or
         persons so appointed as to the manner of casting such votes or giving
         such consent, and may execute or cause to be executed in the name and
         on behalf of the Corporation and under its corporate seal or otherwise,
         all such written proxies or other instruments as he may deem necessary
         or proper in the premises.



                                      -17-



                                  ARTICLE VIII
                                   AMENDMENTS

                  Section 8.1. Amendments. These By-laws may be altered,
         amended, or repealed at any meeting of the Board of Directors or of the
         stockholders, provided notice of the proposed change was given in the
         notice of the meeting and, in the case of a meeting of the Board of
         Directors, in a notice given not less than two days prior to the
         meeting; provided, however, that, in the case of amendments by
         stockholders, notwithstanding any other provisions of these By-laws or
         any provision of law which might otherwise permit a lesser vote or no
         vote, but in addition to any affirmative vote of the holders of any
         particular class or series of the capital stock of the Corporation
         required by law, the Certificate of Incorporation or these By-laws, the
         affirmative vote of the holders of at least 80 percent of the voting
         power of all the then outstanding shares of the Voting Stock, voting
         together as a single class, shall be required to alter, amend or repeal
         any provision of these By-laws.










                                      -18-

EX-10.1

                                                                    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


- ------------------------
Date

EX-10.2

                                                                    EXHIBIT 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:

EX-10.3

                                                                    EXHIBIT 10.3

[GRACE LOGO]                                 ALFRED E. FESTA
[GRAPHIC OMITTED]                            President & Chief Operating Officer

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



April 22, 2005



Mr. Richard C. Brown
18424 Balmore Pines Lane
Cornelius, NC 28031

Dear Rick:

This letter agreement specifies the terms of your employment with W. R. Grace &
Co. (the "Company"), which will be presented for approval to the Board of
Directors (the "Board") of the Company and/or the Compensation Committee of the
Board, as applicable, on April 27, 2005. I am extremely pleased that you have
agreed to join the Company and believe that you will make a valuable
contribution to the Company's future.

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 is
also enclosed for your records.


POSITION AND RESPONSIBILITIES

At its April 27 meeting, it is anticipated that the Board will elect you to the
position of "Vice President" of the Company (and of its subsidiary, W. R. Grace
& Co. - Conn.), to be effective as of your commencement of employment with the
Company.

Your employment with the Company will commence on May 1, 2005. Your title will
be "Vice President of W. R. Grace & Co. and President of Grace Performance
Chemicals." (As all other Company employees, you will actually be employed by W.
R. Grace & Co. - Conn., a 100% owned subsidiary of the Company, but will be
elected an officer of both W. R. Grace & Co. and W. R. Grace & Co. - Conn.)

You will be an employee of the Company "at will" with no definite term of
employment, and you will be subject to the same requirements as other salaried
employees of the Company, except as provided under this letter agreement.

You will be head of, and responsible for, the operations of the Company's Grace
Performance Chemicals business unit, and you will report directly to me, in my
capacity as Chief Operating Officer, and as Chief Executive Officer, of the
Company. Your office will be located at Grace Performance Chemicals'
headquarters in Cambridge, Massachusetts, or at Corporate headquarters in
Columbia, Maryland, the decision to be made after you have evaluated the site
question and consulted with me.




Richard C. Brown                   4/28/2005                             Page 2

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COMPENSATION

1.     Your initial annual base salary as corporate Vice President and President
       of Grace Performance Chemicals will be $375,000.00. Thereafter, your base
       salary will be subject to periodic reviews on the same basis and at the
       same intervals as are applicable to other officers of the Company.

       Your salary will cease to accrue immediately upon your termination of
       employment with the Company, regardless of the reason for such
       termination. (Note, however, the provisions under "Severance Pay
       Arrangement.")

2.     You will be eligible to participate in the Company's Annual Incentive
       Compensation Program. For the 2005 calendar year, your targeted award
       under the Program will be $285,000, based on the financial performance of
       the Company and Grace Performance Chemicals and your personal achievement
       during that year. The cash payment you actually receive under the Program
       for 2005 (the "2005 AICP Payment") will be paid to you in March 2006 at
       the same time other Program participants receive their payments for 2005,
       provided that the 2005 AICP Payment you actually receive will not be less
       than $285,000; subject to the requirements of the remainder of this
       paragraph. You will receive your 2005 AICP Payment only if you are
       employed by the Company on that March 2006 payment date or if your
       employment is terminated by the Company without "Cause" (as defined
       below) before that date. You will not be entitled to that payment if you
       terminate your employment with the Company, or are terminated by the
       Company for "Cause," prior to that March 2006 payment date.

       Under the Program, awards for a calendar year are generally paid during
       March of the following calendar year and are subject to Board approval.
       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 (and any
       applicable business unit) 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. From time to time, the
       individual incentive targets are reviewed and adjusted as necessary based
       on competitive practice. 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 above paragraph.

3.     You will be eligible for a targeted award under the Company's Long-Term
       Incentive Plan (the "LTIP") for the 2005 - 2007 performance period
       (subject to the Plan's approval in bankruptcy court) in the amount of
       $335,000, prorated for your actual time of active employment during the
       performance period. You will also participate in the 2004 - 2006 LTIP and
       the 2003 - 2005 LTIP with a targeted award under each of $400,000,
       prorated for your actual time of active employment during each LTIP's
       performance period. The terms of your award under all 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.

4.     Consistent with your election as an officer of the Company, the Board
       will be requested to authorize the Company to enter into a written
       Executive Severance




Richard C. Brown                   4/28/2005                             Page 3

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       Agreement, or a so-called "golden parachute," with you. In general, the
       terms of that agreement will provide for a severance payment of 3.00
       times the sum of your annual base salary plus your targeted annual
       incentive compensation award (adjusted in accordance with the terms of
       that agreement), and certain other benefits, in the event your employment
       terminates under certain conditions following a change-in-control of the
       Company. The form and provisions of your Executive Severance Agreement
       will be the same as applicable to other elected officers of the Company.
       Please refer to the Executive Severance Agreement itself for definition
       of "change in control", "employment termination" and other particulars of
       this arrangement.

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 the Company,

(ii)   Refusal or failure of you to comply with the mandates of the Company or
       failure by you to substantially perform your duties as a corporate Vice
       President and President of Grace Performance Chemicals, 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.

SEVERANCE PAY ARRANGEMENT

If you are involuntarily terminated by the Company under circumstances in which
you would qualify for severance pay under the terms of the Grace Severance Pay
Plan for Salaried Employees (the "Grace Severance Plan"), then you will be
entitled to a severance payment of 1.5 times a dollar amount equal to your
annual base salary at the time your employment is terminated. This severance pay
arrangement shall be governed by the terms of the Grace Severance Plan, except
of course for the calculation of the amount of severance pay. Under that Plan,
the total severance payment would be made to you in installments, at the same
time and in the same manner as salary continuation payments, over a period of 18
months beginning as of the date you are terminated. However, at your option,
under the current terms of the Grace Severance Plan, the entire severance
payment may be paid to you in a single lump sum as soon as practical after your
termination. 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




Richard C. Brown                   4/28/2005                             Page 4

- --------------------------------------------------------------------------------


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 offer, you will not be
entitled to any other severance pay from the Company.

SIGN-ON BONUS

As consideration for the unvested, "in-the-money" stock options and the
near-term unvested restricted stock units you will "walk away" from at your
previous employer, the Company will pay you a sign-on bonus of $350,000 on May
12, 2005 (which is the first regular Company pay date immediately following your
employment start date of May 1, 2005), subject to the repayment provisions
specified in the next sentence. You agree to re-pay to the Company the full
amount of this bonus if you terminate your employment with the Company within
the first 12 months of your employment; i.e., anytime prior to May 1, 2006. In
that event, such repayment must be made in full, no later than your last day of
active employment with the Company.

SPECIAL SUPPLEMENTAL RETIREMENT PAYMENT ARRANGEMENT

Management will recommend that the Board approve a special retirement
arrangement to recognize, in part, your service with your prior employer and to
provide you with meaningful mid-career accrual of retirement benefits. Under the
circumstances described below, the Company will provide you with 10 additional
years of credited service in determining your total retirement benefits from the
Company. The benefit associated with those additional years would be calculated
and administered as if that additional benefit would be payable under the W. R.
Grace & Co. Retirement Plan for Salaried Employees and the Grace Supplemental
Executive Retirement Plan ("SERP").

On the first, second, third and fourth anniversary dates of your employment,
i.e., on May 1, 2006, 2007, 2008 and 2009, you will be credited with an
additional year of credited service, provided you are still an employee of the
Company on such dates. On the fifth anniversary of your date of employment,
i.e., on May 1, 2010, you will be credited with an additional 6 years of
credited service so that your total retirement benefit on that date would be
based on 15 years of credited service, provided you are still an employee of the
Company on that date. After that date, credited service would accrue each year
under the Grace Retirement Plan and SERP only, in accordance with the applicable
terms of those Plans. For example, based on the current provisions of those
Plans, after 1, 2, 3, 4 and 5 years of service with Grace, your total retirement
benefit would be based upon 2, 4, 6, 8 and 15 years of credited service.

Notwithstanding the foregoing, if you are terminated by the Company without
"Cause" (as defined above) prior to such anniversary (i.e., prior to May 1,
2010), including termination without "Cause" following a change-in-control of
the Company, you will receive a number of years of additional credited service
under this special supplemental retirement payment arrangement equal to the
result of the following calculation:

         10 years x your full and partial years of service with Grace
                   --------------------------------------------------
                                        5




Richard C. Brown                   4/28/2005                             Page 5

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This supplemental retirement payment would not be offset by any benefits payable
to you from your previous employer and would be payable from the general assets
of the Company - it would not be pre-funded in any manner.

If the Grace Salaried Retirement Plan is amended in a manner that affects the
calculation of benefits, while you are employed by the Company, then your
supplemental retirement payment may be adjusted in a equitable manner consistent
with such amendment. Any such adjustment will be determined by the actuary for
the Salaried Retirement Plan; but such adjustment may not in any event decrease
your supplemental retirement payment below an amount that would be calculated
based on your years of service and "final average compensation" as of the day
before the effective date of such amendment.


OTHER BENEFIT PROGRAMS

As an officer of the Company, you will also 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

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

FINANCIAL COUNSELING PROGRAM

As an officer of the Company, you will be eligible to participate in the
Company's Financial Counseling Program. This Program provides you with financial
and estate planning and income tax preparation assistance. The Company will pay
up to $4,000 per calendar year for reasonable, supportable expenses, except that
the maximum amount for the first year of your participation will be $9,000.




Richard C. Brown                   4/28/2005                             Page 6

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EXECUTIVE PHYSICAL PROGRAM

As an officer of the Company, you will be eligible to receive a Company-paid
annual executive physical examination. The Company has made arrangements at
leading healthcare facilities for this purpose and you should schedule your
examination through the Company's Medical Director.

VACATION

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

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 an 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.

RELOCATION

You will be entitled to receive principal residence relocation assistance under
the Company's relocation policy applicable to the relocation of active
employees.

CONFIDENTIALITY AND NON-COMPETE AGREEMENTS

As a condition of employment, you will be required to sign the Company's
standard employment agreement (the "Standard Agreement"--copy attached), which
includes agreements regarding the confidentiality of Company information and
non-competition, and similar provisions. 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. In addition, 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
agreement.

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.




Richard C. Brown                   4/28/2005                             Page 7

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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
letter, executed by you and the Company.

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

Rick, again, we are very excited about your decision to join Grace and look
forward to a productive and rewarding relationship.

Sincerely,




Alfred E. Festa
President & Chief Operating Officer
W. R. Grace & Co.

Attachment

cc:    W. B. McGowan
       M. N. Piergrossi


AGREED AND ACCEPTED:



- ------------------------
Richard C. Brown

- ------------------------
Date