<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1994
Commission File Number 1-3720
W. R. GRACE & CO. SALARIED EMPLOYEES
SAVINGS AND INVESTMENT PLAN
W. R. Grace & Co.
One Town Center Road
Boca Raton, Florida 33486-1010
<PAGE>
FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS. Filed as part of this Report on Form 11-K are
the financial statements of the W. R. Grace & Co. Salaried Employees Savings and
Investment Plan, as required by Form 11-K, together with the report thereon of
Price Waterhouse LLP, independent accountants, dated April 27, 1995.
(b) EXHIBITS. The Consent of Price Waterhouse LLP is being filed as an
exhibit to this Report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee has duly caused this annual report to be signed on its
behalf by the undersigned thereunto duly authorized.
W. R. GRACE & CO.
SALARIED EMPLOYEES
SAVINGS AND INVESTMENT PLAN
By: /S/R. H. CARL
------------------------
R. H. Carl
Chairman, Administrative
Committee
Date: June 27, 1995
<PAGE>
F - 1
REPORT OF INDEPENDENT ACCOUNTANTS
April 27, 1995
To the Participants and
Administrative Committee of the
W. R. Grace & Co. Salaried Employees
Savings and Investment Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits appearing on pages F-2 through F-4 of this report present fairly, in
all material respects, the net assets available for plan benefits of the W. R.
Grace & Co. Salaried Employees Savings and Investment Plan at December 31, 1994
and 1993, and the changes in net assets available for plan benefits for the
years then ended, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the plan administrator
and/or other plan fiduciaries (the "Plan Fiduciaries"); our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by the Plan
Fiduciaries, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Fund Information in the statement of
net assets available for plan benefits and the statement of changes in net
assets available for plan benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits and
changes in net assets available for plan benefits of each fund. The Fund
Information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Price Waterhouse LLP
<PAGE>
F - 2
W. R. GRACE & CO. SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
DECEMBER 31, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993
-------------- -------------
<S> <C> <C>
Assets:
Investments:
Insurance company contracts at
contract value $ 312,776,263 $ 284,145,921
Other securities
(cost: 1994, $3,717,356;
1993, $13,950,694) 3,717,356 13,950,694
W. R. Grace & Co.
common stock
(cost: 1994, $73,689,690;
1993, $66,559,083) 102,138,946 103,798,825
Fidelity Mutual Funds
(cost: 1994, $100,749,566;
1993, $98,516,686)
Balanced Fund 36,288,392 46,064,553
Growth & Income Fund 7,439,265 5,793,240
Blue Chip Growth Fund 35,661,705 28,009,245
Contrafund 15,136,486 13,804,903
OTC Fund 2,434,871 2,144,820
Loans Receivable 5,972,697 --
Contributions receivable 2,520,927 2,318,450
------------- -------------
Net assets available
for plan benefits $ 524,086,908 $ 500,030,651
------------- -------------
------------- -------------
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
<PAGE>
F - 3
W. R. GRACE & CO. SALARIED EMPLOYEES
SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
EMPLOYEES' FIDELITY FIDELITY
FIXED INCOME GRACE STOCK STOCK BALANCED GROWTH & INCOME
FUND FUND OWNERSHIP PLAN FUND FUND
------------ ------------ -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Contributions:
Participants $ 15,319,654 $ 2,264,503 $ -- $ 4,903,959 $ 1,331,052
Transfers among funds 683,112 3,676,482 (5,720,077) (8,456,230) 682,236
Transfers to other plans -- -- -- -- --
Company -- -- 10,764,311 -- --
------------- ------------ ------------ ------------ -----------
Total 16,002,766 5,940,985 5,044,234 (3,552,271) 2,013,288
------------- ------------ ------------ ------------ -----------
Income/(loss) from
investments:
Interest 26,195,455 25,169 41,056 41,665 4,387
Dividends -- -- -- 1,315,369 540,721
Net realized gain/(loss) -- 725,180 370,468 (996,891) (37,087)
Change in unrealized
(depreciation)/appreciation -- (712,233) (4,061,770) (2,694,545) (364,578)
------------- ------------ ------------ ------------ -----------
Total 26,195,455 38,116 (3,650,246) (2,334,402) 143,443
------------- ------------ ------------ ------------ -----------
Less:
Participant withdrawals 24,316,487 2,328,135 5,791,600 3,850,593 462,609
Administrative expenses 283,523 22,966 133,871 14,226 1,935
------------- ------------ ------------ ------------ -----------
Net increase/(decrease) 17,597,711 3,628,000 (4,531,483) (9,751,492) 1,692,187
Net assets available
for plan benefits:
Beginning of year 298,865,293 22,955,729 81,840,319 46,336,077 5,825,466
------------- ------------ ------------ ------------ -----------
End of year $ 316,463,004 $ 26,583,729 $ 77,308,836 $ 36,584,585 $ 7,517,653
------------- ------------ ------------ ------------ -----------
------------- ------------ ------------ ------------ -----------
<CAPTION>
FIDELITY FIDELITY
BLUE CHIP FIDELITY OTC LOANS
GROWTH FUND CONTRAFUND FUND RECEIVABLE TOTAL
------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Contributions:
Participants $ 3,892,689 $ 2,786,158 $ 454,631 $ -- $ 30,952,646
Transfers among funds 3,076,319 (67,681) 26,760 6,099,079 --
Transfers to other plans -- -- -- (9,858) (9,858)
Company -- -- -- -- 10,764,311
------------ ------------ ----------- ------------ -------------
Total 6,969,008 2,718,477 481,391 6,089,221 41,707,099
------------ ------------ ----------- ------------ -------------
Income/(loss) from
investments:
Interest 25,638 14,481 2,011 -- 26,349,862
Dividends 766,111 104,873 21,528 -- 2,748,602
Net realized gain/(loss) (566) (194,020) (47,720) -- (180,636)
Change in unrealized
(depreciation)/appreciation 2,120,814 (120,532) (30,082) -- (5,862,926)
------------ ------------ ----------- ------------ -------------
Total 2,911,997 (195,198) (54,263) -- 23,054,902
------------ ------------ ----------- ------------ -------------
Less:
Participant withdrawals 2,146,078 1,091,114 125,732 116,524 40,229,372
Administrative expenses 5,148 14,459 244 -- 476,372
------------ ------------ ----------- ------------ -------------
Net increase/(decrease) 7,729,779 1,417,706 301,152 5,972,697 24,056,257
Net assets available
for plan benefits:
Beginning of year 28,164,128 13,884,100 2,159,539 -- 500,030,651
------------ ------------ ----------- ------------ -------------
End of year $ 35,893,907 $ 15,301,806 $ 2,460,691 $ 5,972,697 $ 524,086,908
------------ ------------ ----------- ------------ -------------
------------ ------------ ----------- ------------ -------------
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
<PAGE>
F - 4
W. R. GRACE & CO. SALARIED EMPLOYEES
SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
FUND D -
FIXED INCOME FUND B - DIVERSIFIED GRACE STOCK
FUND EQUITY FUND FUND FUND
-------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Contributions:
Participants $ 16,352,502 $ 968,412 $ 2,133,948 $ 2,435,490
Transfers among funds 538,529 (21,210,519) (46,103,954) (6,803,488)
Company -- -- -- --
Transfers from/(to) other plans 35,241,361 (39,507) (6,079) 3,933,090
------------- ------------ ------------ ------------
Total 52,132,392 (20,281,614) (43,976,085) (434,908)
------------- ------------ ------------ ------------
Income/(loss) from
investments:
Interest 23,318,635 18,939 732,456 26,903
Dividends -- 138,992 213,928 580,193
Net realized gain/(loss) -- 5,498,439 5,009,336 2,312,130
Change in unrealized
appreciation/(depreciation) -- (7,336,443) (3,904,859) (1,849,225)
------------- ------------ ------------ ------------
Total 23,318,635 (1,680,073) 2,050,861 1,070,001
------------- ------------ ------------ ------------
Less:
Participant withdrawals 17,432,480 517,665 1,172,568 1,793,140
Administrative expenses 511,731 49,213 72,618 18,813
------------- ------------ ------------ ------------
Net increase/(decrease) 57,506,816 (22,528,565) (43,170,410) (1,176,860)
Net assets available
for plan benefits:
Beginning of year 241,358,477 22,528,565 43,170,410 24,132,589
------------- ------------ ------------ ------------
End of year $ 298,865,293 $ -- $ -- $ 22,955,729
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
<CAPTION>
EMPLOYEES' FIDELITY FIDELITY FIDELITY
STOCK BALANCED GROWTH & INCOME BLUE CHIP
OWNERSHIP PLAN FUND FUND GROWTH FUND
-------------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
Contributions:
Participants $ -- $ 2,888,834 $ 342,859 $ 1,647,852
Transfers among funds (7,681,710) 39,115,616 4,881,597 23,380,340
Company 8,404,331 -- -- --
Transfers from/(to) other plans -- 3,156,054 373,782 1,633,577
------------ ------------ ----------- ------------
Total 722,621 45,160,504 5,598,238 26,661,769
------------ ------------ ----------- ------------
Income/(loss) from
investments:
Interest 87,649 -- -- --
Dividends -- 2,966,171 197,166 3,847,465
Net realized gain/(loss) 2,047,062 98,314 6,866 (18,257)
Change in unrealized
appreciation/(depreciation) (1,475,914) (952,266) 39,840 (1,412,030)
------------ ------------ ----------- ------------
Total 658,797 2,112,219 243,872 2,417,178
------------ ------------ ----------- ------------
Less:
Participant withdrawals 4,937,081 927,124 16,152 909,949
Administrative expenses 95,442 9,522 492 4,870
------------ ------------ ----------- ------------
Net increase/(decrease) (3,651,105) 46,336,077 5,825,466 28,164,128
Net assets available
for plan benefits:
Beginning of year 85,491,424 -- -- --
------------ ------------ ----------- ------------
End of year $ 81,840,319 $ 46,336,077 $ 5,825,466 $ 28,164,128
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
<CAPTION>
FIDELITY
FIDELITY OTC
CONTRAFUND FUND TOTAL
------------ ------------ -------------
<S> <C> <C> <C>
Contributions:
Participants $ 842,604 $ 156,598 $ 27,769,099
Transfers among funds 12,134,832 1,748,757 --
Company -- -- 8,404,331
Transfers from/(to) other plans 424,426 151,962 44,868,666
------------ ------------ -------------
Total 13,401,862 2,057,317 81,042,096
------------ ------------ -------------
Income/(loss) from
investments:
Interest -- -- 24,184,582
Dividends 863,518 194,587 9,002,020
Net realized gain/(loss) 14,496 25 14,968,411
Change in unrealized
appreciation/(depreciation) (298,154) (87,615) (17,276,666)
------------ ------------ -------------
Total 579,860 106,997 30,878,347
------------ ------------ -------------
Less:
Participant withdrawals 92,725 4,691 27,803,575
Administrative expenses 4,897 84 767,682
------------ ------------ -------------
Net increase/(decrease) 13,884,100 2,159,539 83,349,186
Net assets available
for plan benefits:
Beginning of year -- -- 416,681,465
------------ ------------ -------------
End of year $ 13,884,100 $ 2,159,539 $ 500,030,651
------------ ------------ -------------
------------ ------------ -------------
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
<PAGE>
F-5
W. R. GRACE & CO. SALARIED EMPLOYEES
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF THE PLAN:
The following description of the W. R. Grace & Co. Salaried Employees Savings
and Investment Plan ("Plan") provides only general information. Participants
should refer to the text of the Plan and the Summary Plan Description and the
Prospectus Supplement for the Plan for more complete information.
GENERAL:
The Plan is a defined contribution plan originally adopted effective September
1, 1976, and has been amended from time to time. The Plan is subject to certain
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Effective July 1, 1993, The Northern Trust Company was succeeded by Fidelity
Management Trust Company as trustee for the Plan. On the same date, Fund B -
Equity Fund was terminated and its balance transferred to the Fidelity Blue Chip
Growth Fund; Fund D - Diversified Fund was terminated and its balance
transferred to the Fidelity Balanced Fund; and three additional Fidelity Funds -
Growth and Income, Contrafund, and OTC Portfolio - were also added as investment
options under the Plan.
ELIGIBILITY AND VESTING:
Within those units of W. R. Grace & Co. ("Grace") and its subsidiaries
(collectively, the "Company") designated as participating units in the Plan, any
salaried employee (or any salesman paid on a commission basis) and any other
employee in an eligible employment classification who has completed 12 months of
employment (including 1,000 hours of service) is eligible to participate in the
Plan, subject to certain exceptions and special provisions.
A participant's interest in the Plan is always fully vested.
CONTRIBUTIONS TO THE PLAN:
Plan participants may elect to contribute to the Plan from 2% to 16% of their
compensation (which, for purposes of the Plan, consists of salary and/or
commissions, incentive compensation, specially granted bonus awards, shift
differential and overtime pay).
<PAGE>
F-6
Participant contributions may be made from before-tax and/or after-tax income,
as provided under Sections 401(k) and 401(m) of the Internal Revenue Code,
subject to an annual dollar limit on before-tax contributions of $9,240 for 1994
($8,994 for 1993), subject to annual adjustment for inflation and to regulations
that restrict the contribution percentages of highly compensated participants in
order to prevent discrimination in their favor. In addition, federal income tax
law limits to $150,000 for 1994 ($235,840 for 1993), subject to annual
adjustment for inflation, the annual compensation on which tax-qualified
plan benefits may be based.
A Company contribution equal to 50% of each participant's contribution is made
to the Plan; however, no Company contribution is made with respect to a
participant's contribution in excess of 6% of his compensation. Therefore, the
maximum Company contribution is 3% of each participant's compensation, subject
to the annual limitations noted above.
Participants may elect to have their contributions invested in any one or more
of the following funds in which the Plan participates:
FIXED INCOME FUND
The Fixed Income Fund is invested in fixed income securities or
obligations, interest-bearing bank accounts or guaranteed income funds
established or maintained by licensed insurance companies. Excess cash
may be invested in short-term fixed income securities.
GRACE STOCK FUND
The Grace Stock Fund is invested in Grace Common Stock. Pending
investment of cash credited to this Fund, this Fund may invest in
short-term securities.
FIDELITY MUTUAL FUNDS. The Plan also offers the following five
Fidelity Mutual Funds to Plan participants:
FIDELITY BALANCED FUND is invested in both fixed income
securities and equity securities at all times.
FIDELITY GROWTH AND INCOME FUND is invested in equity securities
at all times and may be invested in fixed income securities,
depending upon market conditions.
<PAGE>
F-7
FIDELITY BLUE CHIP GROWTH FUND is invested in equity securities
of companies with higher than average earnings growth.
FIDELITY CONTRAFUND is invested in equity securities of companies
generally out of favor with the market that are judged by the
Fund's investment manager to be capable of above average growth
in value.
FIDELITY OTC PORTFOLIO is invested in equity securities of
smaller companies traded in the over-the-counter market.
At December 31, 1994 and 1993, the number of participants contributing to the
Plan are 7,014 and 12,719, respectively, and the number of participants in the
various Funds (including former employees whose funds have not yet been
distributed and who no longer contribute to the Plan) are as follows:
December 31, 1994 December 31, 1993
----------------- -----------------
Fixed Income 7,182 11,581
Grace Stock 2,140 3,308
Balanced 3,017 4,707
Growth & Income 1,245 808
Blue Chip Growth 3,199 3,598
Contra 1,983 1,512
OTC 614 446
The Plan provides that a statement of each participant's account be sent to the
participant at least once a year. Presently, such statements are sent at the
end of each calendar quarter.
On any business day, participants may allocate their future contributions among
the Funds and transfer the amounts related to their prior contributions in any
of the Funds to other Funds. Transfers may be in whole dollar amounts or in
multiples of 5% of the participant's account.
Company contributions are generally credited to the Employee Stock Ownership
Plan ("ESOP Fund"). The ESOP Fund is invested in Grace Common Stock. The ESOP
Fund is an Employee Stock Ownership Plan, within the meaning of the Internal
Revenue Code.
<PAGE>
F-8
Eligible employees (generally, those age 50 and older) may elect to transfer all
or a portion of their Company contributions once each year from the ESOP Fund to
any of the other Funds except the Grace Stock Fund. Such transfers may be in
whole dollar amounts or multiples of 5% of the participant's account.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Investments in publicly traded securities are valued at the last reported sales
price on the last day of the year. Investments in Fidelity Mutual Funds are
valued at the market prices quoted at year-end, which represent the net asset
value of securities held. Investments in commercial paper, U.S. Treasury Bills
and U. S. government securities mutual funds are valued at cost, which
approximates market value. Investments in insurance company contracts are
stated at contract value, which represents contributions made under the
contract plus interest at the contract rate, less funds used for withdrawals.
Loans receivable is valued at cost, which approximates market value.
The assets of the Plan are commingled in the Trust Fund of the W. R. Grace & Co.
Profit Sharing and Savings and Investment Plans ("Trust Fund") with the assets
of other tax-qualified profit sharing and savings and investment plans
maintained by the Company. The Trust Fund is administered by The Fidelity
Management Trust Company ("Trustee"). Assets and investment returns are
allocated to the plans based upon the proportion of each plan's daily net asset
balance to the daily total net asset balances of the Funds. Income of each fund
is reinvested in that fund, except that dividends paid on shares of Grace Common
Stock held in the ESOP Fund are paid to participants on a quarterly basis or
within 90 days after the end of the calendar year in which the dividends are
received. The Trustee manages the Grace Stock Fund and the ESOP Fund by
purchasing shares of Grace Common Stock and by selling shares to the extent
necessary to obtain cash for disbursements and transfers from the Funds.
Investment management of the Fixed Income Fund and investment oversight of the
Fidelity Mutual Funds is the responsibility of the Investment Committee
appointed by the Grace Board of Directors, except as delegated by that
Committee.
The Plan recognizes a gain or loss on Grace Common Stock distributed to
participants in an amount equal to the difference between the market value at
the distribution date and the average cost of the shares of such Common Stock.
The cost of securities sold is determined on the basis of average cost, and a
gain or loss is recorded equal to the difference between average cost and the
proceeds from the sale.
Amounts transferred to successor trustees are deducted from the Plan's net
assets upon the divestiture of, or discontinuance of participation by, a
participating unit.
<PAGE>
F-9
NOTE 3 - INVESTMENTS:
FIXED INCOME FUND:
The investments in the Fixed Income Fund consist primarily of guaranteed fixed
income contracts, as shown below:
Value at December 31,
-------------------------
Issuer & Rate 1994 1993 Repayment Terms
- --------------------- ------------ ------------ ----------------------
Metropolitan Life
Insurance Company:
9.55% $ 49,842,876 $ 45,640,029 Repayable in three
installments on
12/15/92, 12/15/93
and 12/15/95 or
12/15/96 (at issuer's
option)
10.05% - 45,024,368 Repaid in two
installments on
10/31/91 and
10/31/94
9.05% 60,333,904 55,499,785 Repayable on 10/15/96
7.00% 42,140,831 34,371,704 Repayable on 12/15/99
Prudential Insurance
Company:
9.13% 112,741,591 - Repayable on 6/1/97
9.75% - 60,143,592 Repayable on 11/30/97
8.45% - 43,466,443 Repayable in two
equal annual
installments com-
mencing 12/1/98
<PAGE>
F-10
Value at December 31,
-------------------------
Issuer & Rate 1994 1993 Repayment Terms
- --------------------- ------------ ------------ ----------------------
John Hancock Mutual
Life Insurance Company:
7.02% 19,913,689 - Repayable on 6/30/01
7.85% 27,803,372 - Repayable on 12/15/00
------------ ------------
$312,776,263 $284,145,921
------------ ------------
------------ ------------
Other investments in the Fixed Income Fund at December 31, 1994 and 1993
consisted of the following:
December 31,
-------------------------
1994 1993
----------- ----------
Commercial paper, at cost, which
approximates market value $ 2,722,418 $13,182,385
----------- -----------
----------- -----------
GRACE STOCK FUND:
As of December 31, 1994 and 1993, the Grace Stock Fund under the Plan held
679,212 and 566,417 shares of Grace Common Stock, respectively.
Sales/distributions of Grace Common Stock by/from the Grace Stock Fund under the
Plan resulted in net realized gains, as follows:
December 31,
-------------------------
1994 1993
----------- -----------
Proceeds from
sales/distributions
of securities $17,367,689 $ 9,531,137
Cost of securities
sold/distributed 16,642,509 7,219,007
----------- -----------
Net realized gains $ 725,180 $ 2,312,130
----------- -----------
----------- -----------
<PAGE>
F-11
Other investments in the Grace Stock Fund under the Plan at December 31, 1994
and 1993 consisted of the following:
December 31,
-----------------------
1994 1993
---------- -----------
Commercial paper, at cost, which
approximates market value $ 205,050 $ 122,374
---------- ----------
---------- ----------
ESOP FUND:
As of December 31, 1994 and 1993, this fund held 1,965,142 and 1,998,631 shares
of Grace Common Stock, respectively.
Sales/distributions of Grace Common Stock by/from the ESOP Fund under the Plan
resulted in net realized gains, as follows:
December 31,
-------------------------
1994 1993
----------- -----------
Proceeds from
sales/distributions of
securities $11,936,398 $ 5,469,617
Cost of securities
sold/distributed 11,565,930 3,422,555
----------- -----------
Net realized gains $ 370,468 $ 2,047,062
----------- -----------
----------- -----------
Other investments in the ESOP Fund at December 31, 1994 and 1993 consisted of
the following:
December 31,
----------------------
1994 1993
---------- -----------
Commercial paper, at cost, which
approximates market value $ 789,888 $ 645,935
---------- ----------
---------- ----------
<PAGE>
F-12
NOTE 4 - TRANSFER OF ASSETS:
In 1993 Grace acquired all of the outstanding shares of Grace Energy Corporation
("GEC") not owned by Grace in connection with Grace's plan to divest GEC. As a
consequence, three defined contribution plans of GEC were terminated, and their
account balances were transferred to the Plan, as follows: Effective November
1, 1993, account balances of the Grace Offshore Employees Profit Sharing Plan
and the HOMCO International Inc. Employees Profit Sharing Investment and Savings
Plan were transferred to the Fixed Income Fund of the Plan, with subsequent
transfers to the other Funds of the Plan as directed by participants. Effective
December 1, 1993, account balances of the GEC Employees Savings and Investment
Plan were transferred to the corresponding Funds of the Plan.
NOTE 5 - FEDERAL INCOME TAXES:
By letter dated November 25, 1985, the Internal Revenue Service stated that the
Plan, as then in effect, was in compliance with the applicable requirements of
the Internal Revenue Code. The Plan has been amended since the issuance of this
determination letter. In December 1994, Grace filed for an updated determination
letter from the Internal Revenue Service regarding whether the Plan, as amended,
continues to comply with those requirements. Subject to receipt of the updated
determination letter, the Plan's administrator and the Plan's counsel believe
that the Plan, as currently in effect, is in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, they believe that the
Plan continues to be qualified and that the related Trust is tax exempt. Subject
to the foregoing, no income taxes are required to be paid by the Plan, and
participants are not taxed on Company contributions, before-tax contributions
and any earnings or gains from investments attributable to their Plan accounts
while such contributions, earnings and gains remain in the Trust.
NOTE 6 - PLAN TERMINATION:
Grace anticipates that the Plan will continue indefinitely, but reserves the
right to amend or discontinue the Plan at any time. A participating unit may
terminate its participation in the Plan with the approval of Grace's Board of
Directors.
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-8 (No. 33-15182) of
W. R. Grace & Co. of our report dated April 27, 1995 appearing on page F-1 of
the Annual Report of the W. R. Grace & Co. Salaried Employees Savings and
Investment Plan on Form 11-K for the year ended December 31, 1994.
PRICE WATERHOUSE LLP
/s/ PRICE WATERHOUSE LLP
New York, New York
June 27, 1995
