SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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):
May 1, 1995
W. R. GRACE & CO.
(Exact name of registrant as specified in charter)
NEW YORK
(State or other jurisdiction
of incorporation)
1-3720 13-3461988
(Commission File No.) (IRS employer
identification no.)
One Town Center Road, Boca Raton, Florida 33486-1010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(407) 362-2000
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Item 5. Other Events.
On May 1, 1995, the Board of Directors of W. R. Grace
& Co. ("Company") elected Mr. Albert J. Costello as the
President and Chief Executive Officer of the Company effective
immediately, and entered into a letter agreement ("Letter
Agreement") with respect to the terms of such election. The
Letter Agreement provides that Mr. Costello will be elected by
the Board as a director and Chairman of the Board promptly
after the Company's May 10, 1995 Annual Meeting. In connection
therewith, the Company issued a press release ("Press
Release"), dated May 1, 1995.
The foregoing is qualified in its entirety by
reference to the Letter Agreement and the Press Release filed
as exhibits hereto, which are incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
10.1. Letter Agreement, dated May 1, 1995, by and
between W. R. Grace & Co. and Mr. Albert J.
Costello.
99.1. Press Release, dated May 1, 1995.
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Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
W. R. GRACE & CO.
By: /s/ Robert B. Lamm
Name: Robert B. Lamm
Title: Vice President and
Secretary
Date: May 1, 1995
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EXHIBIT INDEX
Exhibit
No. Description
10.1 Letter Agreement, dated May 1, 1995, by
and between W. R. Grace & Co. and Mr.
Albert J. Costello.
99.1. Press Release, dated May 1, 1995.
-3-
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Exhibit 10.1
[letterhead of W. R. Grace & Co.]
May 1, 1995
Mr. Albert J. Costello
417 Devonshire Drive
Franklin Lakes, NJ 07417
Dear Mr. Costello:
On behalf of the Board of Directors of W. R. Grace &
Company (the "Board"), I am pleased to welcome you. This let-
ter sets forth the terms on which you have agreed to be em-
ployed by the Company effective as of May 1, 1995.
Positions: Chairman of the Board, President, Chief
Executive Officer and member of the Board
Starting Date: May 1, 1995 as President and Chief
Executive Officer. Election to the
Board will be promptly after the Company's
1995 Annual Meeting.
Term: Through April 30, 1998; in May of 1997, the
Board will notify you of its intention re-
garding renewal or nonrenewal of your em-
ployment.
Base Salary: $900,000 per year, subject to annual review.
Bonus: For the period May 1 to December 31, 1995
-- minimum $900,000, payable after year-
end.
1996 and thereafter -- subject to perfor-
mance under the Annual Incentive Compensa-
tion Plan or a successor plan.
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Mr. Albert J. Costello
May 1, 1995
Page 2
Stock Options: Non-statutory stock options to purchase
300,000 shares to be granted under the 1994
Stock Incentive Plan, at the market price
on May 1, 1995, to vest as follows:
100,000 shares -- May 1, 1996
100,000 shares -- May 1, 1997
100,000 shares -- May 1, 1998
Long-Term In-
centive Plans: Effective May 1, 1995 (and based on May 1,
1995 stock price), participation on same
basis as other senior executives of the
Company (prorated from May 1, 1995) for
1993-1995, 1994-1996 and 1995-1997 cycles.
Participation on the same basis as other
senior executives of the Company beginning
with 1996-1998 cycle.
Insurance: Whole life policy, premium paid by Company,
providing coverage of two times base salary
Pension: Participation in all qualified and non-
qualified pension, retirement and savings
plans on the same basis as other senior
executives of the Company
Relocation: Payment of customary relocation expenses,
including temporary housing, closing costs
and moving expenses
Change of
Control: Change of control severance protection on
the same terms as other senior executives
of the Company
Other: Comprehensive program of executive ben-
efits, stock options and perquisites on the
same basis as other senior executives of
the Company
Physical: We understand that you had a complete
physical examination in late 1994, the re-
sults of which were satisfactory
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Mr. Albert J. Costello
May 1, 1995
Page 3
It is intended that you and the Company will enter
into a more formal employment agreement as soon as possible,
which will incorporate the terms of this letter and such other
terms and provisions as are appropriate for contracts of this
nature and are approved by the Board or its authorized desig-
nees.
If the foregoing correctly expresses our agreement,
please so indicate by signing the enclosed copy of this letter
in the space provided below and returning it to the Company.
W. R. GRACE & CO.
By:/s/ Thomas A. Holmes
Thomas A. Holmes
AGREED AND ACCEPTED:
/s/ Albert J. Costello
Albert J. Costello
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Exhibit 99.1
#2597
Contact: Mary Lou Kromer 407-362-2600 or
800-GRACE99
W. R. GRACE & CO. NAMES ALBERT COSTELLO PRESIDENT AND CEO
BOCA RATON, FLA, May 1, 1995 -- W. R. Grace & Co.
(NYSE:GRA) announced today that Albert J. Costello has been
named president and chief executive officer effective immedi-
ately.
Costello, 59, was chairman of the board and CEO of
American Cyanamid, a global biotechnology and chemical business,
from April 1993 until his retirement in December 1994, when that
company was acquired by American Home Products for approximately
$9.6 billion.
"Al Costello is the right person to lead the continued
global growth of W. R. Grace," said Thomas A. Holmes, who headed
the Board's CEO Search Committee and had served as acting CEO
since March 2. "He brings to Grace nearly four decades of man-
agement and leadership experience."
"There is a tremendous potential for continued growth
within the businesses of W. R. Grace," said Costello, "and I am
excited about being a part of that."
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W. R. Grace reported its 1995 first quarter results last
week, noting a 56 percent increase in net operating earnings over
the prior year quarter, and a 25 percent increase in sales. All
of the Company's six core businesses and every geographic region
contributed to the excellent results of the quarter.
"The performance improvement recorded in 1994 appears to
be gaining momentum in 1995," said Costello. "My focus will be on
maintaining that momentum and enhancing value and opportunity for
our shareholders, employees, customers and communities."
The Company has agreed that Costello will be elected by
the Board as a director and Chairman of the Board promptly after
the Company's May 10, 1995 Annual Meeting. Under New York law,
Costello will stand for reelection at the 1996 Annual Meeting.
"Once I am elected Chairman, I will move expeditiously
to fulfill the Board's commitment to its shareholders, and oversee
the Company's governance in the best interests of all sharehold-
ers," said Costello. "The Board is eager to move forward deci-
sively, making sure that W. R. Grace's excellent current perfor-
mance can continue uninterrupted."
The CEO Search Committee comprised Holmes, Harold Eck-
mann, Edward Duffy, Dr. George Dacey and Dr. James Frick -- all
independent directors.
Costello joined American Cyanamid as a chemist in 1957
and during his career with that company held a number of marketing
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and management posts, including assignments in Mexico and Spain.
He was named president of Cyanamid in 1981 and had served as
executive vice president and a member of the company's Executive
Committee beginning in 1983.
Costello is a member of the boards of trustees of
Fordham University and St. Joseph's Hospital and Medical Center,
and a member of the British North American Committee and served on
the boards of directors of the Chemical Manufacturers Association,
the Pharmaceutical Manufacturers Association and the American
Enterprise Institute, and was a member of the Business Roundtable.
Costello was born in New York City. In 1957 he earned a
bachelor of science degree in chemistry from Fordham University,
and in 1964, earned a master's degree in chemistry from New York
University.
Grace is the world's largest specialty chemicals company
and holds a leadership position in specialized health care.
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