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): March 4, 1996
W. R. GRACE & CO.
(Exact name of registrant as specified in its charter)
New York 1-3720 13-3461988
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
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
<PAGE>
Item 6. Resignations of Registrant's Directors.
On March 4, 1996, W. R. Grace & Co. ("Company") announced that it had
accepted the resignation of Thomas L. Gossage as a director of the Company.
The Company's press release dated March 4, 1996, Mr. Gossage's letter of
resignation and a letter to Mr. Gossage from Albert J. Costello, Chairman,
President and Chief Executive Officer of the Company, are being filed as
exhibits to this Report and are incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The following are being filed as exhibits to this Report:
(a) letter dated March 4, 1996 from Thomas L. Gossage to Albert J.
Costello, Chairman, President and Chief Executive Officer of the
Company;
(b) the Company's March 4, 1996 press release; and
(c) letter dated March 4, 1996 from Mr. Costello to Mr. Gossage.
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<PAGE>
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/Robert B. Lamm
-------------------------------
Robert B. Lamm
Vice President and Secretary
Dated: March 6, 1996
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<PAGE>
W. R. GRACE & CO.
Current Report on Form 8-K
Exhibit Index
Exhibit No. Description
17 Letter dated March 4, 1996 from Thomas L. Gossage to
Albert J. Costello
99.1 W. R. Grace & Co. press release dated March 4, 1996
99.2 Letter dated March 4, 1996 from Albert J. Costello to
Thomas L. Gossage
Hercules Incorporated
HERCULES Hercules Plaza
1313 North Market Street
Wilmington, DE 19894-0001
Thomas L. Gossage
Chairman and
Chief Executive Officer
March 4, 1996
Mr. Albert J. Costello
Chairman and Chief Executive Officer
W. R. Grace & Co.
One Town Center Road
Boca Raton, FL 33486-1010
Dear Al:
After our conversation last Friday and after careful deliberation, I
have decided to tender my resignation as a Director of W. R. Grace & Co.
("Grace") effectively immediately. Although I sincerely regret having to take
this action, I cannot remain a Director of Grace given what appears to be its
direction and long-term strategy regarding its specialty chemical business.
As I indicated, I recently have been contacted by several large
shareholders of both Grace and Hercules Incorporated ("Hercules") who have
encouraged me to consider a combination of our companies. Now that Grace is
positioned to become a "pure chemical company," these shareholders believe
that such a combination could create substantial value for shareholders of
both our companies. The Hercules management team also has undertaken a review
of such a combination, based solely on publicly available information, and
believes that such a transaction could provide tremendous opportunities for
increased shareholder value for both companies' shareholders.
Although I have contacted you twice to discuss such a transaction, you
have decided not to meet and to hear our view of the value of the combination.
You told me that, after polling a number of Grace Directors, you do not
believe a combination with Hercules would be in the best interests of Grace's
shareholders. Such a judgment without a thorough analysis and discussion of
the reasons which support my proposed combination is not, in my opinion,
responsive to the best interests of your shareholders. Therefore, I believe,
it is in the best interests of both Grace and Hercules and their respective
shareholders that I resign.
<PAGE>
Mr. Albert J. Costello
Page Two
March 4, 1996
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I hereby request that Grace disclose this letter as provided by Item 6
of Form 8-K under the Securities Exchange Act of 1934.
Sincerely,
T. L. Gossage
cc: W. R. Grace & Co. Board of Directors:
Dr. George C. Dacey
Mr. Edward W. Duffy
Mr. Harold A. Eckmann
Dr. Marye Anne Fox
Dr. James W. Frick
Dr. Constantine L. Hampers
Mr. Thomas L. Holmes
Ms. Virginia A. Kamsky
Mr. Peter S. Lynch
Mr. Robert C. Macauley
Mr. John E. Phipps
Mr. Eugene J. Sullivan
#2633
CONTACT: Chuck Suits or Mary Lou Kromer 407/362-2600 or
800/GRACE99
GRACE ACCEPTS RESIGNATION OF GOSSAGE FROM BOARD;
REJECTS PROPOSAL TO COMBINE GRACE AND HERCULES
BOCA RATON, Fla., March 4, 1996 -- W. R. Grace & Co. (NYSE: GRA) today
announced that it has accepted the resignation of Thomas L. Gossage, chairman
and chief executive officer of Hercules, Incorporated, from its board of
directors. Grace said that Gossage resigned after the Company rejected his
proposal to consider combining Grace and Hercules.
"Tom Gossage has been a member of our board for eight months, and know-
ing what he does about the Company's future, I can understand that he would
find such a transaction attractive," said Albert J. Costello, chairman,
president and chief executive officer of Grace. "However, I and the board view
Gossage's proposal not to be in the best interests of Grace or our
shareholders.
"I believe it is not the right time and Hercules is not the right
company," said Costello. "Neither we nor our advisors see business-related
synergies between Grace and Hercules. If there were strategic overlaps we
would not have put Tom Gossage on the board in the first place."
"I am greatly surprised by Tom Gossage's claim that he is not in
agreement with the direction and long-term strategy of Grace since he has
never expressed dissatisfaction at any board meeting or to me personally,"
said Costello.
(more)
<PAGE>
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"We have delivered significant shareholder value in a relatively
short period of time:
-Reached an agreement with Fresenius AG for National
Medical Care that has been valued by the analyst community at
approximately $4 billion.
-Close to reaching an agreement regarding Grace Dearborn.
We expect an announcement in April.
-Implemented a cost cutting program that will reduce
annual costs by more than $100 million. We are pursuing further
cost reductions.
-Taking aggressive steps that will soon lead to a
greatly enhanced capital structure, including authorization for
up to a 20 percent stock repurchase, debt reduction and
aggressive working capital and capital spending controls.
-Continuing to make significant investments to fuel
growth of our core businesses on a global basis."
"These actions are the steps that will lead to creating substantial
value in both the near- and long-term -- not merging with Hercules."
Following is text from the resignation letter from Gossage and the
response from Costello:
GRACE A. J. Costello
Chairman and CEO
CORPORATE HEADQUARTERS
W. R. Grace & Co.
One Town Center Road
Boca Raton, FL 33486-1010
(407) 362-2121
Fax: (407) 362-2100
March 4, 1996
Mr. Thomas L. Gossage
Chairman and Chief Executive Officer
Hercules Incorporated
Hercules Plaza
1313 North Market Street
Wilmington, DE 19894-0001
Dear Tom:
Based on our discussions last Friday, I was not surprised to
receive your letter resigning from the Grace Board of Directors. I was
disappointed, however, in your characterization of the events surrounding your
resignation.
During your service on the Board of Directors, you never once
voiced any disagreement with Grace's "direction and long-term strategy
regarding its specialty chemical business." To the contrary, the Board has
approved a number of actions which have significantly enhanced shareholder
value and will continue to do so in the future, including the disposition of
NMC and the Dearborn business, and a major corporate restructuring and
cost-cutting effort. Grace's stock price is up 31% since May 1st when I
assumed my position as Chief Executive Officer. Indeed, two recent analyst
reports have indicated that based on the successful conclusion of these
events, they expect the stock to increase another $10 to $15 per share in the
relatively short term.
As an insider, you know our programs at Grace are able to
produce results and our plans indicate growth in value. To commence merger
discussions before these anticipated benefits are reflected in the stock price
would be a disservice to the shareholders of Grace. The other Board members
with whom I spoke agreed. As I told you, there will be a time when Grace will
deem it appropriate to consider major strategic acquisitions. Now is not the
time and Hercules is not that partner.
<PAGE>
Furthermore, there are no synergies between Hercules and the
Grace chemical business that would justify combining the two companies. If
there were strategic overlaps we would not have put you on the Grace Board in
the first instance.
It is clear from your action that you are seeking to promote
the interests of the Hercules shareholders at the expense of the Grace
shareholders. In that regard, I accept your resignation from the Grace Board
of Directors.
Very truly yours,
Albert J. Costello
