DEF 14A 1 a2021proxy.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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W. R. Grace & Co.
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Hudson La Force
President and Chief Executive Officer
W. R. Grace & Co.
7500 Grace Drive
Columbia, MD 21044


May 24, 2021


Dear fellow Grace shareholders:
Change and renewal have been constant themes during Grace’s 167 years as a business enterprise. We have remade our company many times over those years, and that process continues today as we rebuild our portfolio for higher growth. As some markets mature, new opportunities to create value emerge.
Our pursuit of higher growth is based on our intense focus on delivering value to customers, proven innovation capabilities, and high-performance culture, all strengths built over decades. Today 62% of our sales come from our fastest-growing businesses, and we are investing to accelerate our growth strategy.
Sustainability is a core element of our growth. In 2020, a remarkable 49% of our sales directly contributed to our customers' sustainability objectives. And 62% of our R&D projects are tied to at least one of four customer sustainability drivers. We’ve set clear, ambitious environmental goals for our manufacturing operations including a 22% reduction in greenhouse gas emissions by 2030. Grace is rated near the top of our peer groups by Sustainalytics and EcoVadis.
When I consider the growth investments we are making, the strong customer demand for our high-value technologies, and the sustainability benefits we deliver to our customers, I am confident in our strategy to deliver value to our customers, investors, and employees. That confidence is shared by our leadership team and Grace employees worldwide.
On April 26, 2021, we announced an agreement to be acquired by Standard Industries Holdings Inc. in an all-cash transaction valued at approximately $7.0 billion. The closing of this transaction is subject to customary closing conditions, including approval by Grace shareholders and the receipt of certain regulatory approvals, and is expected to close in the fourth quarter of 2021. Shareholders will receive a second proxy statement later this year with information about the merger agreement and instructions for voting on the merger.
On behalf of the Grace Board and our employees, thank you for your investment in Grace and our strategy for the future.
Sincerely,
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Hudson La Force
President and CEO



Grace At a Glance
WHAT IS GRACE?
We are a high-value specialty chemicals company with industry-leading technologies and deep, long-standing customer relationships.
Customers around the world use our technologies to make essential every-day products ranging from safe food packaging to pharmaceuticals to cleaner transportation fuels.
We have a differentiated, customer-focused sustainability strategy. In 2020, 49% of our sales directly contributed to our customers' sustainability objectives.
WHAT WE ACHIEVED IN 2020?
We acted quickly and decisively to keep our people safe and healthy and our plants operating during the pandemic.
After Q2 sales declined 19%, we delivered a very strong finish to the year with 4Q20 sales at more than 95% of pre-pandemic levels. Our 4Q20 gross margins were also nearing pre-pandemic levels.
We delivered strong operating performance and cash flow with lower capital spending, improved working capital, and reduced operating costs. See “Compensation Discussion and Analysis” below for our Adjusted Free Cash Flow performance.
These actions ensured we could protect our growth investments and R&D spending:
We signed a record seven new UNIPOL® Polypropylene Process licenses in our Specialty Catalysts business
We grew our Pharma & Consumer subsegment 12.4% in Materials Technologies
We safely started two significant new manufacturing plants
We were rated near the top of our peer groups by Sustainalytics and EcoVadis.
We protected our investments in people, including over $6 million of commercial excellence investment and over 50,000 hours of training since 2016. We refreshed more than 10% of our global workforce, including upgrading talent where needed and adding key leadership roles throughout the organization.
WHAT IS DRIVING US FORWARD?
Long-term macro trends including a growing global middle class, increasing demand for health and wellness, and increased emphasis on sustainability. We are #1 or #2 in 80% of our end markets and benefit from strong customer demand for our high-value technologies.
We are successfully building a higher growth portfolio, including strategic acquisitions and increased capacity in our higher growth businesses. Our long-term mid-single digit sales growth target remains unchanged.
We are actively upgrading our capabilities and talent to ensure we continue meeting the high expectations of our customers and capture the growth opportunities in our end markets.
Our experienced, diverse global team. On our Board, 29% of our independent directors are women; on the Grace Leadership Team, 50% are women or people of color, including three of four business unit leaders.



To the Holders of Common Stock of W. R. Grace & Co.
Notice of 2021 Annual Meeting of Shareholders
TO BE HELD ON JULY 7, 2021

The 2021 Annual Meeting of Shareholders (the “Annual Meeting”) of W. R. Grace & Co., a Delaware corporation (“Grace”), will be held on Wednesday, July 7, 2021, at 9:00 a.m. Eastern Time, at the Ten Oaks Ballroom and Conference Center, 5000 Signal Bell Lane, Clarksville, Maryland 21029. Our shareholders will vote on the following matters/proposals at the Annual Meeting:
ProposalsBoard Recommendations
Proposal
1
Election of DirectorsFOR Each Nominee
Nominees—Class I (Term expiring 2024)
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Hudson La Force
Mark E. Tomkins
Proposal
2
Ratification of the appointment of PricewaterhouseCoopers LLP as Grace’s independent registered public accounting firm for 2021
FOR
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Proposal
3
Advisory vote to approve the compensation of Grace’s named executive officers, as described in our proxy materials
FOR
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Proposal
4
Advisory vote on whether the advisory vote on named executive officer compensation should occur every one, two or three years
FOR holding vote every year
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Shareholders will also transact such other business as may properly come before the Annual Meeting and at any adjournments or postponements of the meeting. The Board of Directors has fixed the close of business on May 19, 2021, as the record date for the determination of shareholders entitled to notice of, and to vote at, the Annual Meeting. This notice and the accompanying proxy materials are sent to you by order of the Board of Directors. The Proxy Statement and proxy were first made available on the internet or mailed to shareholders on or about May 24, 2021.
Your vote is very important. Whether or not you plan to attend the Annual Meeting, we encourage you to authorize a proxy to vote as promptly as possible by internet, by phone, or by mail.
If you are a shareholder of record, you may cast your vote in any of the following ways:
by authorizing a proxy by the internet at www.proxypush.com/gra (we encourage you to vote by the internet as it is the most cost-effective method and reduces the environmental impact of our Annual Meeting);
by authorizing a proxy by toll-free telephone at 1-866-883-3382 in the U.S.A., U.S. territories, or Canada;



by authorizing a proxy by completing and returning your proxy card so that it is received by our transfer agent before the close of business on July 6, 2021; or
by written ballot in person at the Annual Meeting
If you hold shares through a broker, bank, financial institution or other nominee or intermediary that serves as shareholder of record, you may cast your vote by complying with the instructions of your nominee or intermediary set forth on the voting instruction card.
By Order of the Board of Directors
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Cherée H. Johnson
Senior Vice President, General Counsel and Secretary
May 24, 2021
This Proxy Statement describes the matters that we would like you to vote on and provides information on those matters so that you can make an informed decision. For information about the Annual Meeting and the voting process, see “Questions and Answers about the Annual Meeting and the Voting Process” and “General Information” in this Proxy Statement.
The mailing address of the principal executive offices of W. R. Grace & Co. is 7500 Grace Drive, Columbia, Maryland 21044. The telephone number of the principal executive offices of W. R. Grace & Co. is (410) 531-4000.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON JULY 7, 2021

This Notice and the Proxy Statement, Annual Report and Form 10-K/A
are available at proxymaterials.grace.com.
IMPORTANT NOTICE REGARDING IN PERSON OR VIRTUAL ANNUAL MEETING
We intend to hold our Annual Meeting in person at the Ten Oaks Ballroom and Conference Center as indicated in our Notices and Proxy Statement. We continue to monitor the uncertainties surrounding public health and travel concerns relating to the COVID-19 pandemic coronavirus. We are keeping open the options of: (i) relocating and / or adjourning our Annual Meeting to our headquarters at 7500 Grace Drive in Columbia, MD, in which event the meeting would commence / recommence there at 9:45 a.m.; or (ii) holding a virtual-only meeting. Please monitor our website at www.grace.com and our filings on the SEC’s website at www.sec.gov for further information. We encourage you to review the Proxy Materials and vote in advance of the Annual Meeting.



TABLE OF CONTENTS
Notice of Annual Meeting
Proposal One — Election of Directors
Corporate Governance14
Other Information
Proposal Two — Ratification of the Appointment of Independent Registered Public Accounting Firm
Audit Committee Report
Proposal Three — Advisory Vote to Approve the Compensation of Grace’s Named Executive Officers
Proposal Four — Advisory Vote on Whether Advisory Vote on Named Executive Officer Compensation Should Occur Every One, Two or Three Years
Executive Compensation
Compensation Discussion and Analysis
Executive Summary
Overview
2020 Executive Compensation Program Summary
2020 Executive Compensation Elements, Targets and Results
Other Components and Features of our Executive Compensation Program
Executive Compensation Program Philosophy, Objectives, and Processes
How We Set Compensation — Elements and Target Mix
Compensation Benchmarking
Contributions of the Committee, CEO and Consultant in our Executive Compensation Process
Compensation Policies and Practices Relating to Risk Management
Deductibility of Executive Compensation
Compensation Committee Report
Compensation Committee Interlocks and Insider Participation
Compensation Tables
Questions and Answers about the Annual Meeting and the Voting Process
General Information
Important Information Concerning GAAP and Non-GAAP Financial Measures; Certain Definitions; and our Forward-Looking Statements Notice

5    W. R. GRACE & CO.


Notes Regarding References We Use In This Proxy Statement
References. Unless the context otherwise indicates, in this document the terms “Grace,” “we,” “us,” “our” or the “Company” mean W. R. Grace & Co., itself, and/or its consolidated subsidiaries.
Unless otherwise indicated, the contents of websites mentioned in this Proxy Statement are not incorporated by reference or otherwise made a part of this Proxy Statement.
The United States Securities and Exchange Commission is referred to as the “SEC.” The New York Stock Exchange is referred to as the “NYSE.”
References to the “2020 Form 10-K Original Filing” are to Grace’s 2020 Annual Report on Form 10-K, filed with the SEC on February 26, 2021; and references to the “2020 Form 10-K, as amended” are to Grace’s 2020 Annual Report on Form 10-K, as amended in a filing with the SEC on April 30, 2021.
Trademarks and other intellectual property. GRACE®, the GRACE® logo (and any other use of the term “Grace” as a tradename) as well as the other trademarks, service marks, or trade names used in this disclosure are trademarks, service marks, or trade names, registered in the United States and/or other countries, of Grace or its operating units, except as otherwise indicated. UNIPOL® and UNIPOL UNIPPAC® are trademarks of The Dow Chemical Company or an affiliated company of Dow. Grace and/or its affiliates are licensed to use the UNIPOL® and UNIPOL UNIPPAC® trademarks in the area of polypropylene. ART® and ADVANCED REFINING TECHNOLOGIES® are trademarks, registered in the United States and/or other countries, of Advanced Refining Technologies LLC. RESPONSIBLE CARE® and RESPONSIBLE CARE MANAGEMENT SYSTEM® are trademarks, registered in the United States and/or other countries, of the American Chemistry Council. Sustainalytics‡ is a leading independent provider of ESG and corporate governance ratings, research and analysis, which has provided the ESG Risk Rating as set forth in the ESG Risk Rating Summary Report issued December 31, 2020. EcoVadis is a leading third-party entity that evaluates suppliers on a complex scale of sustainability and ESG factors.
Cross-references for non-GAAP information. In this Proxy Statement, Grace presents certain financial information in accordance with U.S. Generally Accepted Accounting Principles, or “GAAP,” as well as financial information that is not in accordance with GAAP, referred to herein as “non-GAAP” financial measures. See Annex A to this Proxy Statement for important information concerning such non-GAAP financial measures, including reconciliations to GAAP financial measures. Annex A also includes cross-references to our 2020 Form 10-K Original Filing. That filing includes financial statements and information presented in accordance with GAAP, as well as certain non-GAAP information. Non-GAAP performance measures used or referred to in this Proxy Statement include: Adjusted Earnings Before Interest and Taxes (referred to as “Adjusted EBIT”); Adjusted Free Cash Flow; Adjusted Net Sales; and Adjusted Earnings Per Share (referred to as “Adjusted EPS”).


6    W. R. GRACE & CO.


PROPOSAL ONE
ELECTION OF DIRECTORS
Our Board of Directors (our “Board”) has nominated two directors, Hudson La Force and Mark E. Tomkins, to stand for election to our Board as Class I directors for a three-year term expiring at our 2024 annual meeting of shareholders.
Our directors bring to our Board a wealth of leadership capabilities derived from their service in executive and managerial roles, and also extensive board experience. Background information about the nominees and our other directors, including their business experience and directorships held during the past five years, ages as of February 15, 2021, and certain individual qualifications and skills that contribute to our Board’s effectiveness as a whole, are described below.
We believe that the Grace directors as a group have the backgrounds, skills and diversity important for our business. Our Board, led by an independent board chair, has overseen steady refreshment—with six of our directors having joined in the last seven years—balanced with two more experienced directors. Our Board operates within a highly regarded governance structure.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF HUDSON LA FORCE AND MARK E. TOMKINS

7    W. R. GRACE & CO.


Who We Are
Our Board of Directors
In 2020, our directors delivered strong leadership to manage the challenges that the pandemic and hurricanes presented. We met 16 times to support our management team in developing and implementing new safety protocols to protect our employees and our operations and to protect our ability to pursue our growth plan and deliver long-term value to our customers and shareholders — all of which we accomplished. In these meetings, we worked with our management team and advisors to undertake a thorough review of potential strategic alternatives to maximize value for shareholders.
Our directors’ wealth of leadership capabilities and experiences were critical to their effective guidance and oversight in a challenging year. Background information about the nominees and our other directors, including their business experience and directorships held during the past five years, ages as of February 15, 2021, and certain individual qualifications and skills that contribute to our effectiveness as a whole, are described below.


8    W. R. GRACE & CO.


Nominees For Election as Directors
Class I—Term to expire at the 2024 Annual Meeting
Hudson La Force
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President & CEO, W. R. Grace & Co.
Age 56
Director since 2017
Experience
President and Chief Executive Officer, W. R. Grace & Co. (November 2018 - present); President and Chief Operating Officer (2016 - 2018), where responsible for Grace’s Catalysts Technologies and Materials Technologies business segments and Grace’s global manufacturing and supply chain operations; Chief Financial Officer (2008 - 2016)
Chief Operating Officer and Senior Counselor to the Secretary, U.S. Department of Education and served as a member of the President’s Management Council
Held general management and financial leadership positions with Dell, Inc., AlliedSignal, Inc. (now Honeywell International Inc.), Emerson Electric Co., and Arthur Andersen & Co.
Qualifications
Significant leadership, operations, and financial experience
In-depth knowledge of our growth strategy, customers and worldwide operations
Education
BBA, Baylor University
MBA, Kellogg School of Management at Northwestern University
Corporate Boards
Madison Industries, a Chicago-based private industrial holding company, Advisory Board
Mark E. Tomkins
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Age 65
Director since 2006
Experience
Retired Senior Vice President and Chief Financial Officer, Innovene, a petrochemical and oil refining company controlled by BP that is now part of the INEOS Group (2005 - 2006)
Chief Financial Officer, Vulcan Materials Company (2001 - 2005)
Chief Financial Officer, Great Lakes Chemical (1998 - 2001)
Held various mid- and upper-level financial positions with AlliedSignal (now Honeywell International Inc.) and Monsanto Company
Certified public accountant
Qualifications
Intimate knowledge of the global chemicals and petroleum industries
Significant experience overseeing finance and business development in major corporations
Substantial governance and oversight experience
Education
BS, Eastern Illinois University
MBA, Eastern Illinois University
Corporate Boards
Terminix Global Holdings, Inc. (f/k/a ServiceMaster Holdings), Lead Director; formerly non-executive Chairman
Trinseo LLC
Former Corporate Board Service
Klockner Pentaplast
Elevance Renewable Sciences Inc., a privately-held renewable polymer and energy company
CVR Energy, Inc.

9    W. R. GRACE & CO.


Continuing Directors
Class II—Term to expire at the 2022 Annual Meeting
Robert F. Cummings, Jr.
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Age 71
Director since 2015

Experience
Retired Vice Chairman of Investment Banking, JPMorgan Chase & Co. (2010 - 2016)
Began his business career in the investment banking division of Goldman, Sachs & Co., where he was named a Partner and served as an advisory director
Qualifications
More than 30 years of investment banking experience advising corporate clients on financings, business development, mergers and acquisitions, and other strategic financial issues
Significant knowledge of public markets, private equity, and real estate
Substantial governance and oversight experience
Education
BA, Union College
MBA, University of Chicago
Corporate Boards
Corning Inc.
Former Corporate Board Service
Viasystems Group, Inc. (2002 - 2015)
Diane H. Gulyas
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Age 64
Director since 2015
Experience
Retired President, Performance Polymers business, E.I. du Pont de Nemours and Company (2009 - 2014)
Chief Marketing and Sales Officer, DuPont, responsible for corporate branding and marketing communications, market research, e-business, and marketing/sales capability worldwide (2004 - 2009)
Group Vice President of DuPont’s electronic and communication technologies platform
Vice President and General Manager for DuPont’s advanced fiber business
Joined DuPont in 1978
Qualifications
Substantial and varied management experience
Strong skills in engineering, manufacturing (domestic and international), marketing, and non-U.S. sales and distribution
Governance and oversight experience
Education
BS, Chemical Engineering, University of Notre Dame
Corporate Boards
Expeditors International of Washington, Inc.
Ingevity Corporation
Former Corporate Board Service
Navistar International Corporation (2009 - 2012)
Mallinckrodt Pharmaceuticals (2013 - 2018)

10    W. R. GRACE & CO.


Henry R. Slack
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Managing Director, Quarterwatch LLC
Age 71
Director since 2019*
Experience
Managing Director of Quarterwatch LLC ( 2001 - present)
Director, E. Oppenheimer and Son International Limited and on its Investment Committee (1979 - 2017)
Executive Director, Anglo American plc (1980 - 2000)
Chief Executive Officer, Minorco SA, an international mining company (1991 - 1999)
Qualifications
Significant industry and international experience and the perspectives of a public company chairman and chief executive officer
Background includes extended service on the boards of both a supplier of catalysts and a large consumer of materials
Extensive experience in the areas of business, finance and capital markets
Education
BA, Princeton University
Corporate Boards
Alico, Inc. (previously Chairman), a publicly-traded holding company with interests in agriculture and environmental resources
Former Corporate Board Service
Terra Industries, an international nitrogen-based fertilizer company (1983 - 2010); Chairman (2001 - 2010)
SABMiller plc (1998 - 2002)
Minorco SA (1980 - 1999)
Salomon Brothers (1982 - 1988)
Engelhard Corporation (1985 - 2006)
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*    For additional information regarding Mr. Slack’s election as a director of the Company, see “Other Information - Related Party Transactions - Agreements with Certain of our Shareholders.”

11    W. R. GRACE & CO.


Class III—Term to expire at the 2023 Annual Meeting
Julie Fasone Holder
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Chief Executive Officer, JFH Insights LLC
Age 68
Director since 2016

Experience
Chief Executive Officer, JFH Insights LLC, a consulting firm primarily dedicated to leadership coaching for high potential women executives (2009 - present)
Retired Senior Vice President, Chief Marketing, Sales and Reputation Officer, U.S. Area Executive Oversight, The Dow Chemical Company (2007 - 2009); Corporate Vice President, Human Resources, Public Affairs and Diversity and Inclusion (2006 - 2007); Business Vice President Specialty Plastics, (2004 - 2006); Business Vice President Industrial Chemicals (2000 - 2004); joined in 1975
Qualifications
Strong international business management, including sales, marketing, and operations
Deep chemical industry knowledge and experience that provides an important depth of understanding of how our businesses operate and interact with customers and suppliers
Substantial human capital management experience including diversity, equity and inclusion
Education
BA, Michigan State University
Corporate Boards
Eastman Chemical Company
McLaren Northern MI Hospital, Board of Trustees
Christopher J. Steffen
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Non-Executive Chairman, W. R. Grace & Co.

Age 78
Director since 2006
Experience
Appointed non-executive Chairman of the Board of Directors on November 7, 2019; previously, Lead Independent Director, presiding at all executive sessions of the Board
Retired Vice Chairman, Citicorp and its principal subsidiary, Citibank N.A. (1993 - 1996)
Senior Vice President and Chief Financial Officer, Eastman Kodak (1993)
Executive Vice President and Chief Financial and Administrative Officer, Honeywell International, Inc. (1989 -1993)
Vice President and Controller, Chrysler Corporation (1981 - 1988)
Qualifications
Background as a financial and operational leader with companies with global operations in various industries
Extensive international business expertise and knowledge of financial matters and financial reporting
Substantial governance and oversight experience
Education
BA, University of Michigan
MBA, Wayne State University
Former Corporate Board Service
Viasystems Group, Inc. (2003 - 2015), Chairman
Platinum Underwriters Holdings, Ltd. (2010 - 2015)
Accelrys, Inc. (2004 - 2012)
Citicorp and its principal subsidiary, Citibank N.A. (1993 - 1996)
Honeywell International, Inc. (1990 - 1992)

12    W. R. GRACE & CO.


Shlomo Yanai
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Board Chair, Lumenis

Age 68
Director since 2018
Experience
Board Chair, Lumenis (2020 - present)
Senior Advisor, Moelis & Company (2016 - present)
Retired President and Chief Executive Officer, Teva Pharmaceutical Industries Ltd. (2007 - 2012)
Chief Executive Officer and President, ADAMA Agricultural Solutions Ltd. (2002 - 2006)
Served for 32 years with the Israeli Defense Forces in a variety of leadership roles, retired as a Major General
Qualifications
Global industry leadership
Successful completion of over 20 acquisitions
Specialty chemicals and pharmaceutical experience
Perspective of a former Chief Executive Officer and Chair of three boards
Education
BA, Tel Aviv University
MPA, George Washington University
AMP, Harvard Business School
Corporate Boards
Amneal Pharmaceuticals, Inc.
Philip Morris International Inc.
Former Corporate Board Service
PDL BioPharma, Inc. (2018 - 2020)
Cambrex Corporation, Chairman (2014 - 2019)
Protalix Biotherapeutics, Inc., Chairman (2014 - 2019)
Perrigo Company plc (2015 - 2017)
Sagent Pharmaceuticals, Inc. (2015 - 2017)


13    W. R. GRACE & CO.


Corporate Governance
How We Are Selected, Elected, Evaluated and Refreshed
Nominees for Director in 2021
Our Board determined that each of the nominees qualifies for election as a member of our Board. In making this determination, our Board believes that directors should have the highest integrity, a diverse set of attributes and experiences, the education and ability to understand business problems and evaluate and propose solutions, the personality to work well with others, a commitment to the interests of our shareholders, a reasoned commitment to our social responsibilities, and the time to meet their responsibilities as directors. Our Board further believes that a substantial majority of our directors should be independent. Our Board has determined that Mr. Tomkins qualifies as an independent director under applicable rules and regulations and Grace’s independence standards. Since Mr. La Force is our President and Chief Executive Officer, he is not considered independent. See information contained in the “Corporate Governance—Number and Independence of Directors” section of this Proxy Statement, below.
If a nominee becomes unable to serve or for good cause will not serve as a director, the proxies will vote in their discretion for a Board-designated substitute or our Board may reduce the number of directors. Grace has no reason to believe that any of the nominees for election will be unable to serve.
Number and Independence of Directors
Our Board determines the number of directors. Currently, our Board consists of eight members. Under our Corporate Governance Principles, a substantial majority of Grace’s directors are required to be “independent” as determined under guidelines set forth in the listing standards of the New York Stock Exchange, or “NYSE.” Our Board, at its February 25, 2021, meeting, affirmatively determined that all of our directors, other than Mr. La Force, are independent under NYSE rules, because none of the directors has any direct or indirect material relationship with Grace or our subsidiaries under those rules.
The independence determination by the Board with respect to all directors (other than Mr. La Force) included the following:
None of these directors has any material relationship with Grace (either directly or as a partner, shareholder or officer of an organization that has a relationship with Grace).
None of these directors are, or have been within the last three years, an employee of Grace, nor is there an immediate family member who is, or has been within the last three years, an executive officer of Grace.
None of these directors received, nor is there an immediate family member who has received, during any 12-month period within the last three years, more than $120,000 in direct compensation from Grace, other than director and committee fees.

14    W. R. GRACE & CO.


None of these directors: (i) is a current partner or employee of a firm that is Grace’s internal or external auditor; (ii) has an immediate family member who is a current partner of such a firm; (iii) has an immediate family member who is a current employee of such a firm and personally works on Grace’s audit; and (iv) was, or has an immediate family member who was within the last three years a partner or employee of such a firm and personally worked on Grace’s audit within that time.
None of these directors or any immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of Grace’s present executive officers at the same time serves or served on that company’s compensation committee.
None of these directors or any immediate family member is a current executive officer of a company that has made payments to, or received payments from, Grace for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues.
None of these directors, nor any member of their immediate families, is an executive officer of any other entity with whom Grace does any material amount of business.
None of these directors serve, or within the last five years served, as an executive officer, director, trustee or fiduciary of any charitable organization to which Grace made any material charitable donation.
Two directors resigned from our Board in 2020: (i) Jeffry N. Quinn resigned from our Board, effective March 1, 2020; and (ii) Kathleen G. Reiland, resigned from our Board, effective October 13, 2020, based on her disagreement with the Board regarding Grace’s strategic direction. Both Mr. Quinn and Ms. Reiland had served on the Board’s Audit, Compensation, Nominating and Governance, and Corporate Responsibility Committees prior to their resignations, and each was an independent director under NYSE rules and the aforementioned independence standards.
There are no family relationships among any of our directors or executive officers.
Director Terms
Our Amended and Restated Certificate of Incorporation provides for the division of our Board into three classes, each to serve for a three-year term and until their respective successors are duly elected and qualify. The term of one class of directors currently expires each year at the annual meeting of shareholders. Our Board may fill a vacancy by electing a new director to the same class as the director being replaced. Our Board may also create a new director position in any class and elect a director to hold the newly created position. At the 2021 Annual Meeting, the shareholders will vote on the election of two Class I Directors to serve for a term expiring at our 2024 annual meeting of shareholders.
Over the last several years, the Board has undergone significant refreshment through the addition of new members and the departure of longer-serving members.
Director Identification and Selection
When our Board or the Nominating and Governance Committee has identified the need to add a new Board member with specific qualifications or to fill a vacancy on our Board, the Chair of the Nominating and Governance Committee will initiate a search, seeking input from other directors and management, review any candidates that the committee has previously identified or that have been recommended by shareholders in that year, and may retain a search firm. The committee will identify the initial list of candidates who satisfy the specific criteria, if any, and otherwise qualify for membership on our Board. Generally, the Chair of the Nominating and Governance Committee, together with two other members of that committee, and our CEO, will interview each qualified candidate. Other directors may also interview the candidate if practicable. Based on a successful outcome of those reviews, the committee will make its recommendation on the candidate to our Board.
The Nominating and Governance Committee has the sole authority to retain and terminate any search firm to be used to identify director candidates and the sole authority to approve the search firm’s fees and other retention

15    W. R. GRACE & CO.


terms.
Based on the belief that the Board’s effectiveness is enhanced by having an appropriate mix of longer-serving directors, who have a valuable understanding of our businesses, and newcomers who bring fresh viewpoints, the Nominating and Governance Committee has pursued a multi-year refreshment initiative which has significantly improved our Board’s diversity. As of March 31, 2021, the median tenure of our independent directors was slightly over six years, with only two independent directors having served for more than ten years. Presently, 29% of our independent directors are women.
Director Evaluations
Our Board conducts a self-evaluation process every year and periodically reviews the skills and characteristics needed by our Board. As part of the director evaluation review process, our Board considers the skill areas represented on our Board, those skill areas represented by directors expected to retire or leave our Board in the near future, and recommendations of directors regarding skills that could improve the ability of our Board to carry out its responsibilities.
Our Board and committee self-evaluation process starts with the distribution of extensive questionnaires seeking feedback regarding, among other things: responsibilities and contributions; culture and atmosphere; meetings and materials; and continuous improvement. The compiled responses become the basis for discussions in executive sessions in Board and committee meetings early each year. Thereafter, based on the evaluation results, the Board and committees consider changes to their practices and implement such improvements, when appropriate. As a result of these evaluations and discussions, the Board has taken actions such as updating Board and Committee Charters, responsibilities, and information management practices.
How We Are Organized
Under our Corporate Governance Principles, our Board makes a determination as to whether our CEO should also serve as the Board Chair. The Board makes this determination as part of the succession planning process, based upon the composition of our Board, and the circumstances of Grace at the relevant time. In 2019, the Board appointed Mr. Steffen to serve as independent, non-executive Chairman of our Board. Our Board believes that this leadership structure is appropriate for Grace and is in the best interests of Grace shareholders at this time.
As the independent Board Chair, Mr. Steffen presides at all meetings of our Board; calls and presides over executive sessions of the independent directors at each Board meeting; acts as primary liaison with the independent directors; approves Board meeting agendas; approves meeting schedules to assure that there is sufficient time for discussion of all agenda items; consults with the CEO on major issues in advance of each Board meeting; and calls meetings of the independent directors. He also serves as a contact for Grace shareholders who wish to communicate with our Board. Prior to Mr. Steffen’s appointment as non-executive Chairman, he served as the Company’s Lead Independent Director.
Interested parties may communicate with Mr. Steffen by writing to him at the following address: Christopher J. Steffen, Chairman, c/o W. R. Grace & Co., 7500 Grace Drive, Columbia, Maryland 21044.
Standing Committees of our Board of Directors
Our Board has the following four standing committees: (i) Audit Committee; (ii) Nominating and Governance Committee; (iii) Compensation Committee; and (iv) Corporate Responsibility Committee. Only independent directors, as independence is determined in accordance with NYSE rules, are permitted to serve on the standing committees. The Board annually selects, from among its members, the members and Chair of each standing committee.
The table below provides information with respect to current standing committee memberships of the directors as

16    W. R. GRACE & CO.


May 19, 2021. The table also sets forth the number of meetings (including teleconference and videoconference meetings) held by each Board committee in 2020. We reimburse directors for expenses they incur in attending Board and committee meetings and other activities incidental to their service as directors, but we do not pay our directors any separate meeting fees.
DirectorAuditCompensationNominating and GovernanceCorporate Responsibility
Robert F. Cummings, Jr.
Julie Fasone HolderC
Diane H. GulyasC
Hudson La Force
Henry R. Slack
Christopher J. Steffen*C
Mark E. TomkinsC
Shlomo Yanai
Number of 2020 Meetings5712
_______________________________________________________________________________
    Committee Member and Independent Director
C    Committee Member, Independent Director, and Committee Chair
*    Chairman of the Board
Each standing committee has a written charter that describes its responsibilities. Each of the standing committees has the authority, as it deems appropriate, to independently engage outside legal, accounting or other advisors or consultants. In addition, each standing committee annually conducts a review and evaluation of its performance and reviews and reassesses its charter. You can find the current charters of each standing committee on our website at www.grace.com/en-us/corporate-leadership/Pages/Governance.aspx.
Audit Committee
The Audit Committee has been established in accordance with the provisions of the Securities Exchange Act of 1934, as amended, or the “Exchange Act,” the rules of the NYSE, and our Corporate Governance Principles. The Audit Committee assists our Board in overseeing:
the integrity of Grace’s financial statements;
Grace’s compliance with legal and regulatory requirements;
the qualifications and independence of the independent auditors;
the performance of Grace’s internal audit function and independent auditors;
Grace’s systems of disclosure controls and procedures and internal controls over financial reporting; and
the preparation of the internal control report and an audit committee report as required by the United States Securities and Exchange Commission, or the “SEC.”
The Audit Committee has the authority and responsibility for the appointment, retention, compensation, oversight and, if circumstances dictate, discharge of Grace’s independent auditors, including pre-approval of all audit and non-audit services to be performed by the independent auditors. The independent auditors report directly to the Audit Committee and, with the internal auditors, have full access to the Audit Committee and routinely meet with the Audit Committee without management being present. The Audit Committee is also responsible for reviewing, approving and ratifying any related party transaction.
All of the members of our Audit Committee meet the independence standards of the SEC and NYSE, are financially literate within the meaning of the NYSE listing standards and meet the experience and financial requirements of the

17    W. R. GRACE & CO.


NYSE listing standards. Mr. Tomkins serves as Chair of the Audit Committee. Our Board determined that Mr. Tomkins is an “audit committee financial expert” as defined by SEC rules and regulations. A number of our other independent directors would also qualify as audit committee financial experts.
Nominating and Governance Committee
The Nominating and Governance Committee
sets criteria for the selection of directors, identifies individuals qualified to become directors, and recommends to our Board the director nominees for the annual meeting of shareholders;
develops and recommends to our Board appropriate corporate governance principles applicable to Grace; and
oversees and administers the evaluation of our Board, its committees and management.
In considering candidates for election to our Board (including candidates recommended by shareholders), we believe that our Board should be comprised of individuals meeting the qualifications set forth above under “Proposal One—Election of Directors.” We value diversity in all its forms and work to ensure that our Board reflects diversity of gender and other attributes as well as diversity of industry experience, and functional background. When we undertake searches for new members of our Board, we focus on gender and racial/ethnic diversity as well as candidate’s skills, experiences and other attributes. We also believe that a substantial majority of our Board should be independent, as defined by NYSE rules and applicable laws and regulations.
Each member of the Nominating and Governance Committee meets the independence standards of the NYSE. Mr. Steffen serves as Chair of the Nominating and Governance Committee.
Compensation Committee
The Compensation Committee
approves all compensation actions with respect to nonemployee members of the Board and executive officers of the Company;
evaluates and approves the Grace annual and long-term incentive compensation plans (including equity-based plans);
oversees the development of succession plans for the CEO and the other executive officers; and
produces and approves an annual report on executive officer compensation as required by applicable law.
The committee engaged Willis Towers Watson, or “WTW,” a leading global advisory, broking and solutions company, as its independent provider of compensation consulting services for decisions relating to 2020 compensation. Please see “Executive Compensation—Compensation Discussion and Analysis” in this Proxy Statement for more discussion about the role of WTW. The committee also utilizes external legal advisors as necessary and assesses the independence of all of its advisors.
Representatives of WTW regularly attended meetings of the committee. For portions of those meetings, the President and CEO, and our Senior Vice President, Human Resources and Information Technology, and Chief Human Resources Officer (our “CHRO”), also attended and were given the opportunity to express their views on executive compensation to the committee.
Each member of the Compensation Committee is independent under the independence standards of the NYSE; a “nonemployee director” of Grace as defined under Rule 16b-3 of the Exchange Act; and an “outside director” for the purposes of the corporate compensation provisions (previously) contained in Section 162(m) of the Internal Revenue Code of 1986, as amended, or Tax Code. Ms. Gulyas serves as Chair of the Compensation Committee.

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Corporate Responsibility Committee
The Corporate Responsibility Committee assists our Board and management in addressing Grace’s environmental and social responsibilities to its various stakeholders. In particular, the committee counsels and advises management with respect to:
the development, implementation and continuous improvement of procedures, programs, policies and practices relating to Grace’s environmental and social responsibilities, including ethical business practices, sustainability, and diversity and inclusion;
the adherence to those procedures, programs, policies and practices at all levels of Grace; and
the maintenance of open communications to ensure that issues are brought to the attention of, and considered by, all appropriate parties.
Each member of the Corporate Responsibility Committee is: independent under the independence standards of the NYSE; a “nonemployee director” of Grace as defined under Rule 16b-3 of the Exchange Act; and an “outside director” for the purposes of the corporate compensation provisions (previously) contained in Section 162(m) of the Tax Code. Ms. Holder serves as Chair of the Corporate Responsibility Committee.


19    W. R. GRACE & CO.


How We Govern
Corporate Governance Principles
Our Board has adopted the Grace Corporate Governance Principles to provide a framework for the governance of Grace, and to promote the efficient functioning of our Board. These principles are reviewed, and updated as appropriate, our governance highlights include:
An independent board chair
A majority voting standard for uncontested director elections
A small, steadily refreshed board
Seven independent directors two of whom are women
A management team of ten that, as of early 2021, includes two minorities and four women; three of four business leaders are diverse
Best practice internal and external pay parity
100% of NEOs have made personal investments in company equity
A clawback policy covering ethics violations and financial misconduct resulting in restatements
You can find the Grace Corporate Governance Principles on our website at www.grace.com/en-us/corporate-leadership/Pages/Governance.aspx.
Director Attendance at Board of Directors Meetings
Our Board generally holds six regular meetings per year and meets on other occasions when circumstances require. Directors spend additional time preparing for Board and committee meetings and participating in conference calls to discuss quarterly earnings announcements or significant transactions or developments. Additionally, we may call upon directors for advice between meetings. Our Corporate Governance Principles provide that our Board will meet regularly in executive session without management in attendance. Under our Corporate Governance Principles, we expect directors to regularly attend meetings of our Board and of all committees on which they serve and to review the materials sent to them in advance of those meetings. We expect nominees for election at each annual meeting of shareholders to attend the annual meeting.
Our Board held 16 meetings in 2020. Each director currently serving on our Board attended 75% or more of the 2020 meetings of our Board and the Board committees on which the director served in 2020.
Director Attendance at the Annual Meeting
We expect that directors serving on our Board at the time of the Annual Meeting will attend the Annual Meeting pursuant to our Corporate Governance Principles. All of our directors serving on our Board at the time of the 2020 Annual Meeting of Shareholders attended that meeting.
Board Role in Strategy Oversight
A key responsibility of our Board is the oversight of the Company’s short-term and long-term strategy. Our directors take an active role in the oversight of the Company’s strategy at both a Board and committee level and hold management accountable for the execution of our strategy. Each of our directors has an obligation to keep informed about the Company’s business and strategy. In doing so, they can better provide guidance to management in

20    W. R. GRACE & CO.


formulating and developing plans and knowledgeably exercise their decision-making authority on matters of importance to the Company.
Each year, our executive team meets to review and, when in the best interests of the Company, adjust the Company’s corporate strategy. Our Board, in turn, conducts its own review of the Company’s long-term strategic plan including its annual operating plan, and advises management on key priorities and our long-term strategy. Throughout the year, the Board receives information and updates from management and actively engages with senior leaders regarding the Company’s progress against its strategic goals.
Board Role in Risk Oversight
Our Board actively oversees the risk management of Grace, including the risks inherent in the implementation of our strategic plan and the operation of our businesses. Our Board reviews the Grace enterprise risk management program at least annually and considers whether risk management processes are functioning properly and are appropriately aligned to Grace’s strategy, culture, risk appetite and value-generation objectives. The Grace enterprise risk management program includes reviews of privacy and cybersecurity vulnerability and the actions necessary to enhance the controls and security of our information systems. Our Board provides guidance to management regarding risk management as appropriate for the risks faced by companies in our industry. These activities are supplemented by a rigorous internal audit function that reports directly to the Audit Committee. Our Board also oversees the risks posed by the COVID-19 pandemic and oversees our response to the COVID-19 pandemic.
Standing Board committees are responsible for overseeing risk management practices relevant to their functions. The Audit Committee oversees the management of market and operational risks that could have a financial impact, such as those relating to internal controls and financial liquidity. The Nominating and Governance Committee oversees risks related to governance issues, such as the independence of directors and the breadth of skills on our Board. The Compensation Committee manages risks related to Grace’s executive compensation plans and the succession of the CEO and other executive officers, and other talent-related risks. The Corporate Responsibility Committee manages certain risks related to government regulation and environment, health and safety matters, including the physical and transitional risks associated with climate change.
Board Role in Human Capital Management
Our Board believes that it has an important responsibility to oversee risks related to human capital, and this responsibility is shared by multiple Board committees as well as the full Board. While the full Board has oversight responsibilities for the overall management of human capital, the Corporate Responsibility Committee has specific responsibilities for reviewing management’s initiatives to promote diversity and inclusion in its talent acquisition, development, and retention programs. In addition, the Compensation Committee has specific responsibilities to review compensation policies and plans to promote the Company’s ability to attract, retain and motivate the talent required to execute our strategy.
Our Board believes it plays an important role as a resource to management in finding ways to extend our inclusive culture. Together, our Board and management seek and support top talent from diverse backgrounds to enhance innovation and to signal the importance of fairness and opportunity as ingredients supporting sustainable performance.

21    W. R. GRACE & CO.


Share Ownership Guidelines
To ensure that the long-term financial interests of our directors and senior executives are fully aligned with the long-term interests of our shareholders, our Board implemented share ownership guidelines. The current guidelines are as follows:
CategoryOwnership Guideline
Directors (Outside)5 times cash portion of annual retainer
CEO5 times base salary
Executive Officers, other than CEO3 times base salary
Presidents of Operating Segments2 times base salary
Certain Key Vice Presidents1 times base salary
Directors and executives subject to the share ownership guidelines generally have five years from the later of 2016 or the year of their initial election or appointment within the relevant category above to comply with the guideline. As noted above, 100% of Grace’s NEOs have invested personally in company equity in addition to the equity granted as part of their compensation.
Policy regarding Hedging and Pledging
Our policy regarding hedging and pledging provides that our directors and executive officers are not permitted to hedge their economic exposure to Grace common stock or other Company securities through put or call options, short sales, derivatives, or similar instruments or transactions, or pledge any Grace common stock or other Company securities as collateral or to secure any loan or other liability or obligation. The application of our hedging and pledging policy does not extend to officers or employees of the Company who are not directors or executive officers of Grace. The policy covers Grace common stock or other Company securities purchased by or granted to the directors and executive officers as part of Company compensation and would apply to such Grace common stock or other Company securities held directly or indirectly by our directors and executive officers.
Clawback Policy
To reinforce the alignment of management’s interests with those of our shareholders, and to support good governance practices, the Board has adopted an Executive Compensation Recovery Policy. The policy applies to recovery of both cash and equity incentive compensation in the case of: (i) misconduct that contributes to a restatement of the Company’s financial statements; (ii) breach of non-competition, non-solicitation or confidentiality obligations; or (iii) violations of the Company’s code of business ethics. The policy applies to all our NEOs.
Environment, Health, Safety, and Security (or “EHSS”) Programs
We continuously seek to improve our environment, health and safety performance. To the extent applicable, we extend the basic elements of the American Chemistry Council’s RESPONSIBLE CARE ® program to all our locations worldwide, embracing specific performance objectives in the key areas of management systems, product stewardship, employee health and safety, community awareness and emergency response, distribution, process safety and pollution prevention.
Sustainability
Overview
We succeed when we deliver value to our customers, and that success is increasingly based on how we help customers meet their sustainability goals. Many of our products and technical services improve the efficiency of our customers’ processes or products, or enable them to reduce energy or water use, cut harmful emissions, conserve material inputs, and/or reduce waste. Several of our technologies enable our customers to make products that meet

22    W. R. GRACE & CO.


the toughest environmental standards, or to reformulate products to address rising consumer and regulatory expectations for sustainability, human health, and safety. As a leading manufacturer of process catalysts, we have become an active participant in the circular economy, with increasing business in assisting our customers with the recycling or reprocessing of spent catalysts. As part of our commitment to RESPONSIBLE CARE®, we systematically track safety and environmental performance through a comprehensive, global EHS management system covering the environmental, health, safety (including process safety and product safety) and security aspects of our operations, and track progress through pertinent metrics. In 2020, we also provided disclosures in line with the Sustainability Accounting Standards Board (SASB) standard for the chemical industry, and publicly reported our facility carbon emissions and water usage to the Carbon Disclosure Project (CDP). Our Board oversees the Company’s sustainability initiatives, including through its Corporate Responsibility Committee.
Product Portfolio
As part of our periodic strategic review of our product portfolio, we work to identify products that contribute to our customers’ sustainability objectives, including:
Products designed for use-phase efficiency — defined by SASB as products that “through their use-can be shown to improve energy efficiency, eliminate or lower greenhouse gas (GHG) emissions, reduce raw materials consumption, increase product longevity, and/or reduce water consumption,” either through:
Improved products — by increasing the efficiency of a product during its use phase, or
Improved processes — by increasing the efficiency of the manufacturing processes used to make products;
Meeting Strict Environmental Standards — products that directly enable customers to meet environmental regulatory/legal requirements applicable to their products or manufacturing processes; and
Cleaner/Safer Products — products that enable customers to reformulate their products to avoid or reduce to de minimis levels substances of concern to their customers.
We reviewed the requested disclosures from SASB, CDP as well as other ESG ratings organizations and expanded our product categories to include products that make a significant contribution to the move towards a more circular economy through:
Circularity/Enabling Material Recycling and Renewable Feeds — products that are tailored to enable customers to replace petroleum inputs with bio-based and recycled materials, and FCC catalyst sales (not counted above) where Grace takes back spent FCC catalysts for recycling, or otherwise enables the reuse or recycling of spent catalysts.
Together, the products in our portfolio that address these sustainability endpoints accounted for approximately $1.1 billion or 49% of our total revenue in 2020 (including the revenues of our Advanced Refining Technologies LLC joint venture).
ESG Rankings
For 2020, Grace again earned a Gold Rating from EcoVadis, placing the Company in the 95th percentile of all companies ranked by EcoVadis on their sustainability performance. EcoVadis is a leading third-party entity that evaluates suppliers on a complex scale of sustainability and environmental, social, and governance, or “ESG,” factors. Also, in 2020, the ESG Risk Rating from Sustainalytics
placed us in the top quintile of both chemical and specialty companies.
Further Information
Shareholders and other interested persons can visit our website for additional sustainability information at
http://www.grace.com/sustainability/en-us, including our disclosures to SASB and CDP. That further information is not incorporated by reference and is not a part of this Proxy Statement.

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Security
We have implemented the RESPONSIBLE CARE® Security Code through a Company-wide security program focused on the security of our people, processes, and systems. We have reviewed existing security, including cybersecurity and vulnerability, and have taken actions to enhance security systems where deemed necessary. In addition, we are complying with the Department of Homeland Security’s Chemical Facility Anti-Terrorism Standards, including identifying facilities subject to the standards, conducting security vulnerability assessments and developing site security plans, as necessary.

24    W. R. GRACE & CO.


How You Can Communicate With Us
Communicating with the Board of Directors
We believe it is important for us as a board to cast a wide net to gather information and input, including individuals and entities who are not compensated by the Company. We therefore have established numerous engagement channels
Participating in our annual meeting
Requesting an engagement with our Independent Board Chair (contact information on website)
Contacting the chair of our Audit Committee (contact information on website)
Using our independently monitored reporting hotline available toll free for anonymous use if desired in 30 countries, staffed by multi-lingual case managers
Corresponding with us by writing to Mr. Steffen, Chairman of the Board, at the following address: Christopher J. Steffen, Chairman of the Board, c/o W. R. Grace & Co., 7500 Grace Drive, Columbia, Maryland 21044
The Board and management recognize the importance of proactive shareholder engagement. Throughout the year, our CEO/director, CFO and Senior Manager for Investor Relations engage regularly with shareholders on a variety of topics to ensure that we are aware of their viewpoints, address their questions and concerns, and provide a forum to receive their input and perspectives.
Our management’s proactive shareholder outreach and engagement provide an opportunity to discuss our strategy, financial results and business performance with investors and analysts. It occurs in many forms, including:
Investor conferences
Analyst meetings
Headquarters events
One-on-one meetings
Investor days
Investor presentations
Video and telephonic conference calls
E-mail communications
Independent perception studies and quarterly sentiment reports (interviews with investors)
During 2020, representatives of the Company presented at eight investor conferences and conducted six “non-deal roadshows” (where our officers held discussions with current and potential investors in our Company, but not as part of an offering of Grace securities), many of which were in a virtual format this year in response to the pandemic. Our efforts led to over 300 unique “touch point” engagements with more than 200 buy-side and sell-side firms over the course of the year. Shareholder feedback from our robust engagement program is provided to our Board and management, and these viewpoints are considered in our decision-making.
We provide additional forms of communications directed toward our shareholders, including:
Our annual report, SEC filings and proxy statement
Our quarterly earnings releases and earnings presentations
News releases
Conference calls with question and answer sessions for our quarterly earnings releases and other major corporate events
Our website and social media activity

25    W. R. GRACE & CO.


How We are Paid
Director Compensation Program
Under our compensation program for nonemployee directors, each nonemployee director receives an annual retainer of $210,000 that is divided between cash and equity. For the equity-based portion of the retainer which is paid in fully vested shares of our common stock, we calculate the number of shares of common stock to be issued by dividing the grant date dollar amount to be paid in shares of common stock by the fair market value per share of our common stock. This fair market value per share is the average of the high and low trading prices of our common stock on the NYSE on the date of grant. If any calculation would result in a fractional share being issued, we round the number of shares to be issued up to the nearest whole share. Under this program, in 2020, each nonemployee director receives an annual retainer of $95,000 paid quarterly in cash and an annual award of approximately $115,000 of Grace common stock issued in May. The non-executive Chairman is paid an additional annual cash retainer of $100,000. Other additional annual cash retainers are as follows: the Audit Committee Chair receives $18,000; the Chair of the Compensation Committee receives $15,000; the Chair of the Nominating and Governance Committee receives $10,000; and the Chair of the Corporate Responsibility Committee receives $10,000. We reimburse nonemployee directors for expenses they incur in attending Board and committee meetings and other activities incidental to their service as directors; however, we do not pay our directors any separate meeting fees. Our nonemployee directors, and all Grace employees, are entitled to participate in the Grace Foundation’s Matching Grants Program.
Mr. La Force’s 2020 compensation, payable in respect of his services as President and Chief Executive Officer of the Company, is described in the Compensation Discussion and Analysis and compensation tables below. Mr. La Force does not receive any additional compensation for serving as a member of our Board.
The following table sets forth amounts that we paid to our nonemployee directors in connection with their services to Grace during 2020.

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NameFees
Earned
or Paid
in Cash
($)(a)
Stock
Awards
($)(b)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)
All Other
Compensation
($)(c)
Total
($)
Robert F. Cummings, Jr.95,000115,015210,015
Julie Fasone Holder105,000115,0153,000223,015
Diane H. Gulyas110,000115,015225,015
Jeffry N. Quinn (d)15,83415,834
Kathleen G. Reiland (e)
Henry R. Slack95,000115,015210,015
Christopher J. Steffen205,000115,0153,000323,015
Mark E. Tomkins113,000115,015228,015
Shlomo Yanai95,000115,015210,015
_______________________________________________________________________________
(a)Amount consists of cash portion of annual retainer in the amount of $95,000 and additional payments to: Ms. Fasone Holder for serving as Chair of the Corporate Responsibility Committee in the amount of $10,000; Ms. Gulyas for serving as Chair of the Compensation Committee in the amount of $15,000; Mr. Tomkins for serving as Chair of the Audit Committee in the amount of $18,000; and Mr. Steffen for serving as Chairman of the Board in the amount of $100,000 and for serving as Chair of the Nominating and Governance Committee in the amount of $10,000.
(b)Reflects the aggregate grant date fair value of the equity portion of the annual retainer 2,280 shares of Grace common stock calculated in accordance with FASB ASC Topic 718.
(c)Consists of charitable contributions paid during 2020 to academic institutions at the request of the director pursuant to the W. R. Grace Foundation Inc.’s Matching Grants to Education Program. The program’s purpose is to assist the primary educational objectives of approved institutions of higher education in the United States and Canada. The foundation will match, dollar for dollar, personal gifts made by employees and nonemployee directors to qualified colleges, universities and secondary schools up to a maximum of $3,000 per year.
(d)Mr. Quinn resigned from our Board effective March 1, 2020 and therefore received prorated fees in respect of his service in 2020.
(e)Ms. Reiland did not receive any compensation from the Company for her service on our Board per a letter agreement with 40 North (see “Agreements with Certain of our Shareholders,” below).
Director Compensation Process
Our director compensation program is intended to enhance our ability to attract, retain and motivate nonemployee directors of exceptional ability and to promote the common interests of directors and shareholders in enhancing the value of Grace. The Compensation Committee reviews director compensation at least annually. The Compensation Committee has the sole authority to engage a consulting firm to evaluate director compensation and, in 2020, engaged Willis Towers Watson (WTW) to assist in establishing director compensation. The Compensation Committee determines director compensation based on recommendations and information provided by WTW and based on reviewing commercially available survey data from WTW related to general industry director compensation trends at companies of comparable size and our peer group companies (using the same peer group as is used for benchmarking our NEOs’ compensation as described under the caption “Executive Compensation—Compensation Discussion and Analysis”).

27    W. R. GRACE & CO.


Other Information

Stock Ownership of Certain Beneficial Owners and Management
The following table sets forth the amount of Grace common stock beneficially owned, directly or indirectly:
as of the date of the most recent Schedule 13D or Schedule 13G (or amendments thereto), filed by such person with the SEC on or before May 13, 2021, by each person that is the beneficial owner of more than 5% of the outstanding shares of Grace common stock as reflected in such Schedule (or amendment thereto); and
as of May 13, 2021, by:
each current director and nominee;
each of the executive officers named in the Summary Compensation Table set forth in “Executive Compensation—Compensation Tables”; and
all current directors, nominees, and executive officers as a group.

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Name and Address of Beneficial Owner (1)Shares of Common Stock Beneficially OwnedPercent (2)
40 North Management LLC (3)9,865,00814.9 
9 West 57th Street, 30th Floor
New York, NY 10019
The Vanguard Group, Inc. (4)5,669,4938.6 
100 Vanguard Blvd.
Malvern, PA 19355
Robert F. Cummings18,823
2,000(5)
20,823*
Julie Fasone Holder8,474*
Diane H. Gulyas14,823*
Hudson La Force123,107
101,332(6)
224,439*
Henry R. Slack5,495*
Christopher J. Steffen25,887*
Mark E. Tomkins24,823*
Shlomo Yanai6,973*
William C. Dockman14,736
21,065(6)
35,801*
Elizabeth C. Brown22,537
31,517(6)
54,054*
Keith N. Cole16,946
28,202(6)
45,148*
Mark A. Shelnitz69,104
12,624(5)
30,865(6)
112,593*
Current directors, nominees, and executive officers as a group (12 persons) (7)282,624
2,000(5)
182,116(6)
466,7400.7 
_______________________________________________________________________________
*Indicates less than 1.0%.
(1)The address of each of our directors and executive officers is c/o Corporate Secretary, W. R. Grace & Co., 7500 Grace Drive, Columbia, Maryland 21044. Except as otherwise indicated, to our knowledge, each individual, along with his or her spouse, as applicable, has sole voting and investment power over the shares.
(2)Based on 66,253,465 shares of Grace common stock outstanding on May 13, 2021, plus shares deemed outstanding pursuant to Rule 13d-3(d)(1) under the Exchange Act to the extent applicable.
(3)40 North Management LLC (“40 North Management”), 40 North Latitude Fund LP (“40 North Latitude Feeder”), 40 North GP III LLC (“40 North GP III”), 40 North Latitude Master Fund Ltd. (“40 North Latitude Master”), David S. Winter and David J. Millstone, beneficially owns 9,865,008 shares of Grace common stock (the “40 North Shares”). Each of 40 North Management, 40 North Latitude Feeder, 40 North GP III, 40 North Latitude Master, Mr. Winter and Mr. Millstone may be deemed the beneficial owner of all of the 40 North Shares. 40 North Management may be deemed to have sole power to vote and sole power to dispose of all of the 40 North Shares, whereas the other reporting persons having beneficial ownership may be deemed to have shared power to vote and shared power to dispose of such 40 North

29    W. R. GRACE & CO.


Shares. 40 North Management serves as principal investment manager to 40 North Latitude Feeder and 40 North Latitude Master. As such, 40 North Management has been granted investment discretion over portfolio investments, including the 40 North Shares. Mr. Winter and Mr. Millstone serve as the sole members and principals of each of 40 North Management and 40 North GP III, and as the sole directors of 40 North Latitude Master. The ownership information set forth is based on materials contained a in Schedule 13D/A filed with the SEC by 40 North Management LLC on April 26, 2021.
(4)The Vanguard Group, Inc. (“VGI”) beneficially owns in the aggregate 5,669,493 shares of Grace common stock by means of: shared voting power over 40,700 shares; sole investment power over 5,581,527 shares; and shared investment power over 87,966 shares. The ownership information set forth is based in its entirety on material contained in a Schedule 13G/A filed with the SEC by VGI on February 10, 2021.
(5)Shares owned by trusts and other entities as to which the person has the power to direct voting and/or investment.
(6)Shares of Grace common stock to be issued upon the exercise of stock options that are exercisable and shares of Grace common stock with respect to which investment or voting power will vest within 60 days after May 13, 2021. Pursuant to SEC rules, such shares are deemed to be beneficially owned as of such date.
(7)Excludes Mr. Shelnitz, who resigned effective December 31, 2020, and includes Cherée H. Johnson, who was elected Senior Vice President, General Counsel and Secretary in 2021.
Arrangements that may result in Change of Control
For Arrangements that may result in Change of Control, see “Other Information - Related Party Transactions—Agreements with Certain of our Shareholders,” below, which information is incorporated herein by reference.

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Equity Compensation Plan Information
The following table sets forth information as of December 31, 2020, with respect to our compensation plans under which shares of Grace common stock are authorized for issuance upon the exercise of options, warrants or other rights. The only such compensation plans in effect are stock incentive plans providing for the issuance of stock options, restricted stock and other equity awards.
Plan CategoryNumber of securities
to be issued upon
exercise of
outstanding options, warrants and rights
(#)(b)
Weighted-average
exercise price of
outstanding options, warrants and rights
($)(b)(c)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities to be issued upon exercise of outstanding options, warrants and rights)
(#)(d)
Equity compensation plans approved by security holders(a)1,981,15966.866,304,064
Equity compensation plans not approved by security holdersN/AN/AN/A
Total1,981,15966.866,304,064
_______________________________________________________________________________
(a)    The 2014 Stock Incentive Plan (the “2014 Plan”) was approved on behalf of Grace shareholders by the Official Committee of Equity Security Holders in the Grace Chapter 11 case and by the U.S. Bankruptcy Court and U.S. District Court for the District of Delaware as part of our Joint Plan of Reorganization, which became effective on February 3, 2014. The 2018 Stock Incentive Plan (the “2018 Plan”) was approved by Grace shareholders on May 9, 2018.
(b)    Under the 2014 Plan, as of December 31, 2020 there were 898,066 shares of Grace common stock to be issued upon the exercise of outstanding options (the weighted-average exercise price of outstanding options is $68.86), 38,658 shares to be issued upon completion of the performance period for stock-settled performance-based units, or “PBUs” (assuming 55% of target payout for the 2018-2020 PBUs) and 23,359 shares to be issued upon completion of the vesting period for stock-settled restricted stock units, or “RSUs,” awards. Under the 2018 Plan, as of December 31, 2020 there were 519,268 shares of Grace common stock to be issued upon the exercise of outstanding options (the weighted-average exercise price of outstanding options is $63.39), 392,565 shares to be issued upon completion of the performance period for stock-settled PBUs (assuming 55% of target payout for the 2018-2020 PBUs and the maximum number of shares are earned in respect of all other outstanding PBUs) and 109,243 shares to be issued upon completion of the vesting period for stock-settled restricted stock unit (“RSU”) awards.
(c)    The calculation of weighted-average exercise price does not take outstanding PBUs and RSUs into account.
(d)    Amount represents the number of shares of Grace common stock available for issuance pursuant to stock options, restricted stock, PBUs and other awards that could be granted in the future under the 2018 Plan. Future awards may not be granted under the 2014 Plan.
Related Party Transactions
Our Board recognizes that transactions involving related persons in which Grace is a participant can present conflicts of interest, or the appearance thereof, so our Board has adopted a written policy as part of the Grace Corporate Governance Principles (which are available on our website at www.grace.com/en-us/corporate-leadership/Pages/Governance.aspx) with respect to related person transactions. The policy applies to transactions involving related persons that are required to be disclosed pursuant to SEC regulations, which are generally transactions in which:
Grace is a participant;
the amount involved exceeds $120,000; and
any related person, such as a Grace executive officer, director, director nominee, 5% shareholder or any of their respective family members, has a direct or indirect material interest.

31    W. R. GRACE & CO.


Each such related person transaction shall be reviewed, determined to be in, or not inconsistent with, the best interests of Grace and its shareholders and approved or ratified by:
the disinterested members of the Audit Committee, if the disinterested members of the Audit Committee constitute a majority of the members of the Audit Committee; or
the disinterested members of our Board.
In the event a related person transaction is entered into without prior approval and, after review by the Audit Committee or our Board, as the case may be, the transaction is not ratified, we will make all reasonable efforts to cancel the transaction.
Agreements with Certain of our Shareholders
On April 26, 2021, the Company issued a press release announcing the entry into a definitive agreement providing for the acquisition of the Company by an affiliate of Standard Industries Holdings Inc. (“Standard Industries Holdings”), subject to the terms and conditions contained therein. The Company also announced that Standard Industries Holdings’ related investment platform 40 North Latitude Master Fund Ltd. (“40 North”), which owns approximately 14.9% of the Company’s outstanding common stock, had entered into a voting agreement pursuant to which 40 North has agreed to vote its shares of Grace common stock in favor of the transaction.
Merger Agreement
On April 26, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Gibraltar Acquisition Holdings LLC, a Delaware limited liability company (“Parent”) and a wholly owned subsidiary of Standard Industries Holdings, and Gibraltar Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Our Board has unanimously approved the Merger Agreement.
As a result of the Merger, each share of Grace common stock outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (subject to certain exceptions, including for shares of Grace common stock owned by shareholders of the Company who have not voted in favor of the adoption of the Merger Agreement and have properly exercised appraisal rights in accordance with Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”)) will, at the Effective Time, automatically be converted into the right to receive $70.00 in cash, without interest, subject to applicable withholding taxes (the “Merger Consideration”).
Pursuant to the Merger Agreement, as of the Effective Time, (1) each option to purchase shares of Grace common stock and each stock appreciation right with respect to shares of Grace common stock that is outstanding immediately prior to the Effective Time will vest at closing and be converted into the right to receive an amount in cash equal to the product of Merger Consideration (less the applicable exercise price) and the number of shares of Grace common stock covered by such option (without interest and less applicable withholding taxes) and (2) each restricted stock unit award and each performance-based unit award relating to shares of Grace common stock that is outstanding immediately prior to the Effective Time will be assumed and converted into the right to receive an amount in cash (without interest) equal to the product obtained by multiplying the Merger Consideration by the number of shares of Grace common stock covered by such award immediately prior to the Effective Time, which converted cash award will be subject to continued service vesting and other terms as set forth in the Merger Agreement.
Pursuant to the terms of the Merger Agreement, the Company will suspend payment of its quarterly dividend during the pendency of the transaction.
If the Merger is consummated, the Grace common stock will be delisted from the New York Stock Exchange and deregistered under the Exchange Act.

32    W. R. GRACE & CO.


Closing Conditions
Completion of the Merger is subject to certain mutual closing conditions, including (1) the adoption of the Merger Agreement by holders of a majority of the outstanding shares of Grace common stock, (2) the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and the approval of the Merger under certain other applicable antitrust laws, and (3) the absence of any order, injunction or law prohibiting the Merger. In the case of the Company, completion of the Merger is subject to certain additional closing conditions, including (A) the accuracy of Parent and Merger Sub’s representations and warranties, subject to certain materiality standards set forth in the Merger Agreement, and (B) the performance by Parent and Merger Sub in all material respects of their covenants and agreements under the Merger Agreement. In the case of Parent and Merger Sub, completion of the Merger is subject to certain additional closing conditions, including (X) the accuracy of the Company’s representations and warranties, subject to certain materiality standards set forth in the Merger Agreement, (Y) the performance by the Company in all material respects of its covenants and agreements under the Merger Agreement, and (Z) no Company Material Adverse Effect (as defined in the Merger Agreement) having occurred since the date of the Merger Agreement. The closing of the Merger is not subject to a financing condition. The parties expect the transaction to close in the fourth quarter of 2021.
No Solicitation
The Merger Agreement provides that the Company must comply with customary non-solicitation restrictions, including certain restrictions on its ability to solicit alternative acquisition proposals from third parties, to provide non-public information to third parties and to engage in negotiations with third parties regarding alternative acquisition proposals. Subject to certain customary “fiduciary out” exceptions, our Board is required to recommend that the Company’s shareholders adopt the Merger Agreement and to call a meeting of the Company’s shareholders to vote on a proposal to adopt the Merger Agreement.
Termination and Fees
Either the Company or Parent may terminate the Merger Agreement in certain circumstances, including if (1) the Merger is not completed by January 26, 2022 (subject to extension to April 26, 2022 under certain circumstances described in the Merger Agreement, including for purposes of obtaining required regulatory approvals), (2) a governmental authority of competent jurisdiction has issued a final non-appealable governmental order or law permanently prohibiting the Merger, (3) the Company’s shareholders fail to adopt the Merger Agreement, and (4) the other party materially breaches its representations, warranties or covenants in the Merger Agreement, subject in certain cases, to the right of the breaching party to cure the breach. Parent and the Company may also terminate the Merger Agreement by mutual written consent.
The Company is also entitled to terminate the Merger Agreement, and receive a termination fee of $281 million from Parent, if (1) Parent fails to consummate the Merger following the satisfaction or waiver of certain closing conditions or (2) if Parent otherwise breaches its obligations under the Merger Agreement such that the applicable condition to the consummation of the Merger is not satisfied.
If the Merger Agreement is terminated in certain other circumstances, including by the Company in order to accept a Superior Company Proposal (as defined in the Merger Agreement), or by Parent because our Board withdraws its recommendation in favor of the Merger, the Company would be required to pay to Parent a termination fee of $141 million.
Financing
Parent has obtained equity financing and debt financing commitments for the purpose of financing the transactions contemplated by the Merger Agreement. Standard Industries Holdings has committed to capitalize Parent at the closing of the Merger with an aggregate equity contribution equal to $3,516 million on the terms and subject to the conditions set forth in its equity commitment letter. Standard Industries Holdings has announced that its equity commitment will be supported by the available cash of its subsidiary, Standard Industries Inc., and up to $2,500 million in proceeds from a secured term loan.

33    W. R. GRACE & CO.


J.P. Morgan, BNP Paribas, Citi and Deutsche Bank (the “Lenders”) have agreed to provide Parent with debt financing in an aggregate principal amount of up to $3,455 million on the terms and subject to the conditions set forth in a debt commitment letter. The obligations of the Lenders to provide debt financing under the debt commitment letter are subject to a number of customary conditions.
In addition, Standard Industries Holdings has guaranteed payment of the termination fee payable by Parent under certain circumstances, as well as certain reimbursement obligations that may be owed by Parent pursuant to the Merger Agreement, subject to the terms and conditions set forth in the Merger Agreement and a limited guarantee provided by Standard Industries Holdings to the Company.
Other Terms of the Merger Agreement
The Company has made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants to use reasonable best efforts to conduct its business in all material respects in the ordinary course during the period between the date of the Merger Agreement and the completion of the Merger. The parties have agreed to take all actions necessary to consummate the merger, including cooperating to obtain the regulatory approvals necessary to complete the Merger.
The foregoing description of the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, a copy of which has been filed with the SEC.
The Merger Agreement has been filed with the SEC to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company, Parent, Merger Sub or their respective affiliates. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement as of the specific dates therein, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be reflected in the Company’s public disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Company, Parent and Merger Sub and the transactions contemplated by the Merger Agreement that will be contained in or attached as an annex to the proxy statement on Schedule 14A that the Company will file in connection with the transactions contemplated by the Merger Agreement, as well as in the other filings that the Company will make with the SEC.
Voting Agreement
40 North has entered into a voting agreement (the “Voting Agreement”) with the Company pursuant to which it has agreed, among other things, to vote its shares of Grace common stock in favor of adoption of the Merger Agreement, so long as, among other things, the Merger Agreement remains in effect. 40 North and its affiliates collectively own 9,865,008 shares of Grace common stock as of the date hereof, representing approximately 14.9% of the total outstanding Grace common stock.
The foregoing description of the Voting Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Voting Agreement, a copy of which has been filed with the SEC.
Letter Agreements
On February 1, 2021, we entered into a letter agreement (the “2021 Letter Agreement”) with 40 North Management LLC, 40 North GP III LLC, 40 North Latitude Master Fund Ltd. and 40 North Latitude Fund LP (collectively, the “40 North Parties”). Pursuant to the 2021 Letter Agreement and subject to the terms and conditions set forth therein, the 40 North Parties agreed to, among other things, comply with certain confidentiality obligations and standstill

34    W. R. GRACE & CO.


restrictions pursuant to which the 40 North Parties would refrain from taking certain actions with respect to the Company and the common stock of the Company until 11:59 p.m. Eastern Time on March 31, 2021 (such restrictions, the “Standstill Provisions”), subject to the earlier termination of the Standstill Provisions in certain circumstances.
In connection with the 40 North Parties’ agreement to the Standstill Provisions, the Company agreed in the 2021 Letter Agreement that, among other things, notwithstanding the latest date that a shareholder may provide timely notice of a nomination of candidates for election to the Company’s Board pursuant to the Company’s Amended and Restated By-Laws (the “By-Laws”), our Board would consider timely any nomination by the 40 North Parties of director candidates for the upcoming 2021 Annual Meeting that was delivered to the Company on or before the fifteenth day following the expiration or termination of the Standstill Provisions and otherwise complied with the applicable requirements of the By-Laws. In addition, the Company agreed in the 2021 Letter Agreement that, if the 40 North Parties delivered a notice of nomination of director candidates for the 2021 Annual Meeting on or before the fifteenth day following the expiration or termination of the Standstill Provisions, which notice of nomination otherwise complied with the requirements of the By-Laws, the Company would hold its 2021 Annual Meeting no earlier than 60 days from the date of such notice of nomination.
On April 14, 2021, the Company entered into an amendment (the “Extension Amendment”) to the 2021 Letter Agreement. Pursuant to the Extension Amendment, Grace and the 40 North Parties agreed to extend the nomination deadline for the 40 North Parties to submit candidates for election to the Company’s Board of Directors at the Company’s 2021 Annual Meeting of Shareholders to April 26, 2021. Grace and the 40 North Parties also agreed not to make any further public statements regarding the other party or the ongoing discussions between the parties prior to April 26, 2021.
The 40 North Parties did not submit a nomination of director candidates for the 2021 Annual Meeting during the applicable time period set forth in the 2021 Letter Agreement, as extended.
On February 20, 2019, we entered into an agreement with the 40 North Parties pursuant to which, among other things, we included Mr. Slack and Ms. Reiland on the slate of director nominees recommended by our Board in the Proxy Statement for our 2019 Annual Meeting of Shareholders. Mr. Slack and Ms. Reiland were elected as directors at that meeting. Prior to our 2020 Annual Meeting of Shareholders, our Board appointed Ms. Reiland as a Class I director with a term expiring at our 2021 Annual Meeting of Shareholders. Effective October 13, 2020, Ms. Reiland resigned from the Company’s Board and all of its committees based on her disagreement with the Board regarding the Company’s strategic direction. Ms. Reiland had served on the Board’s Audit, Compensation, Nominating and Governance, and Corporate Responsibility Committees.
For the amount of Grace common stock beneficially owned, directly or indirectly, by 40 North and its affiliates, see “Other Information—Stock Ownership of Certain Beneficial Owners and Management,” above.

35    W. R. GRACE & CO.


Our Auditors
PROPOSAL TWO
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of our Board has selected PricewaterhouseCoopers LLP (“PwC”) to be Grace’s independent registered public accounting firm for 2021. Although the submission of this matter for shareholder ratification at the Annual Meeting is not required by law, regulation or our By-laws, our Board is nevertheless doing so to determine our shareholders’ views. If the selection is not ratified, the Audit Committee will reconsider its selection of PwC for future years.
PwC acted as independent accountants for Grace and its consolidated subsidiaries during 2020 and has been retained by the Audit Committee for 2021. A representative of PwC is expected to attend the Annual Meeting and be available to answer questions and would have an opportunity to make a statement if he or she wishes to do so.
See “Principal Accountant Fees and Services” and “Audit Committee Pre-Approval Policies and Procedures,” below.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS GRACE’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2021.


36    W. R. GRACE & CO.


Principal Accountant Fees and Services
The Audit Committee of our Board selected PwC to act as our principal independent accountants for 2020. The following table sets forth the fees and expenses that we incurred for the services of PwC for the year ended December 31, 2019, and our estimate of the fees and expenses that we incurred for the year ended December 31, 2020:
Fee Description20202019
Audit Fees$2,635,000 $2,564,000 
Audit-Related Fees178,000 55,000 
Tax Fees6,000 203,000 
All Other Fees5,000 5,000 
Total Fees$2,824,000 $2,827,000 
Audit Services relate to the audit of our consolidated financial statements and our internal controls over financial reporting (as required under Section 404 of the Sarbanes-Oxley Act of 2002); the reviews of our consolidated quarterly financial statements; services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements; services in connection with the implementation of new accounting or financial standards; and consents and assistance with respect to our SEC filings.
Audit-Related Services consisted of assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not included under “Audit Services” above, including relating to our offering of senior notes.
Tax Services consisted of tax advice and compliance for non-U.S. subsidiaries, including preparation of tax returns, and advice and assistance with transfer pricing compliance.
All Other Fees consisted of license fees for access to accounting, tax, and financial reporting literature and non-financial agreed-upon procedures.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee has adopted a pre-approval policy that requires the Audit Committee to specifically pre-approve the annual engagement of the independent accountants for the audit of our consolidated financial statements and internal controls. The policy also provides for general pre-approval of certain audit-related, tax and other services provided by the independent accountants. Any other services must be specifically pre-approved by the Audit Committee. However, the Chair of the Audit Committee has the authority to pre-approve services requiring immediate engagement between scheduled meetings of the Audit Committee. The Chair must report any such pre-approval decisions to the full Audit Committee at its next scheduled meeting. During 2020 and 2019, no audit-related, tax, or other services were performed by PwC without specific or general approval as described above. We have been advised by PwC that a substantial majority of the hours expended on their engagement for the 2020 audit of our consolidated financial statements and internal controls were attributed to work performed by PwC’s full-time, permanent employees.

37    W. R. GRACE & CO.


Audit Committee Report
The following is the report of the Audit Committee of our Board with respect to Grace’s audited consolidated financial statements for the year ended December 31, 2020, which include the consolidated balance sheets of Grace as of December 31, 2020 and 2019, and the related consolidated statements of income, comprehensive income, cash flows, and changes in equity for each of the three years in the period ended December 31, 2020, and the notes thereto (collectively, the “Financial Statements”).
The Audit Committee consists of the following members of our Board: Mark E. Tomkins (Chair), Robert F. Cummings, Jr., Julie Fasone Holder, Diane H. Gulyas, Henry R. Slack, Christopher J. Steffen and Shlomo Yanai. Each of the members of the Audit Committee is “independent,” as defined under the NYSE’s listing standards and the rules and regulations of the Securities Exchange Act of 1934, as amended. The Audit Committee operates under a written charter adopted by our Board.
The Audit Committee is responsible for reviewing the financial information that Grace provides to shareholders and others, and for overseeing Grace’s internal controls and its auditing, accounting and financial reporting processes generally. The Audit Committee’s specific responsibilities include: (1) selection of an independent registered public accounting firm to audit Grace’s annual consolidated financial statements, including the periodic rotation required by SEC rules, and its internal control over financial reporting; (2) serving as an independent and objective party to monitor Grace’s annual and quarterly financial reporting process and internal control system; (3) reviewing and appraising the audit efforts of Grace’s independent registered public accounting firm and internal audit department; and (4) providing an open avenue of communication among the independent registered public accounting firm, the internal audit department, management and our Board.
The Audit Committee has reviewed and discussed the audited financial statements of Grace for the year ended December 31, 2020, with Grace’s management.
The Audit Committee has discussed with PwC, Grace’s independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC.
The Audit Committee has received the written disclosures and the letter from PwC required by applicable requirements of the Public Company Accounting Oversight Board regarding PwC’s communications with the Audit Committee concerning independence and has discussed with PwC the independence of PwC.
Based on the Audit Committee’s review and discussions noted above, the Audit Committee recommended to our Board that Grace’s audited financial statements be included in Grace’s Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the SEC.
AUDIT COMMITTEE
Mark E. Tomkins, Chair
Robert F. Cummings, Jr.
Julie Fasone Holder
Diane H. Gulyas
Henry R. Slack
Christopher J. Steffen
Shlomo Yanai


38    W. R. GRACE & CO.


Our Pay
PROPOSAL THREE
ADVISORY VOTE TO APPROVE THE COMPENSATION OF GRACE’S NAMED EXECUTIVE OFFICERS
Under Section 14A of the Exchange Act, our shareholders are entitled to vote on a proposal to approve on an advisory (non-binding) basis, the compensation of the named executive officers set forth in the Summary Compensation Table set forth in “Executive Compensation—Compensation Tables.” This vote is generally referred to as a “Say on Pay” vote. Accordingly, we are asking shareholders to approve, on an advisory basis, the following resolution:
RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.
We do not intend that this vote address any specific items of compensation, but rather the overall compensation of our named executive officers and the policies and procedures described in this Proxy Statement. This vote is advisory and not binding on Grace, the Compensation Committee, or our Board. However, as the vote is an expression of our shareholders’ views on a significant matter, the Compensation Committee will consider the outcome of the vote when making future executive compensation decisions. We currently hold such advisory vote each year and would expect to hold another advisory vote at our 2022 Annual Meeting of Shareholders (if held), pending the shareholder vote under Proposal Four set forth in this Proxy Statement.
The principal components of pay under our 2020 executive compensation program were annual base salary, annual cash incentive awards, and long-term incentive awards, which consisted of stock options, PBUs and RSUs. The performance measures for the 2020 annual cash incentive awards were Adjusted EBIT (weighted 50%), Adjusted Free Cash Flow (weighted 25%), and Adjusted Net Sales (weighted 25%). For PBUs, which represent approximately 50% of the value of our Long-Term Incentive Plan, or “LTIP,” awards, the amount of an individual payout under a PBU award is based upon: an award recipient’s PBU target share amount; the growth in our LTIP Adjusted EPS over the three-year performance period; the Total Shareholder Return (or “TSR”) for the three-year performance period as compared to a similar figure for the Russell 1000 Index; and the value of Grace common stock on the payout date. We encourage our shareholders to read the Compensation Discussion and Analysis set forth under “Executive Compensation” which describes our 2020 compensation program in detail as well as Annex A hereto, which provides important information about non-GAAP performance measures.
We have designed our executive compensation program to attract, retain, and motivate a highly qualified and effective executive team and to promote long-term shareholder value, strong annual and long-term operational and financial results, and ethical conduct in accordance with the Grace Core Values. The Grace Core Values consist of a commitment to teamwork, performance, integrity, speed and innovation, which, with our overall commitment to safety, are the foundation of our corporate culture.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL ON AN ADVISORY BASIS OF THE COMPENSATION OF GRACE’S NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

39    W. R. GRACE & CO.


PROPOSAL FOUR
ADVISORY VOTE ON WHETHER THE ADVISORY VOTE TO APPROVE THE COMPENSATION OF GRACE’S NAMED EXECUTIVE OFFICERS SHOULD OCCUR EVERY ONE, TWO, OR THREE YEARS
Under Section 14A of the Exchange Act, our shareholders are entitled to indicate how frequently we should seek an advisory vote to approve the compensation of our named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables, and any related material disclosed in this Proxy Statement. Accordingly, we are asking whether the advisory vote should occur every one year, every two years, or every three years. Our Board asks that you support a frequency period of every one year (an annual vote) for future non-binding shareholder votes on the compensation of our named executive officers.
In making its recommendation aligned with our current practice, our Board believes that an advisory vote every year will be the most effective timeframe for Grace to respond to shareholders’ feedback and provide Grace with sufficient time to engage with shareholders to understand and respond to the vote results.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR A FREQUENCY OF “ONE YEAR” FOR FUTURE NONBINDING SHAREHOLDER VOTES TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

40    W. R. GRACE & CO.


Executive Compensation

Compensation Discussion and Analysis
Executive Summary
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COVID-19 and Hurricanes Laura and Delta had significant impacts on our business.
The impact of the COVID-19 pandemic, combined with Hurricane-related outages and repairs to vital Grace facilities, caused Grace to perform below plan on adjusted metrics including net sales, EBIT, EPS and free cash flow.
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Our management team and Board acted quickly and decisively.
The safety and well-being of our employees and our customers was our first priority. We had no layoffs, limited furloughs, continued all employee benefits, moved nearly half of our employees to remote work, and took action to protect our critical employees in the workplace.
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We delivered solid operational and financial results and positioned the Company for future growth despite the challenging year.
We met our customer obligations and delivered a very strong finish to 2020. In the short term, we invested in growth, improved cash flow, continued our dividend, and optimized our manufacturing network. We positioned Grace for long-term growth by continuing our product development and growth initiatives without interruption.
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We focused our employees on free cash flow generation and rewarded the team for their exemplary work.
In April, the Company revised our pre-pandemic 2020 performance metrics under our Annual Incentive Compensation Program (“AICP”) for all participants, except the CEO and his Leadership Team (who retained the original 2020 performance metrics). The revised broad-based plan focused entirely on adjusted free cash flow, which was deemed essential for managing through the pandemic. Plan participants, which includes the vast majority of our workforce, received payouts at an average of 71% of target.
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Annual incentives for the Named Executive Officers (“NEOs”) paid on average at 60% of target.
In early 2021, the Board and the Committee evaluated the Company’s performance relative to the original performance metrics and determined that based solely on the original metrics, payout to the NEOs would be 16% of target AICP opportunity. After considering the performance of each NEO on an individual basis, taking into account, specifically, contributions towards managing the pandemic, meeting customer commitments, delivering financial results, advancing the Grace Value Model, managing human capital risk, promoting diversity and reinforcing our inclusive culture, and taking actions to manage Grace’s environmental footprint, the Committee used its discretion to adjust NEO AICP from 16% of target, as indicated by the formula, to an average of 60% of target.
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2018-2020 performance-based units (“PBUs”) paid out at approximately 55% of target.
The Company’s PBU awards are tied to specific EPS targets over a three year period. Our Committee used its discretion under the equity incentive plan to bifurcate and pro-rate the 2018-2020 award to recognize (1) above target performance in 2018-2019 and (2) below threshold performance in 2020. Our relative TSR modifier further reduced the payout to 55% of target.
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We continue to make enhancements to our compensation program.
In 2021, we are eliminating stock options, will use a more aligned comparator group for our relative TSR modifier, and will use a target range for EPS to account for continued market uncertainty.

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Overview
Our Company
Grace is a leading global supplier of specialty chemicals. Our products are used in the production of goods ranging from safe food packaging to pharmaceuticals to cleaner transportation fuels.
Our two industry-leading business segments—Catalysts Technologies and Materials Technologies—provide innovative products, technologies, and services that enhance the products and processes of our customers around the world. Through customer-driven innovation, strategic acquisitions, flexible worldwide manufacturing, and the talent of our approximately 4,000 employees, we maintain strong strategic positions and unmatched customer relationships with many of the world’s best companies. Over 80% of our sales were in segments where we are #1 or #2. Grace is committed to delivering value, safely and sustainably, to customers, to shareholders, and to the communities in which we operate.
Our profitable growth strategy has four well-defined elements, founded on our focused, high-value business portfolio, our strong strategic positions, and the sustainable growth drivers in the industries we serve:
1.Invest to accelerate growth and extend our competitive advantages;
2.Invest in great people to strengthen our high-performance culture;
3.Execute the Grace Value Model to drive operating excellence; and
4.Acquire to build our technology and manufacturing capabilities for our customers.
Our Named Executive Officers
Our NEOs for fiscal year 2020 were:
Hudson La ForcePresident and Chief Executive Officer
William C. DockmanSenior Vice President and Chief Financial Officer
Elizabeth C. BrownSenior Vice President, Human Resources and Information Technology, and Chief Human Resources Officer
Keith N. ColeSenior Vice President, Public Affairs and Environment, Health, Safety, and Chief Sustainability Officer
Mark A. ShelnitzFormer Senior Vice President, General Counsel and Secretary
In connection with his mutually agreed departure from Grace, Mr. Shelnitz resigned on December 31, 2020.
Our Culture
Grace’s great talent and high-performance culture are the most important sources of our competitive advantage and long-term ability to deliver value to customers and investors. We have invested heavily in our global talent and talent management system, which includes aligned goal setting, ongoing feedback and coaching, effective performance reviews, and a continuous cycle of professional development.
Our high-performance culture is based on our commitment to performance and our five Grace Leadership Behaviors: Deliver Results; Think Critically; Be Authentic; Communicate; and Engage and Include. We expect our colleagues to model these behaviors and our values in their daily business conduct. We aspire to continually strengthen our talent and culture by welcoming and valuing the unique backgrounds, cultures, experiences, perspectives, and contributions of our employees around the globe as a core element of executing our profitable growth strategy and achieving our value-creation goals.
Finally, a commitment to safety is integral to our culture. We have an overarching goal of No One Hurt, which we interpret as zero OSHA recordable injuries. We regularly benchmark our safety performance against peers, invest in building a safe and healthful workplace, and every meeting we hold across the business begins with a safety message, and the commitment to safety is expected at all levels of the organization.

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Grace Value Model
The Grace Value Model (or “GVM”) is an important part of our growth strategy. The GVM is a tightly aligned operating excellence model designed to accelerate growth and profitability for Grace. At the company level, we focus on portfolio, strong strategic position, and disciplined capital allocation. We invest to grow our businesses, improve our strategic position, and maintain our returns. At the business level, we focus on customers, innovation, growth and profitability. We invest in R&D and technology innovation to drive customer-focused, solution-oriented innovation, and we invest in the Grace Manufacturing System as the foundation of our operating excellence strategy. Linking and enabling all elements are great talent, high-performance culture, and integrated business management processes. Our ability to rigorously execute the Grace Value Model is a principal source of our competitive advantage and our financial performance.
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Our Response to COVID-19 and Hurricanes Laura and Delta
While our business suffered the disruptions that many other companies experienced due to COVID-19, we believe we differentiated ourselves in proactively managing our business and protecting our great talent. In addition, we were also impacted by two hurricanes – including the most powerful hurricane to ever hit Southwest Louisiana. Hurricane Laura delivered a direct blow to our Lake Charles facility, the largest refining catalyst plant in the world. Less than six weeks later, Hurricane Delta affected the same region again.
The following table highlights some of the actions taken in response to COVID-19 and the hurricanes:

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EmployeesCustomersShareholders

Formed Global COVID Response Team to drive decisions, processes and practices
Limited furloughs and prevented layoffs
Maintained salaries and benefits for employees; paid for COVID-19 testing
Provided health and wellness resources, including mental and physical health
Moved to remote work for all feasible roles
Provided PPE and safe work protocols for employees not working remotely
Procured temporary housing, trailers, food and supplies to support employees impacted by hurricanes
Provided comprehensive support for affected employees, including flexible absence policies
Supported communities through donations to local food banks and disaster relief
Achieved exceptional employee engagement and discretionary effort
Continued to hire and onboard key positions supporting recovery and long-term growth

Limited manufacturing and laboratory downtime due to the pandemic
Continued product supply while managing severe impact of hurricanes in Louisiana
Built on-site power generation to quickly return Lake Charles facility to service
Leveraged new remote technologies to connect, educate and value-sell products and services to current and potential customers
Shifted customer start-up and technical support to virtual platforms, maintaining industry-leading technical service
Accelerated R&D collaboration with key customers to define and develop new products
Built healthy pipeline of new sales opportunities, some derived from market shortfalls in service and supply
Developed products directly supporting COVID-19 test kits, therapies, and vaccines

Improved cash flow. Reduced costs, improved working capital and lowered capital spending, adding more than $125 million to 2020 cash flow
Delivered more than 95% of pre-pandemic Adjusted Free Cash Flow, despite 34% drop in Adjusted EBIT
Continued dividend at established rate
Re-formulated catalysts to maximize profitability in rapidly changing economic environment
Continued new product development and testing without interruption
Safely started two significant capacity expansions
Optimized manufacturing network driving productivity and incremental capacity with limited investment
Improved systems and processes to accelerate collection of receivables and reduced inventories
Positioned Grace for long-term growth by strengthening commercial excellence and operating excellence initiatives
Financial Performance
At the beginning of 2020, we were well positioned to deliver our financial outlook for the year. While we encountered significant obstacles presented by the COVID-19 pandemic and Gulf Coast hurricanes, we delivered a very strong finish to 2020, executing well in a challenging environment. We stayed focused on our growth strategy, leveraging our number one market positions, strong cash flow and customer-focused sustainability strategy. Grace achieved these results by taking decisive actions early in 2020 as the pandemic began to affect economies around the world, and by successfully navigating the U.S. Gulf Coast hurricanes. We immediately lowered capital spending, improved working capital and reduced operating costs to improve our cash flow for the year. While we have not yet fully recovered from the economic effects of the pandemic, it is clear that our businesses are rebounding with momentum.
We remain focused on executing our profitable growth strategy and managing our company for the long-term. We have strong leadership positions in end-markets that are critical to consumers and the global economy and have continued to invest in these positions during the pandemic to ensure that we capture growth as our end markets recover. In recent years, we’ve taken meaningful steps to strengthen our portfolio and accelerate our growth by investing in our polyolefin catalyst, specialty silica and pharmaceutical end markets. These investments position Grace well for future growth to create long-term value for shareholders.
We achieved the following results compared with the prior year for four key performance metrics that the committee uses in compensation determinations:
Adjusted Net Sales1 of $1,734.5 million decreased 12.4%, with weak demand for catalysts used to produce transportation fuels partially offset by solid customer demand for our high-value petrochemical catalysts and process technology solutions and our silicas and pharmaceutical technologies;
1 Where to find further information on non-GAAP performance measures: For a discussion of our non-GAAP performance measures, definitions, reconciliations, and other important information, see Annex A to this proxy statement, which includes cross-references to the Company’s 2020 Annual Report Original Filing. Non-GAAP performance measures include: Adjusted Net Sales; Adjusted EBIT; Adjusted EPS; and Adjusted Free Cash Flow. These non-GAAP financial measures do not purport to represent income or liquidity measures as defined under GAAP, and should not be considered as alternatives to such measures as an indicator of our performance.

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Adjusted EBIT1 of $312.2 million declined 34.0%, primarily due to lower gross profit, an approximately $19 million impact from hurricane-related costs and lower income from our ART joint venture, partially offset by lower operating expenses;
Adjusted EPS1 of $2.64 decreased 39.7%, including hurricane-related costs of approximately $0.21 per share; and;
Adjusted Free Cash Flow1 was $236.9 million, down 4.2%, reflecting strong execution of cash and cost management actions in response to the pandemic.
The following charts illustrate key performance metrics used in our compensation program:
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2020 Executive Compensation Program Summary
CEO and NEO Compensation Mix At Target
The majority of compensation paid to our CEO and the other NEOs is at risk. As shown in the following graphics, 66% of our CEO’s target compensation is at risk, 64% is long-term oriented, and 50% is performance-based. For our other NEOs, 56% of target compensation is at risk, 44% is long-term oriented, and 45% is performance-based.

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Elements of CEO and NEO Compensation
Our compensation programs are a key element of our high-performance culture. The compensation of our NEOs is directly linked to our success in delivering value to our customers and investors. Our leaders are expected to drive performance and be role models for delivering results the right way. The following table provides an overview of our executive compensation program structure and outcomes:
Component and Proportion of MixMetrics & WeightingsOutcomes
Base Salary
18% of CEO pay
33% of other NEO pay
N/AN/A
Annual Incentive Cash Plan (AICP)
18% of CEO pay
23% of other NEO pay
Performance-based cash (100%)
Adjusted EBIT (50%)
Adjusted Net Sales (25%)
Adjusted Free Cash Flow (25%)
Pre-COVID-19 goals resulted in calculated payout at 16% of target.
Board exercised discretion to increase payout from 16% to an average of 60% for NEOs based on individual performance.
Long-Term Incentive
64% of CEO pay
44% of other NEO pay
PBUs (50%)
Adjusted EPS (100%)
Relative TSR Modifier (+/- 25%)
Stock Options (25%)
RSUs (25%)
Board exercised discretion to bifurcate Adjusted EPS performance period with pro-rated payout opportunities; (1) one for the period 2018-2019 and (2) the second for 2020 calendar year. The 2018-2020 LTIP cycle earned at 55% of target overall (2018-2019 earned at 109% and 2020 earned at 0%).
Relative TSR metric continued through full three-year period, resulting in 25% downward payout adjustment.
Annual Say-On-Pay Vote Results and Shareholder Engagement
At our annual meeting in May 2020, approximately 99% of the shareholder votes cast supported our executive compensation program in an advisory “say-on-pay” vote. Based on its review and consideration of the 2020 shareholder advisory vote, the committee believes these results indicate strong support for our compensation policies and structure and confirm the importance of our maintaining a strong link between pay and performance in our compensation philosophy and market-best practices.

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The committee welcomes the continued input of shareholders. Each year, the Company engages with a broad set of shareholders on a wide range of topics including strategy, operations, financial results, and sustainability and social responsibility. The Company has also sought the input of shareholders on our executive compensation program by means of the annual advisory “say-on-pay” vote, or in specific discussions about “say-on-pay” or our compensation programs and policies.
Upcoming 2021 Long Term Compensation Program Design Changes
We continue to evolve our compensation program in response to shareholder feedback, our business strategy, evolving market expectations, and peer benchmarking data. For 2021, we are making the following changes to our long-term incentive program:
Eliminating stock options and basing long-term incentive compensation on an even mix (at target) of PBUs and RSUs
Updating our relative TSR performance group to the Russell 3000 Chemicals Sector, rather than the full Russell 1000 index as used in 2020 and prior awards, to improve the comparison of our performance against relevant peers
Implementing a narrow EPS target range for 2021-2023 PBUs only to allow for greater uncertainty in goal-setting given the current pandemic-affected business conditions
Lowering the threshold performance from 85% to 80% of target, aligned with market practice
We believe that these adjustments are in the best interests of shareholders and align well with evolving market expectations for executive compensation.

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Compensation Governance Best Practices
The following are some of the key elements of our Executive Compensation Program.
compensationmixpiecharts-0d.jpg What We Do
compensationmixpiecharts-0c.jpg What We Don’t Do
Carefully align compensation with shareholder interestsNo individual severance agreements (excluding change in control termination protection arrangements)
Foster direct pay-for-performance linkageNo granting options below fair market value
Conduct thorough assessments of executive and Company performanceNo option repricing without shareholder approval
Hold an annual say-on-pay voteNo tax gross-ups, except on relocations
Maintain robust share ownership guidelines, which are reviewed annually (for additional information, see “Proposal OneElection of DirectorsCorporate GovernanceShare Ownership Guidelines”)
No hedging or pledging of Grace securities by directors or executive officers*
Benchmark peer and industry data annually for competitive analysis of CEO / other NEO compensationLimited transferability of stock incentive compensation
Provide appropriate mix of compensation; with a significant portion of compensation “at-risk”No excessive perquisites
Structure our compensation plans to mitigate risk
Include clawback policy for misconduct leading to a restatement of financial results
Have an entirely independent Compensation Committee
Include double trigger change in control equity treatment in our current stock incentive plan
Retain an independent compensation consultant for the Compensation Committee
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* See “Policy regarding Hedging and Pledging” under “Corporate Governance” which disclosure is incorporated by reference in this Compensation Discussion and Analysis.
2020 Executive Compensation Elements, Targets and Results
The principal components of compensation under our executive compensation program are annual base salary, annual cash incentive awards, and long-term incentive awards, which, in 2020, consisted of PBUs, RSUs, and stock options. We use this mix of fixed and variable pay components with different payout forms (cash, full-value stock awards and stock options) to reward annual and sustained, long-term performance. These components afford the committee the appropriate mechanisms to reward management for Grace performance and align our executives’ interests with those of our shareholders. We continuously evaluate best practices and market data to ensure alignment between pay and performance in our compensation plan design.
Base Salary
The committee reviews base salaries and market movement for executive officers annually, but also when roles change significantly. The committee considers individual performance, achievement of individual strategic objectives, changes in the breadth or scope of responsibilities, and its review of competitive compensation information described above.

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Named Executive OfficerBase Salary Rate as of 12/31/2020
($)
Base Salary Rate as of 12/31/2019
($)
Percentage Increase in Base Salary Rate
(%)
Hudson La Force925,000850,0008.8
William C. Dockman470,004415,00013.3
Elizabeth C. Brown420,000420,000
Keith N. Cole380,004370,0002.7
Mark A. Shelnitz462,000450,0002.7
Mr. La Force became President and CEO of the Company in 2018. His increase in base salary in the table above reflects an adjustment to better match peer group and broader industry compensation for similarly situated CEOs.
Mr. Dockman was promoted to CFO in May 2019, and his increase in base salary reflects his promotional increase to better align with peer group and broader industry compensation for this position.
Mr. Cole, who had not received a salary increase since 2018, received a modest increase in base salary in-line with general market movement.
Mr. Shelnitz, who had not received a salary increase since 2018, received a modest increase in base salary in-line with general market movement.
Annual Incentive Compensation
The AICP is a cash-based, pay-for-performance incentive plan. Its purpose is to motivate and reward upper- and middle-level employees, including executive officers, for their contributions to our performance.
In 2020 prior to the pandemic, the AICP was based on earnings, cash generation, and revenue performance metrics, with the belief that those metrics closely aligned with short-term milestones in the Company’s strategy to achieve long-term value creation. Consistent with the 2019 AICP, the 2020 AICP used the following metrics to quantify performance:
Adjusted EBIT (weighted 50%) — demonstrates our effectiveness at growing the Company profitably through our focus on value selling, manufacturing excellence, and operating cost productivity.
Adjusted Net Sales (weighted 25%) — emphasizes the importance of top-line growth in measuring our market segment performance and confirmation of our ability to earn the confidence and trust of our customers.
Adjusted Free Cash Flow (weighted 25%) — reflects how well we manage our business as a whole; including net sales and profit growth and the investment required to support that growth.
The committee established 2020 AICP targets in February 2020 prior to the pandemic, based on the performance targets in our 2020 annual operating plan and after considering the general economic environment in which we expected to be operating during the year.
Payouts under the AICP are determined using the following process:
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In setting the actual amount of the AICP incentive pool, the committee has discretion to adjust the performance objectives, adjust the calculation of each performance measure, or adjust the size of the AICP incentive pool irrespective of the achievement of performance objectives in consideration of unforeseeable or one-time events occurring during the course of the year.
The 2020 AICP target percentages for our NEOs remained the same as the end of 2019.
Named Executive Officer
AICP Target as Percentage of Base Salary in 2020
(%)
AICP Target as Percentage of Base Salary in 2019
(%)
Hudson La Force100100
William C. Dockman7070
Elizabeth C. Brown7070
Keith N. Cole7070
Mark A. Shelnitz7070
Actual awards for executive officers may range from $0 to an amount equal to 200% of the target amount, based on the factors described above.
2020 AICP Performance Targets (For results in these three AICP target categories, see further below.)
The amount of the AICP incentive pool is the sum of the amounts funded in the Adjusted EBIT Pool, the Adjusted Free Cash Flow Pool, and the Adjusted Net Sales Pool. The funding of each pool is determined independently by reference to the Adjusted EBIT Target, Cash Target and Sales Target set forth in the Grace annual operating plan for the one-year performance period as follows:
2020 AICP Performance Target—Adjusted EBIT
Percentage Funded in
 Adjusted EBIT Pool
(%)*
Grace Performance as a Percentage of Adjusted EBIT Target
(%)
Grace Adjusted EBIT Target
(in millions $)
200120 or above624
150110572
100100515-520
7593476
5085438
Below 85Below 438
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*    Actual amount funded to the Adjusted EBIT Pool is prorated on a straight-line basis for performance that falls between the performance targets set forth in the table.

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2020 AICP Performance Target—Adjusted Free Cash Flow
Percentage Funded in
Adjusted Free Cash Flow Pool
(%)*
Grace Performance as a Percentage of Adjusted Free Cash Flow Target (%)Grace Adjusted Free Cash Flow Target
(in millions $)
200120 or above330
150110303
100100265-275
7593245
5085225
Below 85Below 225
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*    Actual amount funded to the Adjusted Free Cash Flow Pool is prorated on a straight-line basis for performance that falls between the performance targets set forth in the table.
2020 AICP Performance Target—Adjusted Net Sales
Percentage Funded in
 Adjusted Net Sales Pool
(%)*
Grace Performance as a Percentage of Adjusted Net Sales Target
(%)
Grace Adjusted Net Sales Target
(in millions $)
200110 or above2,217
1501052,116
1001002,015
75951,914
50901,814
Below 90Below 1,814
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*    Actual amount funded to the Adjusted Net Sales Pool is prorated on a straight-line basis for performance that falls between the performance targets set forth in the table.
2020 AICP Component Results and Funding
Grace’s 2020 AICP results for the one-year performance period were as follows:
2020 Result
(in millions $)
Funding Level (percentage of target)WeightAICP Incentive Pool Contribution
2020 AICP Adjusted EBIT312.20%50%0%
2020 AICP Adjusted Free Cash Flow236.965%25%16%
2020 AICP Adjusted Net Sales1,734.50%25%0%
Total16%
As a result of performance delivered against criteria established prior to COVID-19 and Hurricanes Laura and Delta, the AICP Incentive Pool for the CEO and his Leadership Team (including NEOs) funded at 16% of target.
Leadership Team Actions and Individual NEO Contributions to Value Delivered
Our executive team remained focused on employee safety and well-being, meeting our customers’ expectations and protecting shareholder value despite the challenges imposed by the COVID-19 pandemic and Gulf Coast Hurricanes. In early 2021, the Board and the committee evaluated each NEO’s performance in the response to COVID-19 and Hurricanes Laura and Delta, and their contributions towards managing the pandemic, meeting customer and shareholder needs, delivering financial results, advancing the Grace Value Model, managing human capital risk, promoting diversity and reinforcing our inclusive culture, and taking actions to manage our environmental footprint.
Our executives demonstrated strong leadership, working hard to ensure the safety and well-being of our employees while proactively managing our business. In determining AICP payouts to the NEOs in respect of 2020 performance,

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considerations made by the Board and the committee focused on the NEOs’ continued leadership in the face of internal and external challenges and included:
Immediate implementation of Grace’s global pandemic response plan designed to ensure employee health and safety and continuity of our business and manufacturing operations. Successful execution of our business continuity plan resulted in no customer disruptions as a result of the pandemic, a seamless transition to a remote work environment for nearly half of our employees, a new technology platform to support virtual customer business requirements and global communication, and the development of worksite safety protocols to protect our essential employees onsite.
A proactive response to maximize cash flow, including lower capital spending, improved working capital, and reduced operating costs. This organizational priority was reinforced across the company by resetting the AICP metric below the Leadership Team to focus solely on adjusted free cash flow. As a result of these actions and our collective focus, we delivered adjusted free cash flow at more than 95% of 2019 levels and remain well placed for future growth and investments.
The safe and successful launch of two significant capacity expansions which maintain our growth momentum and strong strategic position.
A quick, effective and comprehensive response following Hurricanes Laura and Delta, focused on supporting our affected employees, promptly and safely restoring our manufacturing operations and minimizing the impact experienced by our customers.
A commitment to our employees who worked tirelessly this year, with no layoffs and limited furloughs, no salary reductions, participation in a revised AICP which paid at an average of 71% of target (excluding our CEO and his Leadership Team), continued investments in employee development and the hiring of critical talent. This resulted in exceptionally high levels of engagement and productivity during the pandemic, ensuring we were able to meet the needs of our customers and that we are positioned well for future growth with a committed workforce.
As noted above, the committee approved the 2020 AICP goals in February 2020. Upon reviewing the plan during the year, the committee accepted that the performance goals no longer aligned with Grace’s operating plan given the impact of COVID-19 and Hurricanes Laura and Delta, and with continued uncertainty of COVID-19 no changes would be made to the pre-pandemic metrics or plan design for the CEO and his Leadership Team. Instead performance would be assessed holistically at year-end with consideration given to the application of discretion to provide appropriate payouts to participants.
In February 2021, the committee evaluated the formulaic AICP payout based on the goals approved in February 2020 and determined that the result did not fully represent the results that the executive team had delivered. After careful consideration of the above factors, the committee determined with the advice of its independent compensation consultant, it was appropriate to apply discretion to increase payouts from 16% of target to an average of approximately 60% of target for the CEO and his Leadership Team (including all NEOs) based on their individual contributions. The committee believed that these payouts, which remained both below target and below the payouts made to the broader employee population, were more appropriate reflections of both collective and individual NEO performance delivered during the year.
The following table describes the calculations for the AICP payout for each NEO, with the Individual Performance Adjustment reflecting the committee’s upward discretionary adjustment to AICP payouts:

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NameTarget Payout
($)
Calculated AICP Incentive Pool Funding
(%)
Calculated AICP Funding
($)(a)
Individual Performance Adjustment
($)(b)
Final Payout
($)
Final Payout as Percentage of Target
(%)
Hudson La Force906,35316145,016398,795543,81160
William C. Dockman319,4301651,109140,549191,65860
Elizabeth C. Brown294,0001647,040157,584204,62470
Keith N. Cole264,2621642,282116,276158,55860
Mark A. Shelnitz321,3121651,410108,603160,01350
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(a)Disclosed in the Summary Compensation Table as Non-Equity Incentive Program compensation
(b)Disclosed in the Summary Compensation Table as Bonus compensation
Long-Term Incentive Compensation
Our Long-Term Incentive Plans, or LTIPs, are designed to motivate and reward LTIP participants, including our NEOs, for their contributions to our performance over a multi-year period, align their financial interests with those of our shareholders, and guide their behavior accordingly by making a significant portion of their total compensation variable and dependent upon our sustained financial performance. The goals of the LTIP are long-term operational excellence, increased quality of earnings, and shareholder value creation.
The target value of the LTIP award for each LTIP participant, with the exception of the CEO, was determined by the committee based on the recommendation of the CEO. The target value of the CEO’s LTIP award was determined by the committee without recommendation from the CEO. These target award values were determined by reviewing current market compensation data (as discussed above), historical long-term incentive target values, the level of dilution represented by outstanding equity awards, and internal pay equity considerations. These grant award values were determined in February 2020, before the breadth and depth of the effects of the pandemic were generally understood by the marketplace.
Set forth below is a discussion of our 2020 LTIP grants, followed by information on our 2018-2020 PBU performance period.
2020 LTIP Grants
During 2020, our LTIP grants consisted of three components: PBUs, RSUs, and stock options. The PBUs consist of a target award of shares that can be increased, decreased, or forfeited based on Grace’s results over a three-year performance period as compared to baseline performance during the year prior to the performance period. The number of PBU shares to be paid out is based upon EPS growth targets, subject to adjustment, up or down, by a factor of 25% if relative TSR for the three-year performance period is above the 75th percentile or below the 25th percentile of the Russell 1000 Index, respectively, subject to a maximum funding percentage. The PBUs “cliff vest” after the completion of the three-year performance period. The RSUs vest in three equal annual installments and will be settled within 60 days of each applicable vesting date. The stock options vest in three equal annual installments beginning on the first anniversary of the grant and have a ten-year term from the grant date.
LTIP grants for 2020 consisted of three components:
PBUs (approximately 50% of 2020 LTIP Value);
RSUs (approximately 25% of 2020 LTIP Value); and
Stock Options (approximately 25% of 2020 LTIP Value).
Grants for the 2020 LTIP were made on February 27, 2020, before the breadth and depth of the effects of the pandemic were understood.

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2020-2022 PBUs
The PBUs are share-denominated and the actual number of shares earned by an NEO can vary based on the achievement of specified business performance objectives. The value of the PBUs also varies based on the value of our stock and the amount of dividends paid on that stock. Accordingly, PBUs align leadership focus with our expectations for the ongoing success of our business and for increasing long-term shareholder value. Specifically, the amount of an individual payout under a 2020 PBU award is based upon:
the individual’s PBU target share amount;
the growth in our LTIP Adjusted EPS over the three-year performance period;
the TSR for the three-year performance period as compared to the Russell 1000 Index; and
the value of Grace common stock on the payout date.
Payouts to executives who are subject to the share ownership guidelines, including the NEOs, are payable in shares of common stock.
2020 LTIP Performance Target — LTIP Adjusted EPS
The committee selected Adjusted EPS as the primary performance measure for the PBUs, reflecting our focus on long-term operational excellence and quality of earnings. The committee believes that employing Adjusted EPS in the LTIP aligns internal leadership focus with the Board’s expectations for the ongoing success of our business and driving long-term shareholder value.
In determining cumulative LTIP Adjusted EPS growth, Adjusted EPS for the performance period may be adjusted in the discretion of the committee to eliminate the effect of changes in accounting, like our adoption of mark-to-market pension accounting, or significant changes in our business. In order to earn 100% of the target share amount, our LTIP Adjusted EPS for 2022 must reach $5.51, as reflected in the following table (Adjusted EPS at the end of fiscal year 2019 was $4.38):
Percentage of PBU Award Funded per Adjusted EPS Performance
(%)*
Grace Performance as a Percentage of Adjusted EPS Target
(%)
Grace Adjusted EPS Target
($)
2001206.61
1501106.06
1001005.51
83955.23
67904.96
50854.68
0Below 85Below 4.68
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*    Actual amount funded per LTIP Adjusted EPS Performance is prorated on a straight-line basis for performance that falls between the performance targets set forth in the table. Figures in the table may be rounded.

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2020 LTIP Performance Targets — Total Shareholder Return
The committee has selected TSR as the second performance measure for PBU awards, which provides enhanced alignment with actual shareholder value creation. We calculate TSR as the growth in stock price based upon 20-business-day average closing prices at the beginning and end of the performance period, plus dividends reinvested, compared to the same figure for the Russell 1000 Index. The number of PBU shares to be paid out based upon EPS targets as shown in the above table, is subject to adjustment, up or down, by a factor of 25% if relative TSR for the three-year period 2020-2022 is above the 75th percentile or below the 25th percentile of the Russell 1000 Index, respectively, subject to maximum funding of 200%. The committee chose the Russell 1000 Index in 2016 as it is a broad representation of similarly-sized companies including a majority of the Company’s peers.
Grace TSR relative to Russell 1000 TSRAdjustment to PBU Award as calculated based upon EPS Target
Above 75th PercentileIncrease of 25% of PBU Award
Between 25th and 75th PercentileNo Adjustment to PBU Award
Below 25th PercentileDecrease of 25% of PBU Award
RSUs
RSUs represent approximately 25% of the value of our 2020 LTIP awards. The value of an RSU is directly related to the value of Grace common stock, so RSUs provide direct alignment between the interests of our executive officers and shareholders. RSUs granted in 2020 vest in three equal installments beginning on the anniversary of the grant date, generally subject to continued employment of the holder of the RSUs. Payments in respect of RSUs are made in shares of common stock.
Stock Options
Stock options represent approximately 25% of the value of our 2020 LTIP awards. The value of stock options is directly related to the increase in the value of our stock, so stock options provide direct alignment between the interests of our executive officers and shareholders. In determining the value of stock option awards, the committee uses an analysis of stock option value based on an adjusted Black-Scholes option pricing model and reviews this analysis with WTW. The committee approved the stock option grants included in the 2020 LTIP on February 27, 2020. The exercise price of the stock options was $55.405 which was the average of the high and low trading prices of Grace common stock on the NYSE on February 27, 2020. The term of the stock options is ten years and they vest over three years in equal annual installments, generally subject to the continued employment of the holder of the stock options.
Effect of Dividends on LTIP Awards
Following common market practice, the committee approved “dividend equivalent” accruals for holders of unvested RSUs and PBUs (which would be paid to holders only following vesting of the underlying award). Dividend equivalents accrue quarterly (based on target levels, in the case of PBUs) throughout the vesting period on all unvested PBUs and RSUs. In the case of PBUs we then adjust these dividend equivalents for actual Company performance (financial results) at the end of the performance period to correspond with the number of PBUs earned. In the event an employee leaves the Company before dividend equivalents are paid, for retirement, disability, or voluntary/involuntary termination, proration rules would apply to the dividend equivalents and any resulting unvested dividends would be forfeited. We do not provide dividend equivalents for stock option awards.
2018-2020 Long-Term Incentive Compensation Plan (or “2018 LTIP”) — PBUs
PBUs represented approximately 50% of the value of our 2018 LTIP awards. The PBUs are share-denominated and the actual number of shares earned by the NEOs in respect of the 2018 PBUs was determined based on the achievement of specified business performance objectives through December 31, 2020. Specifically, the realized value of an individual payout under a 2018 PBU award was based upon:
the individual’s PBU target share amount;

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the growth in our LTIP Adjusted EPS over the three-year performance period;
the TSR for the three-year performance period as compared to the Russell 1000; and
the value of Grace common stock on the payout date.
Payouts to the NEOs in respect of PBUs are made in shares of Grace common stock. The three-year EPS targets are set taking into account anticipated repurchases by the Company of its common stock; the committee has discretion to adjust for share repurchases above or below such anticipated levels.
2018 LTIP Performance Target — LTIP Adjusted EPS
The committee selected Adjusted EPS as the primary performance measure for the 2018 PBUs, reflecting our focus on long-term operational excellence and quality of earnings. The Adjusted EPS targets were reflective of a baseline Adjusted EPS of $3.36. In order to earn 100% of the target share amount, our cumulative annual LTIP Adjusted EPS growth from the 2017 baseline performance to 2020 actual performance had to reach $4.75 (approximately 141% of the $3.36 baseline amount), as reflected in the following table:
Percentage of PBU Award Funded per Adjusted EPS Performance
(%)*
Grace Performance as a Percentage of Adjusted EPS Target
(%)
Grace Adjusted EPS Target
($)
2001205.70
1501105.23
1001004.75
83954.51
67904.28
50854.04
0Below 854.04
_______________________________________________________________________________
*    Actual amount funded per Adjusted EPS Performance is prorated on a straight-line basis for performance that falls between the performance targets set forth in the table. Figures in the table may be rounded.
2018 LTIP Performance Target — TSR
The committee selected TSR as the second performance measure for 2018 PBU awards, which provided enhanced alignment with actual shareholder value creation. We calculate Total Shareholder Return as the growth in stock price between the first and last business day of the performance period plus dividends reinvested compared to the same figure for the Russell 1000 Index. The number of PBU shares to be paid out based upon EPS targets as shown in the above table was subject to adjustment, up or down, by a factor of 25% if relative TSR for the three-year period 2018-2020 is above the 75th percentile or below the 25th percentile of the Russell 1000 Index, respectively, subject to a maximum funding percentage of 200. The committee chose the Russell 1000 Index as it is a broad representation of similarly-sized companies, including a majority of the Company’s peers.
2018-2020 LTIP Adjusted EPS and Total Shareholder Return Results and 2018-2020 PBU Payouts
Based on the final EPS results, the formulaic payout of the 2018-2020 PBUs was 0% based on the direct impact of COVID-19 on our 2020 performance. The committee believed that this result did not accurately reflect the achievements of the executive team over the performance period, and with the advice of its independent compensation consultant, explored ways to more effectively balance pay and performance alignment.
The committee determined that it was important to recognize the financial accomplishments that the executive team had achieved through the first two years of the performance period prior to the pandemic, while holding the executive team accountable for the Company’s financial performance in the final year of the period. The committee also determined that it was important to hold the executive team accountable for relative shareholder value creation across the full performance period. The committee concluded that it was appropriate to bifurcate the three-year performance period to reflect the unanticipated impact of COVID-19.

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Through bifurcating the performance period, the committee believed the adjusted award enabled appropriate recognition of the above target performance delivered in the first two years of the performance period. The first period included 2018 and 2019, and the second period related to 2020. The target opportunity was pro-rated for the two periods, with the 2018-2019 period having two-thirds of the original opportunity and 2020 having one-third. The relative TSR modifier, measured over the original three-year performance period, continued to have effect for the full award. The Adjusted EPS goal was not modified; rather, payout in respect of the 2018-2019 period was based on progress towards the pro-rated original 2020 goal.
gracegraphics0324211a.jpg
Achievement related to the adjusted award segment pertaining to 2018 and 2019 was assessed based on progress towards achieving the 2020 target goal, pro-rated for the length of the segment performance period.
The target goal of $4.75 for 2020 represented a $1.39 improvement in Adjusted EPS compared to 2017 Adjusted EPS of $3.36 (Adjusted EPS for 2017 of $3.40 was further adjusted downward by $0.04 for stock-based compensation changes driven by Accounting Standards Update 2016-09). In 2019, the Company achieved Adjusted EPS of $4.38, a $1.02 improvement over the 2017 Adjusted EPS baseline. This represented the Company achieving 73% progress towards the 2020 target by the end of 2019 ($1.02 two-year improvement divided by the $1.39 three-year improvement goal).
Awards are also subject to a relative TSR modifier which adjusts the payout depending on the Company’s stock price performance when compared to the Russell 1000 index. Given this measure is, by design, self-calibrating (given the fact the Company’s TSR peers were also affected by COVID-19 and other environmental impacts in 2020) the committee did not believe it was necessary to adjust for the impact of COVID-19. Our TSR performance for the three-year period relative to the constituents in the Russell 1000 over the same period was in the lowest quartile, resulting in an additional 25% reduction in the number of PBUs earned in accordance with our program design (in other words, the number of earned PBUs was multiplied by 75%).
ThresholdTargetMaximumActual
Performance< 25th Percentile25th – 75th Percentile> 75th Percentile24th Percentile
Modifier75%100%125%75%
As a result of the bifurcated performance period, Adjusted EPS performance and the relative TSR modifier, all plan participants (including NEOs) each received shares representing approximately 55% of their target PBU award.

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2018 and 2019 Segment2020 Segment
Weighting2/31/3
Achievement (% of Target)109% (a)0% (b)
Weighted Achievement73% of target
Relative TSR Modifier 75% (25% reduction in earned payout)
With TSR Modifier55% of target
_______________________________________________________________________________
(a)The committee divided: (i) the 73% progress made towards the 2020 goal within the 2018-2019 period by (ii) the proportion of performance period represented by the 2018-2019 period, which is approximately 67% of the cycle, to arrive at a payout for this two-year segment of 109% (that is, 73%/67%).
(b)The Company’s Adjusted EPS performance of $2.64 in 2020 fell below threshold performance and resulted in a 0% payout for the 2020 award segment.
Earned shares, and their value as of the payment date, for each executive related to the 2018-2020 PBUs are shown in the table below.
NameTarget PBU Payout
(Units)
Adjusted EPS Funding for 2018-2020(a)Relative TSR Modifier Factor for 2018-2020Final PBU Payout as Percentage of TargetFinal PBU Payout (Shares)Actual Value of 2018-2020 PBU Payout(b)
($)
Hudson. La Force9,65373%75%55%5,310314,671
William C. Dockman1,76873%75%55%97357,660
Elizabeth C. Brown3,71373%75%55%2,043121,068
Keith N. Cole3,34273%75%55%1,839108,979
Mark A. Shelnitz4,08473%75%55%2,247133,157
_______________________________________________________________________________
(a)Based on weighted average of performance across each segment of the bifurcated performance period.
(b)The actual values of the PBU payouts were determined based on the closing price of Grace common stock on the February 26, 2021, payment date of $59.26.
Other Components and Features of our Executive Compensation Program
Pension Plan/Supplemental Executive Retirement Plan
As described below under the caption “—Compensation Tables—Pension Benefits,” payments under our tax-qualified pension plan are calculated using annual compensation, including base salary and AICP awards, and years of credited Grace service. The committee has also implemented a Supplemental Executive Retirement Plan, generally referred to as a SERP, which applies to approximately 50 executive employees, including the NEOs whose annual compensation exceeds the amount that can be taken into account for purposes of calculating benefits under tax-qualified pension plans. Under this plan, each such employee will receive the full pension to which that employee would be entitled in the absence of the limitations described above and other limitations imposed under federal income tax law. The SERP is unfunded and is not qualified for tax purposes. The defined benefit pension plan and SERP have been closed to new entrants since January 1, 2017. Furthermore, in January 2021, Grace announced both plans will be frozen as of December 31, 2024 and as of January 1, 2025, all participants will be moved to a defined contribution retirement plan already in place for new hires as of January 1, 2017.
Savings and Investment Plan/Replacement Payment Plan
We generally offer a tax-qualified 401(k) Savings and Investment Plan, or S&I Plan, to employees under which they may save a portion of their annual compensation in investment accounts on a pre- or post-tax basis. During 2020, we matched 100% of employee savings under the S&I Plan up to 6% of the employee’s base salary and annual incentive compensation. The committee believes that a 401(k) plan with a meaningful Company match is an effective recruiting and retention tool for our employees, including our NEOs. The committee has also implemented

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an S&I Plan Replacement Payment Plan that currently applies to approximately 45 executive employees, including the NEOs, whose annual compensation exceeds the amount that can be taken into account for purposes of calculating benefits under tax-qualified savings plans, including the S&I Plan. Under the Replacement Plan, each such employee will receive the full matching payments to which that employee would be entitled in the absence of the limitations described above and other limitations imposed under federal income tax law.
Executive Personal Benefits
The committee believes that executive personal benefits should be limited. Executive officers, including the NEOs, are eligible to participate in an executive physical examination program that offers executives an annual comprehensive physical examination. Our CEO has access to corporate aircraft for reasonable personal travel and would be responsible for paying income taxes on the value of such travel as determined by the Internal Revenue Service.
Change in Control Severance Agreements
As described below under the caption “—Compensation Tables—Termination and Change in Control Arrangements,” we have entered into change in control severance agreements with each of the NEOs. We base the provisions in these agreements on competitive practice and design them to ensure that the NEOs’ interests remain aligned with the interests of our shareholders if a change in control occurs. Payments under these agreements are triggered by the involuntary termination of the executive officer’s employment without cause (including constructive termination caused by a material reduction in his or her authority or responsibility or by certain other circumstances) following a change in control, commonly referred to as a “double-trigger” arrangement. A change in control situation often undermines an executive officer’s job security, and it is to our benefit and our shareholders’ benefit to encourage our executive officers (including the NEOs) to seek out beneficial transactions and to remain employed through the closing of any transaction, even though their future employment at Grace may be uncertain. The change in control severance agreements are designed to reinforce and encourage the continued attention and dedication of the NEOs to their assigned duties without distraction in the face of potentially adverse circumstances arising from the possibility of a change in control of Grace. Certain terms of these agreements are described below under the caption “—Compensation Tables—Potential Payments Upon Termination or Change in Control.”
Severance Arrangements
Grace maintains the Severance Plan for Leadership Team Officers of W. R. Grace & Co. (the “Executive Severance Plan”), which provides that, if the employment of an executive officer (including our NEOs) is terminated without cause without a change in control, he or she will be entitled to cash severance equal to the sum of his or her base salary and target bonus (two times the sum, in the case of the CEO). The Executive Severance Plan also provides that, upon a termination without cause not due to a change in control, an executive officer will be entitled to a prorated annual bonus for the year of termination if he or she has completed at least three months of employment in the applicable year. Payments under the Executive Severance Plan are contingent upon the executive officer’s execution and non-revocation of a release of claims and non-compete and non-solicitation of employees covenants, in favor of Grace. We designed our severance arrangements to encourage and reinforce the continued attention and dedication of our executive officers to their assigned duties, without undue concern regarding their job security. See below under “—Compensation Tables—Potential Payments Upon Termination or Change in Control” and under “—Termination and Change in Control Arrangements” in that section.
Executive Salary Protection Plan
As described below under the caption “—Compensation Tables—Potential Payments Upon Termination or Change in Control,” our Executive Salary Protection Plan (“ESPP”) provides payments to our NEOs, or their respective beneficiaries, in the event of their disability or death prior to age 70 while employed by Grace. We designed the plan to encourage the continued attention and dedication of our executive officers (including our NEOs) to their assigned duties without undue concern regarding their ability to earn a living and support their families in the event of death or disability.

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Vesting under the 2018 Stock Incentive Plan
Under the 2018 Stock Incentive Plan, subject to change in control provisions thereof, stock incentives shall vest no earlier than the first anniversary of the date the stock incentive is granted; provided, however, that, stock incentives that result in the issuance of an aggregate of up to 5% of the shares of Common Stock available under the Plan may be granted to any one or more NEOs without respect to such minimum vesting provisions and nothing therein shall preclude the committee from accelerating or maintaining the vesting of any stock incentives in connection with a named executive officer’s death, disability, retirement or other termination of Service.
Executive Compensation Program Philosophy, Objectives, and Processes
Alignment between Pay and Performance
The committee believes that the Company’s executive compensation program provides a strong linkage between pay and performance and is well-aligned with shareholder interests. Our measures of performance under our AICP and LTIP — Adjusted Net Sales, Adjusted EBIT, Adjusted Free Cash Flow, EPS and TSR, are accepted measures of financial success by the investment community, and similar measures are also used by our peer companies in various forms of incentives. The committee sets targets for these measures based on the macroeconomic environment, competitive dynamics, and factors unique to the Company. The committee designs these targets which, if attained, represent excellent performance by the Company. If the Company achieves or exceeds these targets, the committee believes executives generally should be rewarded with higher payouts of awards, and if targets are not met, executives generally should receive lower or no awards.
Key Objectives
The key objectives of the Grace executive compensation program for executive officers are to incentivize and motivate our executive officers to improve our performance, deliver our growth plan, and increase shareholder value; and to enable us to compete effectively with other firms in attracting, motivating and retaining executives. We designed the incentive compensation portion of the program to closely align the financial interests of our executive officers with those of our shareholders. Because executive officers have a substantial ability to influence business success, we believe that the portion of compensation that is at-risk based on organization-wide performance should increase as the level of responsibility increases.
We also expect the executive compensation program to be applied consistently with our culture of ethical conduct, personal integrity, and compliance with both our policies and applicable law. We expect our executive officers to lead by example, modeling our Grace Core Values in their daily business conduct. The Grace Core Values consist of a commitment to teamwork, performance, integrity, speed and innovation, which, with our overall commitment to safety, are the foundation of our corporate culture.
Share Ownership Guidelines
Our Board has designed and implemented share ownership guidelines to align the long-term financial interests of our directors and executive officers with the long-term interests of our shareholders. The guidelines are set forth under “Proposal One—Election of Directors—Corporate Governance—Share Ownership Guidelines” and are incorporated herein by reference.
How We Set Compensation — Elements and Target Mix
Our Board has delegated to the committee, the authority for approving and administering the compensation program for executive officers (including the NEOs in the Summary Compensation Table set forth under “—Compensation Tables”). Our Board has appointed all of the independent members of our Board to serve as members of the committee.

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Elements of Compensation
The following table outlines the major elements of compensation in 2020 for the NEOs:
Compensation ElementDefinitionRationale
Base SalaryFixed cash compensation paid monthlyPayment for completion of day-to-day responsibilities
Annual Incentive Compensation PlanVariable cash compensation earned by annual individual performance and achievement of pre-established annual corporate financial performance goalsBuilds accountability for achieving annual financial and business results and individual performance goals
Long-Term Incentive Compensation Plan (Stock Options)Equity compensation with staggered vesting that increases in value with increases in stock price; value is equivalent to approximately 25% of executive officer’s long-term incentive grant value for the yearBuilds accountability for sustained financial results; Aligns long-term interests of executive officers and shareholders; Encourages executive retention
Long-Term Incentive Compensation Plan (PBUs)Equity compensation subject to performance-based vesting criteria over a three-year period; value is equivalent to approximately 50% of executive officer’s long-term incentive grant value for the yearBuilds accountability for sustained financial results; Aligns long-term interests of executive officers and shareholders; Encourages executive retention
Long-Term Incentive Compensation Plan (RSUs)Equity compensation with staggered vesting that increases in value with increases in stock price; value is equivalent to approximately 25% of executive officer’s long-term incentive grant value for the yearBuilds accountability for sustained financial results; Aligns long-term interests of executive officers and shareholders; Encourages executive retention
U.S. Defined Contribution Retirement PlansSavings and Investment Plan (401(k))-Standard tax-qualified defined contribution retirement benefit subject to limitations on compensation and benefits under the U.S. Tax CodeProvides U.S. employees with the opportunity to save for retirement on a tax-advantaged basis with matched contributions from Grace
Savings and Investment Plan Replacement Payment Plan (nonqualified) provides benefits in excess of those permitted under the Savings and Investment PlanProvides certain highly-paid U.S. employees with the opportunity for the same level of Grace match as other participants in the Savings and Investment Plan, notwithstanding U.S. Tax Code limitations
U.S. Defined Benefit Retirement PlansRetirement Plan for Salaried Employees (“Pension Plan”) - Standard tax-qualified pension plan subject to limitations on compensation and benefits under the U.S. Tax CodeProvides U.S. employees with retirement income
Supplemental Executive Retirement Plan (nonqualified)
Provides certain highly-paid U.S. employees with the same benefit formula as other participants in the Pension Plan, notwithstanding U.S. Tax Code limitations
Target Compensation Mix
As determined by the committee, and informed by market practices, our compensation mix at target (shown above for both our CEO and, collectively, for the other NEOs) is largely incentive-based. The charts further below include 2020 base salary, target AICP, and grant date fair values for the 2020 LTIP grants. The charts illustrate how the mix of target total direct compensation for our NEOs emphasizes incentive compensation, with a significant focus on long-term incentives tied to our long-term performance. Further, the charts indicate the high percentage of executive compensation that is “at-risk,” demonstrating the linkage of shareholder interests and executive officer performance goals.

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Compensation Benchmarking
In order to gauge market compensation levels and practices, the committee has retained the services of WTW, a leading independent global advisory, broking and solutions company. Periodically, the committee consults with WTW for an assessment of our executive officer compensation program relative to the competitive market.
The committee, with the assistance of WTW, has selected the companies below as our compensation peer group based upon their industry (those being chemicals, materials and specialty chemicals), size and global scope, revenues, profitability, market capitalization, market for talent, and the availability of public information regarding their compensation practices. The committee relies upon the compensation data gathered from the peer group as well as published broad industry survey data, reflecting the chemicals and general industries, to represent the competitive market for executive talent for our executive officers, and does not focus on any specific data or benchmark for guidance when making pay decisions. The committee reviews the composition of our compensation peer group annually to ensure that it remains suitable and appropriate and removes companies that are no longer public entities.
Peer Group
Albemarle Corp.Hexcel Corp.
Ashland Global Holdings Inc.International Flavors & Fragrances Inc.
Cabot Corp.Minerals Technologies Inc.
Celanese CorporationNewMarket Corporation
Element Solutions Inc.PQ Corporation
Ferro CorporationRPM International Inc.
FMC Corp.Sensient Technologies Corporation
HB Fuller Co.Stepan Company
When reviewing the appropriateness of including companies in our peer group based on revenues, we consider the total net sales of Advanced Refining Technologies LLC (or “ART”), our joint venture with Chevron Products Company, a division of Chevron U.S.A. Inc., given our significant managerial responsibilities in connection therewith. Net sales of ART, an unconsolidated affiliate in which we have a 50% interest, were $481.9 million during 2020. We also consider total ART net sales in survey benchmarking.

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Contributions of the Committee, CEO and Consultant in our Executive Compensation Process
Role of the Compensation Committee
Pursuant to a delegation from our Board, the committee is responsible for reviewing and approving the compensation of all executive officers, including:
base salary
annual incentive compensation
long-term incentive compensation
employment agreements
severance arrangements
change in control agreements
any special or supplemental benefits not generally available to salaried employees
The committee oversees executive development and succession planning for the CEO and the other executive officers; reviews management’s goal setting process; identifies important year-over-year and multi-year targets; and commits the executive compensation program to a rigorous review annually. The committee reviews and approves all corporate goals and objectives used in determining the incentive compensation of each executive officer including our NEOs. Our human resources department and legal services group provide advice and legal and administrative assistance to aid the committee in meeting its responsibilities.
The committee reviews the distribution of peer group pay practices and broad industry data and determines the appropriate positioning of each executive officer’s compensation based on several factors, including:
the executive officer’s role and level of responsibility
the executive officer’s individual performance in that role
the need to attract, retain and motivate the talent required for world-class leadership
the economic and business environment in which Grace operates
the importance of the executive officer to Grace’s objectives and strategy
internal comparisons of pay and roles within the executive officer group;
legal and governance requirements and standards related to executive compensation, including internal pay equity with other salaried employees
with respect to executive officers other than the CEO, the CEO’s recommendation of appropriate compensation levels
The committee’s compensation philosophy is to attract, retain and motivate employees to deliver results and increase shareholder value, performing in the best interests of the Company and its shareholders. The committee reviews compensation policies and plans to ensure that this philosophy is supported and that such policies and plans allow the Company to compete effectively with other firms in attracting, motivating and retaining the talent required.
Each year, the committee evaluates the leadership ability, business experience, technical skill, and potential to contribute to Grace’s overall performance, of each executive officer (including our NEOs). In addition, since the number of executive officers is small, the committee is able to spend considerable time with each executive officer outside committee meetings, so the committee members are able to develop strong holistic views of each executive officer’s performance and potential. The committee also reviews each executive officer’s existing compensation. This information, presented in the form of a “tally sheet,” reflects all compensation payable or potentially payable to each executive officer under our compensation program. For each executive officer, the committee reviews the tally sheet, the peer group information, and broad industry data to provide context to the compensation decisions. The committee then reviews the recommendation of the CEO, as discussed below, solely with respect to the other

63    W. R. GRACE & CO.


executive officers, and makes the compensation determination based on its individual evaluation of each executive officer.
The committee’s process for determining the compensation of the CEO is similar to the process it applies to other executive officers. The committee reviews and approves corporate goals and objectives used in determining the compensation of the CEO. The committee evaluates the CEO’s performance considering those goals and objectives as well as market data and has sole authority to determine the CEO’s compensation based on this evaluation. The CEO plays no part in the committee’s deliberations concerning, or approval of, the CEO’s own compensation. The committee believes the CEO’s compensation should be higher than the compensation of other executive officers because the CEO is uniquely positioned to influence all aspects of our operations and performance and the resulting return to our shareholders. In addition, the committee believes that a competitive compensation package that aligns the interests of the CEO with Grace’s shareholders is the most effective way to incentivize the CEO and maximize Company performance. The committee’s view is consistent with the practices of the compensation peer group companies and the broad industry data that the committee has reviewed, as described in greater detail in the section below titled “Role of the Compensation Consultant.”
Role of the Chief Executive Officer
The CEO proposes compensation levels for the other executive officers. The CEO bases his recommendations for the other executive officers and NEOs on his personal review of the factors considered by the committee, as described above. The committee affords the CEO’s recommendations significant weight but retains full discretion when determining executive officer compensation. Although not a member of the committee, the CEO attends committee meetings and participates in committee deliberations regarding compensation levels for the other executive officers. The CEO is excused from deliberations regarding his own compensation and from the “executive session” portion of each meeting when the committee meets alone or alone with its outside advisors.
Role of the Compensation Consultant
In order to add rigor in the process of setting executive officer compensation and to inform the committee of market trends, the committee has engaged the services of WTW to analyze our executive compensation structure and plan designs, and to assess whether our compensation program is competitive and supports the committee’s goal to align the interests of our executive team with the interests of our shareholders.
Specific services provided by WTW in 2020 included:
participation in committee meetings
review of our pay-for-performance alignment
review of risk factors associated with the design and administration of our executive compensation program
review of companies included in our compensation peer group
preparation of market compensation data for executives and outside directors
pandemic-specific studies and advice, including comparative information
review of the CEO’s compensation as well as compensation recommendations for the other NEOs
presentation of recommendations for the CEO’s compensation to the committee
assessment of the share usage under our long-term incentive plan versus our peer group
advice on incentive compensation plan design
advice on current market trends and practices
review of compensation disclosure
We expect WTW and our executive officers, including our CEO and our CHRO, to meet, exchange information, and otherwise cooperate in the performance of their respective duties outside committee meetings.
During 2020, the Company paid fees to WTW for services rendered in respect of executive officer and director compensation in the amount of $266,000. In addition, management engaged WTW to provide additional services to

64    W. R. GRACE & CO.


the Company in an amount equal to $134,400 during 2020. These services included human capital and broking, and data, surveys and technology.
The committee has the sole authority to approve the independent compensation consultant’s fees and terms of engagement. The committee annually reviews its relationship with WTW to ensure independence. The process includes a review of the services WTW provides, the quality of those services, and fees associated with the services during 2020 as well as consideration of the factors impacting independence that the NYSE rules require. In its review, the committee noted no conflicts of interest related to the work of WTW and has determined the consultant to be independent.
Compensation Policies and Practices Relating to Risk Management
We do not believe that risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on Grace through excessive risk-taking incentives or otherwise. Our compensation program, though tailored to our specific needs, is generally similar to compensation programs used by other companies in our industry. We have many years of experience with the various components of our compensation program, including our incentive plans under which payments may vary based on the performance of the business. We believe these plans, backed by our corporate ethics program and the Grace Core Values, have been successful in aligning the interests of our executives and senior employees with the interests of our shareholders and in encouraging the responsible pursuit of corporate objectives by our employees.
In order to ensure that our executive officer compensation program does not encourage excessive risk-taking, the committee conducts a periodic risk assessment of our compensation plans, including their design, structure and administration. In 2020, the committee reviewed risk factors associated with the design and administration of the Company’s executive compensation program with WTW. The committee believes that several elements of our compensation programs mitigate risk, including the use of performance measures based on reasonable targets, the balance of the compensation elements, between time-based and performance-based compensation, the implementation of share ownership guidelines, and hedging/pledging prohibitions, the use of severance and change in control agreements to maintain our executives’ focus in times of uncertainty, and the committee’s oversight and discretion regarding incentive compensation.
In addition, as discussed above, to reinforce the alignment of management’s interests with those of our shareholders, and support good governance practices, the Board has adopted an Executive Compensation Recovery Policy (“Clawback”) that applies to all of our NEOs. For additional information, see “Clawback Policy” above.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the tax deduction for compensation expense each year in excess of $1 million paid to certain executive officers. As in effect prior to the 2018 tax year, there was an exception from Section 162(m) for “performance-based” compensation that satisfies certain other conditions. Effective with the 2018 tax year, the Tax Cuts and Jobs Act of 2017 eliminated the exception under Section 162(m) for performance-based compensation, unless there was a binding written arrangement with respect to such compensation in place on November 2, 2017. According to the IRS, whether a written arrangement is binding for such purpose will be determined under applicable state law. While the design of the AICP and LTIP was structured to provide flexibility in determining whether compensation payable thereunder may be tax deductible, deductibility was only one criterion we considered when establishing such plans. We believe that it is important to preserve the ability to structure compensation plans to meet a variety of corporate objectives even if the compensation is not deductible.

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Compensation Committee Report
We, the undersigned members of the Compensation Committee of the Board of Grace, have reviewed Grace’s Compensation Discussion and Analysis for 2020 and have discussed it with Grace management. Based on our review and this discussion, we recommend to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
COMPENSATION COMMITTEE
Diane H. Gulyas, Chair
Robert F. Cummings, Jr.
Julie Fasone Holder
Henry R. Slack
Christopher J. Steffen
Mark E. Tomkins
Shlomo Yanai

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Compensation Committee Interlocks and Insider Participation
During 2020, the Compensation Committee of the Board was composed of Mses. Fasone Holder, Gulyas and Reiland, and Messrs. Cummings, Quinn, Slack, Tomkins, Steffen, and Yanai. Ms. Gulyas chaired the Compensation Committee during 2020. None of these persons is a current or former Grace officer or employee, nor did we have any reportable related party transactions with any of these persons; except that Ms. Reiland and Mr. Slack were included on the slate of director nominees recommended by our Board in the Proxy Statement for our 2019 Annual Meeting of Shareholders pursuant to a letter agreement with 40 North. See “Agreements with Certain of our Shareholders,” above. Ms. Reiland resigned from our Board effective October 13, 2020. None of our executive officers serves or in the past has served as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving, or in the past having served, on our Board or our Compensation Committee.

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Compensation Tables
Summary Compensation Table
The following table sets forth the compensation we paid to NEOs as of December 31, 2020.
Name and Principal PositionYearSalary
($)
Bonus
($)(a)
Stock Awards(b)
($)
Option Awards(b)
($)
Non-Equity Incentive Plan Compensation
($)
Change in Pension Value and Nonqualified Deferred Compensation Earnings(d)
($)
All Other Compensation(e)
($)
Total
($)
AICP(c)
H. La Force
President & Chief Executive Officer
2020906,250 398,795 2,399,979 807,321 145,016 1,134,000 179,879 5,971,240 
2019850,000 — 2,099,966 693,209 697,000 1,021,000 168,849 5,530,024 
2018667,243 — 975,011 325,189 692,700 124,000 83,584 2,867,727 
W. C. Dockman
Senior Vice President & Chief Financial Officer
2020456,250 140,549 600,036 201,833 51,109 676,000 50,497 2,176,274 
2019377,650 — 574,938 123,789 203,580 625,000 42,730 1,947,687 
E. C. Brown
Senior Vice President, Human Resources and Information Technology and Chief Human Resources Officer
2020420,000 157,584 412,490 138,758 47,040 309,000 60,785 1,545,657 
2019397,083 — 562,506 185,675 227,949 236,000 62,916 1,672,129 
2018390,000 — 374,989 125,073 320,800 76,000 57,941 1,344,803 
K. N. Cole
Senior Vice President, Public Affairs & Environment, Health, Safety & Chief Sustainability Officer
2020377,500 116,276 337,528 113,530 42,282 246,000 54,719 1,287,835 
2019370,000 — 525,011 173,298 212,380 293,000 53,875 1,627,564 
2018365,000 — 337,551 112,565 300,500 90,000 42,824 1,248,440 
M. A. Shelnitz
Former Senior Vice President, General Counsel & Secretary
2020459,000 108,603 412,490 138,758 51,410 755,000 916,110 2,841,371 
2019450,000 — 412,447 136,166 258,300 1,488,000 70,083 2,814,996 
2018443,750 — 412,494 137,580 365,400 — 53,615 1,412,839 
_______________________________________________________________________________
(a)Amounts contained in this column represent amounts paid in the Compensation Committee’s exercise of discretion that were in excess of the amounts earned by meeting the performance measures under the 2020 AICP. See "Compensation Discussion and Analysis – Annual Incentive Compensation" above for additional information regarding our NEOs’ 2020 bonus awards.
(b)In the “Stock Awards” column, the amounts reflect the aggregate grant date fair value of: (i) RSU awards; and (ii) PBU awards, to each executive officer, computed in accordance with FASB ASC Topic 718, “Compensation-Stock Compensation.” In the “Option Awards” column, the amounts reflect the aggregate grant date fair value of option awards to each NEO computed in accordance with FASB ASC Topic 718.
In the case of RSU awards, the amounts shown in the Stock Awards column are based on an estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures.
In the case of PBU awards, the amounts shown in the Stock Awards column are based on an estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718 assuming the target level of performance conditions is achieved and excluding the effect of estimated forfeitures. The values of the PBU awards at the grant date if the highest level of performance conditions is achieved would be as follows: Mr. La Force — $3,199,971; Mr. Dockman — $800,048; Ms. Brown — $549,950; Mr. Cole — $450,000; and Mr. Shelnitz — $549,950.
In the case of stock options, Grace values the options using a Black-Scholes option-pricing model, as discussed under “2020 Executive Compensation—Elements, Targets, and Results—Long-Term Incentive Compensation—Stock Options” in the Compensation Discussion and Analysis above.
The assumptions used to calculate the compensation expense for 2020 are described in the Company’s 2020 Form 10-K Original Filing in Item 8 (Financial Statements and Supplementary Data) under Note 15 (Stock Incentive Plans) to the Consolidated Financial Statements.
(c)The amount consists of earned payments pursuant to the AICP. Amounts contained in this column in respect of 2020 exclude amounts paid in the Committee’s exercise of discretion that were in excess of the amounts earned by meeting the performance measures under the 2020 AICP.
(d)The 2020 amount consists of the aggregate change in the actuarial present value of the individual’s accumulated benefit under the Grace Pension Plan and SERP from December 31, 2019 to December 31, 2020, assuming retirement at age 62 with benefits payable on a straight-life annuity basis, based on assumptions used for financial reporting purposes under generally accepted accounting principles, including a 2.41% discount rate determined as set forth in the Company’s 2020 Form 10-K Original Filing in Item 8 (Financial Statements and Supplementary Data) under Note 8 (Pension Plans and Other Retirement Plans) to the Consolidated Financial Statements. Although

68    W. R. GRACE & CO.


these amounts appear as a lump sum, they are generally paid as an annuity. The amount reported is an accounting value and was not realized by the individual in cash during 2020. The amounts include benefits that the individual may not currently be entitled to receive because the executive is not vested in such benefits. No NEO received preferential or above market earnings on nonqualified deferred compensation in 2020.
NameChange in Pension Plan Value
($)
Change in SERP Value
($)
Total Change in Pension Value
($)
H. La Force156,000978,0001,134,000
W. C. Dockman218,000458,000676,000
E. C. Brown105,000204,000309,000
K. N. Cole103,000143,000246,000
M. A. Shelnitz248,000507,000755,000
(e)The 2020 amount of All Other Compensation consists of the following:
NamePersonal Benefits*
($)
S&I Plan Matching Payments
($)
S&I Plan Replacement Payments
($)
Dividend Equivalents**
($)
Liability Insurance
($)
Severance Related Payments*** ($)Total
($)
H. La Force36,01917,10079,09545,3892,276179,879
W. C. Dockman16,36522,4909,3662,27650,497
E. C. Brown17,10021,77719,6322,27660,785
K. N. Cole16,44318,29317,7072,27654,719
M. A. Shelnitz17,10025,93823,6852,276847,111916,110
_______________________________________________________________________________
*    Consists of our aggregate incremental cost of providing perquisites and other personal benefits or property if the aggregate amount of perquisites and other personal benefits provided to the individual equaled or exceeded $10,000. For Mr. La Force, the amount relates to the incremental cost associated with his personal use of a Grace-provided aircraft and consists of $36,019 computed by aggregating the direct operating costs for the use of the aircraft by Mr. La Force, including the costs for maintenance, engine costs, pilot fees, catering, de-icing, landing fees, flight time on an hourly basis (including taxi time), fuel, and surtax.
**    Consists of dividend equivalents on vested awards in 2020.
***    In connection with Mr. Shelnitz’s mutually agreed departure from Grace on December 31, 2020, he received a $785,400 severance payment, a $26,173 lump sum payment for health benefits coverage, and a $35,538 lump sum payment for unused vacation.

69    W. R. GRACE & CO.


Grants of Plan-Based Awards in 2020
The following table provides information regarding grants under our AICP and LTIP to the executive officers named in the Summary Compensation Table above during 2020.
NamePlanGrant
Date
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(a)Estimated Future Payouts Under Equity Incentive Plan Awards(b)All Other Stock Awards: Number of Shares of Stock
(#)(c)
All Other Option Awards: Number of Securities Underlying Options
(#)(d)
Exercise or Base Price of Option Awards
($/Sh)(e)
Closing Price on Grant Date
($/Sh)
Grant Date Fair Value of Stock and Option Awards
($)(f)
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum (#)
H. La Force2020 AICPn/a453,177906,3531,812,706
2020 LTIP (Option)2/27/202083,74755.4154.24807,321
2020 LTIP (RSU)2/27/202014,439799,993
2020 LTIP (PBU)2/27/202014,43928,87857,7561,599,986
W. C. Dockman2020 AICPn/a159,715319,430638,860
2020 LTIP (Option)2/27/202020,93755.4154.24201,833
2020 LTIP (RSU)2/27/20203,610200,012
2020 LTIP (PBU)2/27/20203,6107,22014,440400,024
E. C. Brown2020 AICPn/a147,000294,000588,000
2020 LTIP (Option)2/27/202014,39455.4154.24138,758
2020 LTIP (RSU)2/27/20202,482137,515
2020 LTIP (PBU)2/27/20202,4824,9639,926274,975
K. N. Cole2020 AICPn/a132,131264,262528,524
2020 LTIP (Option)2/27/202011,77755.4154.24113,530
2020 LTIP (RSU)2/27/20202,031112,528
2020 LTIP (PBU)2/27/20202,0314,0618,122225,000
M. A. Shelnitz2020 AICPn/a160,656321,312642,624
2020 LTIP (Option)2/27/202014,39455.4154.24138,758
2020 LTIP (RSU)2/27/20202,482137,515
2020 LTIP (PBU)2/27/20202,4824,9639,926274,975
_______________________________________________________________________________
(a)The amounts earned by our NEOs in 2020 based on actual achievement of the 2020 performance objectives under the AICP are shown in the "Non-Equity Incentive Plan Compensation" column of the 2020 Summary Compensation Table above, and amounts paid to our NEOs in 2020 in excess of the amounts earned by meeting the 2020 performance objectives as a result of the Committee's exercise of discretion were reportable as "Bonus" in the Summary Compensation Table. See "Compensation Discussion and Analysis – Annual Incentive Compensation" above for additional information regarding the 2020 AICP.
(b)Pursuant to the terms of the grants, the number of PBUs that are earned, if any, would be determined after the close of the performance period based on performance for fiscal years 2020 to 2022, inclusive, and would be payable in early 2023, generally subject to continued employment.
(c)These 2020 LTIP RSUs vest in one-third increments on February 27, 2021, February 27, 2022, and February 27, 2023, generally subject to continued employment.
(d)Options awarded under the 2020 LTIP are exercisable in one-third increments on February 27, 2021, February 27, 2022, and February 27, 2023, generally subject to continued employment.
(e)The exercise price was determined based on the average of the high and low trading prices of Grace common stock on the NYSE on the grant date.
(f)The grant date fair value is generally the amount that Grace would expense in its financial statements over the award’s service period but does not include a reduction for forfeitures.

70    W. R. GRACE & CO.


Outstanding Equity Awards at Fiscal Year End 2020
The following table provides information regarding outstanding stock options, RSUs, and PBUs held by the NEOs as of December 31, 2020.
Option AwardsStock Awards
NameNumber of Securities Underlying Unexercised Options
(#)
Exercisable
Number of Securities Underlying Unexercised Options
(#)
Unexercisable
Option Exercise Price
($)
Option Expiration DateNumber of Units of Stock That Have Not Vested (#)Market Value of Units of Stock That Have Not Vested ($)Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested
(#)
Equity Incentive Plan Awards: Payout Value of Unearned Units That Have Not Vested
($)
H. La Force— — — — 1,609 88,205 (a)— — 
— — — — 5,974 327,495 (b)— — 
— — — — 14,439 791,546 (c)— — 
— — — — — — 17,922 982,484 (f)
— — — — — — 28,878 1,583,092 (g)
— 83,747 (h)55.405 2/27/2030— — — — 
12,845 25,688 (i)78.115 2/23/2029— — — — 
17,698 8,848 (j)67.335 2/22/2023— — — — 
21,181 — 71.410 2/23/2022— — — — 
22,893 — 68.470 2/25/2021— — — — 
W. C. Dockman— — — — 294 16,117 (d)— — 
— — — — 1,066 58,438 (b)— — 
— — — — 3,610 197,900 (c)— — 
— — — — 2,664 146,040 (e)— — 
— — — — — — 3,200 175,424 (f)
— — — — — — 7,220 395,800 (g)
— 20,937 (h)55.405 2/27/2030— — — — 
2,294 4,587 (i)78.1152/23/2029— — — — 
3,123 1,561 (k)70.7155/8/2023— — — — 
4,814 — 71.4102/23/2022— — — — 
4,683 — 68.4702/25/2021— — — — 
E. C. Brown— — — — 618 33,879 (a)— — 
— — — — 1,600 87,712 (b)— — 
— — — — 2,482 136,063 (c)— — 
4,801 263,191 (f)
— — — — — — 4,963 272,072 (g)
— 14,394 (h)55.4052/27/2030— — — — 
3,441 6,880 (i)78.1152/23/2029— — — — 
6,807 3,403 (j)67.3352/22/2023— — — — 
9,628 — 71.4102/23/2022— — — — 
14,568 — 68.4702/25/2021— — — — 
K. N. Cole— — — — 557 30,535 (a)— — 
— — — — 1,493 81,846 (b)— — 
— — — — 2,031 111,339 (c)— — 
— — — — — — 4,481 245,648 (f)
— — — — — — 4,061 222,624 (g)
— 11,777 (h)55.4052/27/2030— — — — 
3,211 6,422 (i)78.1152/23/2029— — — — 
6,126 3,063 (j)67.3352/22/2023— — — — 
8,665 — 71.4102/23/2022— — — — 
9,365 — 68.4702/25/2021— — — — 
M. A. Shelnitz (l)— — — — — — 2,359 129,320 
— — — — — — 1,688 92,536 
— 3,998 55.405 12/31/2023— — — — 
2,523 5,046 78.115 12/31/2023— — — — 
7,488 3,743 67.3352/22/2023— — — — 
10,590 — 71.4102/23/2022— — — — 
15,609 — 68.4702/25/2021— — — — 
_______________________________________________________________________________
(a)Market value of RSUs that have not been earned is based on the December 31, 2020, closing market price of Grace common stock of $54.82 per share. Such RSUs vested in full based on continued employment with Grace on February 22, 2021.

71    W. R. GRACE & CO.


(b)Market value of RSUs that have not been earned is based on the December 31, 2020, closing market price of Grace common stock of $54.82 per share. One-half of these RSUs vested on February 25, 2021, and the remaining RSUs will generally be earned or forfeited based on continued employment with Grace through February 25, 2022.
(c)Market value of RSUs that have not been earned is based on the December 31, 2020, closing market price of Grace common stock of $54.82 per share. One-third of these RSUs vested on February 27, 2021, and the remaining RSUs will generally be earned or forfeited in equal increments based on continued employment with Grace through February 27, 2022 and February 27, 2023.
(d)Market value of RSUs that have not been earned is based on the December 31, 2020, closing market price of Grace common stock of $54.82 per share. The remaining RSUs will generally be earned or forfeited based on continued employment with Grace through May 7, 2021.
(e)Market value of RSUs that have not been earned is based on the December 31, 2020, closing market price of Grace common stock of $54.82 per share. The remaining RSUs will generally be earned or forfeited based on continued employment with Grace through May 8, 2021.
(f)Market value of PBUs granted in February 2019 that have not been earned is based on the December 31, 2020, closing market price of Grace common stock of $54.82 per share. Pursuant to the terms of the grants, the PBUs would be earned or forfeited based on Grace performance from fiscal year 2019 through fiscal year 2021.
(g)Market value of PBUs granted in February 2020 that have not been earned is based on the December 31, 2020, closing market price of Grace common stock of $54.82 per share. Pursuant to the terms of the grants, the PBUs would be earned or forfeited based on Grace performance from fiscal year 2020 through fiscal year 2022.
(h)One-third of these options vested on February 27, 2021. The remaining options will become exercisable in equal increments on February 27, 2022, and February 27, 2023.
(i)One-half vested on February 25, 2021 and the remaining options will become exercisable on February 25, 2022.
(j)These remaining options became fully exercisable on February 21, 2021.
(k)Remaining options became exercisable May 7, 2021.
(l)Given that Mr. Shelnitz terminated employment with Grace effective as of the close of business on December 31, 2020, and was retirement eligible at such time, his awards outstanding as of December 31, 2020 are shown here, prorated where applicable. For additional information regarding the compensation and benefits payable to Mr. Shelnitz in connection with his mutually agreed departure from Grace, including treatment of his awards, see the sections entitled “Option Exercises and Stock Vested in 2020” and “Potential Payments Upon Termination or Change in Control” below.
Option Exercises and Stock Vested in 2020
The following table provides information regarding the exercise of options and the vesting of stock awards (PBUs and RSUs) held by the NEOs during 2020.
 Option AwardsStock Awards
NameNumber of Shares Acquired on Exercise
(#)
Value Realized on Exercise
($)
Number of Shares Acquired on Vesting
(#)
Value Realized on Vesting
($)(a)
H. La Force11,189672,057
W. C. Dockman1,798122,653
E. C. Brown4,045243,770
K. N. Cole3,668221,004
M. A. Shelnitz5,902346,693
_______________________________________________________________________________
(a)The values in this column include all stock award vesting events, including the 2018-2020 PBUs valued at a closing stock price for Grace common stock of $59.26 on February 26, 2021. The values of the PBU payout amounts as of the February 26, 2021, payment date, based on the closing price of Grace common stock on that date of $59.26 were: for Mr. La Force — $314,671; for Mr. Dockman — $57,660; for Ms. Brown — $121,068; for Mr. Cole — $108,979; and for Mr. Shelnitz — $133,157. For Mr. Shelnitz, the value includes prorated RSUs that vested on December 31, 2020 as well.

72    W. R. GRACE & CO.


Pension Benefits
The following table provides information regarding benefits under our Pension Plan and our SERP for the NEOs.
NamePlan NameNumber of Years Credited Service
(years)
Present Value of Accumulated Benefit
($)(a)
Payments During Last Fiscal Year
($)
H. La ForcePension Plan12.75730,000
SERP12.752,943,000
W. C. DockmanPension Plan21.171,379,000
SERP21.171,521,000
E. C. BrownPension Plan5.92359,000
SERP5.92544,000
K. N. ColePension Plan6.83445,000
SERP6.83591,000
M. A. ShelnitzPension Plan37.172,391,000
SERP37.174,445,000
_______________________________________________________________________________
(a)Amounts comprise the actuarial present value of the individual's accumulated benefit under the Pension Plan and SERP as of December 31, 2020, assuming retirement at age 62 with benefits payable on a straight-life annuity basis, based on assumptions used for financial reporting purposes under generally accepted accounting principles, including a 2.41% discount rate determined as set forth in the Company's 2020 Form 10-K Original Filing, in Item 8 (Financial Statements and Supplementary Data) under Note 8 (Pension Plans and Other Retirement Plans) to the Consolidated Financial Statements. The Pension Plan and SERP provide for a reduction in pension benefits to individuals who elect early retirement ranging from a 17% reduction for retirement at age 55 to no reduction for retirement at age 62. Although these amounts appear as a lump sum, they are generally paid as an annuity. The amounts reported are accounting values and were not realized by the individuals in cash during 2020.
Retirement Plan for Salaried Employees
Certain full-time salaried employees who are 21 or older and who have one or more years of service (including each of the NEOs) are eligible to participate in our Retirement Plan for Salaried Employees, also called the Pension Plan. Under this qualified retirement plan, pension benefits are based upon (a) the employee’s average annual compensation for the 60 consecutive months in which his or her compensation is highest during the last 180 months of continuous participation, and (b) the number of years of the employee’s credited Grace service. At age 62, a participant is entitled to full benefits under the Pension Plan, but a participant may elect reduced payments upon early retirement beginning at age 55. For purposes of the Pension Plan, compensation generally includes base salary and AICP awards; however, for 2020, federal income tax law limits to $285,000 the annual compensation on which benefits under the Pension Plan may be based. As of December 31, 2020, Messrs. La Force and Dockman, and Ms. Brown were eligible for early retirement under the Pension Plan, and Messrs. Cole and Shelnitz were eligible for regular retirement under the Pension Plan. The Pension Plan is further described in Item 8 (Financial Statements and Supplementary Data) under Note 8 (Pension Plans and Other Retirement Plans) to the Consolidated Financial Statements and in Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations under the captions “Financial Condition, Liquidity, and Capital Resources” and “Employee Benefit Plans—Defined Benefit Pension Plans”) of the Company’s 2020 Form 10-K Original Filing. This benefit plan was closed to new entrants effective January 1, 2017. In January 2021, Grace announced the Pension Plan will be frozen as of December 31, 2024 and effective January 1, 2025 all participants will be moved to a defined contribution plan already in place for new hires as of January 1, 2017.
Supplemental Executive Retirement Plan
We also have an unfunded, nonqualified SERP, under which an employee will receive the full pension to which he or she would be entitled in the absence of the limitations described above and other limitations imposed under federal income tax law. With respect to payments, the SERP generally operates in the same manner as the Pension Plan. As of December 31, 2020, Messrs. La Force and Dockman, and Ms. Brown were eligible for early retirement under the SERP, and Messrs. Cole and Shelnitz were eligible for regular retirement under the SERP. The SERP is further

73    W. R. GRACE & CO.


described in Item 8 (Financial Statements and Supplementary Data) under Note 8 (Pension Plans and Other Retirement Plans) to the Consolidated Financial Statements and in Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations under the captions “Financial Condition, Liquidity, and Capital Resources” and “Employee Benefit Plans—Defined Benefit Pension Plans”) of the Company’s 2020 Form 10-K Original Filing. Like the Pension Plan, the SERP was closed to new entrants since January 1, 2017. In January 2021, Grace announced the SERP will be frozen as of December 31, 2024 and effective January 1, 2025 all eligible participants will be moved to a defined contribution plan already in place for eligible new hires as of January 1, 2017.