SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Year Ended December 31, 2001
Commission File Number 1-13953
W. R. GRACE & CO. SALARIED EMPLOYEES
SAVINGS AND INVESTMENT PLAN
W. R. GRACE & CO.
7500 GRACE DRIVE
COLUMBIA, MARYLAND 21044
W. R. GRACE & CO.
SALARIED EMPLOYEES
SAVINGS AND INVESTMENT PLAN
DECEMBER 31, 2001 AND 2000
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrative Committee of the
W. R. Grace & Co. Salaried Employees
Savings and Investment Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the W. R. Grace & Co. Salaried Employees Savings and Investment Plan (the
"Plan") at December 31, 2001 and 2000, and the changes in net assets available
for benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As further described in Note 1, effective December 31, 2001, the W. R. Grace &
Co. Hourly Employees Savings and Investment Plan was merged with and into the
Plan.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Baltimore, Maryland
June 27, 2002
-1-
W. R. GRACE & CO.
SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
--------------------------------------------------------------------------------
DECEMBER 31,
2001 2000
ASSETS
Interest in W. R. Grace & Co. Savings Plan Master Trust $431,860,806 $454,510,085
Contributions receivable 4,011 613,104
Due from Hourly Plan 259,259 -
------------ ------------
Net assets available for benefits $432,124,076 $455,123,189
============ ============
The accompanying notes are an integral part of these financial statements.
-2-
W. R. GRACE & CO.
SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
--------------------------------------------------------------------------------
FOR THE YEAR ENDED
DECEMBER 31,
2001 2000
ADDITIONS
Additions to net assets attributable to
Contributions
Participants $ 12,670,992 $ 12,092,176
Employer 7,750,963 4,059,296
------------ ------------
20,421,955 16,151,472
------------ ------------
Interest in the income (loss) of the W. R. Grace & Co.
Savings Plan Master Trust
Interest and dividends 16,346,727 37,798,901
Net depreciation (see Note 3) (38,876,159) (110,451,342)
------------ ------------
(22,529,432) (72,652,441)
------------ ------------
TOTAL (2,107,477) (56,500,969)
------------ ------------
DEDUCTIONS
Deductions from net assets attributable to
Participant withdrawals 59,520,997 66,572,477
Administrative expenses 71,168 119,186
------------ ------------
TOTAL 59,592,165 66,691,663
------------ ------------
NET DECREASE PRIOR TO TRANSFERS FROM OTHER PLANS (61,699,642) (123,192,632)
Net transfers from other plans 38,700,529 337,800
------------ ------------
NET DECREASE (22,999,113) (122,854,832)
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 455,123,189 577,978,021
------------ ------------
END OF YEAR $ 432,124,076 $ 455,123,189
============= =============
The accompanying notes are an integral part of these financial statements.
-3-
W. R. GRACE & CO.
SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1 . DESCRIPTION OF THE PLAN
The following description of the W. R. Grace & Co. Salaried Employees
Savings and Investment Plan ("Plan" or "Salaried Plan") provides only
general information. Participants should refer to the text of the Plan,
the Summary Plan Description, and the Prospectus Supplement for the Plan
for more complete information.
GENERAL
On April 2, 2001, W. R. Grace & Co. ("Grace") and 61 of its U.S.
subsidiaries and affiliates (collectively, the "Company") filed voluntary
petitions for reorganization under Chapter 11 of the United States
Bankruptcy Court for the District of Delaware. The United States
Bankruptcy Court in Wilmington, Delaware approved on April 2, 2001 an
order that authorized, but did not direct, the debtors and debtors in
possession under the bankruptcy filing to pay, in their sole discretion,
employee benefits, including employer contributions under the Plan. Under
the Court's authorization, Grace has continued to meet its obligations
under the Plan. Should the Plan terminate as a result of the bankruptcy
filing, Company contributions would cease and the net assets of the Plan
would be distributed in accordance with the provisions of the Plan
document.
The Plan is a defined contribution plan originally adopted effective
September 1, 1976, and has been amended from time to time. The Plan is
subject to certain provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
Effective December 31, 2001, the W. R. Grace & Co. Hourly Employees
Savings and Investment Plan ("Hourly Plan") was merged with and into the
Plan. Effective on the date of the merger $34,303,697 was transferred from
the Hourly Plan to the Plan. On January 1, 2002, the Plan was renamed the
W. R. Grace Savings and Investment Plan.
Effective January 31, 2001, assets of the ICI Americas Inc. Retirement
Savings Plan (the "ICI Plan"), in the amount of $4,055,195, were
transferred to the Plan. This amount represented the account balances of
the participants of the ICI Plan who became Grace employees as a result of
Grace's purchase of the hydroprocessing catalyst business of ICI.
ELIGIBILITY AND VESTING
Prior to the merger of the Hourly Plan, Grace and its subsidiaries
designated as participating units in the Plan, any salaried employee (or
any salesman paid on a commission basis) and any other employee in an
eligible employment classification who has completed three months of
service or, for periods prior to October 1, 2000, twelve months of
employment (including 1,000 hours of service), are eligible to participate
in the Plan, subject to certain exceptions and special provisions.
Effective January 1, 2002, hourly employees are also available to
participate in the Plan.
A participant's interest (employee contributions, Company contributions
and earnings thereon) in the Plan is always fully vested.
PACKAGING TRANSACTION
On March 31, 1998, a predecessor of Grace ("Old Grace") completed a
transaction ("Packaging Transaction") in which its flexible packaging
business ("Cryovac Business") was combined with
-4-
W. R. GRACE & CO.
SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Sealed Air Corporation ("Sealed Air"). As a result of the Packaging
Transaction, for each share of common stock held, each shareholder of Old
Grace common stock received: (a) one share of common stock of the "New
W. R. Grace & Co." ("New Grace"), (b) .536 shares of common stock of
Sealed Air and (c) .475 shares of convertible preferred stock of Sealed
Air. As a result of the Packaging Transaction, approximately $203.5
million was transferred to the successor trustee. The common stock of Old
Grace was canceled as a result of the Packaging Transaction.
As part of the Packaging Transaction, all balances were required to be
transferred out of the Sealed Air Common Stock Fund and the Sealed Air
Preferred Stock Fund and into other Plan investment options by December
31, 2000. Remaining balances not transferred by December 31, 2000 were
liquidated and transferred to the Fixed Income Fund.
CONTRIBUTIONS
Each year, participants may elect to contribute to the Plan 2% to 16% of
their compensation (which, for purposes of the Plan, consists of salary
and/or commissions, incentive compensation, and certain special and bonus
awards).
Participant contributions may be made from before-tax and/or after-tax
income, as provided under Sections 401(k) and 401(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), subject to an annual dollar
limit on before-tax contributions of $10,500 for 2001 and 2000. Federal
income tax law limited the annual compensation on which tax-qualified plan
benefits may be based to $170,000 for 2001 and 2000.
Effective January 1, 2001 the Company contributed 100% of the first 6% of
base compensation that a participant contributes to the Plan. Therefore,
the maximum Company contribution is 6% of a participant's base
compensation.
Effective October 1, 2000 the Company contributed 75% of the first 6% of
base compensation that a participant contributes to the Plan. Prior to
October 1, 2000 the Company contributed 50% of the first 6% of base
compensation. Therefore, effective October 1, 2000 the maximum Company
contribution is 4.5% of each participant's compensation, subject to the
annual dollar limitations noted above. Prior to October 1, 2000 the
maximum Company contribution was 3%.
The Plan currently offers 26 mutual funds, Company common stock account
and a Fixed Income Fund comprised principally of guaranteed investment
contracts as investment options for participants.
Effective January 1, 2001, matching Company contributions are allocated to
investment options in accordance with the participant's contribution
investment election. Prior to January 1, 2001, Company contributions were
generally credited to the ESOP, which was invested in New Grace common
stock. The ESOP is an Employee Stock Ownership Plan, within the meaning of
the Code.
Effective October 1, 2000 participants were able to, at any time, elect to
transfer all or a portion of their Company contributions from the ESOP to
any of the other funds. Such transfers could be in whole dollar amounts or
multiples of 5% of the participant's account balance.
The Plan provides that a statement of each participant's account be sent
to the participant at least once a year. Presently, such statements are
sent shortly after the end of each calendar quarter.
-5-
W. R. GRACE & CO.
SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Effective January 1, 2001, on any business day, participants may allocate
their future contributions among any of the investment options and may
transfer the amounts related to their prior contributions in any of the
investment options to other investment options. All investment options are
participant-directed. Prior to January 1, 2001 all investment options were
participant-directed, except for the ESOP. Transfers may be in whole
dollar amounts or in multiples of 5% of the participant's account balance.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution, the applicable allocation of the Company's contribution and
an allocation of Plan earnings (losses) and charged with an allocation of
administrative expenses. Allocations are based on participant earnings or
account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
account.
Prior to December 31, 2001, transfers between the Hourly Plan and the
Salaried Plan occurred from time to time when the participant
classification changed from hourly to salaried and vice versa. Effective
December 31, 2001 the Hourly Plan assets were merged with and into the
Plan.
PARTICIPANT LOANS
Participants may borrow up to one-half of the value of their account
balance up to $50,000. Loans may be for a term of one to five years for a
general purpose loan and up to twenty years for a loan to purchase a
principal residence. The interest rate for the loans is fixed for the term
of the loan and the loans are repaid in periodic installments, depending
on the loan provisions. Participants can repay the outstanding loan
balance in full at any time without penalty. Loans are considered to be in
default and treated as a distribution for tax purposes if no payment is
received for ninety days. If employment with the Company ends, any
outstanding loan balance will be considered a distribution if not repaid
within ninety days.
Interest paid on loans is credited to the individual investment options
from which the loan was taken.
PAYMENT OF BENEFITS
Upon disability, retirement, or other termination of service, an
individual may elect to receive his/her vested benefit in the form of a
single lump sum payment or annual or quarterly installment payments if the
vested balance exceeds $5,000. For amounts less than $5,000, a single lump
sum payment is made.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounts of the Plan are maintained on the accrual basis of
accounting, which is acceptable under U.S. Department of Labor Regulations
and is in accordance with accounting principles generally accepted in the
United States of America ("GAAP").
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in publicly traded securities and mutual funds are stated at
fair value. Investments in publicly traded securities are valued at the
last reported sales price on the last day of the year. Shares
-6-
W. R. GRACE & CO.
SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
of mutual funds are valued at the net asset value of shares held by the
Plan at year end. Investments in guaranteed investment contracts held in
the Fixed Income Fund (see Note 5) are stated at contract value, which
represents contributions made under the contract plus interest at the
contract rate, less funds used for withdrawals. Participant loans are
valued at cost, which approximates fair value.
Purchases and sales of publicly traded securities are recorded on a
trade-date basis. Dividends are recorded on the ex-dividend date.
Prior to December 31, 2001, the assets of the Plan were commingled in the
W. R. Grace & Co. Savings Plan Master Trust ("Master Trust") with the
assets of the W. R. Grace & Co. Hourly Employees Savings and Investment
Plan. The Master Trust is administered by The Fidelity Management Trust
Company ("Fidelity" or "Trustee"). The participating plans had a specific
interest in the Master Trust's net assets. Fidelity continues to serve as
the Trustee for the surviving W. R. Grace & Co. Savings and Investment
Plan.
Income of each investment option is reinvested in that option, except that
any dividends paid on shares of New Grace common stock held in the ESOP
are paid to participants in cash within 90 days after the end of the
calendar year in which the dividends are received. The ESOP dividends are
not treated as income to the Plan or as distributions to participants. The
Trustee manages the Grace Stock Fund and the ESOP by purchasing shares of
New Grace common stock and by selling shares to the extent necessary to
obtain cash for disbursements and transfers to the other funds. Investment
management of the Fixed Income Fund and investment oversight of the
Fidelity Mutual Funds is the responsibility of the Investment and Benefits
Committee appointed by the Grace Board of Directors, or as delegated by
that Committee.
The Plan records a realized gain or loss on New Grace common stock
distributed to participants in an amount equal to the difference between
the market value at the distribution date and the average cost of the
shares distributed. The cost of securities sold is determined on the basis
of average cost, and a gain or loss is recorded equal to the difference
between average cost and the sale price.
The Plan presents in the Statement of Changes in Net Assets Available for
Benefits the net appreciation (depreciation) in the fair value of its
investments, which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
PAYMENT OF BENEFITS
The Plan recognizes benefits when paid.
Amounts transferred to successor trustees are deducted from the Plan's net
assets upon the divestiture of, or discontinuance of participation by, a
participating business unit.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires
the Plan fiduciaries to make estimates and assumptions that affect the
reported amounts of assets and liabilities on the date of the financial
statements. Actual amounts may differ from the estimates used.
-7-
W. R. GRACE & CO.
SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
3. INVESTMENTS
The following presents investments that represent five percent or more of
the Plan's net assets included in the Master Trust.
-------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
---------------------------------
2001 2000
====================================================================================================================
Guaranteed Investment Contracts (GICs)
Metropolitan Life Insurance Co., 6.94%, March 2003 $ 31,616,342 $ 28,175,028
John Hancock Mutual Life Insurance Co., 7.02%,
June 2001 - 23,258,400
State Street Bank and Trust Co., 6.42% and 7.20%,
respectively, various maturity dates 86,396,415 36,185,945
Fidelity Management Trust Company
Fidelity Contrafund, 806,156 and 868,352 shares,
respectively 34,479,301 42,696,854
Fidelity Growth and Income Fund, 729,423 and
797,130 shares, respectively 27,265,840 33,559,190
Fidelity Over the Counter Portfolio Fund, 648,995
and 675,908 shares, respectively 20,229,174 27,746,013
Fidelity Balanced Fund, 1,687,356 and 1,633,585
shares, respectively 25,141,612 24,814,152
Fidelity Blue Chip Fund, 1,343,618 and 1,476,905
shares, respectively 57,694,952 76,104,939
-------------------------------------------------------------------------------------------------------------------
During 2001 and 2000, the Plan's investments held in the Master Trust
(including gains and losses on investments bought and sold, as well as
held during the year) depreciated in value by $38,876,159 and
$110,451,342, respectively as follows:
------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
2001 2000
==================================================================================================================
Mutual Funds $ (29,220,829) $ (44,315,360)
Common Stocks (9,655,330) (64,551,380)
Preferred Stock - (1,584,602)
----------------------------------
$ (38,876,159) $ (110,451,342)
------------------------------------------------------------------------------------------------------------------
-8-
W. R. GRACE & CO.
SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
4. GRACE COMMON STOCK
Prior to October 1, 2000, Company contributions were credited to the ESOP
account with limited diversification privileges. Complete diversification
of the ESOP account became available to participants on October 1, 2000.
Additionally, effective January 1, 2001, Company contributions could be
directed to any of the available investment options. Therefore, as of
January 1, 2001 the Plan's investments are entirely participant-directed.
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments
as of December 31, 2000 and for the year then ended was as follows:
-------------------------------------------------------------------------
DECEMBER 31,
2000
=========================================================================
NET ASSETS
Common Stocks $ 13,023,389
-------------------------
==========================================================================
FOR THE YEAR ENDED
DECEMBER 31, 2000
==========================================================================
CHANGES IN NET ASSETS
Contributions $ 4,037,525
Interest 294,724
Net depreciation (46,934,206)
Benefits paid to participants (4,993,146)
Transfers to participant-directed investments (11,054,587)
Administrative expenses (30,338)
-------------------------
$ (58,680,028)
-------------------------------------------------------------------------
5. GUARANTEED INVESTMENT CONTRACTS
Investments in the participant-directed Fixed Income Fund consist
primarily of benefit-responsive guaranteed investment contracts ("GICs")
issued by various insurance companies. The Plan's GICs are stated at
contract value, which approximates fair value. Contract value includes
principal invested, plus earnings, less benefit payments and
administrative expenses. Listed below is the Plan's specific interest in
the investments in GICs held in the Master Trust:
-9-
W. R. GRACE & CO.
SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
VALUE AT DECEMBER 31,
--------------------------------
ISSUER RATE 2001 2000 MATURITY DATE
=========================================================================================================
GUARANTEED INVESTMENT CONTRACTS (GICs)
--------------------------------------
Metropolitan Life Insurance Co. 6.94% $ 31,616,342 $ 28,175,028 Mar-03
AEGON Institutional Markets 6.87% - 17,732,970 Dec-01
6.40% 10,612,574 13,201,993 Dec-02
6.13% 14,885,722 13,364,535 Mar-03
New York Life Insurance Co. 6.63% 20,944,053 18,718,637 Jun-03
5.84% - 2,607,272 Jun-01
John Hancock Mutual Life Ins. Co. 7.02% - 23,258,400 Jun-01
Pacific Mutual Life Insurance Co. 6.87% 8,176,221 14,582,195 Jun-02
6.09% 20,135,708 - Dec-03
6.09% - 18,087,782 various
Massachusetts Mutual 6.98% 5,617,240 5,003,953 Dec-03
SEI Financial Management 5.88% 11,365,190 8,525,170 various
State Street Bank and Trust Co. 7.20% - 36,185,945 various
Principal Life Insurance Co. 6.10% 12,254,194 11,006,830 Sep-03
---------------------------------
Total Traditional GICs 135,607,244 210,450,710
SYNTHETIC GICS
--------------
State Street Bank and Trust Co.
Wrapper Contract 6.42% (2,359,402) - various
Underlying Assets
Interest in the UAM Trust
Company Dwight Target 5 Fund
Master Trust 88,755,817 -
---------------------------------------------------
Contract Value 86,396,415 -
---------------------------------------------------
Total Contracts 222,003,659 210,450,710
Commercial Paper 3,043,200 8,101,411 various
---------------------------------
TOTAL FIXED INCOME FUND $ 225,046,859 $218,552,121
---------------------------------------------------------------------------------------------------------
-10-
W. R. GRACE & CO.
SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
6. MASTER TRUST
The Plan's investments were held in the Master Trust through December 31,
2001, which was established for the investment of assets of the W. R.
Grace & Co. Salaried Employees Savings and Investment Plan and the W. R.
Grace & Co. Hourly Employees Savings and Investment Plan. Each
participating retirement plan had a specific interest in the Master Trust.
The assets of the Master Trust were held by the Trustee. Effective with
the Hourly Plan merger on December 31, 2001, the Plan had a 100% interest
in the Master Trust at December 31, 2001. At December 31, 2000, the Plan's
interest in the net assets of the Master Trust was approximately 94%.
Contributions and benefit payments are specifically allocated to the
operation of the appropriate plan. However, other plan income and expenses
are allocated to the respective plans' participants using methods outlined
in the Master Trust agreement. The record keeper of the Master Trust
allocates trust income and expenses between the participants of the
participating plans on a monthly basis in relation to the market value of
each participant's account at the beginning of the month for each Master
Trust investment account. The financial statements reflect the Plan's
share of the Master Trust assets and activities using this allocation
method.
The following tables present the fair values of investments and investment
income for the Master Trust:
-----------------------------------------------------------------------------------------------------
DECEMBER 31,
-----------------------------------
2001 2000
=====================================================================================================
INVESTMENTS AT CONTRACT VALUE
Guaranteed Investment Contracts $ 225,046,859 $ 229,327,189
INVESTMENTS AT COST
Participant Loans 5,144,781 5,399,564
INVESTMENTS AT FAIR VALUE
W. R. Grace & Co. Common Stock 17,065,769 25,203,345
Mutual Funds 184,608,222 222,857,757
-----------------------------------
$ 431,865,631 $ 482,787,855
-----------------------------------
=====================================================================================================
FOR THE YEAR ENDED
DECEMBER 31,
-----------------------------------
2001 2000
=====================================================================================================
INVESTMENT (LOSS) INCOME
Interest and Dividends $ 17,548,754 $ 39,640,311
NET DEPRECIATION IN FAIR VALUE OF INVESTMENTS
W. R. Grace & Co. Common Stock (12,161,369) (72,350,602)
Mutual Funds (31,007,165) (46,582,806)
Sealed Air Preferred Stock - (1,739,344)
Sealed Air Common Stock - (2,244,019)
-----------------------------------
$ (25,619,780) $ (83,276,460)
-----------------------------------------------------------------------------------------------------
-11-
W. R. GRACE & CO.
SALARIED EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
7. RELATED-PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by the
Fidelity Management Trust Company. Fidelity is the trustee as defined by
the Plan, and, therefore, these transactions qualify as party-in-interest
transactions. Fees paid by the Plan for the investment management services
amounted to $71,168 and $119,186 for the years ended December 31, 2001 and
2000, respectively.
W. R. Grace & Co., as plan sponsor, is also a related party. Investments
include shares of W. R. Grace common stock. At December 31, 2001 and 2000
the Plan held 21,168,553 and 12,779,481 shares, respectively of Grace
Common Stock. The fair value of the Grace Common Stock was $17,065,769 and
$20,557,062 at December 31, 2001 and 2000, respectively. Purchases of
$7,965,879 (8,217,641 shares) and $21,984,576 (5,762,617 shares) and sales
of $6,371,448 (5,488,149 shares) and $17,146,532 (4,459,690 shares) of
W. R. Grace common stock were made at the Plan level during 2001 and 2000,
respectively.
8. FEDERAL INCOME TAXES
On July 13, 1995, the Internal Revenue Service ("IRS") issued a letter
stating that the Plan, as then in effect, was in compliance with the
applicable requirements of the Code. The Plan has been amended since the
issuance of this determination letter. On February 28, 2002 the Plan
administrator submitted an application to the IRS for a new determination
letter. A response has not yet been received, however, the Plan
fiduciaries believe that the Plan is currently designed and is currently
being operated in compliance with the applicable requirements of the Code.
Therefore, the Plan fiduciaries believe the Plan continues to be
qualified, and the related trust continues to be tax exempt.
9. PLAN TERMINATION
Grace anticipates that the Plan will continue indefinitely, but reserves
the right to amend or discontinue the Plan at any time. A participating
business unit may terminate its participation in the Plan with the
approval of Grace's Board of Directors.
-12-
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee has duly caused this annual report to be signed on its
behalf by the undersigned thereunto duly authorized.
W. R. GRACE & CO.
SALARIED EMPLOYEES
SAVINGS AND INVESTMENT PLAN
By: /s/ Brenda Gottleib
----------------------------------
Brenda Gottleib
Chairman, Administrative Committee
Date: June 27, 2002
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-49703) of W. R. Grace & Co. of our report dated
June 27, 2002 relating to the financial statements of the W. R. Grace & Co.
Salaried Employees Savings and Investment Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Baltimore, Maryland
June 27, 2002