[GRACE Logo]
Eben W. Pyne
W. R. Grace & Co.
One Town Center Road
Boca Raton, FL 33486-1010
Exhibit 10.28
March 7, 1995
Mr. J. P. Bolduc
3000 South Ocean Boulevard
Boca Raton, FL 33432
Dear JP,
This will confirm the arrangements relating to your retirement as
President and Chief Executive Officer of W. R. Grace & Co. ("Company"), which
have previously been approved by you and by the Board of Directors of the
Company on the recommendation of its Compensation, Employee Benefits and Stock
Incentive Committee, as well as the three-person special Committee of the Board
appointed to negotiate these arrangements with you. These arrangements follow:
1. You have resigned your positions as President and Chief Executive
Officer of the Company effective March 3, 1995. You will remain an employee and
be paid through and be retired on March 31, 1995.
2. You agree that your Employment Agreement with the Company, as
amended, will terminate and be of no further force and effect effective March 3,
1995. In consideration of the termination of your Employment Agreement, the
Company agrees to pay you $5,062,208, less applicable tax withholding, promptly
following the execution of this letter (see Exhibit I). This payment is in lieu
of monthly severance payments for the balance of the term of your Employment
Agreement and renders inoperable the provision dealing with reducing monthly
severance payments by outside "Earned Income".
3. In addition, effective immediately following your retirement on
March 31, 1995:
- You are entitled to receive a gross pension benefit, before
adjustments and tax withholding, of $1,081,000 per year. (This
pension benefit is calculated in accordance with the terms of your
-2-
Employment Agreement. It will not be reduced because of age (62 vs.
55 years).
- It will include full pension benefits to be paid to you as though you
were 62 years of age and, based on your plan to elect a 100% joint and
survivor benefit, it will be adjusted for such election. Therefore,
after adjusting for joint and survivor, your annual pension benefit
will be $848,584.92, less applicable tax withholding.
Full post-retirement medical -- family medical plan -- will be
provided to you and your spouse for life, as it may be continued or amended from
time to time, with your cost share monthly payment equal to the amount paid by
other retirees, currently at $276.36 and such amount as it may be adjusted from
time to time for similarly situated retirees.
4. You will continue to receive your current split dollar life
insurance coverage (Confederation Life Policy Nos. 5-181-624 and 5-181-625 or
their successors) with a total face value of $4.5 million. Annual premiums will
continue to be shared by you and the Company as scheduled according to your age.
These terms, as well as all other terms and conditions of the policies, will
continue in full force and effect under the same terms and conditions as similar
policies are maintained for other executives of the Company. At age 68, when
these policies are transferred to you, they are expected to have an estimated
total face value of $5,420,000 and estimated aggregate cash surrender values of
$2,068,000, although it is understood these figures will depend on the
performance of the policies (and the insurance carrier's dividends) and are not
guaranteed by the Company.
5. In total, you currently own 268,348 common shares.
Notwithstanding any restrictions in effect as to any such shares of Company
Common Stock awarded to you under a restricted stock award program or any other
form of restriction, these 268,348 shares will be purchased promptly, following
the execution of this letter, by the Company at $45 per share for total proceeds
due you of $12,075,660, less applicable tax withholdings with respect to 5,725
shares which were previously not vested (see Exhibit II).
6. Your participation in the Company's Long-Term Incentive Program for
the 1993-94-95 and the 1994-95-96 periods will be paid to you, less applicable
tax withholding, on the execution of this letter (see Exhibit III) as follows:
1993-1995 Performance Period $ 812,500
1994-1996 Performance Period 437,500
----------
TOTAL $1,250,000
-3-
7. You previously have been granted 655,000 stock options under a
stock incentive plan of the Company. Of these 655,000, 290,000 are not fully
exercisable. In consideration of your retirement from the Company, options on
those 290,000 shares will be immediately fully vested. Therefore, options on
all 655,000 shares are immediately exercisable and may be exercised at any time
during the 36-month grace period following your retirement through March 31,
1998.
8. Your total Deferred Compensation balance of $1,529,604, as of
February 28, 1995, consists of the following balances:
- $290,295 plus interest to date of payment, less applicable taxes,
payable in lump sum on April 30, 1995,
- $1,180,502 payable in quarterly installments over 10 years beginning
6/30/95, and
- $58,807 payable quarterly over ten years beginning at the end of the
quarter following the date on which you notify the Company of your
permanent retirement from any employer.
You agreed that in consideration of your retirement from the Company, these
balances would be consolidated into one single balance which will be payable in
quarterly installments over ten years beginning June 30, 1995, in accordance
with all terms and conditions of the Company's Deferred Compensation Program.
9. Your Savings and Investment balance of $582,343 does not include
the February 1995 second pay period savings/contributions or Fixed Income Fund
earnings for February. These amounts will be posted and adjusted accordingly.
You may elect to receive these monies at any time in either of the following
ways:
Lump Sum
Installments
Deferred payment until you attain the age of 70-1/2
You will be paid a Savings and Investment Plan Replacement payment of
$40,110 for 1995, less applicable tax withholding (see Exhibit IV).
10. Your outstanding interest-free loan in the amount of $400,000
will be repaid by you by offsetting this $400,000 from any amount due you from
the Company on execution of this letter.
-4-
11. You will also receive, in consideration of your retirement:
- Your 1995 Mercedes Benz 500S -- serial number WDBGA51E8SA230142
- Your desk, credenza and three chairs
- Reasonable legal fees associated with your negotiated retirement --
estimated at about $25,000
If this letter correctly sets forth our understanding, please sign the
accompanying copy and return it to Robert B. Lamm, Secretary of the Company, One
Town Center Road, Boca Raton, FL 33486-1010.
Very truly yours,
/S/ EBEN W. PYNE
Eben W. Pyne, Chairman
Compensation, Employee
Benefits and Stock
Incentive Committee
Accepted and Agreed to:
/S/ J. P. BOLDUC
-----------------------------------
J. P. Bolduc
J.P. BOLDUC
Exhibit I
Employment Agreement Resolution $5,062,208.00
Less: FIT @ 28% 1,417,418.24
HI @ 1.45% 73,402.02
Net $3,571,387.74
J.P. BOLDUC
Exhibit II
Company Stock Repurchase $12,075,660.00
(reportable income IRS Form 1099 B)
Repayment of Housing Loan (400,000.00)
SEC "Short Swing" profit regulation compliance
return of profit of $6.125 per share for 800 shares (4,900.00)
Taxes due on transfer of automobile (23,715.01)
($80,526.36 W-2 income - market value)
FIT @ 28% 22,547.38
HI @ 1.45% 1,167.63
Tax on vesting fourth installment 1992 (74,184.55)
restricted share award
$251,900.00 W-2 income 5725 shares @ $45.00
per share less $5,275.00
FIT @ 28% 70,532.00
HI @ 1.45% 3,652.55
Net $11,572,860.44
J.P. BOLDUC
Exhibit III
a) 1993 - 1995 LTIP $812,500.00
Less: FIT @ 28% 227,500.00
HI @ 1.45% 11,781.25
Net $573,218.75
b) 1994 - 1996 LTIP $437,500.00
Less: FIT @ 28% 122,500.00
HI @ 1.45% 6,343.75
Net $308,656.25
J.P. BOLDUC
Exhibit IV
Savings & Investment Plan
Replacement Payment 1995 $40,110.00
Less: FIT @ 28% 11,230.80
HI @ 1.45% 581.60
Net $28,297.60
AGREEMENT
Agreement made this 2nd day of March, 1995 between W. R. Grace & Company
(the "Company") and J. P. Bolduc ("Mr. Bolduc"):
A. The parties agree to make no disclosure to any third person with
respect to Mr. Bolduc's resignation except as may be required by law or pursuant
to an order from a Court or Administrative Agency of competent Jurisdiction or
in response to relevant questions posed in testimony or in response to relevant
discovery requests in any proceedings commenced by a third party to the extent
necessary for defense, and except as follows:
1. The parties may make any statement concerning the business and
financial operations of the Company during Mr. Bolduc's tenure as an officer of
the Company and concerning his management of the Company;
2. If any inquiry is made relating to Mr. Bolduc, other than concerning
the operations and financial results of the Company, and his management of the
Company, and if the Company determines that a public statement is required to be
made or if Mr. Bolduc determines that the Company should make such a statement
and communicates that determination to the Company, then the Company will state
only that no complaint of misconduct has ever been filed against Mr. Bolduc.
The parties also agree that any violation of Paragraph A of this Agreement
by any officer, director and/or employee of the Company shall be grounds for
dismissal from his/her position as officer, director and/or employee.
B. The parties shall enter into an Agreement providing to Mr. Bolduc the
monetary compensation, severance and other benefits
set forth in the letter and schedule attached hereto.
C. The Company shall pay all reasonable legal fees incurred by Mr. Bolduc
in connection with his resignation and negotiation of this Agreement.
D. Mr. Bolduc agrees that, until he reaches the age of 62, he will not
engage in any business which is in substantial competition with the Company in
any of the Company's current six core businesses.
E. In consideration of the mutual undertakings of the parties and for
other good and valuable consideration, receipt of which is hereby acknowledged,
Mr. Bolduc agrees to release the Company, its subsidiaries and affiliates, and
their respective directors, officers, employees, agents and representatives in
their corporate capacity, as well as any individual who consulted with or
provided information to the Board of Directors and any committee thereof in
connection with Mr. Bolduc's resignation as an employee of the Company, and the
Company agrees to release Mr. Bolduc, from any and all claims, causes of action
or demands against each other, including without limitation any such matters
arising out of, or related to, Mr. Bolduc's employment by the Company and his
resignation from such employment with the exception of any claims by Mr. Bolduc
or the Company with respect to his or its rights under this Agreement.
Notwithstanding the foregoing, the Company agrees that Mr. Bolduc shall continue
to be indemnified by the Company to the full extent permitted under the
Company's By-Laws
and Charter as now in effect for all actions taken by Mr. Bolduc on behalf of
the Company during his period of employment.
W. R. GRACE & COMPANY
By: /s/ T. A. Holmes
--------------------
/s/ J. P. Bolduc
-------------------------
J. P. Bolduc