Hercules Incorporated HERCULES Hercules Plaza 1313 North Market Street Wilmington, DE 19894-0001 Thomas L. Gossage Chairman and Chief Executive Officer March 4, 1996 Mr. Albert J. Costello Chairman and Chief Executive Officer W. R. Grace & Co. One Town Center Road Boca Raton, FL 33486-1010 Dear Al: After our conversation last Friday and after careful deliberation, I have decided to tender my resignation as a Director of W. R. Grace & Co. ("Grace") effectively immediately. Although I sincerely regret having to take this action, I cannot remain a Director of Grace given what appears to be its direction and long-term strategy regarding its specialty chemical business. As I indicated, I recently have been contacted by several large shareholders of both Grace and Hercules Incorporated ("Hercules") who have encouraged me to consider a combination of our companies. Now that Grace is positioned to become a "pure chemical company," these shareholders believe that such a combination could create substantial value for shareholders of both our companies. The Hercules management team also has undertaken a review of such a combination, based solely on publicly available information, and believes that such a transaction could provide tremendous opportunities for increased shareholder value for both companies' shareholders. Although I have contacted you twice to discuss such a transaction, you have decided not to meet and to hear our view of the value of the combination. You told me that, after polling a number of Grace Directors, you do not believe a combination with Hercules would be in the best interests of Grace's shareholders. Such a judgment without a thorough analysis and discussion of the reasons which support my proposed combination is not, in my opinion, responsive to the best interests of your shareholders. Therefore, I believe, it is in the best interests of both Grace and Hercules and their respective shareholders that I resign. Mr. Albert J. Costello Page Two March 4, 1996 - ------------------------------------------------------------------------------ I hereby request that Grace disclose this letter as provided by Item 6 of Form 8-K under the Securities Exchange Act of 1934. Sincerely, T. L. Gossage cc: W. R. Grace & Co. Board of Directors: Dr. George C. Dacey Mr. Edward W. Duffy Mr. Harold A. Eckmann Dr. Marye Anne Fox Dr. James W. Frick Dr. Constantine L. Hampers Mr. Thomas L. Holmes Ms. Virginia A. Kamsky Mr. Peter S. Lynch Mr. Robert C. Macauley Mr. John E. Phipps Mr. Eugene J. Sullivan