gra-20201231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________________________________________________

FORM 10-K/A

Amendment No. 1

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 1-13953

W. R. GRACE & CO.

(Exact name of registrant as specified in its charter)


Delaware						65-0773649
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

7500 Grace Drive, Columbia, Maryland 21044-4098

(Address of principal executive offices) (Zip Code)

(410) 531-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value per share

GRA

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The aggregate market value of W. R. Grace & Co. voting and non-voting common equity held by non-affiliates as of June 30, 2020 (the last business day of the registrant’s most recently completed second fiscal quarter) was $2,844,898,340.

At March 31, 2021, 66,248,119 shares of W. R. Grace & Co. Common Stock, $0.01 par value per share, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None.

EXPLANATORY NOTE

This Amendment No. 1 to Form 10-K (this “Amendment No.1” or “Form 10-K/A”) is being filed to amend the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, of W. R. Grace & Co., a Delaware corporation, originally filed February 26, 2021, with the United States Securities and Exchange Commission, or the “SEC” (the “Original Filing”). We are filing this Amendment No. 1 to include in the Original Filing the information required by Part III (Items 10, 11, 12, 13, and 14) of Form 10-K. This information was previously omitted from the Original Filing in reliance on General Instruction G(3) to Form 10-K, which permits the information required by such items of Part III of Form 10-K to be incorporated into by reference from a registrant’s definitive proxy statement, if such definitive proxy statement is filed with the SEC not later than 120 days after the end of the registrant’s fiscal year covered by such Form 10-K. We are filing this Amendment No. 1 to include Part III information in the Original Filing because we will not file a definitive proxy statement within such 120-day period.

Part III (Items 10, 11, 12, 13 and 14) of the Original Filing is hereby deleted in its entirety and replaced with the following Part III set forth below, and Item 15 of Part IV of the Original Filing is being amended to add new exhibits, including certifications. As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, currently dated certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto as Exhibit 31(i).3 and Exhibit 31(i).4, respectively. Because no financial statements are included in this Amendment No. 1 and this Amendment No. 1 does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4 and 5 of the certifications have been omitted. Also, we are not including the certifications under Section 906 of Sarbanes-Oxley Act of 2002 as no financial statements are being filed with this Amendment No. 1. Further, we are amending the cover page to update the number of ordinary shares outstanding and to remove the statement that information is being incorporated by reference from our definitive proxy statement.

Except as described above, no other changes have been made to the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and our other filings with the SEC. The Original Filing continues to speak as of the date of the Original Filing, and we have not updated the disclosures contained therein to reflect any events that occurred at a date subsequent to the filing of the Original Filing.

TABLE OF CONTENTS


EXPLANATORY NOTE
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	5
Item 11.	Executive Compensation	24
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	63
Item 13.	Certain Relationships and Related Transactions, and Director Independence	66
Item 14.	Principal Accountant Fees and Services	71
PART IV
Item 15.	Exhibits, Financial Statement Schedules	72
SIGNATURES		76

GENERAL REFERENCES

Notes on references that we use in this disclosure. Unless the context indicates otherwise, the terms “Grace,” the “Company,” “we,” “us,” or “our” mean (i) W. R. Grace & Co. itself, or (ii) W. R. Grace & Co. and/or one or more of its consolidated subsidiaries and affiliates and, in certain cases, their respective predecessors. Unless otherwise indicated, the contents of websites that we mention are not incorporated by reference or otherwise made a part of this Report.

We refer to the Financial Accounting Standards Board as the “FASB.” The FASB issues, among other things, Accounting Standards Codifications (which we refer to as “ASC”) and Accounting Standards Updates (which we refer to as “ASU”). We refer to the U.S. Internal Revenue Service as the “IRS.”

TRADEMARKS AND OTHER INTELLECTUAL PROPERTY REFERENCED IN THIS DISCLOSURE

Trademarks and other intellectual property that we discuss in this disclosure. 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 Report 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, a leading independent provider of ESG and corporate governance ratings, research and analysis, has provided the ESG Risk Rating as set forth in the ESG Risk Rating Summary Report issued December 31, 2020.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this communication may contain forward-looking statements, that is, information related to future, not past, events. Such statements generally include the words “believes,” “plans,” “intends,” “targets,” “will,” “expects,” “suggests,” “anticipates,” “outlook,” “continues,” or similar expressions. Forward-looking statements include, without limitation, statements regarding: financial positions; results of operations; cash flows; financing plans; business strategy; operating plans; capital and other expenditures; impact of COVID-19 on our business; competitive positions; growth opportunities for existing products; benefits from new technology; benefits from cost reduction initiatives; succession planning; markets for securities; the anticipated timing of closing of the proposed transaction between the Company and affiliates of Standard Industries Holdings Inc. and the potential benefits of the proposed transaction. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We are subject to risks and uncertainties that could cause actual results or events to differ materially from our projections or that could cause forward-looking statements to prove incorrect. Factors that could cause actual results or events to differ materially from those contained in the forward-looking statements include, without limitation: risks related to foreign operations, especially in areas of active conflicts and in emerging regions; the costs and availability of raw materials, energy and transportation; the effectiveness of our research and development and growth investments; acquisitions and divestitures of assets and businesses; developments affecting our outstanding indebtedness; developments affecting our pension obligations; legacy matters (including product, environmental, and other legacy liabilities) relating to past activities of Grace; our legal and environmental proceedings; environmental compliance costs (including existing and potential laws and regulations pertaining to climate change); the inability to establish or maintain certain business relationships; the inability to hire or retain key personnel; natural disasters such as storms and floods; fires and force majeure events; the economics of our customers’ industries, including the petroleum refining, petrochemicals, and plastics industries, and shifting consumer preferences; public health and safety concerns, including pandemics and quarantines; changes in tax laws and regulations; international trade disputes, tariffs, and sanctions; the potential effects of cyberattacks; the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement between Grace and Standard Industries Holdings Inc.’s affiliates; the failure to obtain Grace shareholder approval of the proposed transaction or the failure to satisfy any of the other conditions to the completion of the proposed transaction; risks relating to the financing required to complete the proposed transaction; the effect of the announcement of the proposed transaction on the ability of Grace to retain and hire key personnel and maintain relationships with its customers, vendors and others with whom it does business, or on its operating results and businesses generally; risks associated with the disruption of management’s attention from ongoing business operations due to the proposed transaction; the ability to meet expectations regarding the timing and completion of the transaction; significant transaction costs, fees, expenses and charges; the risk of litigation and/or regulatory actions related to the transaction; other business effects, including the effects of industry, market, economic, political, regulatory or world health conditions (including new or ongoing effects of the COVID-19 pandemic), and other factors detailed in the Original Filing and Grace’s other filings with the SEC, which are available at http://www.sec.gov and on Grace’s website at www.grace.com. Our reported results should not be considered as an indication of our future performance. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly any revisions to our projections and forward-looking statements, or to update them to reflect events or circumstances occurring after the dates those projections and statements are made.

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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.

Class I—Term to expire at the 2021 Annual Meeting



Hudson La Force 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 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.

Class II—Term to expire at the 2022 Annual Meeting



Robert F. Cummings, Jr. 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 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)


Henry R. Slack 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) •Englehard Corporation (1985 - 2006)

_______________________________________________________________________________

* For additional information regarding Mr. Slack’s election as a director of the Company, see Item 13, “Certain Relationships and Related Transactions, and Director Independence” under the captions “Related Party Transactions - Agreements with Certain of our Shareholders.”

Class III—Term to expire at the 2023 Annual Meeting



Julie Fasone Holder 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 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)



Shlomo Yanai 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. •Current nominee to serve as member of Board of Directors of 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)

Our Executive Officers

Certain information required by this Item regarding Grace’s executive officers appears at Part I after Item 4 in the Original Filing under the caption, “Information about our Executive Officers.” As Mr. La Force is also a director of the Company, additional information regarding his experience is set forth above under the caption “Our Board of Directors.” Further information regarding our executive officers required by this Item is set forth below.

Family Relationships

There are no family relationships among any of our directors or executive officers.


Corporate Governance

How the Board is Selected, Elected, Evaluated and Refreshed

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.

•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.

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.

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 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 of March 15, 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.

Director

Audit

Compensation

Nominating and Governance

Corporate Responsibility

Robert F. Cummings, Jr.

•

Julie Fasone Holder

•

Diane H. Gulyas

•

Hudson La Force

Henry R. Slack

•

Christopher J. Steffen*

•

Mark E. Tomkins

•

Shlomo Yanai

•

Number of 2020 Meetings

_______________________________________________________________________________

• 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 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 having the leadership capabilities, experience, backgrounds, skills and diversity important for our business. 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 Form 10-K/A 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, our 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.

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.

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

All of our directors serving on our Board at the time of the 2020 Annual Meeting of Shareholders attended that meeting. We expect our directors to attend Annual Meetings pursuant to our Corporate Governance Principles.

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

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.

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:


Category						Ownership Guideline
Directors (Outside)						5 times cash portion of annual retainer
CEO						5 times base salary
Executive Officers, other than CEO						3 times base salary
Presidents of Operating Segments						2 times base salary
Certain Key Vice Presidents						1 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. 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

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.

This year, 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 Form 10-K/A.

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.

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 Vice President 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

Where can I find Grace corporate governance materials?

We have provided our Corporate Governance Principles, Business Ethics and Conflicts of Interest policies, and the Charters for the Audit, Compensation, Nominating and Governance, and Corporate Responsibility Committees of our Board on our website at www.grace.com/en-us/corporate-leadership/Pages/Governance.aspx. Our filings with the Securities and Exchange Commission (including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Section 16 insider trading transactions forms) are available at www.sec.gov.

Our Business Ethics and Conflicts of Interest policies are applicable to the members of our Board and to all of our employees, including, but not limited to, our principal executive officer, principal financial officer, principal accounting officer, and controller, or any person performing similar functions. Any amendments to or waivers of our Business Ethics and Conflicts of Interest policies that our Board approves will be disclosed on our website. We are not including the information contained on our website as part of, or incorporating it by reference into, this Form 10-K/A.

How can I obtain Grace corporate governance materials if I do not have access to the internet?

You may receive a copy of our corporate governance materials free of charge by:

•contacting Grace Shareholder Services at 410-531-4167; or

•writing to:

W. R. Grace & Co.
Attention: Grace Shareholder Services
7500 Grace Drive
Columbia, Maryland 21044

What is the process for reporting possible violations of the Grace Business Ethics and Conflicts of Interest policies?

Employees and other interested persons may anonymously report a possible violation of the Grace Business Ethics and Conflicts of Interest policies by calling NAVEX Global, a third-party service, at 866-458-3947 in the U.S. and Canada, or via the website at www.grace.ethicspoint.com. Toll-free telephone numbers for other countries can be found at https://grace.com/sustainability/en-us/Values-Ethics-Governance/Pages/Ethics-and-Business-Conduct.aspx. Reports of possible violations of the Grace Business Ethics and Conflicts of Interest policies may also be made to Cherée H. Johnson, our Chief Ethics and Compliance Officer at W. R. Grace & Co., 7500 Grace Drive, Columbia, Maryland 21044. Reports may be made anonymously, subject to certain restrictions outside the U.S.

Reports of possible violations of the Grace Business Ethics and Conflicts of Interest policies that the complainant wishes to go directly to our Board may be addressed to the Chair of the Nominating and Governance Committee, Christopher J. Steffen. Mr. Steffen can be contacted with a letter to his attention at W. R. Grace & Co., 7500 Grace Drive, Columbia, Maryland 21044.

Reports of possible violations of financial or accounting policies may be made to the Chair of the Audit Committee, Mark E. Tomkins. Mr. Tomkins can be contacted with a letter to his attention at W. R. Grace & Co., 7500 Grace Drive, Columbia, Maryland 21044.

Item 11. EXECUTIVE COMPENSATION

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.


Name	Fees 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.	95,000	115,015	—	—	—	—	210,015
Julie Fasone Holder	105,000	115,015	—	—	—	3,000	223,015
Diane H. Gulyas	110,000	115,015	—	—	—	—	225,015
Jeffry N. Quinn (d)	15,834	—	—	—	—	—	15,834
Kathleen G. Reiland (e)	—	—	—	—	—	—	—
Henry R. Slack	95,000	115,015	—	—	—	—	210,015
Christopher J. Steffen	205,000	115,015	—	—	—	3,000	323,015
Mark E. Tomkins	113,000	115,015	—	—	—	—	228,015
Shlomo Yanai	95,000	115,015	—	—	—	—	210,015

_______________________________________________________________________________

(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”).

Compensation Discussion and Analysis

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 Force						President and Chief Executive Officer
William C. Dockman						Senior Vice President and Chief Financial Officer
Elizabeth C. Brown						Senior Vice President, Human Resources and Information Technology, and Chief Human Resources Officer
Keith N. Cole						Senior Vice President, Public Affairs and Environment, Health, Safety, and Chief Sustainability Officer
Mark A. Shelnitz						Former 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 is expected at all levels of the organization.

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:



Employees	Customers	Shareholders
•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

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.

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 Mix	Metrics & Weightings	Outcomes
Base Salary 18% of CEO pay 33% of other NEO pay	N/A	N/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.

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.

Compensation Governance Best Practices

The following are some of the key elements of our Executive Compensation Program.


What We Do						What We Don’t Do
Carefully align compensation with shareholder interests						No individual severance agreements (excluding change in control termination protection arrangements)
Foster direct pay-for-performance linkage						No granting options below fair market value
Conduct thorough assessments of executive and Company performance						No option repricing without shareholder approval
Hold an annual say-on-pay vote						No tax gross-ups, except on relocations
Maintain robust share ownership guidelines, which are reviewed annually (for additional information, see ”Share Ownership Guidelines” in Item 10 of this Amendment No. 1).						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 compensation						Limited 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.


Named Executive Officer	Base Salary Rate as of 12/31/2020 ($)	Base Salary Rate as of 12/31/2019 ($)	Percentage Increase in Base Salary Rate (%)
Hudson La Force	925,000	850,000	8.8
William C. Dockman	470,004	415,000	13.3
Elizabeth C. Brown	420,000	420,000	—
Keith N. Cole	380,004	370,000	2.7
Mark A. Shelnitz	462,000	450,000	2.7

•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:

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 Force	100	100
William C. Dockman	70	70
Elizabeth C. Brown	70	70
Keith N. Cole	70	70
Mark A. Shelnitz	70	70

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 $)
200	120 or above	624
150	110	572
100	100	515-520
75	93	476
50	85	438
—	Below 85	Below 438

_______________________________________________________________________________

* 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.

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 $)
200	120 or above	330
150	110	303
100	100	265-275
75	93	245
50	85	225
—	Below 85	Below 225

_______________________________________________________________________________

* 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 $)
200	110 or above	2,217
150

SEC Form 10-K/A filed by W.R. Grace & Co. (Amendment)