Document

DEF 14A 1 a2021proxy.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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			Hudson La Force President and Chief Executive Officer
			W. R. Grace & Co. 7500 Grace Drive Columbia, MD 21044

May 24, 2021

Dear fellow Grace shareholders:

Change and renewal have been constant themes during Grace’s 167 years as a business enterprise. We have remade our company many times over those years, and that process continues today as we rebuild our portfolio for higher growth. As some markets mature, new opportunities to create value emerge.

Our pursuit of higher growth is based on our intense focus on delivering value to customers, proven innovation capabilities, and high-performance culture, all strengths built over decades. Today 62% of our sales come from our fastest-growing businesses, and we are investing to accelerate our growth strategy.

Sustainability is a core element of our growth. In 2020, a remarkable 49% of our sales directly contributed to our customers' sustainability objectives. And 62% of our R&D projects are tied to at least one of four customer sustainability drivers. We’ve set clear, ambitious environmental goals for our manufacturing operations including a 22% reduction in greenhouse gas emissions by 2030. Grace is rated near the top of our peer groups by Sustainalytics‡ and EcoVadis.

When I consider the growth investments we are making, the strong customer demand for our high-value technologies, and the sustainability benefits we deliver to our customers, I am confident in our strategy to deliver value to our customers, investors, and employees. That confidence is shared by our leadership team and Grace employees worldwide.

On April 26, 2021, we announced an agreement to be acquired by Standard Industries Holdings Inc. in an all-cash transaction valued at approximately $7.0 billion. The closing of this transaction is subject to customary closing conditions, including approval by Grace shareholders and the receipt of certain regulatory approvals, and is expected to close in the fourth quarter of 2021. Shareholders will receive a second proxy statement later this year with information about the merger agreement and instructions for voting on the merger.

On behalf of the Grace Board and our employees, thank you for your investment in Grace and our strategy for the future.

Sincerely,

Hudson La Force
President and CEO

Grace At a Glance

WHAT IS GRACE?

•We are a high-value specialty chemicals company with industry-leading technologies and deep, long-standing customer relationships.

•Customers around the world use our technologies to make essential every-day products ranging from safe food packaging to pharmaceuticals to cleaner transportation fuels.

•We have a differentiated, customer-focused sustainability strategy. In 2020, 49% of our sales directly contributed to our customers' sustainability objectives.

WHAT WE ACHIEVED IN 2020?

•We acted quickly and decisively to keep our people safe and healthy and our plants operating during the pandemic.

•After Q2 sales declined 19%, we delivered a very strong finish to the year with 4Q20 sales at more than 95% of pre-pandemic levels. Our 4Q20 gross margins were also nearing pre-pandemic levels.

•We delivered strong operating performance and cash flow with lower capital spending, improved working capital, and reduced operating costs. See “Compensation Discussion and Analysis” below for our Adjusted Free Cash Flow performance.

•These actions ensured we could protect our growth investments and R&D spending:

•We signed a record seven new UNIPOL® Polypropylene Process licenses in our Specialty Catalysts business

•We grew our Pharma & Consumer subsegment 12.4% in Materials Technologies

•We safely started two significant new manufacturing plants

•We were rated near the top of our peer groups by Sustainalytics‡ and EcoVadis.

•We protected our investments in people, including over $6 million of commercial excellence investment and over 50,000 hours of training since 2016. We refreshed more than 10% of our global workforce, including upgrading talent where needed and adding key leadership roles throughout the organization.

WHAT IS DRIVING US FORWARD?

•Long-term macro trends including a growing global middle class, increasing demand for health and wellness, and increased emphasis on sustainability. We are #1 or #2 in 80% of our end markets and benefit from strong customer demand for our high-value technologies.

•We are successfully building a higher growth portfolio, including strategic acquisitions and increased capacity in our higher growth businesses. Our long-term mid-single digit sales growth target remains unchanged.

•We are actively upgrading our capabilities and talent to ensure we continue meeting the high expectations of our customers and capture the growth opportunities in our end markets.

•Our experienced, diverse global team. On our Board, 29% of our independent directors are women; on the Grace Leadership Team, 50% are women or people of color, including three of four business unit leaders.

To the Holders of Common Stock of W. R. Grace & Co.

Notice of 2021 Annual Meeting of Shareholders


TO BE HELD ON JULY 7, 2021

The 2021 Annual Meeting of Shareholders (the “Annual Meeting”) of W. R. Grace & Co., a Delaware corporation (“Grace”), will be held on Wednesday, July 7, 2021, at 9:00 a.m. Eastern Time, at the Ten Oaks Ballroom and Conference Center, 5000 Signal Bell Lane, Clarksville, Maryland 21029. Our shareholders will vote on the following matters/proposals at the Annual Meeting:


Proposals		Board Recommendations
Proposal 1	Election of Directors	FOR Each Nominee
	Nominees—Class I (Term expiring 2024)
	Hudson La Force
	Mark E. Tomkins
Proposal 2	Ratification of the appointment of PricewaterhouseCoopers LLP as Grace’s independent registered public accounting firm for 2021	FOR
Proposal 3	Advisory vote to approve the compensation of Grace’s named executive officers, as described in our proxy materials	FOR
Proposal 4	Advisory vote on whether the advisory vote on named executive officer compensation should occur every one, two or three years	FOR holding vote every year

Shareholders will also transact such other business as may properly come before the Annual Meeting and at any adjournments or postponements of the meeting. The Board of Directors has fixed the close of business on May 19, 2021, as the record date for the determination of shareholders entitled to notice of, and to vote at, the Annual Meeting. This notice and the accompanying proxy materials are sent to you by order of the Board of Directors. The Proxy Statement and proxy were first made available on the internet or mailed to shareholders on or about May 24, 2021.

Your vote is very important. Whether or not you plan to attend the Annual Meeting, we encourage you to authorize a proxy to vote as promptly as possible by internet, by phone, or by mail.

If you are a shareholder of record, you may cast your vote in any of the following ways:

•by authorizing a proxy by the internet at www.proxypush.com/gra (we encourage you to vote by the internet as it is the most cost-effective method and reduces the environmental impact of our Annual Meeting);

•by authorizing a proxy by toll-free telephone at 1-866-883-3382 in the U.S.A., U.S. territories, or Canada;

•by authorizing a proxy by completing and returning your proxy card so that it is received by our transfer agent before the close of business on July 6, 2021; or

•by written ballot in person at the Annual Meeting

If you hold shares through a broker, bank, financial institution or other nominee or intermediary that serves as shareholder of record, you may cast your vote by complying with the instructions of your nominee or intermediary set forth on the voting instruction card.

By Order of the Board of Directors

Cherée H. Johnson
Senior Vice President, General Counsel and Secretary

May 24, 2021

This Proxy Statement describes the matters that we would like you to vote on and provides information on those matters so that you can make an informed decision. For information about the Annual Meeting and the voting process, see “Questions and Answers about the Annual Meeting and the Voting Process” and “General Information” in this Proxy Statement.

The mailing address of the principal executive offices of W. R. Grace & Co. is 7500 Grace Drive, Columbia, Maryland 21044. The telephone number of the principal executive offices of W. R. Grace & Co. is (410) 531-4000.


IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON JULY 7, 2021 This Notice and the Proxy Statement, Annual Report and Form 10-K/A are available at proxymaterials.grace.com.

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

TABLE OF CONTENTS


Notice of Annual Meeting						3
Proposal One — Election of Directors						7
Corporate Governance						14
Other Information						28
Proposal Two — Ratification of the Appointment of Independent Registered Public Accounting Firm						36
Audit Committee Report						38
Proposal Three — Advisory Vote to Approve the Compensation of Grace’s Named Executive Officers						39
Proposal Four — Advisory Vote on Whether Advisory Vote on Named Executive Officer Compensation Should Occur Every One, Two or Three Years						40
Executive Compensation						41
Compensation Discussion and Analysis						41
Executive Summary						41
Overview						42
2020 Executive Compensation Program Summary						45
2020 Executive Compensation Elements, Targets and Results						48
Other Components and Features of our Executive Compensation Program						58
Executive Compensation Program Philosophy, Objectives, and Processes						60
How We Set Compensation — Elements and Target Mix						60
Compensation Benchmarking						62
Contributions of the Committee, CEO and Consultant in our Executive Compensation Process						63
Compensation Policies and Practices Relating to Risk Management						65
Deductibility of Executive Compensation						65
Compensation Committee Report						66
Compensation Committee Interlocks and Insider Participation						67
Compensation Tables						68
Questions and Answers about the Annual Meeting and the Voting Process						80
General Information						90
Important Information Concerning GAAP and Non-GAAP Financial Measures; Certain Definitions; and our Forward-Looking Statements Notice						Annex A

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Notes Regarding References We Use In This Proxy Statement

References. Unless the context otherwise indicates, in this document the terms “Grace,” “we,” “us,” “our” or the “Company” mean W. R. Grace & Co., itself, and/or its consolidated subsidiaries.

Unless otherwise indicated, the contents of websites mentioned in this Proxy Statement are not incorporated by reference or otherwise made a part of this Proxy Statement.

The United States Securities and Exchange Commission is referred to as the “SEC.” The New York Stock Exchange is referred to as the “NYSE.”

References to the “2020 Form 10-K Original Filing” are to Grace’s 2020 Annual Report on Form 10-K, filed with the SEC on February 26, 2021; and references to the “2020 Form 10-K, as amended” are to Grace’s 2020 Annual Report on Form 10-K, as amended in a filing with the SEC on April 30, 2021.

Trademarks and other intellectual property. GRACE®, the GRACE® logo (and any other use of the term “Grace” as a tradename) as well as the other trademarks, service marks, or trade names used in this disclosure are trademarks, service marks, or trade names, registered in the United States and/or other countries, of Grace or its operating units, except as otherwise indicated. UNIPOL® and UNIPOL UNIPPAC® are trademarks of The Dow Chemical Company or an affiliated company of Dow. Grace and/or its affiliates are licensed to use the UNIPOL® and UNIPOL UNIPPAC® trademarks in the area of polypropylene. ART® and ADVANCED REFINING TECHNOLOGIES® are trademarks, registered in the United States and/or other countries, of Advanced Refining Technologies LLC. RESPONSIBLE CARE® and RESPONSIBLE CARE MANAGEMENT SYSTEM® are trademarks, registered in the United States and/or other countries, of the American Chemistry Council. Sustainalytics‡ is a leading independent provider of ESG and corporate governance ratings, research and analysis, which has provided the ESG Risk Rating as set forth in the ESG Risk Rating Summary Report issued December 31, 2020. EcoVadis is a leading third-party entity that evaluates suppliers on a complex scale of sustainability and ESG factors.

Cross-references for non-GAAP information. In this Proxy Statement, Grace presents certain financial information in accordance with U.S. Generally Accepted Accounting Principles, or “GAAP,” as well as financial information that is not in accordance with GAAP, referred to herein as “non-GAAP” financial measures. See Annex A to this Proxy Statement for important information concerning such non-GAAP financial measures, including reconciliations to GAAP financial measures. Annex A also includes cross-references to our 2020 Form 10-K Original Filing. That filing includes financial statements and information presented in accordance with GAAP, as well as certain non-GAAP information. Non-GAAP performance measures used or referred to in this Proxy Statement include: Adjusted Earnings Before Interest and Taxes (referred to as “Adjusted EBIT”); Adjusted Free Cash Flow; Adjusted Net Sales; and Adjusted Earnings Per Share (referred to as “Adjusted EPS”).

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PROPOSAL ONE
ELECTION OF DIRECTORS

Our Board of Directors (our “Board”) has nominated two directors, Hudson La Force and Mark E. Tomkins, to stand for election to our Board as Class I directors for a three-year term expiring at our 2024 annual meeting of shareholders.

Our directors bring to our Board a wealth of leadership capabilities derived from their service in executive and managerial roles, and also extensive board experience. Background information about the nominees and our other directors, including their business experience and directorships held during the past five years, ages as of February 15, 2021, and certain individual qualifications and skills that contribute to our Board’s effectiveness as a whole, are described below.

We believe that the Grace directors as a group have the backgrounds, skills and diversity important for our business. Our Board, led by an independent board chair, has overseen steady refreshment—with six of our directors having joined in the last seven years—balanced with two more experienced directors. Our Board operates within a highly regarded governance structure.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF HUDSON LA FORCE AND MARK E. TOMKINS

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Who We Are

Our Board of Directors

In 2020, our directors delivered strong leadership to manage the challenges that the pandemic and hurricanes presented. We met 16 times to support our management team in developing and implementing new safety protocols to protect our employees and our operations and to protect our ability to pursue our growth plan and deliver long-term value to our customers and shareholders — all of which we accomplished. In these meetings, we worked with our management team and advisors to undertake a thorough review of potential strategic alternatives to maximize value for shareholders.

Our directors’ wealth of leadership capabilities and experiences were critical to their effective guidance and oversight in a challenging year. Background information about the nominees and our other directors, including their business experience and directorships held during the past five years, ages as of February 15, 2021, and certain individual qualifications and skills that contribute to our effectiveness as a whole, are described below.

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Nominees For Election as Directors

Class I—Term to expire at the 2024 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.

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Continuing Directors

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)

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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) •Engelhard Corporation (1985 - 2006)

_______________________________________________________________________________

* For additional information regarding Mr. Slack’s election as a director of the Company, see “Other Information - Related Party Transactions - Agreements with Certain of our Shareholders.”

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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)

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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. •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)

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Corporate Governance

How We Are Selected, Elected, Evaluated and Refreshed

Nominees for Director in 2021

Our Board determined that each of the nominees qualifies for election as a member of our Board. In making this determination, our Board believes that directors should have the highest integrity, a diverse set of attributes and experiences, the education and ability to understand business problems and evaluate and propose solutions, the personality to work well with others, a commitment to the interests of our shareholders, a reasoned commitment to our social responsibilities, and the time to meet their responsibilities as directors. Our Board further believes that a substantial majority of our directors should be independent. Our Board has determined that Mr. Tomkins qualifies as an independent director under applicable rules and regulations and Grace’s independence standards. Since Mr. La Force is our President and Chief Executive Officer, he is not considered independent. See information contained in the “Corporate Governance—Number and Independence of Directors” section of this Proxy Statement, below.

If a nominee becomes unable to serve or for good cause will not serve as a director, the proxies will vote in their discretion for a Board-designated substitute or our Board may reduce the number of directors. Grace has no reason to believe that any of the nominees for election will be unable to serve.

Number and Independence of Directors

Our Board determines the number of directors. Currently, our Board consists of eight members. Under our Corporate Governance Principles, a substantial majority of Grace’s directors are required to be “independent” as determined under guidelines set forth in the listing standards of the New York Stock Exchange, or “NYSE.” Our Board, at its February 25, 2021, meeting, affirmatively determined that all of our directors, other than Mr. La Force, are independent under NYSE rules, because none of the directors has any direct or indirect material relationship with Grace or our subsidiaries under those rules.

The independence determination by the Board with respect to all directors (other than Mr. La Force) included the following:

•None of these directors has any material relationship with Grace (either directly or as a partner, shareholder or officer of an organization that has a relationship with Grace).

•None of these directors are, or have been within the last three years, an employee of Grace, nor is there an immediate family member who is, or has been within the last three years, an executive officer of Grace.

•None of these directors received, nor is there an immediate family member who has received, during any 12-month period within the last three years, more than $120,000 in direct compensation from Grace, other than director and committee fees.

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•None of these directors: (i) is a current partner or employee of a firm that is Grace’s internal or external auditor; (ii) has an immediate family member who is a current partner of such a firm; (iii) has an immediate family member who is a current employee of such a firm and personally works on Grace’s audit; and (iv) was, or has an immediate family member who was within the last three years a partner or employee of such a firm and personally worked on Grace’s audit within that time.

•None of these directors or any immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of Grace’s present executive officers at the same time serves or served on that company’s compensation committee.

•None of these directors or any immediate family member is a current executive officer of a company that has made payments to, or received payments from, Grace for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues.

•None of these directors, nor any member of their immediate families, is an executive officer of any other entity with whom Grace does any material amount of business.

•None of these directors serve, or within the last five years served, as an executive officer, director, trustee or fiduciary of any charitable organization to which Grace made any material charitable donation.

Two directors resigned from our Board in 2020: (i) Jeffry N. Quinn resigned from our Board, effective March 1, 2020; and (ii) Kathleen G. Reiland, resigned from our Board, effective October 13, 2020, based on her disagreement with the Board regarding Grace’s strategic direction. Both Mr. Quinn and Ms. Reiland had served on the Board’s Audit, Compensation, Nominating and Governance, and Corporate Responsibility Committees prior to their resignations, and each was an independent director under NYSE rules and the aforementioned independence standards.

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

Director Terms

Our Amended and Restated Certificate of Incorporation provides for the division of our Board into three classes, each to serve for a three-year term and until their respective successors are duly elected and qualify. The term of one class of directors currently expires each year at the annual meeting of shareholders. Our Board may fill a vacancy by electing a new director to the same class as the director being replaced. Our Board may also create a new director position in any class and elect a director to hold the newly created position. At the 2021 Annual Meeting, the shareholders will vote on the election of two Class I Directors to serve for a term expiring at our 2024 annual meeting of shareholders.

Over the last several years, the Board has undergone significant refreshment through the addition of new members and the departure of longer-serving members.

Director Identification and Selection

When our Board or the Nominating and Governance Committee has identified the need to add a new Board member with specific qualifications or to fill a vacancy on our Board, the Chair of the Nominating and Governance Committee will initiate a search, seeking input from other directors and management, review any candidates that the committee has previously identified or that have been recommended by shareholders in that year, and may retain a search firm. The committee will identify the initial list of candidates who satisfy the specific criteria, if any, and otherwise qualify for membership on our Board. Generally, the Chair of the Nominating and Governance Committee, together with two other members of that committee, and our CEO, will interview each qualified candidate. Other directors may also interview the candidate if practicable. Based on a successful outcome of those reviews, the committee will make its recommendation on the candidate to our Board.

The Nominating and Governance Committee has the sole authority to retain and terminate any search firm to be used to identify director candidates and the sole authority to approve the search firm’s fees and other retention

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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

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May 19, 2021. The table also sets forth the number of meetings (including teleconference and videoconference meetings) held by each Board committee in 2020. We reimburse directors for expenses they incur in attending Board and committee meetings and other activities incidental to their service as directors, but we do not pay our directors any separate meeting fees.

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

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NYSE listing standards. Mr. Tomkins serves as Chair of the Audit Committee. Our Board determined that Mr. Tomkins is an “audit committee financial expert” as defined by SEC rules and regulations. A number of our other independent directors would also qualify as audit committee financial experts.

Nominating and Governance Committee

The Nominating and Governance Committee

•sets criteria for the selection of directors, identifies individuals qualified to become directors, and recommends to our Board the director nominees for the annual meeting of shareholders;

•develops and recommends to our Board appropriate corporate governance principles applicable to Grace; and

•oversees and administers the evaluation of our Board, its committees and management.

In considering candidates for election to our Board (including candidates recommended by shareholders), we believe that our Board should be comprised of individuals meeting the qualifications set forth above under “Proposal One—Election of Directors.” We value diversity in all its forms and work to ensure that our Board reflects diversity of gender and other attributes as well as diversity of industry experience, and functional background. When we undertake searches for new members of our Board, we focus on gender and racial/ethnic diversity as well as candidate’s skills, experiences and other attributes. We also believe that a substantial majority of our Board should be independent, as defined by NYSE rules and applicable laws and regulations.

Each member of the Nominating and Governance Committee meets the independence standards of the NYSE. Mr. Steffen serves as Chair of the Nominating and Governance Committee.

Compensation Committee

The Compensation Committee

•approves all compensation actions with respect to nonemployee members of the Board and executive officers of the Company;

•evaluates and approves the Grace annual and long-term incentive compensation plans (including equity-based plans);

•oversees the development of succession plans for the CEO and the other executive officers; and

•produces and approves an annual report on executive officer compensation as required by applicable law.

The committee engaged Willis Towers Watson, or “WTW,” a leading global advisory, broking and solutions company, as its independent provider of compensation consulting services for decisions relating to 2020 compensation. Please see “Executive Compensation—Compensation Discussion and Analysis” in this Proxy Statement for more discussion about the role of WTW. The committee also utilizes external legal advisors as necessary and assesses the independence of all of its advisors.

Representatives of WTW regularly attended meetings of the committee. For portions of those meetings, the President and CEO, and our Senior Vice President, Human Resources and Information Technology, and Chief Human Resources Officer (our “CHRO”), also attended and were given the opportunity to express their views on executive compensation to the committee.

Each member of the Compensation Committee is independent under the independence standards of the NYSE; a “nonemployee director” of Grace as defined under Rule 16b-3 of the Exchange Act; and an “outside director” for the purposes of the corporate compensation provisions (previously) contained in Section 162(m) of the Internal Revenue Code of 1986, as amended, or Tax Code. Ms. Gulyas serves as Chair of the Compensation Committee.

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Corporate Responsibility Committee

The Corporate Responsibility Committee assists our Board and management in addressing Grace’s environmental and social responsibilities to its various stakeholders. In particular, the committee counsels and advises management with respect to:

•the development, implementation and continuous improvement of procedures, programs, policies and practices relating to Grace’s environmental and social responsibilities, including ethical business practices, sustainability, and diversity and inclusion;

•the adherence to those procedures, programs, policies and practices at all levels of Grace; and

•the maintenance of open communications to ensure that issues are brought to the attention of, and considered by, all appropriate parties.

Each member of the Corporate Responsibility Committee is: independent under the independence standards of the NYSE; a “nonemployee director” of Grace as defined under Rule 16b-3 of the Exchange Act; and an “outside director” for the purposes of the corporate compensation provisions (previously) contained in Section 162(m) of the Tax Code. Ms. Holder serves as Chair of the Corporate Responsibility Committee.

SEC Form DEF 14A filed by W.R. Grace & Co.