SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Year Ended December 31, 2001
Commission File Number 1-13953
W. R. GRACE & CO. HOURLY EMPLOYEES
SAVINGS AND INVESTMENT PLAN
W. R. GRACE & CO.
7500 GRACE DRIVE
COLUMBIA, MARYLAND 21044
W. R. GRACE & CO.
HOURLY EMPLOYEES
SAVINGS AND INVESTMENT
PLAN
DECEMBER 31, 2001 AND 2000
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrative Committee of the
W. R. Grace & Co. Hourly Employees
Savings and Investment Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the W. R. Grace & Co. Hourly Employees Savings and Investment Plan (the
"Plan") at December 31, 2001 and 2000, and the changes in net assets available
for benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As further discussed in Note 1, effective December 31, 2001, the Plan merged
with and into the W. R. Grace & Co. Salaried Employee Savings and Investment
Plan.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Baltimore, Maryland
June 27, 2002
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W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
--------------------------------------------------------------------------------
DECEMBER 31,
2001 2000
ASSETS
Interest in W. R. Grace & Co. Savings Plan Master $ - $28,250,405
Trust
Contributions receivable 259,259 129,639
--------- -----------
Total assets 259,259 28,380,044
========= ===========
LIABILITIES AND NET ASSETS
Liabilities
Due to Salaried Plan (259,259) -
--------- -----------
Total liabilities (259,259) -
--------- -----------
Net assets available for benefits $ - $28,380,044
========= ===========
The accompanying notes are an integral part of these financial statements.
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W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
--------------------------------------------------------------------------------
FOR THE YEAR ENDED
DECEMBER 31,
2001 2000
ADDITIONS
Additions to net assets attributable to
Contributions
Participants $ 4,781,433 $ 4,190,358
Employer 2,932,733 1,465,636
------------ ------------
7,714,166 5,655,994
------------ ------------
Interest in income (loss) of W. R. Grace & Co. Savings
Plan Master Trust
Interest and dividends 1,202,027 1,841,410
Net depreciation (see Note 3) (4,292,375) (12,465,429)
------------ ------------
(3,090,348) (10,624,019)
------------ ------------
TOTAL 4,623,818 (4,968,025)
------------ ------------
DEDUCTIONS
Deductions from net assets attributable to
Participant withdrawals 2,027,434 2,061,564
Administrative expenses 46,110 38,191
------------ ------------
TOTAL 2,073,544 2,099,755
------------ ------------
NET INCREASE (DECREASE) PRIOR TO TRANSFERS (TO) FROM
OTHER PLANS 2,550,274 (7,067,780)
Net transfers (to) from other plans (30,930,318) 209,012
------------ ------------
NET DECREASE (28,380,044) (6,858,768)
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 28,380,044 35,238,812
------------ ------------
END OF YEAR $ - $ 28,380,044
============ ============
The accompanying notes are an integral part of these financial statements.
-3-
W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the W. R. Grace & Co. Hourly Employees
Savings and Investment Plan ("Plan" or "Hourly Plan") provides only
general information. Participants should refer to the text of the Plan,
the Summary Plan Description, and the Prospectus Supplement for the Plan
for more complete information.
GENERAL
On April 2, 2001, W. R. Grace & Co. ("Grace") and 61 of its U.S.
subsidiaries and affiliates (collectively, the "Company") filed voluntary
petitions for reorganization under Chapter 11 of the United States
Bankruptcy Court for the District of Delaware. The United States
Bankruptcy Court in Wilmington, Delaware approved on April 2, 2001 an
order which authorized, but did not direct, the debtors and debtors in
possession under the bankruptcy filing to pay, in their sole discretion,
employee benefits, including employer contributions under the Plan. Under
the Court's authorization, Grace has continued to meet its obligations
under the Plan. Should the Plan terminate as a result of the bankruptcy
filing, Company contributions would cease and the net assets of the Plan
would be distributed in accordance with the provisions of the Plan
document.
The Plan is a defined contribution plan originally adopted effective
January 1, 1987, and has been amended from time to time. The Plan is
subject to certain provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
Effective December 31, 2001, the Plan was merged with and into the W. R.
Grace & Co. Salaried Employees Savings and Investment Plan ("Salaried
Plan"). Effective on the date of the merger $34,303,697 was transferred
from the Plan to the Salaried Plan. On January 1, 2002, the Salaried Plan
was renamed the W. R. Grace & Co. Savings and Investment Plan.
Effective January 31, 2001, assets of the ICI Americas Inc. Retirement
Savings Plan (the "ICI Plan"), in the amount of $3,727,817, were
transferred to the Plan. This amount represented the account balances of
the participants of the ICI Plan who became Grace employees as a result of
Grace's purchase of the hydroprocessing catalyst business of ICI.
ELIGIBILITY AND VESTING
Prior to the Plan's merger into the Salaried Plan, Grace and its
subsidiaries designated as participating units in the Plan, any hourly
employee in an eligible employment classification who had completed three
months of service or, for periods prior to October 1, 2000, twelve months
of employment (including 1,000 hours of service), were eligible to
participate in the Plan, subject to certain exceptions and special
provisions.
A participant's interest (employee contributions, Company contributions
and earnings thereon) in the Plan was always fully vested.
PACKAGING TRANSACTION
On March 31, 1998, a predecessor of Grace ("Old Grace") completed a
transaction ("Packaging Transaction") in which its flexible packaging
business ("Cryovac Business") was combined with Sealed Air Corporation
("Sealed Air"). As a result of the Packaging Transaction, for each share
of common stock held, each shareholder of Old Grace common stock received:
(a) one share of
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W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
common stock of the "New W. R. Grace & Co." ("New Grace"), (b) .536 shares
of common stock of Sealed Air and (c) .475 shares of convertible preferred
stock of Sealed Air. As a result of the Packaging Transaction,
approximately $5.0 million was transferred to the successor trustee. The
common stock of Old Grace was canceled as a result of the Packaging
Transaction.
As part of the Packaging Transaction, all balances were required to be
transferred out of the Sealed Air Common Stock Fund and the Sealed Air
Preferred Stock Fund and into other Plan investment options by December
31, 2000. Remaining balances not transferred by December 31, 2000 were
liquidated and transferred to the Fixed Income Fund.
CONTRIBUTIONS
Each year, participants could elect to contribute to the Plan 2% to 16% of
their compensation (which, for purposes of the Plan, consists of regular
wages, incentive compensation, and certain special bonus awards, shift
differential and overtime pay).
Participant contributions could be made from before-tax and/or after-tax
income, as provided under Sections 401(k) and 401(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), subject to an annual dollar
limit on before-tax contributions of $10,500 for 2001 and 2000. Federal
income tax law limited the annual compensation on which tax-qualified plan
benefits could be based to $170,000 for 2001 and 2000.
Effective January 1, 2001 the Company contributed 100% of the first 6% of
base compensation that a participant contributed to the Plan. Therefore,
the maximum Company contribution was 6% of a participant's base
compensation.
Effective October 1, 2000 the Company contributed 75% of the first 6% of
base compensation that a participant contributed to the Plan. Prior to
October 1, 2000 the Company contributed 50% of the first 6% of base
compensation. Therefore, effective October 1, 2000 the maximum Company
contribution was 4.5% of each participant's compensation, subject to the
annual dollar limitations noted above. Prior to October 1, 2000 the
maximum Company contribution was 3%.
The Plan offered 26 mutual funds, Company common stock account and a
Fixed Income Fund comprised principally of guaranteed investment
contracts as investment options for participants.
Effective January 1, 2001, matching Company contributions were allocated
to investment options in accordance with the participant's contribution
investment election. Prior to January 1, 2001, Company contributions were
generally credited to the ESOP, which was invested in New Grace common
stock. The ESOP was an Employee Stock Ownership Plan, within the meaning
of the Code.
Effective October 1, 2000 participants could, at any time, elect to
transfer all or a portion of their Company contributions from the ESOP to
any of the other funds. Such transfers could be in whole dollar amounts or
multiples of 5% of the participant's account balance.
The Plan provided that a statement of each participant's account be sent
to the participant at least once a year. Such statements were sent shortly
after the end of each calendar quarter.
Effective January 1, 2001, on any business day, participants could
allocate their contributions among any of the investment options and
transfer the amounts related to their prior contributions in any of
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W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
the investment options to other investment options. All investment options
were participant-directed. Prior to January 1, 2001, all investment
options were participant-directed, except for the ESOP. Transfers could be
in whole dollar amounts or in multiples of 5% of the participant's account
balance.
PARTICIPANT ACCOUNTS
Each participant's account was credited with the participant's
contribution, the applicable allocation of the Company's contribution and
an allocation of Plan earnings (losses) and charged with an allocation of
administrative expenses. Allocations were based on participant earnings or
account balances, as defined. The benefit to which a participant was
entitled was the benefit that could be provided from the participant's
account.
Prior to December 31, 2001, transfers between the Hourly Plan and the
Salaried Plan occurred from time to time when the participant
classification changed from hourly to salaried and vice versa. Effective
December 31, 2001, the Plan assets were merged with and into the Salaried
Plan.
PARTICIPANT LOANS
Participants could borrow up to one-half of the value of their account
balance up to $50,000. Loans were for a term of one to five years for a
general purpose loan and up to twenty years for a loan to purchase a
principal residence. The interest rate for the loans was fixed for the
term of the loan and the loans were repaid in periodic installments
depending on the loan provisions. Participants could repay the outstanding
loan balance in full at any time without penalty. Loans were considered to
be in default and treated as a distribution for tax purposes if no payment
was received for ninety days. If employment with the Company ended, any
outstanding loan balance was considered a distribution if not repaid
within ninety days.
Interest paid on loans was credited to the individual investment options
from which the loan was taken.
PAYMENT OF BENEFITS
Upon disability, retirement, or other termination of service, an
individual could elect to receive his/her vested benefit in the form of a
single lump sum payment or annual or quarterly installment payments if the
vested balance exceeded $5,000. For amounts less than $5,000, a single
lump sum payment was made.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounts of the Plan were maintained on the accrual basis of
accounting, which is acceptable under U.S. Department of Labor Regulations
and is in accordance with accounting principles generally accepted in the
United States of America ("GAAP").
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in publicly traded securities and mutual funds were stated at
fair value. Investments in publicly traded securities were valued at the
last reported sales price on the last day of the year. Shares of mutual
funds were valued at the net asset value of shares held by the Plan at
year end. Investments in guaranteed investment contracts held in the Fixed
Income Fund (see Note 5) were
-6-
W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
stated at contract value, which represented contributions made under the
contract plus interest at the contract rate, less funds used for
withdrawals. Participant loans were valued at cost, which approximated
fair value.
Purchases and sales of publicly traded securities were recorded on a
trade-date basis. Dividends were recorded on the ex-dividend date.
Prior to December 31, 2001, the assets of the Plan were commingled in the
W. R. Grace & Co. Savings Plan Master Trust ("Master Trust") with the
assets of the W. R. Grace & Co. Salaried Employees Savings and Investment
Plan. The Master Trust is administered by The Fidelity Management Trust
Company ("Fidelity" or "Trustee"). The participating plans had a specific
interest in the Master Trust's net assets. Fidelity continues to serve as
the Trustee for the surviving W. R. Grace & Co. Savings and Investment
Plan.
Income of each investment option was reinvested in that option, except
that any dividends paid on shares of New Grace common stock held in
the ESOP were paid to participants in cash within 90 days after the
end of the calendar year in which the dividends were received. The
ESOP dividends were not treated as income to the Plan or as
distributions to participants. The Trustee managed the Grace Stock
Fund and the ESOP by purchasing shares of New Grace common stock and
by selling shares to the extent necessary to obtain cash for
disbursements and transfers to the other funds. Investment management
of the Fixed Income Fund and investment oversight of the Fidelity
Mutual Funds were the responsibility of the Investment and Benefits
Committee appointed by the Grace Board of Directors, or as delegated
by that Committee.
The Plan recorded a realized gain or loss on New Grace common stock
distributed to participants in an amount equal to the difference between
the market value at the distribution date and the average cost of the
shares distributed. The cost of securities sold was determined on the
basis of average cost, and a gain or loss was recorded equal to the
difference between average cost and the sale price.
The Plan presents in the Statement of Changes in Net Assets Available for
Benefits the net appreciation (depreciation) in the fair value of its
investments, which consisted of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
PAYMENT OF BENEFITS
The Plan recognized benefits when paid.
Amounts transferred to successor trustees were deducted from the Plan's
net assets upon the divestiture of, or discontinuance of participation by,
a participating business unit.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires
the Plan Fiduciaries to make estimates and assumptions that affect the
reported amounts of assets and liabilities on the date of the financial
statements. Actual amounts may differ from the estimates used.
-7-
W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
3. INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets included in the Master Trust:
-------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
-----------------------------------
2001 2000
===================================================================================================================
Guaranteed Investment Contracts (GICs)
State Street Bank and Trust Co., 6.00%, various maturity dates $ - $ 1,784,616
W. R. Grace common stock:
Grace Common Stock Fund, 0 and 1,373,273 shares, respectively - 2,307,099
Employee Stock Ownership Plan, 0 and 1,489,926 shares, respectively - 2,339,183 *
Fidelity Management Trust Company
Fidelity Contrafund, 0 and 53,613 shares, respectively - 2,636,163
Fidelity Blue Chip Fund, 0 and 78,523 shares, respectively - 4,046,300
===================================================================================================================
* Nonparticipant-directed
During 2001 and 2000, the Plan's investments held in the Master Trust
(including gains and losses on investments bought and sold, as well as
held during the year) depreciated in value by $4,292,375 and $12,465,429,
respectively as follows:
-------------------------------------------------------------------------
FOR THE YEAR ENDED
-----------------------------------
DECEMBER 31,
=========================================================================
2001 2000
=========================================================================
Mutual Funds $ (1,786,336) $ (2,267,445)
Common Stocks (2,506,039) (10,043,242)
Preferred Stock - (154,742)
-----------------------------------
$ (4,292,375) $(12,465,429)
=========================================================================
-8-
W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
4. GRACE COMMON STOCK
Prior to October 1, 2000, Company contributions were credited to the
ESOP account with limited diversification privileges. Complete
diversification of the ESOP account became available to participants
on October 1, 2000. Additionally, effective January 1, 2001, Company
contributions could be directed to any of the available investment
options. Therefore, as of January 1, 2001, the Plan's investments were
entirely participant-directed. Information about the net assets and
the significant components of the changes in net assets relating to
the nonparticipant-directed investments as of December 31, 2000 and
for the year then ended were as follows:
--------------------------------------------------------------------------
DECEMBER 31,
2000
--------------------------------------------------------------------------
NET ASSETS
Common Stocks $ 2,339,183
-----------------
==========================================================================
FOR THE YEAR ENDED
DECEMBER 31, 2000
==========================================================================
CHANGES IN NET ASSETS
Contributions $ 1,550,231
Interest 29,008
Net depreciation (5,871,425)
Benefits paid to participants (345,770)
Transfers to participant-directed investments (1,001,976)
Administrative expense (22,658)
-----------------
$ (5,662,590)
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W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
5. GUARANTEED INVESTMENT CONTRACTS
Investments in the participant-directed Fixed Income Fund consisted
primarily of benefit-responsive guaranteed investment contracts ("GICs")
issued by various insurance companies. The Plan's GICs were stated at
contract value, which approximated fair value. Contract value included
principal invested, plus earnings, less benefit payments and
administrative expenses. Listed below is the Plan's specific interest in
the investments in GICs held in the Master Trust:
------------------------------------------------------------------------------------------------------------------
VALUE AT DECEMBER 31,
---------------------------------
ISSUER RATE 2001 2000 MATURITY DATE
==================================================================================================================
Metropolitan Life Insurance Co. 6.94% $ - $ 1,389,534 Mar-03
AEGON Institutional Markets 6.87% - 874,554 Dec-01
6.40% - 651,095 Dec-02
6.13% - 659,111 Mar-03
New York Life Insurance Co. 6.63% - 923,165 Jun-03
5.84% - 128,585 Jun-01
John Hancock Mutual Life Ins. Co. 7.02% - 1,147,056 Jun-01
Pacific Mutual Life Insurance Co. 6.87% - 719,164 Jun-02
6.09% - 892,052 various
State Street Bank and Trust Co. 7.20% - 1,784,616 various
Massachusetts Mutual 6.98% - 246,785 Dec-03
SEI Financial Management 6.87% - 420,444 various
Principal Life Insurance Co. 6.10% - 542,834 Sep-03
---------------------------------
Total Contracts - 10,378,995
Commercial Paper - 396,073 various
---------------------------------
TOTAL FIXED INCOME FUND $ - $ 10,775,068
==================================================================================================================
-10-
W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
6. MASTER TRUST
The Plan's investments were held in the Master Trust through December 31,
2001, which was established for the investment of assets of the W. R.
Grace & Co. Salaried Employees Savings and Investment Plan and the W. R.
Grace & Co. Hourly Employees Savings and Investment Plan. Each
participating retirement plan had a specific interest in the Master Trust.
The assets of the Master Trust were held by the Trustee. Effective with
the Plan merger with and into the Salaried Plan on December 31, 2001, the
Plan had a 0% interest in the Master Trust at December 31, 2001. At
December 31, 2000, the Plan's interest in the net assets of the Master
Trust was approximately 6%.
Contributions and benefit payments were specifically allocated to the
operation of the appropriate plan. However, other plan income and expenses
were allocated to the respective plans' participants using methods
outlined in the Master Trust agreement. The record keeper of the Master
Trust allocated trust income and expenses between the participants of the
participating plans on a monthly basis in relation to the market value of
each participant's account at the beginning of the month for each Master
Trust investment account. The financial statements reflect the Plan's
share of the Master Trust assets and activities using this allocation
method.
The following tables present the fair values of investments and investment
income for the Master Trust Fund:
------------------------------------------------------------------------------------------------------
DECEMBER 31,
------------------------------------
2001 2000
======================================================================================================
INVESTMENTS AT CONTRACT VALUE
Guaranteed Investment Contracts $ 225,046,859 $ 229,327,189
INVESTMENTS AT COST
Participant Loans 5,144,781 5,399,564
INVESTMENTS AT FAIR VALUE
W. R. Grace & Co. Common Stock 17,065,769 25,203,345
Mutual Funds 184,608,222 222,857,757
------------------------------------
$ 431,865,631 $ 482,787,855
======================================================================================================
FOR THE YEAR ENDED
DECEMBER 31,
------------------------------------
2001 2000
======================================================================================================
INVESTMENT (LOSS) INCOME
Interest and Dividends $ 17,548,754 $ 39,640,311
NET DEPRECIATION IN FAIR VALUE OF INVESTMENTS
W. R. Grace & Co. Common Stock (12,161,369) (72,350,602)
Mutual Funds (31,007,165) (46,582,806)
Sealed Air Preferred Stock - (1,739,344)
Sealed Air Common Stock - (2,244,019)
------------------------------------
$ (25,619,780) $ (83,276,460)
------------------------------------------------------------------------------------------------------
-11-
W. R. GRACE & CO.
HOURLY EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
7. RELATED PARTY
Certain plan investments were shares of mutual funds managed by the
Fidelity Management Trust Company. Fidelity was the trustee as defined by
the Plan, and, therefore, these transactions qualified as
party-in-interest transactions. Fees paid by the Plan for the investment
management services amounted to $46,110 and $38,191 for the years ended
December 31, 2001 and 2000, respectively.
W. R. Grace & Co., as plan sponsor, is also a related party. Investments
include shares of W. R. Grace common stock. At December 31, 2001 and 2000,
the Plan held 0 and 2,863,199 shares, respectively, of Grace Common Stock.
The fair value of the Grace Common Stock was $4,646,282 at December 31,
2000. Purchases of $3,740,300 (4,028,921 shares) and $5,454,629 (1,723,315
shares) and sales of $1,310,791 (1,232,398 shares) and $1,494,291 (391,859
shares) of W. R. Grace common stock were made at the Plan level during
2001 and 2000, respectively.
8. FEDERAL INCOME TAXES
On July 13, 1995, the Internal Revenue Service ("IRS") issued a letter
stating that the Plan, as then in effect, was in compliance with the
applicable requirements of the Code. The Plan has been amended since the
issuance of this determination letter. However, the Plan fiduciaries
believe that the Plan was designed and was operated in compliance with the
applicable requirements of the Code. Therefore, the Plan fiduciaries
believe the Plan continued to be qualified, and the related Trust
continued to be tax exempt through December 31, 2001.
-12-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee has duly caused this annual report to be signed on its
behalf by the undersigned thereunto authorized.
W. R. GRACE & CO.
HOURLY EMPLOYEES
SAVINGS & INVESTMENT PLAN
By: /s/ Brenda Gottleib
----------------------------------
Brenda Gottleib
Chairman, Administrative Committee
Date: June 27, 2002
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-49705) of W. R. Grace & Co. of our report dated
June 27, 2002 relating to the financial statements of the W. R. Grace & Co.
Hourly Employees Savings and Investment Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Baltimore, Maryland
June 27, 2002