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W R Grace & Co · 10-12B · On 3/13/98

Filed On 3/13/98 · SEC File 1-13953 · Accession Number 950123-98-2517

  As Of               Filer                 Filing     On/For/As Docs:Pgs              Issuer               Agent

 3/13/98  W R Grace & Co                    10-12B                 7:286                                    950123

Registration of Securities (General Form) · Form 10
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-12B      Grace Specialty Chemicals, Inc.                      173    978K 
 2: EX-4.1      Form of Rights Agreement                              34    157K 
 3: EX-10.1     Form of Employee Benefits Allocation Agreement        19     78K 
 4: EX-10.2     Form of Tax Sharing Agreement                         27     93K 
 5: EX-10.20    Form of Executive Severance Agreement                 23     64K 
 6: EX-10.25    Option Agreement                                       2     13K 
 7: EX-21       Subsidiaries of New Grace                              8     33K

10-12B · Grace Specialty Chemicals, Inc.
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Advance Notice Provisions for Stockholder Nominations and Stockholder Proposals Amendment of Certain Provisions of the New Grace Certificate of Incorporation and the New Grace By-laws Annex F Annex G Anti-Takeover Statute Asbestos-Related Liability Asbestos-Related Matters Authorized Capital Stock Beneficial Ownership of Management Board of Directors Business of New Grace and Grace Specialty Chemicals Capitalization Catalysts and other silica-based products Certain Agreements between New Sealed Air and New Grace Certain Anti-Takeover Features Certain Anti-Takeover Provisions Certain Federal Income Tax Consequences Certain Other Information Certain Relationships and Transactions Certain Risk Factors Change in Control Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Classified Board of Directors Committees of the Board of Directors Common Stock Company Compensation Compensation Committee Interlocks and Insider Participation Compensation of Directors Competition Conditions; Termination Consolidated Financial Statements Construction Container Continuing Director Corporate Transaction Current liabilities Description of New Grace Capital Stock Directors' Compensation and Consulting Arrangements Discontinued operations Dividend Policy and Share Repurchases Employment Agreements Environmental, Health and Safety Matters Environmental Matters Environmental Proceedings Exchange Act Executive Compensation and Employee Benefits following the Spin-off Executive Compensation and Employee Benefits prior to the Spin-off Executive Officers Exercise Period Financial Condition Financial Statements Financial Statements and Exhibits Grace Construction Products Grace Davison Grace Specialty Chemicals, Inc Grace Summary Selected Financial Data Indemnification of Directors and Officers Index of Defined Terms Information Statement Insurance Litigation Interest expense and related financing costs Legal Proceedings and Regulatory Matters Liability and Indemnification of Directors and Officers Limitation of Liability of Directors Liquidity and Capital Resources Listing and Trading of New Grace Common Stock Ltip Management Management's Discussion and Analysis of Results of Operations and Financial Condition Manner of Effecting the Spin-off New Grace Common Stock New Grace Preferred Stock New Grace Pro Forma Summary Financial Information New Grace Rights Nmc No Operating History as an Independent Company No Prior Market for New Grace Common Stock No Stockholder Action by Written Consent; Special Meetings Notes and accounts receivable, net Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet and Statement of Operations Number of Directors; Removal; Filling Vacancies Other Overview and Strategy Packaging Patents and Other Intellectual Property Matters Preemptive Rights Products and Markets Pro Forma Financial Information Properties Questions and Answers About the Transactions Recent Results Recent Sales of Unregistered Securities Regulatory Matters Relationships after the Spin-off Relationships and Transactions with Management and Others Research Activities Research and development expenses Resignations of Executive Officers Restrictions on New Grace to Protect Tax-Free Treatment Rights to Purchase Securities and Other Property Sales and revenues Security Ownership of Certain Beneficial Owners Severance Agreements Shareholders' Equity Specialty Chemicals Industry Overview Spin-off, The Spread Stockholder Proposals Stock Options Subsidiary Summary Tax Consequences of the Spin-off The Spin-off Unaudited Pro Forma Condensed Consolidated Balance Sheet Unaudited Pro Forma Condensed Consolidated Statement of Operations Where Stockholders Can Find More Information W. R. Grace & Co
1	1st Page
"	Grace Specialty Chemicals, Inc
4	Item 10. Recent Sales of Unregistered Securities
"	Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
"	Item 15. Financial Statements and Exhibits
9	Information Statement
17	Questions and Answers About the Transactions
18	Summary
"	W. R. Grace & Co
19	Tax Consequences of the Spin-off
20	Capitalization
21	Grace Summary Selected Financial Data
"	Recent Results
23	New Grace Pro Forma Summary Financial Information
24	Certain Risk Factors
"	No Operating History as an Independent Company
"	Asbestos-Related Matters
"	No Prior Market for New Grace Common Stock
25	Dividend Policy and Share Repurchases
"	Restrictions on New Grace to Protect Tax-Free Treatment
26	Certain Anti-Takeover Provisions
"	Environmental Matters
"	Competition
27	The Spin-off
"	Manner of Effecting the Spin-off
"	Certain Federal Income Tax Consequences
"	Conditions; Termination
28	Relationships after the Spin-off
"	Listing and Trading of New Grace Common Stock
"	Regulatory Matters
29	Pro Forma Financial Information
"	Unaudited Pro Forma Condensed Consolidated Balance Sheet
30	Unaudited Pro Forma Condensed Consolidated Statement of Operations
34	Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet and Statement of Operations
36	Business of New Grace and Grace Specialty Chemicals
"	Overview and Strategy
"	Specialty Chemicals Industry Overview
37	Products and Markets
40	Research Activities
"	Patents and Other Intellectual Property Matters
"	Environmental, Health and Safety Matters
41	Legal Proceedings and Regulatory Matters
43	Environmental Proceedings
"	Insurance Litigation
46	Properties
48	Management
"	Board of Directors
50	Committees of the Board of Directors
"	Compensation of Directors
51	Executive Officers
"	Executive Compensation and Employee Benefits prior to the Spin-off
"	Executive Compensation and Employee Benefits following the Spin-off
52	Compensation Committee Interlocks and Insider Participation
53	Certain Agreements between New Sealed Air and New Grace
"	Certain Relationships and Transactions
54	Security Ownership of Certain Beneficial Owners
"	Beneficial Ownership of Management
55	Description of New Grace Capital Stock
"	Authorized Capital Stock
"	New Grace Common Stock
"	New Grace Preferred Stock
"	New Grace Rights
57	Preemptive Rights
58	Classified Board of Directors
59	Number of Directors; Removal; Filling Vacancies
"	No Stockholder Action by Written Consent; Special Meetings
"	Advance Notice Provisions for Stockholder Nominations and Stockholder Proposals
61	Rights to Purchase Securities and Other Property
62	Amendment of Certain Provisions of the New Grace Certificate of Incorporation and the New Grace By-laws
"	Certain Anti-Takeover Features
"	Anti-Takeover Statute
64	Liability and Indemnification of Directors and Officers
"	Limitation of Liability of Directors
"	Indemnification of Directors and Officers
65	Certain Other Information
66	Where Stockholders Can Find More Information
"	Stockholder Proposals
67	Index of Defined Terms
87	Change in Control
88	Common Stock
"	Company
"	Continuing Director
"	Corporate Transaction
"	Exchange Act
"	Exercise Period
"	Spread
"	Subsidiary
98	Compensation
"	Other
100	Stock Options
101	Ltip
104	Employment Agreements
105	Severance Agreements
106	Resignations of Executive Officers
"	Directors' Compensation and Consulting Arrangements
108	Relationships and Transactions with Management and Others
110	Annex F
112	Consolidated Financial Statements
114	Current liabilities
"	Shareholders' Equity
118	Asbestos-Related Liability
123	Nmc
125	Notes and accounts receivable, net
135	Management's Discussion and Analysis of Results of Operations and Financial Condition
136	Sales and revenues
"	Packaging
"	Container
"	Catalysts and other silica-based products
"	Construction
137	Interest expense and related financing costs
"	Research and development expenses
138	Discontinued operations
139	Financial Condition
"	Liquidity and Capital Resources
144	Annex G
"	Item 1. Financial Statements
159	Grace Davison
161	Grace Construction Products

10-12B 1st Page of 173 TOC Top Previous Next Bottom Just 1st

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
-----------------------

GRACE SPECIALTY CHEMICALS, INC.
(TO BE RENAMED W. R. GRACE & CO.)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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DELAWARE 65-0773649
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

ONE TOWN CENTER ROAD
BOCA RATON, FLORIDA 33486
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (561)362-2000
--------------------

SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

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TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
------------------- ------------------------------

COMMON STOCK, PAR VALUE $0.01 PER SHARE NEW YORK STOCK EXCHANGE
PREFERRED SHARE PURCHASE RIGHTS NEW YORK STOCK EXCHANGE

SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

NONE

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GRACE SPECIALTY CHEMICALS, INC.

I. INFORMATION INCLUDED IN INFORMATION STATEMENT AND INCORPORATED IN FORM 10 BY
REFERENCE

CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF FORM 10

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ITEM
NO. ITEM CAPTION LOCATION IN PROXY STATEMENT
---- ------------ ---------------------------

1. Business............................ "SUMMARY"; "THE SPIN-OFF -- Manner of Effecting the
Spin-off"; "BUSINESS OF NEW GRACE AND GRACE SPECIALTY
CHEMICALS"; and "Management's Discussion and Analysis of
Results of Operations and Financial Condition (included
in Annexes F and G)."

2. Financial Information............... "GRACE SUMMARY SELECTED FINANCIAL DATA"; "NEW GRACE PRO
FORMA FINANCIAL INFORMATION"; "Management's Discussion
and Analysis of Results of Operations and Financial
Condition (included in Annexes F and G)"; "Annex F"; and
"Annex G."

3. Properties.......................... "BUSINESS OF NEW GRACE AND GRACE SPECIALTY CHEMICALS."

4. Security Ownership of Certain
Owners and Management........... "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS"; and
"SECURITY OWNERSHIP OF MANAGEMENT."

5. Directors and Executive Officers.... "MANAGEMENT"; and "LIABILITY AND INDEMNIFICATION OF DIRECTORS
AND OFFICERS."

6. Executive Compensation.............. "Annex E."

7 Certain Relationships and Related
Transactions.................... "CERTAIN RISK FACTORS"; "THE SPIN-OFF -- Relationships after
the Spin-off"; "MANAGEMENT"; "BUSINESS OF NEW GRACE AND
GRACE SPECIALTY CHEMICALS -- Legal Proceedings and
Regulatory Matters"; and "Annex E."

8. Legal Proceedings................... "BUSINESS OF NEW GRACE AND GRACE SPECIALTY CHEMICALS -- Legal
Proceedings and Regulatory Matters."

9. Market Price of and Dividends on
the Registrant's Common Equity
and Related Stockholder
Matters......................... "SUMMARY"; "CERTAIN RISK FACTORS"; and "THE SPIN-OFF --
Listing and Trading of New Grace Common Stock."

11. Description of Registrant's
Securities to be Registered..... "DESCRIPTION OF NEW GRACE CAPITAL STOCK"; and "CERTAIN
ANTI-TAKEOVER PROVISIONS."

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ITEM
NO. ITEM CAPTION LOCATION IN PROXY STATEMENT
---- ------------ ---------------------------

12. Indemnification of Directors and
Officers........................ "LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS."

13. Financial Statements and
Supplementary Data.............. "GRACE SUMMARY SELECTED FINANCIAL DATA"; "NEW GRACE PRO FORMA
FINANCIAL INFORMATION"; "Management's Discussion and Analysis
of Results of Operations and Financial Condition (included in
Annexes F and G)"; "Annex F"; and "Annex G."

15. Financial Statements and Exhibits.
(a) Financial Statements and
Schedules....................... "GRACE SUMMARY SELECTED FINANCIAL DATA"; "NEW GRACE PRO FORMA
FINANCIAL INFORMATION"; "Annex F"; and "Annex G."

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II. INFORMATION NOT INCLUDED IN INFORMATION STATEMENT

Item 10. Recent Sales of Unregistered Securities

On August 12, 1997, Grace Specialty Chemicals, Inc. ("New Grace")
issued 1,000 shares of its common stock to W. R. Grace & Co. ("Grace"),
its direct parent, for consideration of $1,000. In the opinion of New
Grace, this transaction is exempt from registration under the
Securities Act of 1933, as amended, by virtue of Section 4(2) thereof
in that such transaction did not involve any public offering.

Item 14. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

None.

Item 15. Financial Statements and Exhibits.

(a) Financial Statements:

The following financial statements are filed as part of this
Registration Statement:

(1) CAPITALIZATION

(2) GRACE SUMMARY SELECTED FINANCIAL DATA

(3) NEW GRACE PRO FORMA SUMMARY FINANCIAL INFORMATION

(4) PRO FORMA FINANCIAL INFORMATION

(A) Unaudited Pro Forma Condensed Consolidated Balance
Sheet

(B) Unaudited Pro Forma Condensed Consolidated Statement
of Operations

(5) ANNEX F (W. R. Grace & Co. Financial Information for the
Year Ended December 31, 1996)

(6) ANNEX G (W. R. Grace & Co. Financial Information for the
Quarter Ended September 30, 1997)

Financial Statement Schedules:

Supplemental schedules are omitted because of the absence of the
conditions under which they are required.

(b) Exhibits:

2.1 Form of Distribution Agreement, by and among Grace, W. R.
Grace & Co.-Conn. ("Grace-Conn.") and New Grace (attached
as Annex B to the Joint Proxy Statement/Prospectus, dated
February 13, 1998, of Grace and Sealed Air Corporation (the
"Joint Proxy Statement/ Prospectus"))

3.1 Form of Amended and Restated Certificate of Incorporation
of New Grace (attached as Annex A to New Grace's
Information Statement, dated February 13, 1998 (the
"Information Statement"))

3.2 Form of Amended and Restated By-Laws of New Grace (attached
as Annex B to the Information Statement)

*4.1 Form of Rights Agreement, by and between New Grace and The
Chase Manhattan Bank, as Rights Agent

-3-

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4.2 Indenture, dated as of September 29, 1992, among
Grace-Conn., Grace and Bankers Trust Company (incorporated
by reference to Exhibit 4.2 to Grace's Annual Report on
Form 10-K for the year ended December 31, 1992)

4.3 Supplemental Indenture, dated as of September 24, 1996,
among Grace-Conn., Grace, Grace Holding, Inc. and Bankers
Trust Company, to Indenture, dated as of September 29, 1992
(incorporated by reference to Exhibit 4.4 to Grace's Form
8-K filed October 10, 1996)

4.4 Indenture, dated as of January 28, 1993, among Grace-Conn.,
Grace and The Bank of New York (successor to NationsBank of
Georgia, N.A.) (incorporated by reference to Exhibit 4.4 to
Grace's Annual Report on Form 10-K for the year ended
December 31, 1992)

4.5 Supplemental Indenture, dated as of September 24, 1996,
among Grace-Conn., Grace, Grace Holding, Inc. and The Bank
of New York, to Indenture, dated as of January 28, 1993
(incorporated by reference to Exhibit 4.5 to Grace's Form
8-K filed October 10, 1996)

*10.1 Form of Employee Benefits Allocation Agreement, by and
among Grace, Grace-Conn. and New Grace

*10.2 Form of Tax Sharing Agreement, by and among Grace,
Grace-Conn. and Sealed Air Corporation

10.3 Form of New Grace 1998 Stock Incentive Plan (attached as
Annex C to the Information Statement) 10.4 Form of New
Grace 1998 Stock Plan for Nonemployee Directors (attached
as Annex D to the Information Statement)

10.5 Grace 1996 Stock Incentive Plan, as amended (incorporated
by reference to Exhibit 10.1 to Grace's Form 10-Q for the
period ended March 31, 1997)

10.6 Grace 1996 Stock Retainer Plan for Nonemployee Directors
(incorporated by reference to Exhibit 10.2 to Grace's Form
8-K filed October 10, 1996)

10.7 Grace Supplemental Executive Retirement Plan, as amended
(incorporated by reference to Exhibit 10.03 to Grace's
Annual Report on Form 10-K for the year ended December 31,
1996)

10.8 Grace Executive Salary Protection Plan, as amended
(incorporated by reference to Exhibit 10.04 to Grace's
Annual Report on Form 10-K for the year ended December 31,
1996)

10.9 Grace 1981 Stock Incentive Plan, as amended (incorporated
by reference to Exhibit 10.3 to Grace's Form 8-K filed
October 10, 1996)

10.10 Grace 1986 Stock Incentive Plan, as amended (incorporated
by reference to Exhibit 10.4 to Grace's Form 8-K filed
October 10, 1996)

10.11 Grace 1989 Stock Incentive Plan, as amended (incorporated
by reference to Exhibit 10.5 to Grace's Form 8-K filed
October 10, 1996)

10.12 Grace 1994 Stock Incentive Plan, as amended (incorporated
by reference to Exhibit 10.6 to Grace's Form 8-K filed
October 10, 1996)

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10.13 Forms of Stock Option Agreements (incorporated by reference
to Exhibit 10(h) to Grace's Annual Report on Form 10-K for
the year December 31, 1991)

10.14 Information concerning Grace Incentive Compensation
Program, Deferred Compensation Program and Long-Term
Incentive Program (incorporated by reference to pages 7-12
and 26-36 to Grace's Proxy Statement filed April 7, 1997)

10.15 Form of Long-Term Incentive Program Award (incorporated by
reference to Exhibit 10.13 to Grace's Form S-1 filed August
2, 1996)

10.16 Form of Stock Option Agreements (incorporated by reference
to Exhibit 10.14 to Grace's Form S-1 filed August 2, 1996)

10.17 Grace Retirement Plan for Outside Directors, as amended
(incorporated by reference to Exhibit 10.13 to Grace's
Annual Report on Form 10-K for the year ended December 31,
1996)

10.18 Form of Executive Severance Agreement between Grace and
officers elected prior to May 1996 (incorporated by
reference to Exhibit 10.22 to Grace's Form S-1 filed August
2, 1996)

10.19 Form of Executive Severance Agreement between Grace and
officers elected in or after May 1996 (incorporated by
reference to Exhibit 10.23 to Grace's Form S-1 filed August
2, 1996)

*10.20 Form of Executive Severance Agreement between Grace and
officers

10.21 Employment Agreement, dated as of May 1, 1995, between
Grace and Albert J. Costello (incorporated by reference to
Exhibit 10.1 to Grace's Form 10-Q for the period ended June
30, 1995)

10.22 Amendment dated August 9, 1996 to Employment Agreement,
dated as of May 1, 1995, between Grace and Albert J.
Costello (incorporated by reference to Exhibit 10.7 to
Grace's Form 8-K filed October 10, 1996)

10.23 Option Agreement between Grace and Albert J. Costello,
dated May 1, 1995, as amended (incorporated by reference to
Exhibit 10.8 to Grace's Form 8-K filed October 10, 1996)

10.24 Option Agreement between Grace and Albert J. Costello,
dated March 6, 1996 (incorporated by reference to Exhibit
10.37 to Grace's Form S-1 filed August 2, 1996)

*10.25 Option Agreement between Grace and Albert J. Costello,
dated March 5, 1997

10.26 Employment Agreement, dated as of May 15, 1995, between
Grace and Larry Ellberger (incorporated by reference to
Exhibit 10.28 to Grace's Annual Report on Form 10-K for the
year ended December 31, 1996)

10.27 Restricted Stock Award Agreement, dated June 6, 1995,
between Grace and Larry Ellberger, as amended by letter
agreement, dated August 26, 1996, between Larry Ellberger
and Grace (incorporated by reference to Exhibit 10.29 to
Grace's Annual Report on Form 10-K for the year ended
December 31, 1996)

10.28 Letter Agreement, dated December 10, 1996, between Grace
and Larry Ellberger (incorporated by reference to Exhibit
10.30 to Grace's Annual Report on Form 10-K for the year
ended December 31, 1996)

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10.29 Distribution Agreement by and among Grace, a New York
corporation subsequently renamed Fresinius National Medical
Care Holdings, Inc., Grace-Conn. and Fresinius AG, dated
February 4, 1996 (incorporated by reference to Exhibit 2 to
Grace's Form 8-K filed February 6, 1996)

10.30 Form of Indemnification Agreement between Grace and certain
directors (incorporated by reference to Exhibit 10.39 to
Grace's Form S-1 filed August 2, 1996)

10.31 Form of Indemnification Agreement between Grace and certain
directors (incorporated by reference to Exhibit 10.37 to
Grace's Annual Report on Form 10-K for the year ended
December 31, 1996)

10.32 364-Day Credit Agreement, dated as of May 16, 1997, among
Grace-Conn., Grace, the several banks parties thereto,
NationsBank, N.A. (South), as documentation agent, and The
Chase Manhattan Bank, as administrative agent for such
banks (incorporated by reference to Exhibit 10.1 to Grace's
Form 10-Q for the period ended June 30, 1997)

10.33 Credit Agreement, dated as of May 16, 1997, among
Grace-Conn., Grace, the several banks parties thereto, and
The Chase Manhattan Bank, as administrative agent for such
banks (incorporated by reference to Exhibit 10.2 to Grace's
Form 10-Q for the period ended June 30, 1997)

*21 Subsidiaries of New Grace

------------------
* Filed herewith

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SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.

GRACE SPECIALTY CHEMICALS, INC.

By:/s/ Albert J. Costello
---------------------------------
Name: Albert J. Costello
Title: President

March 13, 1998

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INFORMATION STATEMENT
GRACE SPECIALTY CHEMICALS, INC.
(TO BE RENAMED W. R. GRACE & CO.)
COMMON STOCK

W. R. Grace & Co. (Grace) is sending you this Information Statement,
together with a Joint Proxy Statement/ Prospectus that describes the proposed
combination of Grace's packaging business with the business of Sealed Air
Corporation (Sealed Air). Grace intends to combine these businesses by first
transferring all of its specialty chemicals businesses to a new company, Grace
Specialty Chemicals, Inc. (New Grace), spinning off New Grace to Grace
stockholders (the Spin-off), and then combining with Sealed Air (the Merger). We
refer to Grace after the Spin-off and the Merger as "New Sealed Air."

This Information Statement relates to the shares of New Grace that will be
issued to you in the Spin-off. It provides important information about New
Grace. You should read the entire document carefully. For information about New
Grace's businesses, earnings and financial position, please review "Business of
New Grace and Grace Specialty Chemicals" beginning on page 23 and the pro forma
financial information beginning on page 16. You should also pay particular
attention to the information set forth in "Certain Risk Factors" beginning on
page 11. For more detailed information on the transactions, including the
proposals relating to the Spin-off and the Merger that will be considered at
Grace's special meeting of stockholders, see the Joint Proxy
Statement/Prospectus.

If completed, the Spin-off and Merger will result in the following changes:

GRACE STOCKHOLDERS WILL OWN:

- 100% of New Grace; and

- a 63% equity interest in New Sealed Air, through ownership of New Sealed
Air common and convertible preferred stock.

NEW GRACE WILL:

- own and operate Grace's specialty chemicals businesses;

- retain Grace's asbestos, environmental and certain other liabilities;

- receive approximately $1.2 billion from Grace (the Cash Transfer) prior
to the Spin-off; and

- be renamed "W. R. Grace & Co."

NEW SEALED AIR WILL:

- own and operate Grace's packaging business and the business of Sealed
Air;

- be recapitalized so that Grace stockholders will own shares of common
stock of New Sealed Air and shares of a new series of voting convertible
preferred stock of New Sealed Air (with stockholders of Sealed Air also
receiving shares of New Sealed Air common stock in the Merger);

- retain the obligation to repay the approximately $1.2 billion of debt
used to finance the Cash Transfer; and

- be renamed "Sealed Air Corporation."

The diagrams on the following pages show the effects of these transactions.

These transactions will occur only if they are approved by the stockholders
of Grace and Sealed Air and the parties either satisfy or waive the other
conditions described in the Joint Proxy Statement/Prospectus. The Spin-off and
Merger are expected to be tax-free to Grace and its stockholders for U.S.
federal income tax purposes.

We expect New Grace's stock to be listed on the New York Stock Exchange
under the symbol "GRA."
------------------------

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS DETERMINED IF THIS DOCUMENT IS ACCURATE OR ADEQUATE OR APPROVED
THE NEW GRACE COMMON STOCK TO BE ISSUED. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------

THIS INFORMATION STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.

The date of this Information Statement is February 13, 1998.

10-12B 10th Page of 173 TOC 1st Previous Next Bottom Just 10th

The following diagrams illustrate the proposed transactions in general
terms and are not comprehensive. For a more complete description of the proposed
transactions, see "The Spin-off" on page 14 of this Information Statement and
"The Distribution and Merger Agreements" on page 65 of the Joint Proxy
Statement/Prospectus.

[CURRENT STRUCTURE FLOW CHART]

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[CASH TRANSFER FLOW CHART AND SPINOFF FLOW CHART]
---------------

* Grace and a packaging subsidiary will borrow a total of approximately $1.2
billion and transfer the borrowed funds to New Grace or a subsidiary of New
Grace.

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[RECAPITALIZATION FLOW CHART AND MERGER FLOW CHART]

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[POST-TRANSACTION STRUCTURE FLOW CHART]

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NEW GRACE INFORMATION STATEMENT

TABLE OF CONTENTS

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PAGE
----

QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS................ 4
SUMMARY..................................................... 5
New Grace................................................. 5
The Spin-off and the Merger............................... 5
Tax Consequences of the Spin-off.......................... 6
Certain Risk Factors...................................... 6
CAPITALIZATION.............................................. 7
GRACE SUMMARY SELECTED FINANCIAL DATA....................... 8
NEW GRACE PRO FORMA SUMMARY FINANCIAL INFORMATION........... 10

CERTAIN RISK FACTORS........................................ 11
No Operating History as an Independent Company............ 11
Asbestos-Related Matters.................................. 11
No Prior Market for New Grace Common Stock................ 11
Dividend Policy and Share Repurchases..................... 12
Restrictions on New Grace to Protect Tax-Free Treatment... 12
Certain Anti-Takeover Provisions.......................... 13
Environmental Matters..................................... 13
Competition............................................... 13

THE SPIN-OFF................................................ 14
Manner of Effecting the Spin-off.......................... 14
Certain Federal Income Tax Consequences................... 14
Conditions; Termination................................... 14
Relationships after the Spin-off.......................... 15
Listing and Trading of New Grace Common Stock............. 15

REGULATORY MATTERS.......................................... 15

PRO FORMA FINANCIAL INFORMATION............................. 16
Unaudited Pro Forma Condensed Consolidated Balance
Sheet.................................................. 16
Unaudited Pro Forma Condensed Consolidated Statement of
Operations............................................. 17
Notes to Unaudited Pro Forma Condensed Consolidated
Balance Sheet and Statement of Operations.............. 21

BUSINESS OF NEW GRACE AND GRACE SPECIALTY CHEMICALS......... 23
Overview and Strategy..................................... 23
Specialty Chemicals Industry Overview..................... 23
Products and Markets...................................... 24
Research Activities....................................... 27
Patents and Other Intellectual Property Matters........... 27
Environmental, Health and Safety Matters.................. 27
Legal Proceedings and Regulatory Matters.................. 28
Properties................................................ 33

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PAGE
----

MANAGEMENT.................................................. 35
Board of Directors........................................ 35
Committees of the Board of Directors...................... 37
Compensation of Directors................................. 37
Executive Officers........................................ 38
Executive Compensation and Employee Benefits prior to the
Spin-off............................................... 38
Executive Compensation and Employee Benefits following the
Spin-off............................................... 38
Compensation Committee Interlocks and Insider
Participation.......................................... 39

CERTAIN AGREEMENTS BETWEEN NEW SEALED AIR AND NEW GRACE..... 40

CERTAIN RELATIONSHIPS AND TRANSACTIONS...................... 40

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS............. 41

BENEFICIAL OWNERSHIP OF MANAGEMENT.......................... 41

DESCRIPTION OF NEW GRACE CAPITAL STOCK...................... 42
Authorized Capital Stock.................................. 42
New Grace Common Stock.................................... 42
New Grace Preferred Stock................................. 42
New Grace Rights.......................................... 42
Preemptive Rights......................................... 44

CERTAIN ANTI-TAKEOVER PROVISIONS............................ 45
Classified Board of Directors............................. 45
Number of Directors; Removal; Filling Vacancies........... 46
No Stockholder Action by Written Consent; Special
Meetings............................................... 46
Advance Notice Provisions for Stockholder Nominations and
Stockholder Proposals.................................. 46
New Grace Preferred Stock................................. 47
Rights to Purchase Securities and Other Property.......... 48
Amendment of Certain Provisions of the New Grace
Certificate of Incorporation and the New Grace
By-laws................................................ 49
New Grace Rights.......................................... 49
Certain Anti-Takeover Features............................ 49
Anti-Takeover Statute..................................... 49

LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS..... 51
Limitation of Liability of Directors...................... 51
Indemnification of Directors and Officers................. 51
Certain Other Information................................. 52

WHERE STOCKHOLDERS CAN FIND MORE INFORMATION................ 53

STOCKHOLDER PROPOSALS....................................... 53

INDEX OF DEFINED TERMS...................................... 54

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· Download Table

ANNEXES
A -- Form of Amended and Restated Certificate of Incorporation of
New Grace................................................. A-1
B -- Form of Amended and Restated By-laws of New Grace........... B-1
C -- Form of New Grace 1998 Stock Incentive Plan................. C-1
D -- Form of New Grace 1998 Stock Plan for Nonemployee
Directors................................................. D-1
E -- Grace 1997 Proxy Excerpt.................................... E-1
F -- Grace Financial Information for the Year Ended December 31,
1996 (including the Consolidated Financial Statements,
Financial Summary and Management's Discussion and Analysis
of Results of Operations and Financial Condition)......... F-1
G -- Grace Financial Information for the Quarter Ended September
30, 1997 (including the Third Quarter Financial Statements
and Management's Discussion and Analysis of Results of
Operations and Financial Condition)....................... G-1

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QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS

Q. WHEN WILL THE SPIN-OFF OF NEW GRACE OCCUR?

A. We expect to complete the Spin-off shortly after the Grace and Sealed Air
stockholder meetings, late in the 1998 first quarter, so long as Grace
stockholders approve the Spin-off and Merger, and other conditions
(including approval of the Merger by Sealed Air stockholders) are satisfied
or waived.

Q. WHAT WILL BE NEW GRACE'S BUSINESSES?

A. After the Spin-off, New Grace will operate the specialty chemicals
businesses currently owned by Grace: Grace Davison, Grace Construction
Products and Darex Container Products. Please read the information on New
Grace's business and the associated risks beginning on pages 11 and 23.

Q. WHAT WILL I RECEIVE IN THE PROPOSED TRANSACTIONS?

A. As a result of the Spin-off, for every share of Grace common stock you own,
you will receive one share of New Grace common stock, together with an
associated preferred share purchase right similar to the rights you have
with your existing Grace shares. Just before the Merger, your Grace common
stock will be recapitalized (the Recapitalization). As a result of the
Recapitalization, Grace stockholders will also receive shares of New Sealed
Air common and convertible preferred stock representing, in total, 63% of
New Sealed Air. Within a few weeks after the transactions are completed, you
will receive your New Grace common stock and written instructions for
exchanging your existing Grace common stock for shares of New Sealed Air
common and convertible preferred stock.

Q. DO I HAVE TO PAY TAXES ON THE RECEIPT OF NEW GRACE COMMON STOCK?

A. The Spin-off is expected to be tax-free to Grace stockholders for U.S.
federal income tax purposes. After the transactions are completed, you will
receive information on the allocation of your tax basis among your shares of
New Grace and New Sealed Air. To review the tax consequences of the Spin-off
and Merger in greater detail, see the Joint Proxy Statement/Prospectus.

Q. WILL NEW GRACE PAY DIVIDENDS?

A. New Grace is not currently expected to pay dividends.

Q. WILL MY NEW GRACE STOCK BE LISTED ON THE NEW YORK STOCK EXCHANGE?

A. Yes, we anticipate that New Grace common stock will be listed for trading
under the symbol "GRA."

Q. WHAT DO I NEED TO DO NOW?

A. Complete, sign and mail your proxy card in the enclosed return envelope as
soon as possible, so that your shares will be represented at the Grace
stockholder meeting. YOU SHOULD NOT SEND IN YOUR STOCK CERTIFICATES AT THIS
TIME. If you continue to hold your Grace shares at the time of the Spin-off,
you will automatically receive New Grace shares. After the Merger, you will
receive instructions for exchanging your Grace stock for New Sealed Air
common and convertible preferred stock, as well as cash instead of
fractional shares, as described in the Joint Proxy Statement/Prospectus.

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SUMMARY

This summary highlights selected information from this document. It may not
contain all of the information that is important to you. To better understand
the transactions, and for a more complete description of the Spin-off and the
Merger, you should carefully read this entire document, the Joint Proxy
Statement/Prospectus and the other documents we refer to. See "Where
Stockholders Can Find More Information."

If you have questions about Grace or New Grace or your holdings in either
company, please contact:

W. R. Grace & Co.
One Town Center Road
Boca Raton, FL 33486
(800) 354-8917

NEW GRACE (SEE PAGE 23)

New Grace will be the parent company of W. R. Grace & Co.-Conn. (Grace
Specialty Chemicals*), which is primarily engaged in specialty chemicals
businesses on a worldwide basis. Grace Specialty Chemicals primarily operates
through the following three units:

- Grace Davison manufactures catalysts, including fluid cracking catalysts
that "crack" crude oil into transportation fuels and other
petroleum-based products, as well as polyolefin catalysts that are
critical in the manufacture of polyethylene resins for plastic film,
high-performance pipe and household containers. Grace Davison also
manufactures silica and zeolite adsorbents, which are used in a wide
variety of products, such as plastics, toothpastes, paints and insulated
glass, as well as in the refining of edible oils. Grace Davison accounted
for approximately 43% of Grace Specialty Chemicals' 1996 sales and
revenues from continuing operations.

- Grace Construction Products produces construction chemicals, including
performance-enhancing concrete admixtures, cement additives and masonry
products; and specialty building materials, including fireproofing and
waterproofing materials. Grace Construction Products accounted for
approximately 25% of Grace Specialty Chemicals' 1996 sales and revenues
from continuing operations.

- Darex Container Products produces container and closure sealants that
protect food and beverages from bacteria and other contaminants, extend
shelf life and preserve flavor, and coatings used in the manufacture of
cans and closures. Darex Container Products accounted for approximately
16% of Grace Specialty Chemicals' 1996 sales and revenues from continuing
operations.

Grace Specialty Chemicals' strategy has been and, following the Spin-off,
will be to enhance stockholder value by profitably growing its specialty
chemical businesses on a global basis and achieving high levels of financial
performance. To achieve these objectives, Grace Specialty Chemicals plans to (i)
use the funds to be received in the Cash Transfer to repay borrowings and to
invest in its businesses; (ii) invest in research and development activities,
with the goals of introducing new value-added products and services and
enhancing manufacturing processes; (iii) make selected strategic acquisitions;
and (iv) continue to implement process improvements and cost-management
initiatives, including rigorous controls on working capital and capital
spending. These plans are designed to make Grace Specialty Chemicals a
high-performance company focused on the strengths of its global specialty
chemicals businesses.

THE SPIN-OFF AND THE MERGER (SEE PAGE 14)

Grace and Sealed Air have agreed to combine Sealed Air with Grace's
packaging business, which we refer to as the "Packaging Business." In order to
separate the Packaging Business from Grace's other

---------------

* Information concerning Grace Specialty Chemicals in this Information Statement
is given on a pro forma basis, excluding Grace's packaging business (but
including specialty chemicals businesses sold in 1996 and 1997).
5

10-12B 19th Page of 173 TOC 1st Previous Next Bottom Just 19th

businesses (which we refer to as the "Specialty Chemicals Businesses") and to
complete the Spin-off and the Merger, we will take the following steps:

- Grace will separate the Packaging Business and the Specialty Chemicals
Businesses into separate groups of subsidiaries.

- Grace and a Packaging Business subsidiary will then make the Cash
Transfer ($1.2 billion, subject to adjustment) to Grace Specialty
Chemicals, funded by new debt incurred by Grace and a Packaging Business
subsidiary.

- Grace will transfer the stock of Grace Specialty Chemicals to New Grace,
so that Grace Specialty Chemicals becomes a wholly owned subsidiary of
New Grace.

- Grace will distribute the shares of New Grace common stock to Grace's
stockholders, completing the Spin-off.

- Grace (then consisting only of the Packaging Business and the debt used
to finance the Cash Transfer) will be recapitalized, so that each share
of Grace common stock will be exchanged for a fraction of a share of New
Sealed Air common stock and a fraction of a share of New Sealed Air
convertible preferred stock. The actual amount of New Sealed Air common
and convertible preferred stock that you will receive will be calculated
shortly after the Recapitalization, using the formulas described under
"The Distribution and Merger Agreements -- Reorganization of Grace" on
page 65 of the Joint Proxy Statement/Prospectus.

Immediately after the Recapitalization, a wholly owned subsidiary of Grace
will be merged into Sealed Air in the Merger, so that Grace will become the
parent company of both Sealed Air and the Packaging Business. We refer to the
Spin-off, the Cash Transfer, the Recapitalization, the Merger and related
transactions as the "Transactions."

As a result of the Transactions, former stockholders of Grace will own (i)
100% of the Specialty Chemicals Businesses, through their ownership of New Grace
common stock, and (ii) a 63% interest (on an as-converted basis) in the
Packaging Business and the businesses of Sealed Air, through their ownership of
New Sealed Air common and convertible preferred stock.

Immediately after the Transactions, New Grace will change its name to "W.
R. Grace & Co." and Grace will change its name to "Sealed Air Corporation."

TAX CONSEQUENCES OF THE SPIN-OFF

For U.S. federal income tax purposes, the Spin-off is expected to be
tax-free to Grace and its stockholders. For a description of the material U.S.
federal income tax consequences of the Transactions to Grace and its
stockholders, please refer to "The Reorganization and Merger -- Certain United
States Federal Income Tax Consequences" on page 32 of the Joint Proxy
Statement/Prospectus.

CERTAIN RISK FACTORS (SEE PAGE 11)

Stockholders should carefully review the matters discussed under "Certain
Risk Factors."

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CAPITALIZATION

The table below shows the capitalization of Grace at September 30, 1997 and
the pro forma capitalization of New Grace at that date, giving effect to the
Transactions and other related transactions described in the notes to the
unaudited pro forma condensed consolidated balance sheet and statement of
operations. You should read this table along with those notes, our consolidated
financial statements for the year ended December 31, 1996 (the Consolidated
Financial Statements) and our unaudited consolidated financial statements for
the quarter ended September 30, 1997 (the Third Quarter Financial Statements),
included in Annexes F and G, respectively, to this Information Statement.

· Download Table

SEPTEMBER 30, 1997
-----------------------
GRACE NEW GRACE
HISTORICAL PRO FORMA
---------- ---------
(DOLLARS IN MILLIONS,
EXCEPT PAR VALUE)

Debt, including short-term debt............................. $1,104.2 $ --
Shareholders' equity:
Grace common stock:
Common stock, $.01 par value: 300,000,000 shares
authorized; 80,316,000 issued; 74,092,000
outstanding............................................ $ .8 --
New Grace common stock:
Common stock, $.01 par value: 300,000,000 shares
authorized; 74,092,000 outstanding..................... -- $ .7
Paid in capital........................................... 593.1 258.7
Retained earnings......................................... 377.0 --
Cumulative translation adjustments........................ (154.0) (67.0)
Deferred compensation trust............................... (5.2) (5.2)
Treasury stock, at cost................................... (331.7) --
-------- ------
Total shareholders' equity............................. 480.0 187.2
-------- ------
Total capitalization................................... $1,584.2 $187.2
======== ======

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GRACE SUMMARY SELECTED FINANCIAL DATA

The tables below show summary selected financial data of Grace. The
information for the years ended December 31, 1992 through 1996 is based on the
Consolidated Financial Statements, which have been audited by Price Waterhouse
LLP, independent certified public accountants. The information for the
nine-month periods ended September 30, 1997 and 1996 is based on the unaudited
Third Quarter Financial Statements, which, in the opinion of management, include
all adjustments necessary for a fair presentation. Certain amounts in prior
periods have been restated to conform to the current period's basis of
presentation. Operating results for the nine months ended September 30, 1997 are
not necessarily indicative of the results for the year ended December 31, 1997.

It is important that you read this selected consolidated financial
information together with "Management's Discussion and Analysis of Results of
Operations and Financial Condition," the Consolidated Financial Statements and
the Third Quarter Financial Statements included elsewhere in this Information
Statement.

· Enlarge/Download Table

NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------------------- -------------------
1996 1995 1994 1993 1992 1997 1996
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

STATEMENT OF OPERATIONS DATA:
Sales and revenues........... $3,454.1 $3,552.6 $3,128.5 $2,824.7 $2,985.2 $2,460.7 $2,603.2
Income/(loss) from continuing
operations................. 213.8 (179.6) (35.1) 28.1 7.7 222.5 333.0
Earnings/(loss) per share
from continuing
operations................. 2.32 (1.87) (.38) .30 .08 2.92 3.42
Dividends declared per common
share...................... .50 1.175 1.40 1.40 1.40 .415 .375
BALANCE SHEET DATA (AT END OF
PERIOD):
Total assets................. $4,945.8 $6,360.6 $6,230.6 $6,108.6 $5,598.6 $4,200.0 $5,346.8
Long-term debt............... 1,073.0 1,295.5 1,098.8 1,173.5 1,354.5 1,062.7 741.6
Total liabilities............ 4,313.4 5,128.8 4,726.1 4,591.0 4,053.6 3,720.0 4,076.4
Total equity................. 632.4 1,231.8 1,504.5 1,517.6 1,545.0 480.0 1,270.4

W R Grace & Co · 10-12B · On 3/13/98

Filed On 3/13/98 · SEC File 1-13953 · Accession Number 950123-98-2517

Registration of Securities (General Form) · Form 10Filing Table of Contents

10-12B · Grace Specialty Chemicals, Inc.Document Table of Contents

Registration of Securities (General Form) · Form 10
Filing Table of Contents

10-12B · Grace Specialty Chemicals, Inc.
Document Table of Contents