EMPLOYMENT AGREEMENT



     AGREEMENT, dated as of the 1st day of January, 2001 (this "Agreement"), by

and between W.R. Grace & Co.-Conn., a Connecticut corporation (the "Company"),

and Paul J. Norris (the "Executive").



     WHEREAS, Executive has served as the President and Chief Executive Officer

of the Company since November 1, 1998 and as Chairman since January 1999.



     WHEREAS, the Board of Directors of the Company (the "Board") has

determined that, in light of increased risks and financial uncertainties facing

the Company and the industry as a whole, it is in the best interests of the

Company and its shareholders to continue to employ Executive, in the capacity

and on the terms and conditions hereinafter set forth.



     WHEREAS, Executive is willing to accept continued employment with the

Company in light of such increased risks and financial uncertainties, on the

terms and conditions hereinafter set forth.



     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:



     This Agreement specifies the terms and conditions of Executive's continued

employment with the Company as Chairman, President and Chief Executive Officer,

which have been approved by the Board and/or the Compensation Committee of the

Board (the "Compensation Committee"), as applicable.



1. POSITION AND DUTIES



     At all times throughout the Employment Term (as defined below), Executive

shall serve as the Company's Chairman, President and Chief Executive Officer.

Executive's principal obligations, duties and responsibilities shall be those

that are generally inherent in those offices and titles. In this regard, all

employees of the Company (and its subsidiaries) shall continue to report

directly or indirectly to Executive. Executive's office shall continue to be

located at the Company's headquarters in Columbia, Maryland.



2. TERM OF AGREEMENT



     a) The initial term of Executive's employment under this Agreement shall

be from the date hereof through December 31, 2002, unless Executive's

employment is sooner terminated for any reason (the "Initial Term").



     b) Unless Executive or the Company provides written notice to the contrary

at least 180 days prior to the expiration of the Initial Term, or any renewal

term, Executive's employment shall be extended for an additional one-year

renewal term following the expiration of the Initial Term or such renewal term.

The Initial Term, together with any and all renewal terms, are collectively

referred to herein as the "Employment Term." The Employment Term (including any

renewal term) shall terminate upon Executive's termination of employment for

any reason. During any renewal term, Executive's annual base salary and target

percentages under the







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Company's annual incentive compensation program (the "Annual Incentive

Compensation Program") and the Company's long-term incentive compensation

program shall be no less favorable to Executive, in the aggregate, than those

applicable to Executive as of the date hereof, and Executive shall continue to

participate in all benefit plans and programs for which he is eligible

(according to the terms of such plans and programs) on terms no less favorable

than those applicable to the most senior executives of the Company from time to

time. Not later than 120 days prior to the commencement of any renewal term, the

Company shall communicate to Executive any change in the annual base salary and

the target percentages under the Annual Incentive Compensation Program and the

Company's long-term incentive compensation program that shall apply to Executive

during such renewal term, consistent with the requirements of this Section 2(b).



3. COMPENSATION



     In consideration for, among other things, Executive's continued services

to the Company, Executive's opportunities lost as a result of his continued

employment with the Company, and any risks associated with Executive's

continued employment with the Company, the following compensation provisions

shall apply, except as otherwise indicated, throughout the Employment Term:



     a) Executive's annual base salary shall be not less than $875,000.00,

subject to withholding of all taxes and similar charges required by applicable

law to be withheld and subject to annual review by the Board or the

Compensation Committee for possible increase. Executive's salary shall cease to

accrue immediately upon his termination of employment with the Company for any

reason.



     b) Subject to Section 2(b), Executive shall continue to participate in the

Company's Annual Incentive Compensation Program, on terms no less favorable

than those applicable to the Company's other most senior executives. The awards

under this Program are in cash, are contingent upon individual performance, are

paid on a calendar year basis and shall be determined by the financial results

of the Company as a whole. In addition, all annual incentive compensation

awards are subject to approval by the Compensation Committee or the Board.

Executive shall be eligible for a targeted award under the program of 75% (or

higher, if deemed appropriate by the Compensation Committee) of Executive's

annual base salary. For the calendar year in which Executive's employment

terminates for any reason (other than Cause), Executive or his beneficiary

shall receive an award under the Annual Incentive Compensation Program at the

time that Executive would have received such award had his employment with the

Company not terminated, in an amount equal to the product of (i) the award to

which Executive would be entitled by operation of the Annual Incentive

Compensation Program for performance in the year of Executive's employment

termination, as if his employment had not terminated, and (ii) a fraction, the

numerator of which is the number of days in the current fiscal year through

Executive's employment termination date, and the denominator of which is 365.

Except as set forth in the preceding sentence, immediately upon Executive's

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