Retirement Plan for Salaried Employees

Retirement Plan for Salaried EmployeesSummary Plan Description Effective January 1, 2012

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Retirement Plan for Salaried Employees Summary Plan Description 2012 i

ContentsParticipation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Who’s Eligible? ....................................................................1When Participation Starts .....................................................1How to Get an Estimate or Make Elections ..........................1Hour of Service .....................................................................1Cost .......................................................................................1The Grace Employee Service Center ....................................1

How the Plan Works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Credited Service ....................................................................2Final Average Pay .................................................................2Primary Social Security Benefit ............................................2An Example ..........................................................................2Pension Benefit Statements ...................................................3Minimum Benefits ................................................................3Maximum Benefits ................................................................3Maximum Compensation ......................................................3If You Made Contributions ...................................................3

Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3Normal Retirement ................................................................3Early Retirement ...................................................................3If You Work Past Normal Retirement ..................................4If You Receive Payments Before Age 62 .............................4

Payment of Retirement Benefits . . . . . . . . . . . . . . . . . . . .4When Retirement Payments Are Made .................................4Normal Payment Methods at Retirement ..............................4Optional Payment Methods at Retirement ............................4Payment of Small Retirement Benefits .................................5

Payment of Pre-Retirement Benefits . . . . . . . . . . . . . . . . .6What You May Elect ............................................................6How an Immediate Lump Sum Is Determined .....................6How an Immediate Annuity Is Determined ..........................6The Early Retirement Subsidy ..............................................6Making Your Pre-Retirement Benefits Election ...................7Deciding Which Option Is Best for You ...............................7Lump Sum or Monthly Annuity Example ............................8

What Else You Should Know About Plan Payments . . .8Tax Considerations ...............................................................8Electing an Option ................................................................9When to Apply ......................................................................9Divorced or Separated Participants .......................................9

If You Are Disabled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Survivor Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9Coverage Before Retirement Payments Start .......................9Coverage After Retirement Payments Start ........................10

Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10What Vesting Means ...........................................................10If Your Employment Ends ..................................................10

If You Are Rehired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11Participation ........................................................................11Restoring Prior Service .......................................................11If Payments Have Started ....................................................11

How Military Service May Affect You . . . . . . . . . . . . . .11Differential Military Pay .....................................................11If You Die or Become Disabled During Military Service ..12Survivor Benefits ................................................................12

When Benefits Are Not Paid . . . . . . . . . . . . . . . . . . . . . .12

Claims for Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12What to Do ..........................................................................12If a Claim Is Denied ............................................................12

Employing Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Merged Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13Plan Sponsor .......................................................................13Plan Administrator ..............................................................13Trustee .................................................................................13Plan Year .............................................................................13Plan Identification ...............................................................14If You Can’t Receive Payments ..........................................14Legal Service ......................................................................14Plan Documents ..................................................................14Rights to Benefits ................................................................14The Plan’s Future ................................................................14Benefit Insurance ................................................................14

Your Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15Receive Information About Your Plan and Benefits ..........15Prudent Actions by Plan Fiduciaries ...................................15Enforce Your Rights ...........................................................15Assistance With Your Questions ........................................16

A Few Words About the Plan . . . . . . . . . . . . . . . . . . . . .16

Retirement Plan for Salaried Employees Summary Plan Description 2012 1

Participation

Who’s Eligible?As a salaried employee (or hourly employee, if specifi-cally designated by the company), you’re eligible for the retirement plan if you work for an employing unit authorized to participate in the plan (page 12).You’re not eligible, however, if you actively partici-pate in another company-sponsored retirement plan or if you’re subject to a collective bargaining agreement that doesn’t provide coverage in the plan.

When Participation StartsParticipation starts on the first of the month on or after the date you complete a year of service and reach age 21.You’ll complete a year of service if you have at least 1,000 hours of service during the 12-month period after you’re hired. But, if you have fewer than 1,000 hours during this 12-month period, you’ll complete a year of service when you have at least 1,000 hours in a calendar year, starting with the first, full calendar year after you’re hired.For example, suppose you were hired on May 3, 2012. If you have at least 1,000 hours of service from May 3,2012 to May 2, 2013, you would complete a year of service and, if you’re age 21 or older, your participa-tion would start on June 1, 2012. But if you have fewer than 1,000 hours during this 12-month period, you’ll complete a year of service when you have at least 1,000 hours during a calendar year, starting with 2012 in this example. Then, if you have at least 1,000 hours in 2012 and are age 21 or older, your participation would start on January 1, 2013.Although participation starts automatically when you meet the requirements, you’ll be asked to provide any information needed to run the plan. If you prefer, how-ever, you may elect to waive participation at any time. If you do, you should know that:• you won’t earn any benefits for the time you waive partici-

pation, and

• you may apply to become a participant on a later date, as of the first of any month, if you’re still eligible.

Contact the Grace Employee Service Center at 1-800-974-2363 for more information about participation.

How to Get an Estimate or Make ElectionsCall the Grace Employee Service Center at 1-800-974-2363, between 9:00 a.m. and 6:00 p.m. Eastern time, Monday to Friday, to request an estimate of your ben-efit under this plan, to make elections under the plan, or to request the forms to start benefit payments.

Hour of ServiceAn hour of service is the basic unit for measuring service under the plan, and includes each hour you’re paid (or are entitled to be paid) by the company for:• your work• vacation, holidays, illness, incapacity (including disabil-

ity), layoff, jury duty, military duty, and approved leaves of absence, up to 501 hours for any period in which you aren’t working

• back pay that’s awarded or agreed to by the company.

Exempt salaried employees (employees who aren’t eli-gible for overtime) receive 45 hours of service for each week in which they have at least one hour of service.For purposes of determining when you may start par-ticipation in the plan and your vesting service (page 10), you may be credited with hours of service for employment while you were ineligible for the plan or for employment with a Grace unit that isn’t covered by the plan. Contact the Grace Employee Service Center at 1-800-974-2363 for more information.

CostThe company pays the full cost of the plan. Company contributions to support the plan are based on the ad-vice of independent actuaries, and are deposited in a trust fund that’s set up for the sole benefit of partici-pants and their beneficiaries.Before January 1, 1975, however, contributions by participants were required; see page 3 for informa-tion on these contributions. Contributions by partici-pants under certain merged plans (page 13) may have ended at a different date; contact the Grace Em-ployee Service Center at 1-800-974-2363 for details.

The Grace Employee Service CenterGeneral administrative services under the retirement plan are provided by the Grace Employee Service Cen-ter. Representatives of the Service Center are available on business days from 9:00 a.m. to 6:00 p.m. Eastern time. You may contact the Service Center at 1-800-974-2363.Important! The Grace Employee Service Center only provides certain administrative services under the plan. The company handles all questions about retirement plan claims and benefits.

2 Retirement Plan for Salaried Employees Summary Plan Description 2012

How the Plan WorksBenefits reflect your credited service, final average pay, and estimated primary Social Security benefit.

Credited ServiceYou earn a month of credited service for each month in which you’re a participant and have at least one hour of service. In addition, service you earned under a prior plan may count as credited service under this plan; contact the Grace Employee Service Center at 1-800-974-2363 for details. If you temporarily trans-fer to a unit of the company that isn’t covered by the plan, you’ll earn credited service during the transfer if you’re not covered by another retirement plan.Credited service, however, doesn’t include:• a permanent transfer to a unit not covered by this plan or

to an ineligible employment status,

• any period in which you didn’t make contributions re-quired under this plan or a prior plan, and

• service while you’re ineligible for the plan.

In addition, your credited service includes the year of service required to become a participant (page 1), but only if your employment with the company ends on or after September 1, 1997. Your first year of ser-vice won’t count as credited service under this plan, however, if you become a participant in this plan im-mediately upon becoming a salaried employee of the company (for example, if your employment status changes from hourly to salaried).

Final Average PayYour final average pay equals the monthly average of your pay for the 60 consecutive months in which your pay is the greatest during the 180-month period before your employment ends.If there isn’t a 60-consecutive-month period that may be used to determine your final average pay, your final average pay will equal the monthly average of your pay during your total period of employment.Your pay includes all earnings you receive from the company before any deductions are made, but ex-cludes:• special pay,

• benefits of stock options,

• the company’s cost of your coverage or participation in any employee benefit plan, including this plan,

• severance pay (and pay instead of notice of termination),

• pay for any unused vacation to which you’re entitled for the calendar year in which your employment ends.

Primary Social Security BenefitBenefits under the retirement plan take into account an estimate of the benefits you’ll receive from Social Security, which is another important source of retire-ment income. This benefit is the unreduced annual benefit to which you’re entitled at retirement based on your actual career earnings and the terms of the Social Security Act at the time your employment ends, but excludes any Social Security benefits that may be pay-able to members of your family. That is, the plan uses an estimate of your primary Social Security benefit to figure your benefit from this plan.

The Retirement FormulaYour monthly benefit under the retirement plan equals:

1 .5% times your final average pay times your credited serviceminus1 .25% times your estimated primary Social Security benefit times your credited service

Important! Benefits produced under the formula as-sume that payments will be made under the life an-nuity payment method starting at age 62 or later. If payments are made under a method other than a life annuity or if payments start before age 62, the benefit calculated under the formula will be reduced. In addi-tion, special rules apply to the calculation of benefits if you’re under age 55 when your employment ends (see page 6).

An ExampleAn employee retires at age 65 and has 30 years of credited service, final average pay of $2,400 per month, and an estimated primary Social Security bene-fit of $850 per month. The employee’s monthly benefit under the retirement plan would equal:1.5% (.015) x $2,400 x 30 years = $1,080.001.25% (.0125) x $850 x 30 years – 318.75monthly retirement plan benefit = $761.25

($9,135 per year)

When the employee’s benefits from the plan and Social Security are combined, the employee’s total monthly retirement income equals $1,611.25 ($761.25 + $850), or $19,335 per year.


Pension Benefit StatementsThe company may choose to provide statements to plan participants periodically. As a participant, how-ever, you have the right to request a statement of ben-efits you have earned under the plan. You may do so by contacting the Grace Employee Service Center at 1-800-974-2363.

Minimum BenefitsIf you were a participant in the prior Grace Salaried Plan or Davison Salaried Plan, or in a merged plan (page 13), your benefit under this plan may be subject to certain minimum-benefit rules. Contact the Grace Employee Service Center at 1-800-974-2363 for more information.

Maximum BenefitsFederal law limits the maximum benefit anyone may receive in any year from a plan such as the retirement plan. Only certain highly-paid employees are affected by these limits. If affected, your benefit from the plan may be reduced. In this event, you’ll be given an ex-planation of why and how the reduction is made.

Maximum CompensationFederal law places limits on the earnings you receive from the company in any year that may be used to determine benefits you earn under any of the com-pany’s qualified benefit plans during that year. For example, in 2012 only the first $250,000 of earnings an employee receives from the company may be used to determine benefits during 2012. The company will notify you and explain any action that’s taken if you’re affected by this law.

If You Made ContributionsParticipants were required to contribute to the retire-ment plan until January 1, 1975. (Contributions by par-ticipants under certain merged plans may have ended on a different date.) Your contributions, if any, have re-mained in the plan’s trust fund and have earned interest (contact the Grace Employee Service Center at 1-800-974-2363 for details on interest earned under the plan).Your contributions will remain in the plan’s trust fund until your employment ends. Any time after your employment ends and before your plan payments are scheduled to start, you may elect to withdraw your contributions and interest. In this event, your plan pay-ments will be reduced to reflect the portion of your benefit that your contributions would have provided if they hadn’t been withdrawn. You may obtain details about the reduction by contacting the Grace Employee Service Center at 1-800-974-2363.

If you prefer, however, you may leave your contribu-tions in the plan and receive plan payments that in-clude the benefit that your contributions provide.If no other survivor benefits are payable upon your death, your beneficiary will receive any unpaid portion of your contributions and interest. Keep in mind that your spouse automatically is your beneficiary, unless your spouse had consented in writing, in the presence of a plan administrator or notary public, to pay this amount to a different beneficiary.Important! As of July 31, 1984, participants had the option of electing a transfer to the savings and invest-ment plan—or a refund of certain smaller amounts—of their retirement plan contributions and interest. If you elected a transfer or refund as of this date, your benefit was reduced to reflect the benefit your contributions provided. You received a statement reporting the actual reduction in your case. Contact the Grace Em-ployee Service Center at 1-800-974-2363 if you have any questions.

RetirementWhen is the best time to retire under the plan? It’s a de-cision only you may make. But you have flexibility—the plan has two types of retirement: normal and early.

Normal RetirementNormal retirement occurs at the end of the month in which your employment ends on or after the date you reach age 65.

Early RetirementIf you want to stop working at a younger age, you may retire at the end of any month on or after your 55th birthday. You must apply for early retirement—it isn’t automatic. Contact the Grace Employee Service Cen-ter at 1-800-974-2363 for details.You have an important decision to make if you retire early: whether to start payments right away or to delay them to a later date. If payments start before age 62, your benefit will be reduced to reflect the likelihood that you’ll receive more payments. In this event, the re-duction will be based on your age when payments start.

For Each Month from Age The Reduction Equals57 to 62 1/6 percent (2 percent per year)56 to 57 1/4 percent (3 percent per year)55 to 56 1/3 percent (4 percent per year)


For example, suppose your monthly benefit under the plan equals $761.25 (see page 2 for an example of how this benefit is figured) under the life annuity method of payment. The following example shows the reduction to your benefit if early retirement payments were to start at different ages.

Age WhenPayments Start Total Reduction Monthly Benefit

62 or later n/a $761.2561 2 percent $746.0360 4 percent $730.8059 6 percent $715.5858 8 percent $700.3557 10 percent $685.1356 13 percent $662.2955 17 percent $631.84

If you elect early retirement and delay the start of pay-ments until age 62 or later, no early retirement reduc-tion will be made to your benefit because of your age. Your normal retirement date at age 65 is the latest you may delay the start of early retirement payments. But, if you elect to delay the start of early retirement payments, you may change your mind at any time and elect to have payments start at an earlier date.

If You Work Past Normal RetirementPayment of your benefit may not begin while you’re actively employed by the company. If your employ-ment with the company continues after your normal retirement date, payment of your benefit must start no later than April 1 after the year in which you either re-tire or reach age 701⁄2, whichever is later.

If You Receive Payments Before Age 62If you choose to start payment of your benefit before age 62, the plan may reduce the amount you receive to account for the longer period of time that a life annuity would be paid. Even if you don’t elect an annuity pay-ment method, your benefit may be lower because all forms of payment are based on a life annuity payable at age 62 or later. See “Early Retirement” on this page for more information on how payments are reduced if they begin before age 62. In addition, when your benefit is paid, it will be subject to income taxes. Choosing to start your benefit now will result in immediate taxation, but delaying the start of your benefit will also delay taxation.

Payment of Retirement Benefits

When Retirement Payments Are MadeIf you’re under age 55 and you don’t elect an im-mediate lump sum or annuity when your employment with the company ends (page 6), your next oppor-tunity to receive your retirement benefit will be when you reach age 55.If you’re age 55 or older and you don’t elect to re-ceive your benefit when your employment with the company ends, you may elect to receive your retire-ment benefit as of the first of any month on or after the date your employment with the company ends.Remember, if your employment with the company ends you may not delay the start of retirement pay-ments past the April 1 after the year in which you ei-ther retire or reach age 701⁄2, whichever is later.

Normal Payment Methods at RetirementIf you’re single when your retirement payments are scheduled to start, your normal payment method is a life annuity . This method provides you with lifetime monthly payments, but no payments continue to any-one upon your death. Payments are greatest under this method because only one lifetime is covered—yours.If you’re married when your retirement payments are scheduled to start, your normal payment method is a 50 percent joint and survivor annuity . This method provides you with reduced monthly payments for life. Upon your death, your spouse will receive one-half of your monthly payments for life. Payments are reduced under this method to cover two lifetimes—yours and your spouse’s.You’ll receive a written notice about this and optional methods when you retire. The notice includes specific information on how these methods compare in your case. The notice will also explain your ability to delay payment of your benefit and the effect on your benefit if you choose not to delay payment.

Optional Payment Methods at RetirementThe plan’s retirement payment options include:• Joint and Survivor Annuity . This option provides you

with reduced monthly payments for life and, upon your death, lifetime monthly payments for your spouse. Your spouse will receive either 100, 75, 662⁄3, or 50 percent of your monthly payments, as you elect. Payments under this option are reduced to cover two lifetimes—yours and your spouse’s.


• Life Annuity . This option is the same as the normal method for single participants and is available as an option to participants who are married when their payments are scheduled to start. But remember, under this option pay-ments stop upon your death.

• Ten-Year Certain and Life Annuity . This option pro-vides you with reduced monthly payments for life, with payments guaranteed for at least 10 years. If you die before all guaranteed payments are made, your spouse or beneficiary will receive the remaining guaranteed pay-ments; payments to your spouse or beneficiary will stop after the last guaranteed payment is made. But, if you die after all guaranteed payments are made, no payments continue upon your death. Payments under this option are reduced to provide the guarantee they will be made for at least 10 years.

If your spouse or beneficiary dies before all guaranteed payments are made, the value of the remaining guaranteed payments will be paid to your spouse’s or beneficiary’s estate in a lump sum. But, if your spouse or beneficiary doesn’t survive you, the value of any guaranteed payments remaining at your death will be paid to your estate in a lump sum.

• Level Income . As a result of government regulations, the level income option will not be available during Grace’s Chapter 11 case or thereafter pending satisfaction of cer-tain funding requirements. When these funding require-ments are satisfied, the level income option will again be available under the plan.

For your information, the level income option is for employees who retire before age 62 and receive plan benefits before Social Security payments begin. You’ll receive greater monthly payments from the plan before age 62 and reduced payments from the plan after age 62. (In some cases, this reduction could result in payments ending at that time.) This option helps provide about the same monthly retirement income before and after Social Security payments begin. Payments stop when you die and don’t continue to anyone else.

• A special rule applies if you elect the level income option and the total value of your remaining benefit when you reach age 62 is $5,000 or less. In this event, you may elect to receive the full value of your remaining benefit in a single, lump-sum payment. If you elect the lump sum, no further benefits would be payable to you. In addition, if you’re mar-ried, your spouse must consent in writing in the presence of a plan administrator or notary public to elect a lump sum.

Contact the Grace Employee Service Center at 1-800-974-2363 for more information about the level income option, including the availability of this option.

• Lump Sum . This option pays your benefit to you in a single, lump sum cash payment. The value of your lump sum is based on your unreduced accrued benefit as of your normal retirement date (age 65). The amount of the lump sum equals the present value of your accrued benefit cal-culated based on your age and the interest/discount rates and annuity tables specified in the retirement plan. By “present value,” we mean the lump sum amount needed as of the date your benefit is calculated to provide your ac-crued benefit at your normal retirement date. (See page 6 for more information on how the lump sum is calculated.)

Important! As required under the Pension Protection Act of 2006, beginning on January 1, 2008 and while Grace is in Chapter 11, lump sum payments from this plan won’t be permitted unless the plan is 100 percent funded. This provision will affect those retiring (or otherwise re-questing benefit payments) after December 1, 2007. Once Grace emerges from Chapter 11, lump-sum payments under this plan may be permitted if the funded status of the plan exceeds 80 percent.

Payment of Small Retirement BenefitsIf the total value of your benefit doesn’t exceed $1,000, your full benefit will be paid to you or your beneficiary in a single sum; your spouse’s consent to receive a single sum, however, may be required in cer-tain cases. If the total value of your benefit exceeds $1,000 but doesn’t exceed $5,000, your benefit will remain in the plan’s trust fund until you either elect to receive pay-ment of your benefit or elect to roll over your benefit to an individual retirement plan. While your benefit remains in the plan’s trust fund, it won’t earn interest and won’t appreciate or depreciate in value. The Grace Employee Service Center will notify you or your beneficiary in writing of the amount of the benefit you have earned and your payment options. Contact the Grace Employee Service Center by phone at 1-800-974-2363 if you have any questions about payment of benefits.Important! Generally, benefits under this plan aren’t subject to the mandatory 20 percent withholding rules under Federal law. But if you or your beneficiary re-ceives a lump-sum payment under this plan, the tax-able portion of that lump sum may be subject to the mandatory 20 percent withholding. If this payment is considered to be an “eligible rollover distribution,” however, you, your beneficiary, or alternate payee will have choices concerning payment of the lump sum. You’ll receive details on your choices at the time pay-ment of the lump sum is scheduled to be made.


Payment of Pre-Retirement BenefitsInstead of the normal and early retirement benefits described in the preceding pages, you have the option of electing to receive certain pre-retirement benefits as described in this section.

What You May ElectIf your employment with the company ends on or after January 1, 1998, and you’re vested in the benefit you’ve earned under the plan (page 10), you have the following payment options regardless of your age when your employment ends:• you may elect to receive an immediate lump sum payment

(subject to the rules described on page 5),• you may elect to receive an immediate monthly annuity, or• you may elect to delay receiving payment of benefits until

age 55 or later.

If you’re age 55 or older when your employment with the company ends, payment of any monthly benefit you elect will be made as described under “Payment of Retirement Benefits” (page 4).Important! If you don’t elect to receive immediate pay-ment of a lump sum or annuity when your employment ends, your next opportunity to start payment of your benefit will be when you reach age 55, which is the age you become eligible for early retirement benefits.The following information describes how an immedi-ate lump sum and a pre-retirement annuity are deter-mined, as well as the decisions you’ll need to make.

How an Immediate Lump Sum Is DeterminedThe value of your immediate lump sum is based on the unreduced benefit you earn (your “accrued” benefit) as of your normal retirement date (age 65, in most cases). The amount of the immediate lump sum will be the present value of your accrued benefit calculated based on your age and using the interest/discount rates and annuity tables specified in the retirement plan.By “present value,” we mean the amount of the lump sum needed today to provide your accrued benefit at normal retirement.

How an Immediate Annuity Is DeterminedIf you elect to receive an immediate monthly annu-ity starting when your employment with the company ends before age 55, you’ll receive:• a life annuity, if you’re unmarried at that time, or• a 50 percent joint and survivor annuity, if you’re

married at that time.

The amount of the monthly annuity will reflect your age and your spouse’s age (if payments are made under a 50 percent joint and survivor annuity) when your employment with the company ends.

The Early Retirement SubsidyThe retirement plan provides for generous “subsi-dized” early retirement benefits when payment of a monthly annuity starts at age 55 or later. As described on page 3, an eligible participant may retire at age 55 and start receiving payments that are subject to a 17 percent early retirement reduction. This means that the participant would receive 83 percent of the accrued benefit that’s payable at age 65.Your plan benefit is fully subsidized at age 62, which means that the amount of your monthly payments starting at age 62 will be the same amount as the payments would be starting at age 65, assuming, of course, you stop earning benefits at or before age 62.The plan provides, however, that the value of the subsidy feature won’t be included in the calcula-tion of a lump sum option at any age or an annuity starting before age 55 (see the example below).To show how the “subsidy” feature works, the follow-ing example assumes that:• You’re age 35 when your employment with the company

and active plan participation ends.• At that time, your accrued benefit under the retirement

plan equals $1,000 per month payable at age 65 as a life annuity.

As shown in this example, you could elect to:• receive an immediate annuity payment of $78 per month

for your lifetime,• receive an immediate lump sum payment of $16,000, or• delay the start of benefit payments until you become eli-

gible for retirement — age 55 or later.

In this example, if you choose to delay payment until age 55, you could choose to receive payment of a life annuity of $830 per month (which includes the subsidy) or payment of a single lump sum of $61,000 (which doesn’t include the subsidy).

Age When Benefit Payments

BeginMonthly Life

Annuity PaymentLump Sum Payment

35 $78 $16,000* * *55 $830 $61,00060 $960 $86,00061 $980 $92,00062 $1,000 $99,00063 $1,000 $106,00064 $1,000 $114,00065 $1,000 $122,000

*If you elect to delay payment, you would have to wait until age 55 before you could elect to receive payment of your benefit. There-fore, this example doesn’t show benefits between ages 35 and 55.


Making Your Pre-Retirement Benefits ElectionWhen your employment with the company ends, you’ll receive more detailed information on the payment options available to you under the retirement plan, including calculations of your benefit under the plan’s payment options as of the date your participation ends and as of your retirement date (if you’re under age 55).We urge you to consider all the payment options avail-able to you and to consult your tax and other advisors before making an election. No Grace employee or other person related to Grace is authorized or qualified to offer you specific advice regarding whether or not the lump sum or any other payment option is right for you.

Deciding Which Option Is Best for YouOnly you (with the help of your family and advisors) can decide which payment option is best for you.When you leave the company, you’ll receive more de-tailed information on the payment options available to you under the retirement plan, including calculations of your benefit under the plan’s payment options as of the date your participation ends and as of your retire-ment date.We urge you to consider all the payment options avail-able to you, and to consult your tax and other advisors before making an election.No Grace employee or other person related to Grace is authorized or qualified to offer you specific advice regarding whether the lump sum or any other payment option is right for you.One factor to consider is that the plan provides gener-ous “subsidized” early retirement benefits for monthly annuities starting at age 55 or later. (Please note that your plan benefit is fully subsidized at age 62, which means that the amount of your monthly payments starting at age 62 will be the same as they would be at age 65, assuming you stop earning benefits at or before age 62.) But if a lump sum is elected, or an annuity starting before age 55 is elected, the plan provides that the value of the “subsidy” won’t be included in the calculation of the lump sum or annuity .

You should also consider the following factors and ex-ample before making a decision.

Advantages and Disadvantages of Receiving

a Lump Sum

Advantages and Disadvantages of Receiving

a Monthly AnnuityAdvantages of receiving a lump sum include:

Advantages of receiving a monthly annuity include:

• immediate distribution of the present value of your total re-tirement plan benefit

• ability to invest the present value of your benefit with the potential for the value to grow larger than what would have been payable from the plan if you receive a monthly annuity

• if you elect to roll over the distribution, you may continue to defer taxes and avoid tax penalties

• you receive consistent, monthly retirement payments for life

• you receive the “early retire-ment subsidy” if your retire-ment benefits start before age 65 (see page 3)

• you may elect to provide pay-ments to your spouse upon your death

• your monthly annuity is in-sured up to certain limits by the PBGC

Disadvantages of receiving a lump sum include:

Disadvantages of receiving a monthly annuity include:

• you don’t receive the “early retirement subsidy” when the lump sum is calculated

• you assume all risk associated with the investment of your benefit

• if you don’t roll over the distri-bution, the payment is subject to federal taxes and may be subject to an additional 10 per-cent federal excise tax

• no monthly retirement benefit will be paid to you at retirement or to your spouse at your death

• Grace and the plan will have no further pension obligation to you regarding plan benefits

• the Pension Benefit Guaranty Corporation (PBGC), a fed-eral agency, won’t protect the amount of the lump sum from potential losses after the lump sum has been paid to you

• if retirees receive an increase in benefits (or a “cost of liv-ing increase”) after the lump sum has been paid, you won’t receive any payment related to that increase

• each monthly payment is con-sidered taxable income in the year received

• no ability to roll over the pay-ment to an IRA and defer taxes


Lump Sum or Monthly Annuity ExampleThe table below is provided to help you decide be-tween a lump sum and a monthly annuity, payable either immediately or at retirement. It assumes that, when your employment ends, your accrued benefit under the retirement plan equals $1,000 per month payable at age 62 as a life annuity, and that if you elect to start payments at age 55 you’d receive $830 per month for your lifetime.For example, if you’re age 35 when you stop working for the company and participating in the retirement plan (Column 1), you’d be eligible to receive an imme-diate lump sum payment of about $16,000 (Column 2).If you elect to receive that immediate lump sum and invest the funds yourself, you would need to earn a rate of return of about 8.0% each year until you are age 62 to equal the value of a $1,000 monthly annuity starting at age 62 (Column 3), and you’d need to earn a rate of return of about 10.7% each year until age 55 to equal the value of a $830 monthly annuity starting at age 55 (Column 4).

(1) (2) (3) (4)Approximate Annual Rate of Return on a Lump Sum

Payment Needed to Provide . . .

Age atTermination

Lump Sum Payment at Current Age

$1,000 Per Month atAge 62

$830 Per Month atAge 55

25 $8,000 7.5% 9.5%30 $12,000 7.8% 10.0%35 $16,000 8.0% 10.7%40 $23,000 8.5% 12.2%45 $31,000 9.0% 15.2%50 $43,000 10.0% 24.2%55 $61,000 12.0% n/a60 $86,000 25.0% n/a62 $99,000* * n/a65 $122,000** ** n/a67 $116,000*** *** n/a

*Using the same basis used to calculate the lump sum (see page 6), it would take approximately $131,000 (not $99,000) to provide $1,000 per month for life beginning at age 62.**Using the same basis used to calculate the lump sum (see page 6), $122,000 is the equivalent of $1,000 per month for life starting at age 65.***Using the same basis used to calculate the lump sum (see page 6), $116,000 is the equivalent of $1,000 per month for life starting at age 67.

What Else You Should Know About Plan Payments

Tax ConsiderationsRetirement plan payments are generally taxable. How much tax you must pay depends on the amount and form of your retirement payment, your age, and vari-ous other factors, including your total taxable income. It’s important to consider the tax implications of each payment option before deciding to receive retirement plan benefits.If you elect to receive your retirement plan benefit as a monthly annuity, the amount of each payment is considered taxable income whether you elect to start monthly payments immediately or at retirement. When you start payments, you’ll need to tell the plan admin-istrator how much to withhold from each monthly pay-ment for tax purposes.If you elect to receive your retirement plan benefit as a lump sum payable to you, the amount of the lump sum will be considered taxable income to you. The retire-ment plan is required to withhold 20 percent of the lump sum amount as payment to the IRS for federal income tax. Your total tax liability for that year, however, may exceed the amount withheld depending on your personal tax situation. In addition, if you receive a lump sum pay-ment before age 59½, the lump sum may be subject to an additional 10 percent federal excise tax. This 10 percent excise tax won’t apply if your employment with the company ends during or after the year in which you have reached age 55, if the lump sum is paid under the terms of a qualified domestic relations order, or in certain other cases. Contact a tax advisor for more information.In addition, state and local taxes may apply to retire-ment plan payments you receive.If you elect to receive your retirement plan benefit as a lump sum payable as a rollover to an IRA or to another employer’s plan, the amount of the lump sum won’t be considered taxable income to you in the year the payment is made. This form of payment allows you to defer taxes and avoid the 10 percent federal excise tax penalty described above.Based on current IRS regulations, you aren’t allowed to directly roll over a lump sum payment to the new “Roth” IRA and defer taxes to a later date. But if you elect to receive a lump sum, the retirement plan will withhold the mandatory 20 percent for federal taxes and you may then deposit the remainder into a “Roth” IRA. You should note, however, that you’ll be respon-sible for paying taxes on the full payment and you may be subject to the 10 percent federal excise tax penalty described above.


A rollover of your lump sum payment to an IRA or to another qualified plan places responsibility for the investment of the benefit on you. Keep in mind that IRAs and similar investments have varying degrees of investment risk. You should consult a financial advisor before making an election regarding any payment you may receive.

Electing an OptionIf you’re single when retirement payments are sched-uled to start, you may elect any option except a joint and survivor annuity.If you’re married when retirement payments are scheduled to start, the only option you may elect is a joint and survivor annuity, with your spouse as benefi-ciary, unless your spouse consents in writing to elect a different option in the presence of a plan administrator or notary public. If payments are to be made under a joint and survivor annuity, you must provide proof of your age and your spouse’s age.The election of an option takes effect as of the date your benefit payments are scheduled to start. You may elect or change an option any time within 180 days after you receive notification from the plan adminis-trator of the payment methods available to you under the plan or before the date your benefit payments are scheduled to start, whichever is later. Generally, you should apply at least 30 days in advance. You may choose to waive this 30-day requirement, however, and elect to start payments on the first of the month after the date you first call to start your benefit. For ex-ample, if you first made your call to start payments on April 25, 2012, you could have elected a May 1, 2012 start date if you signed a waiver of the 30-day require-ment. Contact the Grace Employee Service Center at 1-800-974-2363 for details.Generally, you may not change a beneficiary or pay-ment method after the date payments are scheduled to start. Under a 10-year certain and life annuity, how-ever, you may name a new beneficiary at any time if you’re single (if married, your spouse automatically is your beneficiary).Contact the Grace Employee Service Center at 1-800-974-2363 if you have any questions on electing an option.

When to ApplyBecause it may take up to 180 days after all necessary documents have been received before benefit payments will start, you should apply for benefits well in ad-vance of the date you want payments to start. Contact the Grace Employee Service Center at 1-800-974-2363 for details.

Divorced or Separated ParticipantsIf you’re divorced or legally separated, your benefit at the time of the divorce or legal separation may be subject to the terms of any qualified domestic relations order. Contact the Grace Employee Service Center at 1-800-974-2363 for details on how a qualified domes-tic relations order (“QDRO”) may affect your retire-ment benefit or if you would like more information about the procedures governing QDRO determinations (those details will be provided without charge).

If You Are DisabledYou’ll qualify as disabled under the retirement plan if you receive Social Security disability benefits. In this event, you’ll continue to earn credited service under the retirement plan until the earliest of:• the date Social Security disability payments end, unless

these payments end solely because they are referred to as Social Security retirement payments upon reaching age 65

• the date payment of your benefit under a long-term dis-ability plan of the company stops, if you’re age 65 or older

• the date payment of your retirement plan benefit is sched-uled to start.

If you qualify as disabled, your benefit under the plan will reflect credited service earned before and during your disability, and your final average pay and esti-mated primary Social Security benefit as of the date you qualified as disabled.You may elect to start benefit payments under the plan any time after you reach age 55. But benefit payments must start by the later of your normal retirement date at age 65 or the date payment of your benefit under a long-term disability plan of the company stops.

Survivor BenefitsDifferent survivor coverage applies before and after retirement payments are scheduled to start.

Coverage Before Retirement Payments StartYour spouse will receive lifetime monthly survivor payments if you and your spouse had been married at least one year, you were vested at the time of your death, and:• you die before your retirement payments are scheduled to

start, or

• your employment with the company had ended and you didn’t elect an immediate lump sum or annuity payment when your employment ended.


Survivor coverage for your spouse is provided auto-matically under a 50 percent joint and survivor an-nuity. When you reach age 55, however, you may increase your spouse’s survivor coverage by electing a 662⁄3, 75, or 100 percent joint and survivor annuity. You may elect a different joint and survivor annuity and change your spouse’s survivor coverage any time after age 55 and before your retirement payments are scheduled to start. Contact the Grace Employee Ser-vice Center at 1-800-974-2363 for details.If you qualified for survivor coverage, your spouse will receive the survivor portion of the joint and survi-vor annuity that’s calculated as follows:• The credited service, final average pay, and estimated

primary Social Security benefit for use in the formula (page 2) will be determined as of the date you died or the date your employment ended, whichever is earlier. In addition, if you qualified as disabled under the plan, any credited service you earned during your disability (page 9) will be included in the calculation.

• The joint and survivor annuity reduction factor will be based on your age and your spouse’s age as of the date of your death.

• The calculation will be made assuming your employment had ended when you died and you were eligible to elect to start receiving payments. If you were under age 62 at the time of your death, the calculation will reflect the early retirement reduction (page 3) in effect when you died or when your employment ended, whichever is earlier, based on your age when you died. Moreover, if you were under age 55 at the time of your death, a further reduction will be made based on an actuarial factor that reflects your at-tained age.

Important! The survivor coverage in effect before retirement payments start is provided at no cost to you unless:• upon reaching age 55 (or at a later date) you elected a joint

and survivor option that provided increased survivor pro-tection for your spouse and you then cancelled or reduced this increased protection, or

• you elect an option under which your actual retirement payments are made and this option provides less survivor protection than the method in effect before your retirement payments started.

In either case, the cost of survivor coverage will result in a reduction to your actual retirement benefit based on the specific survivor coverage you elected and how long the coverage was in effect. In any event, how-ever, this reduction won’t exceed ½ percent for each year the coverage was in effect and the total reduction won’t exceed 5 percent .

Coverage After Retirement Payments StartIf you die on or after the date your retirement pay-ments are scheduled to start, any survivor benefits that are payable will be made as provided under the pay-ment method in effect.

Vesting

What Vesting MeansIf your employment ends before retirement for a rea-son other than disability (if you qualify under the plan) or death, you’ll have a right to receive retirement pay-ments from the plan if you’re vested. You’re vested if you’re age 55 or older or have at least five years of vesting service when your employment ends.You earn a year of vesting service for each calendar year in which you have at least 1,000 hours of service and are age 18 or older. In addition, subject to the rules of this plan, you’ll continue to earn vesting service during a permanent transfer to a unit not covered by this plan or to an ineligible employment status. You won’t receive any vesting service, however, for any period in which you elected to stop contributions you were required to make under this plan (or a prior plan), if you were eligible to make such contributions.

If Your Employment EndsIf your employment ends before you’re vested, you’ll lose any benefit you earned under the plan. This is called a forfeiture. Your forfeited benefit won’t be paid to you or anyone else, and will be used to reduce com-pany contributions to the plan.Keep in mind, however, that your employment doesn’t end during:• a layoff of up to one year or an approved leave of absence• a temporary or permanent transfer to a unit not covered by

this plan or to an ineligible employment status.

If you’re vested when your employment ends, your benefit will be based on your credited service, final average pay, and estimated primary Social Security benefit at the time your employment ended.Vested retirement payments aren’t automatic; you must apply. You may elect to start receiving your vested retirement payments any time upon reaching age 55, but not later than age 65. If these payments start before age 62, they will be reduced the same as an early retirement benefit.


Because it may take up to 180 days after all necessary documents have been received before benefit pay-ments will start, you should apply for benefits well in advance of the date you want payments to start. Gen-erally, you should apply at least 30 days in advance. You may choose to waive this 30-day requirement, however, and elect to start payments on the first of the month after the date you first call to start your benefit. For example, if you first made your call to start pay-ments on April 25, 2012, you could have elected a May 1, 2012 start date if you signed a waiver of the 30-day requirement. Contact the Grace Employee Ser-vice Center at 1-800-974-2363 for details.

If You Are Rehired

ParticipationParticipation resumes automatically on the date you’re rehired if you’re eligible and you were a participant when your employment ended. Otherwise, participation will start when you meet the requirements (page 1); any service you had when your employment ended will count to determine when participation starts.

Restoring Prior ServiceThe vesting and credited service you had when your employment ended will be restored automatically if you were vested when your employment ended or if you’re rehired before a break in service has lasted five, consecutive calendar years. A break in service occurs when your employment ends for a reason other than retirement, disability (if you qualify under the plan), or death, and you don’t have more than 500 hours of service in a calendar year.If you’re absent from work because of pregnancy, childbirth, adoption, or related child care, you’ll re-ceive hours of service—up to a maximum of 501 hours—if you otherwise would incur a break in service in either the calendar year in which your absence starts or in the following year.If you weren’t vested when your employment ended and your break in service lasts at least five, consecu-tive calendar years, the vesting and credited service you had when your employment ended will be restored if the years the break lasted are fewer than the years of vesting service you had when your employment ended.

Important! If you received a lump-sum payment of your benefit when your employment ended, you must repay the lump sum, including interest, within five years after you’re rehired in order to restore prior credited service. In addition, if you received payment of your contributions and interest when your employ-ment ended, repayment of this money within five years after you’re rehired may be required to restore the full retirement benefit you earned before your employment ended. Contact the Grace Employee Service Center at 1-800-974-2363 for more information on whether or not you may restore prior service by repaying benefits you’ve received.These rules for restoring vesting and credited service apply only if your employment ends on or after Janu-ary 1, 1976 and you’re rehired on or after January 1, 1985. Contact the Grace Employee Service Center at 1-800-974-2363 for details on the rules that apply if your employment ended or you were rehired on differ-ent dates.

If Payments Have StartedRetirement payments will stop if you’re rehired as an eligible employee and you’re paid for at least 40 hours during any month (or payroll period, if that payroll pe-riod is four or five weeks).Retirement payments will resume after your employ-ment ends. Your new benefit will reflect your credited service and earnings before and after rehire, and will be reduced by the value of payments you’ve already received.

How Military Service May Affect YouSpecial rules may apply if you’re away from work because of “qualified military service,” which means active military service while you’re entitled to re-employment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).

Differential Military PayThe retirement plan treats differential wage payments as compensation under USERRA. “Differential wage payments” are payments to employees for periods dur-ing which they are on active military duty for a period of more than 30 days, which represent all or part of the wages they would have received from the company if they had been performing services for the company.


If You Die or Become Disabled During Military ServiceIf you die or become disabled during qualified military service, your military service will count for purposes of determining your retirement plan benefit as if you had re-sumed employment with the company on the day before death or disability, then terminated employment on the date of death or disability.

Survivor BenefitsIf you die while performing qualified military service, you’ll be considered to be vested for purposes of deter-mining any survivor benefits that may be payable.

When Benefits Are Not PaidBenefits under the retirement plan aren’t paid to you or your beneficiary if:• your employment ends before you’re vested

• you die and didn’t qualify for survivor protection

• you can’t be contacted because we don’t have your current address.

Claims for Benefits

What to DoGenerally, you or your beneficiary will be notified whenever a benefit becomes payable. You may be asked to provide certain information, such as proof of birth for you and your spouse and proof of marriage. Payments may be delayed until this information is pro-vided.If you believe you’re entitled to a benefit and haven’t been notified that one is payable, or if you disagree with the amount of the benefit that’s payable, you may file a written claim with the plan administrator, which is the plan’s Administrative Committee. The Admin-istrative Committee has full and exclusive authority to interpret all plan provisions and to decide claims for all benefits that are filed.A decision on a claim will be made by the Administra-tive Committee as soon as possible, but no later than 90 days after a claim is filed, or 180 days in special cases. If a decision on a claim can’t be made within 90 days, you’ll be notified in writing before the end of this 90-day period of the special circumstances that require an extended period of consideration of your claim and the approximate date as of which the Ad-ministrative Committee expects to reach a decision on your claim.

If a Claim Is DeniedIf a claim is denied, in whole or in part, you or your beneficiary will receive a written notice from the Ad-ministrative Committee explaining why and on which plan provisions the claim has been denied. The notice will also explain how to file an appeal. An appeal must be made within 60 days after a denial by writing to the Administrative Committee. You or your beneficiary also may choose to name a representative to handle your appeal.You or your beneficiary will be told if any additional information is needed to make a claim acceptable. All material related to a claim, such as the plan’s official documents, may be examined by you or your benefi-ciary. Copies of any materials or records that support the claim should be sent with the appeal.A decision on an appeal usually will be made within 60 days of when it’s received, or 120 days in special cases. If a decision on an appeal can’t be made within 60 days, you’ll be notified in writing before the end of this 60-day period of the special circumstances that require an extended period of consideration of your appeal. The plan administrator’s decision on an appeal is final. If you or your beneficiary has filed a claim for benefits which has been denied on appeal by the plan adminis-trator and you or your beneficiary believes the claim has been improperly denied, in whole or in part, you or your beneficiary has certain rights. See page 15 for details.

Employing UnitsAn employing unit is a unit of employees within a prod-uct line or business unit of W. R. Grace & Co., or any company owned or controlled by W. R. Grace & Co., authorized by Grace’s Board of Directors (or its desig-nee) to participate in the retirement plan. As of January 1, 2012, salaried employees of these employing units were authorized to participate in the retirement plan:• Grace Construction Products

– including eligible employees of DeNeef Construction Chemicals, Inc.

– including eligible employees of Verifi • Grace Davison

– including eligible employees of Synthetech– excluding employees at the Chicago, IL and East

Chicago, IN facilities• Grace Headquarters Office located in:

– Florida– Maryland– Massachusetts– New Jersey– South Carolina– Tennessee

• Grace Management Services, Inc.– U. S. Expatriates


The authority to participate in the retirement plan is au-tomatically withdrawn for employees of any employing unit that’s sold or otherwise divested by W. R. Grace & Co. This means that the active plan participation of em-ployees of a divested employing unit ends on the date the employing unit is divested (regardless of whether or not the employees continue to work for the divested employing unit). As a result, among other things, em-ployees will stop earning credited service on that date.Contact the Grace Employee Service Center at 1-800-974-2363 for information on whether or not a specific employing unit participates in the plan.

Merged PlansPlan Name Date of MergerDewey & Almy Chemical Company Retirement Annuity Plan

July 1, 1959

American Breeders Service, Inc. Employees’ Retirement Plan

May 16, 1968

Lachman-Rose Company Inc. Pension Trust* January 1, 1973Kiddie City Pension Plan and Trust* January 1, 1973Retirement Plan for Salaried Employees of the Davison Chemical Division of W. R. Grace & Co.— Retirement Plan for Employees of Robertson Chemical Corporation**

January 1, 1973

Elm Coated Fabrics Co. Inc. Employees Pension Trust*

May 1, 1973

Employees’ Retirement Plan of Ambrosia Chocolate Company

January 1, 1974

Retirement Plan of W. R. Grace & Co. Chemical Group (Duncan Plant)

January 1, 1975

Retirement Plan of W. R. Grace & Co. Chemical Group (Woburn Plant)

January 1, 1975

Retirement Plan of W. R. Grace & Co. Chemical Group (Simpsonville Plant)

January 1, 1975

W. R. Grace & Co. Retirement Plan “M” for Salaried and Hourly Employees (as it pertains to salaried employees)

January 1, 1976

Red Barn Chemical Company Retirement Plan (as it pertains to salaried employees)

January 1, 1976

Lawrence Maid Employees’ Pension Trust* April 1, 1976Elmex Corporation Pension Trust* April 1, 1976Retirement Plan for Employees of TEC Systems, Inc. (as it pertains to salaried employees)

February 1, 1979

Robert B. Peters Co., Inc. Employees Pension Trust (as it pertains to salaried employees)

February 1, 1979

Retirement Plan of W. R. Grace & Co. Chemical Group—Evans (as it pertains to salaried employees)

October 1, 1979

Golding Industries Inc. Retirement Plan for Salaried Employees

July 2, 1981

Dearborn Chemical Pension Plan March 10, 1982

*These plans have been divested after their merger into this plan; Grace, however, maintains liabilities for retirees and participants who were vested when their employment ended.**The Robertson Plan was initially merged into a previous Davison Plan as of August 1, 1963.

Copies of the merged plans as well as plan-merger documents (including portions of any corporate merger documents that describe or control the plan merger) are available for inspection by former participants in a merged plan. Copies of such documents may be obtained at a reasonable charge upon written request to the Administrative Committee. Contact the Grace Employee Service Center at 1-800-974-2363 for more information.

Other InformationThe following pages describe other information you should know about the plan and your rights.

Plan SponsorThe sponsor of the plan is:

W. R. Grace & Co.7500 Grace DriveColumbia, MD 21044

Plan AdministratorThe plan administrator is the:

Administrative Committee of the W. R. Grace & Co. Benefit PlansW. R. Grace & Co.7500 Grace DriveColumbia, MD 21044(410) 531-4000

The Investment and Benefits Committee is responsible for the management and operation of the plan, and has the full, exclusive, and discretionary authority to deter-mine eligibility for benefits and to interpret the terms of the plan, except to the extent that such authority has been delegated to the Administrative Committee.

TrusteeAll contributions to support this plan go into a trust fund held by:

The Northern Trust Company50 South LaSalle StreetChicago, IL 60675

Plan YearPlan records are kept on a plan-year basis, which is the same as a calendar year (January 1 to December 31).


Plan IdentificationThe official name of the plan is the W. R. Grace & Co.—Conn. Retirement Plan for Salaried Employees. The Internal Revenue Service identifies the company by the number 65-0654331, and the Department of Labor identifies the plan by the number 001. The plan is classified as a “defined-benefit” pension plan.

If You Can’t Receive PaymentsIf the company determines that you or a beneficiary isn’t able to receive payments—for example, if you’re physically or mentally disabled—it may have pay-ments made to the person or institution who is respon-sible for you or your beneficiary.

Legal ServiceIf there’s a need to take legal action under the plan, legal process may be served on the:

General CounselW. R. Grace & Co.7500 Grace DriveColumbia, MD 21044

Legal process also may be served on the plan adminis-trator or trustee.

Plan DocumentsThis summary reflects the terms of the plan as of Janu-ary 1, 2012. It’s written in everyday terms and avoids technical terms wherever possible. You should know that the plan also has official documents; this summary isn’t an official document. The official documents — not this summary — must be used to resolve any ques-tion about benefits from the plan. You may review the official documents by contacting the Grace Employee Service Center at 1-800-974-2363. You may obtain copies of these documents by writing to the Investment and Benefits Committee. A reasonable charge may be made for copying these materials.

Rights to BenefitsGenerally, your benefit from the plan may not be as-signed, sold, transferred, or pledged to a creditor or anyone else. But benefits may be subject to the terms of any qualified domestic relations order resulting from divorce or separation from your spouse.

The Plan’s FutureThe company, by action of its Board of Directors or the Investment and Benefits Committee, reserves the right to change, suspend, or end the plan at any time. If the plan should end, the money in the trust fund will be used only for the benefit of participants and beneficia-ries, to the extent necessary to provide those benefits.In the event of a complete plan termination, all par-ticipants will become fully vested in their retirement benefits, to the extent funded. In the event of a partial termination, all participants affected by the partial ter-mination will become fully vested in the benefits they have earned.Moreover, in the event of a complete plan termination, the assets held in the plan’s trust fund will be used to fund the retirement benefits of each plan participant, former participant, and beneficiary, as follows:• first, to fund benefits provided by employee contributions

• second, to fund certain benefits already being paid

• third, to fund benefits to the limit insured by the Pension Benefit Guaranty Corporation (see the following explana-tion of “Benefit Insurance”)

• fourth, to fund all other vested benefits, except those that become vested solely because the plan ended

• fifth, to fund any other benefits earned under the plan.

If the retirement plan is completely terminated, ben-efits generally will be provided under a group annu-ity contract bought from an insurance company with plan assets. Any plan assets that remain after all plan benefits have been provided for will be returned to the company.

Benefit InsuranceYour pension benefits under this plan are insured by the Pension Benefit Guaranty Corporation (PBGC), a federal insurance agency. If the plan ends without enough money to pay all benefits, the PBGC will step in to pay pension benefits. Most people will receive all of the pension benefits they would have received under their plan, but some people may lose certain benefits.The PBGC guarantee generally covers normal and early retirement benefits, disability benefits if you become disabled before the plan ends, and certain ben-efits for your survivors.The PBGC guarantee generally doesn’t cover:• benefits greater than the maximum guaranteed amount set

by law for the year in which the plan ends,

• some or all of benefit increases and new benefits based on plan provisions that have been in place for fewer than five years at the time the plan ends,


• benefits that aren’t vested because you haven’t worked long enough for the company,

• benefits for which you haven’t met all of the requirements at the time the plan ends,

• certain early retirement payments (such as supplemental benefits that stop when you become eligible for Social Security) that result in an early retirement monthly benefit greater than your monthly benefit at the plan’s normal re-tirement age, and

• non-pension benefits, such as health insurance, life insur-ance, certain death benefits, vacation pay, and severance pay.

Even if certain of your benefits aren’t guaranteed, you still may receive some of those benefits from the PBGC depending on how much money your plan has and on how much the PBGC collects from employers.For more information about the PBGC and the benefits it guarantees, ask your plan administrator or contact the PBGC’s Technical Assistance Division, 1200 K Street N.W., Suite 930, Washington, D.C. 20005-4026 or call 202-326-4000 (not a toll-free number). TTY/TDD users may call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4000. Additional information about the PBGC’s pension insurance program is available through PBGC’s website on the internet at www.pbgc.gov.

Your RightsAs a participant in the W. R. Grace & Co. Retirement Plan for Salaried Employees, you’re entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA pro-vides that all plan participants are entitled to:

Receive Information About Your Plan and BenefitsYou may examine, without charge, at the plan admin-istrator’s office and at other specified locations, such as worksites, all documents governing the plan, and a copy of the latest annual report (Form 5500 Series) filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.You may obtain, upon written request to the plan ad-ministrator, copies of documents governing the opera-tion of the plan, including copies of the latest annual report (Form 5500 Series) and an updated summary plan description. The administrator may make a rea-sonable charge for the copies.

You’ll receive a summary of the plan’s annual finan-cial report. The plan administrator is required by law to furnish each participant with a copy of this sum-mary annual report.You may obtain a statement telling you whether you have a right to receive a pension at normal retirement age (age 65) and if so, what your benefits would be at normal retirement age if you stop working under the plan now. If you do not have a right to a pension, the statement will tell you how many more years you have to work to get a right to a pension. This statement must be requested in writing and isn’t required to be given more than once every 12 months. The plan must pro-vide the statement free of charge.

Prudent Actions by Plan FiduciariesIn addition to creating rights for plan participants ERISA imposes duties upon the people who are re-sponsible for the operation of the employee benefit plan. The people who operate your plan, called “fidu-ciaries” of the plan, have a duty to do so prudently and in the interest of you and other plan participants and beneficiaries. No one, including your employer or any other person may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA.

Enforce Your RightsIf your claim for a pension benefit is denied or ig-nored, in whole or in part, you have a right to know why this was done, to obtain copies of documents re-lating to the decision without charge, and to appeal any denial, all within certain time schedules.Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the plan and don’t receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the plan administrator to provide the mate-rials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the administrator.If you have a claim for benefits that’s denied or ig-nored, in whole or in part, you may file suit in a state or Federal court. In addition, if you disagree with the plan’s decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, you may file suit in Federal court.

http://www.pbgc.gov


If it should happen that plan fiduciaries misuse the plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

Assistance With Your QuestionsIf you have any questions about your plan, you should contact the Grace Employee Service Center at 1-800-974-2363 or the plan administrator.If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the plan administrator, you should contact the nearest office of the Employee Bene-fits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

A Few Words About the PlanW. R. Grace & Co. provides retirement benefits for eligible employees under the W. R. Grace & Co. Retirement Plan for Salaried Employees. This document is the summary plan description of the retirement plan. This plan also has official plan docu-ments – this summary isn’t an official plan document. In the event of any difference between the terms of this summary plan description and official plan documents, the terms of the official plan documents will govern.Grace has the sole discretionary authority at any time to modify, amend, or terminate the plan to any extent, as adopted by the Investment & Benefits Commit-tee, the Board of Directors, or their designees. If the plan is amended or terminated while you’re a partici-pant, you’ll be notified of the effect of the change on your plan benefits or participation. No consent of any employee, or other person, is necessary for Grace to amend or terminate the plan. If the plan is terminated, special rules will apply to vesting and the payment of benefits. Participants and beneficiaries will be notified of how benefits will be affected in the event the plan terminates.

The plan administrator has the authority to control and manage the operation and administration of the plan, including all rights and powers needed to carry out its functions, whether or not such rights and powers are specified in this document.In addition, the plan administrator has the authority and discretion to interpret the provisions of the plan, to determine all questions arising under or related to the plan, including all questions of fact and questions of eligibility to participate and obtain benefits, and to determine the amount, manner, and time of payment of any benefits under the plan. The plan administra-tor may, in its sole discretion, delegate authority with regard to the administration of the plan, or any portion of the plan. The plan administrator’s (or its designee’s) decisions are final and binding.Important! Statements of policies, benefits, and regulations in this summary don’t constitute the terms and conditions of an employment contract, either ex-pressed or implied. Moreover, Grace reserves the right to change its policies, benefits, and regulations at any time, without notice.

Retirement Plan for Salaried Employees

Documents

Transcript of Retirement Plan for Salaried Employees