COMMISSION FILE NO. 1-496
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1993
Title of the plan:
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HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN
Issuer of the securities held pursuant to the plan:
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HERCULES INCORPORATED
Hercules Plaza
1313 North Market Street
Wilmington, Delaware 19894
<PAGE>
HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN
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FINANCIAL STATEMENTS
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STATEMENT OF ASSETS, LIABILITIES, AND PLAN EQUITY
December 31, 1993 and 1992
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
Years ended December 31, 1993, 1992 and 1991
For
ANNUAL REPORT
FORM 11-K
<PAGE>
<TABLE>
HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN
STATEMENT OF ASSETS, LIABILITIES AND PLAN EQUITY
December 31, 1993
<CAPTION>
Hercules
Incorporated Blended Fidelity
Common Gov't Bond Interest Rate Magellan
Stock Equity Fund Fund Savings Fund Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments $2,851,663a $416,195b $65,511c $13,040,233 $1,074,037d $208,400e $17,656,039
Receivable from Company 3,514 12,626 284 169,078 6,731 0 192,233
Cash 35,252 2,799 17 266,360 74,745 0 379,173
---------- -------- ------- ----------- ---------- -------- -----------
Total Assets $2,890,429 $431,620 $65,812 $13,475,671 $1,155,513 $208,400 $18,227,445
========== ======== ======= =========== ========== ======== ===========
Liabilities & Equity
Liability for Withdrawals $ 35,376 $ 213 $ 0 $ 317,031 $ 43,651 $ 7,637 $ 403,908
Advances from Company 2,561 24,195 2,398 17,049 1,373 0 47,576
Plan Equity 2,852,492 407,212 63,414 13,141,592 1,110,489 200,763 17,775,962
---------- -------- ------- ----------- ---------- -------- -----------
Total Liabilities & Equity $2,890,429 $431,620 $65,812 $13,475,672 $1,155,513 $208,400 $18,227,446
========== ======== ======= =========== ========== ======== ===========
<CAPTION>
December 31, 1992
Hercules Blended
Incorporated Interest Rate Money
Common Savings Equity Market
Stock Fund Fund Fund Total
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Assets
Investments $2,437,458a $4,189,638 $24,779b $52,845 $6,704,720
Receivable from Company 51,922 35,363 1,918 5,833 95,036
Cash 576 79,167 5,472 139 85,354
---------- ---------- ------- ------- ----------
Total Assets $2,489,956 $4,304,168 $32,169 $58,817 $6,885,110
========== ========== ======= ======= ==========
Liabilities and Equity
Liability for Withdrawals $ 701,885 $ 71,001 $ 2,564 $ 8,653 $ 784,103
Advances from Company 52,043 9,661 0 1,992 63,696
Plan Equity 1,736,028 4,223,506 29,605 48,172 6,037,311
---------- ---------- ------- ------- ----------
Total Liability and Equity $2,489,956 $4,304,168 $32,169 $58,817 $6,885,110
========== ========== ======= ======= ==========
<FN>
(a) At fair value. Cost: 1993, $931,651; 1992, $1,549,945. Shares: 1993, 25,125; 1992, 38,385.
(b) At fair value. Cost: 1993, 416,195; 1992, $22,717.
(c) At fair value. Cost: 1993, $65,511.
(d) At fair value. Cost: 1993, $1,061,069.
(e) Represents loans to plan participants.
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
Year Ended December 31, 1993
<CAPTION>
Hercules
Incorporated Blended Fidelity
Common Gov't Bond Interest Rate Magellan Loan
Stock Equity Fund Fund Savings Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Participating Employees $ 13,640 $ 33,690 $17,651 $1,266,975 $ 106,462 $ 0 $1,438,418
Company Contributions 158,614 0 0 0 0 0 158,614
---------- -------- ------- ---------- ---------- -------- ----------
$ 172,254 $ 33,690 $17,651 $1,266,975 $ 106,462 $ 0 $ 784,473
Interplan Transfers 352,762 572,505 0 7,856,933 931,495 201,207 2,057,900
Investment Income:
Cash Dividends 57,289 0 0 0 0 0 57,289
Interest 1,281 515 833 687,673 62,350 0 515,172
Change in Market Value 1,461,885 6,746 506 1,001 13,901 0 1,483,038
---------- -------- ------- ---------- ---------- -------- ----------
Total $2,045,471 $613,456 $18,990 $9,812,582 $1,114,208 $201,207 4,897,872
Withdrawals (554,117) (47,135) (9,213) (1,388,251) (60,909) (7,638) (2,013,738)
Interfund Transfers (374,890) (188,714) 5,465 493,755 57,190 7,194 0
---------- --------- ------- ---------- ---------- -------- ----------
Change in Plan Equity 1,116,464 377,607 15,242 8,918,086 1,110,489 200,763 11,738,651
Plan Equity, Dec. 31, 1992 1,736,028 29,605 48,172 4,223,506 0 0 6,037,311
---------- --------- ------- ---------- ---------- -------- ----------
Plan Equity, Dec. 31, 1993 $2,852,492 $407,212 $63,414 $13,141,592 $1,110,489 $200,763 $17,775,962
========= ======= ======= =========== ========== ======== ===========
<CAPTION>
Year Ended December 31, 1992
Hercules
Incorporated Blended
Common Interest Rate Money Market
Stock Savings Fund Equity Fund Fund Total
<S> <C> <C> <C> <C> <C>
Contributions:
Participating Employees $ 66,913 $ 918,847 $10,246 $31,104 $1,027,110
Company Contributions 252,867 252,867
----------- ---------- ------- ------- ----------
$ 319,780 $ 918,847 $10,246 $31,104 $1,279,977
Interplan Transfers 3,441 3,441
Investment Income:
Cash Dividends 109,818 109,818
Interest 2,155 289,841 161 1,933 294,090
Change in Market Value 448,041 0 2,369 0 450,410
----------- ---------- ------- ------- ---------
Total $ 879,794 $1,212,129 $12,776 $33,037 2,137,736
Withdrawals (1,042,958) (2,412,196) (29,959) (27,333) (3,512,446)
Interfund Transfers (350,738) 347,074 1,432 2,232 0
----------- ----------- -------- -------- -----------
Change in Plan Equity (513,902) (852,993) (15,751) 7,936 (1,374,710)
Plan Equity, Dec. 31, 1991 2,249,930 5,076,499 45,356 40,236 7,412,021
----------- ----------- -------- -------- -----------
Plan Equity, Dec. 31, 1992 $1,736,028 $4,223,506 $29,605 $48,172 $6,037,311
========== ========== ======== ======== ===========
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY (cont'd)
Year Ended December 31, 1991
<CAPTION>
Hercules Fund for
Incorporated Blended United States United States
Common Interest Rate Money Market Gov't Savings Gov't
Stock Savings Fund Equity Fund Fund Bonds Securities Total
<S> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Participating Employees $ 95,036 $1,166,917 $10,323 $32,756 $ 16,400 $ 1,350 $1,322,782
Company Contributions 329,614 0 0 0 0 0 329,614
---------- ---------- ------- ------- --------- -------- ----------
424,650 1,166,917 10,323 32,756 16,400 1,350 $1,652,396
========== ========== ======= ======= ========= ======== ==========
Interplan Transfers 866 3,814 0 896 0 0 5,576
Investment Income:
Cash Dividends 119,157 0 0 0 0 0 119,157
Interest 1,693 488,657 46 1,834 68 347 492,645
Change in Market Value 849,574 0 1,790 0 0 57 851,421
---------- ---------- ------- ------- --------- -------- ----------
Total $1,395,940 $1,659,388 $12,159 $35,486 $ 16,468 $ 1,754 $3,121,195
Withdrawals (826,011) (2,219,085) (1,985) (8,521) (185,968) 0 (3,241,570)
Interfund Transfers (50,071) 21,187 35,182 13,271 (559) (19,010) 0
---------- ---------- ------- ------- --------- -------- ----------
Change in Plan Equity 519,858 (538,510) 45,356 40,236 (170,059) (17,256) (120,375)
Plan Equity, Dec. 31, 1990 1,730,072 5,615,009 0 0 170,059 17,256 7,532,396
---------- ---------- ------- ------- --------- -------- ----------
Plan Equity, Dec. 31, 1991 $2,249,930 $5,076,499 $45,356 $40,236 $ $ $7,412,021
========== ========== ======= ======= ========= ======== ==========
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Investments in the Plan are carried at fair value. The fair value of
the common stock of Hercules Incorporated is based upon the price at which the
stock closed on the New York Stock Exchange on the last business day of the
year. The Blended Interest Rate Savings Fund, the Government Bond Fund and the
Fidelity Magellan Fund are carried at cost plus accrued interest which is
equivalent to fair value. The fair value of the Equity Fund is based on the
market price of the underlying securities held by the fund.
The Plan provides that participants who retire from the Company may
elect an Optional Valuation Date (OVD) for determining their final withdrawal.
The OVD is the last business day in January of the year following retirement.
The liability for such withdrawals is reflected in the financial statements on
the Optional Valuation Date.
The Plan presents in the statement of income and changes in plan
equity the net appreciation (depreciation) in fair value of its investments
(under the caption Change in Market Value), which consists of the realized
gains or losses and the change in unrealized appreciation (depreciation) on
those investments.
The unrealized appreciation (depreciation) for all investments at
December 31, 1993, December 31, 1992, and December 31, 1991 and January 1,
1991 was $1,932,981, $889,575, $590,088, and $(245,169), respectively.
2. Investment Program
At time of enrollment in the Plan, a participant, by giving written
notice to the Trustee, shall direct the investment of his monthly savings in
any of the following, or a combination thereof, providing his monthly savings
in any one medium selected is not less than 20% of the total amount saved and
is stated in 5% increments.
During May 1993, the Money Market Fund was eliminated and a U.S.
Government Bond Fund and a Long-Term Capital Appreciation Fund (Fidelity
Magellan) were added as investment media under the Plan. Participants with
balances in the Money Market Fund were provided the option to transfer their
balances to other investment funds or have their balances automatically
transferred to the new U.S. Government Bond Fund.
The following investment medium are available under the Employee
Savings Plan.
1. Hercules Incorporated Common Stock.
2. A Blended Interest Rate Savings Fund, wherein savings so directed are
deposited with various major insurance companies, who guarantee the
payment of principal. For 1993, the blended yield of these contracts
was approximately 7.6%.
3. Equity Fund. This Fund is made up of substantially all the stocks that
make up the Standard and Poor's 500 Index in such a mix as to track as
closely as possible the movement of the Index.
4. U.S. Government Bond Fund, which invests in U.S. Treasury and Agency
issues and fully insured savings bank deposits.
5. Fidelity Magellan Fund is a Long-Term Capital Appreciation Fund, which
invests in common stocks, and securities convertible to common stock,
issued by companies operating in the U.S. and abroad as well as
foreign companies.
The Company contribution, as defined in the Plan, is equal to 25% of
the participants' contribution. The Company contribution must be invested in
common stock of Hercules Incorporated.
There were 812 participants at December 31, 1993 who participated in
one or more of the five investment media. At December 31, 1993 the number of
participants selecting each of the investment media for their contributions
was as follows:
Hercules Incorporated Common Stock . . . . 25
Equity Fund. . . . . . . . . . . . . . . . 62
Government Bond Fund . . . . . . . . . . . 12
Blended Interest Rate Savings Fund . . . . 745
Fidelity Magellan Fund . . . . . . . . . . 99
<PAGE>
3. Interplan Transfers
Interplan transfers represent transfers from acquired company plans
and rollovers of new employees' distributions from defined contribution plans.
Effective July 1, 1993, the net assets of the Employee Savings Plan
(approximately $10mm) of the Aqualon Company (a wholly-owned subsidiary of
Hercules Incorporated) were transferred to the Hercules Incorporated Employee
Savings Plan. Participant's benefits under the plan were substantially
unaffected by the transfer of net assets.
4. Tax Status
The United States Treasury Department advised on October 24, 1986,
that the Plan as amended through January 1, 1985 is a qualified trust under
Section 401(a) of the Internal Revenue Code and is therefore exempt from
Federal income taxes under provisions of Section 501(a) of the code.
The Federal Income Tax status of the employee is covered under the
caption "Federal Tax Aspects" of the Registration Statement "Hercules
Incorporated Employee Savings Plan" (No. 33-21667) on Form S-8 and
supplemented by periodic benefit updates.
5. Investments
Investments that represent five percent or more of Plan Equity at
December 31, 1993 or 1992 are as follows:
1993 1992
---- ----
Hercules Incorporated Common Stock $2,851,663 $2,437,458
Fidelity Magellan Fund $1,074,037 --
Group Annuity Contract with Peoples
Life Insurance Company (#BDA 00002TR) $1,853,071 $ 649,024
Group Annuity Contract with Provident Life and
Accident Insurance Company (#630-05537) $1,231,962 --
Group Annuity Contract with Travelers
Insurance Company (#15135), 9.3%, 6/30/92 -- $ 441,459
Group Annuity Contract with Aetna Life
Insurance Company (#13762), 9.2%, 4/30/97 -- $ 315,512
Group Annuity Contract with Metropolitan Life
Insurance Company (#12833), 7.43%, 4/30/95 -- $ 309,168
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors,
Hercules Incorporated,
Wilmington, Delaware
We have audited the accompanying statements of assets, liabilities and
plan equity of Hercules Incorporated Employee Savings Plan as of December 31,
1993 and 1992, and the related statements of income and changes in plan equity
for each of the three years in the period ended December 31, 1993. These
financial statements are the responsibility of the Plan's administrators. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Hercules Incorporated
Employee Savings Plan as of December 31, 1993 and 1992, and its income and
changes in plan equity for each of the three years in the period ended
December 31, 1993 in conformity with generally accepted accounting principles.
2400 Eleven Penn Center Coopers & Lybrand
Philadelphia, Pennsylvania 19103
June 20, 1994
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN
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H. Eugene McBrayer, Chairman
Finance Committee, Hercules Incorporated,
Plan Administrator
Date: June 20, 1994
<PAGE>
EXHIBIT INDEX
Number Description
1 Consent of Independent Accountants.
<PAGE>
Exhibit 1. CONSENT OF INDEPENDENT ACCOUNTANTS.
We consent to the incorporation by reference in the registration
statement of Hercules Incorporated on Form S-8 (Registration No. 33-21667) of
our report dated June 20, 1994 on our audits of the financial statements of
Hercules Incorporated Employee Savings Plan as of December 31, 1993 and 1992
and for each of the three years in the period ended December 31, 1993, which
report is included in this Annual Report on Form 11-K.
2400 Eleven Penn Center Coopers & Lybrand
Philadelphia, Pennsylvania 19103
June 23, 1994
