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 SAVINGS AND INVESTMENT 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 SAVINGS AND INVESTMENT 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 SAVINGS AND INVESTMENT PLAN
STATEMENT OF ASSETS, LIABILITIES AND PLAN EQUITY
December 31, 1993
<CAPTION>
Hercules
Incorporated Blended Fidelity
Common Interest Rate Equity Balanced Magellan Gov't Loan
Stock Savings Fund Fund Asset Fund Fund Bond Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments $128,716,516a $314,751,911 $39,187,215b $2,256,518c $17,040,260d $4,936,156e $18,983,525f $525,872,101
Receivable from Company 211,067 2,045,828 121,335 14,521 1,087,124 16,188 0 3,496,063
Cash 1,004,363 6,609,727 668,632 98,121 1,682,135 83,113 298,226 10,444,317
------------ ------------ ----------- --------- ----------- ---------- ----------- ------------
Total Assets $129,931,946 $323,407,466 $39,977,182 $2,369,160 $19,809,519 $5,035,457 $19,281,751 $539,812,481
============ ============ =========== ========== =========== ========== =========== ============
Liabilities & Equity
Liability for Withdrawals $ 176,356 $ 2,941,673 $ 524,319 $ 1,198 $ 83,200 $ 21,868 $ 821,576 $ 4,570,190
Advances from Company 344,641 894,984 19,880 13,330 864,745 0 0 2,137,580
Plan Equity 129,410,949 319,570,809 39,432,983 2,354,632 18,861,574 5,013,589 18,460,175 533,104,711
------------ ------------ ----------- ---------- ----------- ---------- ----------- ------------
Total Liabilities
& Equity $129,931,946 $323,407,466 $39,977,182 $2,369,160 $19,809,519 $5,035,457 $19,281,751 $539,812,481
============ ============ =========== ========== =========== ========== =========== ============
<CAPTION>
December 31, 1992
Hercules Blended
Incorporated Interest Rate Money
Common Savings Equity Market Loan
Stock Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments $86,233,376a $269,293,626 $32,427,862b $4,887,439 $15,700,444e $408,542,747
Receivable from Company 198,013 134,441 241,445 182,102 0 756,001
Cash 760,393 5,351,338 21,498 13,752 382,416 6,529,397
----------- ------------ ----------- ---------- ----------- ------------
Total Assets $87,191,782 $274,779,405 $32,690,805 $5,083,293 $16,082,860 $415,828,145
=========== ============ =========== ========== =========== ============
Liabilities and Equity
Liability for Withdrawals $ 892,474 $ 2,813,147 $ 225,403 $ 0 $ 1,117,778 $ 5,110,466
Advances from Company 247,587 89,070 26,699 61,664 0 363,356
Plan Equity 86,051,721 271,877,188 32,438,703 5,021,629 14,965,082 410,354,323
----------- ------------ ----------- ---------- ----------- ------------
Total Liability and Equity $87,191,782 $274,779,405 $32,690,805 $5,083,293 $16,082,860 $415,828,145
=========== ============ =========== ========== =========== ============
<FN>
(a) At fair value. Cost: 1993, $50,450,910; 1992, $55,619,128. Shares: 1993, 1,134,066; 1992, 1,358,006.
(b) At fair value. Cost: 1993, $30,764,416; 1992, $27,180,631.
(c) At fair value. Cost: 1993, $2,249,488.
(d) At fair value. Cost: 1993, $16,798,135.
(e) At fair value. Cost: 1993, $4,817,017.
(f) Represents loans to plan participants.
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
Year Ended December 31, 1993
<CAPTION>
Hercules
Incorporated Blended Fidelity
Common Interest Rate Equity Balanced Magellan Gov't Loan
Stock Savings Fund Fund Asset Fund Fund Bond Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Participating Employees $ 1,556,211 $ 18,518,991 $ 4,114,550 $ 145,163 $ 1,118,723 $ 643,499 $ 0 $ 26,097,137
Company Contributions 10,906,326 0 0 0 0 0 0 $ 10,906,326
------------ ------------ ----------- ---------- ----------- ---------- ----------- ------------
$ 12,462,537 $ 18,518,991 $ 4,114,550 $ 145,163 $ 1,118,723 $ 643,499 $ 0 $ 37,003,463
Interplan Transfers 1,064,589 23,299,237 2,096,507 0 4,051,278 6,260 1,546,388 32,064,259
Investment Income:
Cash Dividends 2,907,669 0 0 13,330 1,089,151 0 0 4,010,150
Interest 48,612 22,000,435 10,102 1,806 7,053 68,460 1,506,651 23,643,119
Change in Market Value 62,819,424 0 3,673,129 22,270 266,814 121,165 0 66,902,802
------------ ------------ ----------- ---------- ----------- ---------- ----------- ------------
Total $ 79,302,831 $ 63,818,663 $ 9,894,288 $ 182,569 $ 6,533,019 $ 839,384 $ 3,053,039 $163,623,793
Withdrawals (7,336,948) (28,698,002) (3,136,274) (36,837) (252,772) (827,037) (585,535) (40,873,405)
Interfund Transfers (28,606,655) 12,572,960 236,266 2,208,900 12,581,327 (20,387) 1,027,589 0
------------ ------------ ----------- ---------- ----------- ---------- ----------- ------------
Change in Plan Equity 43,359,228 47,693,621 6,994,280 2,354,632 18,861,574 (8,040) 3,495,093 122,750,388
Plan Equity, Dec. 31, 1992 86,051,721 271,877,188 32,438,703 0 0 5,021,629 14,965,082 410,354,323
------------ ------------ ----------- ---------- ----------- ---------- ----------- ------------
Plan Equity, Dec. 31, 1993$129,410,949 $319,570,809 $39,432,983 $2,354,632 $18,861,574 $5,013,589 $18,460,175 $533,104,711
============ ============ =========== ========== =========== ========== =========== ============
<CAPTION>
Year Ended December 31, 1992
Hercules Blended
Incorporated Interest Rate Money
Common Savings Equity Market Loan
Stock Fund Fund Fund Fund Total
------------ ------------ ------ ------ ---- -----
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Participating Employees $ 3,884,619 $ 18,406,755 $ 3,644,561 $ 728,073 $ 0 $ 26,664,008
Company Contributions 8,089,385 0 0 0 0 8,089,385
----------- ------------ ----------- ---------- ----------- ------------
11,974,004 18,406,755 3,644,561 728,073 0 34,753,393
Interplan Transfers 1,035,945 2,648,253 193,977 39,055 0 3,917,230
Investment Income:
Cash Dividends 3,164,811 0 0 0 0 3,164,811
Interest 24,008 21,753,986 7,007 193,879 1,685,993 23,664,873
Change in Market Value 19,170,423 0 2,391,045 0 0 21,561,468
----------- ----------- ----------- ---------- ---------- ------------
Total 35,369,191 42,808,994 6,236,590 961,007 1,685,993 87,061,775
Withdrawals (10,875,911) (41,035,198) (4,421,739) (928,257) (1,688,989) (58,950,094)
Interfund Transfers (19,820,025) 16,305,837 1,870,909 (222,701) 1,865,980 0
------------ ------------ ----------- ---------- ----------- ------------
Change in Plan Equity 4,673,255 18,079,633 3,685,760 (189,951) 1,862,984 28,111,681
Plan Equity, December 31, 1991 81,378,466 253,797,555 28,752,943 5,211,580 13,102,098 382,242,642
----------- ------------ ----------- ---------- ----------- ------------
Plan Equity, December 31, 1992 $86,051,721 $271,877,188 $32,438,703 $5,021,629 $14,965,082 $410,354,323
=========== ============ =========== ========== =========== ============
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY (cont'd)
Year Ended December 31, 1991
<CAPTION>
Hercules Blended
Incorporated Interest Rate Money
Common Savings Equity Market Loan
Stock Fund Fund Fund Fund Total
------------ ------------ ------ ------ ---- -----
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Participating Employees $ 3,405,852 $ 19,843,861 $ 3,202,402 $ 871,370 $ $ 27,323,485
Company Contributions 9,752,650 9,752,650
----------- ------------ ----------- ---------- ----------- ------------
13,158,502 19,843,861 3,202,402 37,076,135
Interplan Transfers 446,454 1,408,906 99,654 871,370 1,986,353
Investment Income: 31,339
Cash Dividends 3,928,168 3,928,168
Interest 61,480 21,252,036 188,052 264,535 987,003 22,753,106
Change in Market Value 28,667,636 5,346,341 (20,137) 33,993,840
----------- ----------- ----------- ---------- ----------- -----------
Total 46,262,240 42,504,803 8,836,449 1,167,244 966,866 99,737,602
Withdrawals (8,045,683) (34,580,846) (3,091,202) (582,974) (1,152,058) (47,452,763)
Interfund Transfers (17,859,575) 10,669,739 4,172,511 539,804 2,477,521
------------ ------------ ----------- ---------- ----------- ------------
Change in Plan Equity 20,356,982 18,593,696 9,917,758 1,124,074 2,292,329 52,284,839
Plan Equity, December 31, 1990 61,021,484 235,203,859 18,835,185 4,087,506 10,809,769 329,957,803
------------ ------------ ----------- ---------- ----------- ------------
Plan Equity, December 31, 1991 $81,378,466 $253,797,555 $28,752,943 $5,211,580 $13,102,098 $382,242,642
=========== ============ =========== ========== =========== ============
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 is carried at cost plus accrued
interest which is equivalent to fair value. The market value of the Equity
Fund, the Balanced Asset Fund, the Government Bond Fund and the Fidelity
Magellan Fund is based on the fair value of the underlying securities held by
the fund.
The Plan provides that participants who retire from the Company may
elect, upon retirement, an Optional Valuation Date (OVD) for determining their
final withdrawal. The OVD is the last business day of any month following
retirement up to age 70 in which the distribution is requested. 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, December 31, 1991, and January 1, 1991
was $87,056,699, $35,861,479, $22,458,111 and $(9,439,952), 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, a Balanced Asset Management Fund and a Long-Term Capital
Appreciation (Fidelity Magellan) Fund 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 Savings and
Investment 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. Balanced Asset Management Fund, which invests in a managed portfolio
of stocks, bonds and money market instruments.
6. Fidelity Magellan Fund is a Long-Term Capital Appreciation (Fidelity)
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 50% of
that portion of the participants' contribution which does not exceed 6% of
earnings or base pay and must be invested in common stock of Hercules
Incorporated.
There were 8,227 participants at December 31, 1993 who participated in
one or more of the six 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 . . . . 2,020
Blended Interest Rate Savings Fund . . . . 6,536
Equity Fund. . . . . . . . . . . . . . . . 1,803
Balanced Asset Fund. . . . . . . . . . . . 232
Fidelity Magellan Fund . . . . . . . . . . 875
Government Bond Fund . . . . . . . . . . . 480
<PAGE>
3. Interplan Transfers
Interplan transfers represent transfers from acquired company plans and
the Hercules Incorporated Employee Savings Plan and rollovers of new
employees' distributions from defined contribution plans.
Effective January 1, 1993, the net assets of the Capital Accumulation
Plan (approximately $31mm) of the Aqualon Company (a wholly-owned subsidiary of
Hercules Incorporated) were transferred to the Hercules Incorporated Savings
and Investment 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 February 17, 1987, 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 Summary Plan Description dated November
1, 1990 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 $128,716,516 $86,233,376
Bankers Trust Equity Index Fund $ 39,187,215 $32,427,862
Group Annuity Contract with Peoples
Life Insurance Company (#BDA 00002TR) $ 44,473,712 $42,619,266
Group Annuity Contract with Provident Life and
Accident Insurance Company (#630-05537) $ 29,567,082 --
Group Annuity Contract with Travelers
Insurance Company (#15135), 9.3%, 6/30/92 -- $28,989,122
Group Annuity Contract with Aetna Life
Insurance Company (#13762), 9.2%, 4/30/97 -- $20,718,588
<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 Savings and Investment 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
Savings and Investment 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 SAVINGS AND INVESTMENT 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. 33-37279) of
our report dated June 20, 1994 on our audits of the financial statements of
Hercules Incorporated Savings and Investment 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
