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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, 1994
Title of the plan:
--------------------
HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
Issuer of the securities held pursuant to the plan:
-----------------------------------------------------
HERCULES INCORPORATED
Hercules Plaza
1313 North Market Street
Wilmington, Delaware 19894
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HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
---------------------------------------------------
FINANCIAL STATEMENTS
----------------------
STATEMENT OF ASSETS, LIABILITIES, AND PLAN EQUITY
December 31, 1994 and 1993
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
Years ended December 31, 1994, 1993 and 1992
For
ANNUAL REPORT
FORM 11-K
1
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HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
STATEMENT OF ASSETS, LIABILITIES AND PLAN EQUITY WITH FUND INFORMATION
DECEMBER 31, 1994
<TABLE>
<CAPTION>
HERCULES BLENDED FIDELITY
INCORPORATED INTEREST RATE EQUITY BALANCED MAGELLAN GOV'T LOAN
COMMON STOCK SAVINGS FUND FUND ASSET FUND FUND BOND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments $115,968,503(a) $297,707,734 $38,249,289(b) $3,803,098(c) $24,599,610(d) $4,641,771(e) $18,072,657(f) $503,042,662
Receivable from
Company 21,469 (15,226) 2,083 48,519 (1,522) 2,371 0 57,694
Cash 690,490 12,275,974 346,172 40,308 281,788 52,402 40,489 13,727,623
------------ ------------ ----------- ---------- ----------- ---------- ----------- ------------
Total Assets $116,680,462 $309,968,482 $38,597,544 $3,891,925 $24,879,876 $4,696,544 $18,113,146 $516,827,979
============ ============ =========== ========== =========== ========== =========== ============
LIABILITIES &
EQUITY
Liability for
Withdrawals $ 1,008,111 $ 6,784,099 $ 640,552 $ 17,946 $ 300,517 $ 66,467 $ 397,473 $ 9,215,165
Advances from
Company 28,559 0 0 37,540 0 0 0 66,099
Plan Equity 115,643,792 303,184,383 37,956,992 3,836,439 24,579,359 4,630,077 17,715,673 507,546,715
------------ ------------ ------------ ---------- ----------- ---------- ----------- ------------
Total
Liabilities
& Equity $116,680,462 $309,968,482 $38,597,544 $3,891,925 $24,879,876 $4,696,544 $18,113,146 $516,827,979
============ ============ ============ ========== =========== ========== =========== ============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1993
HERCULES BLENDED FIDELITY
INCORPORATED INTEREST RATE EQUITY BALANCED MAGELLAN GOV'T LOAN
COMMON STOCK SAVINGS FUND FUND ASSET FUND FUND BOND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments $128,716,516(a) $314,751,911 $39,187,215(b) $2,256,518(c) $17,040,260(d) $4,936,156(e) $18,983,525(f) $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
============ ============ =========== ========== =========== ========== =========== ============
</TABLE>
<TABLE>
<S> <C> <C> <C>
(a) At fair value. Cost: 1994, $49,364,025 1993, $50,450,910 Shares: 1994, 3,012,168 1993, 3,405,199
(b) At fair value. Cost: 1994, $30,018,711 1993, $30,764,416
(c) At fair value. Cost: 1994, $3,979,476 1993, $2,249,488
(d) At fair value. Cost: 1994, $25,765,510 1993, $16,798,135
(e) At fair value. Cost: 1994, $4,515,388 1993, $4,817,017
(f) Represents loans to plan participants.
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
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HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
HERCULES BLENDED FIDELITY
INCORPORATED INTEREST RATE EQUITY BALANCED MAGELLAN GOV'T LOAN
COMMON STOCK SAVINGS FUND FUND ASSET FUND FUND BOND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONTRIBUTIONS
Participating Employees $ 2,399,459 $ 15,441,854 $ 3,368,547 $ 347,896 $ 2,450,782 $ 533,315 $ 0 $ 24,541,853
Company Contributions 8,688,258 0 0 0 0 0 0 8,688,258
------------ ------------ ----------- ---------- ----------- ---------- ----------- ------------
Subtotal Contributions 11,087,717 15,441,854 3,368,547 347,896 2,450,782 533,315 0 33,230,111
Interplan Transfers 755,632 23,624,171 455,888 9,290 (184,362) (149,227) (201,206) 24,310,186
Investment Income:
Cash Dividends 2,297,887 68,351 0 103,000 928,900 0 0 3,398,138
Interest 48,034 21,452,338 6,687 1,732 3,778 1,451 1,461,538 22,975,558
Change in Market Value 1,157,555 3,275 484,814 (184,911) (1,425,825) 15,212 0 50,120
------------ ------------ ----------- ---------- ----------- ---------- ----------- -------------
Total $ 15,346,825 $ 60,589,989 $ 4,315,936 $ 277,007 $ 1,773,273 $ 400,751 $ 1,260,332 $ 83,964,113
============ ============ =========== ========== =========== ========== =========== =============
WITHDRAWALS $(16,892,888) $(82,819,260) $(5,037,241) $ (202,938) $(2,203,626) (771,459) $(1,594,697) $(109,522,109)
Interfund Transfers (12,221,094) 5,842,845 (754,686) 1,407,738 6,148,138 (12,804) 410,137 0
------------ ------------ ---------- ---------- ----------- ---------- ----------- -------------
Change in Plan Equity (13,767,157) (16,386,426) (1,475,991) 1,481,807 5,717,785 (383,512) (744,502) (25,557,996)
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
Plan Equity, Dec. 31, 1994 $115,643,792 $303,184,383 $37,956,992 $3,836,439 $24,579,359 $4,630,077 17,715,673 $507,546,715
============ ============ =========== ========== =========== ========== =========== =============
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1993
HERCULES BLENDED FIDELITY
INCORPORATED INTEREST RATE EQUITY BALANCED MAGELLAN GOV'T LOAN
COMMON 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
============ ============ =========== ========== =========== ========== =========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements
3
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HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY WITH FUND INFORMATION
Year Ended December 31, 1992
<TABLE>
<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 $3,884,619 $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
=========== ============ =========== ========== =========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
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NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan are prepared under the accrual
method of accounting. 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. Purchases and sales of securities are recorded on a
trade-date basis, interest income is recorded on the accrual basis and
dividends are recorded on the ex-dividend date. Withdrawals are recorded upon
distribution.
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, 1994, December 31, 1993, December 31, 1992, and January 1, 1992
was $73,619,161, $87,056,699, $35,861,479, and $22,458,111, 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 1994, the blended yield of these contracts
was approximately 7.1%.
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 9,049 participants at December 31, 1994 who participated in
one or more of the six investment media. At December 31, 1994 the number of
participants selecting each of the investment media for their contributions was
as follows:
<TABLE>
<S> <C>
Hercules Incorporated Common Stock . . . . . . . . . 5,849
Blended Interest Rate Savings Fund . . . . . . . . . 5,046
Equity Fund . . . . . . . . . . . . . . . . . . . . . 1,626
Balanced Asset Fund . . . . . . . . . . . . . . . . . 285
Fidelity Magellan Fund . . . . . . . . . . . . . . . . 1,049
Government Bond Fund . . . . . . . . . . . . . . . . . 397
</TABLE>
5
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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 $31 MM) 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, 1994 or 1993 are as follows:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Hercules Incorporated Common Stock $115,968,503 $128,716,516
Bankers Trust Equity Index Fund $38,249,289 $39,187,215
Group Annuity Contract with Peoples
Life Insurance Company (#BDA 00002TR) $36,743,923 $44,473,712
Group Annuity Contract with Provident Life and
Accident Insurance Company (#630-05537) $29,629,378 $29,567,082
</TABLE>
6. SUBSEQUENT EVENT
On March 15, 1995 Hercules completed the sale of its Aerospace
business to Alliant Techsystems Inc. (Alliant). The sale agreement provided
for a transfer of fund assets (approximately $200 million) and assumption of
fund liabilities to Alliant as of April 1, 1995.
6
<PAGE> 8
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 with fund information of Hercules Incorporated Savings and Investment
Plan as of December 31, 1994 and 1993, and the related statements of income and
changes in plan equity with fund information for each of the three years in the
period ended December 31, 1994. 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, 1994 and 1993, and its income
and changes in plan equity for each of the three years in the period ended
December 31, 1994 in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The fund information in the
accompanying statements of assets, liabilities, and plan equity of the Hercules
Incorporated Savings and Investment Plan and the related statements of income
and changes in plan equity is presented for purposes of additional analysis
rather than to present the financial position and income and changes in plan
equity of each fund. The fund information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and in our
opinion are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
2400 Eleven Penn Center Coopers & Lybrand L.L.P
Philadelphia, Pennsylvania 19103
June 28, 1995
7
<PAGE> 9
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
-------------------------------------------------
H. Eugene McBrayer, Chairman
Finance Committee, Hercules Incorporated,
Plan Administrator
Date: June 28, 1995
8
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EXHIBIT INDEX
Number Description
23 Consent of Independent Accountants.
9
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EXHIBIT 23. 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 28, 1995 on our audits of the financial statements of
Hercules Incorporated Savings and Investment Plan as of December 31, 1994 and
1993 and for each of the three years in the period ended December 31, 1994,
which report is included in this Annual Report on Form 11-K.
2400 Eleven Penn Center Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania 19103
June 28, 1995
10
