<PAGE> 1
COMMISSION FILE NO. 1-496
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 YEAR ENDED DECEMBER 31, 1997
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
<PAGE> 2
HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
at December 31, 1997 and 1996
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
for the year ended December 31, 1997
Supplemental schedules required by Section 2520, 103-10 of the Department of
Labor Rules and Regulations for Reporting and Disclosure under ERISA have been
omitted because they are not applicable. Plans with all of their assets in a
Master Trust are exempt from the requirement to include investment supplemental
schedules as part of their Financial Statements.
1
<PAGE> 3
HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
<TABLE>
<CAPTION>
DECEMBER 31, 1997
PARTICIPANT DIRECTED
-------------------------------------------------------------------------------------------
HERCULES
INCORPORATED BLENDED FRANK RUSSELL
COMMON STOCK INTEREST RATE FIDELITY MAGELLAN LOAN EQUITY INDEX
FUND SAVINGS FUND EQUITY FUND FUND FUND FUND
----------- ------------ ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Allocated Share of Master
Savings Trust Investments $23,760,445(a) $115,611,690 $63,161,169(b) $30,707,808(c) $9,007,645 $7,139,167(d)
Contributions Receivable 71,796 -- -- -- -- --
Allocated Share of Master
Savings Trust Cash 350,032 977,287 -- -- 100 --
----------- ------------ ----------- ----------- ---------- ----------
Total Assets $24,182,273 $116,588,977 $63,161,169 $30,707,808 $9,007,745 $7,139,167
----------- ------------ ----------- ----------- ---------- ----------
LIABILITIES
Accounts Payable 6 9,981 48,761 91,424 12,001 23,276
----------- ------------ ----------- ----------- ---------- ----------
Net Assets Available for Benefits $24,182,267 $116,578,996 $63,112,408 $30,616,384 $8,995,744 $7,115,891
=========== ============ =========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
--------------------------------------------------------------------------------------
SEI DIVERSIFIED SEI DIVERSIFIED
SEI INTERNATIONAL CONSERVATIVE SEI CORE FIXED SEI SMALL CAP. MODERATE
EQUITY FUND FUND INCOME FUND GROWTH FUND GROWTH FUND
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Allocated Share of Master
Savings Trust Investments $1,841,918(d) $3,925,623(e) $4,687,313(f) $4,565,057(g) $5,344,653(h)
Contributions Receivable -- 6,188 1,278 45,885 64,902
Allocated Share of Master
Savings Trust Cash -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total Assets $1,841,918 $3,931,811 $4,688,591 $4,610,942 $5,409,555
---------- ---------- ---------- ---------- ----------
LIABILITIES
Accounts Payable 10,542 156 24,475 3,996 64,577
---------- ---------- ---------- ---------- ----------
Net Assets Available for Benefits $1,831,376 $3,931,655 $4,664,116 $4,606,946 $5,344,978
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
NONPARTICIPANT
DIRECTED
--------------
HERCULES
INCORPORATED
COMMON
STOCK FUND TOTAL
----------- ------------
<S> <C> <C>
ASSETS
Allocated Share of Master
Savings Trust Investments $50,190,521(a) $319,943,009
Contributions Receivable 151,660 341,709
Allocated Share of Master
Savings Trust Cash 739,391 2,066,810
----------- ------------
Total Assets $51,081,572 $322,351,528
----------- ------------
LIABILITIES
Accounts Payable 12 289,209
----------- ------------
Net Assets Available for Benefits $51,081,560 $322,062,321
=========== ============
</TABLE>
(a) At fair value. Cost $35,305,350. Shares: 1,477,173.
(b) At fair value. Cost $35,976,488.
(c) At fair value. Cost $ 6,921,298.
(d) At fair value. Cost $ 2,078,237.
(e) At fair value. Cost $ 3,916,452.
(f) At fair value. Cost $ 4,624,943.
(g) At fair value. Cost $ 5,007,964.
(h) At fair value. Cost $ 5,372,084.
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 4
HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
----------------------------------------------------------------------------
HERCULES BLENDED
INCORPORATED INTEREST RATE FIDELITY
COMMON SAVINGS BALANCED MAGELLAN
STOCK FUND EQUITY FUND ASSET FUND FUND
----------- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Allocated Share of Master
Savings Trust Investments $24,250,083(a) $141,736,081 $47,885,550(b) $6,210,650(c) $27,017,123(d)
Contributions Receivable -- -- 74,634 56,815 39,867
Allocated Share of Master
Savings Trust Cash 271,439 2,358,103 266,683 321,998 501,330
----------- ------------ ----------- ---------- -----------
Total Assets $24,521,522 $144,094,184 $48,226,867 $6,589,463 $27,558,320
=========== ============ =========== ========== ===========
LIABILITIES
Accounts Payable 80,940 646,001 24,332 63,507 20,067
----------- ------------ ----------- ---------- -----------
Net Assets Available for
Benefits $24,440,582 $143,448,183 $48,202,535 $6,525,956 $27,538,253
=========== ============ =========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
NONPARTICIPANT
PARTCIPANT DIRECTED DIRECTED
--------------------------- ------------
HERCULES
GOVERNMENT INCORPORATED
BOND FUND LOAN FUND COMMON STOCK TOTAL
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
Allocated Share of Master
Savings Trust Investments $2,379,885(e) $10,584,045(f) $52,563,611(a) $312,627,028
Contributions Receivable -- -- -- 171,316
Allocated Share of Master
Savings Trust Cash 23,381 (222,602) 588,361 4,108,693
---------- ------------ ----------- ------------
Total Assets $2,403,266 $ 10,361,443 $53,151,972 $316,907,037
========== ============ =========== ============
LIABILITIES
Accounts Payable 5,416 18,385 175,445 1,034,094
---------- ------------ ----------- ------------
Net Assets Available for
Benefits $2,397,850 $ 10,343,058 $52,976,527 $315,872,944
========== ============ =========== ============
</TABLE>
(a) At fair value. Cost $40,363,347. Shares: 1,776,039.
(b) At fair value. Cost $29,990,475.
(c) At fair value. Cost $ 5,735,246.
(d) At fair value. Cost $25,222,593.
(e) At fair value. Cost $ 2,167,946.
(f) Represents loans to Plan participants.
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 5
HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
PARTICIPANT DIRECTED
--------------------------------------------------------------------------------------------------
HERCULES BLENDED
INCORPORATED INTEREST BALANCED
COMMON RATE ASSET FIDELITY GOVERNMENT
STOCK FUND SAVINGS FUND EQUITY FUND FUND MAGELLAN FUND BOND FUND LOAN FUND
----------- ------------ ----------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CONTRIBUTIONS:
Participating Employees $ 1,967,219 $ 4,253,544 $ 2,769,731 $ 242,387 $ 1,464,740 $ 93,324 $ --
Company Contributions -- -- -- -- -- -- --
----------- ------------ ----------- ---------- ------------ ---------- ------------
Subtotal Contributions 1,967,219 4,253,544 2,769,731 242,387 1,464,740 93,324 --
Interplan Transfers 390,136 (254,584) 21,145 (24,629) (4,723) (67) (17,717)
ALLOCATED SHARE OF MASTER
SAVINGS TRUST INVESTMENT
ACTIVITIES:
Cash Dividends 495,025 -- -- 92,483 2,030,253 -- --
Interest 179 8,151,979 6,700 1,406 -- 417 607,435
Change in Market Value 3,466,191 -- 16,391,211 1,294,456 4,915,673 89,720 --
----------- ------------ ----------- ---------- ------------ ---------- ------------
Total $ 6,318,750 $ 12,150,939 $19,188,787 $1,606,103 $ 8,405,943 $ 183,394 $ 589,718
Withdrawals (3,468,131) (28,475,054) (8,542,566) (454,599) (4,322,989) (201,624) (1,282,138)
Interfund Transfers (3,108,934) (10,545,072) 4,263,662 (7,677,460) (1,004,823) (2,379,620) (654,894)
----------- ------------ ----------- ---------- ------------ ---------- ------------
Change in Net Assets Available
For Benefits (258,315) (26,869,187) 14,909,873 (6,525,956) 3,078,131 (2,397,850) (1,347,314)
Net Assets Available for Benefits
December 31, 1996 24,440,582 143,448,183 48,202,535 6,525,956 27,538,253 2,397,850 10,343,058
----------- ------------ ----------- ---------- ------------ ---------- ------------
Net Assets Available for Benefits
December 31, 1997 $24,182,267 $116,578,996 $63,112,408 $ -- $ 30,616,384 $ -- $ 8,995,744
=========== ============ =========== ========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
---------------------------------------------------------------------------
SEI DIVERSIFIED
FRANK RUSSELL EQUITY SEI INTERNATIONAL CONSERVATIVE SEI CORE FIXED
INDEX FUND EQUITY FUND FUND INCOME FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CONTRIBUTIONS:
Participating Employees $ 216,282 $ 61,457 $ 112,220 $ 92,181
Company Contributions -- -- -- --
----------- ----------- ----------- -----------
Subtotal Contributions 216,282 61,457 112,220 92,181
Interplan transfers 2,178 1,178 -- 334
ALLOCATED SHARE OF MASTER
SAVINGS TRUST INVESTMENT
ACTIVITIES:
Cash Dividends -- 57,391 77,914 102,668
Interest 17 -- -- --
Change in Market Value 239,333 (265,101) 15,800 40,434
----------- ----------- ----------- -----------
Total $ 457,810 $ (145,075) $ 205,934 $ 235,617
Withdrawals (993,037) (154,627) (274,019) (394,320)
Interfund Transfers 7,651,118 2,131,078 3,999,740 4,822,819
----------- ----------- ----------- -----------
Change in Net Assets Available
For Benefits 7,115,891 1,831,376 3,931,655 4,664,116
Net Assets Available for Benefits
December 31, 1996 -- -- -- --
----------- ----------- ----------- -----------
Net Assets Available for Benefits
December 31, 1997 $ 7,115,891 $ 1,831,376 $ 3,931,655 $ 4,664,116
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
NONPARTICIPANT
PARTICIPANT DIRECTED DIRECTED
--------------------------------- ------------
HERCULES
SEI DIVERSIFIED INCORPORATED
SEI SMALL CAP. MODERATE GROWTH COMMON STOCK
GROWTH FUND FUND FUND TOTAL
----------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
CONTRIBUTIONS:
Participating Employees $ 108,469 $ 65,103 $ -- $ 11,446,657
Company Contributions -- -- 3,583,541 3,583,541
----------- ----------- ------------ -------------
Subtotal Contributions 108,469 65,103 3,583,541 15,030,198
Interplan transfers 19,073 -- 960,283 1,092,607
ALLOCATED SHARE OF MASTER
SAVINGS TRUST INVESTMENT
ACTIVITIES:
Cash Dividends 167,698 140,845 1,218,456 4,382,733
Interest -- 7 440 8,768,580
Change in Market Value (291,555) (26,264) 8,531,133 34,401,031
----------- ----------- ------------ -------------
Total $ 3,685 $ 179,691 $ 14,293,853 $ 63,675,149
Withdrawals (288,747) (97,446) (8,536,475) (57,485,772)
Interfund Transfers 4,892,008 5,262,733 (7,652,345) --
----------- ----------- ------------ -------------
Change in Net Assets Available
For Benefits 4,606,946 5,344,978 (1,894,967) 6,189,377
Net Assets Available for Benefits
December 31, 1996 -- -- 52,976,527 315,872,944
----------- ----------- ------------ -------------
Net Assets Available for Benefits
December 31, 1997 $ 4,606,946 $ 5,344,978 $ 51,081,560 $ 322,062,321
=========== =========== ============ =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Hercules Incorporated Savings and Investment Plan (the Plan) is a
defined-contribution plan subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Upon hire, employees are immediately eligible to participate in the
Plan and obtain immediate, nonforfeitable (vested) rights to the full market
value of their account. 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 Plan's investment media, 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.
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other investment
securities. Investment securities are exposed to various risks, such as interest
rate, market, and credit. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in the
value of investment securities, it is at least reasonably possible that changes
in risks in the near term would materially affect participants' account balances
and the amounts reported in the statement of net assets available for benefits
and the statement of changes in net assets available for benefits.
The assets of the Plan are commingled for investment purposes in the
Hercules Incorporated Master Savings Trust (the Trust) with the assets of the
Hercules Incorporated Employee Savings Plan. The assets of the Trust are held by
Bankers Trust Company (Trustee). The Plan's investment in the Trust is based
upon the fair value of net assets in the Trust and the Plan's relative interest
in the Trust. The Plan's allocated share of Master Trust investments in the
accompanying statements of net assets available for Plan benefits represent the
Plan's share of the investments in the Trust, which was 97.47% and 97.68% at
December 31, 1997 and 1996, respectively.
The Plan includes an employee loan provision authorizing participants
to borrow an amount from their vested balances in the Plan. The loans are
executed by promissory notes and have a minimum term of 12 months and a maximum
term of 60 months, except for qualified residential loans, which have a maximum
term of 120 months. The loans bear an interest rate equal to the average rate
charged by selected major banks to prime customers for secured loans. The loans
are repaid over the term in monthly installments of principal and interest by
payroll deduction. A participant also has the right to repay the loan in full at
any time without penalty.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make significant estimates
and assumptions that affect the reported amounts of assets, liabilities and
changes therein, and disclosures of contingent assets and liabilities at the
date of the financial statements.
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 contract value, which approximates fair
value. The market value of the Equity Fund, the Balanced Asset Fund, the
Government Bond Fund, the Fidelity Magellan Fund, the Frank Russell Equity Index
Fund, and the SEI group of funds 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 Plan presents in the statement of changes in net assets available
for benefits its allocated share of the Trust's investment activities, which
includes 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.
5
<PAGE> 7
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
2. INVESTMENT PROGRAM
The following investment media 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 1997 and 1996, the
blended yield of these contracts was approximately 6.4% and
6.1%, respectively.
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. During
1997 this investment medium was eliminated.
5. Balanced Asset Management Fund, which invests in a managed
portfolio of stocks, bonds and money market instruments.
During 1997 this investment medium was eliminated.
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.
7. Frank Russell Equity Index Fund sells high long-term returns
by investing in common stocks of the largest companies in the
U.S. stock market.
8. SEI International Equity Fund seeks to provide aggressive
long-term growth from investments in foreign stocks and
diversification in domestic stock portfolios.
9. SEI Small Cap. Growth Fund invests in stocks of smaller
companies that are in an early stage or transition point in
their development.
10. SEI Diversified Moderate Growth Fund invests in U.S. and
international stocks and provides a limited level of current
income by investing in bonds.
11. SEI Diversified Conservative Fund seeks to provide current
income with opportunity for capital growth by investing in
domestic and international stocks and bonds.
12. SEI Core Fixed Income Fund invests in a diversified portfolio
of high-quality fixed-income bonds.
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 4,497 participants at December 31, 1997 who participated in
one or more of the ten investment media. At December 31, 1997 the number of
participants selecting each of the investment media for their contributions was
as follows:
Hercules Incorporated Common Stock ......................... 3,654
Blended Interest Rate Savings Fund ......................... 2,960
Equity Fund................................................. 1,787
Fidelity Magellan Fund...................................... 1,268
Frank Russell Equity Index Fund............................. 500
SEI Core Fixed Income Fund.................................. 370
SEI Diversified Conservative Fund........................... 343
SEI Diversified Moderate Growth Fund........................ 219
SEI International Equity Fund............................... 232
SEI Small Cap. Growth Fund.................................. 374
6
<PAGE> 8
3. INTEREST IN HERCULES INCORPORATED MASTER SAVINGS TRUST
The Plan's allocated share of the Trust's net assets is based upon the
total of each individual Plan's interest in investments of the Trust. The
allocated interest of the net assets of each fund in the Trust at December 31
was as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Hercules Incorporated Common Stock............................. 99.1% 99.2%
Blended Interest Rate Savings Fund............................. 95.6% 96.5%
Equity Fund.................................................... 98.6% 98.9%
Balanced Asset Fund............................................ 0% 100%
Fidelity Magellan Fund......................................... 95.8% 96.1%
Government Bond Fund........................................... 0% 100%
Loan Fund...................................................... 100% 100%
Frank Russell Equity Index Fund................................ 98.9% 0%
SEI Diversified Conservative Fund.............................. 100% 0%
SEI International Equity Fund.................................. 100% 0%
SEI Small Cap. Growth Fund..................................... 99.2% 0%
SEI Diversified Moderate Growth Fund........................... 100% 0%
SEI Core Fixed Income Fund..................................... 100% 0%
</TABLE>
4. 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.
5. TAX STATUS
The United States Treasury Department advised on June 21, 1995, that
the Plan as amended through January 1, 1995 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 Plan has been amended
since receiving the determination letter. However, the Plan administrator
believes that the Plan is currently being operated in compliance with the
applicable provisions of the Internal Revenue Code.
6. INVESTMENTS
The Plan's allocated interest in investments in the Trust that
represent five percent or more of net assets available for benefits at December
31, 1997 or 1996 are as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Hercules Incorporated Common Stock
(Participant/Nonparticipant) $73,950,966 $76,813,694
Bankers Trust Equity Index Fund $63,161,169 $47,885,550
Fidelity Magellan Fund $30,707,808 $27,017,123
Group Annuity Contract with Peoples
Life Insurance Company (#BDA 00002TR) $23,088,209 $21,939,567
Group Annuity Contract with Metropolitan Life
Insurance Company (#12833) $ -- $18,295,494
GIC Prudential (#GA 8083) $25,914,612 $24,581,444
Group Annuity Contract with Transamerica $18,448,411 $17,580,387
</TABLE>
7
<PAGE> 9
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31,
1997 1996
------------- -------------
<S> <C> <C>
Net Assets Available for Benefits
per the financial statements $ 322,062,321 $ 315,872,944
Amounts Allocated to Withdrawing Participants (338,603) (3,388,339)
------------- -------------
Net Assets Available for Benefits
per the Form 5500 $ 321,723,718 $ 312,484,605
============= =============
</TABLE>
The following is a reconciliation of withdrawals per the financial
statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
-----------------
<S> <C>
Withdrawals per the financial statements $ 57,485,772
Add: Amounts Allocated to Withdrawing Participants at
December 31, 1997 338,603
Less: Amounts Allocated to Withdrawing Participants at
December 31, 1996 (3,388,339)
------------
Withdrawals per the Form 5500 $ 54,436,036
============
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for payment prior
to December 31 but not yet paid as of that date.
8
<PAGE> 10
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors,
Hercules Incorporated,
Wilmington, Delaware
We have audited the accompanying statements of net assets available for benefits
of Hercules Incorporated Savings and Investment Plan as of December 31, 1997 and
1996, and the related statement of changes in net assets available for benefits
for the year ended December 31, 1997. 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 net assets available for benefits of Hercules
Incorporated Savings and Investment Plan as of December 31, 1997 and 1996, and
the changes in net assets available for benefits for the year ended December 31,
1997 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 net assets available for benefits of the Hercules Incorporated
Savings and Investment Plan and the related statement of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for plan benefits and changes in net
assets available for plan benefits 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.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania 19103
June 25, 1998
9
<PAGE> 11
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 hereunto duly authorized.
HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN
H. Eugene McBrayer
-------------------------------------------------
H. Eugene McBrayer, Chairman
Finance Committee, Hercules Incorporated,
Plan Administrator
Date: June 30, 1998
10
<PAGE> 12
EXHIBIT INDEX
Number Description
23 Consent of Independent Accountants.
11
<PAGE> 1
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 25, 1998 on our audits of the financial statements of Hercules
Incorporated Savings and Investment Plan as of December 31, 1997 and 1996 and
for the year ended December 31, 1997, which report is included in this Annual
Report on Form 11-K.
Coopers & Lybrand L.L.P
2400 Eleven Penn Center
Philadelphia, Pennsylvania 19103
June 25, 1998
