Page
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
3
|
STATEMENT
OF NET ASSETS AVAILABLE FOR BENEFITS
|
4
|
At
December 31, 2005 and 2004
|
|
STATEMENT
OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
|
5
|
For
the years ended December 31, 2005 and 2004
|
|
NOTES
TO FINANCIAL STATEMENTS
|
6
|
SUPPLEMENTAL
SCHEDULES
|
13
|
Schedule
H, Part IV, Item 4(i) - Assets Held for Investment
Purposes
|
|
Schedule
H, Part IV, Item 4(j) - Reportable Transactions
|
|
EXHIBIT
INDEX
|
16
|
December
31,
|
|||||||
2005
|
2004
|
||||||
ASSETS:
|
|||||||
Investments
(Note 4)
|
$
|
362,116
|
$
|
389,359
|
|||
Contributions
receivable
|
4,599
|
2,417
|
|||||
Total
assets
|
$
|
366,715
|
$
|
391,776
|
|||
LIABILITIES:
|
|||||||
Loan
payable (Note 7)
|
39,154
|
51,212
|
|||||
Total
liabilities
|
39,154
|
51,212
|
|||||
NET
ASSETS AVAILABLE FOR BENEFITS
|
$
|
327,561
|
$
|
340,564
|
Year
Ended December 31,
|
|||||||
2005
|
2004
|
||||||
ADDITIONS:
|
|||||||
Increase
to net assets attributed to:
|
|||||||
Investment
income (loss)
|
|||||||
Net
(depreciation) appreciation in fair value
of
investments (Note 4)
|
$
|
(13,542
|
)
|
$
|
37,867
|
||
Interest
|
3,636
|
3,397
|
|||||
Dividends
|
6,436
|
3,326
|
|||||
Contributions:
|
|||||||
Participants
|
12,619
|
12,391
|
|||||
Employer
|
16,878
|
17,137
|
|||||
Transfers
from other plans (Note 9)
|
14
|
12,778
|
|||||
Total
Additions
|
26,041
|
86,896
|
|||||
DEDUCTIONS:
|
|||||||
Deductions
from net assets attributed to:
|
|||||||
Benefits
paid to participants
|
36,513
|
34,792
|
|||||
Administrative
expenses
|
14
|
8
|
|||||
Interest
Expense
|
2,517
|
2,737
|
|||||
Total
Deductions
|
39,044
|
37,537
|
|||||
Net
(Decrease) Increase
|
(13,003
|
)
|
49,359
|
||||
NET
ASSETS AVAILABLE FOR BENEFITS:
|
|||||||
Beginning
of year
|
340,564
|
291,205
|
|||||
End
of year
|
$
|
327,561
|
$
|
340,564
|
3.
|
Tax
Status
|
2005
|
2004
|
||||||
* Vanguard
500 Index Fund
|
$
|
43,154
|
$
|
46,495
|
|||
Vanguard
Explorer Fund
|
11,080
|
10,655
|
|||||
Vanguard
Extended Market Index Fund
|
6,740
|
5,506
|
|||||
* Vanguard
Growth & Income Fund
|
26,302
|
26,552
|
|||||
Vanguard
International Growth Fund
|
11,867
|
9,493
|
|||||
Vanguard
LifeStrategy Conservative Growth Fund
|
4,480
|
4,307
|
|||||
Vanguard
LifeStrategy Growth Fund
|
3,918
|
3,681
|
|||||
Vanguard
LifeStrategy Income Fund
|
2,903
|
2,731
|
|||||
Vanguard
LifeStrategy Moderate Growth Fund
|
8,424
|
7,850
|
|||||
* Vanguard
PRIMECAP Fund
|
42,546
|
44,145
|
|||||
Vanguard
Small-Cap Value Index Fund
|
9,278
|
7,141
|
|||||
Vanguard
Total Bond Market Index Fund
|
13,015
|
13,031
|
|||||
* Vanguard
Windsor II Fund
|
26,026
|
23,208
|
|||||
* Hercules
Common Stock Fund
|
61,668
|
90,970
|
|||||
Loan
Fund
|
4,700
|
4,705
|
|||||
* Hercules
Blended Interest Fund
|
86,015
|
88,889
|
|||||
Total
|
$
|
362,116
|
$
|
389,359
|
|||
* Represents
at Least 5% interest at December 31, 2005 and 2004
|
2005
|
2004
|
||||||
Hercules
Common Stock
|
$
|
(20,374
|
)
|
$
|
16,801
|
||
Mutual
Funds
|
6,832
|
21,066
|
|||||
Net
(depreciation) appreciation in fair value of investments
|
$
|
(13,542
|
)
|
$
|
37,867
|
5.
|
Employer
Contributions Received and
Receivable
|
Stock
|
Cash
|
Total
|
||||||||
December
31, 2005
|
$
|
14,452
|
$
|
2,426
|
$
|
16,878
|
||||
December
31, 2004
|
$
|
17,137
|
$
|
—
|
$
|
17,137
|
||||
6.
|
Non-participant-directed
Investments
|
Investments
|
Employer
Contributions Receivable
|
Loan
|
Net
Assets
|
||||||||||
December
31, 2005
|
|||||||||||||
Hercules
Common Stock Fund
|
|||||||||||||
Participant-directed
|
$
|
3,664
|
$
|
—
|
$
|
—
|
$
|
3,664
|
|||||
Non-participant-directed
|
20,513
|
—
|
—
|
20,513
|
|||||||||
24,177
|
—
|
—
|
24,177
|
||||||||||
Hercules
ESOP Stock Fund
|
|||||||||||||
Allocated
Non-participant-directed
|
18,103
|
1,523
|
—
|
19,626
|
|||||||||
Unallocated
Non-participant-directed
|
19,418
|
—
|
(39,154
|
)
|
(19,736
|
)
|
|||||||
37,521
|
1,523
|
(39,154
|
)
|
(110
|
)
|
||||||||
$
|
61,698
|
1,523
|
(39,154
|
)
|
$
|
24,067
|
|||||||
December
31, 2004
|
|||||||||||||
Hercules
Common Stock Fund
|
|||||||||||||
Participant-directed
|
$
|
8,066
|
$
|
—
|
$
|
—
|
$
|
8,066
|
|||||
Non-participant-directed
|
28,522
|
—
|
—
|
28,522
|
|||||||||
36,588
|
—
|
—
|
36,588
|
||||||||||
Hercules
ESOP Stock Fund
|
|||||||||||||
Allocated
Non-participant-directed
|
22,981
|
1,723
|
—
|
24,704
|
|||||||||
Unallocated
Non-participant-directed
|
31,431
|
—
|
(51,212
|
)
|
(19,781
|
)
|
|||||||
54,
412
|
1,723
|
(51,212
|
)
|
4,923
|
|||||||||
$
|
91,000
|
$
|
1,723
|
$
|
(51,212
|
)
|
$
|
41,511
|
Hercules
Common
|
Hercules
ESOP Stock Fund
|
|||||||||
Stock
Funds
|
Allocated
|
Unallocated
|
||||||||
December
31, 2005
|
||||||||||
Net
(depreciation) in fair value of investments:
|
$
|
(8,009
|
)
|
$
|
(5,727
|
)
|
$
|
(6,638
|
)
|
|
Employer
contributions
|
24
|
—
|
14,575
|
|||||||
Employee
contributions
|
493
|
(117
|
)
|
—
|
||||||
Benefit
paid to participants
|
(2,645
|
)
|
(1,849
|
)
|
—
|
|||||
Interest
expense
|
(2
|
)
|
—
|
(2,518
|
)
|
|||||
Allocation
of shares under ESOP provisions
|
—
|
5,374
|
(5,374
|
)
|
||||||
Net
loan activity
|
119
|
(74
|
)
|
—
|
||||||
Transfer
to other investments options
|
(2,391
|
)
|
(2,685
|
)
|
—
|
|||||
Net
(decrease) increase
|
$
|
(12,411
|
)
|
$
|
(5,078
|
)
|
$
|
45
|
||
December
31, 2004
|
||||||||||
Net
appreciation in fair value of investments:
|
$
|
6,991
|
$
|
4,183
|
$
|
5,627
|
||||
Transfers
in from FiberVisions
|
1,189
|
—
|
—
|
|||||||
Employee
contributions
|
588
|
403
|
—
|
|||||||
Employer
contributions
|
—
|
—
|
16,752
|
|||||||
Benefit
paid to participants
|
(3,325
|
)
|
(1,732
|
)
|
—
|
|||||
Interest
expense
|
—
|
—
|
(2,737
|
)
|
||||||
Allocation
of shares under ESOP provisions
|
—
|
5,173
|
(5,173
|
)
|
||||||
Net
loan activity
|
3
|
(98
|
)
|
—
|
||||||
Transfer
to other investments options
|
(8,275
|
)
|
(4,007
|
)
|
—
|
|||||
Net
(decrease) increase
|
$
|
(2,829
|
)
|
$
|
(3,922
|
)
|
$
|
14,469
|
Identity
of Issue
|
Investment
Type
|
Cost
|
Current
Value
|
|||||||
*Vanguard
500 Index Inv
|
Registered
Investment Company
|
$
|
35,058,517
|
$
|
43,154,359
|
|||||
*Vanguard
Explorer Fund
|
Registered
Investment Company
|
9,031,937
|
11,079,550
|
|||||||
*Vanguard
Extended Market Index Inv
|
Registered
Investment Company
|
5,148,452
|
6,740,208
|
|||||||
*Vanguard
Growth & Income Inv
|
Registered
Investment Company
|
21,145,693
|
26,301,872
|
|||||||
*Vanguard
International Growth Fund
|
Registered
Investment Company
|
8,834,061
|
11,866,544
|
|||||||
*Vanguard
LifeStrategy Conservative Growth Fund
|
Registered
Investment Company
|
4,097,465
|
4,480,332
|
|||||||
*Vanguard
LifeStrategy Growth Fund
|
Registered
Investment Company
|
3,323,781
|
3,918,303
|
|||||||
*Vanguard
LifeStrategy Income Fund
|
Registered
Investment Company
|
2,799,170
|
2,902,966
|
|||||||
*Vanguard
LifeStrategy Moderate Growth Fund
|
Registered
Investment Company
|
7,371,487
|
8,423,971
|
|||||||
*Vanguard
PRIMECAP Fund
|
Registered
Investment Company
|
28,536,014
|
42,546,000
|
|||||||
*Vanguard
Small-Cap Value Index Fund
|
Registered
Investment Company
|
8,049,490
|
9,278,031
|
|||||||
*Vanguard
Total Bond Market Index Fund
|
Registered
Investment Company
|
13,224,579
|
13,015,073
|
|||||||
*Vanguard
Windsor II Fund
|
Registered
Investment Company
|
20,245,168
|
26,025,917
|
|||||||
*Hercules
Common Stock Fund
|
Company
Stock Fund
|
42,862,115
|
24,146,858
|
|||||||
*Hercules
ESOP Fund
|
Company
Stock Fund
|
25,029,454
|
18,103,028
|
|||||||
*Hercules
ESOP - Unallocated
|
Company
Stock Fund
|
13,317,585
|
19,417,897
|
|||||||
*Loan
Fund
|
5.25%-11.50
|
%
|
4,700,434
|
4,700,434
|
||||||
*Hercules
Blended Interest Fund
|
Unallocated
Insurance Contract
|
86,014,403
|
86,014,403
|
|||||||
Total
Assets Held for Investment Purposes
|
$
|
338,789,805
|
$
|
362,115,746
|
Identity
of Party Involved
|
Description
of Asset
|
Purchase
Price
|
Selling
Price
|
Historical
Cost of Asset
|
Current
Value of Asset on Transaction Date
|
Historical
Gain (Loss)
|
|||||||||||||
The
Vanguard Group
|
Hercules
Blended Fund
|
$
|
15,153,401
|
$
|
15,153,401
|
||||||||||||||
The
Vanguard Group
|
Hercules
Blended Fund
|
$
|
18,028,917
|
$
|
18,028,917
|
18,028,917
|
|||||||||||||
The
Vanguard Group
|
Hercules
Common Stock Fund
|
8,284,914
|
8,284,914
|
||||||||||||||||
The
Vanguard Group
|
Hercules
Common Stock Fund
|
11,838,386
|
15,568,287
|
11,838,386
|
(3,729,901
|
)
|
|||||||||||||
* Transactions
or a series of transactions in excess of 5% of the current value
of the
Plan's assets as of the beginning of the plan
|
|||||||||||||||||||
year
as defined in 'section 2520.103-6 of the Department of Labor Rules
and
Regulations for Reporting and Disclosure under ERISA.
|
HERCULES
INCORPORATED SAVINGS AND INVESTMENT PLAN
|
|
/s/
Edward V. Carrington
|
|
Edward
V. Carrington
Vice
President, Human Resources
Plan
Administrator
|
|
May
12, 2006
|
Number
|
Description
|
23.1
|
Consent
of Independent Accountants
|