SCHEDULE
14A INFORMATION
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Proxy
Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment
No. )
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Filed
by Registrant [X]
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Filed
by a Party other than the Registrant [ ]
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Check
the appropriate box:
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[X]
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Preliminary
Proxy Statement
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[
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Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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[
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Definitive
Proxy Statement
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[
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Definitive
Additional Materials
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[
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Soliciting
Material Pursuant to Section 240.14a-12
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HERCULES
INCORPORATED
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(Name
of Registrant as Specified in Its Charter)
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(Name
of Person(s) Filing Proxy Statement if other than the
Registrant)
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Payment of Filing Fee (Check the appropriate
box):
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[X
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No
fee required.
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[
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11
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1)
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Title
of each class of securities to which transaction applies:
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2)
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Aggregate
number of securities to which transaction applies:
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3)
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Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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4)
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Proposed
maximum aggregate value of transaction:
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5)
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Total
fee paid:
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[
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Fee
paid previously by written preliminary materials.
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[
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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1)
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Amount
Previously Paid:
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2)
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Form Schedule
or Registration Statement No.:
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3)
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Filing
Party:
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4)
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Date
Filed:
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EXPLANATORY
NOTE
The
purpose of this Amendment is to add the Schedule 14A cover page
which was
inadvertently omitted from the Preliminary Proxy Statement filed
earlier
today. Except for the Schedule 14A cover page added hereby, the
attached
Preliminary Proxy Statement is the same as the earlier filed
Preliminary
Proxy Statement.
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2007
Proxy
Statement
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Invitation
to 2007
Annual
Meeting
of
Shareholders
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Hercules
Incorporated
Hercules
Plaza
1313
North Market Street
Wilmington,
DE 19894-0001
John
K. Wulff
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Chairman
of the Board
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Craig
A. Rogerson
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President
and
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Chief
Executive Officer
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March
21, 2007
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Sincerely
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John
K. Wulff
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Chairman
of the Board
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Craig
A. Rogerson
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President
and Chief Executive Officer
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· |
Take
Interstate 95 South to Wilmington (do not take I-495 - follow I-95
signs
for Wilmington).
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· |
Take
Exit 7B, which is Delaware Avenue/Route
52.
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Stay
to the left as you come up grade to traffic light. Turn left onto
Delaware
Avenue and take center lane. There is a sign marked "Business District
52
South."
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You
will pass seven streets - Adams, Jefferson, Washington, West, Tatnall,
Orange and Shipley. After crossing over Orange Street, the Hotel
DuPont
will be on your right. Get into the left
lane.
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The
next street is Market Street. Turn
left.
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Proceed
down Market Street crossing over 12th
and 13th
Streets (traffic lights at each corner). Hercules Plaza is at
13th
Street and will be on your left. Hercules Plaza is a twelve-story
granite/glass building with green tinted
windows.
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Stay
to the far left lane as you exit the Delaware Memorial Bridge. Stay
left
heading toward sign stating Wilmington Delaware Turnpike - Baltimore
- 295
- 95 - 495.
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Bear
to the right heading for Interstate 95
North.
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Take
the center lane as it will narrow to two lanes past Exit 6 (Martin
Luther
King Boulevard).
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Take
Exit 7, Delaware Avenue. Stay to the right as you come up grade to
traffic
light. You are on Adams Street - continue straight ahead to dead
end
(about 3 blocks) to Delaware Avenue. Turn right onto Delaware Avenue
and
take center lane. You will pass under sign "Business District 52
South."
Pass five streets - Jefferson, Washington, West, Tatnall and Orange.
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After
crossing over Orange Street, the Hotel DuPont will be on your right.
Get
into the left lane.
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Turn
left onto Market Street. Pass 12th
and 13th
Streets (traffic lights at each). Hercules Plaza is at 13th
Street and will be on your left. Hercules Plaza is a twelve-story
granite/glass building with green tinted
windows.
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Take
the Blue Route to Interstate 95 South to Wilmington.
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Follow
the above directions for traveling from
Philadelphia.
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Take
Interstate 95 North to Wilmington. Take Exit 7, which is Delaware
Avenue/Route 52.
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Stay
to the right as you come up grade to traffic light. You are on Adams
Street - continue straight ahead to dead end (about 3 blocks) to
Delaware
Avenue. Turn right on to Delaware Avenue and take center lane. You
will
pass under sign "Business District 52 South." Pass five streets -
Jefferson, Washington, West, Tatnall and Orange.
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After
crossing over Orange Street, the Hotel DuPont will be on your right.
Get
into the left lane.
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Turn
left onto Market Street. Pass 12th
and 13th
Streets (traffic lights at each). Hercules Plaza is at 13th
Street and will be on your left. Hercules Plaza is a twelve-story
granite/glass building with green tinted
windows.
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The
Wilmington Train Station is located between King and French Streets
on
Front Street.
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Hercules
Plaza is at Market and 13th
Streets, 12 blocks north of the station. Cabs are usually
available at the station.
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Hercules
Plaza is on the NW corner of Market and 13th
Streets. Hercules Plaza is a twelve-story granite/glass building
with
green tinted windows.
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After
you enter the building, follow the posted signs to the meeting room
located in the Lower Atrium.
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1. |
Re-election
of each of the following three (3) director nominees: John C. Hunter,
III,
Robert D. Kennedy and Craig A. Rogerson, each for a new three-year
term
expiring at the 2010 Annual Meeting of Shareholders (Proposal No.
1);
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2. |
Ratification
of the appointment of BDO Seidman, LLP as Hercules’ independent registered
public accountants for 2007 (Proposal No. 2);
and
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3. |
Amendments
to Hercules’ Amended and Restated Certificate of Incorporation and
Hercules’ Revised and Amended By-laws (Proposal No.
3).
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By
order of the Board of Directors
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Israel
J. Floyd
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Corporate
Secretary
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and
General Counsel
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Page
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1
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1
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2
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3
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3
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4
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4
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4
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4
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5
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5
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6
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Method and Cost of Proxy Solicitation |
6
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6
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7
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8
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10
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Board Committees |
12
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DIRECTOR COMPENSATION |
14
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Compensation of Employee Directors |
14
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Compensation of Non-Employee Directors |
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20
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24
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25
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PRINCIPAL ACCOUNTANT FEES AND SERVICES |
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27
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HUMAN RESOURCES COMMITTEE REPORT |
31
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COMPENSATION DISCUSSION AND ANALYSIS |
31
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SUMMARY COMPENSATION TABLE |
42
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GRANT OF PLAN-BASED AWARDS |
44
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PENSION BENEFITS |
47
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HUMAN RESOURCES COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION |
51
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BENEFICIAL OWNERSHIP OF COMMON STOCK |
52
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· |
To
vote your proxy by mail, mark your selections on the enclosed Proxy
Card,
date and sign your name exactly as it appears on your Proxy Card,
and
return your Proxy Card in the enclosed envelope.
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· |
To
vote by telephone, please dial 1-866-540-5760, have your Proxy Card
in
hand when you call and follow the voice prompts.
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· |
To
vote by use of the Internet, please log on to the Internet at
http://www.proxyvoting.com/herc and
have your Proxy Card in hand when you access the
website.
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a
letter from your bank, broker or nominee stating that you owned your
shares as of the Record Date;
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an
account statement from your bank, broker or nominee indicating that
you
owned your shares as of the Record Date; or
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· |
a
copy of the voting instruction card provided by your bank, broker
or
nominee indicating that you owned your shares as of the Record
Date.
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a
validly executed proxy naming you as the proxy holder, signed by
a
Hercules shareholder who owned Hercules shares as of the Record Date;
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valid
government-issued photographic identification (such as a driver’s license
or passport); and
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· |
if
the shareholder whose proxy you hold was not a record holder of Hercules
shares as of the Record Date, proof of the shareholder’s ownership of
Hercules shares as of the Record Date, in the form of a letter or
statement from a bank, broker or nominee or the voting instruction
card
provided by the bank, broker or nominee in each case, indicating
that the
shareholder owned those shares as of the Record
Date.
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· |
FOR
the election of each of the three director nominees (Proposal No.
1);
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· |
FOR
the ratification of the appointment of BDO Seidman, LLP as Hercules’
independent registered public accountants for 2007 (Proposal No.
2); and
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FOR
the amendments to Hercules’ Amended and Restated Certificate of
Incorporation and to Hercules’ Revised and Amended By-laws (Proposal No.
3).
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to
vote “FOR” or “WITHHOLD” authority for one or more of the director
nominees (see Proposal No. 1);
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to
vote “FOR” or “AGAINST,” or to “ABSTAIN” from voting on, the ratification
of the appointment of BDO Seidman, LLP as Hercules’ independent registered
public accountants for 2007 (see Proposal No. 2);
or
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· |
to
vote “FOR” or “AGAINST,” or to “ABSTAIN” from voting on, the amendments to
the Hercules' Amended and Restated Certificate of Incorporation and
the
Hercules' Revised and Amended By-laws (see Proposal No.
3).
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· |
the
name, residence and business address of the nominating
shareholder;
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· |
a
representation that the shareholder is a record holder of Hercules
stock
or holds Hercules stock through a bank, broker or other nominee and
the
number of shares held;
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· |
information
regarding each nominee which would be required to be included in
a proxy
statement;
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· |
a
description of any arrangements or understandings between and among
the
shareholder and each and every nominee;
and
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· |
the
written consent of each nominee to serve as a director, if
elected.
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· |
the
director is, or within the last three (3) years has been, an
employee* of
the Company;
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· |
an
immediate family member of the director is, or has been within the
last
three (3) years, an executive officer**
of
the Company;
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· |
the
director is a current partner or employee of a firm that is the Company’s
internal or external auditor;
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· |
an
immediate family member of the director is a current partner of a
firm
that is the Company’s internal or external
auditor;
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· |
an
immediate family member of the director is a current employee of
the
Company’s internal or external auditor and participates in the firm's
audit, assurance or tax compliance (but not tax planning) practice;
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· |
the
director or an immediate family member was within the last three
years a
partner or employee of a firm that is the Company’s internal or external
auditor and personally worked on the Company’s audit within that
time;
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· |
the
director or an immediately family member of the director is, or has
been
within the last three (3) years, an executive officer of another
company
where any of the Company’s present executive officers at the same time
serves or served on that other company’s compensation committee;
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· |
the
director is a current employee, or an immediate family member of
the
director is a current executive officer, of a company that has made
payments to, or received payments from, the Company for property
or
services in an amount which, in any of the last three fiscal years,
exceeds the greater of $1 million, or 2% of such other company’s
consolidated gross revenues; and
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· |
the
director or an immediate family member of the director has received
during
any twelve-month period within the last three years more than $100,000
in
direct compensation from the Company (other than in director and
committee
fees and pension or other forms of deferred compensation for prior
service
(provided such compensation is not contingent in any way on continued
service) and compensation received by an immediate family member
for
service as a non-executive employee and compensation received by
a
director for former service as an interim executive officer of the
Company).
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Director
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Audit
Committee
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Human
Resources
Committee
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Emergency
Committee
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Finance
Committee
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Governance
Committee
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Respon-
sible
Care
Committee
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Anna
C. Catalano
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X
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X
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X
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Thomas
P. Gerrity
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X
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X
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X
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John
C. Hunter, III
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X
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X
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C
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X
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Burton
M. Joyce
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C
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X
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X
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Robert
D. Kennedy
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X
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X
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X
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C
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Jeffrey
M. Lipton
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C
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X
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X
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X
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Craig
A. Rogerson
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C
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John
K. Wulff
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X
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X
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X
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X
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Joe
B. Wyatt
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X
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X
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C
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X
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Number
of Meetings in 2006
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13
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3
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0
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4
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5
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4
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Name
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Fees
Earned or
Paid
in
Cash
($)(1)
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Stock
Awards
($)(2)(5)
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Option
Awards
($)(3)(5)
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Change
in
Pension
Value
and
Nonqualified
Deferred
Compen-
sation
Earnings(4)
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All
Other
Compen-sation
($)
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Total
($)
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Anna
C. Catalano
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$56,800
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$14,505
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$21,083
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-
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-
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$92,389
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Thomas
P. Gerrity
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$56,800
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$26,427
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$21,083
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$4
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-
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$104,314
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John
C. Hunter III
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$79,800
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$26,289
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$21,083
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$6
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-
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$127,178
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Burton
M. Joyce
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$75,048
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$14,505
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$21,083
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-
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-
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$110,637
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Robert
D. Kennedy
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$78,600
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$47,866
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$21,083
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$5
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-
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$147,554
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Jeffrey
M. Lipton
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$64,300
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$47,866
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$21,083
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$2,270
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-
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$135,519
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John
K. Wulff
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$62,800
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$58,372
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$21,083
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$2,503
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-
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$144,758
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Joe
B. Wyatt
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$67,800
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$47,560
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$21,083
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$7
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-
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$136,451
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(1) |
The
fees earned by each director are determined by the number of meetings
held
by the respective committees on which the director served. Since
the
Committee membership and meetings are not the same for each committee
or
director, the fees are not the same for each director. Pursuant to
the
Non-Employee Director Stock Accumulation Plan, Messrs. Joyce, Lipton
and
Wulff exchanged 100% of their fees for stock. Mr. Wyatt exchanged 50%
of his fees for stock and Mr. Hunter exchanged 25% of his fees for
stock. In each case, the number of shares of stock was determined
using
85% of fair market value on the date of
grant.
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(2) |
Amounts
reflect the dollar amount recognized for financial statement reporting
purposes for the fiscal year ended December 31, 2006, in accordance
with
FAS 123(R) and thus may include amounts from awards granted in and
prior
to 2006. Assumptions used in the calculation of these amounts are
included
in footnote 14 to the Company’s audited financial statements for the
fiscal year ended December 31, 2006, included in the Company’s Annual
Report on Form 10-K filed with the Securities and Exchange Commission
on
February 28, 2007. The following lists the grant date fair value of
each stock award computed in accordance with FAS 123 (R):
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Grant
Date
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Value
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Grant
Date
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Value
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A.
C. Catalano
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6/16/2005
11/7/2005
10/26/2006
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$15,939
$47,835
$37,900
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R.
D. Kennedy
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8/23/2001
12/13/2002
11/4/2003
11/12/2004
11/7/2005
10/26/2006
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$12,408
$8,900
$32,328
$28,856
$47,835
$37,900
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T.
P. Gerrity
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9/30/2003
11/4/2003
11/12/2004
11/7/2005
10/26/2006
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$12,463
$32,328
$28,856
$47,835
$37,900
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J.
M. Lipton
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8/23/2001
12/13/2002
11/4/2003
11/12/2004
11/7/2005
10/26/2006
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$12,408
$8,900
$32,328
$28,856
$47,835
$37,900
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J.
C. Hunter, III
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1/2/2003
11/4/2003
11/12/2004
11/7/2005
10/26/2006
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$10,109
$32,328
$28,856
$47,835
$37,900
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J.
K. Wulff
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9/30/2003
11/4/2003
11/12/2004
3/28/2005
11/7/2005
2/7/2006
10/26/2006
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$12,463
$32,328
$28,856
$50,000
$47,835
$50,000
$37,900
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B.
M. Joyce
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6/16/2005
11/7/2005
10/26/2006
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$15,939
$47,835
$37,900
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J.
B. Wyatt
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10/29/2001
12/13/2002
11/4/2003
11/12/2004
11/7/2005
10/26/2006
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$9,042
$8,900
$32,328
$28,856
$47,835
$37,900
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(3) |
Amounts
reflect the dollar amount recognized for financial statement reporting
purposes for the fiscal year ended December 31, 2006, in accordance
with
FAS 123(R) with respect to the annual grant of 3,000 stock options
under
the Omnibus Plan. FAS 123 (R) value for 2006 grant was $21,083.
Assumptions used in the calculation of these amounts are included
in
footnote 14 to the Company’s audited financial statements for the fiscal
year ended December 31, 2006, included in the Company’s Annual Report on
Form 10-K filed with the SEC on February 28,
2007.
|
(4) |
Hercules
does not maintain any defined benefit pension plans for current
directors. Non-Employee Directors cash accounts are credited
quarterly with interest based on the Morgan Guaranty Trust prime
rate of
interest.
|
(5) | The following table lists the aggregate number of stock awards and options outstanding as of December 31, 2006. |
Aggregate
Restricted
Stock
Unit Awards at Year-End
|
Aggregate
Stock Option
Awards
at Year End
|
|
Anna
C. Catalano
|
9,899
|
6,000
|
Thomas
P. Gerrity
|
16,673
|
12,000
|
John
C. Hunter, III
|
21,657
|
12,000
|
Burton
M. Joyce
|
16,639
|
6,000
|
Robert
D. Kennedy
|
20,317
|
18,000
|
Jeffrey
M. Lipton
|
43,215
|
18,000
|
John
K. Wulff
|
44,255
|
12,000
|
Joe
B. Wyatt
|
31,010
|
18,000
|
Ownership
Target
(Shares)
@ $19.31
|
Total
Qualifying Shares(1)
|
|
Anna
C. Catalano(2)
|
12,947
|
9,899
|
Thomas
P. Gerrity
|
12,947
|
16,673
|
John
C. Hunter, III
|
12,947
|
23,657
|
Burton
M. Joyce
|
12,947
|
17,639
|
Robert
D. Kennedy
|
12,947
|
43,817
|
Jeffrey
M. Lipton
|
12,947
|
53,215
|
John
K. Wulff
|
12,947
|
69,255
|
Joe
B. Wyatt
|
12,947
|
31,010
|
· |
A
Related Person includes (i) any person since the beginning of our
last
fiscal year who was a Director, Executive Officer or nominee to become
a
Director and certain of their respective immediate family members
or (ii)
any person who is known to be a beneficial owner of more than five
percent
(5%) of any class of our voting securities.
|
· |
A
Related Person Transaction is a transaction, arrangement or relationship
(or any series of similar transactions, arrangements or relationships)
in
which the Company (including any of its subsidiaries or controlled
affiliates) was, is or will be a participant and the amount involved
exceeds One Hundred Twenty Thousand Dollars ($120,000), or the equivalent
thereof in other relevant currencies, and in which any Related Person
had,
has or will have a direct or indirect interest
(“Transaction”).
|
· |
No
Director or Audit Committee member shall participate in any discussion,
evaluation, approval, disapproval or ratification of a proposed
Transaction with respect to which he or she
or his or her immediate family member is a Related Person, except
that the
Director shall provide all material information concerning the proposed
Transaction to the Audit Committee and the Corporate Secretary and
respond
to any questions that are raised by the Audit Committee.
|
· |
The
Audit Committee has determined that certain defined Transactions
shall be
deemed pre-approved even if the aggregate amount of such Transaction
exceeds One Hundred Twenty Thousand Dollars ($120,000), or the equivalent
thereof in other relevant
currencies.
|
· |
The
Corporate Secretary will compile, maintain and update a Master List
of
Related Persons and distribute such list within the Company as necessary
to effectuate the policy. Once a proposed transaction is identified,
notice thereof is provided to the Corporate Secretary. The Corporate
Secretary will determine if the noticed transaction qualifies as
a
Transaction and if so, he or she will submit such Transaction to
the Audit
Committee for consideration at the next scheduled Audit Committee
meeting
or, if appropriate or if between meetings of the Audit Committee,
to the
Chair of the Audit Committee. The Audit Committee (or the Chair of
the
Audit Committee) will approve, disapprove or ratify the proposed
Transaction. If the Audit Committee or Chair of the Audit Committee
determines that the Transaction may have an impact on a Director’s
independence then such Transaction will be discussed with the Chair
of
the Governance Committee before the Audit Committee or the Chair, as
the case may be, renders a decision on such Transaction.
|
· |
Transactions
that are ongoing and have a remaining term of more than six (6) months
or
remaining amounts payable to or receivable from the Company of more
than
Two Hundred Fifty Thousand Dollars ($250,000) or the equivalent in
other
relevant currencies shall be reviewed at the first meeting of the
Audit
Committee in each fiscal year. The Audit Committee will determine
if it is
in the best interests of the Company to continue, modify, terminate
or
establish guidelines for the Company’s management to follow with respect
to the Transaction.
|
· |
The
Audit Committee will approve or ratify proposed charitable contributions,
or pledges of charitable contributions by the Company to a charitable
or
non-profit organization identified on the Master List. The Audit
Committee
will review on a periodic basis all charitable contributions in excess
of
Fifty Thousand Dollars ($50,000) or the equivalent in other relevant
currencies in the aggregate by the Company’s Executive Officers (as
defined) and their spouses to charitable or non-profit organizations
identified on the Master List.
|
· |
No
immediate family member of a Director or Executive Officer shall
be hired
as an employee of the Company unless the employment arrangement is
approved by the Board’s Human Resources Committee (with notice to the
Audit Committee) or approved by the Audit Committee. If a person
becomes a
Director or an Executive Officer and an immediate family member is
already
an employee, no material changes in the terms of employment, including
compensation, may be made without prior written approval of the Board’s
Human Resources Committee or the Audit Committee.
|
· |
All
Transactions that are required to be disclosed in the Company’s SEC
filings, as required by the Securities Act of 1933 or the Securities
Exchange Act of 1934 and related rules and regulations, shall be
so
disclosed in accordance with such laws, rules and
regulations.
|
(Dollars
in millions)
|
|||||||
2006
|
2005
|
||||||
Audit
|
$
|
3.0
|
$
|
3.7
|
|||
Audit
Related
|
--
|
0.4
|
|||||
Tax
|
0.1
|
--
|
|||||
All
Other
|
--
|
--
|
|||||
$
|
3.1
|
$
|
4.1
|
Audit
Committee
|
B.
M. Joyce (Chair)
|
J.
C. Hunter, III
|
R.
D. Kennedy
|
· |
Legally
Prohibited/Restricted Services - Those services which our auditor
may not
provide by statute.
|
· |
Additional
Prohibited Services - Those services which our auditor may legally
provide, but which we will not obtain from our
auditor.
|
· |
Permitted
Services - Those services which our auditor may provide if pre-approved
by
the Audit Committee.
|
1. |
Bookkeeping
or other services related to the accounting records or financial
statements of the audit client
|
2. |
Financial
information systems design and
implementation
|
3. |
Appraisal
or valuation services, fairness opinions or contribution-in-kind
reports
|
4. |
Actuarial
services
|
5. |
Internal
audit outsourcing activities
|
6. |
Management
functions or human resources
|
7. |
Broker
or dealer, investment adviser or investment banking
services
|
8. |
Legal
services and expert services unrelated to the
audit
|
9. |
Any
other service that the Public Company Accounting Oversight Board
determines by regulation is
impermissible
|
· |
Large-scale
Information System Design and Implementation
Services
|
· |
Tax
Shelters
|
§ Services
related to SEC filings
§ Accounting
and financial reporting consultations
§ Carve-out
audits
§ Statutory
audits
§ Agreed-upon
audit procedures performed to comply with a contract between the
Company
and a third party
|
§ Acquisition
and divestiture-related due diligence and transaction
services
§ Fraud
and forensic investigations
§ Dispute
resolution and litigation support
§ Benefit
plan audits
|
· |
Tax
return preparation, review, consultation and
assistance
|
· |
Tax
audit support
|
· |
Tax
planning on acquisition/divestiture structuring, dividend planning,
etc.
|
· |
Tax
consulting
|
· |
Expatriate
tax services
|
· |
Transfer
pricing tax services
|
· |
Subject
to Board approval, to establish compensation policy consistent with
corporate goals and objectives and shareholder
interests.
|
· |
To
review and approve or, to the extent the Human Resources Committee
may
deem appropriate, recommend for approval by
the independent members of the Board, at
least once a year corporate goals and objectives relevant to the
Chief Executive Officer’s compensation and
evaluate at least once a year the Chief Executive Officer’s performance in
light of established goals and objectives. Based upon these evaluations
the Human Resources Committee shall
approve or, to the extent the Human Resources Committee may deem
appropriate,
recommend for approval by the independent members of the Board,
the Chief Executive Officer’s annual compensation, including salary,
bonus, incentive and equity compensation.
In determining the incentive components of the Chief Executive Officer’s
compensation, the Human Resources Committee may consider a number
of
factors, including, but not limited to, Hercules’ performance and relative
shareholder return, the value of similar incentive awards to Chief
Executive Officers at comparable companies and the awards given to
the
Chief Executive Officer in past years.
|
· |
To
review and approve
or, to the extent the Human Resources Committee may deem appropriate,
recommend
for Board approval,
at least annually,
changes in the annual base salaries and annual incentive opportunities
of
the executive officers. In addition, periodically and as and when
appropriate, the Human Resources Committee shall review and approve
or, to the extent the Human Resources Committee may deem
appropriate,
recommend for approval by the independent members of the Board, the
following as they affect the Chief Executive Officer and the executive
officers: (a) all other incentive awards and opportunities, including
both
cash-based and equity-based awards and opportunities; (b) any employment
agreements and severance arrangements; and (c) any change-in-control
agreements and change-in-control provisions affecting any elements
of
compensation and benefits. In addition, the Human Resources Committee
shall receive periodic reports on Hercules’ compensation programs as they
affect all employees. Finally, the Human Resources Committee shall
review
and approve
or, to the extent the Human Resources Committee may deem appropriate,
recommend
for approval by the independent members of the Board,
any special or supplemental compensation and benefits for the Chief
Executive Officer and the executive officers and individuals who
formerly
served as the Chief Executive Officer and/or as executive officers,
including supplemental retirement benefits and the perquisites provided
to
them during and after employment.
|
· |
Notwithstanding
the foregoing, if any grant or award to the Chief Executive Officer
or any
other executive is intended to qualify for the performance-based
compensation exemption from the limitations on deductibility of executive
compensation imposed by Section 162(m) of the Internal Revenue Code
of
1986, as amended, or any successor thereto, the Human Resources Committee,
rather than the independent members of the Board, shall approve such
award, but it may refer such award to the independent members of
the Board
for ratification.
|
· |
To
evaluate the methods for establishing the amounts, types and
competitiveness of Director compensation benefits, including under
any
incentive compensation plans and equity-based compensation
plans.
|
· |
In
conjunction with the Governance Committee, to assist the Board in
developing
and evaluating potential candidates for the Chief Executive Officer
position, and in oversight of executive succession
plans.
|
· |
To
assure systems are in place for development of management competencies
that are linked to those competencies identified to be critical to
attaining the business and strategic plans of
Hercules.
|
· |
To
monitor Hercules’ compliance with relevant laws applicable to compensation
plans, policies and programs, including without limitation, those
relating
to (i) 401(k) and similar savings and benefit items and (ii) loans
to
directors or officers under Section 402 of the Sarbanes-Oxley Act
or
otherwise.
|
· |
To
oversee Hercules’ compliance with the requirement under the New York Stock
Exchange rules that shareholders approve equity compensation plans,
with
limited exceptions.
|
· |
To
prepare the
annual report
required by the rules of the SEC to be included
in
Hercules’ proxy statement
and annual report on Form 10-K in compliance with the rules and
regulations promulgated by the SEC.
|
· |
To
review and discuss the Compensation Discussion and Analysis (the
"CD&A") required to be included in Hercules’ proxy statement and
annual report on Form 10-K by the rules and regulations of the SEC
with
management and, based on such review and discussion, determine whether
or
not to recommend to the Board that the Compensation Discussion and
Analysis be so included.
|
Air
Liquide America
|
Huber
(J.M.)
|
Air
Products & Chemicals
|
Huntsman
Corp.
|
Akzo
Nobel
|
International
Flavors & Fragrances
|
Amcor
PET Packaging NA
|
INVISTA
|
Arch
Chemicals
|
Koppers
Holdings Inc.
|
Arkema
|
Lubrizol
|
Ashland
Inc
|
Lyondell
Chemical Co.
|
Basell
USA
|
Mosaic
|
Bayer
Material Science
|
Nalco
Holding Co.
|
Cabot
Corp
|
Nova
Chemicals Corp.
|
Chemtura
Corp
|
Noveon
|
Chevron
Phillips Chemicals
|
Occidental
Chemical
|
Church
& Dwight Co. Inc.
|
PPG
Industries
|
Ciba
Specialty Chemicals
|
Potash
Corp.
|
Clariant
|
Praxair
Inc.
|
Cytec
Industries
|
Saint-Gobain
- Ceramics
|
Degussa
|
Sasol
North America
|
Dow
Chemical Co.
|
Scotts
Miracle-Gro Co.
|
DuPont
|
Sigma-Aldrich
Corp.
|
Eastman
Chemical Co.
|
Solutia,
Inc.
|
Ecolab
Inc.
|
Solvay
America
|
Engelhard
|
Sunoco
Chemical
|
FMC
|
Tronox
|
Fuller
(H.B.)
|
W.
R. Grace
|
Georgia
Gulf Corp.
|
Westlake
Chemical
|
Hexion
Specialty Chemicals
|
Ongoing EPS
|
|
Payout
|
33%
Weighting
|
Threshold
|
$0.85
|
Target
|
$0.95
|
Maximum
|
$1.05
|
2006
Actual
|
$1.23
|
Cash
Flow from Operations
|
|
Payout
|
67%
Weighting
|
Threshold
|
$135
MM
|
Target
|
$150
MM
|
Maximum
|
$165
MM
|
2006
Actual
|
$173
MM
|
Target
Incentive %
|
Actual
Payout $
|
Payout
as %
of
Base Salary
|
|
C.
A. Rogerson
|
100%
of base
|
$1,387,000
|
190%
|
E.
V. Carrington
|
50%
of competitive base
|
$
182,000
|
67%
|
J.
E. Panichella
|
50%
of base
|
$
315,000
|
100%
|
P.
C. Raymond
|
50%
of competitive base
|
$
227,500
|
72%
|
A.
A. Spizzo
|
53%
of competitive base
|
$
400,000
|
114%
|
Executive
Officer
|
Indemnity
Period
|
Crediting
of Service
|
Fred
G. Aanonsen
|
3
years
|
Yes
|
Edward
V. Carrington
|
2
years
|
No
|
Richard
G. Dahlen
|
2
years
|
No
|
Israel
J. Floyd
|
3
years
|
Yes
|
Craig
A. Rogerson
|
3
years
|
Yes
|
Stuart
C. Shears
|
3
years
|
Yes
|
Allen
A. Spizzo
|
3
years
|
Yes
|
Name
|
Executive
Contributions in Last FY ($)(1)
|
Registrant
Contributions in Last FY ($)(2)
|
Aggregate
Earnings in Last FY ($)(3)
|
Aggregate
Withdrawals / Distributions ($)
|
Aggregate
Balance at Last FYE ($)(4)
|
C.
A. Rogerson
|
$64,875
|
TBD
|
$17,242
|
-
|
TBD
|
E.
V. Carrington
|
-
|
TBD
|
$
1,915
|
-
|
TBD
|
P.
C. Raymond
|
$12,900
|
TBD
|
$
1,125
|
-
|
TBD
|
J.
E. Panichella
|
-
|
TBD
|
-
|
-
|
TBD
|
A.
A. Spizzo
|
-
|
TBD
|
$
4,495
|
-
|
TBD
|
“Perk”
|
Approximate
Value
|
Eligibility
|
Pool
Car/Driver
|
$62,000/year
|
CEO
(occasional use
|
(including
tax gross up)
|
for
commuting only)
|
|
Reserved
Parking
|
$2,010/year
|
Executive
Officers
|
Name
|
Ownership
- Target
(Shares) @ $19.31/Share
|
Total
Qualifying Shares(1)
|
C.
A. Rogerson
|
189,023
|
574,636
|
E.
V. Carrington
|
42,415
|
95,640
|
J.
E. Panichella(2)
|
48,938
|
29,058
|
P.
C. Raymond
|
48,938
|
76,599
|
A.
A. Spizzo
|
54,377
|
122,772
|
2006
Summary Compensation Table
|
|||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
Name
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)(1)
|
Option
Awards
($)(1)
|
Non-Equity
Incentive Plan Comp
($)(2)
|
Change
in Pension Value and Non-Qualified Deferred
Compensation
Earnings ($)(3)
|
All
Other Compensation
($)(4)
|
Total
($)
|
C.A.
Rogerson
President
& CEO
|
2006
|
$712,508
|
-
|
$1,131,676
|
$1,237,157
|
$1,387,000
|
$740,017(5)
|
TBD
|
TBD
|
E.V.
Carrington
Vice
President, Human Resources
|
2006
|
$271,678
|
-
|
$
153,031
|
$
81,719
|
$
182,000
|
$
99,372
|
TBD
|
TBD
|
J.E.
Panichella
President,
Aqualon Division
|
2006
|
$313,807
|
-
|
$
64,165
|
-
|
$
315,000
|
$349,972(6)
|
TBD
|
TBD
|
P.C.
Raymond
President,
Paper Technologies & Ventures
|
2006
|
$312,500
|
-
|
$
214,726
|
$
124,359
|
$
227,500
|
$
26,335
|
TBD
|
TBD
|
A.A.
Spizzo
Chief
Financial Officer
|
2006
|
$345,838
|
-
|
$
386,178
|
-
|
$
400,000
|
$226,005(7)
|
TBD
|
TBD
|
(1) |
The
amounts in columns (e) and (f) reflect the dollar amount recognized
for
financial statement reporting purposes for the fiscal year December
31,
2006, in accordance with FAS 123(R) of awards pursuant to the Long
Term
Incentive Compensation Plan (LTICP) and thus may include amounts
for
awards granted in and prior to 2006. Assumptions used in the calculation
of these amounts are included in footnote 14 to the Company's audited
financial statements for the fiscal year ended December 31, 2006,
included
in the Company's Annual Report on Form 10-K filed with the SEC on
February
28, 2007.
|
(2) |
The
amounts in column (g) reflect the cash awards to the named executive
officers under the Management Incentive Compensation Plan (MICP),
which is
discussed in further detail under the heading "How Management Incentive
Compensation Plan (MICP) Awards are
Determined".
|
(3) |
The
amounts in column (h) reflect the actuarial increase in the present
value
of the name executive officers' benefits under all pension plans
established by the Company determined using interest rate and mortality
rate assumptions consistent with those used in the Company's financial
statements and includes amounts which the named executive officers
may not
currently be entitled to receive because such amounts are not
vested. The amounts also include interest credited quarterly based
on the Morgan Guaranty Trust prime rate of interest. The interest
earnings are disclosed in the Deferred Compensation Plan Table.
|
(4) |
The
amounts in column (i) include:
|
Hercules
Savings & Investment Plan - Employer Contributions
|
Hercules
Deferred Compensation Plan Nonqualified Savings - Employer
Contributions
|
Chauffeur/
Car
|
Tax
Gross-Up
|
Relocation
|
Parking
|
Miscellaneous
|
|
C.A.
Rogerson
|
TBD
|
TBD
|
$34,893
|
$26,755
|
-
|
$2,010
|
-
|
E.V.
Carrington
|
TBD
|
TBD
|
-
|
-
|
-
|
$2,010
|
-
|
J.E.
Panichella
|
TBD
|
TBD
|
-
|
-
|
$203,475
|
$2,010
|
$108,000(a)
|
P.C.
Raymond
|
TBD
|
TBD
|
-
|
-
|
$
9,684
|
$2,010
|
-
|
A.A.
Spizzo
|
TBD
|
TBD
|
-
|
-
|
-
|
$2,010
|
-
|
(5) |
A
significant portion of this amount is attributable to Mr. Rogerson
first
becoming eligible in 2006 for subsidized early retirement benefits
under
the Pension Plan of Hercules Incorporated and the impact of his increased
compensation used to calculate his pension
benefit.
|
(6) | A significant portion of this amount is attributable to Mr. Panichella returning to Hercules' employment in January 2006 and the impact of his increased compensation used to calculate his pension benefit. |
(7) | A significant portion of this amount is attributable to Mr. Spizzo's increased compensation used to calculate his pension benefit. |
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
(l)
|
Est.
Future Payouts Under Non-
Equity
Incentive Plan Awards (1)
|
Est.
Future Payouts Under
Equity
Incentive Plan Awards
|
||||||||||
Name
|
Grant
Date
|
Thres-
Hold
($)
|
Target
($)
|
Maximum
($)
|
Thres-
Hold
(#)
|
Target
(#)
|
Maxi-
Mum
(#)
|
All
Other Stock Awards: Number of Shares of Stock or Units (#)
|
All
Other Option Awards: Number of Securities Underlying Options
(#)
|
Exercise
or Base Price of Option Awards ($/sh)
|
Grant
Date Fair Value of Stock and Option Awards (2)
|
C.A.Rogerson
|
2/16/2006
-
|
-
0
|
-
$730,000
|
-
$1,460,000
|
-
-
|
-
-
|
-
-
|
94,108
-
|
282,324
-
|
$12.22
-
|
$2,487,340
-
|
E.V.Carrington
|
2/16/2006
-
|
-
0
|
-
$140,000
|
-
$
280,000
|
-
-
|
-
-
|
-
-
|
9,411
-
|
28,230
-
|
$12.22
-
|
$
248,725
-
|
J.E.Panichella
|
2/16/2006
-
|
-
0
|
-
$157,500
|
-
$
315,000
|
-
-
|
-
-
|
-
-
|
28,641
-
|
-
-
|
-
-
|
$
349,993
-
|
P.C.Raymond(3)
|
2/16/2006
4/17/2006
-
|
-
-
0
|
-
-
$175,000
|
-
-
$
350,000
|
-
-
-
|
-
-
-
|
-
-
-
|
14,321
7,500
-
|
42,960
-
-
|
$12.22
-
-
|
$
378,500
$
103,275
-
|
A.A.Spizzo
|
2/16/2006
-
|
-
0
|
-
$200,000
|
-
$
400,000
|
-
-
|
-
-
|
-
-
|
31,423
-
|
-
-
|
-
-
|
$
383,989
-
|
(1) |
The
amounts shown in column (c), (d) and (e) reflect the minimum, target,
and
maximum payment level under the Company's Management Incentive
Compensation Plan (MICP). Payouts range from 0% to 200% of
Target.
|
(2) |
Restricted
stock value based on stock price of $12.22 and $13.77 on the date
of
grants (February 16, 2006 and April 17, 2006). Stock
options are valued based on SFAS 123(R) value of $4.7369 on the date
of grant (February 16, 2006).
|
(3) |
Mr.
Raymond's April 17, 2006 grant was a one-time award pursuant to
the
Long-Term Incentive Compensation Plan, Article VII. Vesting will
occur on
April 18, 2011.
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
Option
Awards
|
Stock
Awards
|
|||||||||
Name
|
Number
of Securities Underlying Unexercised
Options
(#)
Exercisable
(1)
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
(2)
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
/
Unearned Options (#)(3)
|
Option
Exercise Price ($)
|
Option
Exp. Date
|
Number
of
Shares or Units of Stock That Have Not Vested (#)
(4)
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)
(5)(6)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other
Rights
That Have Not Vested (#)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares,
Units or
Other Rights That Have Not Vested ($)
|
|
C.A.
Rogerson
|
45,500
|
-
|
-
|
$17.1875
|
05/17/2010
|
477,701
|
$9,224,406
|
- | - | |
35,500
|
-
|
-
|
$11.2800
|
08/23/2011
|
||||||
50,000
|
-
|
-
|
$11.9100
|
05/09/2012
|
||||||
78,892
|
118,337
|
-
|
$14.4500
|
02/18/2015
|
||||||
-
|
282,324
|
-
|
$12.2200
|
02/16/2016
|
||||||
E.V.Carrington
|
-
|
28,230
|
-
|
$12.2200
|
02/16/2016
|
84,432
|
$1,630,382
|
- | - | |
J.E.
Panichella
|
-
|
-
|
-
|
-
|
-
|
28,641
|
$553,058
|
- | - | |
P.C.
Raymond
|
-
|
42,960
|
-
|
$12.2200
|
02/16/2016
|
55,350
|
$1,068,809
|
- | - | |
A.A.
Spizzo
|
2,400
|
-
|
1,200
|
$52.1250
|
08/27/2007
|
118,028
|
$2,279,121
|
- | - | |
3,000
|
-
|
1,500
|
$47.8125
|
05/05/2008
|
||||||
3,000
|
-
|
-
|
$25.5625
|
09/01/2008
|
||||||
-
|
-
|
1,500
|
$37.5625
|
05/04/2009
|
||||||
4,275
|
-
|
-
|
$17.2500
|
02/18/2010
|
||||||
13,475
|
-
|
-
|
$15.3125
|
04/05/2010
|
||||||
30,000
|
-
|
-
|
$11.9100
|
05/09/2012
|
||||||
20,000
|
-
|
-
|
$11.6000
|
06/28/2012
|
||||||
(a)
|
Option
Awards
|
Stock
Awards
|
||
(b)
|
(c)
|
(d)
|
(e)
|
|
Name
|
Number
of Shares Acquired on Exercise (#)
|
Value
Realized on Exercise
($)(1)
|
Number
of Shares Acquired on Vesting (#)
|
Value
Realized
on
Vesting
($)
(2)
|
C.A.
Rogerson
|
-
|
-
|
10,000(3)
|
$
164,400
|
E.
V. Carrington
|
85,500
|
$
362,239
|
-
|
-
|
J.
E. Panichella
|
-
|
-
|
-
|
-
|
P.
C. Raymond
|
-
|
-
|
5,000
|
$
58,550
|
A.
A. Spizzo
|
25,000
|
$
172,577
|
14,457(4)
|
$
174,062
|
(1) |
Stock
option value realized is equal to the difference between the option
exercise price and the market value of Hercules common stock on the
date
of exercise multiplied by the number of options exercised.
|
(2) |
Stock
value realized is equal to the number of vesting shares multiplied
by the
closing stock price on the vest date, without netting any shares
surrendered to cover tax withholding.
|
(3) |
3,340
shares withheld from acquired shares to cover
taxes.
|
(4) |
These
shares were purchased using Above Target MICP compensation in 2003
and
were restricted for three years. 4,865 shares were withheld from
acquired
shares to cover taxes.
|
Name
|
Plan
|
Number
of Years Credited Service
(#)
|
Present
Value of Accumulated Benefit (1)(7)
|
Payments
During Last Fiscal Year
|
Change
in Pension Value During 2006
|
C.
A. Rogerson(2)
|
Nonqualified
|
24.5
|
$1,926,375
|
0
|
$678,055
|
Qualified
|
24.5
|
531,868
|
0
|
44,720
|
|
Total
|
2,458,243
|
0
|
722,775
|
||
E.
V. Carrington(3)
|
Nonqualified
|
37.3
|
$1,631,790
|
0
|
$78,730
|
Qualified
|
33.3
|
1,123,808
|
0
|
18,727
|
|
Total
|
2,755,778
|
0
|
97,457
|
||
J.
E. Panichella(4)
|
Nonqualified
|
23.0
|
$408,241
|
0
|
$312,801
|
Qualified
|
23.0
|
359,568
|
0
|
37,171
|
|
Total
|
767,809
|
0
|
349,972
|
||
P.
C. Raymond(5)
|
Nonqualified
|
1.9
|
$42,624
|
0
|
$25,210
|
Qualified
|
1.9
|
0
|
0
|
0
|
|
Total
|
42,624
|
0
|
25,210
|
||
A.
A. Spizzo(6)
|
Nonqualified
|
27.7
|
$737,441
|
0
|
$178,981
|
Qualified
|
25.4
|
$499,448
|
0
|
45,529
|
|
Total
|
$1,236,889
|
0
|
221,510
|
(1)
|
Benefits were valued as a 51% lump sum and 49%
single
life annuity using the assumptions described in the table below.
Earliest
age at which the executive is eligible for an unreduced benefit.
This
value differs from Termination Scenario Table which assumes a
December 29, 2006 termination.
|
(2)
|
The
increase in pension value is attributable to Mr. Rogerson
first becoming eligible for the subsidized early retirement
benefit available to all Hercules employees with similar service
in 2006
and his increased compensation used to calculate his pension
benefit.
|
(3)
|
Mr.
Carrington's nonqualified pension benefit reflects 4-1/2 years service
granted in 1997 under the Hercules Pension Plan attributable to service
earned with an acquired
company.
|
(4)
|
The
increase in pension value is attributable to reinstatement of Mr.
Panichella's former service when he rejoined Hercules in January 2006
and his increased compensation used to calculate his pension
benefit.
|
(5)
|
Mr.
Raymond joined Hercules in January 2005, and as an inducement for
him to
leave his previous employer, Hercules granted him 4 years of service
for
vesting and eligibility purposes but not for benefit calculation.
Because
of this special service recognition, he is a participant in the
Nonqualified Plan effective on hire
date.
|
(6)
|
Mr.
Spizzo's nonqualified pension plan benefit is calculated as though
he had
continued employment from May 22, 1979. Mr. Spizzo left employ in
April 1995 and returned August 1997. As an inducement for Mr. Spizzo
to return, Hercules credited his 2 years-3 months period while he
was
employed by another employer. Benefit service for qualified plan
purposes is based on his adjusted service date of August 1,
1981. The increase in Mr. Spizzo's pension value is
attributable to increased compensation used to calculate his pension
benefit.
|
(7)
|
These
calculations do not reflect offsets from other Company sponsored
plans or
other offsets provided for under the
Plan.
|
Definition
|
December
31, 2006
|
December
31, 2005
|
Discount
Rate - Lump Sum
|
4.69%
|
4.73%
|
Discount Rate - Annuity | 5.90% | 5.70% |
IRC
Section 401(a)(17) pay limitation
|
$220,000
|
$210,000
|
IRC
Section 415 benefit limitation
|
$175,000
|
$170,000
|
Retirement
Ages
|
Later
of current age or age at which participant is first eligible for
an
unreduced benefit
|
Later
of current age or age at which participant is first eligible for
an
unreduced benefit
|
Termination
and disability rates
|
None
|
None
|
Pre-Retirement
Mortality
|
None
|
None
|
Post-Retirement
Mortality (Annuities)
|
RP-2000
(projected to 2015 with phased-out improvements, no collar
adjustments)
|
RP-2000
(projected to 2015 with phased-out improvements, no collar
adjustments)
|
Post-Retirement
Mortality (Minimum Lump Sums)
|
GAR
1994 Unisex
|
GAR
1994 Unisex
|
Form
of Pension Payment
|
If
eligible, 51% Lump Sum (based on December 31, 2004 accrued benefit);
49%
Single Life Annuity; otherwise, 100% Single Life Annuity
|
If
eligible, 51% Lump Sum (based on December 31, 2004 accrued benefit);
49%
Single Life Annuity; otherwise, 100% Single Life
Annuity
|
Type
of Compensation
|
Voluntary
|
Involuntary
|
Change
in
Control(10)(11)
|
|||
Resign
|
Retire
(1)(9)
|
Cause
|
w/o
Cause
|
|||
C.
A. Rogerson
|
|
|
||||
Separation
Bonus(2)
|
$0
|
$730,000
|
$0
|
$730,000
|
$730,000
|
|
Cash
Severance
|
0
|
0
|
0
|
686,034
|
4,380,024
|
|
Equity
- Regular (3)(4)(5)
|
0
|
11,801,201
|
0
|
11,801,201
|
4,649,764
|
|
Equity - CiC Addition |
0
|
0
|
0
|
0
|
7,157,437
|
|
Retirement
- Regular (6)
|
3,370,722
|
3,370,722
|
1,211,722
|
3,370,722
|
3,370,722
|
|
Retirement - CiC Addition |
0
|
0
|
0
|
0
|
2,700,000
|
|
Deferred
Compensation (7)
|
291,379
|
291,379
|
291,379
|
291,379
|
291,379
|
|
Other
Benefits
|
0
|
0
|
0
|
11,700
|
237,497
|
|
Excise
Tax Gross Up (8)
|
0
|
0
|
0
|
0
|
4,097,003
|
|
Total
|
$3,662,101
|
$16,193,302
|
$1,503,101
|
$16,891,037
|
$27,607,826
|
|
A.
A. Spizzo
|
||||||
Separation
Bonus(2)
|
$0
|
$200,000
|
$0
|
$200,000
|
$200,000
|
|
Cash
Severance
|
0
|
0
|
0
|
350,004
|
1,650,012
|
|
Equity
- Regular (3)(4)(5)
|
0
|
2,279,121
|
0
|
1,040,837
|
1,040,837
|
|
Equity - CiC Addition |
0
|
0
|
0
|
0
|
1,238,284
|
|
Retirement
- Regular (6)
|
801,029
|
801,029
|
436,029
|
801,029
|
801,029
|
|
Retirement - CiC Addition |
0
|
0
|
0
|
0
|
1,746,000
|
|
Deferred
Compensation (7)
|
59,918
|
59,918
|
59,918
|
59,918
|
59,918
|
|
Other
Benefits
|
0
|
0
|
0
|
11,700
|
156,497
|
|
Excise
Tax Gross Up (8)
|
0
|
0
|
0
|
0
|
2,382,707
|
|
Total
|
$860,947
|
$3,340,068
|
$495,947
|
$2,463,488
|
$9,275,284
|
|
J.
E. Panichella
|
||||||
Separation
Bonus (2)
|
$0
|
$157,500
|
$0
|
$157,500
|
$157,500
|
|
Cash
Severance
|
0
|
0
|
0
|
472,500
|
472,500
|
|
Equity
- Regular(3)(4)(5)
|
0
|
553,058
|
0
|
68,700
|
68,700
|
|
Equity - CiC Addition |
0
|
0
|
0
|
0
|
484,358
|
|
Retirement
- Regular (6)
|
404,194
|
404,194
|
198,194
|
404,194
|
404,194
|
|
Retirement - CiC Addition |
0
|
0
|
0
|
0
|
0
|
|
Deferred
Compensation (7)
|
0
|
0
|
0
|
0
|
0
|
|
Other
Benefits
|
0
|
0
|
0
|
11,700
|
11,700
|
|
Excise
Tax Gross Up (8)
|
0
|
0
|
0
|
0
|
0
|
|
Total
|
$404,194
|
$1,114,752
|
$198,194
|
$1,114,594
|
$1,598,952
|
|
P.
C. Raymond
|
||||||
Separation
Bonus(2)
|
$0
|
$175,000
|
$0
|
$175,000
|
$175,000
|
|
Cash
Severance
|
0
|
0
|
0
|
490,000
|
490,000
|
|
Equity
- Regular (3)(4)(5)
|
0
|
1,373,395
|
0
|
795,780
|
795,780
|
|
Equity - CiC Addition |
0
|
0
|
0
|
0
|
577,615
|
|
Retirement
- Regular (6)
|
81,483
|
81,483
|
41,483
|
81,483
|
81,483
|
|
Retirement - CiC Addition |
0
|
0
|
0
|
0
|
0
|
|
Deferred
Compensation (7)
|
30,127
|
30,127
|
30,127
|
30,127
|
30,127
|
|
Other
Benefits
|
0
|
0
|
0
|
11,700
|
11,700
|
|
Excise
Tax Gross Up (8)
|
0
|
0
|
0
|
0
|
0
|
|
Total
|
$111,611
|
$1,660,006
|
$71,611
|
$1,584,090
|
$2,161,706
|
|
E.
V. Carrington
|
||||||
Separation
Bonus(2)
|
$0
|
$140,000
|
$0
|
$140,000
|
$140,000
|
|
Cash
Severance
|
0
|
0
|
0
|
273,012
|
826,024
|
|
Equity
- Regular(3)(4)(5)
|
0
|
1,830,533
|
0
|
1,830,533
|
797,056
|
|
Equity - CiC Addition |
0
|
0
|
0
|
0
|
1,033,477
|
|
Retirement -
Regular(6)
|
2,836,822
|
2,836,822
|
1,159,822
|
2,836,822
|
2,836,822
|
|
Retirement - CiC Addition |
0
|
0
|
0
|
0
|
0
|
|
Deferred
Compensation (7)
|
25,292
|
25,292
|
25,292
|
25,292
|
25,292
|
|
Other
Benefits
|
0
|
0
|
0
|
11,700
|
67,471
|
|
Excise
Tax Gross Up (8)
|
0
|
0
|
0
|
0
|
377,998
|
|
Total
|
$2,862,114
|
$4,832,647
|
$1,185,114
|
$5,117,359
|
$6,104,140
|
1. |
Scenario
for Death or Disability nearly identical to
Retire.
|
2. |
“Separation
Bonus” is the 2006 MICP target assuming the individual is employed for
full Plan year and the Board approves the award; MICP affords Company
payout discretion.
|
3. |
Equity
values assume $19.31/share.
|
4. |
Stock
option value assumes immediate exercise at $19.31/share at
termination.
|
5. |
Restricted
stock is full value if executive is retirement eligible, otherwise
it is
prorated.
|
6. |
“Retirement”
data includes present value of benefits accrued to December 29,
2006 under the Defined Benefit Pension Plan but 100% lump sum
is available only for Change in Control
increment.
|
7. |
Deferred
Compensation and 401(k) balances (included in “Retirement”) on December
29, 2006.
|
8. |
Excise
Tax Gross-up calculation as of December 29,
2006.
|
9. |
“Retire”
scenario illustrative only for Messrs. Panichella, Raymond and Spizzo
who
are not yet retirement eligible.
|
10. |
Double
trigger Change in Control except for Mr. Carrington who has a single
trigger (i.e., event only).
|
11. | Messrs. Rogerson and Carrington would become eligible for Equity - Change in Control Addition, if they retire concurrent with a Change in Control. |
· |
beneficial
owners of more than five percent of Hercules common
stock;
|
· |
each
Hercules director and nominee for
director;
|
· |
each
of the executive officers named in the 2006 Summary
Compensation Table set forth under “Compensation Discussion and
Analysis”; and
|
· |
all
directors, nominees and executive officers of Hercules as a
group.
|
Name
|
Shares
Beneficially
Owned(1)
|
Options
Exercisable
Within 60 Days
|
Percent
of Shares(2)
|
5%
Shareholders
|
|||
State
Street Global Advisors (U.S) (3)
225
Franklin Street
Boston,
MA 02110
|
[TBD]
|
[TBD]
|
[TBD]
|
Sasco
Capital, Inc. (4)
10
Sasco Hill Road
Fairfield,
Connecticut 06824
|
[TBD]
|
[TBD]
|
[TBD]
|
GAMCO
Investors, Inc. (5)
One
Corporate Center
Rye,
New York 10580
|
[TBD]
|
[TBD]
|
[TBD]
|
T.
Rowe Price Associates, Inc. (6)
100
E. Pratt Street
Baltimore,
Maryland 21202
|
[TBD]
|
[TBD]
|
[TBD]
|
Directors
and Officers
|
|
||
C.
A. Rogerson, Director and Officer
|
[TBD]
|
[TBD]
|
[TBD]
|
A.
A. Spizzo, Officer
|
[TBD]
|
[TBD]
|
[TBD]
|
E.
V. Carrington, Officer
|
[TBD]
|
[TBD]
|
[TBD]
|
A.
C. Catalano, Director
|
[TBD]
|
[TBD]
|
[TBD]
|
T.
P. Gerrity, Director
|
[TBD]
|
[TBD]
|
[TBD]
|
J.
C. Hunter, III, Director
|
[TBD]
|
[TBD]
|
[TBD]
|
B.
M. Joyce, Director
|
[TBD]
|
[TBD]
|
[TBD]
|
R.
D. Kennedy, Director
|
[TBD]
|
[TBD]
|
[TBD]
|
J.
M. Lipton, Director
|
[TBD]
|
[TBD]
|
[TBD]
|
J.
E. Panichella, Officer
|
[TBD]
|
[TBD]
|
[TBD]
|
P. C. Raymond, Director |
[TBD]
|
[TBD]
|
[TBD]
|
J.
K. Wulff, Director
|
[TBD]
|
[TBD]
|
[TBD]
|
J.
B. Wyatt, Director
|
[TBD]
|
[TBD]
|
[TBD]
|
All
directors and executive officers as a group
|
[TBD]
|
[TBD]
|
[TBD]
|
*
|
Less
than 1% of the outstanding Hercules common
shares.
|
(1)
|
[To
be determined based upon Beneficial Ownership Table.] Includes
shares acquired by officers pursuant to our Management Incentive
Compensation Plan, or MICP, under which award amounts for above-target
performance may be used by the participant to purchase restricted
stock at
85% of the fair market value through our Long Term Incentive Compensation
Plan, or LTICP. The above table includes the following shares that
were
purchased in 2002 and 2003 pursuant to the MICP: [___________],
[___________]; and [___________], [___________]. Restrictions and
forfeiture risks are specified under the LTICP. Also included
are: (1) 2004, 2005, 2006 and 2007 annual long-term
incentive grants: [___________], [___________]; [___________],
[___________]; [___________], [___________]; [___________], [___________];
[___________], [___________]; [___________], [___________]; and
[___________], [___________]; and all executive officers as a group,
[___________]; and (2) shares owned in the Hercules Savings and
Investments Plan as of March 5, 2007: [___________],
[___________][___________], [___________]; [___________], [___________];
and [___________], [___________]and all directors and executive officers
as a group, [___________]. The total number of shares with restrictions
and forfeiture risks for all directors and executive officers is
[___________]. Owners have the same voting and dividend rights as
other
shareholders of Hercules, but no right to sell or transfer. Non-employee
directors and named executive officers have restricted stock units,
or
Restricted stock units, representing the following numbers of shares:
A.
C. Catalano, [___________]; P. Duff, [___________]; T. P. Gerrity,
[___________]; J. C. Hunter, [___________]; B. M. Joyce, [___________];
R.
D. Kennedy, [___________]; J. M. Lipton, [___________]; C.A. Rogerson,
[___________]; J. K. Wulff, [___________]; and J. B. Wyatt,
[___________]. Non-employee directors and named executive officers
do not
have any current voting rights or the right to dispose of these restricted
stock units, although they may receive actual shares with respect
to
certain restricted stock units when they leave the Board or Hercules.
Further discussion of these restricted stock unit grants can be found
in
Proposal No. 1 of this Proxy Statement under “Board of Directors
—Directors Compensation.”
|
(2) |
Based
on public filings for 5% shareholders and on [112,859,768]
shares outstanding on March 5, 2007 for directors and officers.
|
(3) |
Share
holding as of December 31, 2006, as reported on Schedule 13G filed
by
State Street Bank and Trust Company acting in various fiduciary
capabilities on February 12, 2007.
|
(4) |
Share
holding as of December 31, 2006, as reported on Amendment No. 2 to
the
Schedule 13G filed by Sasco Capital, Inc. on February 8,
2007.
|
(5) |
Share
holding as of September 30, 2006, as reported on Amendment No. 14
to
Schedule 13D filed by Gamco Investors, Inc. on January 5,
2007.
|
(6) |
Share
holding as of December 31, 2006, as reported on Amendment No. 8
to
Schedule 13G filed by T. Rowe Price on February 13,
2007.
|
Nominees
are:
|
1.
John
C. Hunter, III
|
2. Robert
D. Kennedy
|
|
3. Craig
A. Rogerson
|
FOR
|
WITHHOLD
|
[
]
|
[
]
|
FOR
|
AGAINST
|
ABSTAIN
|
[
]
|
[
]
|
[
]
|
FOR
|
AGAINST
|
ABSTAIN
|
[
]
|
[
]
|
[
]
|
Mark
here if your address has changed and provide us with your new address
in
the space provided to the right: [ ]
|
New
Address:
___________________________________________
___________________________________________
___________________________________________
|
Signature: _________________
|
Signature: ________________
|
Date __________,
2007
|
Title: _________________
|
Title: ________________
|