-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K/wUwAAUgU0rxhct2L6B0u5peQQSiSyRqoz2zCHCBEdHeRa6PHjOtkbyoJMePzXL a9w1m4GcXUlc4gD3Q78TKg== 0000893220-96-001106.txt : 19960702 0000893220-96-001106.hdr.sgml : 19960702 ACCESSION NUMBER: 0000893220-96-001106 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960701 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HERCULES INC CENTRAL INDEX KEY: 0000046989 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS, MATERIALS, SYNTH RESINS & NONVULCAN ELASTOMERS [2821] IRS NUMBER: 510023450 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00496 FILM NUMBER: 96589408 BUSINESS ADDRESS: STREET 1: 1313 N MARKET ST STREET 2: HERCULES PLZ CITY: WILMINGTON STATE: DE ZIP: 19894 BUSINESS PHONE: 3025945000 MAIL ADDRESS: STREET 1: HERCULES PLAZA STREET 2: RM 8151 NW CITY: WILMINGTON STATE: DE ZIP: 19894-0001 FORMER COMPANY: FORMER CONFORMED NAME: HERCULES POWDER CO DATE OF NAME CHANGE: 19680321 11-K 1 FORM 11-K HERCULES INCORPORATED 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 FISCAL YEAR ENDED DECEMBER 31, 1995 Title of the plan: --------------------------- HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN Issuer of the securities held pursuant to the plan: ------------------------------------------------------------------ HERCULES INCORPORATED Hercules Plaza 1313 North Market Street Wilmington, Delaware 19894 2 HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN ------------------------------------------- FINANCIAL STATEMENTS -------------------- STATEMENT OF ASSETS, LIABILITIES, AND PLAN EQUITY December 31, 1995 and 1994 STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY Years ended December 31, 1995, 1994, and 1993 For ANNUAL REPORT FORM 11-K 1 3 HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN STATEMENT OF ASSETS, LIABILITIES, AND PLAN EQUITY WITH FUND INFORMATION DECEMBER 31, 1995
HERCULES INCORPORATED BLENDED FIDELITY COMMON EQUITY GOVERNMENT INTEREST RATE MAGELLAN STOCK FUND BOND FUND SAVINGS FUND FUND LOAN FUND TOTAL ----- ---- --------- ------------ ---- --------- ----- ASSETS Investments $870,396(a) $532,254(b) $ 0 $ 10,593,316 $1,948,450(c) $320,110(d) $14,264,526 Receivable from Company 0 2,494 0 (7,402) 7,530 0 2,622 Cash 21,522 3,122 0 264,279 13,339 160 302,422 -------- -------- -------- ------------ ---------- -------- ----------- Total Assets $891,918 $537,870 $ 0 $ 10,850,193 $1,969,319 $320,270 $14,569,570 ======== ======== ======== ============ ========== ======== =========== LIABILITIES & EQUITY Plan Equity $891,918 $537,870 $ 0 $ 10,850,193 $1,969,319 $320,270 $14,569,570 -------- -------- -------- ------------ ---------- -------- ----------- Total Liabilities & Equity $891,918 $537,870 $ 0 $ 10,850,193 $1,969,319 $320,270 $14,569,570 ======== ======== ======== ============ ========== ======== ===========
(a) At fair value. Cost: $214,191. Shares: 15,439. (b) At fair value. Cost: $531,507. (c) At fair value. Cost: $1,796,545. (d) Represents loans to plan participants. The accompanying notes are an integral part of the financial statements. 2 4 HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN STATEMENT OF ASSETS, LIABILITIES, AND PLAN EQUITY WITH FUND INFORMATION DECEMBER 31, 1994
HERCULES INCORPORATED BLENDED FIDELITY COMMON EQUITY GOVERNMENT INTEREST RATE MAGELLAN STOCK FUND BOND FUND SAVINGS FUND FUND LOAN FUND TOTAL ---------- -------- -------- ----------- ----------- -------- ----------- ASSETS Investments $1,867,454(a) $301,076(b) $ 24,643(c) $12,427,503 $ 1,178,384(d) $276,791(e) $16,075,851 Receivable from Company 1,316 2,865 (273) 22,590 5,293 150 31,941 Cash 42,145 51,559 (26) 604,798 20,035 28,052 746,563 ---------- -------- -------- ----------- ----------- -------- ----------- Total Assets $1,910,915 $355,500 $ 24,344 $13,054,891 $ 1,203,712 $304,993 $16,854,355 ========== ======== ======== =========== =========== ======== =========== LIABILITIES & EQUITY Other Liabilities $ 1,051 $ 1 $ 0 $ 0 $ 0 $ 7,956 $ 9,008 Advances from Company 0 0 0 0 123 0 123 Plan Equity 1,909,864 355,499 24,344 13,054,891 1,203,589 297,037 16,845,224 ---------- -------- -------- ----------- ----------- -------- ----------- Total Liabilities & Equity $1,910,915 $355,500 $ 24,344 $13,054,891 $ 1,203,712 $304,993 $16,854,355 ========== ======== ======== =========== =========== ======== ===========
(a) At fair value. Cost: $956,271. Shares: 48,505. (b) At fair value. Cost: $305,588. (c) At fair value. Cost: $24,643. (d) At fair value. Cost: $1,233,978. (e) Represents loans to plan participants. The accompanying notes are an integral part of the financial statements. 3 5 HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY WITH FUND INFORMATION YEAR ENDED DECEMBER 31, 1995
HERCULES INCORPORATED BLENDED FIDELITY COMMON EQUITY GOVERNMENT INTEREST RATE MAGELLAN LOAN STOCK FUND BOND FUND SAVINGS FUND FUND FUND TOTAL ----------- --------- -------- ------------ ----------- --------- ------------ CONTRIBUTIONS: Participating Employees $ 2,464 $ 64,422 $ 891 $ 1,036,960 $ 191,928 $ 0 $ 1,296,665 Company Contributions 21,136 18,305 0 307,211 39,908 0 386,560 ----------- --------- -------- ------------ ----------- --------- ------------ Subtotal Contributions 23,600 82,727 891 1,344,171 231,836 0 1,683,225 Interplan Transfers 0 448,045 (1,430) 1,776,945 1,324,737 0 3,548,297 Investment Income: Cash Dividends 34,982 0 0 0 108,236 0 143,218 Interest 2,175 1,100 0 776,482 2,299 23,189 805,245 Change in Market Value (140,386) 17,023 796 (27,239) 228,212 0 78,406 ----------- --------- -------- ------------ ----------- --------- ------------ Total $ (79,629) $ 548,895 $ 257 $ 3,870,359 $ 1,895,320 $ 23,189 $ 6,258,391 Withdrawals (813,477) (436,353) (24,601) (5,835,160) (1,424,716) 262 (8,534,045) Interfund Transfers (124,840) 69,829 0 (239,897) 295,126 (218) 0 ----------- --------- -------- ------------ ----------- --------- ------------ Change in Plan Equity (1,017,946) 182,371 (24,344) (2,204,698) 765,730 23,233 (2,275,654) Plan Equity, Dec. 31, 1994 1,909,864 355,499 24,344 13,054,891 1,203,589 297,037 16,845,224 ----------- --------- -------- ------------ ----------- --------- ------------ Plan Equity, Dec. 31, 1995 $ 891,918 $ 537,870 $ 0 $ 10,850,193 $ 1,969,319 $ 320,270 $ 14,569,570 =========== ========= ======== ============ =========== ========= ============
The accompanying notes are an integral part of the financial statements. 4 6 HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY WITH FUND INFORMATION YEAR ENDED DECEMBER 31, 1994
HERCULES INCORPORATED BLENDED FIDELITY COMMON EQUITY GOVERNMENT INTEREST RATE MAGELLAN LOAN STOCK FUND BOND FUND SAVINGS FUND FUND FUND TOTAL ----------- --------- -------- ------------ ----------- --------- ------------ CONTRIBUTIONS: Participating Employees $ 19,391 $ 82,127 $ 14,095 $ 1,296,547 $ 179,305 $ 150 $ 1,591,615 Company Contributions 140,989 15,884 0 334,351 38,821 0 530,045 ----------- --------- -------- ------------ ----------- --------- ------------ Subtotal Contributions $ 160,380 $ 98,011 $ 14,095 $ 1,630,898 $ 218,126 $ 150 $ 2,121,660 Interplan Transfers 0 (303,343) 26,946 17,546 (3,732) 30,505 (232,078) Investment Income: Cash Dividends 52,760 0 0 75 0 0 52,835 Interest 2,364 1,190 7 907,976 48,656 28,052 988,245 Change in Market Value (584,157) (3,539) 314 24,144 (73,214) 0 (636,452) ----------- --------- -------- ------------ ----------- --------- ------------ Total $ (368,653) $(207,681) $ 41,362 $ 2,580,639 $ 189,836 $ 58,707 $ 2,294,210 Withdrawals (92,391) (102,451) (80,432) (2,869,931) (79,426) (317) (3,224,948) Interfund Transfers (481,584) 258,419 0 202,591 (17,310) 37,884 0 ----------- --------- -------- ------------ ----------- --------- ------------ Change in Plan Equity (942,628) (51,713) (39,070) (86,701) 93,100 96,274 (930,738) Plan Equity, Dec. 31, 1993 2,852,492 407,212 63,414 13,141,592 1,110,489 200,763 17,775,962 ----------- --------- -------- ------------ ----------- --------- ------------ Plan Equity, Dec. 31, 1994 $ 1,909,864 $ 355,499 $ 24,344 $ 13,054,891 $ 1,203,589 $ 297,037 $ 16,845,224 =========== ========= ======== ============ =========== ========= ============
The accompanying notes are an integral part of the financial statements. 5 7 HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY WITH FUND INFORMATION YEAR ENDED DECEMBER 31, 1993
HERCULES INCORPORATED BLENDED FIDELITY COMMON EQUITY GOVERNMENT INTEREST RATE MAGELLAN LOAN STOCK FUND BOND FUND SAVINGS FUND FUND FUND TOTAL ----- ---- --------- ------------ ---- ---- ----- CONTRIBUTIONS: Participating Employees $ 13,640 $ 25,480 $ 17,263 $ 1,126,631 $ 82,020 $ 0 $ 1,266,034 Company Contributions 158,614 8,210 388 140,344 23,442 0 330,998 ----------- --------- -------- ------------ ----------- --------- ------------ Subtotal Contributions $ 172,254 $ 33,690 $ 17,651 $ 1,266,975 $ 106,462 $ 0 $ 1,597,032 Interplan transfers 352,762 572,505 0 7,856,933 931,495 201,207 9,914,902 Investment Income: Cash Dividends 57,289 0 0 0 0 0 57,289 Interest 1,281 515 833 687,673 62,350 0 752,652 Change in Market Value 1,461,885 6,746 506 1,001 13,901 0 1,484,039 ----------- --------- -------- ------------ ----------- --------- ------------ Total $ 2,045,471 $ 613,456 $ 18,990 $ 9,812,582 $ 1,114,208 $ 201,207 $ 13,805,914 Withdrawals (554,117) (47,135) (9,213) (1,388,251) (60,909) (7,638) (2,067,263) Interfund Transfers (374,890) (188,714) 5,465 493,755 57,190 7,194 0 ----------- --------- -------- ------------ ----------- --------- ------------ Change in Plan Equity 1,116,464 377,607 15,242 8,918,086 1,110,489 200,763 11,738,651 Plan Equity, Dec. 31, 1992 1,736,028 29,605 48,172 4,223,506 0 0 6,037,311 ----------- --------- -------- ------------ ----------- --------- ------------ Plan Equity, Dec. 31, 1993 $ 2,852,492 $ 407,212 $ 63,414 $ 13,141,592 $ 1,110,489 $ 200,763 $ 17,775,962 =========== ========= ======== ============ =========== ========= ============
The accompanying notes are an integral part of the financial statements. 6 8 NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Hercules Incorporated Employee Savings Plan (the Plan) is a defined-contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). 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 and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. 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 assets, liabilities, and plan equity and the statement of income and changes in plan equity. 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 Government Bond Fund and The Fidelity Magellan Fund is based on the fair value of the underlying securities held by the fund. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis and dividends are recorded on the ex-dividend date. Withdrawals are recorded upon distribution. The Plan provides that participants who retire from the Company may elect an Optional Valuation Date (OVD) for determining their final withdrawal. The OVD is the last business day in January of the year following retirement. The Plan presents in the statement of income and changes in plan equity the net appreciation (depreciation) in fair value of its investments (under the caption Change in Market Value), which consists of the realized gains or losses and the change in unrealized appreciation (depreciation) on those investments. The unrealized appreciation (depreciation) for all investments at December 31, 1995, December 31, 1994, and December 31, 1993 and January 1, 1993 was $808,857, $851,077, $1,932,981, and $889,575, respectively. 2. INVESTMENT PROGRAM 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 following medium, or a combination thereof, providing his monthly savings in any one medium selected is not less than 20% of the total amount saved and is stated in 5% increments. During May 1993, the Money Market Fund was eliminated and a U.S. Government Bond Fund and a Long-Term Capital Appreciation Fund (Fidelity Magellan) were added as investment media under the Plan. Participants with balances in the Money Market Fund were provided the option to transfer their balances to other investment funds or have their balances automatically transferred to the new U.S. Government Bond Fund. The following investment medium are available under the Employee Savings 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 1995, the blended yield of these contracts was approximately 6.6%. 3. Equity Fund. This Fund is made up of substantially all the stocks that make up the Standard and Poor's 500 Index in such a mix as to track as closely as possible the movement of the Index. 4. U.S. Government Bond Fund, which invests in U.S. Treasury and Agency issues and fully insured savings bank deposits. 7 9 5. Fidelity Magellan Fund is a Long-Term Capital Appreciation Fund, which invests in common stocks, and securities convertible to common stock, issued by companies operating in the U.S. and abroad as well as foreign companies. The Company contribution, as defined in the Plan, is equal to 25% of the participants' contribution. There were 445 participants at December 31, 1995 who participated in one or more of the five investment media. At December 31, 1995 the number of participants selecting each of the investment media for their contributions was as follows: Hercules Incorporated Common Stock .................. 86 Equity Fund.......................................... 67 Government Bond Fund................................. 0 Blended Interest Rate Savings Fund .................. 410 Fidelity Magellan Fund............................... 133
3. INTERPLAN TRANSFERS Interplan transfers represent transfers from acquired company plans and rollovers of new employees' distributions from defined contribution plans. Effective July 1, 1993, the net assets of the Employee Savings Plan (approximately $10 MM) of the Aqualon Company (a wholly-owned subsidiary of Hercules Incorporated) were transferred to the Hercules Incorporated Employee Savings Plan. Participant's benefits under the Plan were substantially unaffected by the transfer of net assets. 4. TAX STATUS The United States Treasury Department advised on 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 administrator believes that the Plan is currently being operated in compliance with the applicable provisions of the Internal Revenue Code. The Federal Income Tax status of the employee is covered under the caption "Federal Tax Aspects" of the Registration Statement "Hercules Incorporated Employee Savings Plan" (No. 33-21667) on Form S-8 and supplemented by periodic benefit updates. 5. INVESTMENTS Investments that represent five percent or more of Plan Equity at December 31, 1995 or 1994 are as follows:
1995 1994 ---- ---- Hercules Incorporated Common Stock $ 870,396 $1,867,454 Fidelity Magellan Fund $1,948,450 $1,178,384 Group Annuity Contract with Peoples Life Insurance Company (#BDA 00002TR) $1,430,318 $1,530,997 Group Annuity Contract with Provident Life and Accident Insurance Company (#630-05537) $1,148,051 $1,234,558 Group Annuity Contract with Metropolitan Life Insurance Company (#12833) $1,205,855 $ 935,268 GIC Prudential (#GA 8083) $1,592,213 -- Hartford Life Contract (#GA 10226) $ 752,044 --
6. DIVESTITURE On March 15, 1995 Hercules completed the sale of its Aerospace business to Alliant Techsystems Inc. (Alliant). The sale agreement provided for a transfer of plan assets (approximately $4 million) and assumption of plan obligations to Alliant as of April 1, 1995. 8 10 7. RECLASSIFICATION Amounts allocated to persons who have elected to withdraw from the Plan but have not been paid as of year end are reported as part of plan equity. Previously these amounts were reported in liability for withdrawals. The 1994 information has been restated to conform with the 1995 presentation. 8. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of plan equity per the financial statements to the Form 5500:
DECEMBER 31, ---------------------------- 1995 1994 ---- ---- Plan equity per the financial statements $ 14,569,570 $ 16,845,223 Amounts allocated to withdrawing participants (19,764) (121,881) ------------ ------------ Plan equity per the Form 5500 $ 14,549,806 $ 16,723,342 ============ ============
The following is a reconciliation of withdrawals per the financial statements to the Form 5500:
YEAR ENDED DECEMBER 31, 1995 ----------------- Withdrawals per the financial statements $ 8,534,045 Add: Amounts allocated to withdrawing participants at December 31, 1995 19,764 Less: Amounts allocated to withdrawing participants at December 31, 1994 (121,881) ----------- Withdrawals per the Form 5500 $ 8,431,928 ===========
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. 9 11 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors, Hercules Incorporated, Wilmington, Delaware We have audited the accompanying statements of assets, liabilities, and plan equity with fund information of Hercules Incorporated Employee Savings Plan as of December 31, 1995 and 1994, and the related statements of income and changes in plan equity with fund information for each of the three years in the period ended December 31, 1995. These financial statements are the responsibility of the Plan's administrators. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hercules Incorporated Employee Savings Plan as of December 31, 1995 and 1994, and its income and changes in plan equity for each of the three years in the period ended December 31, 1995 in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The fund information in the accompanying statements of assets, liabilities, and plan equity of the Hercules Incorporated Employee Savings Plan and the related statements of income and changes in plan equity is presented for purposes of additional analysis rather than to present the financial position and income and changes in plan equity of each fund. The fund information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Coopers & Lybrand L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania 19103 June 28, 1996 10 12 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 EMPLOYEE SAVINGS PLAN H. Eugene McBrayer -------------------------------------------- H. Eugene McBrayer, Chairman Finance Committee, Hercules Incorporated, Plan Administrator Date: June 28, 1996 11 13 EXHIBIT INDEX Number Description 23 Consent of Independent Accountants. 12 EX-23 2 CONSENT OF INDEPENDENT ACCOUNTANTS 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. 33-21667) of our report dated June 28, 1996 on our audits of the financial statements of Hercules Incorporated Employee Savings Plan as of December 31, 1995 and 1994 and for each of the three years in the period ended December 31, 1995, 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 28, 1996 13 -----END PRIVACY-ENHANCED MESSAGE-----