-----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, BRX6TTHOxlVYStt6LG+4RZKBcdi2aZ0QyqscJwnZ0e0NVy2Bsp9l1JT+ULEd5V/Q zvP0gRF+bOJyWqLvEORpBg== 0000893220-99-000784.txt : 19990630 0000893220-99-000784.hdr.sgml : 19990630 ACCESSION NUMBER: 0000893220-99-000784 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HERCULES INC CENTRAL INDEX KEY: 0000046989 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS CHEMICAL PRODUCTS [2890] IRS NUMBER: 510023450 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-00496 FILM NUMBER: 99655329 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 YEAR ENDED DECEMBER 31, 1998 Title of the Plan: HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN Issuer of the securities held pursuant to the Plan: HERCULES INCORPORATED Hercules Plaza 1313 North Market Street Wilmington, Delaware 19894 2 HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN FINANCIAL STATEMENTS STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION at December 31, 1998 and 1997 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION for the year ended December 31, 1998 Supplemental schedules required by Section 2520, 103-10 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable. Plans with all of their assets in a Master Trust are exempt from the requirement to include investment supplemental schedules as part of their Financial Statements. 1 3 HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION DECEMBER 31, 1998
PARTICIPANT DIRECTED ----------------------------------------------------- HERCULES INCORPORATED BLENDED COMMON INTEREST RATE STOCK FUND SAVINGS FUND EQUITY FUND ---------- ------------ ----------- ASSETS Allocated Share of Master Savings Trust Investments $ 14,094,550(a) $100,770,139 $ 75,182,000(b) Allocated Share of Master Savings Trust Cash 353,150 6,460,322 3 ------------ ------------ ------------ Total Assets 14,447,700 107,230,461 75,182,003 ------------ ------------ ------------ LIABILITIES Accounts Payable 87,525 20,736 6,949 ------------ ------------ ------------ Net Assets Available for Benefits $ 14,360,175 $107,209,725 $ 75,175,054 ============ ============ ============ PARTICIPANT DIRECTED ------------------------------------------------------- FRANK RUSSELL FIDELITY MAGELLAN LOAN EQUITY FUND FUND INDEX FUND ---- ---- ---------- ASSETS Allocated Share of Master Savings Trust Investments $ 39,596,181(c) $ 8,743,273 $ 12,346,695(d) Allocated Share of Master Savings Trust Cash 13,008 51,225 3,221 ------------ ------------ ------------ Total Assets 39,609,189 8,794,498 12,349,916 ------------ ------------ ------------ LIABILITIES Accounts Payable 124,598 4,058 3,422 ------------ ------------ ------------ Net Assets Available for Benefits $ 39,484,591 $ 8,790,440 $ 12,346,494 ============ ============ ============
PARTICIPANT DIRECTED -------------------------------------------------------------------------------- SEI DIVERSIFIED SEI INTERNATIONAL CONSERVATIVE SEI CORE FIXED SEI SMALL CAP. EQUITY FUND FUND INCOME FUND GROWTH FUND ----------- ---- ----------- ----------- ASSETS Allocated Share of Master Savings Trust Investments $ 2,548,550(e) $ 5,275,885(f) $ 7,956,803(g) $ 5,475,885(h) Allocated Share of Master Savings Trust Cash 90 6,323 57,891 23,786 ------------ ------------ ------------ ------------ Total Assets 2,548,640 5,282,208 8,014,694 5,499,671 ------------ ------------ ------------ ------------ LIABILITIES Accounts Payable -- 910 54,561 1,153 ------------ ------------ ------------ ------------ Net Assets Available for Benefits $ 2,548,640 $ 5,281,298 $ 7,960,133 $ 5,498,518 ============ ============ ============ ============ PARTICIPANT NONPARTICIPANT DIRECTED DIRECTED --------- -------- HERCULES SEI DIVERSIFIED INCORPORATED MODERATE COMMON GROWTH FUND STOCK FUND TOTAL ----------- ---------- ----- ASSETS Allocated Share of Master Savings Trust Investments $ 5,424,389(i) $ 31,357,081(a) $308,771,431 Allocated Share of Master Savings Trust Cash -- 785,675 7,754,694 ------------ ------------ ------------ Total Assets 5,424,389 32,142,756 316,526,125 ------------ ------------ ------------ LIABILITIES Accounts Payable 3,630 194,725 502,267 ------------ ------------ ------------ Net Assets Available for Benefits $ 5,420,759 $ 31,948,031 $316,023,858 ============ ============ ============
- ---------- (a) At fair value. Cost $43,321,650. Shares: 1,667,950 (b) At fair value. Cost $39,853,001. (c) At fair value. Cost $27,744,643. (d) At fair value. Cost $10,367,371. (e) At fair value. Cost $ 2,519,491. (f) At fair value. Cost $ 4,964,005. (g) At fair value. Cost $ 7,963,914. (h) At fair value. Cost $ 5,367,182. (i) At fair value. Cost $ 5,120,550. The accompanying notes are an integral part of these financial statements. 2 4 HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION DECEMBER 31, 1997
PARTICIPANT DIRECTED ------------------------------------------------------- HERCULES BLENDED INCORPORATED COMMON INTEREST RATE STOCK FUND SAVINGS FUND EQUITY FUND ---------- ------------ ----------- ASSETS Allocated Share of Master Savings Trust Investments $ 23,760,445(a) $115,611,690 $ 63,161,169(b) Contributions Receivable 71,796 -- -- Allocated Share of Master Savings Trust Cash 350,032 977,287 -- ------------ ------------ ------------ Total Assets 24,182,273 116,588,977 63,161,169 ------------ ------------ ------------ LIABILITIES Accounts Payable 6 9,981 48,761 ------------ ------------ ------------ Net Assets Available for Benefits $ 24,182,267 $116,578,996 $ 63,112,408 ============ ============ ============ PARTICIPANT DIRECTED ------------------------------------------------------- FRANK RUSSELL FIDELITY LOAN EQUITY INDEX MAGELLAN FUND FUND FUND ------------- ---- ---- ASSETS Allocated Share of Master Savings Trust Investments $ 30,707,808(c) $ 9,007,645 $ 7,139,167(d) Contributions Receivable -- -- -- Allocated Share of Master Savings Trust Cash -- 100 -- ------------ ------------ ------------ Total Assets 30,707,808 9,007,745 7,139,167 ------------ ------------ ------------ LIABILITIES Accounts Payable 91,424 12,001 23,276 ------------ ------------ ------------ Net Assets Available for Benefits $ 30,616,384 $ 8,995,744 $ 7,115,891 ============ ============ ============
PARTICIPANT DIRECTED ------------------------------------------------------------------------------- SEI DIVERSIFIED SEI INTERNATIONAL CONSERVATIVE SEI CORE FIXED SEI SMALL CAP. EQUITY FUND FUND INCOME FUND GROWTH FUND ----------- ---- ------------ ----------- ASSETS Allocated Share of Master Savings Trust Investments $ 1,841,918(e) $ 3,925,623(f) $ 4,687,313(g) $ 4,565,057(h) Contributions Receivable -- 6,188 1,278 45,885 Allocated Share of Master Savings Trust Cash -- -- -- -- ------------ ------------ ------------ ------------ Total Assets 1,841,918 3,931,811 4,688,591 4,610,942 ------------ ------------ ------------ ------------ LIABILITIES Accounts Payable 10,542 156 24,475 3,996 ------------ ------------ ------------ ------------ Net Assets Available for Benefits $ 1,831,376 $ 3,931,655 $ 4,664,116 $ 4,606,946 ============ ============ ============ ============ PARTICIPANT NONPARTICIPANT DIRECTED DIRECTED --------- -------- HERCULES SEI DIVERSIFIED INCORPORATED MODERATE COMMON GROWTH FUND STOCK FUND TOTAL ------ ---------- ----- ASSETS Allocated Share of Master Savings Trust Investments $ 5,344,653(i) $ 50,190,521(a) $319,943,009 Contributions Receivable 64,902 151,660 341,709 Allocated Share of Master Savings Trust Cash -- 739,391 2,066,810 ------------ ------------ ------------ Total Assets 5,409,555 51,081,572 322,351,528 ------------ ------------ ------------ LIABILITIES Accounts Payable 64,577 12 289,207 ------------ ------------ ------------ Net Assets Available for Benefits $ 5,344,978 $ 51,081,560 $322,062,321 ============ ============ ============
- ---------- (a) At fair value. Cost $35,305,350. Shares: 1,477,173. (b) At fair value. Cost $35,976,488. (c) At fair value. Cost $ 6,921,298. (d) At fair value. Cost $ 6,913,894. (e) At fair value. Cost $ 2,078,237. (f) At fair value. Cost $ 3,916,452. (g) At fair value. Cost $ 4,624,943. (h) At fair value. Cost $ 5,007,964. (i) At fair value. Cost $ 5,372,084. The accompanying notes are an integral part of these financial statements. 3 5 HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION YEAR ENDED DECEMBER 31, 1998
PARTICIPANT DIRECTED ------------------------------------------------------- HERCULES BLENDED INTEREST INCORPORATED RATE SAVINGS COMMON STOCK FUND FUND EQUITY FUND ----------------- ---- ----------- CONTRIBUTIONS: Participating Employees $ 1,269,171 $ 3,808,738 $ 3,224,900 Company Contributions -- -- -- ------------- ------------- ------------- Subtotal Contributions 1,269,171 3,808,738 3,224,900 Interplan Transfers 559,131 27,226 214,183 ALLOCATED SHARE OF MASTER SAVINGS TRUST INVESTMENT ACTIVITIES: Cash Dividends 531,471 -- -- Interest 48 7,152,231 75 Change in Market Value (10,221,161) -- 16,874,645 ------------- ------------- ------------- Total (7,861,340) 10,988,195 20,313,803 Withdrawals (2,175,045) (15,790,058) (5,473,875) Interfund Transfers 214,293 (4,567,408) (2,777,282) ------------- ------------- ------------- For Benefits (9,822,092) (9,369,271) 12,062,646 Net Assets Available for Benefits December 31, 1997 24,182,267 116,578,996 63,112,408 ------------- ------------- ------------- December 31, 1998 $ 14,360,175 $ 107,209,725 $ 75,175,054 ============= ============= ============= PARTICIPANT DIRECTED -------------------------------------------------------- FRANK RUSSELL FIDELITY MAGELLAN EQUITY FUND LOAN FUND INDEX FUND ---- --------- ---------- CONTRIBUTIONS: Participating Employees $ 1,596,314 $ -- $ 794,918 Company Contributions -- -- -- ------------- ------------- ------------- Subtotal Contributions 1,596,314 -- 794,918 Interplan Transfers 163,427 87,265 153,704 ALLOCATED SHARE OF MASTER SAVINGS TRUST INVESTMENT ACTIVITIES: Cash Dividends 1,861,162 -- 278 Interest -- 588,899 91 Change in Market Value 7,939,429 -- 1,978,911 ------------- ------------- ------------- Total 11,560,332 676,164 2,927,902 Withdrawals (1,699,257) (305,028) (586,919) Interfund Transfers (992,868) (576,440) 2,889,620 ------------- ------------- ------------- For Benefits 8,868,207 (205,304) 5,230,603 Net Assets Available for Benefits December 31, 1997 30,616,384 8,995,744 7,115,891 ------------- ------------- ------------- December 31, 1998 $ 39,484,591 $ 8,790,440 $ 12,346,494 ============= ============= =============
PARTICIPANT DIRECTED ----------------------------------------------------------------------------- SEI DIVERSIFIED SEI INTERNATIONAL CONSERVATIVE SEI CORE FIXED SEI SMALL CAP. EQUITY FUND FUND INCOME FUND GROWTH FUND ----------- ---- ----------- ----------- CONTRIBUTIONS: Participating Employees $ 195,985 $ 256,071 $ 256,825 $ 345,523 Company Contributions -- -- -- -- ------------- ------------- ------------- ------------- Subtotal Contributions 195,985 256,071 256,825 345,523 Interplan transfers 44,927 13,856 15,395 86,695 ALLOCATED SHARE OF MASTER SAVINGS TRUST INVESTMENT ACTIVITIES: Cash Dividends 118,971 322,936 525,365 23,501 Interest -- -- -- -- Change in Market Value 252,547 369,915 (6,174) 369,851 ------------- ------------- ------------- ------------- Total 612,430 962,778 791,411 825,570 Withdrawals (401,614) (221,411) (574,261) (536,245) Interfund Transfers 506,448 608,276 3,078,867 602,247 ------------- ------------- ------------- ------------- Change in Net Assets Available For Benefits 717,264 1,349,643 3,296,017 891,572 Net Assets Available for Benefits December 31, 1997 1,831,376 3,931,655 4,664,116 4,606,946 ------------- ------------- ------------- ------------- Net Assets Available for Benefits December 31, 1998 $ 2,548,640 $ 5,281,298 $ 7,960,133 $ 5,498,518 ============= ============= ============= ============= PARTICIPANT NONPARTICIPANT DIRECTED DIRECTED -------- -------- SEI DIVERSIFIED HERCULES MODERATE INCORPORATED COMMON GROWTH FUND STOCK FUND TOTAL ----------- ---------- ----- CONTRIBUTIONS: Participating Employees $ 242,621 $ -- $ 11,991,066 Company Contributions -- 4,203,427 4,203,427 ------------- ------------- ------------- Subtotal Contributions 242,621 4,203,427 16,194,493 Interplan transfers 40,694 1,176,224 2,582,727 ALLOCATED SHARE OF MASTER SAVINGS TRUST INVESTMENT ACTIVITIES: Cash Dividends 391,244 1,118,036 4,892,964 Interest -- 100 7,741,444 Change in Market Value 479,475 (21,506,556) (3,469,118) ------------- ------------- ------------- Total 1,154,034 (15,008,769) 27,942,510 Withdrawals (1,641,701) (4,575,559) (33,980,973) Interfund Transfers 563,448 450,799 -- ------------- ------------- ------------- Change in Net Assets Available For Benefits 75,781 (19,133,529) (6,038,463) Net Assets Available for Benefits December 31, 1997 5,344,978 51,081,560 322,062,321 ------------- ------------- ------------- Net Assets Available for Benefits December 31, 1998 $ 5,420,759 $ 31,948,031 $ 316,023,858 ============= ============= =============
The accompanying notes are an integral part of these financial statements. 4 6 NOTES TO FINANCIAL STATEMENTS 1. DESCRIPTION OF PLAN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Hercules Incorporated Savings and Investment Plan (the Plan) is a defined-contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Upon hire, employees are immediately eligible to participate in the Plan and obtain immediate, nonforfeitable (vested) rights to the full market value of their account. At time of enrollment in the Plan, a participant, by giving written notice to the Trustee, shall direct the investment of his monthly savings in any of the Plan's investment media, or a combination thereof, providing his monthly savings in any one medium selected is not less than 20% of the total amount saved and is stated in 5% increments. The Plan provides for various investment options in any combination of stocks, bonds, fixed income securities, mutual funds, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market, and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statement of net assets available for benefits and the statement of changes in net assets available for benefits. The assets of the Plan are commingled for investment purposes in the Hercules Incorporated Master Savings Trust (the Trust) with the assets of the Hercules Incorporated Employee Savings Plan. The assets of the Trust are held by Bankers Trust Company (Trustee). The Plan's investment in the Trust is based upon the fair value of net assets in the Trust and the Plan's relative interest in the Trust. The Plan's allocated share of Master Trust investments in the accompanying statements of net assets available for benefits represent the Plan's share of the investments in the Trust, which was 97.18% and 97.47% at December 31, 1998 and 1997, respectively. Recordkeeping for the Plan is performed by MetLife's Defined Contribution Group. The Plan includes an employee loan provision authorizing participants to borrow an amount from their vested balances in the Plan. The loans are executed by promissory notes and have a minimum term of 12 months and a maximum term of 60 months, except for qualified residential loans, which have a maximum term of 120 months. The loans bear an interest rate equal to the average rate charged by selected major banks to prime customers for secured loans. The loans are repaid over the term in monthly installments of principal and interest by payroll deduction. A participant also has the right to repay the loan in full at any time without penalty. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported amounts of assets, liabilities and changes therein, and disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. 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 Fidelity Magellan Fund, the Frank Russell Equity Index Fund, and the SEI group of funds is based on the fair value of the underlying securities held by the fund. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis and dividends are recorded on the ex-dividend date. Withdrawals are recorded upon distribution. The Plan provides that participants who retire from the Company may elect, upon retirement, an Optional Valuation Date (OVD) for determining their final withdrawal. The OVD is the last business day of any month following retirement up to age 70 in which the distribution is requested. The Plan presents in the statement of changes in net assets available for benefits its allocated share of the Trust's investment activities, which includes the net appreciation (depreciation) in fair value of its investments (under the caption Change in Market Value), which consists of the realized gains or losses and the change in unrealized appreciation (depreciation) on those investments. 5 7 Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts. 2. INVESTMENT PROGRAM The following investment media are available under the Savings and Investment Plan: 1. Hercules Incorporated Common Stock. 2. A Blended Interest Rate Savings Fund, wherein savings so directed are deposited with various major insurance companies, who guarantee the payment of principal. For 1998 and 1997, the blended yield of these contracts was approximately 6.8% and 6.4%, respectively. 3. Equity Fund. This Fund is made up of substantially all the stocks that make up the Standard and Poor's 500 Index in such a mix as to track as closely as possible the movement of the Index. 4. 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. 5. Frank Russell Equity Index Fund sells high long-term returns by investing in common stocks of the largest companies in the U.S. stock market. 6. SEI International Equity Fund seeks to provide aggressive long-term growth from investments in foreign stocks and diversification in domestic stock portfolios. 7. SEI Small Cap. Growth Fund invests in stocks of smaller companies that are in an early stage or transition point in their development. 8. SEI Diversified Moderate Growth Fund invests in U.S. and international stocks and provides a limited level of current income by investing in bonds. 9. SEI Diversified Conservative Fund seeks to provide current income with opportunity for capital growth by investing in domestic and international stocks and bonds. 10. SEI Core Fixed Income Fund invests in a diversified portfolio of high-quality fixed-income bonds. The Company contribution, as defined in the Plan, is equal to 50% of that portion of the participants' contribution which does not exceed 6% of earnings or base pay and must be invested in common stock of Hercules Incorporated. During 1998, the Plan had purchases and sales of Hercules common stock of $16,995,414 and $11,475,620, respectively, which are considered related party transactions. There were 4,281 participants at December 31, 1998 who participated in one or more of the ten available investment media. At December 31, 1998 the number of participants selecting each of the investment media for their contributions was as follows:
Hercules Incorporated Common Stock ......................... 4,039 Blended Interest Rate Savings Fund ......................... 2,716 Equity Fund................................................. 1,897 Fidelity Magellan Fund...................................... 1,348 Frank Russell Equity Index Fund............................. 738 SEI Core Fixed Income Fund.................................. 411 SEI Diversified Conservative Fund........................... 357 SEI Diversified Moderate Growth Fund........................ 300 SEI International Equity Fund............................... 292 SEI Small Cap. Growth Fund.................................. 445
6 8 3. INTEREST IN HERCULES INCORPORATED MASTER SAVINGS TRUST The Plan's allocated share of the Trust's net assets is based upon the total of each individual Plan"s interest in investments of the Trust. The allocated interest of the net assets of each fund in the Trust at December 31 was as follows:
1998 1997 ---- ---- Hercules Incorporated Common Stock............................. 99.3% 99.1% Blended Interest Rate Savings Fund............................. 95.2% 95.6% Equity Fund.................................................... 98.2% 98.6% Fidelity Magellan Fund......................................... 95.4% 95.8% Loan Fund...................................................... 100% 100% Frank Russell Equity Index Fund................................ 98.5% 98.9% SEI Diversified Conservative Fund.............................. 100% 100% SEI International Equity Fund.................................. 99.4% 100% SEI Small Cap. Growth Fund..................................... 98.8% 99.2% SEI Diversified Moderate Growth Fund........................... 99.9% 100% SEI Core Fixed Income Fund..................................... 100% 100%
4. INTERPLAN TRANSFERS Interplan transfers represent transfers from acquired company plans and the Hercules Incorporated Employee Savings Plan, rollovers of new employees' distributions from defined contribution plans, and the vesting of a 1996 supplemental stock award. 5. TAX STATUS The United States Treasury Department advised on October 29, 1997, that the Plan as amended through February 1, 1996 is a qualified trust under Section 401(a) of the Internal Revenue Code and is therefore exempt from Federal income taxes under provisions of Section 501(a) of the code. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and currently being operated in compliance with the applicable provisions of the Internal Revenue Code. 6. INVESTMENTS The Plan's allocated interest in investments in the Trust that represent five percent or more of net assets available for benefits at December 31, 1998 or 1997 are as follows:
1998 1997 ----------- ----------- Hercules Incorporated Common Stock (Participant/Non-participant) ................... $45,451,631 $73,950,966 Bankers Trust Equity Index Fund ...................... $75,182,000 $63,161,169 Fidelity Magellan Fund ............................... $39,596,181 $30,707,808 Group Annuity Contract with Peoples Life Insurance Company (#BDA 00002TR) ........... $36,320,655 $23,088,209 Group Annuity Contract with Transamerica Life Insurance & Annuity Company (#76768) ............ $15,801,561 $ -- GIC Prudential (#GA 8083)............................ $ -- $25,914,612 Group Annuity Contract with Transamerica Life Insurance & Annuity Company (#76589) ............ $19,494,634 $18,448,411
7 9 7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
DECEMBER 31, ------------ 1998 1997 ------------- ------------- Net Assets Available for Benefits per the financial statements ............. $ 316,023,858 $ 322,062,321 Amounts Allocated to Withdrawing Participants (127,263) (338,603) ------------- ------------- Net Assets Available for Benefits per the Form 5500 ........................ $ 315,896,595 $ 321,723,718 ============= =============
The following is a reconciliation of withdrawals per the financial statements to the Form 5500:
YEAR ENDED DECEMBER 31, 1998 ----------------- Benefits paid to participants per the financial statements . $ 33,980,973 Add: Amounts Allocated to Withdrawing Participants at December 31, 1998 .................................... 127,263 Less: Amounts Allocated to Withdrawing Participants at December 31, 1997 .................................... (338,603) ------------ Benefits paid to participants per the Form 5500 ............ $ 33,769,633 ============
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date. 8 10 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors, Hercules Incorporated, Wilmington, Delaware In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of Hercules Incorporated Savings and Investment Plan (the "Plan") at December 31, 1998 and December 31, 1997, and the changes in net assets available for benefits for the year ended December 31, 1998 in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The fund information in the statements of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for benefits of each fund. The fund information is the responsibility of the Plan's management. 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. /s/ PricewaterhouseCoopers LLP Philadelphia, Pennsylvania 19103 June 22, 1999 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed by the undersigned hereunto duly authorized. HERCULES INCORPORATED SAVINGS AND INVESTMENT PLAN /s/ H. Eugene McBrayer ---------------------- H. Eugene McBrayer, Chairman Finance Committee, Hercules Incorporated, Plan Administrator Date: June 29, 1999 12
EXHIBIT INDEX Number Description - ------ ----------- 23 Consent of Independent Accountants.
EX-23 2 CONSENT OF INDEPENDENT ACCOUNTANTS 1 EXHIBIT 23. CONSENT OF INDEPENDENT ACCOUNTANTS. We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-37279) of Hercules Incorporated of our report dated June 22, 1999 relating to the financial statements, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP Philadelphia, Pennsylvania June 29, 1999 -----END PRIVACY-ENHANCED MESSAGE-----