DEFA14A 1 may14defa14a.txt DEFINITIVE ADDITIONAL MATERIALS UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 SCHEDULE 14A (RULE 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant [x] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) [ ] Definitive Proxy Statement [x] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-12 Hercules Incorporated ------------------------------------------------------------------------------ (Name of Registrant as Specified In Its Charter) N/A ------------------------------------------------------------------------------ (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [x] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------------ 2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------------ 3) 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): ------------------------------------------------------------------------------ 4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------------ 5) Total fee paid: ------------------------------------------------------------------------------ [ ] Fee paid previously with preliminary materials. [ ] 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. 1) Amount Previously Paid: ------------------------------------------------------------------------------ 2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------------ 3) Filing Party: ------------------------------------------------------------------------------ 4) Date Filed: ------------------------------------------------------------------------------ [HERCULES LOGO] HERCULES INCORPORATED Hercules Plaza 1313 North Market Street Wilmington, DE 19894-0001 May 14, 2001 Fellow Shareholder: Hercules has made progress on a number of fronts over the last several months. OUR ACTIONS HAVE BEEN EXTENSIVE AND DECISIVE. THEY ARE PAYING OFF EVERY DAY. Consider these achievements: o NEW CEO APPOINTED - Dr. William Joyce was appointed CEO and a member of the Hercules Board on May 8th, 2001. Prior to joining Hercules, he was Chairman and CEO since 1996 of Union Carbide Corporation, which recently merged with The Dow Chemical Company. o DEBT RESTRUCTURED - Since October, we have restructured the Company's debt, which has allowed us to operate our businesses without disruptions. Our customers and employees have also been reassured by this achievement, and we continue to focus on ways to reduce our indebtedness. For example, shedding non-essential assets has helped reduce our debt. We continue in this effort. o ASSET SALES PROGRESS - The divestiture process is continuing successfully. In early May, we completed the sale of the majority of our resins division to Eastman Chemical Company. We also signed a definitive agreement to sell our peroxy chemicals business, and expect that sale to close in the next several weeks. In the last year, we have generated proceeds from asset sales of approximately $700 million. o COSTS REDUCED - Sharpening our focus on costs has paid off too. The workforce has been reduced by 2.5% through normal attrition and this, combined with a hiring freeze and a tight control on discretionary spending, has helped to control costs. During the first quarter, cash flow improved due to increased attention to working capital (cut by 15%) and capital expenditures (reduced by 43%). o OUR CORE BUSINESSES REMAIN HEALTHY - Despite the difficult economic climate we are facing, our core businesses have retained their leadership position as either #1 or a strong #2 in their respective markets, and operating profit for these core businesses was down only 2% from the fourth quarter. LET ME ASSURE YOU THAT OUR SIGHTS ARE FIXED ON ONE GOAL: TO MAXIMIZE VALUE FOR ALL SHAREHOLDERS. Letter to Shareholders May 14, 2001 Page 2 ------------------------------- ELECTING HEYMAN AND HIS NOMINEES AT THIS TIME WOULD BE UNWISE AND COUNTERPRODUCTIVE. o We believe it would damage or delay the sale process - and may ultimately cause potential buyers to abandon the process. What potential buyer will want to deal with Heyman and a divided board? o In addition, we don't believe Heyman and his nominees would contribute anything new as Directors while we move to complete the sale process. The Hercules' management team will need a supportive and informed board. We believe Heyman and his nominees will be neither. Our 2001 meeting is now within sight. We look forward to seeing many shareholders attend, but whether you plan to attend or not, we urge you to vote your WHITE proxy card. PLEASE DO NOT DELAY ANY LONGER. YOUR WHITE PROXY CARD MUST BE RECEIVED BY THE CLOSE OF BUSINESS ON MAY 23RD TO MAKE CERTAIN THAT IT WILL BE COUNTED AS A VOTE IN THIS IMPORTANT ELECTION. Thank you for your critical support at this crucial time for Hercules, Sincerely, /s/ Thomas L. Gossage /s/ William H. Joyce Thomas L. Gossage William H. Joyce Chairman of the Board Chief Executive Officer -------------------------------------------------------------------------------- If you have any questions about the annual meeting, need assistance in voting your WHITE proxy card or need additional copies of Hercules proxy materials, please call MacKenzie Partners TOLL FREE at (800) 322-2885 or collect at (212) 929-5500. You may also call the Company directly toll free at (800) 441-9274. -------------------------------------------------------------------------------- IMPORTANT DEVELOPMENTS INSTITUTIONAL SHAREHOLDER SERVICES RECOMMENDS VOTING FOR HERCULES' DIRECTOR NOMINEES Institutional Shareholder Services, the preeminent proxy advisory service - heavily relied on by institutions, mutual funds and other investment professionals in casting their votes in contested elections - has announced its unqualified support for reelecting the Hercules Board nominees. In an 18-page report, Institutional Shareholder Services clearly analyzes the issues involved in this proxy fight and weighs the merits of the competing positions of Hercules and ISP. The report concludes by stating "THE DECISION COMES DOWN TO WHO IS MORE VITAL TO COMPLETING THE SALE PROCESS THAT IS UNDERWAY, AND WHO IS MORE VITAL IN THE TRANSITION TO THE NEW CEO. WE BELIEVE IT IS THE MANAGEMENT SLATE. THERE IS NO ARGUMENT OF HERCULES' PAST FAILINGS. BUT MR. GOSSAGE, IN CONJUNCTION WITH THE BOARD, HAS ATTEMPTED TO REDRESS THEM AND MOVE THE COMPANY FORWARD ON A SOUNDER PATH. WE BELIEVE MR. JOYCE HAS BOTH THE COMMAND AND THE BACKING OF THE BOARD TO CONTINUE THIS PROCESS IN AN EXPEDITIOUS MANNER. WE THEREFORE ADVOCATE REELECTING MANAGEMENT'S NOMINEES." Shirley Westcott, Chief Policy Advisor of Institutional Shareholder Services, elaborated in the report, "IN RECENT DAYS, THE DISSIDENTS [ISP] HAVE PUBLICLY ADVOCATED THE SALE OF BETZDEARBORN, EVEN THOUGH THE COMPANY HAS ALREADY BEEN EXPLORING THAT OPTION. THEY HAVE URGED THE APPOINTMENT OF A PERMANENT CEO AS THE "HIGHEST PRIORITY," AND JUST YESTERDAY ONE HAS BEEN SELECTED. ONE HAS TO ASK WHAT COULD AN ISP SLATE ADD TO THE BOARD NOW?" The report further stated, "AS THE MEETING APPROACHES, IT IS THE DISSIDENTS THAT SEEM TO BE DEVISING ELEVENTH-HOUR CAMPAIGN THEMES. THEY ARE LOSING GROUND BECAUSE THE COMPANY IS DOING EXACTLY WHAT ISP HAS BEEN ADVOCATING." WE ASK YOU TO FOLLOW THE INSTITUTIONAL SHAREHOLDER SERVICES RECOMMENDATION AND VOTE FOR HERCULES' NOMINEES # # #