EXHIBIT 10-C
June 27, 2001
Mr. Fred G. Aanonsen
14 Meadow Ridge Lane
New Milford, CT 06776
Dear Fred:
I am pleased to confirm the terms and conditions of your offer to join
Hercules Incorporated in the position of Vice President and Controller of
Hercules, effective July 2, 2001. This position will report to the Chief
Executive Officer.
Our offer includes the following components:
1. Annual Base Salary: $260,000 payable in 12 equal monthly
installments. Pursuant to our salary administration policy, salary
reviews are conducted each March 1st.
2. Annual Incentive Compensation: Your target annual incentive
opportunity under the Hercules Management Incentive Compensation
Plan (MICP) is for 2001, 60% of your base salary and will be
prorated for the number of months from your start date to the end of
the year. The maximum payout is 200% of the target and, of course,
the minimum is zero. Any payouts above the target amount may be made
in discounted restricted stock.
3. Long-Term Incentive: In this position, you are eligible to receive
annual grants under the Hercules Long-Term Incentive Compensation
Plan (LTICP). The value of the 2001 award is set at 80% of your base
annual salary subject to a pro-rata adjustment for the partial year.
Upon commencing employment, you will receive a stock options, the
number of which will be based upon the fair market value as of that
date and a Black Scholes Valuation methodology.
4. Benefits: Your service with Union Carbide will be recognized for
purposes of eligibility to receive benefits and vesting. You will
accrue benefits pursuant to the terms of the Pension Plan of
Hercules Incorporated. Benefits will be funded to the extent legally
possible under the qualified pension plan trust with the balance
paid under the unfunded non-qualified pension restoration plan.
Fred G. Aanonsen
June 27, 2001
Page 2
5. Special Pension Bridge: You will be eligible to receive an annual
credit to the Deferred Compensation Plan equal to 10% of your gross
annual Union Carbide pension. This credit will continue for the
lesser of the term of employment or 5 years.
6. Deferred Compensation: Beginning calendar year 2002, you become
eligible to participate in the Hercules Deferred Compensation Plan.
This plan provides the option to defer before-tax salary and/or
target MICP amounts. More information will be provided to you on
this plan when you become eligible to participate.
7. Executive Stock Purchase Program: Beginning calendar year 2002, you
will become eligible to participate in the Executive Stock Purchase
Program. This program, under the LTICP, provides you with the option
of converting salary, target MICP amounts, and Nonqualified Pension
benefits into Hercules Restricted Stock at a 15% discount. The
program also provides for the exchange of Nonqualified Savings Plan
balances for restricted stock with no discount. More information
will be provided to you on this program through the Corporate Human
Resources Department.
8. Temporary Housing: You will be eligible for company paid housing for
a period not to exceed one year from the date a lease is signed
subject to a limit of $1700 per month.
9. Change in Control: You are eligible for a Change in Control
Agreement which triggers upon a Change in Control at Hercules
Incorporated. Upon a qualifying Change in Control, if within the
three year period beginning the date a Change in Control occurs,
there is a defined diminution of duty, compensation, or a required
transfer, you will receive 3 years' salary and the greater of 3
years target bonus or most recent bonus received. The Change in
Control Agreement shall also provide that you will receive at least
60% of the value of your 2001 Long-Term Incentive stock option grant
if a change in control occurs within the first 12 months of
employment where the Company Stock is purchased for cash or for no
consideration and without being replaced by comparable new stock
options.
10. Car Allowance: If required, we will provide a rental car for up to 3
months.
11. Commuting Costs: To the extent a pool car is not available, we will
reimburse weekly and holiday returns to your home limited to advance
purchase coach air travel.
Fred G. Aanonsen
June 27, 2001
Page 3
This offer is contingent upon your passing our standard pre-placement
physical examination before your anticipated starting date. (Part of this
examination will be a test to detect the use of drugs or alcohol. If you are
currently using prescription drugs, please bring your prescription with you to
the physical.) Plus, we must verify employment eligibility under the Immigration
Reform and Control Act.
Fred, we enthusiastically welcome you to the Hercules management team. I
look forward to working with you to make this a personally and professionally
rewarding opportunity.
To indicate your review and acceptance with the above terms please sign a
copy of this letter and return it to me within three days.
Best regards,
Edward V. Carrington
Office of the Chairman
Corporate Resources Group
Accepted by:
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Fred G. Aanonsen
Enclosure