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COMMISSION FILE NO. 1-496
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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, 1994
Title of the plan:
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HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN
Issuer of the securities held pursuant to the plan:
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HERCULES INCORPORATED
Hercules Plaza
1313 North Market Street
Wilmington, Delaware 19894
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HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN
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FINANCIAL STATEMENTS
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STATEMENT OF ASSETS, LIABILITIES, AND PLAN EQUITY
December 31, 1994 and 1993
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
Years ended December 31, 1994, 1993 and 1992
For
ANNUAL REPORT
FORM 11-K
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HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN
STATEMENT OF ASSETS, LIABILITIES AND PLAN EQUITY WITH FUND INFORMATION
DECEMBER 31, 1994
HERCULES BLENDED FIDELITY
INCORPORATED EQUITY GOVERNMENT INTEREST RATE MAGELLAN LOAN
COMMON STOCK FUND BOND FUND SAVINGS FUND FUND 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
Liability for Withdrawals $7,204 $807 $27 $100,083 $15,074 $7,694 130,889
Advances from Company 0 0 0 0 123 0 123
Plan Equity 1,903,711 354,693 24,317 12,954,808 1,188,515 297,299 16,723,343
--------- ------- ------ ----------- ---------- --------- -----------
Total Liabilities & Equity $1,910,915 $355,500 $24,344 $13,054,891 $1,203,712 $304,993 $16,854,355
========== ======== ======= =========== ========== ======== ===========
DECEMBER 31, 1993
HERCULES BLENDED FIDELITY
INCORPORATED GOV'T BOND INTEREST RATE MAGELLAN
COMMON STOCK EQUITY FUND FUND SAVINGS FUND FUND LOAN FUND TOTAL
ASSETS
Investments $2,851,663(a) $416,195(b) $65,511(c) $13,040,233 $1,074,037(d) $ 208,400(e) $17,656,039
Receivable from Company 3,514 12,626 284 169,078 6,731 0 192,233
Cash 35,252 2,799 17 266,361 74,745 0 379,174
---------- -------- ------- ----------- ---------- ---------- -----------
Total Assets $2,890,429 $431,620 $65,812 $13,475,672 $1,155,513 $ 208,400 $18,227,446
========== ======== ======= =========== ========== ========== ===========
LIABILITIES & EQUITY
Liability for Withdrawals $ 35,376 $ 213 $ 0 $ 317,031 $ 43,651 $ 7,637 $ 403,908
Advances from Company 2,561 24,195 2,398 17,049 1,373 0 47,576
Plan Equity 2,852,492 407,212 63,414 13,141,592 1,110,489 200,763 17,775,962
---------- -------- ------- ----------- ---------- ---------- -----------
Total Liabilities & Equity $2,890,429 $431,620 $65,812 $13,475,672 $1,155,513 $208,400 $18,227,446
========== ======== ======= =========== ========== ========== ===========
(a) At fair value. Cost: 1994, $956,271; 1993, $931,651. Shares: 1994,
48,505; 1993, 75,440.
(b) At fair value. Cost: 1994, $305,588; 1993, 416,195.
(c) At fair value. Cost: 1994, $24,643; 1993, $65,511.
(d) At fair value. Cost: 1994, $1,233,978; 1993, $1,061,069.
(e) Represents loans to plan participants.
The accompanying notes are an integral part of the financial statements.
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HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1994
HERCULES BLENDED FIDELITY
INCORPORATED GOV'T BOND INTEREST RATE MAGELLAN LOAN
COMMON STOCK EQUITY FUND 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
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$ 160,380 $ 98,011 $14,095 $ 1,630,898 $ 218,126 $ 150 $ 2,121,600
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 (98,544) (103,257) (80,459) (2,970,014) (94,500) (55) (3,346,829)
Interfund Transfers (481,584) 258,419 0 202,591 (17,310) 37,884 0
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Change in Plan Equity (948,781) (52,519) (39,097) (186,784) 78,026 96,536 (1,052,619)
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 $1,903,711 $ 354,693 $24,317 $12,954,808 $1,188,515 $297,299 $16,723,343
========== ========= ======= ============ ========== ======== ===========
YEAR ENDED DECEMBER 31, 1993
HERCULES BLENDED FIDELITY
INCORPORATED GOV'T BOND INTEREST RATE MAGELLAN LOAN
COMMON STOCK EQUITY FUND FUND SAVINGS FUND FUND FUND TOTAL
Contributions:
Participating Employees $ 13,640 $ 25,480 $17,263 $ 1,126,631 $ 83,020 $ 0 $1,266,034
Company Contributions 158,614 8,210 388 140,344 23,442 0 330,998
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$ 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
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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.
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HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1992
HERCULES
INCORPORATED BLENDED MONEY
COMMON INTEREST RATE EQUITY MARKET
STOCK SAVINGS FUND FUND FUND TOTAL
Contributions:
Participating Employees $ 66,913 $ 918,847 $10,246 $31,104 $1,027,110
Company Contributions 252,867 252,867
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$ 319,780 $ 918,847 $10,246 $31,104 $1,279,977
Interplan Transfers 3,441 3,441
Investment Income:
Cash Dividends 109,818 109,818
Interest 2,155 289,841 161 1,933 294,090
Change in Market Value 448,041 0 2,369 0 450,410
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Total $ 879,794 $1,212,129 $12,776 $33,037 2,137,736
Withdrawals (1,042,958) (2,412,196) (29,959) (27,333) (3,512,446)
Interfund Transfers (350,738) 347,074 1,432 2,232 0
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Change in Plan Equity (513,902) (852,993) (15,751) 7,936 (1,374,710)
Plan Equity, Dec. 31, 1991 2,249,930 5,076,499 45,356 40,236 7,412,021
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Plan Equity, Dec. 31, 1992 $ 1,736,028 $4,223,506 $29,605 $48,172 $6,037,311
=========== ========== ======= ======= ==========
The accompanying notes are an integral part of the financial statements.
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NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 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 liability for such withdrawals is reflected in the financial statements on
the Optional Valuation Date.
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, 1994, December 31, 1993, and December 31, 1992 and January 1, 1992
was $851,077, $1,932,981, $889,575, and $590,088, respectively.
2. INVESTMENT PROGRAM
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, 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 1994, the blended yield of these contracts
was approximately 7.1%.
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.
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 923 participants at December 31, 1994 who participated in
one or more of the five investment media. At December 31, 1994 the number of
participants selecting each of the investment media for their contributions was
as follows:
Hercules Incorporated Common Stock . . . . . . . . . 301
Equity Fund . . . . . . . . . . . . . . . . . . . . . 64
Government Bond Fund . . . . . . . . . . . . . . . . . 9
Blended Interest Rate Savings Fund . . . . . . . . . 678
Fidelity Magellan Fund . . . . . . . . . . . . . . . . 97
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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 October 24, 1986,
that the Plan as amended through January 1, 1985 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 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, 1994 or 1993 are as follows:
1994 1993
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Hercules Incorporated Common Stock $1,867,454 $2,851,663
Fidelity Magellan Fund $1,178,384 $1,074,037
Group Annuity Contract with Peoples
Life Insurance Company (#BDA 00002TR) $1,530,997 $1,853,071
Group Annuity Contract with Provident Life and
Accident Insurance Company (#630-05537) $1,234,558 $1,231,962
Group Annuity Contract with Metropolitan Life
Insurance Company (#12833), 7.4%, 4/30/95 935,268 --
6. SUBSEQUENT EVENT
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 fund assets (approximately $4 million) and assumption of fund
liabilities to Alliant as of April 1, 1995.
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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, 1994 and 1993, 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, 1994. 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, 1994 and 1993, and its income and
changes in plan equity for each of the three years in the period ended December
31, 1994 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.
2400 Eleven Penn Center Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania 19103
June 28, 1995
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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 thereunto duly authorized.
HERCULES INCORPORATED EMPLOYEE SAVINGS PLAN
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H. Eugene McBrayer, Chairman
Finance Committee, Hercules Incorporated,
Plan Administrator
Date: June 28, 1995
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EXHIBIT INDEX
Number Description
23 Consent of Independent Accountants.
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