Exhibit C
PRELIMINARY DRAFT
MANAGEMENT PRESENTATION TO THE
[LOGO] HERCULES
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BOARD OF DIRECTORS
11-FEB-2002
PRELIMINARY DRAFT
II. OVERVIEW OF REFINANCING
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Overview of Refinancing 16
PRELIMINARY DRAFT
CONSOLIDATED DEBT POSITION
ACTUAL AND PRO FORMA FOR IMMEDIATE DEBT RESTRUCTURING OF $800MM
(US$ IN MILLIONS)
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AS OF DECEMBER 31, 2001
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ACTUAL PRO FORMA 1
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Bank Debt Tranche A $ 494 $ 0
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Bank Debt Tranche D 371 371
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New Bank Debt Tranche E -- 400
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Bank Revolver 566 280
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$1,431 $1,051
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11.125% Senior Notes Due 2007 400 400
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New Senior Notes Due 2009 -- 400
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6.625% Senior Notes Due 2003 125 125
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6.60% Debentures Due 2027 100 100
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$ 625 $1,025
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FiberVision Debt 58 58
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ESOP 84 84
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Sundry Bank Debt 15 15
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8% Convertible Debenture 2010 3 3
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$ 160 $ 160
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$2,216 $2,236
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Trust Preferred Retail Issue 2029 363 363
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Convertible Trust Preferred 2029 261 261
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$ 624 $ 624
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TOTAL DEBT AND PREFERRED $2,840 $2,860
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Overview of Refinancing 17
PRELIMINARY DRAFT
INDICATIVE TERM SHEET
$400MM SENIOR UNSECURED NOTES
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Borrower: Hercules Incorporated
Lead Arranger: [REDACTED]
Co-Arrangers: [REDACTED]
Distribution: 144A with Registration Rights
Estimated Pricing: +-10.5%
Maturity: 7 Years No Call 4
Covenants: Similar to Existing Senior Notes
Use of Proceeds: Repayment of Tranche A Bank Debt & Irrevocable Reduction of
Revolving Credit Facility
NOTE: ASSUMES CURRENT CREDIT RATINGS OF HERCULES REMAIN CONSTANT THROUGH
REFINANCING
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Overview of Refinancing 22
PRELIMINARY DRAFT
INDICATIVE TERM SHEET
$400MM (UNDERWRITTEN) INSTITUTIONAL LOAN TRANCHE E
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Borrower: Hercules Incorporated
Lead Arranger: [REDACTED]
Estimated Pricing: LIBOR + 375 bps
Maturity: February 2006
Call Premium: 101 First Year
Guarantors: Same as Existing Agreement
Collateral: Same as Existing Agreement
Amortization: Minimal
Covenants Reps. & Warranties: Same as (to be amended) Existing Agreement
Use of Proceeds: Repayment of Tranche A Bank Debt
Conditions Precedent: 1) Issuance of $350MM Senior Unsecured Notes
2) Deflection of Term Loan D Prepayment
NOTE: ASSUMES CURRENT CREDIT RATINGS OF HERCULES REMAIN CONSTANT THROUGH
REFINANCING
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Overview of Refinancing 23
PRELIMINARY DRAFT
PROPOSED CHANGES TO BANK DEBT COVENANTS
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o Leverage covenants set at 5.5x for year 1, decreasing 0.25x per quarter
thereafter to 4.0x
o Interest coverage permanently lowered to 1.75x
o $125mm restructuring carve-out allowance
o Change use of proceeds to reflect Tranche D paydown
o Allow future refinancings
o Increase pricing grid for revolver and Tranche D
o Amendment fee
o Limit on capital expenditures
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Overview of Refinancing 24