AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 25, 2003
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.)
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HERCULES INCORPORATED
(Name of Registrant as Specified in Its Charter)
THE HERCULES SHAREHOLDERS' COMMITTEE FOR NEW MANAGEMENT
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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THE HERCULES SHAREHOLDERS' COMMITTEE FOR NEW MANAGEMENT
17 State Street, New York, NY 10004
Sender's Direct Dial: (212) 821-1601
June 25, 2003
Ms. Florentina Marinescu, Senior Analyst, U.S. Research
Mr. Rajeev Kumar, Senior Analyst, U.S. Research
Institutional Shareholder Services
2099 Gaither Road, Suite 501
Rockville, MD 20850
Dear Florentina and Rajeev:
On our conference call on Monday, I understand that an issue has been
raised, I assume by Hercules senior management, as to the availability of a
refinancing alternative prior to the BetzDearborn sale - a question which
management now raises apparently for the first time despite the fact that the
full facts concerning this matter were first laid out in our Preliminary Proxy
statement, filed on March 20. There can be little doubt that the refinancing
option was available to the Company, and I trust that the information we
forwarded has been helpful to you.
On another issue, in what one would ordinarily assume to be a simple
matter of fact, Hercules senior management has apparently advised ISS, if I
understood the point correctly, that the Company has a very productive R&D
effort and that 18% of its current sales are from new products introduced in the
last five years. Contrary to that assertion, the Company's R&D effort is
substantially below the specialty chemical industry average, and we are simply
not generating anywhere near that amount of sales from "new products," as that
term is commonly used in industry. This is further evidenced by the low rate of
sales growth at the Company for 2002 (about 50% of the industry average).
While these two isolated issues may not drive your decision, I write to
you about them because they raise a more fundamental question - to what extent
can ISS, any other impartial rating agency, or arbiter in a contested matter
rely on the unsubstantiated assertions of a party whose claims in connection
with a whole host of matters have to be regarded as suspect? In this connection,
despite the fact that we have called to the attention of Hercules shareholders
the many misleading and factually incorrect statements coming from management,
the Company has made little effort - nor could it - to rebut our contentions.
You should know that we have accepted the offer of Hercules' largest
shareholder, Mario Gabelli, to debate/discuss any of the issues with Bill Joyce
before institutional shareholders. We have also challenged Joyce to a
debate/discussion before Hercules employees and retirees in Wilmington to
address unfounded management assertions which could vitally affect Hercules
employees and retirees. To date, Joyce has not responded to either invitation.
In this regard should ISS also so desire, we would be
more than willing to be part of any meeting with ISS, Joyce and representatives
of our Committee face-to-face to address any other issues of concern or in
conflict in connection with your process.
Sincerely,
/s/SAMUEL J. HEYMAN
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Samuel J. Heyman
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