EXHIBIT D
PRESENTATION TO BOARD OF DIRECTORS
BY HERCULES MANAGEMENT
February 11, 2002
PRELIMINARY DRAFT
================================================================================
MANAGEMENT PRESENTATION TO THE
_
|_| HERCULES
- ----------------------------------------------
BOARD OF DIRECTORS
11-Feb-2002
- --------------------------------------------------------------------------------
PRELIMINARY DRAFT
================================================================================
II. OVERVIEW OF REFINANCING
- --------------------------------------------------------------------------------
Overview of Refinancing 16
PRELIMINARY DRAFT
================================================================================
CONSOLIDATED DEBT POSITION
Actual and Pro Forma for Immediate Debt Restructuring of $800mm
(US$ in millions)
- --------------------------------------------------------------------------------
As of December 31, 2001
-------------------------------
Actual Pro Forma 1
- --------------------------------------------------------------------------------
Bank Debt Tranche A $ 494 $ 0
- --------------------------------------------------------------------------------
Bank Debt Tranche D 371 371
- --------------------------------------------------------------------------------
New Bank Debt Tranche E -- 400
- --------------------------------------------------------------------------------
Bank Revolver 566 280
- --------------------------------------------------------------------------------
$1,431 $1,051
- --------------------------------------------------------------------------------
11.125% Senior Notes Due 2007 400 400
- --------------------------------------------------------------------------------
New Senior Notes Due 2009 -- 400
- --------------------------------------------------------------------------------
6.625% Senior Notes Due 2003 125 125
- --------------------------------------------------------------------------------
6.60% Debentures Due 2027 100 100
- --------------------------------------------------------------------------------
$ 625 $1,025
- --------------------------------------------------------------------------------
FiberVision Debt 58 58
- --------------------------------------------------------------------------------
ESOP 84 84
- --------------------------------------------------------------------------------
Sundry Bank Debt 15 15
- --------------------------------------------------------------------------------
8% Convertible Debenture 2010 3 3
- --------------------------------------------------------------------------------
$ 160 $ 160
- --------------------------------------------------------------------------------
$2,216 $2,236
- --------------------------------------------------------------------------------
Trust Preferred Retail Issue 2029 363 363
- --------------------------------------------------------------------------------
Convertible Trust Preferred 2029 261 261
- --------------------------------------------------------------------------------
$ 624 $ 624
- --------------------------------------------------------------------------------
Total Debt and Preferred $2,840 $2,860
- --------------------------------------------------------------------------------
================================================================================
- --------------------------------------------------------------------------------
Overview of Refinancing 17
PRELIMINARY DRAFT
================================================================================
CONSOLIDATED DEBT POSITION
Actual and Pro Forma for Immediate and Subsequent Debt Restructuring
(US$ in millions)
- --------------------------------------------------------------------------------
Pro Forma 1 Pro Forma 2
----------- -----------
` As of As of
Actual 31-Dec-2001 31-Dec-2002
- --------------------------------------------------------------------------------
Issuance NA $800 $400
- --------------------------------------------------------------------------------
Timing NA Immediate 31-Dec-2002
- --------------------------------------------------------------------------------
Bank Debt Tranche A $ 494 $ 0 $ 0
- --------------------------------------------------------------------------------
Bank Debt Tranche D 371 371 370
- --------------------------------------------------------------------------------
New Bank Debt Tranche E -- 400 400
- --------------------------------------------------------------------------------
Bank Revolver 566 280 46
- --------------------------------------------------------------------------------
$1,431 $1,051 $ 816
- --------------------------------------------------------------------------------
11.125% Senior Notes Due 2007 400 400 400
- --------------------------------------------------------------------------------
New Senior Notes Due 2009 -- 400 400
- --------------------------------------------------------------------------------
6.625% Senior Notes Due 2003 125 125 0
- --------------------------------------------------------------------------------
6.60% Debentures Due 2027 100 100 100
- --------------------------------------------------------------------------------
New Senior Subordinated Notes Due 2012 -- -- 400
- --------------------------------------------------------------------------------
$ 625 $1,025 $1,300
- --------------------------------------------------------------------------------
FiberVision Debt 58 58 50
- --------------------------------------------------------------------------------
ESOP 84 84 80
- --------------------------------------------------------------------------------
Sundry Bank Debt 15 15 15
- --------------------------------------------------------------------------------
8% Convertible Debenture 2010 3 3 3
- --------------------------------------------------------------------------------
$ 160 $ 160 $ 148
- --------------------------------------------------------------------------------
$2,216 $2,236 $2,264
- --------------------------------------------------------------------------------
Trust Preferred Retail Issue 2029 363 363 363
- --------------------------------------------------------------------------------
Convertible Trust Preferred 2029 261 261 261
- --------------------------------------------------------------------------------
$ 624 $ 624 $ 624
- --------------------------------------------------------------------------------
Total Debt and Preferred $2,840 $2,860 $2,888
- --------------------------------------------------------------------------------
================================================================================
Overview of Refinancing 18
PRELIMINARY DRAFT
================================================================================
PRO FORMA DEBT MATURITIES
Pro Forma for Immediate Debt Restructuring of $800mm
(US$ in millions)
- --------------------------------------------------------------------------------
[TABLE SHOWING PRO FORMA DEBT MATURITIES FOR DEBT RESTRUCTURING OF $800 MM.
TABLE SHOWS AMOUNTS FROM 2002 TO 2029]
o Bank Debt Tranche D o 6.60% Debentures due 2027
o 11.125% Senior Notes 2007 o Sundry Bank Debt
o 6.625% Senior Notes due 2003 o Bank Revolver
o BetzDearborn ESOP Debt o 8% Convertibles due 2010
Convertible Trust Preferred due 2029 o FiberVisions
o New Bank Debt Tranche E o Trust Preferred Retail Issue due 2029
New Senior Notes due 2009
- --------------------------------------------------------------------------------
Overview of Refinancing 19
PRELIMINARY DRAFT
================================================================================
PRO FORMA DEBT MATURITIES
Pro Forma for Immediate Debt Restructuring of $800mm
(US$ in millions)
- --------------------------------------------------------------------------------
2002 2003 2004 2005 2006 2007 2008 2009 2010 2027 2029
====================================================================================================================================
Bank Debt Tranche D $ 3.8 $ 3.8 $ 3.8 $360.0
- ------------------------------------------------------------------------------------------------------------------------------------
New Bank Debt Tranche E $400.0
- ------------------------------------------------------------------------------------------------------------------------------------
Bank Revolver 280.0
- ------------------------------------------------------------------------------------------------------------------------------------
11.125% Senior Notes due 2007 $400.0
- ------------------------------------------------------------------------------------------------------------------------------------
New Senior Notes due 2009 $400.0
- ------------------------------------------------------------------------------------------------------------------------------------
8% Convertibles due 2010 $2.6
- ------------------------------------------------------------------------------------------------------------------------------------
6.625% Senior Notes due 2003 125.0
- ------------------------------------------------------------------------------------------------------------------------------------
6.60% Debentures due 2027 $100.0
- ------------------------------------------------------------------------------------------------------------------------------------
FiberVisions 8.8 13.7 13.7 14.2 4.3 3.4
- ------------------------------------------------------------------------------------------------------------------------------------
BetzDearborn ESOP Debt 5.4 6.0 7.4 6.8 10.2 12.1 15.2 19.0
- ------------------------------------------------------------------------------------------------------------------------------------
Sundry Bank Debt 15.0
- ------------------------------------------------------------------------------------------------------------------------------------
Trust Preferred Retail Issue due 2029 $362.5
- ------------------------------------------------------------------------------------------------------------------------------------
Convertible Trust Preferred due 2029 260.9
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL DEBT MATURITY $ 33 $ 428 $ 25 $ 383 $ 415 $ 415 $ 15 $ 419 $ 3 $ 100 $ 623
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Overview of Refinancing 20
PRELIMINARY DRAFT
================================================================================
DEBT SCHEDULE
Pro Forma for Immediate Debt Restructuring of $800mm
(US$ in millions)
- --------------------------------------------------------------------------------
Facility 4Q 2001 1Q 2002 2Q 2002 3Q 2002 4Q 2002 1Q 2003 2Q 2003 3Q 2003 4Q 2003
====================================================================================================================================
Beginning Balance $2,898 $2,840 $2,854 $2,882 $2,859 $2,855 $2,838 $2,841 $2,799
- ------------------------------------------------------------------------------------------------------------------------------------
Revolver Bank Debt 566 278 310 290 289 277 412 375 337
- ------------------------------------------------------------------------------------------------------------------------------------
Term Bank Debt 865 770 769 768 767 766 765 764 763
- ------------------------------------------------------------------------------------------------------------------------------------
Bond Issues 628 1,028 1,028 1,028 1,028 1,028 903 903 903
- ------------------------------------------------------------------------------------------------------------------------------------
Trust Preferred 624 624 624 624 624 624 624 624 624
- ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Debt 157 154 151 149 147 143 137 133 130
====================================================================================================================================
Debt Balance $2,840 $2,854 $2,882 $2,859 $2,855 $2,838 $2,841 $2,799 $2,757
====================================================================================================================================
- --------------------------------------------------------------------------------
Overview of Refinancing 21
PRELIMINARY DRAFT
================================================================================
INDICATIVE TERM SHEET
$400mm Senior Unsecured Notes
- --------------------------------------------------------------------------------
Borrower: Hercules Incorporated
Lead Arranger: [Redacted]
Co-Arrangers: [Redacted]
Distribution: 144A with Registration Rights
Estimated Pricing: (+ or -) 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
- --------------------------------------------------------------------------------
Overview of Refinancing 22
PRELIMINARY DRAFT
================================================================================
INDICATIVE TERM SHEET
$400mm (Underwritten) Institutional Loan Tranche E
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
Overview of Refinancing 23
PRELIMINARY DRAFT
================================================================================
PROPOSED CHANGES TO BANK DEBT COVENANTS
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
Overview of Refinancing 24