UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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Hercules Incorporated
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[HERCULES LOGO] HERCULES INCORPORATED
Hercules Plaza
1313 North Market Street
Wilmington, DE 19894-0001
Thomas L. Gossage
Chairman and Chief Executive Officer
April 21, 2001
Dear Shareholder:
Shortly after rejoining Hercules last Fall, I recommended to our Board of
Directors, and they unanimously agreed, that we should actively pursue - and
publicly commit to pursuing - the maximization of shareholder value through a
sale or merger of the Company. With the assistance of our financial advisors, we
have been working diligently in an increasingly difficult economic environment
seeking to bring this delicate process to a timely and successful conclusion.
WHEN AN OFFER THAT IS FAIR TO AND IN THE BEST INTERESTS OF ALL HERCULES
SHAREHOLDERS IS PRESENTED TO THE COMPANY, OUR BOARD IS FULLY COMMITTED TO
APPROVING SUCH A TRANSACTION.
ISP and its controlling shareholder, Sam Heyman, have made our value
maximization process much more difficult by waging a DISRUPTIVE AND MISGUIDED
PROXY BATTLE to attempt to gain control of one-third of our Board. THERE IS NO
NEED TO REMOVE AND REPLACE ME AND THREE OTHER EXISTING DIRECTORS IN ORDER TO
PURSUE A SALE OR MERGER OF THE COMPANY - THAT IS EXACTLY WHAT WE HAVE PUBLICLY
COMMITTED TO DO, AND ARE ALREADY DOING.
Indeed, WE ARE CONVINCED THAT PUTTING HEYMAN AND HIS THREE HAND-PICKED
NOMINEES ON OUR BOARD WOULD FURTHER UNDERMINE AND DELAY THE SALE PROCESS WHICH
WE HAVE UNDER WAY. Giving Heyman and his nominees control of one-third of our
Board would raise further concerns among potential acquirors as to whether they
would ultimately be able to complete a deal with Hercules. You should know that
potential bidders have repeatedly expressed concern about Heyman's activities
and have made it clear that they would consider any increased role for him in
the Company or the sale process as a negative development.
Moreover, in light of HEYMAN'S TRACK RECORD, we and our shareholders have
every reason to be concerned that if Heyman and his nominees are elected, he
could use his influence on the Board to pursue a transaction which would benefit
him at the expense of other shareholders. For example, he could attempt to
acquire Hercules at a particularly opportunistic time for him or on terms that
disadvantage other shareholders. Alternatively, he could resurrect his prior
proposal to acquire enough shares to increase his ownership interest in the
Company to 33%, WITHOUT PAYING A PREMIUM TO ALL HERCULES SHAREHOLDERS, a partial
offer which our Board has prevented him from doing.
o DO NOT GIVE HEYMAN THE CHANCE TO DO TO YOU WHAT HE DID TO THE SHAREHOLDERS
OF GAF CORPORATION. There he first gained control of the company through a
proxy fight and later opportunistically took it private, taking advantage
of the 1987 stock market crash and GAF's depressed stock price.
o DO NOT GIVE HEYMAN A CHANCE TO DO TO YOU WHAT HE TRIED TO DO TO THE
SHAREHOLDERS OF DEXTER CORPORATION JUST LAST YEAR. There he ran a proxy
fight and tried to buy the company for a much lower price than its board
ultimately was able to obtain for all Dexter shareholders from another
party.
o DO NOT GIVE HEYMAN A CHANCE TO SUBVERT OUR BOARD'S DISCIPLINED PROCESS OF
SELLING HERCULES JUST AS IT PROCEEDS TOWARDS A CRITICAL STAGE. How could it
be in your interest to give him such power?
We strongly urge you to reject Heyman's attempt to gain control of
one-third of our Board - and ask for your support for our program to maximize
shareholder value by signing, dating and mailing your WHITE proxy card promptly.
Please do not execute ISP's blue proxy card for any reason (including to
withhold your vote for Heyman and his slate) because you would cancel any
earlier dated WHITE proxy card voting for the Hercules directors. Rather, just
discard the blue proxy card. ONLY YOUR LATEST DATED AND PROPERLY EXECUTED PROXY
CARD THAT IS RECEIVED IN TIME FOR THE MEETING ON MAY 24, 2001, WILL BE VOTED.
REMEMBER, SINCE WE ARE IN A PROXY CONTEST, IF YOU OWN SHARES THROUGH A
BROKER, YOUR SHARES WILL NOT BE REPRESENTED AT THE MEETING AND VOTED UNLESS YOU
ACTUALLY RETURN YOUR SIGNED VOTING INSTRUCTIONS. YOUR VOTE IS IMPORTANT NO
MATTER HOW MANY SHARES YOU OWN. WE ASK THAT YOU PROMPTLY VOTE YOUR WHITE PROXY
CARD FOR THE HERCULES NOMINEES.
Hercules' Annual Report for the year 2000 is enclosed for your information.
OUR BOARD IS COMMITTED TO TAKING ALL NECESSARY AND APPROPRIATE ACTIONS TO
MAXIMIZE VALUE FOR ALL SHAREHOLDERS - NOT JUST HEYMAN AND ISP. We have and will
continue to cut costs and reduce capital spending, and have sold or are in the
process of selling businesses and other assets that are not essential to our
core businesses. We have made and will continue to make tough choices and key
moves to further reduce our debt burden while simultaneously pursuing a sale or
merger of the Company.
We ask for your continued support at this critical time for Hercules.
Sincerely,
/s/ Thomas L. Gossage
Thomas L. Gossage
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If you have any questions about the annual meeting, need assistance in voting
your WHITE proxy card or need additional copies of Hercules' proxy materials,
please call MacKenzie Partners TOLL FREE at (800) 322-2885 or collect at
(212) 929-5500. You may also call the Company directly toll free at
(800) 441-9274.
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