Page
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
3
|
STATEMENT
OF NET ASSETS AVAILABLE FOR BENEFITS
|
4
|
At
December 31, 2006 and 2005
|
|
STATEMENT
OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
|
5
|
For
the years ended December 31, 2006 and 2005
|
|
NOTES
TO FINANCIAL STATEMENTS
|
6
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SUPPLEMENTAL
SCHEDULES
|
13
|
Schedule
H, Part IV, Item 4(i) – Assets Held for Investment
Purposes
|
|
Schedule
H, Part IV, Item 4(j) – Reportable Transactions
|
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EXHIBIT
INDEX
|
16
|
December
31,
|
||||||||
2006
|
2005
|
|||||||
ASSETS:
|
||||||||
Investments
(at fair value) (Note 3)
|
$ |
386,988
|
$ |
356,296
|
||||
Employee
Loans Receivable (Note3)
|
3,896
|
4,700
|
||||||
Total
(at fair value)
|
390,884
|
360,996
|
||||||
Contributions
receivable
|
7,531
|
4,599
|
||||||
Total
assets
|
$ |
398,415
|
$ |
365,595
|
||||
LIABILITIES:
|
||||||||
Loan
payable (Note 6)
|
28,297
|
39,154
|
||||||
Total
liabilities
|
28,297
|
39,154
|
||||||
Net
assets reflecting all investments at fair value
|
370,118
|
326,441
|
||||||
Adjustment
from fair value to contract value for
|
||||||||
fully
benefit – responsive investment contract
|
727
|
1,120
|
||||||
NET
ASSETS AVAILABLE FOR BENEFITS
|
$ |
370,845
|
$ |
327,561
|
Year
Ended December 31,
|
||||||||
2006
|
2005
|
|||||||
ADDITIONS:
|
||||||||
Increase
to net assets attributed to:
|
||||||||
Investment
income (loss)
|
||||||||
Net
appreciation (depreciation) in fair value
of
investments (Note 3)
|
$ |
57,719
|
$ | (13,542 | ) | |||
Interest
|
3,694
|
3,636
|
||||||
Dividends
|
9,831
|
6,436
|
||||||
Contributions:
|
||||||||
Participants
|
12,869
|
12,619
|
||||||
Employer
|
18,757
|
16,878
|
||||||
Transfers
from other plans
|
10
|
14
|
||||||
Total
Additions
|
102,880
|
26,041
|
||||||
DEDUCTIONS:
|
||||||||
Deductions
from net assets attributed to:
|
||||||||
Benefits
paid to participants
|
46,034
|
36,513
|
||||||
Transfers
to other plans (Note 9)
|
11,139
|
—
|
||||||
Administrative
expenses
|
26
|
14
|
||||||
Interest
Expense
|
2,397
|
2,517
|
||||||
Total
Deductions
|
59,596
|
39,044
|
||||||
Net
Increase (Decrease)
|
43,284
|
(13,003 | ) | |||||
NET
ASSETS AVAILABLE FOR BENEFITS:
|
||||||||
Beginning
of year
|
327,561
|
340,564
|
||||||
End
of year
|
$ |
370,845
|
$ |
327,561
|
Adjustment
to
|
||||||||||||
Fair
Value
|
Contract
Value
|
Contract
Value
|
||||||||||
December
31, 2006
|
$ |
75,523
|
$ |
727
|
$ |
76,250
|
||||||
December
31, 2005
|
84,895
|
1,120
|
86,015
|
2006
|
2005
|
|||||||
* Vanguard
500 Index Fund
|
$ |
45,167
|
$ |
43,154
|
||||
Vanguard
Explorer Fund
|
10,517
|
11,080
|
||||||
Vanguard
Extended Market Index Fund
|
7,727
|
6,740
|
||||||
* Vanguard
Growth & Income Fund
|
25,551
|
26,302
|
||||||
Vanguard
International Growth Fund
|
19,708
|
11,867
|
||||||
* Vanguard
PRIMECAP Fund
|
42,351
|
42,546
|
||||||
Vanguard
Small-Cap Value Index Fund
|
12,627
|
9,278
|
||||||
Vanguard
Total Bond Market Index Fund
|
14,392
|
13,015
|
||||||
* Vanguard
Windsor II Fund
|
27,476
|
26,026
|
||||||
* Hercules
Common Stock Fund
|
82,445
|
61,668
|
||||||
* Hercules
Blended Interest Fund
|
75,523
|
84,895
|
||||||
Vanguard
Target Retirement 2005 Fund
|
1,628
|
—
|
||||||
Vanguard
Target Retirement 2015 Fund
|
10,356
|
—
|
||||||
Vanguard
Target Retirement 2025 Fund
|
7,793
|
—
|
||||||
Vanguard
Target Retirement 2035 Fund
|
2,426
|
—
|
||||||
Vanguard
Target Retirement 2045 Fund
|
724
|
—
|
||||||
Vanguard
Target Retirement Income
|
577
|
—
|
||||||
Vanguard
LifeStrategy Conservative Growth Fund
|
—
|
4,480
|
||||||
Vanguard
LifeStrategy Growth Fund
|
—
|
3,918
|
||||||
Vanguard
LifeStrategy Income Fund
|
—
|
2,903
|
||||||
Vanguard
LifeStrategy Moderate Growth Fund
|
—
|
8,424
|
||||||
$ |
386,988
|
$ |
356,296
|
|||||
Employee
Loans Receivable
|
3,896
|
4,700
|
||||||
Total
|
$ |
390,884
|
$ |
360,996
|
||||
* Represents
at least 5% of the Plan’s net assets at December 31, 2006 and
2005
|
2006
|
2005
|
|||||||
Hercules
Common Stock
|
$ |
38,555
|
$ | (20,374 | ) | |||
Mutual
Funds
|
19,164
|
6,832
|
||||||
Net
appreciation (depreciation) in fair value of investments
|
$ |
57,719
|
$ | (13,542 | ) |
4.
|
Employer
Contributions Received and
Receivable
|
Stock
|
Cash
|
Total
|
||||||||||
December
31, 2006
|
$ |
18,566
|
$ |
191
|
$ |
18,757
|
||||||
December
31, 2005
|
$ |
14,452
|
$ |
2,426
|
$ |
16,878
|
||||||
5.
|
Non-participant-directed
Investments
|
Investments
|
Contributions
Receivable
|
Loan
|
Net
Assets
|
|||||||||||||
December
31, 2006
|
||||||||||||||||
Hercules
Common Stock Fund (participant-
directed)
|
$ |
30,013
|
$ |
33
|
$ |
—
|
$ |
30,046
|
||||||||
30,013
|
33
|
—
|
30,046
|
|||||||||||||
Hercules
ESOP Stock Fund (non-participant-
directed)
|
||||||||||||||||
Allocated
|
26,454
|
6,817
|
—
|
33,271
|
||||||||||||
Unallocated
|
25,978
|
—
|
(28,297 | ) | (2,319 | ) | ||||||||||
52,432
|
6,817
|
(28,297 | ) |
30,952
|
||||||||||||
$ |
82,445
|
$ |
6,850
|
$ | (28,297 | ) | $ |
60,998
|
||||||||
December
31, 2005
|
||||||||||||||||
Hercules
Common Stock Fund (participant-
directed)
|
$ |
24,147
|
$ |
30
|
$ |
—
|
$ |
24,177
|
||||||||
24,147
|
30
|
—
|
24,177
|
|||||||||||||
Hercules
ESOP Stock Fund (non-participant-
directed)
|
||||||||||||||||
Allocated
|
18,103
|
1,523
|
—
|
19,626
|
||||||||||||
Unallocated
|
19,418
|
—
|
(39,154 | ) | (19,736 | ) | ||||||||||
37,521
|
1,523
|
(39,154 | ) | (110 | ) | |||||||||||
$ |
61,668
|
$ |
1,553
|
$ | (39,154 | ) | $ |
24,067
|
Hercules
Common
|
Hercules
ESOP Stock Fund
|
|||||||||||
Stock
Funds
|
Allocated
|
Unallocated
|
||||||||||
December
31, 2006
|
||||||||||||
Net
appreciation in fair value of investments:
|
$ |
14,607
|
$ |
12,315
|
$ |
11,633
|
||||||
Employer
contributions
|
60
|
5,346
|
13,255
|
|||||||||
Employee
contributions
|
503
|
—
|
—
|
|||||||||
Benefit
paid to participants
|
(2,845 | ) | (2,295 | ) |
—
|
|||||||
Interest
expense
|
(4 | ) |
—
|
(2,397 | ) | |||||||
Allocation
of shares under ESOP provisions
|
—
|
5,074
|
(5,074 | ) | ||||||||
Net
loan activity
|
69
|
(131 | ) |
—
|
||||||||
Transfer
to other investments options
|
(6,521 | ) | (6,664 | ) |
—
|
|||||||
Net
increase
|
$ |
5,869
|
$ |
13,645
|
$ |
17,417
|
||||||
December
31, 2005
|
||||||||||||
Net
(depreciation) in fair value of investments:
|
$ | (8,009 | ) | $ | (5,727 | ) | $ | (6,638 | ) | |||
Employer
contributions
|
24
|
(117 | ) |
14,575
|
||||||||
Employee
contributions
|
493
|
—
|
—
|
|||||||||
Benefit
paid to participants
|
(2,645 | ) | (1,849 | ) |
—
|
|||||||
Interest
expense
|
(2 | ) |
—
|
(2,518 | ) | |||||||
Allocation
of shares under ESOP provisions
|
—
|
5,374
|
(5,374 | ) | ||||||||
Net
loan activity
|
119
|
(74 | ) |
—
|
||||||||
Transfer
to other investments options
|
(2,391 | ) | (2,685 | ) |
—
|
|||||||
Net
(decrease) increase
|
$ | (12,411 | ) | $ | (5,078 | ) | $ |
45
|
Identity
of Issue
|
Investment
Type
|
Cost/Contract
Value
|
Current/Contract
Value
|
||||||
*Vanguard
500 Index Investment
|
Registered
Investment Company
|
$ |
33,834,114.50
|
$ |
45,166,440.61
|
||||
*Vanguard
Explorer Fund
|
Registered
Investment Company
|
9,287,471.14
|
10,516,983.03
|
||||||
*Vanguard
Extended Market Index Investment
|
Registered
Investment Company
|
5,836,842.64
|
7,726,808.43
|
||||||
*Vanguard
Growth & Income Investment
|
Registered
Investment Company
|
18,864,283.80
|
25,551,348.80
|
||||||
*Vanguard
International Growth Fund
|
Registered
Investment Company
|
15,838,814.26
|
19,708,255.06
|
||||||
*Vanguard
PRIMECAP Fund
|
Registered
Investment Company
|
28,948,820.19
|
42,351,414.23
|
||||||
*Vanguard
Small-Cap Value Index
|
Registered
Investment Company
|
10,499,758.29
|
12,626,901.46
|
||||||
*Vanguard
Target Retirement 2005
|
Registered
Investment Company
|
1,570,824.80
|
1,627,774.63
|
||||||
*Vanguard
Target Retirement 2015
|
Registered
Investment Company
|
9,737,035.16
|
10,355,522.08
|
||||||
*Vanguard
Target Retirement 2025
|
Registered
Investment Company
|
7,226,569.45
|
7,792,791.82
|
||||||
*Vanguard
Target Retirement 2035
|
Registered
Investment Company
|
2,217,899.85
|
2,426,434.27
|
||||||
*Vanguard
Target Retirement 2045
|
Registered
Investment Company
|
671,265.00
|
724,370.91
|
||||||
*Vanguard
Target Retirement Inc
|
Registered
Investment Company
|
566,427.41
|
577,309.80
|
||||||
*Vanguard
Total Bond Market Index
|
Registered
Investment Company
|
14,591,015.61
|
14,391,522.18
|
||||||
*Vanguard
Windsor II Fund Investment
|
Registered
Investment Company
|
20,433,466.77
|
27,476,359.31
|
||||||
*Hercules
Common Stock Fund
|
Company
Stock Fund
|
31,677,690.28
|
30,012,580.45
|
||||||
*Hercules
ESOP Fund
|
Company
Stock Fund
|
21,178,697.99
|
26,454,467.17
|
||||||
*Hercules
ESOP - Unallocated
|
Company
Stock Fund
|
15,201,969.10
|
25,977,878.17
|
||||||
*Hercules
Blended Interest Fund (see Note 1)
|
Unallocated
Insurance Contract
|
76,249,851.84
|
76,249,851.84
|
||||||
Subtotal
|
$ |
324,432,818.08
|
$ |
387,715,014.25
|
|||||
*Loan
Fund Employee Loan Receivable
|
5.25%-9.75%
|
3,896,175.06
|
3,896,175.06
|
||||||
Total
Assets Held for Investment Purposes
|
$ |
328,328,993.14
|
$ |
391,611,189.31
|
Identity
of Party Involved
|
Description
of Asset
|
Purchase
Price
|
Selling
Price
|
Historical
Cost of Asset
|
Current
Value of Asset on Transaction Date
|
Historical
Gain (Loss)
|
|||||||||||||||
The
Vanguard Group
|
Vanguard
500 Index Investment
|
$ |
7,564,956.69
|
$ |
7,564,956.69
|
||||||||||||||||
The
Vanguard Group
|
Vanguard
500 Index Investment
|
$ |
10,924,770.36
|
$ |
8,830,255.44
|
10,924,770.36
|
2,094,514.92
|
||||||||||||||
The
Vanguard Group
|
Hercules
Bin
|
18,723,057.00
|
18,723,057.00
|
||||||||||||||||||
The
Vanguard Group
|
Hercules
Bin
|
28,486,711.09
|
28,486,711.09
|
28,486,711.09
|
|||||||||||||||||
The
Vanguard Group
|
Hercules
Common Stock Fund
|
8,475,817.34
|
8,475,817.34
|
||||||||||||||||||
The
Vanguard Group
|
Hercules
Common Stock Fund
|
21,179,569.89
|
23,510.731.64
|
21,179,569.89
|
(2,331,161.75 | ) | |||||||||||||||
* Transactions
or a series of transactions in excess of 5% of the current value
of the
Plan's assets as of the beginning of the plan
|
|||||||||||||||||||||
year
as defined in 'section 2520.103-6 of the Department of Labor Rules
and
Regulations for Reporting and Disclosure under ERISA.
|
HERCULES
INCORPORATED SAVINGS AND INVESTMENT PLAN
|
|
/s/
Edward V. Carrington
|
|
Edward
V. Carrington
Vice
President, Human Resources
Plan
Administrator
|
|
June
25, 2007
|
Number
|
Description
|
23.1
|
Consent
of Independent Accountants
|