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As filed with the Securities and Exchange Commission on June 27, 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
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HERCULES SHAREHOLDERS' COMMITTEE FOR NEW MANAGEMENT
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News Release
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Hercules Shareholders' Committee For New Management * 17 State Street * New
York, New York 10004
Contact: Chris Hayden
212-440-9850
HERCULES SHAREHOLDERS' COMMITTEE COMMENTS ON
MAJORITY DIRECTORS' LATEST "FLIP-FLOP"
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NEW YORK, NY, JUNE 27, 2003 - The Hercules Shareholders' Committee for New
Management released the following statement today in response to Hercules'
announcement yesterday that it would support an amendment to the Company's
election Bylaw to provide that directors may be elected by a plurality vote,
instead of requiring the vote of a majority of all outstanding shares, starting
with the 2004 Annual Meeting:
"Hercules' announcement yesterday exemplifies in our view the Company's
lack of respect for its shareholders. While in effect acknowledging that the
Committee has been right all along regarding the Bylaw, a position which we have
maintained for more than two years now, yesterday's announcement is nothing but
a transparent election ploy to spruce up the Company's corporate governance
image in the closing weeks of our proxy contest.
Hercules shareholders should be aware of these FACTS:
o The Hercules Board attempted unsuccessfully to use the Company's often
criticized, highly unusual, if not unique, election Bylaw to try and
resist our proxy contest in 2001.
o When our minority directors joined the Board, we asked it to rescind
the Bylaw, pointing out in a February 14, 2002 letter to Joyce as
follows:
'In connection with next week's Board meeting, I would request
that the Board consider taking whatever action necessary to
rescind the Company's outrageously discriminatory election
Bylaw, which it has interpreted to require the affirmative
vote of the holders of a majority of all outstanding shares
for the election of directors.
As you know, by way of hypothetical, in the event a challenger
received votes representing 50 million Hercules shares and the
incumbent director received 0 shares, the incumbent director
would be entitled to retain his seat under the Bylaw as
interpreted by the Company. Obviously, no one can seriously
contend that this would be a fair and equitable result. In
this connection, we believe that the entire Bylaw operates to
disenfranchise Hercules shareholders, is highly unusual, if
not unique, in the annals of corporate America as being
inconsistent with good corporate governance, is legally
unenforceable and would most likely be struck down in the
courts, and is an absolute embarrassment to the Company.'
o In response, the Hercules Board appointed a Special Committee,
comprised solely of majority directors, to "study" the Bylaw, which
Committee recommended shortly thereafter that the Bylaw be retained,
after which its recommendation was approved by the Board over the
objection of our minority directors.
o In the current proxy contest, the Committee has again been highly
critical of the Company's Bylaw, while the Company defended its Bylaw
in its proxy materials filed as recently as just last week, stating
that it was not only lawful but fair and in the interest of
shareholders.
o Only after shareholders expressed their outrage over the Bylaw, did
Hercules just yesterday recommend that the Bylaw be changed in the
future. You should know that the majority directors did so only after
disingenuously attempting to wash their hands of any responsibility for
the Bylaw, emphasizing that 'none of the Company's current directors
were members of the Board when the Bylaw provision was put into place
more than 15 years ago.' What the majority directors failed to mention,
however, was that for the last two years they have all strongly
supported retention of the Bylaw.
o Finally, according to yesterday's announcement, any change would not
affect this year's proxy contest, and even if changed after the proxy
contest, the Bylaw provision could then be reinstated in the event of
another proxy contest sometime in the future. In other words, Hercules
is willing to change the Bylaw only when it doesn't matter in terms of
its effect on the control of the majority directors. This is in
keeping, for example, with the Company's June 3rd announcement of
modest revisions to the Company's poison pill, which would again not
take effect until after this year's Annual Meeting.
We believe that the Company's announcement yesterday is quite frankly
an insult to the intelligence of Hercules shareholders. Given what is in our
opinion Joyce's preoccupation with maintaining himself in office at any cost,
the Hercules Shareholders' Committee for New Management is asking all Hercules
shareholders to carefully scrutinize any further announcements from incumbent
management in the closing weeks of this proxy contest."
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