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                              HERCULES INCORPORATED
                       COMPENSATION BENEFITS GRANTOR TRUST
                       AGREEMENT FOR NONEMPLOYEE DIRECTORS

      THIS AGREEMENT, made as of the 1st day of July, 1989, between Hercules
Incorporated, a Delaware corporation (the "Company"), and Wilmington Trust
Company, a Delaware bank and trust company (the "Trustee").

                                   WITNESSETH:

      WHEREAS, the Company has incurred and expects to continue to incur certain
unfunded benefit liability to or with respect to certain nonemployee members of
the Board of Directors of the Company pursuant to the terms of 1) the Hercules
Incorporated Retirement Plan for Nonemployee Directors (a copy of which is
appended hereto as Exhibit A), and 2) the Hercules Incorporated Deferred
Compensation Plan for Nonemployee Directors (a copy of which is appended hereto
as Exhibit B), (hereinafter each such plan or agreement respectively a "Plan"
and collectively the "Plans"); and

      WHEREAS, The Company desires to provide additional assurance to such
nonemployee members of the Board of Directors of the Company (the
"Participants") and their surviving spouses, beneficiaries or estates under the
Plans (collectively, the "Beneficiaries") that their unfunded retirement benefit
rights under the Plans will in the future be met or substantially met by
application of the procedures set forth herein; and

      WHEREAS, the Company wishes to establish with the Trustee separate
accounts (hereinafter the "Accounts") with respect to the Participants in each
Plan in order to provide a source of payments as such are required under the
terms of such Plan;

      NOW, THEREFORE, in consideration of the premises and mutual and
independent promises herein, the parties hereto covenant and agree as follows:

                                    ARTICLE I

      For purposes of this Agreement, the following terms have the meanings
indicated:

      1.1 "Acquiring Person" shall mean any Person (as such term is hereinafter
      defined) who or which, together with all Affiliates and Associates (as
      such terms are hereinafter defined) of such Person, shall become the
      Beneficial Owner (as such term is hereinafter defined) of 20% or more of
      the Common Shares (as such term is hereinafter defined) then outstanding,
      but shall not include the Company, any wholly-owned Subsidiary (as such
      term is hereinafter defined) of the Company or any employee benefit plan
      of the Company or of any Subsidiary, or an entity holding Common Shares
      for or pursuant to the terms of any such plan.

      1.2 "Affiliate" and "Associate" shall have the respective meanings
      ascribed to such terms in Rule 12b-2 of the General Rules and
      Regulations under the Securities Exchange Act of 1934, as amended (the
      "Exchange Act"), as in effect on the date of this Agreement.

      1.3 A Person shall be deemed the "Beneficial Owner" of and shall be deemed
      to "beneficially own" any securities:

            (i)   which such Person or any such Person's Affiliates or
                  Associates beneficially owns, directly or indirectly;

            (ii)  which such Person or any of such Person's Affiliates or
                  Associates has (A) the right to acquire (whether such right is
                  exercisable immediately or only after the passage of time)
                  pursuant to any agreement, arrangement or understanding, or
                  upon the exercise of conversion rights, exchange rights,
                  rights (other than the preferred share purchase rights created
                  pursuant to the Rights Agreement, dated as of June 24, 1987,
                  between the Company and Manufacturer's Hanover Trust Company
                  [(hereinafter the "Rights"]), warrants or options, or
                  otherwise; provided, however, that a Person shall not be
                  deemed the Beneficial Owner of, or to beneficially own,
                  securities tendered pursuant to a tender or exchange offer
                  made by or on behalf of such Person or any of such Person's
                  Affiliates or Associates until such tendered securities are
                  accepted for purchase; or (B) the right to vote pursuant to
                  any agreement, arrangement or understanding; provided,
                  however, that a Person shall not be deemed the Beneficial
                  Owner of, or to beneficially own, any security if the
                  agree-
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                  ment, arrangement or understanding to vote such security (1)
                  arises solely from a revocable proxy or consent given to such
                  Person in response to a public proxy or consent solicitation
                  made pursuant to, and in accordance with, the applicable rules
                  and regulations of the Exchange Act and (2) is not also then
                  reportable on Schedule 13D under the Exchange Act (or any
                  comparable or successor report); or

            (iii) which are beneficially owned, directly or indirectly, by any
                  other Person with which such Person or any of such Person's
                  Affiliates or Associates has any agreement, arrangement or
                  understanding for the purpose of acquiring, holding, voting,
                  (except to the extent permitted by subparagraph (ii)(B) of
                  this definition) or disposing of any securities of the
                  Company.

      1.4 "Board of Directors" shall mean the Board of Directors of the Company.

      1.5 The occurrence of a "Change in Control Event" shall mean the
      occurrence of any Person (as such term is hereinafter defined) becoming an
      Acquiring Person.

      1.6 "Common Shares" shall mean shares of Common Stock, without par value,
      of the Company.

      1.7 "Person" shall mean any individual, firm, corporation or other entity,
      and shall include any successor (by merger or otherwise) of such entity.

      1.8 The occurrence of a "Solicited Change in Control Event" shall mean the
      occurrence of any Change in Control Event which is other than an
      Unsolicited Change in Control Event (as such term is hereinafter defined.)

      1.9 "Subsidiary" of any Person shall mean any corporation or other entity
      of which a majority of the voting power of the voting equity securities or
      equity interests is owned, directly or indirectly, by such Person.

      1.10 "Transfer Date" shall mean the date of occurrence of the transfer of
      cash or other assets by the Company to the Trustee described in Section
      2.3 of this Agreement.

      1.11 "Trust" shall mean the trust established pursuant to this Agreement.

      1.12 The occurrence of an "Unsolicited Change in Control Event" shall mean
      the occurrence of any Change in Control Event which is not initiated by
      the Company and is of such nature that would require such Change in
      Control Event to be reported in response to Item 6(e) of Schedule 14A of
      Regulation 14A promulgated under the Exchange Act, as in effect on the
      date of this Agreement.

                                   ARTICLE II

      2.1 The Company hereby transfers to the Trustee the sum of Ten Dollars
      ($10.00). The Trustee hereby accepts and agrees to hold, in trust, in
      accordance with the provisions of this Agreement, such sum of Ten Dollars
      ($10.00) plus such additional sums of money and such property acceptable
      to the Trustee as shall from time to time be paid or delivered to the
      Trustee and the earnings and profits thereon. All such money and property,
      all investments made therewith and proceeds thereof, less the payments or
      other distributions which, at the time of reference, shall have been made
      by the Trustee, as authorized herein, are referred to herein as the
      "Fund".

      2.2 The Trustee shall hold, manage, invest and otherwise administer the
      Fund pursuant to the terms of this Agreement. The Trustee shall be
      responsible only for contributions actually received by it hereunder. The
      amount and frequency of each contribution by the Company to the Fund shall
      be determined in the sole discretion of the Company and the Trustee shall
      have no duty or responsibility with respect to such determination.

      2.3 Within a period of not more than five (5) business days following the
      occurrence of an Unsolicited Change in Control Event, as certified by the
      Secretary or an Assistant Secretary of the Company to the Treasurer or an
      Assistant Treasurer of the Company, the Company will transfer to the
      Trustee cash or other assets in an amount equal to the present value
      (using a discount factor equal to the average effective interest yield of
      U.S. Treasury obligations maturing not less than nine (9) years and six
      (6) months and not more than ten (10) years and six (6) months following
      the date of such occurrence) of all benefits payable to the


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      Participants and the Beneficiaries pursuant to the Plans as of the date of
      such Unsolicited Change in Control Event. In the event that the Company
      shall thereafter determine that the amount so transferred to the Trustee
      (the "Transfer Amount") was less than such present value as of such date,
      the Company shall transfer to the Trustee as promptly as possible
      thereafter an additional amount equal to the difference between such
      present value and the Transfer Amount.

      2.4 Commencing on the Transfer Date, the Trustee shall maintain in an
      equitable manner a separate Account for each Participant under each Plan
      (which Plans, including any future amendments thereto, are by this
      reference expressly incorporated herein and made a part hereof) in which
      it shall keep a separate record of the share of such Participant under
      such Plan in the Fund. Also commencing on the Transfer Date, the Fund
      shall be revalued by the Trustee as of the last business day of each
      calendar quarter at current market values, as determined by the Trustee,
      and the Company and each Participant in each Plan or Beneficiary of such
      Participant with respect to whom a separate Account has been established
      shall receive from the Trustee a quarterly statement of such Account with
      respect to such Plan.

      2.5 The Trust is intended to be a trust of which the Company is treated as
      the owner for federal income tax purposes in accordance with the
      provisions of Sections 671 through 679 of the Internal Revenue Code of
      1986, as amended (the "Code"). If the Company, in its sole discretion,
      deems it necessary or advisable for the Company and/or the Trustee to
      undertake or refrain from undertaking any actions (including, but not
      limited to, making or refraining from making any elections or filings) in
      order to ensure that the Company is at all times treated as the owner of
      the Trust for federal income tax purposes, the Company and/or the Trustee
      will undertake or refrain from undertaking (as the case may be) such
      actions.

      2.6 The Trust shall be irrevocable; provided, however, that (a) the Trust
      may be amended at any time and to any extent by a written instrument
      executed by the Trustee and the Company, except that no such amendment may
      be made to make the Trust revocable, (b) the Trust may be so amended prior
      to the occurrence of a Change in Control Event to provide that the Company
      shall not be obligated to provide additional funding to the Trust in the
      event of the occurrence of a Change in Control Event, and (c) the Trust
      may be so amended as necessary either to obtain a favorable ruling from
      the Internal Revenue Service with respect to the tax consequences of the
      establishment and settlement of the Trust, or to make nonsubstantive
      changes which have no effect on the amount of any Participant's or
      Beneficiary's benefits, the time of receipt of benefits, the identity of
      any recipient of benefits, or the reversion of any assets to the Company
      prior to the Trustee's satisfaction of all of its obligations hereunder.
      In the event that the Plans are terminated and there are no remaining
      Participants or Beneficiaries entitled to benefits thereunder, the Trust
      shall terminate and title to any remaining assets shall revert to the
      Company.

                                   ARTICLE III

      3.1 Notwithstanding any provision in this Agreement to the contrary, if at
      any time while the Trust is still in existence the Company becomes
      insolvent (as defined herein), the Trustee shall upon written notice
      thereof suspend the payment of all benefits from the Fund and shall
      thereafter hold the Fund in suspense until it receives a court order
      directing the disposition of the Fund. The Company shall be considered to
      be insolvent if (a) it is unable to pay its debts as they fall due or (b)
      bankruptcy or insolvency proceedings are initiated by its creditors or the
      Company or any third party under the Bankruptcy Code, 11 U.S.C. Section
      101 et. seq., as amended, alleging that the Company is insolvent or
      bankrupt, and such proceedings shall remain undismissed or unstayed and in
      effect for a period of sixty (60) consecutive days. By its approval and
      execution of this Agreement, the Company represents and agrees that the
      Board of Directors and the Company's chief executive officer, as from time
      to time acting, shall have the fiduciary duty and responsibility on behalf
      of the Company's creditors to give the Trustee prompt written notice of
      any event of the Company's insolvency, and the Trustee shall be entitled
      to rely thereon to the exclusion of all directions or claims to pay
      benefits thereafter made. Absent such notice, the Trustee shall have no
      responsibility hereunder for determining whether or not the Company has
      become insolvent. If after an event of insolvency, the Company later
      becomes solvent without the entry of a court order concerning the
      disposition of the Fund, the Company shall by written notice so inform the
      Trustee and the Trustee shall thereupon resume all its duties and
      responsibilities under this Agreement without regard for this Section 3.1
      until and unless the Company again becomes insolvent as such term is
      defined herein.

                                   ARTICLE IV


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      4.1 Commencing on the Transfer Date, the Trustee shall maintain all the
      Plan Participant records contemplated by this Agreement. All such records
      shall be made available to the Company promptly upon the Company's
      request. The Trustee shall also prepare and distribute the quarterly
      statements of Account referred to in Section 2.4 hereof, and shall be
      responsible for information with respect to payments to Participants and
      their Beneficiaries and shall perform such other duties and
      responsibilities as the Company and the Trustee agree is necessary or
      advisable to achieve the objectives of this Agreement.

      4.2 Commencing on the Transfer Date, the Company shall determine and
      furnish to the Trustee all relevant information regarding benefits payable
      to or with respect to each Participant in each Plan, including any
      benefits payable after the Participant's death and the recipient of same.
      The Company shall regularly, at least annually, furnish revised, updated
      information to the Trustee.

      4.3 Upon the proper application of a Participant or Beneficiary of a
      deceased Participant, the Trustee shall prepare a certification to the
      Company and to such Participant or Beneficiary that a Participant's
      benefits under a Plan have become payable. Such certification shall
      include the amount of such benefits, the manner of payment and the name,
      address and social security number of the recipient and shall be updated
      annually or upon receipt by the Trustee from the Company of a notice of a
      benefit change under a Plan.

      4.4 Following the preparation of such certification, the Trustee shall
      make or commence payments to such Participant or Beneficiary (and to the
      Company with respect to taxes required to be withheld from such payments),
      in accordance with such Plan; provided, however, that before the Trustee
      makes or commences any such payment, the Trustee shall request, in
      writing, the Company's agreement that the certification is accurate with
      respect to the amount, fact, and time of payment. If the Company, in a
      writing delivered to the Trustee, agrees with such certification in all
      respects, or if the Company does not respond to the Trustee's request
      within fifteen (15) days after receipt of such request, the Trustee shall
      make payment in accordance with such certification. If the Company advises
      the Trustee in writing on or before the fifteenth (15th) day deadline that
      it does not agree that such Participant or Beneficiary is entitled to
      payment under such Plan, the Trustee immediately shall take whatever steps
      it deems appropriate to attempt to resolve the disagreement between it and
      the Company. If, however, the Trustee is unable to resolve such
      differences to its satisfaction within sixty (60) days after the Company's
      receipt of the above - referenced request, the Trustee shall make such
      payments at such time and in such form and manner as the Trustee, in its
      reasonable discretion, determines will best carry forth the purposes of
      the Trust. The Trustee shall be fully protected in making or refraining
      from making any payments in accordance with the provisions of this Section
      4.4. The Company shall have full responsibility for the payment of all
      withholding taxes to the appropriate taxing authority and shall furnish
      each Participant or Beneficiary with the appropriate tax information form
      evidencing such payment and the amount thereof.

      4.5 All benefits payable from the Fund to a Participant or his Beneficiary
      under a Plan shall be paid solely from the Account of such Participant
      established under such Plan and in accordance with such Plan. Upon the
      satisfaction of all Company liabilities under a Plan to a Participant and
      Beneficiary for whom an Account has been established hereunder, the
      Trustee shall prepare a certification to the Company showing the balance,
      if any, remaining in such Participant's Account under such Plan. Such
      balance shall thereupon be reallocated ratably by the Trustee to the
      Accounts of Participants and Beneficiaries being continued under such Plan
      in the ratio that liabilities in respect of each such Participant and
      Beneficiary under such Plan bear to the total liabilities to all such
      Participants and Beneficiaries under such Plan. Upon the satisfaction of
      all liabilities under a Plan in respect of Participants and Beneficiaries
      for whom Accounts have been established under a Plan, the Trustee shall
      prepare a certification to the Company showing the balance, if any,
      remaining in the Accounts under such Plan. Such balance shall thereupon be
      reallocated ratably by the Trustee to the Accounts of Participants and
      Beneficiaries under the other Plan covered by this Agreement in the ratio
      that liabilities in respect of each such Participant and Beneficiary under
      such Plan bear to the total liabilities to all such Participants and
      Beneficiaries under such Plan. Upon satisfaction of all liabilities of the
      Company under the Plans to Participants and Beneficiaries for whom
      Accounts have been established hereunder, the Trustee shall prepare a
      certification to the Company and shall thereupon hold or distribute the
      Fund in accordance with the written instructions of the Company. At no
      time prior to the Company's insolvency, as defined in Section 3.1, or the
      satisfaction of all liabilities of the Company under the Plans in respect
      of Participants and Beneficiaries having Accounts hereunder shall any part
      of the Fund re-


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      vert to the Company. The Trustee shall have no responsibility for
      determining whether any Participant or Beneficiary has died and shall be
      entitled in that regard to rely upon information furnished by the Company.

      4.6 The Company reserves the right to transfer to the Fund paid-up life
      insurance, retirement income or annuity policies or contracts on or for
      the life of any Participant for whom an Account has been established
      hereunder or to direct the Trustee to purchase any such policies or
      contracts on or for the life of any such Participant out of the amounts to
      the credit of his Account under either of the Plans. Any such policy or
      contract shall be an asset of the Fund subject to the claims of the
      Company's creditors in the event of insolvency, as specified in Section
      3.1. The proceeds of any life insurance policy shall upon the death of the
      insured Participant be credited to his Account under the applicable Plan
      and shall be an additional source of benefits, if any, payable to his
      Beneficiary. If no such Beneficiary survives the Participant, or upon the
      death of the Beneficiary, any balance remaining to the credit of such
      Participant's Account shall be reallocated to other Participant's Accounts
      in accordance with Section 4.5.

      4.7 Nothing provided in this Agreement shall relieve the Company of its
      liabilities to pay the retirement benefits provided under the Plans except
      to the extent such liabilities are met by applications of Fund assets. It
      is the intent of the Company to have each Account established hereunder
      treated as a separate trust designed to satisfy in whole or in part the
      Company's liability under the Plans in respect of the Participant for whom
      such Account has been established. The Company, therefore, agrees that all
      income, deductions and credits of each such Account belong to it as owner
      for federal and state income tax purposes and will be included on the
      Company's federal and state income tax returns.

      4.8 In the event any Participant or his Beneficiary is determined to be
      subject to federal or state income tax on any amount to the credit of such
      Participant's Account under this Agreement prior to the time of payment
      hereunder, the entire amount determined to be so taxable shall be
      distributed by the Trustee to such Participant or Beneficiary. An amount
      to the credit of a Participant's Account shall be determined to be subject
      to federal or state income tax upon the earliest to occur of:

      (a)   a final determination by the Internal Revenue Service addressed to
            the Participant or his Beneficiary which is not appealed to the
            courts; or

      (b)   a final determination by the United States Tax Court or any other
            Federal court affirming any such determination by the Internal
            Revenue Service; or

      (c)   an opinion of counsel for the Company addressed to the Company and
            the Trustee, that, by reason of Treasury Regulations, amendments to
            the Code, published Internal Revenue Service rulings, court
            decisions or other substantial precedent, amounts to the credit of
            the Participant's Account hereunder are subject to federal or state
            income tax prior to payment; provided that any such Participant or
            Beneficiary shall be entitled to challenge any such opinion of
            counsel in any court of competent jurisdiction.

                                    ARTICLE V

      5.1 The Company shall provide the Trustee with copies of each of the Plans
      and of all amendments thereto promptly upon their adoption. The Trustee
      may rely on any certification, notice or direction of the Company that the
      Trustee reasonably believes to have been signed by a duly authorized
      officer or agent of the Company. The Trustee shall have no responsibility
      for acting or not acting in reliance upon any notification reasonably
      believed by the Trustee to have been so signed.

      5.2 The Company shall make its contributions to the Trust in accordance
      with appropriate corporate action and the Trustee shall have no
      responsibility with respect thereto, except to add such contributions to
      the Fund.

      5.3 The Company shall indemnify and hold harmless the Trustee for any
      liability or expenses, including, without limitation, advances for or
      prompt reimbursement of reasonable fees and expenses of counsel and other
      agents retained by it, incurred by the Trustee with respect to holding,
      managing, investing or otherwise administering the Fund, other than by the
      Trustee's negligence or willful misconduct.


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                                   ARTICLE VI

      6.1 The Trustee shall not be liable in discharging its duties hereunder,
      including, without limitation, its duty to invest and reinvest the Fund,
      if it acts in good faith, in a manner reasonable and equitable in view of
      the interests of the Participants and the Beneficiaries, and in a manner
      in which persons of ordinary prudence, diligence, discretion and judgment
      would act in the management of their own affairs, and in accordance with
      the terms of this Agreement and any applicable Federal or state laws,
      rules or regulations.

      6.2 Subject to investment guidelines agreed to in writing from time to
      time by the Company and the Trustee, the Trustee shall have the power in
      investing and reinvesting the Fund in its sole discretion:

            (a)   To invest and reinvest in any property, real, personal or
                  mixed, wherever situated and whether or not productive of
                  income or consisting of wasting assets, including without
                  limitation, common and preferred stocks, bonds, notes,
                  debentures, leaseholds, mortgages, certificates of deposit or
                  demand or time deposits (including any such deposits with the
                  Trustee), shares of investment companies are mutual funds,
                  interests in partnerships and trusts, insurance policies and
                  annuity contracts, and oil, mineral or gas properties,
                  royalties, interests or rights, without being limited to the
                  classes of property in which trustees are authorized to invest
                  by any law or any rule of court of any state and without
                  regard to the proportion any such property may bear to the
                  entire amount of the Fund;

            (b)   To retain any property at any time received by the Trustee;

            (c)   To sell or exchange any property held by it at public or
                  private sale, for cash, to grant and exercise options for the
                  purchase or exchange thereof, to exercise all conversion or
                  subscription rights pertaining to any such property and to
                  enter into any covenant or agreement to purchase any property
                  in the future;

            d)    To participate in any plan of reorganization, consolidation,
                  merger, combination, liquidation or other similar plan
                  relating to property held by it and to consent to or oppose
                  any such plan or any action thereunder or any contract, lease,
                  mortgage, purchase, sale or other action by any person;

            (e)   To deposit any property held by it with any protective,
                  reorganization or similar committee, to delegate discretionary
                  power thereto, and to pay part of the expenses and
                  compensation thereof and any assessments levied with respect
                  to any such property so deposited;

            (f)   To hold uninvested any moneys received by it, without
                  liability for interest thereon, until such moneys shall be
                  invested, reinvested or disbursed;

            (g)   To exercise all voting or other rights with respect to any
                  property held by it and to grant proxies, discretionary or
                  otherwise;

            (h)   To employ suitable agents and counsel, and to pay their
                  reasonable expenses and compensation from the Fund to the
                  extent not paid by the Company;

            (i)   To cause any property held by it to be registered and held in
                  the name of one or more nominees, with or without the addition
                  of words indicating that such securities are held in a
                  fiduciary capacity, and to hold securities in bearer form;

            (j)   To settle, compromise or submit to arbitration any claims,
                  debts or damages due or owing to or from the Trust,
                  respectively, to commence or defend suits or legal proceedings
                  to protect any interest of the Trust, and to represent the
                  Trust in all suits or legal proceedings in any court or before
                  any other body or tribunal; provided, however, that the
                  Trustee shall not be required to take any such action unless
                  it shall have been indemnified by the Company to its
                  reasonable satisfaction against liability or expenses it might
                  incur therefrom;

            (k)   To execute and deliver all instruments which will accomplish
                  or facilitate the exercise of the powers vested in the
                  Trustee;

            (l)   Generally, to do all acts, whether or not expressly
                  authorized, that the Trustee may reasonably deem necessary or
                  desirable for the protection of the Fund. Notwithstanding the
                  foregoing, the Trustee shall upon the written direction of the
                  Company invest all or part of the amount to the credit of any
                  Participant's Account in a commercial annuity, retirement
                  income or life insurance policy or contract selected by the
                  Company and the Trustee shall have no responsibility for any
                  such investment other than as owner and custodian thereof. The
                  Trustee shall


                                        6
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                  not have the power to purchase, exchange, or otherwise deal
                  with or dispose of any assets of the Fund for less than
                  adequate and full consideration in money or money's worth.

      6.3 The Trustee shall distribute cash or property from the Fund in
      accordance with Article IV hereof. The Trustee may make any distribution
      required hereunder by mailing its check for the specified amount, or
      delivering the specified property, to the person to whom such distribution
      or payment is to be made, at such address as may have been last furnished
      to the Trustee, or if no such address shall have been so furnished, to
      such person in care of the Company, or (if so directed by the Company) by
      crediting the account of such person or by transferring funds to such
      person's account by bank or wire transfer.

      6.4 If at any time there is no person authorized to act under this
      Agreement on behalf of the Company, the Board of Directors or its designee
      or designees shall have the authority to act hereunder.

                                   ARTICLE VII

      7.1 While given assets remain part of the Fund, the Company shall pay any
      federal, state or local taxes on such assets, or any part thereof, and on
      the income therefrom.

      7.2 The Company shall pay to the Trustee its reasonable expenses for the
      management and administration of the Fund, including without limitation,
      advances for or prompt reimbursement of reasonable expenses of counsel and
      other agents employed by the Trustee, and reasonable compensation for its
      services as Trustee hereunder, the amount of which shall be agreed upon
      from time to time by the Company and the Trustee in writing. Such expenses
      and compensation shall be payable to the Trustee by the Company, and
      unless and until paid by the Company shall be a charge on the Fund and
      shall constitute a lien thereon in favor of the Trustee.

                                  ARTICLE VIII

      8.1 The Trustee shall maintain records with respect to the Fund that show
      all its receipts and disbursements hereunder. The records of the Trustee
      with respect to the Fund shall be open to inspection by the Company, or
      its representatives, at all reasonable times during normal business hours
      of the Trustee, and may be audited not more frequently than once each
      fiscal year by an independent certified public accountant engaged by the
      Company.

      8.2 Within a reasonable time after the close of each fiscal year of the
      Company (or, in the Trustee's discretion, at more frequent intervals), or
      upon any termination of the duties of the Trustee hereunder, the Trustee
      shall prepare and deliver to the Company a statement of transactions
      reflecting its acts and transactions as Trustee during such fiscal year,
      portion thereof or during such period from the close of the last fiscal
      year or last statement period to the termination of the Trustee's duties,
      respectively, including a statement of the then current value of the Fund.
      The Trustee shall also prepare and furnish to the Company a statement of
      the then current value of each Account.

                                   ARTICLE IX

      9.1 The Trustee may resign at any time by delivering written notice
      thereof to the Company; provided, however, that no such resignation shall
      take effect until the earlier of (i) sixty (60) days from the date of
      delivery of such notice to the Company or (ii) the appointment of a
      successor trustee.

      9.2 The Trustee may be removed at any time by the Company upon sixty (60)
      days written notice of such removal, unless such notice period is waived
      in whole or in part by the Trustee.

      9.3 Upon the resignation or removal of the Trustee, a successor trustee
      shall be appointed by the Company. Such successor trustee shall be a bank
      or trust company established under the laws of the United States or a
      State within the United States. Such appointment shall take effect upon
      the delivery to the Trustee of (a) a written appointment of such successor
      trustee, duly executed by the Company, and (b) a written acceptance by
      such successor trustee, duly executed thereby. Any successor trustee shall
      have all the rights, powers and duties granted the Trustee hereunder.

      9.4 If, within sixty (60) days of either the delivery of the Trustee's
      written notice of resignation or the Trustee's receipt of the written
      notice of removal, a successor trustee shall not have been appointed, the
      Trustee may apply to any court of competent jurisdiction for the
      appointment of a successor trustee.


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      9.5 Upon the resignation or removal of the Trustee and the appointment of
      a successor trustee, and after the acceptance and approval of its account,
      the Trustee shall transfer and deliver the Fund to such successor. Under
      no circumstances shall the Trustee transfer or deliver the Fund to any
      successor which is not a bank or trust company as hereinabove defined.

                                    ARTICLE X

      10.1 The Trust established pursuant to this Agreement may not be
      terminated by the Company prior to the satisfaction of all liabilities
      with respect to all Participants in the Plans and their Beneficiaries.
      Upon receipt of a written certification from the Trustee that all
      liabilities have been satisfied with respect to all Participants in the
      Plans and their Beneficiaries, the Company may terminate the Trust upon
      delivery to the Trustee of a duly executed instrument of termination.

      10.2 Upon the termination of the Trust in accordance with Section 10.1,
      the Trustee shall, after the acceptance and approval of its account,
      distribute the Fund to the Company. Upon completing such distribution, the
      Trustee shall be relieved and discharged. The powers of the Trustee shall
      continue as long as any part of the Fund remains in its possession.

                                   ARTICLE XI

      11.1 This Agreement shall be construed and interpreted under, and the
      Trust hereby created shall be governed by, the laws of the State of
      Delaware, except to the extent that applicable Federal law supersedes
      Delaware law.

      11.2 Neither the gender nor the number (singular or plural) of any word
      shall be construed to exclude another gender or number when a different
      gender or number would be appropriate.

      11.3 No right or interest of any Participant or any Beneficiary in any
      assets of the Fund shall be transferrable or assignable or shall be
      subject to alienation, anticipation or encumbrance, and no right or
      interest of any Participant or Beneficiary in the Plans or in the Fund
      shall be subject to any garnishment, attachment or execution. No
      Participant or any Beneficiary shall have any preferred claim on, or any
      beneficial ownership interest in any assets of the Fund before such assets
      are paid to such Participant or Beneficiary as provided in Article IV, and
      all rights created under the Plans and this Agreement shall be unsecured
      contractual rights of the Participants and the Beneficiaries against the
      Company. Notwithstanding the foregoing, the Fund shall at all times remain
      subject to claims of creditors of the Company in the event the Company
      becomes insolvent as provided in Section 3.1.

      11.4 Any provision of this Agreement that is prohibited by law shall be
      ineffective to the extent of any such prohibition without invalidating the
      remaining provisions hereof.

      11.5 This Agreement shall be binding upon and inure to the benefit of any
      successor to the Company or its business as the result of merger,
      consolidation, reorganization, transfer of assets or otherwise and any
      subsequent successor thereto. In the event of any such merger,
      consolidation, reorganization, transfer of assets or other similar
      transaction, the successor to the Company or its business or any
      subsequent successor thereto shall promptly notify the Trustee in writing
      of its successorship. In no event shall any such transaction described
      herein suspend or delay the rights of Plan Participants or the
      Beneficiaries of deceased Participants to receive benefits hereunder.

      11.6 This Agreement may be executed in any number of counterparts, each of
      which shall be deemed to be an original, but all of which shall together
      constitute only one Agreement.

      11.7 Communications to the Trustee shall be sent to:

           Michael A. DiGregorio
           Trust Officer and Trust Counsel
           Wilmington Trust Company
           Rodney Square North
           Wilmington, Delaware, 19890

      or to such other address as the Trustee may specify in writing.
      Communications to the Company shall be sent to:

           John R. Long
           Director, Investments


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<PAGE>
           Hercules Incorporated
           Hercules Plaza
           Wilmington, DE 19894

      or to such other address as the Company may specify in writing.

           IN WITNESS WHEREOF, the parties hereto have caused this Trust
      Agreement to be duly executed as of the date hereinabove first written.

Attest:                                   Wilmington Trust Company

                                       By
                                          ---------------------------------
                                          Barbara Uberti
                                          Vice President

Attest:                                   HERCULES INCORPORATED

                                    By
                                          ---------------------------------
                                          A. L. Searl
                                          Vice President and Treasurer


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