Document:

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                                                                   EXHIBIT 10.26

                             C O N F I D E N T I A L

                              SEPARATION AGREEMENT
                          AND GENERAL RELEASE OF CLAIMS

                  This Separation Agreement and General Release of Claims
("Agreement") is entered into between Hercules incorporated ("Employer"), and
June B. Barry ("Employee").

                  In consideration of the mutual promises and covenants
contained herein and other good and valuable consideration, the receipt of which
hereby is acknowledged, the parties agree as follows:

1.       SEPARATION DATE. Effective upon the close of business on June 30, 2001
         but subject to the 21-day consideration period described in Section 16,
         Employee shall cease to be employed by Employer (the "Separation
         Date"). Between now and the Separation Date and for 30 days following
         said Separation Date on an "as needed" basis (at no additional charge
         to Employer), Employee shall assist in transitioning her duties and
         responsibilities, and perform such other duties and responsibilities as
         she may be assigned that are not inconsistent therewith.

2.       SEVERANCE PAYMENT. Within twenty (20) days of receipt of this Agreement
         executed by Employee, and provided Employee has not revoked this
         Agreement in accordance with paragraph 17 below, Employer shall pay to
         Employee severance in the amount of One Million Three Hundred Twenty
         Thousand dollars ($1,320,000.00), less all applicable withholdings and
         deductions. Employee expressly waives all rights to benefits under the
         Merger Severance Plan, Change in Control Agreement, Severance Plan, and
         under any and all other plans or agreements purporting to provide for
         severance payments.

3.       SPECIAL PENSION BENEFIT. Employee's regular benefit entitlement under
         and pursuant to the provisions of the BetzDearborn Pension Plan, having
         satisfied all of the requirements of Section 6.6 (Vested Benefit) of
         the BetzDearborn Pension Plan, and including one year Service Credit
         for Plan Year 2001, will be approximately $28,000/year payable at age
         55. Employee will be granted an additional special pension benefit
         payable under the Hercules Employee Pension Restoration Plan of
         $1,333.33 per month effective July 1, 2006, such amount payable for
         Employee's lifetime. The additional benefit is payable pursuant to the
         provisions of the BetzDearborn Pension Plan but is payable under the
         Hercules Pension Restoration Plan, which is a nonqualified pension plan
         payable from the assets of Hercules Incorporated.

         Additionally, Employee will be entitled to the Early Retirement Benefit
         described in Attachment 2 to Employee's Employment Offer Letter dated
         October 6, 1998. The value of this account on March 31, 2001 was
         $833,693.00. Interest will be credited to June 30, 2001.
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                             C O N F I D E N T I A L

4.       NON-QUALIFIED SAVINGS PLAN ACCOUNT BALANCE. Employee will receive her
         account balance in the subject plan. The value of this account is
         $24,900 as of March 31, 2001. Interest will be credited to June 30,
         2001.

         Also reported as of March 31, 2001 as part of this account was $36,900
         which was the value of dividends and interest accrued applicable to the
         Shareholder Value Award granted to Employee November 19, 1999 which by
         its terms will be forfeited on June 30, 2001.

5.       ACCRUED VACATION PAY. Employee has or will take all accrued and earned
         vacation as of June 30, 2001. Employee acknowledges and agrees that she
         is not entitled to any additional payment for accrued vacation time.

6.       HEALTH & DENTAL BENEFIT CONTINUATION. Employer agrees to continue
         Employee's participation (including that of her spouse and children)
         for a period of six months beginning July 1, 2001 in the Health and
         Dental Plans at the same cost as applicable to employee electing the
         same coverage. Following the six month period of coverage, Employer
         shall issue to Employee notice of her right to elect continued health
         coverage in accordance with the Consolidated Omnibus Budget
         Reconciliation Act ("COBRA"). If Employee elects continuation coverage,
         Employee shall be responsible for paying 100% of the premiums and
         administrative fees.

7.       GROUP LIFE INSURANCE COVERAGE. Employee is a participant in the
         Hercules Group Life Insurance Plan. At resignation, Employee is
         eligible to convert $150,000 coverage to a private pay plan. Should
         Employee so convert, Hercules shall reimburse Employee for her premium
         cost for up to 6 months of coverage following resignation.

8.       IMPACT OF SEVERANCE ON OTHER BENEFITS. Except as expressly provided in
         this Agreement, both Employee's and her dependents' participation in,
         coverage by and entitlement to all compensation, fringe benefit and
         employee benefit programs of Employer shall cease upon the Separation
         Date.

9.       COOPERATION FOLLOWING THE SEPARATION DATE. Employee agrees that she
         will cooperate with any reasonable request of Employer to continue to
         aid in the transition of her function or to answer questions regarding
         her functional area following the Separation Date. Employee, prior to
         June 30, 2001, agrees to list all open projects, accountabilities and
         unfinished assignments with a description of status.

10.      AGREEMENT NOT TO SEEK FUTURE EMPLOYMENT WITH EMPLOYER. Employee agrees
         that she will not apply for or otherwise seek employment with Employer
         (as defined below) at any time in the future unless mutually agreed in
         writing by both parties.

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                             C O N F I D E N T I A L

11.      NO ADMISSION. The benefits provided to Employee in this Agreement are
         not intended to be, and shall not be construed as, any admission of
         liability by Employer or of any improper conduct on Employer's part,
         all of which Employer specifically denies.

12.      COMPANY INFORMATION.

                  (a) Employee represents that she has returned or will
         immediately return to Employer all "Company Information," including,
         without limitation, customer information, formulary information,
         product and pricing information, mailing lists, reports, files,
         memoranda, records and software, credit cards, door and file keys,
         computer equipment, computer access codes and disks and instructional
         manuals, and other property which Employee received or prepared or
         helped prepare in connection with Employee's employment with Employer,
         and Employee will not retain any copies, duplicates, reproductions or
         excerpts thereof. The term "Company Information" as used in this
         Agreement means (i) confidential information of Employer, including
         without limitation information received from third parties under
         confidential conditions, and (ii) other information; including
         technical, business or financial information or trade secrets, the use
         or disclosure of which might reasonably be construed to be contrary to
         the interests of Employer or its affiliates.

                           Notwithstanding the foregoing, Employee may, if she
         desires, keep material and or notes that are of a personal nature which
         were accumulated or prepared during her employment with Employer.
         Employee agrees to provide Employer with a list of such retained
         material with a general reference as to the contents. Such material or
         notes will be kept confidential (except in response to subpoena) and
         will remain available for review by Employer, should Employer elect to
         review them, for as long as they are retained by Employee.

                  (b) The parties agree that in the course of Employee's
         employment, Employee has acquired Company Information as defined in
         paragraph 12(a). Employee understands and agrees that such Company
         Information has been disclosed to Employee in confidence and for the
         use only on behalf of Employer. Employee acknowledges that she has no
         ownership right or interest in any Company Information used or
         developed during the course of her employment. Employee understands and
         agrees that (i) Employee will keep such Company Information
         confidential at all times after her employment with Employer, and (ii)
         Employee will not make use of Company Information on her own behalf, or
         on behalf of any third party.

                  (c) Employee further acknowledges that she was privy to
         confidential and privileged information during the course of her
         employment in her capacity as Executive Vice President, Corporate
         Resources Group.

                  (d) Employee will be permitted to retain the computer and fax
         machine provided by Hercules and will be disconnected effective July 1,
         2001 from Hercules

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                             C O N F I D E N T I A L

         provided internet, intranet and other telephone line connections. In
         consideration of Hercules transferring such computer and fax equipment
         to Employee, Employee will cooperate with Hercules to download and
         transfer to Hercules all files contained therein and thereupon erase
         such files from the computer.

13.      GENERAL RELEASE OF CLAIMS AND COVENANT NOT TO SUE. Employee for herself
         and her respective heirs, administrators, executors, agents,
         beneficiaries and assigns, does waive, release and forever discharge
         Employer (as defined below) of and from any and all Claims (as defined
         below). Employee agrees not to file a lawsuit to assert any Claim and
         further agrees that she will not counsel, assist or encourage any other
         person to assert any rights or demands or causes of action against
         Employer or to counsel, assist or encourage any other person to seek
         any damages, penalties, losses, attorneys' fees, costs or expenses
         against Employer, provided, however, that this sentence shall not be
         construed to prevent or apply to any testimony that Employee may
         provide pursuant to subpoena. This release covers all Claims arising
         from the beginning of time up to and including the date of this
         Agreement, but does not cover Claims relating to the validity or
         enforcement of this Agreement, or to Claims for legally mandated
         benefits and vested benefits under any qualified or nonqualified
         savings and pension plans or welfare plans in which Employee may have
         participated or will continue to participate in, or any other rights or
         claims that may arise after this Agreement is executed.

                  The following provisions further explain this general release
         and covenant not to sue:

                  (a) DEFINITION OF "CLAIMS". "Claims" includes without
         limitation all actions or demands of any kind that Employee now has, or
         may have or claim to have in the future. More specifically, Claims
         include rights, causes of action, damages, penalties, losses,
         attorneys' fees, costs, expenses, obligations, agreements, judgments
         and all other liabilities of any kind or description whatsoever, either
         in law or in equity, whether known or unknown, suspected or
         unsuspected.

                  The nature of Claims covered by this release and covenant not
         to sue includes without limitation all actions or demands in any way
         based on Employee's employment with Employer, the terms and conditions
         of such employment or Employee's separation from employment except as
         to those rights, benefits and obligations set forth in and granted by
         this Agreement. More specifically, all of the following are among the
         types of Claims which are waived and barred by this release and
         covenant not to sue:

         -        Contract Claims (whether express or implied);

         -        Tort Claims, such as for defamation or emotional distress;

         -        Claims under federal, state and municipal laws, regulations,
                  ordinance or court decisions of any kind;

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                             C O N F I D E N T I A L

         -        Claims of discrimination, harassment or retaliation, whether
                  based on race, color, religion, gender, sex, age, sexual
                  orientation, handicap and/or disability, national origin or
                  any other legally protected class;

         -        Claims under the AGE DISCRIMINATION IN EMPLOYMENT ACT, Title
                  VII of the Civil Rights Act of 1964, as amended, the Americans
                  with Disabilities Act and similar state statutes and municipal
                  ordinances;

         -        Claims under the Employee Retirement Income Security Act, the
                  Fair Labor Standards Act, state wage payment laws and state
                  wage and hour laws;

         -        Claims for wrongful discharge; and

         -        Claims for reasonable attorneys' fees, including litigation
                  expenses and costs.

         -        Claims made pursuant to the letters ("Letters") and subject
                  matters of the "Letters" listed in Attachment A hereto, except
                  as specifically provided herein.

                  Nothing contained in the foregoing portion of this paragraph
         13 shall be construed to release Employer, or any insurance carrier
         providing insurance coverage to Employer or its directors and officers,
         from any obligation (if any exists) which Employer or such insurance
         carrier may otherwise have to defend or indemnify Employee in any
         action, suit or proceeding brought by a third party against Employee
         based on or arising from Employee's actions as an officer of Employer
         prior to the Separation Date.

                  (b) DEFINITION OF "EMPLOYER". "Employer" includes without
         limitation Hercules Incorporated and its respective past, present and
         future parents, affiliates, subsidiaries, divisions, predecessors,
         successors, assigns, employee benefit plans and trusts. It also
         includes all past, present and future managers, directors, officers,
         partners, agents, employees, attorneys, representatives, consultants,
         associates, fiduciaries, plan sponsors, administrators and trustees of
         each of the foregoing.

                  (c) EMPLOYEE'S ACKNOWLEDGMENT OF SCOPE OF RELEASE. Employee
         declares and agrees that any Claims she may have incurred or sustained
         may not be fully known to her and may be more numerous and more serious
         than she now believes or expects. Further, in making this Agreement,
         Employee relies wholly upon her own judgment of the future development,
         progress and result of said Claims, both known and unknown, and
         acknowledges that she has not been influenced to any extent whatsoever
         in the making of this Agreement by any representations or statements
         regarding said Claims made by individuals or entities who are within
         the definition of Employer above. Employee further acknowledges that
         she accepts the terms herein in full settlement and satisfaction of all
         such Claims.

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                             C O N F I D E N T I A L

14.      AGREEMENT CONFIDENTIAL. Employee agrees to keep this Agreement and its
         terms confidential except as may be required to enforce the Agreement
         or to obtain legal or tax advice.

15.      NON-DISPARAGEMENT. Employer and Employee agree that they will not
         engage in any activity or make any statement that may disparage or
         reflect negatively on Employer or Employee, including those entities
         and individuals related to Employer as defined in the Release section
         of this Agreement.

16.      CONSIDERATION PERIOD. Employee acknowledges that she is being provided
         with a period of twenty-one (21) days to consider the terms of this
         offer from the date this Agreement first was presented to her on June
         21, 2001. Employee agrees that any changes to this offer, whether
         material or immaterial, will not restart the running of the 21-day
         period.

         -        Employee agrees to notify Employer of her acceptance of this
                  Agreement by delivering a signed and witnessed copy to
                  Employer, addressed to the attention of Edward V. Carrington,
                  no later than July 13, 2001. Should Employee not accept this
                  Agreement, she shall continue as an active employee without
                  break in service. Employee understands that she may take the
                  entire 21-day period to consider this Agreement. Employee may
                  return this Agreement in less than the full 21-day period only
                  if her decision to shorten the consideration period is knowing
                  and voluntary and was not induced in any way by Employer.

         -        By signing and returning this Agreement, Employee acknowledges
                  that the consideration period afforded Employee a reasonable
                  period of time to consider fully each and every term of this
                  Agreement, including the release and covenant not to sue, and
                  that Employee has given the terms full and complete
                  consideration.

17.      REVOCATION PERIOD. Employee acknowledges that she shall have seven (7)
         days after signing this Agreement to revoke it if she chooses to do so.
         If Employee elects to revoke this Agreement, she shall give written
         notice of revocation to Employer by delivering it to E. V. Carrington
         in such a manner that it is actually received within the seven-day
         period.

18.      ADVICE TO CONSULT LEGAL REPRESENTATIVE. Employee acknowledges that she
         has consulted with legal counsel of her choosing, at her own expense,
         regarding the meaning and binding effect of this Agreement before
         signing it.

19.      KNOWING AND VOLUNTARY AGREEMENT. Employee, intending to be legally
         bound hereby, certifies and warrants that she has read carefully this
         Agreement and has executed it voluntarily and with full knowledge and
         understanding of its significance, meaning and binding effect. Employee
         further declares that she is competent to understand the content and
         effect of this Agreement, and that her decision to enter into this
         Agreement has not been influenced in any way by fraud, duress,
         coercion, mistake or misleading information.

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                             C O N F I D E N T I A L

20.      HEADINGS. The headings contained in this Agreement are not a part of
         the Agreement and are included solely for ease of reference.

21.      INTEGRATION AND MODIFICATION. Employee declares and represents that no
         promise or agreement has been made to her other than those expressed
         herein. Except as stated herein, this Agreement constitutes the entire
         agreement of the parties and supersedes all prior understandings,
         whether oral or written, between them. Any modification of this
         Agreement must be made in writing and signed by all parties.

22.      SEVERABILITY. If any provision of this Agreement is or shall be
         declared invalid or unenforceable by a court of competent jurisdiction,
         the remaining provisions shall not be affected thereby and shall remain
         in full force and effect.

23.      GOVERNING LAW. Except to the extent any such laws are preempted by
         Federal law, the parties agree that the terms of this Agreement shall
         be governed by the laws of Delaware without giving effect to the choice
         of laws principles of any state, and that either party may pursue
         its/her respective rights hereunder in any court of competent
         jurisdiction.

                  IN WITNESS WHEREOF, and with the intention of being legally
bound, the parties have executed this Agreement on the dates noted below.

                                       AGREED TO AND ACCEPTED

                                       /s/ June B. Barry
                                       ---------------------------------
                                       June B. Barry
                                       Date:  June 22, 2001

                                       HERCULES INCORPORATED

                                       By:  /s/ Edward V. Carrington
                                          ------------------------------
                                       Title:  Office of Chairman
                                             ---------------------------
                                       Date:  June 22, 2001
                                            ----------------------------

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                             C O N F I D E N T I A L

                                  ATTACHMENT A
                                    "LETTERS"

<TABLE>
<CAPTION>
          DATE                     AUTHOR            SUBJECT MATTER

<S>                                <C>               <C>
          February 15, 2000        V.J. Corbo        Executive Benefits
          February 18, 2000        R.L. Fluir        Stock Option Award
                                                     Certificate
          April 13, 2000           V.J. Corbo        Executive Benefits
          June 5, 2000             V.J. Corbo        Executive Benefits
          June 30, 2000            V.J. Corbo        Executive Benefits
</TABLE>

                                       8<PAGE>   1
                                                                   EXHIBIT 10.27

                                  CONFIDENTIAL

                              SEPARATION AGREEMENT
                          AND GENERAL RELEASE OF CLAIMS

                  This Separation Agreement and General Release of Claims
("Agreement") is entered into between Hercules Incorporated ("Employer"), and
George MacKenzie ("Employee").

                  In consideration of the mutual promises and covenants
contained herein and other good and valuable consideration, the receipt of which
hereby is acknowledged, the parties agree as follows:

1.       SEPARATION DATE. Effective upon the close of business on June 30, 2001,
         Employee shall cease to be employed by Employer (the "Separation Date")
         and shall become a Pensioner (as that term is defined in the Hercules
         Retirement Pension Plan) effective July 1, 2001. Between now and the
         Separation Date and for 30 days following said Separation Date on an as
         needed" basis (at no additional charge to Employer), Employee shall
         assist in transitioning his duties and responsibilities, and perform
         such other duties and responsibilities as he may be assigned that are
         not inconsistent therewith.

2.       SEVERANCE PAYMENT. Within twenty (20) days of receipt of this
         Agreement, executed by Employee, and provided Employee has not revoked
         this Agreement in accordance with paragraph 16 below, Employer shall
         pay to Employee severance in the amount of One Million Six Hundred
         Fifty Thousand dollars ($1,650,000.00), less all applicable
         withholdings and deductions. Employee expressly waives all rights to
         benefits under the Merger Severance Plan, Change in Control Agreement,
         Severance Plan, and under any and all other plans or agreements
         purporting to provide for severance payments.

3.       SPECIAL PENSION BENEFITS. In addition to Employee's regular benefit
         entitlement under the Pension Plan of Hercules Incorporated, Employee
         will be granted a special pension benefit payable under the Hercules
         Employee Pension Restoration Plan of $13,172.59 per month effective
         July 1, 2001, such amount payable until age 55 after which the amount
         will be $11,312.43, subject to optional forms of payment elections
         pursuant to the Pension Plan of Hercules Incorporated. This benefit is
         derived by adding 5-1/2 years to Employee's current age and three years
         to Employee's current credited service, then using these additions to
         calculate Employee's pension entitlement pursuant to the Pension Plan
         of Hercules Incorporated and subtracting the benefit calculated not
         using these additions. The total lifetime benefit from all Plans will
         be $14,376.95 per month payable as a single life annuity.

         Additionally, Employee shall be entitled to a special pension benefit
         of $16,677 per year payable in monthly installments for a period
         commencing July 1, 2001 and ending June 30, 2011. This benefit is not
         subject to the 5l% lump sum payment option but is subject to the normal
         joint and survivor option election provisions of the Pension Plan of
         Hercules Incorporated.

                                                                               1
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                                  CONFIDENTIAL

         All of the additional benefits payable pursuant to the terms of this
         Agreement are payable under the Hercules Pension Restoration Plan which
         is a nonqualified pension plan payable from the assets of Hercules
         Incorporated.

4.       ACCRUED VACATION PAY. Employer shall pay to Employee his earned but not
         taken plus accrued vacation calculated as of June 30, 2001 in the
         amount of 54 days, less 5 days taken in 2001, such amount equal to
         Ninety-Four Thousand Five Hundred Forty dollars and Fifty-Eight cents
         ($94,540.58), less applicable deductions and withholdings. Employee
         accepts this payment in full satisfaction for vacation time and hereby
         acknowledges and agrees that he is not entitled to any additional
         payment for accrued vacation time.

5.       Employee meets the age and severance requirement to be a Pensioner as
         that term is defined in the Pension Plan of Hercules Incorporated. As
         such, Employee will be eligible to continue participation in the Health
         Care Plans applicable to Pensioners and the Hercules Executive Survivor
         Benefit Plan.

6.       DENTAL BENEFIT CONTINUATION. Upon an appropriate triggering event,
         Employer shall issue to Employee notice of his right to elect continued
         dental coverage in accordance with the Consolidated Omnibus Budget
         Reconciliation Act ("COBRA"). If Employee elects continuation coverage,
         Employee shall be responsible for paying 100% of the premiums and
         administrative fees.

7.       IMPACT OF SEVERANCE ON OTHER BENEFITS. Except as expressly provided in
         this Agreement, or pursuant to the terms of benefit plans applicable to
         Pensioners, both Employee's and his dependents' participation in,
         coverage by and entitlement to all compensation, fringe benefit and
         employee benefit programs of Employer shall cease upon the Separation
         Date. Employer and Employee specifically agree that Employee is, and
         will remain, eligible for Retiree Medical Coverage as long as it is
         offered to other pensioners from the same employment status as Employee
         and remain eligible to participate in the Hercules Executive Survivor
         Benefit Plan.

         Pursuant to Hercules benefit plan policy applicable to pensioners,
         Employee is eligible to enroll Employee and his eligible dependents in
         any of the available Health Care Plans applicable to Pensioners. Under
         this Policy and as long as it is available to Pensioners, Employee may
         suspend participation for a period of time and then re-enroll at a
         later date. Hercules reserves the right to amend, suspend or terminate
         this Plan at any time.

         Employee, as a participant in the Hercules Executive Survivor Benefit
         Plan, will maintain coverage applicable to pensioners in the amount of
         two times final annual salary ($1MM). This is a non-insured benefit and
         not subject to tax gross-up.

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                                  CONFIDENTIAL

8.       COOPERATION FOLLOWING THE SEPARATION DATE. Employee agrees that he will
         cooperate with any reasonable request of Employer to continue to aid in
         the transition of his function or to answer questions regarding his
         functional area following the Separation Date. Employee, prior to June
         30, 2001, agrees to list all open projects, accountabilities and
         unfinished assignments with a description of status.

9.       AGREEMENT TO RESIGN BOARD APPOINTMENT. Employee agrees to resign as of
         the next meeting from all Board assignments applicable to the Company,
         affiliated Companies or subsidiaries of Hercules.

10.      NO ADMISSION. The benefits provided to Employee in this Agreement are
         not intended to be, and shall not be construed as, any admission of
         liability by Employer or of any improper conduct on Employer's part,
         all of which Employer specifically denies.

11.      COMPANY INFORMATION.

                  (a) Employee represents that he has returned or will
         immediately return to Employer all "Company Information," including,
         without limitation, customer information, formulary information,
         product and pricing information, mailing lists, reports, files,
         memoranda, records and software, credit cards, door and file keys,
         computer access codes and disks and instructional manuals, and other
         property which Employee received or prepared or helped prepare in
         connection with Employee's employment with Employer, and Employee will
         not retain any copies, duplicates, reproductions or excerpts thereof.
         The term "Company Information" as used in this Agreement means (i)
         confidential information of Employer, including without limitation
         information received from third parties under confidential conditions,
         and (ii) other information; including technical, business or financial
         information or trade secrets, the use or disclosure of which might
         reasonably be construed to be contrary to the interests of Employer or
         its affiliates.

                  (b) The parties agree that in the course of Employee's
         employment, Employee has acquired Company Information as defined in
         paragraph 11(a). Employee understands and agrees that such Company
         Information has been disclosed to Employee in confidence and for the
         use only on behalf of Employer. Employee acknowledges that he has no
         ownership right or interest in any Company Information used or
         developed during the course of his employment. Employee understands and
         agrees that (i) Employee will keep such Company Information
         confidential at all times after his employment with Employer, and (ii)
         Employee will not make use of Company Information on his own behalf, or
         on behalf of any third party.

                  (c) Employee further acknowledges that he was privy to
         confidential and privileged information during the course of his
         employment in his capacity as Chief Financial Officer and Vice Chairman
         of the Board of Directors for the Employer.

                                                                               3
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                                  CONFIDENTIAL

                  (d) Employee will be permitted to retain the computer and fax
         machine provided by Hercules and will be disconnected effective July 1,
         2001 from Hercules provided internet, intranet and other telephone line
         connections. In consideration of Hercules transferring such computer
         and fax equipment to Employee, Employee will cooperate with Hercules to
         download and transfer to Hercules all files contained therein and erase
         such files thereupon from the computer.

12.      GENERAL RELEASE OF CLAIMS AND COVENANT NOT TO SUE. Employee for himself
         and his respective heirs, administrators, executors, agents,
         beneficiaries and assigns, does waive, release and forever discharge
         Employer (as defined below) of and from any and all Claims (as defined
         below). Employee agrees not to file a lawsuit to assert any Claim and
         further agrees that he will not counsel, assist or encourage any other
         person to assert any rights or demands or causes of action against
         Employer or to counsel, assist or encourage any other person to seek
         any damages, penalties, losses, attorneys' fees, costs or expenses
         against Employer. This release covers all Claims arising from the
         beginning of time up to and including the date of this Agreement, but
         does not cover Claims relating to the validity or enforcement of this
         Agreement, or to Claims for legally mandated benefits and vested
         benefits under any qualified or non-qualified savings and pension plans
         or welfare plans in which Employee may have participated or will
         continue to participate in, or any other rights or claims that may
         arise after this Agreement is executed.

                  The following provisions further explain this general release
and covenant not to sue:

                  (a) DEFINITION OF "CLAIMS". "Claims" includes without
         limitation all actions or demands of any kind that Employee now has, or
         may have or claim to have in the future. More specifically, Claims
         include rights, causes of action, damages, penalties, losses,
         attorneys' fees, costs, expenses, obligations, agreements, judgments
         and all other liabilities of any kind or description whatsoever, either
         in law or in equity, whether known or unknown, suspected or
         unsuspected.

                  The nature of Claims covered by this release and covenant not
         to sue includes without limitation all actions or demands in any way
         based on Employee's employment with Employer, the terms and conditions
         of such employment or Employee's separation from employment. More
         specifically, all of the following are among the types of Claims which
         are waived and barred by this release and covenant not to sue:

         -        Contract Claims (whether express or implied);

         -        Tort Claims, such as for defamation or emotional distress;

         -        Claims under federal, state and municipal laws, regulations,
                  ordinance or court decisions of any kind;

                                                                               4
<PAGE>   5
                                  CONFIDENTIAL

         -        Claims of discrimination, harassment or retaliation, whether
                  based on race, color, religion, gender, sex, age, sexual
                  orientation, handicap and/or disability, national origin or
                  any other legally protected class;

         -        Claims under the AGE DISCRIMINATION IN EMPLOYMENT ACT, Title
                  VII of the Civil Rights Act of 1964, as amended, the Americans
                  with Disabilities Act and similar state statutes and municipal
                  ordinances;

         -        Claims under the Employee Retirement Income Security Act, the
                  Fair Labor Standards Act, state wage payment laws and state
                  wage and hour laws;

         -        Claims for wrongful discharge; and

         -        Claims for reasonable attorneys' fees, including litigation
                  expenses and costs.

                  Nothing contained in the foregoing portion of this paragraph
         12 shall be construed to release Employer, or any insurance carrier
         providing insurance coverage to Employer or its directors and officers,
         from any obligation (if any exists) which Employer or such insurance
         carrier may otherwise have to defend or indemnify Employee in any
         action, suit or proceeding brought by a third party against Employee
         based on or arising from Employee's actions as an officer or director
         of Employer prior to the Separation Date.

                  (b) DEFINITION OF "EMPLOYER". "Employer" includes without
         limitation Hercules Incorporated and its respective past, present and
         future parents, affiliates, subsidiaries, divisions, predecessors,
         successors, assigns, employee benefit plans and trusts. It also
         includes all past, present and future managers, directors, officers,
         partners, agents, employees, attorneys, representatives, consultants,
         associates, fiduciaries, plan sponsors, administrators and trustees of
         each of the foregoing.

                  (c) EMPLOYEE'S ACKNOWLEDGMENT OF SCOPE OF RELEASE. Employee
         declares and agrees that any Claims he may have incurred or sustained
         may not be fully known to him and may be more numerous and more serious
         than he now believes or expects. Further, in making this Agreement,
         Employee relies wholly upon his own judgment of the future development,
         progress and result of said Claims, both known and unknown, and
         acknowledges that he has not been influenced to any extent whatsoever
         in the making of this Agreement by any representations or statements
         regarding said Claims made by individuals or entities who are within
         the definition of Employer above. Employee further acknowledges that he
         accepts the terms herein in full settlement and satisfaction of all
         such Claims.

13.      AGREEMENT CONFIDENTIAL. Employee agrees to keep this Agreement and its
         terms confidential except as may be required to enforce the Agreement
         or to obtain legal or tax advice.

                                                                               5
<PAGE>   6
                                  CONFIDENTIAL

14.      NON-DISPARAGEMENT. Employer and Employee agree that they will not
         engage in any activity or make any statement that may disparage or
         reflect negatively on Employer or Employee, including those entities
         and individuals related to Employer as defined in the Release section
         of this Agreement.

15.      CONSIDERATION PERIOD. Employee acknowledges that he has been provided
         with a period of twenty-one (21) days to consider the terms of this
         offer from the date this Agreement first was presented to him on June
         15, 2001. Employee agrees that any changes to this offer, whether
         material or immaterial, will not restart the running of the 21-day
         period.

                  -        Employee agrees to notify Employer of his acceptance
                           of this Agreement by delivering a signed and
                           witnessed copy to Employer, addressed to the
                           attention of Edward V. Carrington, no later than July
                           6, 2001. Employee understands that he may take the
                           entire 21-day period to consider this Agreement.
                           Employee may return this Agreement in less than the
                           full 21-day period only if his decision to shorten
                           the consideration period is knowing and voluntary and
                           was not induced in any way by Employer.

                  -        By signing and returning this Agreement, Employee
                           acknowledges that the consideration period afforded
                           Employee a reasonable period of time to consider
                           fully each and every term of this Agreement,
                           including the release and covenant not to sue, and
                           that Employee has given the terms full and complete
                           consideration.

16.      REVOCATION PERIOD. Employee acknowledges that he shall have seven (7)
         days after signing this Agreement to revoke it if he chooses to do so.
         If Employee elects to revoke this Agreement, he shall give written
         notice of revocation to Employer by delivering it to E. V. Carrington
         in such a manner that it is actually received within the seven-day
         period.

17.      ADVICE TO CONSULT LEGAL REPRESENTATIVE. Employee acknowledges that he
         has been advised to consult with legal counsel of his choosing, at his
         own expense, regarding the meaning and binding effect of this Agreement
         before signing it.

18.      KNOWING AND VOLUNTARY AGREEMENT. Employee, intending to be legally
         bound hereby, certifies and warrants that he has read carefully this
         Agreement and has executed it voluntarily and with full knowledge and
         understanding of its significance, meaning and binding effect. Employee
         further declares that he is competent to understand the content and
         effect of this Agreement, and that his decision to enter into this
         Agreement has not been influenced in any way by fraud, duress,
         coercion, mistake or misleading information.

19.      HEADINGS. The headings contained in this Agreement are not a part of
         the Agreement and are included solely for ease of reference.

                                                                               6
<PAGE>   7
                                  CONFIDENTIAL

20.      INTEGRATION AND MODIFICATION. Employee declares and represents that no
         promise or agreement has been made to him other than those expressed
         herein. Except as stated herein, this Agreement constitutes the entire
         agreement of the parties and supersedes all prior understandings,
         whether oral or written, between them. Any modification of this
         Agreement must be made in writing and signed by all parties.

21.      SEVERABILITY. If any provision of this Agreement is or shall be
         declared invalid or unenforceable by a court of competent jurisdiction,
         the remaining provisions shall not be affected thereby and shall remain
         in full force and effect.

22.      GOVERNING LAW. Except to the extent any such laws are preempted by
         Federal law, the parties agree that the terms of this Agreement shall
         be governed by the laws of Delaware without giving effect to the choice
         of laws principles of any state, and that either party may pursue
         its/his respective rights hereunder in any court of competent
         jurisdiction.

23.      Employee has received letter dated June 12, 2001 from R. L. Fluri
         regarding "Long-Term Incentive Retirement Elections including schedule
         of "Stock Options - Expiration Dates". These options will continue to
         be administered pursuant to the terms of the Long-Term Incentive Plan
         dated April 29, 1999 (copy attached).

                  IN WITNESS WHEREOF, and with the intention of being legally
bound, the parties have executed this Agreement on the dates noted below.

                                       AGREED TO AND ACCEPTED

                                        /s/ George MacKenzie
                                       ------------------------------------
                                       George MacKenzie
                                       Date:  June 21, 2001
                                            -------------------------------

                                       HERCULES INCORPORATED

                                       By:  /s/ Edward V. Carrington
                                          ---------------------------------
                                       Title:  Office of the Chairman
                                             ------------------------------
                                       Date:   June 21, 2001
                                            -------------------------------

                                                                               7

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