Document:

<PAGE>
                              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-
<PAGE>
                  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

                                        2
<PAGE>
      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

                                        3
<PAGE>
      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-

                                        4
<PAGE>
      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.

                                        5
<PAGE>
                                   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
<PAGE>
                  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.

                                        7
<PAGE>
      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

                                        8
<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

                                        9<PAGE>

                              HERCULES INCORPORATED
                  ANNUAL MANAGEMENT INCENTIVE COMPENSATION PLAN
                    (AMENDED AND RESTATED FEBRUARY 21, 2003)

ARTICLE I PURPOSE

      The Hercules Incorporated Annual Management Incentive Compensation Plan,
      the terms of which are herein set forth (as the same is now in effect or
      as hereafter amended from time to time, the "Plan"), is intended to enable
      the Company to secure, retain and motivate highly qualified and
      experienced management personnel by providing to employees (including
      officers and directors who are employees) who (i) occupy positions that
      affect the annual performance of the Company and of such of its
      participating related companies as shall from time to time be designated
      by the Board for participation in the Plan and (ii) are designated as
      Participants in the Plan, incentive compensation linked to (a) the
      Company's success in meeting prescribed corporate goals, (b) the
      performance of the employee's organizational unit in meeting its
      prescribed goals and (c) the employee's individual performance in meeting
      its prescribed personal performance goals.

ARTICLE II DEFINITIONS AND CONSTRUCTION

Section 2.1 Definitions

      The following words and phrases when used in the Plan with an initial
      capital letter, unless their context clearly indicates to the contrary,
      shall have the respective meanings set forth below in this Section 2.1:

            Beneficiary. As defined in Subsection 17.7.1.

            Board. The Board of Directors of the Company.

            CEO. The Chief Executive Officer of the Company.

            Change in Control. As defined in Section 15.1.

            Committee. The Compensation Committee of the Board or such other
            committee as may be designated by the Board to administer the Plan.

            Common Stock. The common stock of the Company.

            Company. Hercules Incorporated and its successors and assigns.

            Corporate Payout Curves. As defined in Section 7.1.
<PAGE>
            Corporate Performance Goals. Performance goals for a Plan Year based
            upon corporate performance during that Plan Year.

            Determination Date. As defined in Article X.

            Employee. An employee of the Company or of a Participating
            Subsidiary.

            Exchange Act. The Securities Exchange Act of 1934, as now in effect
            or as hereafter amended from time to time.

            Grantor. The Board, when used in reference to an Incentive Award
            granted to the CEO; the Committee, when used in reference to an
            Incentive Award granted to a Reporting Person; or the CEO, when used
            in reference to an Incentive Award granted to a Nonreporting Person.

            Group. One of the operating groups or corporate staff departments of
            either the Company or a Participating Subsidiary.

            Group Head. The individual occupying the highest organizational
            position within a particular Group.

            Group Payout Curves. As defined in Section 7.1.

            Group Performance Goals. Performance goals for a Plan Year based
            upon the performance of a particular Group during that Plan Year.

            Incentive Award. The actual cash and/or stock distribution made to
            any Participant pursuant to the Plan, the amount and payment of
            which is determined as set forth in the Plan.

            Incentive Awards Pool. As defined in Article IV.

            Incumbent Board. As defined in Section 15.1.

            Individual Performance Goals. Performance goals for a Plan Year
            based upon the performance of a particular Participant during that
            Plan Year.

            Individual Target Award. As defined in Section 5.1.

            LTICP. The Company's Long-Term Incentive Compensation Plan or any
            successor thereto or any other plan pursuant to which the Company
            has the ability to grant restricted shares of Common Stock.

            Maximum. The level of achievement of a particular Performance Goal
            at which the amount distributed with respect to the applicable
            component of the relevant Incentive Award will reach its highest
            possible level.

                                      -2-
<PAGE>
            Nonreporting Person. An Employee who is not subject to the reporting
            requirements of Section 16(a) of the Exchange Act with respect to
            the Company.

            Participant. An Employee who is designated as a Participant in the
            Plan for a given Plan Year pursuant to Article III.

            Participating Subsidiary. A Subsidiary designated by the Board as a
            Participating Subsidiary.

            Payout Curve. The proposed Incentive Awards distribution scheme
            established for a given Plan Year established pursuant to Article
            VII hereof.

            Performance Goals. Corporate Performance Goals, Group Performance
            Goals and Individual Performance Goals.

            Plan. As defined in Article I.

            Plan Year. A calendar year for which any Participant is given the
            opportunity to earn an Incentive Award under the Plan.

            Reporting Person. An Employee subject to the reporting requirements
            of Section 16(a) of the Exchange Act with respect to the Company,
            other than the CEO.

            Restricted Common Stock. As defined in Article X.

            Subsidiary. Any corporation, partnership, joint venture or other
            entity (i) that, directly or indirectly through one or more
            intermediaries, is controlled by the Company or (ii) a majority or
            more of whose outstanding voting stock or voting power for election
            of directors or equivalent governing body is beneficially owned by
            the Company directly or indirectly through one or more
            intermediaries.

            Target. The targeted level of performance with respect to any
            particular Performance Goal.

            Target Incentive Awards Pool. As defined in Article IV.

            Threshold. The minimum level of achievement of a Performance Goal.

Section 2.2 Construction

      Whenever any words are used herein in the masculine gender, they shall be
      construed as though they were also used in the feminine gender in all
      cases where they would so apply, and wherever any words are used herein in
      the singular

                                      -3-
<PAGE>
      form they shall be construed as though they were also used in the plural
      form in all cases where they would so apply. Headings of sections and
      subsections of the Plan are inserted for convenience of reference, are not
      a part of the Plan, and are not to be considered in the construction
      hereof. The words "hereof," "herein," "hereunder" and other similar
      compounds of the word "here" shall mean and refer to the entire Plan, and
      not to any particular provision or section. All references herein to
      specific Articles, Sections or Subsections shall mean Articles, Sections
      or Subsections of this document unless otherwise qualified.

ARTICLE III PARTICIPATION AND GRANT OF INCENTIVE AWARDS

Section 3.1 Power to Designate Participants and Make Incentive Awards

      3.1.1: The Board shall have the exclusive power to designate the CEO as a
      Participant and to make all decisions concerning the Incentive Awards of
      the CEO, including without limitation the terms and conditions of the
      CEO's Incentive Award opportunities and the amounts actually payable to
      the CEO pursuant to Incentive Awards, subject to the terms of the Plan and
      after taking into account the recommendations of the Committee.

      3.1.2: The Committee shall have the exclusive power to designate Reporting
      Persons as Participants and to make all decisions concerning the Incentive
      Awards of Reporting Persons, including without limitation the terms and
      conditions of their Incentive Award opportunities and the amounts actually
      payable to them pursuant to Incentive Awards, subject to the terms of the
      Plan.

      3.1.3: The CEO shall have the power to designate Nonreporting Persons as
      Participants and to make all decisions concerning the Incentive Awards of
      Nonreporting Persons, including without limitation the terms and
      conditions of their Incentive Award opportunities and the amounts actually
      payable to them pursuant to Incentive Awards, subject to the terms of the
      Plan and to the authority and oversight of the Committee.

Section 3.2 Establishment of Terms of Awards

      The terms and conditions of Incentive Award opportunities shall be
      established in accordance with the process set forth in Articles IV
      through VII below. Such process shall be completed not later than the end
      of the first calendar quarter of the applicable Plan Year.

Section 3.3 Notification of Participation

      Employees designated as Participants shall be so advised in writing, and
      shall also be informed of the amount of their Individual Target Awards and
      the other terms and conditions of their Incentive Award opportunities.

                                      -4-
<PAGE>
ARTICLE IV INCENTIVE AWARDS POOLS

      The Committee shall recommend to the Board, and the Board shall determine
      and approve, the aggregate dollar amount of the Incentive Awards that
      would be payable to all Participants if all Performance Goals were met at
      the Target level (the "Target Incentive Awards Pool" for that Plan Year)
      and the maximum aggregate dollar amount of the Incentive Awards that would
      become payable to all Participants if all Performance Goals were met at
      the Maximum level (the "Incentive Awards Pool"). However, the Board may
      adjust the amount of the Target Incentive Awards Pool and/or the Incentive
      Awards Pool upwards or downwards at any time before the end of the Plan
      Year.

ARTICLE V INDIVIDUAL TARGET AWARDS

Section 5.1 Target Awards

      The Grantor shall establish an incentive opportunity (an "Individual
      Target Award") for each Participant who will be eligible to receive an
      Incentive Award for each Plan Year, such that the aggregate of the
      Individual Target Awards does not exceed the Target Incentive Awards Pool
      for that Plan Year. The Individual Target Award shall be a percentage of
      the Participant's base salary or the benchmark for the Participant's
      position, or a flat dollar amount, as determined by the Grantor, but need
      not be the same for any other Participant or group of Participants. In
      selecting such percentage or amount, the Grantor shall consider, among
      other criteria, survey data regarding competitive industry practices for
      similar positions in comparable-sized chemical companies.

Section 5.2 Components

      Each Individual Target Award will consist of two parts: a corporate
      component, to be earned based upon achievement of the applicable Corporate
      Performance Goals, and a Group component, to be earned based upon
      achievement of the applicable Group Performance Goals (in each case
      subject to adjustment based on the achievement of the applicable
      Individual Performance Goals). The Grantor shall determine the percentage
      assigned to each of the two components.

ARTICLE VI PERFORMANCE GOALS

Section 6.1 Corporate Performance Goals

      The Committee shall recommend to the Board, and the Board shall determine
      and approve, the Corporate Performance Goals for each Plan Year, including
      the Threshold, Target and Maximum levels of achievement. After such
      approval, the Board may modify the Corporate Performance Goals in any
      manner that it deems equitable and appropriate as a result of an
      extraordinary and material change in the Company's business, operations,
      corporate or capital structure, in

                                      -5-
<PAGE>
      the manner in which it conducts business or any other extraordinary and
      material change affecting the Company.

Section 6.2 Group Performance Goals

      Group Performance Goals for Participants in each Group shall be
      established for each Plan Year by the CEO after consultation with the
      applicable Group Head, including the Threshold, Target and Maximum levels
      of achievement. After such establishment, the CEO may approve a
      modification to such Group Performance Goals in any manner that he deems
      equitable and appropriate as a result of an extraordinary and material
      change in the Company's business, operations, corporate or capital
      structure, in the manner in which it conducts business or any other
      extraordinary and material change affecting the Company.

Section 6.3 Individual Performance Goals

      Individual Performance Goals shall be established for each Participant for
      each Plan Year, as follows:

            6.3.1: Individual Performance Goals for the CEO shall be established
            by the Board, after consultation with the Committee and the CEO.
            Individual Performance Goals for a Reporting Person shall be
            established by the Committee after consultation with the CEO and the
            Reporting Person. Individual Performance Goals for a Nonreporting
            Person shall be established by the Group Head for whom he works
            after consultation with such Nonreporting Person.

            6.3.2: After Individual Performance Goals have been established
            under Section 6.3.1, the Board, the Committee or the Group Head, as
            applicable, may approve a modification to the Individual Performance
            Goals in any manner that it or he deems equitable and appropriate as
            a result of a change in the Participant's duties and
            responsibilities or the manner in which he discharges his duties and
            responsibilities or any other change, in each case if it or he
            determines such change to be extraordinary and material.

Section 6.4 Certain Modifications

      In the event of a modification of the Corporate Performance Goals or the
      Group Performance Goals for any Plan Year pursuant to Section 6.1 or 6.2,
      the Grantor may modify the Individual Performance Goals of any Participant
      affected by the change resulting in such modification as deemed
      appropriate and equitable in his sole and absolute discretion.

                                      -6-
<PAGE>
ARTICLE VII PAYOUT CURVE

Section 7.1 Establishment of Payout Curves

      The Committee shall establish the Payout Curves for the corporate
      component of Incentive Awards (the "Corporate Payout Curve"), and the CEO
      shall establish the Payout Curves for the Group component of Incentive
      Awards (the "Group Payout Curves").

Section 7.2 Requirements

      Each Payout Curve shall, within the framework of the applicable
      Performance Goals, Individual Target Awards, Thresholds and other terms
      and conditions established pursuant to Articles III through VI:

            7.2.1: Establish Threshold, Target, Maximum and intermediate(s)
            performance and distribution levels for determining the amounts to
            be distributed to Participants pursuant to their Incentive Awards;
            and

            7.2.2: Provide for distributions ranging from 0% to 200% of the
            Target Incentive Awards Pool, depending on the application of actual
            performance against the distribution levels set forth on such Payout
            Curve.

Section 7.3 Modification

      From time to time, at any time before distributions are made with respect
      to Incentive Awards for a Plan Year, the Committee in its sole discretion
      may modify the Corporate Payout Curve, and the CEO, in his sole
      discretion, may modify or amend the Group Payout Curve for any Group, in
      order to reflect changed business or economic conditions.

ARTICLE VIII DETERMINATION OF PERFORMANCE RESULTS

      As soon as practicable following the end of each Plan Year (1) the
      Committee shall determine whether and the extent to which the applicable
      Corporate Performance Goals were attained, (2) the CEO shall determine
      whether and the extent to which each Group attained its applicable Group
      Performance Goals, and (3) the Board, the CEO or the relevant Group Head,
      as applicable, shall determine whether and the extent to which each
      Participant attained his Individual Performance Goals. All such
      determinations shall be conclusive and binding with respect to all
      Participants and their Beneficiaries, except as they may be modified
      pursuant to other provisions of the Plan.

                                      -7-
<PAGE>
ARTICLE IX DETERMINATION OF INCENTIVE AWARDS

Section 9.1 Calculation

      As soon as practicable after the determinations required by Article VIII
      have been made, the actual Incentive Awards to be made to Participants
      shall be calculated, based upon such determinations, and in the following
      manner:

            9.1.1: The corporate component of each Participant's Incentive Award
            shall be determined by the application of the Corporate Payout Curve
            to the achievement of the applicable Corporate Performance Goals.

            9.1.2: The relevant Group component of each Participant's Incentive
            Award shall be determined by the application of the achievement of
            the relevant Group Payout Curve to the applicable Group Performance
            Goals.

            9.1.3: The actual Incentive Award for each Participant, subject to
            Subsection 9.1.4, shall be calculated by adding the corporate and
            Group components as so calculated, and then adjusting the result as
            appropriate based upon the Participant's achievement of the
            applicable Individual Performance Goals and such other factors as
            the Grantor may deem appropriate.

            9.1.4: If the total amount of the Incentive Awards as thus
            determined for all Participants exceeds the Incentive Awards Pool,
            Incentive Awards shall be adjusted so that the total equals the
            Incentive Awards Pool.

Section 9.2 Threshold Requirement

      Notwithstanding any other provision of the Plan, if the achievement of the
      Corporate Performance Goals for a given Plan Year is below the stated
      Threshold, no Participant shall receive any payment under Incentive Awards
      for that Plan Year unless the Board determines otherwise in its sole
      discretion.

ARTICLE X PAYMENT OF INCENTIVE AWARDS

      Promptly following the date on which the final determination of Incentive
      Awards for a Plan Year is made (the "Determination Date"), subject to
      Articles XI through XIII below, each Participant shall be entitled have
      his Incentive Award distributed to him in cash, in restricted shares of
      common stock pursuant to the LTICP ("Restricted Common Stock") or partly
      in each, as the Committee shall determine (and such determination need not
      be the same for all Participants). If any portion of any Incentive Award
      is distributed in Restricted Common Stock of the Company, the number of
      shares shall be determined by dividing (1) the dollar amount of such
      portion of the Incentive Award by (2) 85% of the fair market value of one
      share of Common Stock on the applicable Determination Date. For purposes
      of this Article X, the term "fair market value" shall mean, as of any

                                      -8-
<PAGE>
      given Determination Date, the closing price for one share of Common Stock
      on that Determination Date, as reported on the Composite Tape for New York
      Stock Exchange Listed Companies and published in the Eastern Edition of
      The Wall Street Journal or, if there is no trading on that Determination
      Date, the closing price of the Common Stock as so reported and published
      on the next preceding date on which there was trading in Common Stock.

ARTICLE XI PRO-RATED INCENTIVE AWARDS

Section 11.1 New Participants

      Notwithstanding any provision of the Plan other than Article XV, if an
      Employee becomes a Participant during a given Plan Year, such
      Participant's Incentive Award may (but need not) be pro-rated, if so
      determined by the Grantor, to reflect the partial year of participation.

Section 11.2 Transferred Participants

      Notwithstanding any provision of the Plan other than Article XV, a
      Participant whose employment is transferred from one Group to another
      during a given Plan Year may have his Incentive Award pro-rated between or
      among such Groups as determined by the Grantor, including without
      limitation by applying different Group Performance Goals to different
      portions of his Incentive Award.

Section 11.3 Position Change

      Notwithstanding any provision of the Plan other than Article XV, if during
      any Plan Year a Participant moves from one position to another position in
      the Company or a Participating Subsidiary, the Grantor may, if the Grantor
      determines it is warranted, approve appropriate and equitable
      modifications to the performance requirements applicable to such
      Participant for such Plan Year to take account of such change.

ARTICLE XII SUBSTANDARD PERFORMANCE

      Notwithstanding any provision of the Plan other than Article XV, if, at
      any time before a Participant has received distribution of any particular
      Incentive Award, the Grantor shall determine that a given Participant has
      performed any of his employment obligations in an unsatisfactory manner,
      the Grantor may decrease or may entirely eliminate the amount of the
      distribution that the Participant would otherwise be entitled to receive
      with respect to that Incentive Award.

                                      -9-
<PAGE>
ARTICLE XIII TERMINATION OF EMPLOYMENT

Section 13.1 General Rule

      Except as provided below in this Article XIII and in Article XV, a
      Participant shall not be entitled to receive any distribution pursuant to
      an Incentive Award for a particular Plan Year unless he is employed by the
      Company or a Participating Subsidiary, as applicable, on December 31 of
      such Plan Year.

Section 13.2 Death, Disability, Retirement or Reduction in Force

      A Participant (or, as appropriate, his Beneficiary or his estate) whose
      employment terminates during a Plan Year due to death, disability,
      retirement or reduction in force, may receive a pro-rated portion of his
      Incentive Award for such Plan Year, if so determined by the Grantor.

Section 13.3 Termination for Cause

      Notwithstanding any other provision of the Plan, except as provided in the
      next sentence, a Participant whose employment is involuntarily terminated
      for cause (as determined by the Committee) shall not receive any
      distributions with respect to any Incentive Award for the Plan Year that
      has not actually been distributed before such termination. However, the
      foregoing shall not apply to any payment to the Participant pursuant to
      Article XV unless both the Participant's termination of employment and the
      Committee's determination that such termination was for cause occur before
      the relevant Change in Control.

ARTICLE XIV ADMINISTRATION OF THE PLAN AND DELEGATIONS OF AUTHORITY

Section 14.1 Committee Authority and Responsibility

      The Committee shall have primary responsibility for the administration of
      the Plan, and shall make all determinations under the Plan with respect to
      Reporting Persons. Without limiting the generality of the foregoing, the
      Committee shall (i) grant Incentive Awards to Reporting Persons, (ii)
      establish the maximum aggregate amount of Incentive Awards to be granted
      to Nonreporting Persons as a Group and (iii) establish the guidelines and
      oversight under which, pursuant to authorities granted by the Committee
      and the provisions of the Plan, the CEO may grant Incentive Awards to, and
      make determinations under the Plan with respect to, Nonreporting Persons,
      as more fully provided in Section 3.2. Furthermore, the Committee shall
      have final authority, in its sole discretion, to interpret the Plan and to
      make rules regarding its operation and administration, which shall be
      final and binding upon all Participants. The Committee may delegate to any
      of its members or to one or more employees of the Company the
      responsibility for the day-to-day administration of the Plan, provided
      that the delegated responsibilities are ministerial in nature.

                                      -10-
<PAGE>
Section 14.2 Board Authority and Responsibility

      The Board shall make all determinations under the Plan with respect to the
      CEO in his capacity as a Participant, taking into account the
      recommendations of the Committee. Notwithstanding anything to the contrary
      in the Plan, the Board may exercise any authority under the Plan that is
      given to the Committee or the CEO.

Section 14.3 CEO Authority and Responsibility

      In making awards to Nonreporting Persons and carrying out his other
      responsibilities under the Plan, the CEO is acting as a delegee of the
      Committee and is at all times accountable to the Committee and authorized
      to act only in accordance with the provisions of the Plan and the
      guidelines and direction provided by the Committee from time to time.
      Furthermore, notwithstanding anything to the contrary in the Plan, the
      Committee may at any time revoke any or all authority given to the CEO
      under the Plan, in which event such authority shall be exercised by the
      Committee unless and until the Committee determines otherwise. The CEO
      shall report to the Committee as and when requested by the Committee
      regarding the manner in which the CEO has exercised his power under the
      Plan. The CEO is not intended to be, nor shall the CEO be construed to be,
      a member of the Committee. The CEO may delegate all or part of his
      authority and responsibilities under the Plan to one or more other
      appropriate officers or employees of the Company or any Participating
      Subsidiary.

ARTICLE XV CHANGE IN CONTROL

Section 15.1 Definition

      A "Change in Control" shall mean the occurrence of any of the following
      events:

      (1)   The acquisition by any individual, entity or group (within the
            meaning of Section 13(d)(3) or 14(d)(2) of Exchange Act (a
            "Person")) of beneficial ownership (within the meaning of Rule 13d-3
            promulgated under the Exchange Act) of 20% or more of either (A) the
            then-outstanding shares of common stock of the Company (the
            "Outstanding Company Common Stock") or (B) the combined voting power
            of the then-outstanding voting securities of the Company entitled to
            vote generally in the election of directors (the "Outstanding
            Company Voting Securities"); provided, however, that, for purposes
            of this part (1), the following acquisitions shall not constitute a
            Change of Control: (i) any acquisition directly from the Company,
            (ii) any acquisition by the Company, (iii) any acquisition by any
            employee benefit plan (or related trust) sponsored or maintained by
            the Company or any Affiliated Company, or (iv) any acquisition by
            any corporation pursuant to a transaction that complies with parts
            (3)(A), (3)(B) and (3)(C) of this definition;

                                      -11-
<PAGE>
      (2)   Individuals who, as of [INSERT DATE], constitute the Board (the
            "Incumbent Board") cease for any reason to constitute at least a
            majority of the Board; provided, however, that any individual
            becoming a director subsequent to the date hereof whose election, or
            nomination for election by the Company's shareholders, was approved
            by a vote of at least a majority of the directors then comprising
            the Incumbent Board shall be considered as though such individual
            were a member of the Incumbent Board, but excluding, for this
            purpose, any such individual whose initial assumption of office
            occurs as a result of an actual or threatened election contest with
            respect to the election or removal of directors or other actual or
            threatened solicitation of proxies or consents by or on behalf of a
            Person other than the Board;

      (3)   Consummation of a reorganization, merger, consolidation or sale or
            other disposition of all or substantially all of the assets of the
            Company (a "Business Combination"), in each case, unless, following
            such Business Combination, (A) all or substantially all of the
            individuals and entities that were the beneficial owners of the
            Outstanding Company Common Stock and the Outstanding Company Voting
            Securities immediately prior to such Business Combination
            beneficially own, directly or indirectly, 60% or more of the
            then-outstanding shares of common stock and the combined voting
            power of the then-outstanding voting securities entitled to vote
            generally in the election of directors, as the case may be, of the
            corporation resulting from such Business Combination (including,
            without limitation, a corporation that, as a result of such
            transaction, owns the Company or all or substantially all of the
            Company's assets either directly or through one or more
            subsidiaries) in substantially the same proportions as their
            ownership immediately prior to such Business Combination of the
            Outstanding Company Common Stock and the Outstanding Company Voting
            Securities, as the case may be, (B) no Person (excluding any
            corporation resulting from such Business Combination or any employee
            benefit plan (or related trust) of the Company or such corporation
            resulting from such Business Combination) beneficially owns,
            directly or indirectly, 20% or more of, respectively, the
            then-outstanding shares of common stock of the corporation resulting
            from such Business Combination or the combined voting power of the
            then-outstanding voting securities of such corporation, except to
            the extent that such ownership existed prior to the Business
            Combination, and (C) at least a majority of the members of the board
            of directors of the corporation resulting from such Business
            Combination were members of the Incumbent Board at the time of the
            execution of the initial agreement or of the action of the Board
            providing for such Business Combination; or

      (4)   Approval by the shareholders of the Company of a complete
            liquidation or dissolution of the Company.

                                      -12-
<PAGE>
Section 15.2 Effect of Change in Control

      In the event of a Change in Control of the Company during a given Plan
      Year, each Participant who is employed by the Company or a Participating
      Subsidiary on the date of the Change in Control, or whose employment was
      terminated during the Plan Year but before the Change in Control, shall
      receive a cash payment, in full settlement of his Incentive Award for that
      Plan Year, equal to the Individual Target Award established for such
      Participant at the beginning of such Plan Year, times (in the case of a
      Participant not so employed on the date of the Change in Control) a
      fraction, the numerator of which is the number of days in the Plan Year
      through the date of the Change in Control, and the denominator of which is
      the number of days in the Plan Year. The Incentive Award payable to each
      Participant as a result of such Change in Control shall be paid in full
      within thirty (30) days after the effective date of such Change in
      Control. In the case of a Participant who is a party to any Individual
      Agreement under which the Participant is or may become entitled to
      payments with respect to the same Incentive Award as described above, the
      Company or its successor may make the right of such Participant to receive
      the payment set forth above conditioned upon the execution by such
      Participant of a waiver of the right to receive such payments under the
      Individual Agreement to the extent they would duplicate such payment. In
      the case of a Participant who is a party to any individual agreement under
      which the Participant is or may become entitled to additional payments
      with respect to the same Incentive Award, the Company or its successor may
      make the right of such Participant to receive the payment set forth above
      conditioned upon the execution by such Participant of a waiver of the
      right to receive such payments under the individual agreement to the
      extent they would duplicate such payment.

ARTICLE XVI AMENDMENT, SUSPENSION AND TERMINATION

      The Board reserves the right to amend, suspend or terminate, in whole or
      in part, at any time and from time to time, any or all of the provisions
      of the Plan; provided, that no amendment, suspension or termination of the
      Plan that is made in anticipation of, in connection with or following a
      Change in Control, or at the request of a third party seeking to effect a
      Change in Control, shall have any effect on Article XV or the second
      sentence of Section 13.3, as they apply to that Change in Control, unless
      such effect is in no way adverse to the interests of Participants.

ARTICLE XVII MISCELLANEOUS

Section 17.1 Shares Available for Awards

      Shares of Restricted Common Stock delivered under the Plan shall be taken
      from the share authorization under the LTICP, and shall be subject to all
      of the terms, conditions and provisions thereof, including without
      limitation periods of restriction, transferability restrictions, risk of
      forfeiture and such other conditions

                                      -13-
<PAGE>
      as the Committee, in accordance with the terms of the Long-Term Incentive
      Compensation Plan, may establish at the time the shares are delivered.

Section 17.2 Incentive Awards Pool Adjustments

      The Committee from time to time, either during a given Plan Year or
      subsequent to the conclusion thereof, at any time prior to the
      commencement of distribution of Incentive Award payments for such Plan
      Year to Participants, may recommend to the Board that the amount of the
      Target Incentive Awards Pool and/or the Incentive Awards Pool for such
      Plan Year be increased or decreased, in order to reflect changed business
      or economic conditions.

Section 17.3 Deferral of Payment of Incentive Awards

      A Participant shall be eligible to defer the payment of any Incentive
      Award that the Committee determines will be paid in cash, if he is
      eligible to participate in any deferred compensation plan that permits
      such deferral. Any such deferral shall be made under and subject to the
      provisions of the applicable deferred compensation plan.

Section 17.4 Unfunded Plan

      The Plan shall be unfunded, and the Company shall not be required to
      segregate any assets which may at any time be represented by Incentive
      Awards under the Plan. The Incentive Awards payable under the Plan are
      contingent in character and, therefore, no rights shall vest in any
      Participant under the Plan until either the amount of such Participant's
      Incentive Award has been determined and paid by the Company pursuant to
      the Plan, or receipt thereof has been deferred by such Participant
      pursuant to the Hercules Deferred Compensation Plan.

Section 17.5 Inalienability of Rights and Interests

      The rights and interests of a Participant under the Plan are personal to
      the Participant and to any person or persons who may become entitled to
      distribution or payments under the Plan by reason of death of the
      Participant, and the rights and interests of the Participant or any such
      person (including, without limitation, any Incentive Award distributable
      or payable under the Plan) shall not be subject in any manner to
      anticipation, alienation, sale, transfer, assignment, pledge, encumbrance
      or charge, and any such attempted action shall be void and no such benefit
      or interest shall be in any manner liable for or subject to debts,
      contracts, liabilities, engagements or torts of any Participants. If any
      Participant shall attempt to anticipate, alienate, sell, transfer, assign,
      pledge, encumber or charge any of his rights or interests under the Plan
      (including without limitation, any Incentive Award payable under the
      Plan), then the Committee may hold or apply such benefit or any part
      thereof to or for the benefit of such Participant or his Beneficiary, his
      spouse, children, blood relatives or other dependents, or any

                                      -14-
<PAGE>
      of them in such manner and in such proportions as the Committee may
      consider proper.

Section 17.6 Withholding Taxes

      The Company shall deduct, or cause to be deducted, from all distributions
      pursuant to Incentive Awards, all Federal, state and local taxes that the
      Company is required by any law to withhold on such payments. Restricted
      Common Stock that is distributed in settlement or partial settlement of
      Incentive Awards shall be subject to the applicable tax withholding
      provisions of the Long-Term Incentive Compensation Plan. Cash
      distributions that are deferred as permitted by Section 17.3 shall be
      subject to the tax withholding provisions of the applicable deferred
      compensation plan.

Section 17.7 Designation of Beneficiaries

      17.7.1: Each Participant shall be permitted to file with the Company a
      written designation, on such form and in accordance with such procedures
      and rules as the Committee may prescribe, of one or more persons (each, a
      "Beneficiary") to receive the Incentive Award, if any, payable under the
      Plan upon the Participant's death. If a Participant has filed more than
      one such designation, the designation most recently received by the
      Company shall be controlling; provided, however, that no designation,
      change or revocation thereof shall be effective unless received by the
      Company prior to the Participant's death. If no such Beneficiary
      designation is in effect at the time of a Participant's death, or if no
      designated Beneficiary survives a Participant, all distributions of that
      Participant's Incentive Awards shall be made to the Participant's estate.

      17.7.2: The Committee may disregard the provisions of Section 17.7.1 to
      the extent distributions of Incentive Awards of a deceased Participant are
      required to be made in some other manner pursuant to applicable law. If
      the Committee is in doubt as to the right of any person to receive such
      Incentive Award, the Company may retain such Incentive Award, without
      liability for any interest thereon, until the Committee determines the
      rights thereto, or the Company may pay such Incentive Award to any court
      of appropriate jurisdiction and such payment shall be a complete discharge
      of the liability of the Company therefor.

Section 17.8 No Right to an Incentive Award Payment or to Continued Employment

      Eligibility for Incentive Awards is determined annually. No Participant or
      other person shall have any claim or right to be granted an Incentive
      Award under the Plan or to receive a distribution pursuant to an Incentive
      Award. Neither the action of the Company in establishing the Plan nor any
      provisions hereof, nor any action taken by the Company, any Participating
      Subsidiary, the Committee or the CEO, or any of their respective delegees,
      pursuant to such provisions shall be construed as creating in any employee
      or class of employees any right with respect to continuation of employment
      by the Company or any of the Participating

                                      -15-
<PAGE>
      Subsidiaries, and they shall not be deemed to interfere in any way with
      the Company's or any Participating Subsidiary's right to employ,
      discipline, discharge, terminate, lay off or retire any Participant with
      or without cause, to discipline any Participant, or to otherwise affect
      the Company's right to make employment decisions with respect to any
      Participant.

Section 17.9 Indemnification and Exculpation

      17.9.1: Indemnification. Each person who is or shall have been a member of
      the Committee and each director, officer or employee of the Company or any
      Participating Subsidiary to whom any duty or power related to the
      administration or interpretation of the Plan may be delegated, shall be
      indemnified and held harmless by the Company against and from any and all
      loss, cost, liability or expense that may be imposed upon or reasonably
      incurred by him in connection with or resulting from any claim, action,
      suit or proceeding to which he may be or become a party or in which he may
      be or become involved by reason of any action taken or failure to act
      under the Plan and against and from any and all amounts paid by him in
      settlement thereof (with the Company's written approval) or paid by him in
      satisfaction of a judgment in any such action, suit or proceeding, except
      a judgment in favor of the Company based upon a finding of his bad faith;
      subject, however, to the condition that upon the institution of any claim,
      action, suit or proceeding against him, he shall in writing give the
      Company an opportunity, at its own expense, to handle and defend the same
      before he undertakes to handle and defend it on his own behalf. The
      foregoing right of indemnification shall not be exclusive of any other
      right to which such person may be entitled under the Company's Restated
      Certificate of Incorporation, as a matter of law or otherwise, or any
      power that the Company may have to indemnify him or hold him harmless.

      17.9.2: Exculpation. Each member of the Committee, and each director,
      officer and employee of the Company or of any Participating Subsidiary
      shall be fully justified in relying or acting upon in good faith any
      information furnished in connection with the administration of the Plan by
      any appropriate person or persons other than himself. In no event shall
      any person who is or shall have been a member of the Committee, or a
      director, officer or employee of the Company or any Participating
      Subsidiary be liable for any determination made or other action taken or
      any omission to act in reliance upon such report or information, or for
      any action (including the furnishing of information) taken or any failure
      to act, if in good faith.

Section 17.10 Communications

      17.10.1: Communications by the Committee. All notices, statements, reports
      and other communications made, delivered or transmitted to a Participant,
      Beneficiary or other person under the Plan shall be deemed to have been
      duly given, made or transmitted when delivered to, or when mailed by
      first-class mail, postage

                                      -16-
<PAGE>
      prepaid and addressed to such Participant, Beneficiary or other person at
      his address last appearing on the records of the Committee.

      17.10.2: Communications by the Participants and Others. All elections,
      designations, requests, notices, instructions and other communications
      made, delivered or transmitted by the Company or a Participating
      Subsidiary, Participant, Beneficiary or other person to the Committee
      required or permitted under the Plan shall be in such form as is
      prescribed from time to time by each such Committee, shall be mailed by
      first-class mail or delivered to such location as shall be specified by
      each such Committee, and shall be deemed to have been given and delivered
      only upon actual receipt thereof by such Committee at such location.

Section 17.11 Parties in Interest

      The provisions of the Plan and the terms and conditions of any Incentive
      Award shall, in accordance with their terms, be binding upon, and inure to
      the benefit of, all successors of each Participant, including, without
      limitation, such Participant's estate and the executors, administrators,
      or trustees thereof, heirs and legatees, and any receiver, trustee in
      bankruptcy or representative of creditors of such Participant. The terms
      of the Plan shall be binding upon the Company and its successors and
      assigns.

Section 17.12 No Strict Construction

      No rule of strict construction shall be implied against the Company, the
      Committee or any other person in the interpretation of any of the terms of
      the Plan, any Incentive Award granted under the Plan or any rule or
      procedure established by the Committee.

Section 17.13 Governing Law

      All questions pertaining to the validity, construction and administration
      of the Plan shall be determined with reference to, and the provisions of
      the Plan shall be governed by, and shall be construed in conformity with,
      the internal laws of the State of Delaware.

                                      -17-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00051-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00051-of-00352.parquet"}]]