FORM OF 2000 CHANGE-OF-CONTROL EMPLOYMENT AGREE

FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT BETWEEN HERCULES INCORPORATED AND CRAIG A. ROGERSON

 
 
 
                                CHANGE-OF-CONTROL
 
                              EMPLOYMENT AGREEMENT
 
 
         AGREEMENT, dated as of the ____ day of ________ 2000 (this
"Agreement"), by and between Hercules Incorporated, a Delaware corporation (the
"Company"), and ____________________ (the "Executive").
 
         WHEREAS, the Board of Directors of the Company (the "Board"), has
determined that it is in the best interests of the Company and its
shareholders/stockholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility, threat or
occurrence of a Change of Control (as defined herein). The Board believes it is
imperative to diminish the inevitable distraction of the Executive by virtue of
the personal uncertainties and risks created by a pending or threatened Change
of Control and to encourage the Executive's full attention and dedication to the
current Company and in the event of any threatened or pending Change of Control,
and to provide the Executive with compensation and benefits arrangements upon a
Change of Control that ensure that the compensation and benefits expectations of
the Executive will be satisfied and that are competitive with those of other
corporations. Therefore, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.
 
                 NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
 
SECTION 1. CERTAIN DEFINITIONS.
 
         (a) "Effective Date" means the first date during the Change of Control
Period (as defined herein) on which a Change of Control occurs. Notwithstanding
anything in this Agreement to the contrary, if a Change of Control occurs and if
the Executive's employment with the Company is terminated prior to the date on
which the Change of Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (1) was at the request of a third
party that has taken steps reasonably calculated to effect a Change of Control
or (2) otherwise arose in connection with or anticipation of a Change of
Control, then "Effective Date" means the date immediately prior to the date of
such termination of employment.
 
         (b) "Change of Control Period" means the period commencing on the date
hereof and ending on the third anniversary of the date hereof; provided,
however, that, commencing on the date one year after the date hereof, and on
each annual anniversary of such date (such date and each annual anniversary
thereof, the "Renewal Date"), unless previously terminated, the Change of
Control Period shall be automatically extended so as to terminate three years
from such Renewal Date, unless, at least 60 days prior to the Renewal Date, the
Company shall give notice to the Executive that the Change of Control Period
shall not be so extended.
 
         (c) "Affiliated Company" means any company controlled by, controlling
or under common control with the Company.
 
         (d) "Change of Control" means:
 
 
 
<PAGE>   2
 
 
                  (1) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "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 Section l(d), 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 Sections
l(d)(3)(A), l(d)(3)(B) and 1 (d) (3) (C).
 
                  (2) Individuals who, as of the date hereof, 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) Approval by the shareholders of the Company 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
 
 
                                       2
<PAGE>   3
 
                  (4) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
 
         (e) "Alternative Change of Control" means a Change of Control as
defined above, except that the phrase "Approval by the shareholder of the
Company" in clause (3) of Section 1 (d) shall be deemed to read "Consummation."
 
SECTION 2. EMPLOYMENT PERIOD. The Company hereby agrees to continue the
Executive in its employ, subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the third
anniversary of the Effective Date (the "Employment Period"). The Employment
Period shall terminate upon the Executive's termination of employment for any
reason.
 
SECTION 3. TERMS OF EMPLOYMENT.
 
         (a) POSITION AND DUTIES.
 
                  (1) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and assigned at any
time during the 120-day period immediately preceding the Effective Date and (B)
the Executive's services shall be performed at the office where the Executive
was employed immediately preceding the Effective Date or at any other location
less than 30 miles from such office.
 
                  (2) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period, it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that, to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.
 
         (b) COMPENSATION.
 
                  (1) BASE SALARY. During the Employment Period, the Executive
shall receive an annual base salary (the "Annual Base Salary") at an annual rate
at least equal to 12 times the highest monthly base salary paid or payable,
including any base salary that has been earned but deferred, to the Executive by
the Company and the Affiliated Companies in respect of the 12-month period
immediately preceding the month in which the Effective Date occurs. The
 
 
                                       3
<PAGE>   4
 
Annual Base Salary shall be paid at such intervals as the Company pays executive
salaries generally. During the Employment Period, the Annual Base Salary shall
be reviewed at least annually, beginning no more than 12 months after the last
salary increase awarded to the Executive prior to the Effective Date. Any
increase in the Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. The Annual Base Salary shall
not be reduced after any such increase and the term "Annual Base Salary" shall
refer to the Annual Base Salary as so increased.
 
                  (2) ANNUAL BONUS. In addition to the Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus (the "Annual Bonus") in cash at least equal to the
Executive's Recent Target Bonus, as DEFINED in the next sentence. The "Recent
Target Bonus" means the Annual Base Salary times a percentage equal to the
percentage of base salary most recently established, before the Effective Date,
for purposes of determining the Executive's target bonus under the Company's
Management Incentive Compensation Plan or any predecessor or successor plan (the
"MICP"). Each such Annual Bonus shall be paid no later than the end of the third
month of the fiscal year next following the fiscal year for which the Annual
Bonus is awarded, unless the Executive shall elect to defer the receipt of such
Annual Bonus. Any bonus paid to the Executive under the MICP as a result of the
Change of Control (a "Change of Control Bonus") shall be taken into account in
determining whether the requirements of this Section 3(b)(2) have been met with
respect to the fiscal year in which the Change of Control occurs.
 
                  (3) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the
Employment Period, the Executive shall be entitled to participate in all cash
incentive, equity incentive, savings and retirement plans, practices, policies,
and programs applicable generally to other peer executives of the Company and
the Affiliated Companies, but in no event shall such plans, practices, policies
and programs provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the extent, if
any, that such distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the aggregate, than the
most favorable of those provided by the Company and the Affiliated Companies for
the Executive under such plans, practices, policies and programs as in effect at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive, those provided generally at any time after
the Effective Date to other peer executives of the Company and the Affiliated
Companies. The Executive shall also continue to be entitled to any supplemental
pension benefits to which he may be entitled pursuant to any individual
agreement with the company or any Affiliated Companies (collectively, "Enhanced
Pension Benefits").
 
                  (4) WELFARE BENEFIT PLANS. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and the Affiliated
Companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and the Affiliated Companies, but in no event shall
such plans, practices, policies and programs provide the Executive with benefits
that are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive at any
 
 
                                       4
<PAGE>   5
 
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and the Affiliated
Companies.
 
                  (5) EXPENSES. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and the Affiliated Companies in effect
for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and the Affiliated Companies.
 
                  (6) FRINGE BENEFITS. During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without limitation,
tax and financial planning services, payment of club dues, and, if applicable,
use of an automobile and payment of related expenses, in accordance with the
most favorable plans, practices, programs and policies of the Company and the
Affiliated Companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and the Affiliated Companies.
 
                  (7) OFFICE AND SUPPORT STAFF. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and the Affiliated Companies at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated Companies.
 
                  (8) VACATION. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and the Affiliated Companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and the Affiliated Companies.
 
SECTION 4. TERMINATION OF EMPLOYMENT.
 
         (a) DEATH OR DISABILITY. The Executive's employment shall terminate
automatically if the Executive dies during the Employment Period. If the Company
determines in good faith that the Disability (as defined herein) of the
Executive has occurred during the Employment Period (pursuant to the definition
of "Disability"), it may give to the Executive written notice in accordance with
Section 11(b) of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties. "Disability" means the absence of the
 
 
                                       5
<PAGE>   6
 
Executive from the Executive's duties with the Company on a full-time basis for
180 consecutive business days as a result of incapacity due to mental or
physical illness that is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative.
 
         (b) CAUSE. The Company may terminate the Executive's employment during
the Employment Period for Cause. "Cause" means:
 
                  (1) the willful and continued failure of the Executive to
perform substantially the Executive's duties (as contemplated by Section
3(a)(1)(A)) with the Company or any Affiliated Company (other than any such
failure resulting from incapacity due to physical or mental illness or following
the Executive's delivery of a Notice of Termination for Good Reason), after a
written demand for substantial performance is delivered to the Executive by the
Board or the Chief Executive Officer of the Company that specifically identifies
the manner in which the Board or the Chief Executive Officer of the Company
believes that the Executive has not substantially performed the Executive's
duties, or
 
                  (2) the willful engaging by the Executive in illegal conduct
or gross misconduct that is materially and demonstrably injurious to the
Company.
 
For purposes of this Section 4(b), no act, or failure to act, on the part of the
Executive shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer of
the Company or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive shall not be deemed to be
for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board (excluding the Executive,
if the Executive is a member of the Board) at a meeting of the Board called and
held for such purpose (after reasonable notice is provided to the Executive and
the Executive is given an opportunity, together with counsel for the Executive,
to be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in Section 4(b)(1) or
4(b)(2), and specifying the particulars thereof in detail.
 
         (c) GOOD REASON. The Executive's employment may be terminated by the
Executive for Good Reason or by the Executive voluntarily without Good Reason.
"Good Reason" means:
 
                  (1) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as
contemplated by Section 3(a), or any other diminution in such position,
authority, duties or responsibilities (whether or not occurring solely as a
result of the Company's ceasing to be a publicly traded entity), excluding for
this purpose an isolated,
 
 
                                       6
<PAGE>   7
 
insubstantial and inadvertent action not taken in bad faith and that is remedied
by the Company promptly after receipt of notice thereof given by the Executive;
 
                  (2) any failure by the Company to comply with any of the
provisions of Section 3(b), other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and that is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
 
                  (3) the Company's requiring the Executive (i) to be based at
any office or location other than as provided in Section 3(a)(1)(B), (ii) to be
based at a location other than the principal executive offices of the Company if
the Executive was employed at such location immediately preceding the Effective
Date, or (iii) to travel on Company business to a substantially greater extent
than required immediately prior to the Effective Date;
 
                  (4) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;
or
 
                  (5) any failure by the Company to comply with and satisfy
Section 10(c).
 
For purposes of this Section 4(c), any good faith determination of Good Reason
made by the Executive shall be conclusive. The Executive's mental or physical
incapacity following the occurrence of an event described above in clauses (1)
through (5) shall not affect the Executive's ability to terminate employment for
Good Reason.
 
         (d) NOTICE OF TERMINATION. Any termination by the Company for Cause, or
by the Executive for Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 11(b). "Notice of
Termination" means a written notice that (1) indicates the specific termination
provision in this Agreement relied upon, (2) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated, and (3) if the Date of Termination (as defined herein) is other than
the date of receipt of such notice, specifies the Date of Termination (which
Date of Termination shall be not more than 30 days after the giving of such
notice). The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance that contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executive's or the
Company's respective rights hereunder.
 
         (e) DATE OF TERMINATION. "Date of Termination" means (1) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified in the Notice of Termination, (which date shall not be
more than 30 days after the giving of such notice), as the case may be, (2) if
the Executive's employment is terminated by the Company other than for Cause or
Disability, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination, and (3) if the Executive's
employment is terminated by reason of
 
 
                                       7
<PAGE>   8
 
death or Disability, the Date of Termination shall be the date of death of the
Executive or the Disability Effective Date, as the case may be.
 
SECTION 5. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
 
         (a) GOOD REASON; OTHER THAN FOR CAUSE, DEATH OR DISABILITY. If, during
the Employment Period, the Company terminates the Executive's employment other
than for Cause or Disability or the Executive terminates employment for Good
Reason:
 
                  (1) the Company shall pay to the Executive, in a lump sum in
cash within 30 days after the Date of Termination, the aggregate of the
following amounts:
 
                           (A) the sum of: (i) the Executive's Annual Base
         Salary through the Date of Termination to the extent not theretofore
         paid; (ii) the product of (x) the higher of (I) the Recent Target Bonus
         and (II) the Annual Bonus paid or payable, including any bonus or
         portion thereof that has been earned but deferred (and annualized for
         any fiscal year consisting of less than 12 full months or during which
         the Executive was employed for less than 12 full months), for the most
         recently completed fiscal year during the Employment Period, if any
         (such higher amount, the "Highest Annual Bonus") and (y) a fraction,
         the numerator of which is the number of days in the current fiscal year
         through the Date of Termination and the denominator of which is 365;
         provided, that if the Date of Termination occurs in the same fiscal
         year as the Change of Control, then such product shall be reduced (but
         not below zero) by the amount of any Change of Control Bonus payable to
         the Executive; and (iii) any accrued vacation pay, in each case, to the
         extent not theretofore paid (the sum of the amounts described in
         subclauses (i), (ii) and (iii), the "Accrued Obligations");
 
                           (B) the amount equal to the product of (i) three and
         (ii) the sum of (x) the Executive's Annual Base Salary and (y) the
         Highest Annual Bonus; and
 
                           (C) an amount equal to the excess of (i) the
         actuarial equivalent of the benefit under the Company's qualified
         defined benefit retirement plan (the "Retirement Plan") (utilizing
         actuarial assumptions no less favorable to the Executive than those in
         effect under the Retirement Plan immediately prior to the Effective
         Date), any excess or supplemental retirement plan in which the
         Executive participates (collectively, the "SERP") and any Enhanced
         Pension Benefits that the Executive would receive if the Executive's
         employment had continued for a number of years and fractions of years
         equal to the sum of (1) one or, if greater, the number of years and
         fractions of years from the Date of Termination through the third
         anniversary of the Change of Control (the "Continuation Period") plus
         (II) three years, and had achieved an age equal to the (x) Executive's
         actual age, plus (y) the number of years and fractions of years in the
         Continuation Period, plus (z) such additional number of years and
         fractions thereof, as may be necessary for the Executive to be eligible
         for unreduced early retirement benefits under the Retirement Plan, the
         SERP and the Enhanced Pension Benefits (if any), but the number
         described in this clause (z) shall not
 
 
                                       8
<PAGE>   9
 
         exceed five; with the foregoing calculations being made with the
         assumptions that all accrued benefits are fully vested, and that the
         Executive's compensation during the period of assumed continued
         employment is that required by Sections 3(b)(1) and 3(b)(2); over (ii)
         the actuarial equivalent of the Executive's actual benefit (paid or
         payable), if any, under the Retirement Plan, the SERP and the Enhanced
         Pension Benefits (if any) as of the Date of Termination;
 
 
                  (2) for three years after the Executive's Date of Termination,
or such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue welfare and fringe
benefits to the Executive and/or the Executive's family at least equal to those
that would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 3(b)(4) and (6) if the Executive's
employment had not been terminated or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and the Affiliated Companies and their families, provided, however,
that, if the Executive becomes reemployed with another employer and is eligible
to receive medical or other welfare benefits under another employer provided
plan, the medical and other welfare benefits described herein shall be secondary
to those provided under such other plan during such applicable period of
eligibility; and for purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits pursuant to such
plans, practices, programs and policies, the Executive shall be considered to
have remained employed until three years after the Date of Termination and to
have retired on the last day of such period;
 
                  (3) the Company shall, at its sole expense as incurred,
provide the Executive with outplacement services the scope and provider of which
shall be selected by the Executive in the Executive's sole discretion provided,
that the cost of such outplacement shall not exceed $50,000;
 
                  (4) all stock options and restricted stock held by the
Executive immediately before the Date of Termination shall vest in full, and
such stock options shall remain exercisable until the first to occur of the
first anniversary of the Date of Termination and the expiration of their
original terms; and
 
                  (5) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or that the Executive is eligible to
receive under any plan, program, policy or practice or contract or agreement of
the Company and the Affiliated Companies (such other amounts and benefits, the
"Other Benefits").
 
         (b) DEATH. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, the Company shall provide the
Executive's estate or beneficiaries with the Accrued Obligations and the timely
payment or delivery of the Other Benefits, and shall have no other severance
obligations under this Agreement. The Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of the Other
Benefits, the term "Other Benefits" as utilized in this Section 5(b) shall
include, without limitation, and the Executive's estate and/or beneficiaries
shall be entitled to receive,
 
 
                                       9
<PAGE>   10
 
benefits at least equal to the most favorable benefits provided by the Company
and the Affiliated Companies to the estates and beneficiaries of peer executives
of the Company and the Affiliated Companies under such plans, programs,
practices and policies relating to death benefits, if any, as in effect with
respect to other peer executives and their beneficiaries at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to
the Executive's estate and/or the Executive's beneficiaries, as in effect on the
date of the Executive's death with respect to other peer executives of the
Company and the Affiliated Companies and their beneficiaries.
 
         (c) DISABILITY. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, the Company shall
provide the Executive with the Accrued Obligations and the timely payment or
delivery of the Other Benefits, and shall have no other severance obligations
under this Agreement. The Accrued Obligations shall be paid to the Executive in
a lump sum in cash within 30 days of the Date of Termination. With respect to
the provision of the Other Benefits, the term "Other Benefits" as utilized in
this Section 6(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least
equal to the most favorable of those generally provided by the Company and the
Affiliated Companies to disabled executives and/or their families in accordance
with such plans, programs, practices and policies relating to disability, if
any, as in effect generally with respect to other peer executives and their
families at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive's
family, as in effect at any time thereafter generally with respect to other peer
executives of the Company and the Affiliated Companies and their families.
 
         (d) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's employment is
terminated for Cause during the Employment Period, the Company shall provide to
the Executive (1) the Executive's Annual Base Salary through the Date of
Termination, (2) the amount of any compensation previously deferred by the
Executive, and (3) the Other Benefits, in each case, to the extent theretofore
unpaid, and shall have no other severance obligations under this Agreement. If
the Executive voluntarily terminates employment during the Employment Period,
excluding a termination for Good Reason, the Company shall provide to the
Executive the Accrued Obligations and the timely payment or delivery of the
Other Benefits, and shall have no other severance obligations under this
Agreement. In such case, all the Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination.
 
SECTION 6. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or the Affiliated Companies and for
which the Executive may qualify, nor, subject to Section 11(f), shall anything
herein limit or otherwise affect such rights as the Executive may have under any
other contract or agreement with the Company or the Affiliated Companies.
Amounts that are vested benefits or that the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with the Company or the Affiliated Companies at or subsequent to the
Date of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement, except as explicitly modified by
this Agreement. Notwithstanding the foregoing, if the Executive receives
payments and benefits pursuant to Section 5(a) of this Agreement, the Executive
shall not be entitled to any severance pay or benefits under any severance plan,
 
 
                                       10
<PAGE>   11
 
program or policy of the Company and the Affiliated Companies, including without
limitation the Executive Severance Plan, unless otherwise specifically provided
therein in a specific reference to this Agreement.
 
SECTION 7. FULL SETTLEMENT; CONTESTS.
 
         (a) The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense, or other claim,
right or action that the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement, and such amounts shall not be reduced
whether or not the Executive obtains other employment.
 
         (b) The Company agrees to pay as incurred (within 10 days following the
Company's receipt of an invoice from the Executive), to the full extent
permitted by law, all legal fees and expenses that the Executive may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus, in each case, interest on any
delayed payment at the applicable federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
Notwithstanding the foregoing, the Company shall have no obligation to pay the
Executive's legal fees and expenses in connection with any action initiated by
the Executive as to which the trier of fact finds that the Executive's claim was
frivolous or brought in bad faith.
 
SECTION 8. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
 
         (a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution in the nature of
compensation (within the meaning of Section 28OG(b)(2) of the Code) to or for
the benefit of the Executive, whether paid or payable pursuant to this Agreement
or otherwise (a "Payment"), would be subject to the excise tax imposed by
Section 4999 of the Code, together with any interest or penalties imposed with
respect to such excise tax (the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (the "Gross-Up Payment") in an amount
such that, after payment by the Executive of all taxes (and any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
 
         (b) Subject to the provisions of Section 8(c), all determinations
required to be made under this Section 8, including whether and when a Gross-Up
Payment is required, the amount of such Gross-Up Payment and the assumptions to
be utilized in arriving at such determination, shall be made by
PriceWaterhouseCoopers (the "Accounting Firm"). The Accounting Firm shall
provide detailed supporting calculations both to the Company and the Executive
within 15 business days of the receipt of notice from the Executive that there
has been
 
 
                                       11
<PAGE>   12
 
a Payment or such earlier time as is requested by the Company. In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, the Executive may appoint
another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 8, shall be paid by the Company to the Executive within 5 days of
the receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments that will not have been made by the Company should have been
made (the "Underpayment"), consistent with the calculations required to be made
hereunder. In the event the Company exhausts its remedies pursuant to Section
8(c) and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive.
 
         (c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable, but no later than 10 business days after the Executive is informed
in writing of such claim. The Executive shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that the Company desires to contest such claim,
the Executive shall:
 
                  (1) give the Company any information reasonably requested by
the Company relating to such claim,
 
                  (2) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
 
                  (3) cooperate with the Company in good faith in order
effectively to contest such claim, and
 
                  (4) permit the Company to participate in any proceedings
relating to such claim;
 
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest, and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties) imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this Section 8(c),
the
 
 
                                       12
<PAGE>   13
 
Company shall control all proceedings taken in connection with such contest,
and, at its sole discretion, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the applicable taxing
authority in respect of such claim and may, at its sole discretion, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that, if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties) imposed with respect to such
advance or with respect to any imputed income in connection with such advance;
and provided, further, that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which the Gross-Up Payment would be payable hereunder,
and the Executive shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing
authority.
 
         (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 8(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 8(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 8(c), a determination is made that
the Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
 
         (e) Notwithstanding any other provision of this Section 8, the Company
may, in its sole discretion, withhold and pay over to the Internal Revenue
Service or any other applicable taxing authority, for the benefit of the
Executive, all or any portion of the Gross-Up Payment, and the Executive hereby
consents to such withholding.
 
SECTION 9. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or the Affiliated Companies, and their
respective businesses, which information, knowledge or data shall have been
obtained by the Executive during the Executive's employment by the Company or
the Affiliated Companies and which information, knowledge or data shall not be
or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive's employment with the Company, the Executive shall
not, without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those persons designated
by the Company. In no event shall an asserted violation of the provisions of
 
 
                                       13
<PAGE>   14
 
this Section 9 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
 
SECTION 10. SUCCESSORS.
 
         (a) This Agreement is personal to the Executive, and, without the prior
written consent of the Company, shall not be assignable by the Executive other
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Executive's legal representatives.
 
         (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns. Except as provided in Section 10(c),
without the prior written consent of the Executive this Agreement shall not be
assignable by the Company.
 
         (c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
"Company" means the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid that assumes and agrees to perform this
Agreement by operation of law or otherwise.
 
SECTION 11. MISCELLANEOUS.
 
         (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified other than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
 
         (b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
 
                  if to the Executive:
 
                  Hercules Incorporated
                  Hercules Plaza
                  Wilmington, Delaware 19894-0001
 
                  if to the Company:
 
                  Hercules Incorporated
                  Hercules Plaza
                  Wilmington, Delaware 19894-0001
 
                  Attn: Chief Executive Officer
 
 
                                       14
<PAGE>   15
 
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
 
         (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
 
         (d) The Company may withhold from any amounts payable under this
Agreement such United States federal, state or local or foreign taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
 
         (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Sections 4(c)(1) through 4(c)(5), shall not be deemed to be a waiver
of such provision or right or any other provision or right of this Agreement.
 
         (f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will"
and, subject to Section 1(a), prior to the Effective Date, the Executive's
employment may be terminated by either the Executive or the Company at any time
prior to the Effective Date, in which case the Executive shall have no further
rights under this Agreement. From and after the Effective Date, except as
specifically provided herein, this Agreement shall supersede any other agreement
between the parties with respect to the subject matter hereof.
 
 
 
                                       15
<PAGE>   16
 
 
         IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from the Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.
 
 
 
                                        ________________________________________
                                                      [Executive]
 
                                        HERCULES INCORPORATED
 
 
                                        By______________________________________
                                           President and Chief Executive Officer
 
Attest:
 
______________________________
Secretary
 
 
 
 
 
 
                                       16
 
 
Top of the Document

 

 

FIRST AMENDMENT TO THE

EMPLOYMENT AGREEMENT

BETWEEN HERCULES INCORPORATED AND

CRAIG A. ROGERSON

 

In consideration of the continued employment of the Executive with the Company, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Employment Agreement between Hercules Incorporated (the “Company”) and Craig A. Rogerson (the “Executive”), dated August 24, 2000 (the “Agreement”), is hereby amended as follows:

 

1.                                       Section 5(a)(1)(C) of the Agreement is amended in its entirety to read as follows:

 

“(C) an amount determined under this subparagraph (C) payable under SERP (as defined below) and computed as follows:

 

The Executive shall be entitled to be paid a retirement pension under the Company’s tax-qualified defined benefit retirement plan (the “Retirement Plan”), any excess or supplemental retirement plan in which the Executive participates (collectively, the “SERP”), and any Enhanced Pension Benefits (as defined in Section (3)(b)(3)) that the Executive is entitled to receive (collectively, the “Retirement Programs”), in an amount equal to the greater of:

 

(i) an amount computed in accordance with the terms of the Retirement Programs in effect immediately prior to a Change of Control of the Company and as if those terms were in effect on the Date of Termination, or

 

(ii) an amount computed in accordance with the terms of the Retirement Programs in effect on the Date of Termination; in the case of either clause (i) or (ii), less

 

(iii) the amount of retirement pension actually to be paid to the Executive under the Retirement Programs in the absence of this subparagraph (C).

 

In computing the amounts of the Executive’s retirement pension under clauses (i) and (ii) above, (I) the Company shall use the Executive’s “Average Monthly Earnings” determined under the SERP as of the Date of Termination, except that for purposes of calculating “Average Monthly Earnings”, the Company shall during the three years of Company service which are to be added to the Executive’s actual Company service under clause (III) below, use Annual Base Salary and the Highest Annual Bonus

 



 

for each of such three years; (II) if the Executive is not yet vested in the Executive’s benefit under the Retirement Plan (even with the addition of three years of age and three years of Company Service Credit as provided in clause (III) below), for purposes of this provision, the Executive shall become vested as of the Executive’s Date of Termination, and (III) three years shall be added to the Executive’s actual age and three years shall be added to the Executive’s actual Company service credit under the Retirement Programs as of the Executive’s Date of Termination so that the Executive’s retirement pension under clauses (i) and (ii) above will be the amount it would have been if the Executive had been three years older than the Executive actually was, and the Executive had three years more Company service credit than the Executive actually had, on the Date of Termination.

 

The benefits under this subparagraph (C) shall be calculated under such one of the following options as would produce the highest lump sum payment:

 

(I) using the same factors (interest rate and mortality) as lump sum payments are made under the Retirement Plan (or Pension Plan of Hercules Incorporated) as in effect immediately prior to a Change of Control of the Company; or

 

(II) using the same factors (interest rate and mortality) as lump sum payments are made under the Retirement Plan (or Pension Plan of Hercules Incorporated) as in effect on the Date of Termination.

 

In the event the Executive does not otherwise meet the requirements of the SERP for an immediate lump sum payout from the SERP because of the Executive’s age or service with the Company, the Executive shall nevertheless be entitled to receive the lump sum payment under this subparagraph (C) as provided above.

 

The Executive may, at the Executive’s option, irrevocably choose to have the benefits paid under the terms of the SERP, rather than as a lump sum payment.

 

2.                                       Notwithstanding this First Amendment, the remaining provisions of the Agreement shall remain in full force and effect.

 

3.                                       The provisions of this First Amendment shall be effective as of October 26, 2001.

 

2



 

 

HERCULES INCORPORATED

 

 

 

By:

 

 

 

 

 

Date:

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

 

Date:

 

 

 

 

 

 

 

 

3