(As adopted by the Board of Directors on
December 13, 2007) The Board of
Directors (the “Board”) of Hercules Incorporated (the “Corporation”)
has adopted this Code of Business Conduct and Ethics (this “Code”)
which shall apply to the entire Board. This Code is to help
Directors in the fulfillment of their duties of due care and loyalty
to the Corporation and its shareholders. It is intended to focus the
Board and each Director on some areas of ethical risk, provide
guidance to Directors to help them recognize and deal with ethical
issues, provide mechanisms to report unethical conduct, and help
foster a culture of honesty and accountability. Each Director must
comply with the letter and spirit of this Code. Without limiting the
foregoing, a Director should avoid activities that might be
reasonably understood or misunderstood by others to reflect poorly
on the Corporation or give the appearance of self-dealing,
unfairness, dishonesty, or improper Director Benefit. For purposes
of this Code, “Director Benefit” means a personal, professional, or
business benefit, gain, advantage, interest or profit of the
Director or any member of his or her immediate family. (It is noted
that New York Stock Exchange Rule 303A.02(b) defines “immediate
family” to include an individual’s spouse, parents, children,
siblings, mothers and fathers-in-law, sons and daughters-in-law,
brothers and sisters-in-law, and anyone (other than domestic
employees) who shares such individual’s home.)
No code or policy can anticipate every
situation that may arise. Accordingly, this Code is intended to
serve as a source of guiding principles for Directors. Directors are
encouraged to bring questions about particular circumstances that
may implicate one or more of the provisions of this Code to the
attention of the Chair of the Corporate Governance, Nominating and
Ethics Committee (the “Governance Committee”), who may consult with
advisors (including, without limitation, inside or outside legal
counsel) as such person deems appropriate.
Directors who also serve as officers of the
Corporation should comply with the letter and spirit of this Code as
well as the Corporation’s “Business Practices Policy for Hercules
Employees” and the Corporation’s “Code of Ethics for Senior
Financial Executives.”
If a law conflicts with a policy in this Code,
you must comply with the law.
This Code does not attempt to describe all
potential problem areas that could develop for a Director; however,
some of the more common problem areas are described below. When a
problem, question or situation arises and it is not described below,
then you should contact the Governance Committee (see Section 14 of
this Code). Without limiting the generality of the foregoing, if you
are in a situation which you believe may violate or lead to a
violation of this Code, follow the guidelines described in Section
14 of this Code.
- Conflict of Interest.
A “conflict of interest” occurs when an actual or potential
Director Benefit interferes, could reasonably be expected to
interfere, or could reasonably create the appearance of
interference in any way with the interests of the Corporation. A
conflict situation may arise when a Director takes actions or
has interests that may make it difficult to perform his or her
director duties objectively and effectively. Directors should be
scrupulous in avoiding conflicts of interest with the
Corporation. Any situation that involves, or may reasonably be
expected to involve or appear to involve, a conflict of interest
with the Corporation must be disclosed promptly to the Chair of
the Governance Committee. If the conflict of interest cannot be
reasonably resolved to the satisfaction of the Chair of the
Governance Committee, then the involved Director(s) should
recuse himself or herself and not participate in the discussion
and voting on any matter presented at a Board or Board committee
meeting related to the conflict of interest. If a conflict of
interest exists that cannot be resolved, the involved Director(s)
is expected to tender his or her resignation to the Chair of the
Board for consideration by the Governance Committee of the
continued appropriateness of Board service.
Loans to, or guarantees of the obligations of, a Director, or a
member of his or her immediate family, may create conflicts of
interest. Moreover, Section 13(k) of the Securities Exchange Act
of 1934 (the “Exchange Act”), as amended, generally makes it
unlawful for the Corporation to, directly or indirectly, extend
or maintain credit, arrange for the extension of credit, or
renew an extension of credit, in the form of a personal loan to
or for any Director or executive officer (or equivalent
thereof). Any loans or guarantees that may be made will be
disclosed to the shareholders.
A Director shall recuse himself or herself from any discussion
or decision involving or affecting an actual or potential
Director Benefit of such Director.
- Relationship of the Corporation with
Third Parties.
A Director may not engage in any conduct or activities that are
inconsistent with the Corporation’s best interests or that
disrupt or impair the Corporation’s relationship with a person
or entity with which the Corporation has or proposes to enter
into a business or contractual relationship. Without limiting
the foregoing, a Director should not attempt to use his or her
influence to cause the Corporation to use or not to use
particular company(ies), firm(s), or organization(s). However,
this does not prevent or inhibit a Director from making
recommendations about particular company(ies), firm(s), or
organization(s), or sharing with the Corporation or the Board
his or her knowledge of or past experience with particular
company(ies), firm(s), or organization(s).
- Compensation from Sources Other than
the Corporation.
A Director may not accept compensation, in any form, for
services performed for the Corporation from any source other
than the Corporation. Without limiting the foregoing, a Director
may not accept from others a commission, finder’s fee, or
similar remuneration for any business transaction in which the
Corporation is involved or for services rendered to the
Corporation.
- Gifts.
A Director and members of his or her immediate family may not
offer, give, or receive gift(s) (whether cash, non-cash, or
other) from persons or entities who deal with the Corporation in
those cases where any such gift is being made or could
reasonably appear to have been made in order to influence the
Director’s actions as a member of the Board or where acceptance
of the gift(s) could reasonably create or appear to create a
conflict of interest. In certain circumstances, a Director may
accept non-cash gift(s) (of a nominal fair market value),
provided that acceptance of such gift(s) is customary and
closely related to the Corporation’s business at hand and the
gift(s) are disclosed to the Chair of the Governance Committee
at the earliest opportunity.
- Corporate and Charitable Giving.
In furtherance of its business interests or corporate good
citizenry, the Corporation may make corporate gifts to
charitable organizations from time to time. Any Director who has
any significant interest in a charitable organization to which
the Corporation proposes to make a corporate gift shall promptly
inform the Chair of the Governance Committee of this situation,
and, thereafter, any corporate gifts by the Corporation to such
charitable organization (and appropriateness thereof) shall be
reviewed and approved by the Chair of the Governance Committee.
- Political Activities.
It is recognized that, as an individual, a Director may
become engaged in public service, partisan politics, or
political issues. A Director shall be sensitive that some people
may be unable to differentiate such Director’s personal view
from the view of the Board or of the Corporation. In furtherance
of such differentiation, a Director should do (except as
otherwise specifically approved by the Governance Committee) at
least the following: (a) where appropriate, make it clear that
the Director is speaking or acting personally and not as a
Director of the Corporation; (b) not make a political
contribution for or in the Corporation’s name, and Directors
will not receive reimbursement from the Corporation for any
political contribution made as an individual; (c) not endorse
for or in the Corporation’s name the appointment or election of
a public official or the passage or non-passage of any ballot
propositions; and (d) not use the Corporation’s materials or
property in public service, partisan politics, or political
issues activities.
- Corporate Opportunities.
A Director owes a duty to the Corporation to advance the
Corporation’s legitimate interests when the opportunity to do so
arises. A Director may not: (a) receive or seek to receive a
Director Benefit from opportunities that are discovered through
his or her involvement with the Corporation (including, without
limitation, his or her use of the Corporation’s property, the
Corporation’s information, or his or her position as a
Director); (b) use the Corporation’s property, the Corporation’s
information, or his or her position as a Director for his or her
personal gain or the personal gain of his or her immediate
family or (c) compete with the Corporation, directly or
indirectly, for business opportunities; provided, however, that,
if the Governance Committee finally determines that the
Corporation will not pursue an opportunity that relates to the
Corporation’s business activities, a Director may do so after
disclosing to such Committee that such Director will pursue such
opportunity.
- Confidentiality.
It is imperative that a Director maintain the
confidentiality of all information (whether belonging to the
Corporation or a party with whom the Corporation has a
relationship such as a customer, supplier, or business partner)
entrusted to him or her or that comes to him or her, from
whatever source, in his or her capacity as a Director, except
when disclosure is authorized by the Governance Committee or
required by laws or regulations. Confidential information
includes all non-public information (including private,
proprietary, and other) that might be of use to competitors or
harmful to the Corporation or its relationship parties (such as
customers, suppliers, and business partners) if disclosed.
- Protection and Proper Use of Assets of
the Corporation.
A Director shall protect the Corporation’s assets and ensure
their efficient use. Theft, loss, misuse, carelessness, and
waste of assets have a direct impact on the Corporation’s
profitability. Any suspected incident of fraud or theft should
be immediately reported to the Governance Committee for
investigation. A Director shall protect and not use or seek to
use the Corporation’s time, employees, supplies, equipment,
tools, buildings, or other assets (including without limitation,
proprietary information) for non-Corporation business, except as
part of an adopted or approved program or policy of the
Corporation available to all Directors.
The obligation to protect the Corporation’s proprietary
information includes intellectual property as well as business
plans, novel ideas, databases, records, salary information and
any unpublished financial data and reports. Unauthorized use or
distribution of proprietary information would violate the
Corporation’s policy. It could also be illegal and result in
civil or even criminal penalties.
- Competition and Fair Dealing.
A Director shall deal fairly and oversee fair and honest
dealing by employees and officers with the Corporation’s
Directors, officers, employees, customers, suppliers, and
competitors. Stealing proprietary information, possessing trade
secret information that was obtained improperly (e.g.,
unlawfully or without the owner’s consent or agreement or from
persons not having a legal right to disclose such information),
or inducing such disclosures by past or present directors,
officers, employees or agents of other companies is prohibited.
None of such persons should take unfair advantage of others
through manipulation, concealment, abuse of privileged
information, misrepresentation of material facts, or any other
unfair dealing practices.
- Compliance with Laws, Rules, and
Regulations.
A Director shall comply, and oversee compliance by
employees, officers, and other Directors, with all laws, rules,
and regulations of the United States (federal, state, and other)
and other countries applicable to the Corporation, including
insider trading laws and stock exchange rules and regulations.
Transactions, directly or indirectly, involving securities of
the Corporation should not be undertaken by Directors without
pre-clearance from the Corporation’s Chief Legal Officer or the
General Counsel. Such transactions do not include investments in
vehicles (such as mutual funds) where the Director is one of
many investors and the Director does not control or materially
influence the vehicles’ actions (if any) related to the
Corporation’s securities. All non-public information about the
Corporation should be considered confidential information and
shall not be used or shared for stock trading purposes or for
any other purpose except the conduct of the Corporation’s
business. To use non-public information for Director Benefit or
to “tip” others who might make an investment decision on the
basis of this information is not only unethical but also
illegal. If you have any questions, please consult the
Corporation’s Chief Legal Officer or the General Counsel.
- Payments to Government Personnel
The U.S. Foreign Corrupt Practices Act prohibits giving
anything of value, directly or indirectly, to officials of
foreign governments or foreign political candidates in order to
obtain or retain business. It is strictly prohibited to make
illegal payments to government officials of any country.
In addition, the U.S. government has a number of laws and
regulations regarding business gratuities which may be accepted
by U.S. government personnel. The promise, offer or delivery to
an official or employee of the U.S. government of a gift, favor
or other gratuity in violation of these rules would not only
violate the Corporation’s policy but could also be a criminal
offense. State and local governments, as well as foreign
governments, may have similar rules. The Corporation’s Chief
Legal Officer or the General Counsel can provide guidance to you
in this area.
- Encouraging the Reporting of Any
Illegal or Unethical Behavior.
A Director should promote ethical behavior and take steps to
ensure that the Corporation: (a) encourages employees to talk to
supervisors, managers and other appropriate personnel about
observed illegal or unethical behavior and, when in doubt, about
the best course of action in a particular situation; (b)
encourages employees to report to appropriate personnel
violations of laws, rules, or regulations of the Corporation’s
Business Practices Policy or Code of Ethics for Senior Financial
Executives or of other illegal or unethical conduct; and (c)
informs employees that the Corporation will not permit
retaliation for reports or complaints of illegal or unethical
conduct made in good faith.
- Failure to Comply; Compliance
Procedures.
A Director should communicate the failure of such Director or
any other Director to comply with any laws or regulations, any
rule governing the Corporation’s business, this Code, or any
other policy or requirement of the Corporation to the Chair of
the Governance Committee. Violations will be addressed by the
Governance Committee, which shall timely report them to the
Board for appropriate action. To the extent a Director who is
not an employee of the Corporation becomes aware of any failure
by any employee of the Corporation to comply with any laws or
regulations, any rule governing the Corporation’s business or
any other policy or requirement of the Corporation, such
Director should communicate such failure to the Corporation’s
Chief Executive Officer and, if appropriate, to the Chair of the
Governance Committee.
In some situations it is difficult to know if a violation has
occurred. Since we cannot anticipate every situation that will
arise, it is important that we have a way to approach a
borderline or new question or problem. While the duty of due
care and loyalty to the Corporation and its shareholders, and
the exercise of good judgment are guiding principles for all
questions or problems, the following steps should be kept in
mind when addressing a borderline or new question or problem:
● Always ask first, act later: If you are unsure of what
to do in any situation, seek guidance from the Governance
Committee before you act.
● Make sure you have all the facts. When seeking guidance,
disclose all the facts and relevant information that you have.
In order to reach the right solutions, we must be as fully
informed as possible.
● Ask yourself: What specifically am I being asked to do? Does
it seem unethical or improper? This will enable you to focus on
the specific question you are faced with, and the alternatives
you have. Use your good judgment and common sense; if something
seems unethical or improper, it probably is.
● Seek help from the Governance Committee. In situations where
it may not be appropriate to discuss an issue with the
Governance Committee, or where you do not feel comfortable
approaching the Governance Committee with your question, discuss
it with the Chief Legal Officer or the General Counsel.
- Accounting and Financial Reporting.
The Corporation’s policy is to comply with all financial
reporting and accounting regulations applicable to the
Corporation. A Director supports and upholds ethical behavior
and honesty as it pertains to the Corporation’s Financial
Reporting. If any Director has concerns or complaints regarding
questionable accounting or auditing matters of the Corporation,
then he or she shall submit those concerns or complaints to the
Chair of the Audit Committee promptly.
As a public company, it is of critical importance that the
Corporation’s filings with the Securities and Exchange
Commission be accurate and timely. A Director should encourage
management to take steps to ensure that the Corporation’s public
reports are complete, fair, and understandable.
- Annual Certification.
As part of the Directors and Officers Questionnaire sent
annually to Directors in connection with the Annual Meeting of
Shareholders, each Director will be asked to certify that he or
she has complied and is in compliance with this Code. Such
certification may be in substantially the following form:
“I, [insert name], hereby certify and acknowledge that: (i) I am
a member in good standing of the Board of Directors of Hercules
Incorporated; (ii) I have received, read, and understood the
“Hercules Incorporated Directors Code of Business Conduct and
Ethics”; (iii) such Code has been and is applicable to my
activities as a member of such Board of Directors; (iv) I have
complied and am in compliance with such Code; and (v) I am not
aware of any non-compliance with such Code by others.
Signed:
___________________________________
Name Printed:
____________________________________
Date: ________________________”
- Administration, Amendment,
Modification, and Waiver.
This Code is administered by the
Governance Committee and may be amended, modified, or waived by
the Board from time to time and/or in whole or in part, provided
that waivers may also be granted by the Governance Committee, in
accordance with the terms hereof and subject to the disclosure
and other provisions of the Securities Exchange Act of 1934, as
amended, and the rules thereunder, and the applicable rules of
the New York Stock Exchange.
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