1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the period ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
------------ -------------
ChemFirst Inc. Commission file number 333-157-89
CHEMFIRST INC.
401(K) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
700 North Street
Post Office Box 1249
Jackson, Mississippi 39215-1249
CHEMFIRST INC.
700 North Street
Post Office Box 1249
Jackson, Mississippi 39215-1249
2
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Financial Statements and Schedules
December 31, 1997 and 1996 and June 30, 1996 and 1995
(With Independent Auditors' Report Thereon)
3
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Index to Financial Statements and Schedules
Independent Auditors' Report
Statements of Net Assets Available for Benefits as of December 31, 1997 and 1996
Statements of Changes in Net Assets Available for Benefits for the year ended
December 31, 1997 the six months ended December 31, 1996 and the years
ended June 30, 1996 and 1995
Notes to Financial Statements
Supplemental Schedules:
I. Item 27a - Schedule of Assets Held for Investment Purposes as of December
31, 1997
II. Item 27d - Schedule of Reportable Transactions for the year ended December
31, 1997
All other schedules are omitted because they are not required under Department
of Labor Regulations.
4
Independent Auditors' Report
The Employee Benefits Committee
ChemFirst Inc.:
We have audited the financial statements and supplemental schedules of ChemFirst
Inc. 401(k) Savings and Employee Stock Ownership Plan (the Plan) as listed in
the accompanying index. These financial statements and supplemental schedules
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements and supplemental schedules
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of ChemFirst Inc.
401(k) Savings and Employee Stock Ownership Plan as of December 31, 1997 and
1996 and the changes in net assets available for benefits for the year ended
December 31, 1997, the six months ended December 31, 1996 and each of the years
in the two-year period ended June 30, 1996, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules referred to
above are not a required part of the basic financial statements but are
supplementary information required by Regulation S-X or by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audit of the December 31,
1997 basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the December 31, 1997 basic financial
statements taken as a whole.
/s/ KPMG PEAT MARWICK LLP
----------------------------------
KPMG Peat Marwick LLP
May 21, 1998
5
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Benefits
December 31, 1997 and 1996
1997 1996
---- ----
Investments:
Mutual funds, at fair value (cost $30,547,600
and $26,627,157, respectively) $ 32,487,121 28,015,051
Participant loans, at cost which approximates
fair value 2,026,549 1,811,942
ChemFirst Inc. common stock, at fair value
(cost $7,223,665 and $2,987,903, respectively)
(note 1(a)) 13,151,307 6,641,672
Getchell Gold Corporation common stock,
at fair value (cost $680,324 and $809,816,
respectively) (note 1(a)) 2,299,203 4,299,266
Mississippi Chemical Corporation common stock,
at fair value (cost $1,285,618 and $2,254,308,
respectively) (note 1(a)) 1,000,374 2,302,273
-------------- ---------------
Total investments 50,964,554 43,070,204
-------------- ---------------
Receivables:
Employers' and participants' contributions 558,914 316,110
Dividends -- 158,383
Due from participants 770 3,000
-------------- ---------------
Total receivables 559,684 477,493
-------------- ---------------
Net assets available for benefits $ 51,524,238 43,547,697
============== ===============
See accompanying notes to financial statements.
6
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Benefits
Year ended December 31, 1997, six months ended December 31,
1996 and years ended June 30, 1996 and 1995
Year ended Six months ended Year ended June 30,
December 31, December 31, ----------------------
1997 1996 1996 1995
----------- ----------------- ---------- ----------
Contributions (note 6):
Participants $2,538,650 1,261,378 2,411,273 2,435,199
Employers 1,582,170 698,150 1,366,279 1,449,582
---------- ---------- ---------- ----------
Total contributions 4,120,820 1,959,528 3,777,552 3,884,781
---------- ---------- ---------- ----------
Investment income:
Interest income 180,292 86,126 125,679 117,506
Dividend income:
ChemFirst Inc. common stock
(note 1(a)) 185,331 56,836 102,070 89,244
Mississippi Chemical Corporation
common stock 32,507 -- -- --
Mutual funds 3,667,340 1,743,620 1,664,078 1,148,652
---------- ---------- ---------- ----------
Total dividend income 3,885,178 1,800,456 1,766,148 1,237,896
---------- ---------- ---------- ----------
Realized gains (losses) on investments, net (note 5):
Mutual funds 609,712 789,885 578,166 26,673
ChemFirst Inc. common stock
(note 1(a)) 916,031 1,441,326 861,525 599,385
Getchell Gold Corporation
common stock (note 1(a)) 544,213 510,129 1,384,241 130,327
Mississippi Chemical Corporation
common stock (73,169) -- -- --
---------- ---------- ---------- ----------
Net realized gains 1,996,787 2,741,340 2,823,932 756,385
---------- ---------- ---------- ----------
Unrealized appreciation (depreciation)
of investments, net (note 8) (297,879) 696,374 969,120 6,170,323
Advisory fees (133,698) (21,489) (109,095) (148,168)
---------- ---------- ---------- ----------
Net investment income 5,630,680 5,302,807 5,575,784 8,133,942
---------- ---------- ---------- ----------
(Continued)
7
2
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Benefits
Year ended Six months ended Year ended June 30,
December 31, December 31, ----------------------
1997 1996 1996 1995
----------- ----------------- ---------- ----------
Rollovers (note 7) 522,231 351,534 240,514 65,847
Transfers of ESOP participant account
balances (note 1(b)) 3,432,074 -- -- --
Transfers from PCS Phosphates, Inc.
Employee Savings Plan (note 7) -- -- 133,944 --
Withdrawals and terminations, net
of forfeitures (2,903,167) (1,563,277) (1,870,551) (1,596,682)
Transfer of Getchell Gold Corporation
participant account balances (note 1(a)) -- -- (3,084,813) --
Transfer of fertilizer business participant
account balances (note 1(a)) (2,826,097) -- -- --
------------ ------------ ------------ ------------
Net increase in assets
available for benefits 7,976,541 6,050,592 4,772,430 10,487,888
Net assets available for benefits:
Beginning of period 43,547,697 37,497,105 32,724,675 22,236,787
------------ ------------ ------------ ------------
End of period $ 51,524,238 43,547,697 37,497,105 32,724,675
============ ============ ============ ============
See accompanying notes to financial statements.
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CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1997 and 1996
(1) Description of Plan
The following brief description of ChemFirst Inc. 401(k) Savings and
Employee Stock Ownership Plan (the Plan) is provided for general
information purposes only. Participants should refer to the Plan
agreement for more complete information.
(a) Change in Organization of Plan's Sponsor
In December 1996, First Mississippi Corporation contributed all of
its assets and subsidiaries, other than those relating to its
fertilizer business, to ChemFirst Inc. (the Company or
ChemFirst), which at the time was a wholly-owned subsidiary of
First Mississippi Corporation and had engaged in no business
activities during the previous five years. First Mississippi
Corporation then spun off ChemFirst Inc. in a tax-free
distribution of ChemFirst's common stock to First Mississippi
Corporation's shareholders. This distribution occurred
immediately before and in connection with the merger of First
Mississippi Corporation with a wholly-owned subsidiary of
Mississippi Chemical Corporation (MCC) on December 24, 1996. The
merger consideration consisted of 0.3340026 shares of MCC stock
in exchange for each share of First Mississippi Corporation
stock. Cash was paid in settlement of fractional shares. In
addition, First Mississippi Corporation debt was refinanced and
increased to approximately $150,000,000 and then assumed by MCC.
After the refinancing and payment of certain expenses, cash of
approximately $50,000,000 was transferred to ChemFirst. These
transactions were accounted for as a disposal of the fertilizer
business of First Mississippi Corporation and a name change to
ChemFirst Inc. The name of the Plan was also changed and the
Plan's fiscal year was changed from June 30 to December 31.
Receipt of the MCC shares in exchange for First Mississippi
Corporation stock resulted in a realized gain of $1,513,202
based on the excess of the fair value of the shares on the date
of the exchange over their apportioned cost. In connection with
the spin-off, some of the participant accounts of employees of
the fertilizer business, which was acquired by Mississippi
Chemical Corporation, were transferred from the Plan during
1997.
(Continued)
9
2
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
On October 20, 1995, First Mississippi distributed its shares of
Getchell Gold Corporation to the First Mississippi shareholders
in a spin-off transaction. In connection with the spin-off, the
participant accounts of employees of Getchell Gold Corporation
were transferred from the Plan during the year ended June 30,
1996.
(b) General
The ChemFirst Inc. 401(k) Savings Plan became effective July 1,
1974. The ChemFirst Inc. Employee Stock Ownership Plan became
effective January 1, 1978. The two plans were merged and
restated as the ChemFirst Inc. 401(k) Savings and Employee Stock
Ownership Plan effective January 1, 1997. The 401(k) Savings
Plan is the surviving plan.
The Plan is a defined contribution plan subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended
(ERISA). The Plan currently covers substantially all employees
of the Company and its subsidiaries.
(c) Eligibility
An employee is eligible to participate in the Plan on the first day
of the month which coincides with or next follows the completion
of six months of employment. Beginning January 1, 1998, an
employee will become a participant in the Plan on the first day
of employment. The Plan is available to all employee
classifications except leased employees, temporary employees and
members of a legally recognized collective bargaining unit not
expressly granted permission to participate. Temporary employees
include co-op students and persons hired for a specific period
of time, a specific project or group of assignments.
(d) Contributions
The 401(k) provisions of the Plan allow deferral of tax by the
participants on their contributions and earnings thereon. Plan
participants may elect to contribute from 1% to 15% of monthly
base pay to the Plan, subject to regulatory limitations. The
Company matches these 401(k) contributions up to 4% of monthly
base pay. At December 31, 1997 and 1996 and at June 30, 1996 and
1995, 809, 925, 924 and 990 participants, respectively, were
participating in the Plan.
(Continued)
10
3
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
Additionally, the Company may elect to make a contribution to the
Plan under the employee stock ownership provisions of the Plan.
The contribution, if any, will be an amount determined and
authorized by the Board of Directors of the Company and will be
allocated by the ratio of each eligible participant's
compensation to the total compensation of all eligible
participants.
(e) Investment Options
Participants may elect to have their 401(k) contributions and
allocated earnings thereon invested in any combination of the
following investment programs:
(i) Capital Preservation Fund - This fund was established in
1995 and consists primarily of investments in money market
instruments.
(ii) Short-term Stability Fund - Consists primarily of
investments in fixed income mutual funds.
(iii) Mid-term Balanced Fund - Consists primarily of investments
in fixed income and equity mutual funds.
(iv) Long-term Growth Fund - Consists primarily of investments
in equity mutual funds.
(v) Aggressive Growth Fund - This fund was established in 1996
and consists primarily of investments in small cap and
emerging market mutual funds.
(vi) ChemFirst Inc. common stock (includes Mississippi Chemical
Corporation common stock subsequent to December 23, 1996 -
see note 1(a)).
(vii) Getchell Gold Corporation common stock (as of October 20,
1995, participants could no longer elect to allocate new
contributions to this investment program - see note 1(a)).
Any contributions for which a participant does not make an
investment election are deposited in the Short-term Stability
Fund.
Employee Stock Ownership Plan (ESOP) contributions are invested in
ChemFirst Inc. common stock.
(f) Loans
The Plan also provides for participant loans. A participant can
borrow up to 50% of the participant's vested 401(k) account
balance, not to exceed $50,000 less the participant's highest
outstanding loan balance during the previous twelve months.
(Continued)
11
4
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
The minimum loan amount is $1,000 per loan, and three
loans per participant may be outstanding at any time.
The interest rate charged on loan balances is equal to
the prime rate plus 1%, and the interest charged is
credited to the borrowing participant's account.
Maturities cannot exceed five years, except for loans
made to purchase a primary residence, in which case the
maturity cannot exceed 10 years. The participant must
pay a $50 set-up fee and a $2.50 monthly administrative
fee for each loan.
In addition to the investment options listed above, the Employee
Benefits Committee may authorize establishing additional
investment options consisting of such other securities
or professionally managed funds as may be determined by
unanimous action of the committee. Notice of any such
action must be communicated in writing to each
participant. The following is a summary of the number of
participants whose 401(k) contributions are invested in
each investment option:
Participants' contributions
----------------------------------------------------------------------
Capital Short-term Mid-term Long-term Aggressive
Preservation Stability Balanced Growth Growth
Fund Fund Fund Fund Fund
------------ ---------- -------- --------- ----------
Number of participants:
December 31, 1997 34 458 487 654 164
===== ====== ===== ===== =====
December 31, 1996 30 596 507 657 44
===== ====== ===== ===== =====
June 30, 1996 27 684 500 635 -
===== ====== ===== ===== =====
June 30, 1995 11 725 577 618 -
===== ====== ===== ===== =====
Participants' contributions
---------------------------------
Getchell Gold
ChemFirst Inc. Corporation
common stock common stock
------------- -------------
Number of participants:
December 31, 1997 394 207
====== ======
December 31, 1996 401 260
====== ======
June 30, 1996 384 293
====== ======
June 30, 1995 352 169
====== ======
Employers' contributions
----------------------------------------------------------------------
Capital Short-term Mid-term Long-term Aggressive
Preservation Stability Balanced Growth Growth
Fund Fund Fund Fund Fund
------------ ---------- -------- --------- ----------
Number of participants:
December 31, 1997 35 485 487 656 164
===== ====== ===== ===== =====
December 31, 1996 31 622 510 666 44
===== ====== ===== ===== =====
June 30, 1996 27 695 502 640 -
===== ====== ===== ===== =====
June 30, 1995 11 741 575 619 -
===== ====== ===== ===== =====
Employer's Contributions
---------------------------------
Getchell Gold
ChemFirst Inc. Corporation
common stock common stock
------------- -------------
Number of participants:
December 31, 1997 404 230
====== ======
December 31, 1996 414 286
====== ======
June 30, 1996 411 321
====== ======
June 30, 1995 392 191
====== ======
(Continued)
12
5
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(g) Participant Accounts
Participant accounts are maintained individually and in the
aggregate for each investment option. Each participant's account
is credited with its investment earnings and the portion of the
employers' contributions allocated to it. Participant benefits
are provided solely from each individual participant's account.
(h) Vesting
Participants' 401(k) contributions and allocated earnings thereon
are fully vested at all times and are not subject to forfeiture
for any reason. Employers' 401(k) contributions and allocated
earnings thereon fully vest after a participant completes three
years of service or upon a participant's retirement, disability
or death, whichever occurs first.
Prior to January 1, 1997, participants' ESOP account balances vested
10% after 1 year of service, 25% after 2 years of service and
100% after 3 years of service. Beginning January 1, 1997,
participants' ESOP account balances fully vest after a
participant completes three years of service.
(i) Forfeitures
A participant's forfeiture of their employers' 401(k)
contributions may be used to pay plan expenses and/or to reduce
employers' 401(k) contributions in the year in which the
forfeitures are determined to occur.
A participant's forfeiture of their ESOP account balances is used
to reduce the Company's ESOP contributions in the year in which
the forfeitures are determined to occur.
(j) Administrative Expenses
Administrative expenses, with the exception of advisory fees, are
generally paid by the Company, but may be paid by the Plan.
Advisory fees are for the management of the mutual funds in
which plan assets are invested and are paid by the Plan.
(Continued)
13
6
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(2) Summary of Significant Accounting Policies
The following are the significant accounting policies followed by the
Plan:
(a) Basis of Presentation
The accompanying financial statements of the Plan have been prepared
on the accrual basis of accounting.
(b) Dividends
Dividend income is recorded as of the dividend record date.
(c) Investments
Investments in cash and participant loans are stated at cost, which
approximates fair value. Investments in ChemFirst Inc., Getchell
Gold Corporation and Mississippi Chemical Corporation common
stocks and mutual funds are stated at quoted market value.
Investment transactions are accounted for on the trade date.
The Plan does not require any collateral or other security from the
trustee to support the investments.
(d) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrator
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
(e) Income Taxes
In determination letters dated April 22, 1998, the Internal Revenue
Service held that the Plan is exempt from income taxes in
accordance with applicable provisions of the Internal Revenue
Code. It also held that participant income taxes on
contributions and earnings are deferred until such amounts are
received by the participant or a beneficiary.
(Continued)
14
7
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
The Plan has been amended since the effective date of the April 22,
1998 determination letters. The amended Plan documents have been
submitted to the Internal Revenue Service for a letter of
determination that the Plan continues to qualify as exempt from
Federal taxes. In the opinion of the Plan Administrator, the
Plan has operated within the terms of the Plan and is qualified
and exempt under the applicable requirements of the Internal
Revenue Code.
(f) Sales of Investments
The cost of stock and mutual fund shares sold is determined based on
the average cost of the shares. The cost of other investments is
determined based on the individual cost of each issue.
(3) Voting Rights
All common stock allocated to participants' accounts carries with it
full voting privileges and any other rights that the stock might
have. The Trustee votes such stock in accordance with the written
instructions of the participants. Unallocated stock is voted by the
Trustee as instructed by the Employee Benefits Committee.
(4) Acquisition Loans
The Trustee may incur acquisition loans from time to time to finance the
acquisition of ChemFirst Inc. common stock (ESOP financed shares) or
to repay a prior acquisition loan. Acquisition loans are to be for a
specific term, bear a reasonable rate of interest and are not
payable on demand except in the event of default. An acquisition
loan may be secured only by a pledge of the shares acquired.
Financed shares are allocated to the participants only as payments are
made on the acquisition loan.
As of December 31, 1997 and 1996, no acquisition loans had been incurred
by the Plan.
(Continued)
15
8
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(5) Investment Sales
A summary follows of net realized gains on sales of investments for
the year ended December 31, 1997, the six months ended December 31,
1996 and the years ended June 30, 1996 and 1995:
Proceeds Carrying Net realized
from sales value gains
----------- ----------- ------------
December 31, 1997
Common stock $ 3,621,693 2,234,618 1,387,075
Mutual funds 12,774,245 12,164,533 609,712
----------- ----------- -----------
$16,395,938 14,399,151 1,996,787
=========== =========== ===========
December 31, 1996
Common stock $ 1,199,418 456,827 742,591
Mutual funds 18,779,705 17,989,820 789,885
----------- ----------- -----------
$19,979,123 18,446,647 1,532,476
=========== ===========
Gain recognized on exchange
for MCC shares (note 1) 1,208,864
-----------
$ 2,741,340
===========
June 30, 1996
Common stock $ 4,995,315 2,749,549 2,245,766
Mutual funds 10,885,936 10,307,770 578,166
----------- ----------- -----------
$15,881,251 13,057,319 2,823,932
=========== =========== ===========
June 30, 1995
Common stock $ 2,810,662 2,080,950 729,712
Mutual funds 5,636,596 5,609,923 26,673
----------- ----------- -----------
$ 8,447,258 7,690,873 756,385
=========== =========== ===========
(Continued)
16
9
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(6) Participants' and Employers' 401(k) and ESOP Contributions
A summary follows of contributions by company:
Participants' Employers'
contributions contributions
------------- -------------
Year ended December 31, 1997:
ChemFirst Inc. $ 332,091 212,204
First Chemical Corporation 790,443 455,124
Plasma Energy Corporation 68,653 37,961
Quality Chemicals, Inc. 373,405 253,225
FirstMiss Steel Inc. 143,018 100,204
EKC Technology, Inc. 215,716 117,703
Plasma Processing Corporation 9,881 6,681
Callidus Technologies, Inc. 605,443 399,068
------------ -------------
$ 2,538,650 1,582,170
============ =============
Six months ended December 31, 1996:
ChemFirst Inc. $ 162,212 95,460
First Chemical Corporation 328,446 177,827
Plasma Energy Corporation 41,900 21,893
Quality Chemicals, Inc. 171,448 102,812
FirstMiss Steel Inc. 70,359 41,972
AMPRO Fertilizer, Inc. 99,177 44,871
EKC Technology, Inc. 82,908 35,873
Plasma Processing Corporation 41,056 23,678
Callidus Technologies, Inc. 263,872 153,764
------------ -------------
$ 1,261,378 698,150
============ =============
Year ended June 30, 1996:
First Mississippi Corporation $ 307,472 185,292
First Chemical Corporation 603,108 339,862
Getchell Gold Corporation 133,022 68,514
Plasma Energy Corporation 82,786 42,062
Quality Chemicals, Inc. 334,447 198,847
FirstMiss Steel Inc. 137,734 83,246
AMPRO Fertilizer, Inc. 160,017 75,243
(Continued)
17
10
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(6), Continued
Participants' Employers'
contributions contributions
------------- -------------
Year ended June 30, 1996, continued:
EKC Technology, Inc. 161,603 73,043
Plasma Processing Corporation 103,875 63,533
Callidus Technologies, Inc. 387,209 236,637
------------ -------------
$ 2,411,273 1,366,279
============ =============
Year ended June 30, 1995:
First Mississippi Corporation $ 231,904 152,847
First Chemical Corporation 603,924 375,042
Getchell Gold Corporation 402,943 206,238
Plasma Energy Corporation 77,110 45,319
Quality Chemicals, Inc. 328,803 198,853
FirstMiss Steel Inc. 122,452 93,402
AMPRO Fertilizer, Inc. 147,885 72,810
EKC Technology, Inc. 135,972 60,775
Plasma Processing Corporation 94,485 65,492
Callidus Technologies, Inc. 289,721 178,804
------------ -------------
$ 2,435,199 1,449,582
============ =============
(7) Rollovers and Transfers
During the year ended December 31, 1997, the six months ended December
31, 1996 and the years ended June 30, 1996 and 1995, assets and
participant accounts, were rolled over or transferred from other
qualified employee benefit plans to the Plan as follows:
Year ended
Year ended Six months ended June 30,
December 31, December 31, ----------------
1997 1996 1996 1995
------------ ---------------- ---- ----
ChemFirst Inc. (note 1 (a)) $ 2,224 4,529 76,919 -
First Chemical Corporation 153,165 91,626 18,926 805
Getchell Gold Corporation - - - 41,957
Plasma Energy Corporation 39,948 - 30,813 -
Quality Chemical, Inc. - - 5,088 -
FirstMiss Steel, Inc. 59,897 61,844 3,006 3,895
EKC Technology, Inc. 9,669 - 34,857 4,216
Plasma Processing Corporation - - 77 -
Callidus Technologies, Inc. 257,328 193,535 70,828 14,974
---------- ------- ------- ------
$ 522,231 351,534 240,514 65,847
========== ======= ======= ======
(Continued)
18
11
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
In April 1996, ChemFirst Inc. obtained a 50% interest in FirstMiss
Fertilizer, LP, an ammonia storage terminal facility. As a part of
this acquisition, the Companies hired seven employees from the
seller of the facility. A "plan-to-plan" transfer of these
employees' account balances (including loan balances) aggregating
$133,944 was completed between the PCS Phosphates, Inc. Employee
Savings Plan and the Plan.
(8) Unrealized Appreciation (Depreciation) of Investments
During the year ended December 31, 1997, the six months ended December
31, 1996 and the years ended June 30, 1996 and 1995, unrealized
appreciation (depreciation) of the Plan's investments was as
follows:
Year ended Six months ended Year ended June 30,
December 31, December 31, ------------------------
1997 1996 1996 1995
------------ ---------------- ---- ----
Mutual funds $ 551,628 (496,629) 768,018 1,164,775
ChemFirst Inc. common stock
(note 1(a)) 1,362,994 542,862 (1,328,202) 4,206,502
Getchell Gold Corporation
common stock (1,869,383) 602,177 1,529,304 799,046
Mississippi Chemical Corporation
common stock (343,118) 47,964 - -
------------ ---------- ---------- ---------
$ (297,879) 696,374 969,120 6,170,323
============ ========== ========== =========
(Continued)
19
12
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(9) Investment Option Allocation
The allocation of net assets available for benefits to investment option
as of December 31, 1997 and 1996 follows:
Capital Short-term Mid-term Long-term
Preservation Stability Balanced Growth
Fund Fund Fund Fund
------------ ------------ ----------- -----------
December 31, 1997:
Mutual funds $ 1,001,211 4,844,715 8,284,373 17,001,744
Participant loans 74,449 829,329 761,443 421,755
ChemFirst Inc. common stock -- -- -- --
Getchell Gold Corporation common stock -- -- -- --
Mississippi Chemical Corporation common stock -- -- -- --
----------- ----------- ----------- -----------
Total investments 1,075,660 5,674,044 9,045,816 17,423,499
----------- ----------- ----------- -----------
Receivables:
Employers' and participants' contributions 4,191 39,704 89,884 177,094
Due from participants 770 -- -- --
----------- ----------- ----------- -----------
Total receivables 4,961 39,704 89,884 177,094
----------- ----------- ----------- -----------
Net assets available for benefits $ 1,080,621 5,713,748 9,135,700 17,600,593
=========== =========== =========== ===========
December 31, 1996:
Mutual funds $ 1,180,793 5,521,730 7,416,505 13,460,200
Participant loans 86,270 802,993 635,374 298,744
ChemFirst Inc. common stock -- -- -- --
Getchell Gold Corporation common stock -- -- -- --
Mississippi Chemical Corporation common stock -- -- -- --
----------- ----------- ----------- -----------
Total investments 1,267,063 6,324,723 8,051,879 13,758,944
----------- ----------- ----------- -----------
Receivables:
Employers' and participants' contributions 2,803 41,776 75,712 150,033
Dividends -- 9,294 42,699 109,581
Due from participants 3,000 -- -- --
----------- ----------- ----------- -----------
Total receivables 5,803 51,070 118,411 259,614
----------- ----------- ----------- -----------
Net assets available for benefits $ 1,272,866 6,375,793 8,170,290 14,018,558
=========== =========== =========== ===========
Aggressive Getchell Gold
Growth ChemFirst Inc. Corporation
Fund common stock common stock Combined
---------- ------------ ------------- --------
December 31, 1997:
Mutual funds 1,355,078 -- -- 32,487,121
Participant loans (10,560) (47,303) (2,564) 2,026,549
ChemFirst Inc. common stock -- 13,151,307 -- 13,151,307
Getchell Gold Corporation common stock -- -- 2,299,203 2,299,203
Mississippi Chemical Corporation common stock -- 1,000,374 -- 1,000,374
---------- ---------- ---------- -----------
Total investments 1,344,518 14,104,378 2,296,639 50,964,554
---------- ---------- ---------- -----------
Receivables:
Employers' and participants' contributions 28,537 219,504 -- 558,914
Due from participants -- -- -- 770
---------- ---------- ---------- -----------
Total receivables 28,537 219,504 -- 559,684
---------- ---------- ---------- -----------
Net assets available for benefits 1,373,055 14,323,882 2,296,639 51,524,238
========== ========== ========== ===========
December 31, 1996:
Mutual funds 435,823 -- -- 28,015,051
Participant loans (3,537) (7,902) -- 1,811,942
ChemFirst Inc. common stock -- 6,641,672 -- 6,641,672
Getchell Gold Corporation common stock -- -- 4,299,266 4,299,266
Mississippi Chemical Corporation common stock -- 2,302,273 -- 2,302,273
---------- ---------- ---------- -----------
Total investments 432,286 8,936,043 4,299,266 43,070,204
---------- ---------- ---------- -----------
Receivables:
Employers' and participants' contributions 10,735 35,051 -- 316,110
Dividends (3,191) -- -- 158,383
Due from participants -- -- -- 3,000
---------- ---------- ---------- -----------
Total receivables 7,544 35,051 -- 477,493
---------- ---------- ---------- -----------
Net assets available for benefits 439,830 8,971,094 4,299,266 43,547,697
========== ========== ========== ===========
(Continued)
20
13
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
(9), continued
The allocation of changes in net assets available for benefits to
investment option for the year ended December 31, 1997, the six
months ended December 31, 1996 and the years ended June 30, 1996 and
1995 follows:
Capital Short-term Mid-term Long-term Aggressive
Preservation Stability Balanced Growth Growth
Fund Fund Fund Fund Fund
------------ ------------ ----------- ----------- ----------
Net assets available for benefits
at June 30, 1994 $ -- 7,809,427 5,396,179 3,922,601 -
Participants' contributions 1,531 613,583 710,626 959,697 -
Employers' contributions 984 334,753 408,253 557,478 -
Net investment income 130 610,578 775,668 898,740 -
Rollovers -- 17,065 7,606 3,968 -
Withdrawals and terminations, net -- (821,887) (160,543) (184,143) -
Transfers due to participants'
selection of investment option 47,591 (411,343) (380,394) 1,686,632 -
----------- ----------- ----------- ----------- -
Net assets available for benefits
at June 30, 1995 50,236 8,152,176 6,757,395 7,844,973 -
Participants' contributions 17,006 449,340 642,829 1,112,762 -
Employers' contributions 10,107 246,029 376,975 619,602 -
Net investment income (loss) 24,936 342,115 905,231 1,711,315 -
Rollovers 22,809 17,038 91,809 75,917 -
Transfers from PSC Phosphates, Inc.
Employee Savings Plan -- 54,483 1,976 76,826 -
Withdrawals and terminations, net (38,828) (477,385) (231,066) (972,837) -
Transfers due to participants'
selection of investment option 876,729 (1,271,897) 333,714 1,741,434 -
Transfer of Getchell Gold Corporation
participant account balances (10,554) (900,488) (1,265,469) (655,993) -
----------- ----------- ----------- ----------- -
Net assets available for benefits
at June 30, 1996 952,441 6,611,411 7,613,394 11,553,999 -
Getchell Gold
ChemFirst Inc. Corporation
common stock common stock Combined
------------ ------------- --------
Net assets available for benefits 4,506,912 601,668 22,236,787
at June 30, 1994 107,400 42,362 2,435,199
Participants' contributions 76,328 71,786 1,449,582
Employers' contributions 4,915,803 933,023 8,133,942
Net investment income -- 37,208 65,847
Rollovers (410,418) (19,691) (1,596,682)
Withdrawals and terminations, net
Transfers due to participants' (836,927) (105,559) --
selection of investment option ----------- ----------- -----------
Net assets available for benefits 8,359,098 1,560,797 32,724,675
at June 30, 1995 170,566 18,770 2,411,273
Participants' contributions 103,667 9,899 1,366,279
Employers' contributions (1,282,911) 3,875,098 5,575,784
Net investment income (loss) 32,941 -- 240,514
Rollovers
Transfers from PSC Phosphates, Inc. 659 -- 133,944
Employee Savings Plan (81,791) (68,644) (1,870,551)
Withdrawals and terminations, net
Transfers due to participants' (1,031,066) (648,914) --
selection of investment option
Transfer of Getchell Gold Corporation (90,726) (161,583) (3,084,813)
participant account balances ----------- ----------- -----------
Net assets available for benefits 6,180,437 4,585,423 37,497,105
at June 30, 1996
(Continued)
21
14
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
(9), continued
Capital Short-term Mid-term Long-term
Preservation Stability Balanced Growth
Fund Fund Fund Fund
------------ ------------ ----------- -----------
Net assets available for benefits
at June 30, 1996 952,441 6,611,411 7,613,394 11,553,999
Participants' contributions 10,557 171,313 311,837 632,574
Employers' contributions 6,173 94,420 183,599 341,214
Net investment income 30,853 156,405 524,367 1,389,452
Rollovers 176,850 21,163 23,598 125,013
Withdrawals and terminations, net (201,484) (546,085) (323,320) (293,484)
Transfers due to participants'
selection of investment option 297,476 (132,834) (163,185) 269,790
----------- ----------- ----------- -----------
Net assets available for benefits
at December 31, 1996 1,272,866 6,375,793 8,170,290 14,018,558
Participants' contributions 27,535 296,112 598,227 1,194,152
Employers' contributions 15,707 167,968 351,338 635,144
Net investment income (loss) 43,803 309,188 1,151,391 3,291,070
Rollovers 57,265 36,916 108,041 265,937
Transfers of ESOP participant account balances -- -- -- --
Withdrawals and terminations, net (1,183,496) (397,064) (371,589) (803,209)
Transfers due to participants' selection
of investment option 853,500 (465,569) (235,715) 456,777
Transfer of fertilizer business participant
account balances (note 1(a)) (6,559) (609,596) (636,283) (1,457,836)
----------- ----------- ----------- -----------
Net assets available for benefits
at December 31, 1997 $ 1,080,621 5,713,748 9,135,700 17,600,593
=========== =========== =========== ===========
Aggressive Getchell Gold
Growth ChemFirst Inc. Corporation
Fund common stock common stock Combined
----------- ------------ ------------- --------
Net assets available for benefits
at June 30, 1996 -- 6,180,437 4,585,423 37,497,105
Participants' contributions 13,795 121,302 -- 1,261,378
Employers' contributions 6,150 66,594 -- 698,150
Net investment income 1,634 2,484,282 715,814 5,302,807
Rollovers -- 4,841 69 351,534
Withdrawals and terminations, net -- (130,623) (68,281) (1,563,277)
Transfers due to participants'
selection of investment option 418,251 244,261 (933,759) --
----------- ----------- ----------- -----------
Net assets available for benefits
at December 31, 1996 439,830 8,971,094 4,299,266 43,547,697
Participants' contributions 176,995 245,629 -- 2,538,650
Employers' contributions 89,384 322,629 -- 1,582,170
Net investment income (loss) 81,471 2,080,923 (1,327,166) 5,630,680
Rollovers 32,422 21,650 -- 522,231
Transfers of ESOP participant account balances -- 3,432,074 -- 3,432,074
Withdrawals and terminations, net (12,473) (117,301) (18,035) (2,903,167)
Transfers due to participants' selection
of investment option 565,426 (517,162) (657,257) --
Transfer of fertilizer business participant
account balances (note 1(a)) -- (115,654) (169) (2,826,097)
----------- ----------- ----------- -----------
Net assets available for benefits
at December 31, 1997 1,373,055 14,323,882 2,296,639 51,524,238
=========== =========== =========== ===========
(Continued)
22
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(10) Plan Investments
The following investments exceeded 5% of net assets available for
benefits at December 31, 1997 and 1996:
December 31, 1997
-------------------------------------------
Shares
or face Carrying
amount Cost value
------- ---- --------
Mutual funds:
Frank Russell Fixed Income III 360,401 $ 3,484,678 3,755,377
Frank Russell Equity I 109,715 3,151,841 3,347,410
Frank Russell Equity Q 320,713 10,482,126 11,513,590
ChemFirst Inc. common stock 465,533 7,223,665 13,151,307
December 31, 1996
-------------------------------------------
Shares
or face Carrying
amount Cost value
------- ---- --------
Mutual funds:
Morley Stable Fund 207,873 $ 2,439,086 2,491,086
Frank Russell Income III 324,975 3,179,821 3,304,998
Frank Russell Equity I 99,291 2,770,706 3,012,501
Frank Russell Equity Q 275,650 8,417,440 9,079,908
ChemFirst Inc. common stock 287,207 2,987,903 6,641,672
Getchell Gold Corporation common stock 112,033 809,816 4,299,266
Mississippi Chemical Corporation common stock 95,928 2,254,308 2,302,273
23
Schedule I
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
Shares
or face Carrying
amount Cost value
------- ---- --------
Mutual funds:
Baron Asset 0.7% 7,129 $ 283,034 345,825
Managers Special Equity 0.7% 5,502 302,565 336,572
Morley Stable Value 4.2% 171,519 2,035,978 2,176,302
PBHG Growth 1.0% 21,116 536,632 536,138
Charles Schwab Retirement Money 1.9% 1,001,211 1,001,211 1,001,211
Warburg Pincus Emerging Markets 0.3% 14,253 178,517 136,543
Frank Russell Fixed Income I 2.6% 63,330 1,315,049 1,362,237
Frank Russell Fixed Income II 2.5% 71,181 1,306,996 1,306,176
Frank Russell Fixed Income III 7.3% 360,401 3,484,678 3,755,377
Frank Russell Equity I 6.5% 109,715 3,151,841 3,347,410
Frank Russell Equity II 5.0% 77,976 2,301,467 2,570,102
Frank Russell International 2.3% 34,150 1,255,913 1,181,586
Frank Russell Emerging Markets 4.0% 174,003 2,180,055 2,051,498
Frank Russell Real Estate Securities 1.7% 28,080 731,538 866,554
Frank Russell Equity Q 22.3% 320,713 10,482,126 11,513,590
------------ -------------
30,547,600 32,487,121
Participant loans, interest rates from 7.25%
to 10.0%; maturities from 1 to 10 years 3.9% 2,026,549 2,026,549 2,026,549
*ChemFirst Inc. common stock 25.5% 465,533 7,223,665 13,151,307
Getchell Gold Corporation common stock 4.5% 93,845 680,324 2,299,203
Mississippi Chemical Corporation common stock 1.9% 54,815 1,285,618 1,000,374
------------ -------------
$ 41,763,756 50,964,554
============ =============
* ChemFirst Inc. is a party-in-interest.
See accompanying independent auditors' report.
24
Schedule II
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Item 27d - Schedule of Reportable Transactions
Year ended December 31, 1997
Purchases
-------------------------------------------
Shares
Identity of party involved Description of assets Number or units Cost
- -------------------------- --------------------- ------ -------- ----
Charles Schwab Trust Charles Schwab Retirement
Company Money Fund 119 1,393,819 $ 1,393,819
" Frank Russell Equity Q
mutual fund 144 136,560 4,916,563
" ChemFirst Inc. common stock 90 191,656 4,526,095
Sales
----------------------------------------------
Shares Selling Net gain
Identity of party involved Number or units price or (loss)
- -------------------------- ------ -------- --------- ---------
Charles Schwab Trust
Company 56 2,960,941 $ 2,960,941 -
"
227 91,497 3,228,318 376,440
" 127 62,981 1,594,020 916,031
25
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
CHEMFIRST INC.
401(K) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Date: June 24, 1998 /s/ J. STEVE CHUSTZ
---------------------------------
J. Steve Chustz
Member, Employee Benefits Committee
Date: June 24, 1998 /s/ WILLIAM KEMP
---------------------------------
William Kemp
Member, Employee Benefits Committee
Date: June 24, 1998 /s/ GEORGE SIMMONS
---------------------------------
George Simmons
Member, Employee Benefits Committee
Date: June 24, 1998 /s/ R. MICHAEL SUMMERFORD
---------------------------------
R. Michael Summerford
Member, Employee Benefits Committee
Date: June 24, 1998 /s/ TOM TEPAS
---------------------------------
Tom Tepas
Member, Employee Benefits Committee
26
CHEMFIRST INC.
401(K) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
23.1 Independent Auditors' Consent