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, 2001
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
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Financial Statements and Schedule
December 31, 2001 and 2000
(With Independent Auditors' Report Thereon)
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Independent Auditors' Report
Statements of Net Assets Available for Benefits as of December 31, 2001 and 2000
Statements of Changes in Net Assets Available for Benefits for the years ended
December 31, 2001 and 2000
Notes to Financial Statements
SUPPLEMENTAL SCHEDULE:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year), December 31,
2001
All other schedules are omitted because there is no information to report.
INDEPENDENT AUDITORS' REPORT
The Employee Benefits Committee
ChemFirst Inc.:
We have audited the financial statements of ChemFirst Inc. 401(k) Savings and
Employee Stock Ownership Plan (the Plan) as listed in the accompanying index.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit 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, 2001 and
2000, and the changes in net assets available for benefits for the years ended
December 31, 2001 and 2000, in conformity with accounting principles generally
accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2001 is not a required part of the basic
financial statements but is supplementary information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audit of the December 31,
2001 basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the December 31, 2001 basic financial
statements taken as a whole.
The supplemental schedule of assets (held at end of year) as of December 31,
2001, that accompanies the Plan's financial statements does not disclose the
historical cost of certain nonparticipant-directed plan assets held by the Plan
investment manager. Disclosure of this information is required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
/s/ KPMG LLP
Jackson, Mississippi
May 17, 2002
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000
2001 2000
------------ ------------
Cash $ -- 50
Investments:
Mutual funds, at fair value 31,465,175 36,066,316
Participant loans, at cost which approximates
fair value 1,223,579 1,756,278
ChemFirst Inc. common stock, at fair value 8,208,232 8,812,453
------------ ------------
Total investments 40,896,986 46,635,047
------------ ------------
Receivables:
Employers' contributions 191,696 302,420
Participants' contributions 129,272 262,763
------------ ------------
Total receivables 320,968 565,183
------------ ------------
Net assets available for benefits $ 41,217,954 47,200,280
============ ============
See accompanying notes to financial statements.
2
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 2001 and 2000
2001 2000
------------ ------------
Contributions:
Participants $ 2,318,302 2,376,628
Employers 1,269,257 1,296,182
------------ ------------
Total contributions 3,587,559 3,672,810
------------ ------------
Net investment income (loss):
Interest income 272,720 250,915
Dividend income 144,975 178,769
------------ ------------
Total interest and dividend income 417,695 429,684
------------ ------------
Net depreciation in fair value of investments (4,917,959) (4,181,373)
Advisory fees (11,031) (56,980)
------------ ------------
Net investment loss (4,511,295) (3,808,669)
------------ ------------
Rollovers from other plans 280,898 61,838
Withdrawals and terminations (5,263,257) (3,988,356)
Transfer of participant account balances to other plans (76,231) (314,644)
------------ ------------
Net decrease in net assets available
for benefits (5,982,326) (4,377,021)
Net assets available for benefits:
Beginning of period 47,200,280 51,577,301
------------ ------------
End of period $ 41,217,954 47,200,280
============ ============
See accompanying notes to financial statements.
3
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(1) DESCRIPTION OF PLAN
The following description of ChemFirst Inc. 401(k) Savings and Employee
Stock Ownership Plan (the Plan) provides only general information.
Participants should refer to the Plan agreement for more complete
information.
(a) 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.
(b) PARTICIPATION
An employee becomes a participant in the Plan on the first day
of employment. The Plan is available to all regular employees,
defined as employees (whether full-time or part-time) hired to
fill a specific position on a permanent basis and for whom the
employer annually budgets compensation and benefits.
(c) 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.
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. The Company made contributions under the
employee stock ownership provisions of the Plan of $121,462
and $161,026 in 2001 and 2000, respectively.
(d) LOANS
The Plan 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.
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. Effective
October 1, 2000, the participant must
(Continued)
4
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 2001 and 2000
pay a $35 set-up fee and a $3.75 quarterly administrative fee
for each loan. Prior to October 1, 2000, the participant paid
a $50 set-up fee and a $2.50 monthly administrative fee for
each loan.
(e) PARTICIPANT ACCOUNTS
Individual accounts are maintained for each participant to
reflect the participants' contributions, related matching
contribution, and allocated earnings or losses thereon. The
fund investment options selected by participants allocate
income or loss based on participant shares held in a
particular fund investment option. The benefit to which a
participant is entitled is the benefit that can be provided
from the participant's vested account balance.
(f) VESTING
Participants' 401(k) contributions and allocated earnings or
losses thereon are fully vested at all times and are not
subject to forfeiture for any reason. Employers' 401(k)
matching contributions and employers' contributions made under
the employee stock ownership plan and allocated earnings or
losses thereon on each fully vest after a participant
completes three years of service or upon a participant's
retirement, disability or death, whichever occurs first.
(g) FORFEITURES
A participant's forfeiture of their employers' 401(k) matching
contributions may be used to pay plan expenses and/or to
reduce employers' 401(k) matching 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.
(h) BENEFITS
Benefits are generally payable on termination, retirement,
death, or disability. Benefits may be paid by either (a)
lump-sum payment, (b) deferred payment, or (c) installment
payments, as requested by the participant. The benefit payment
options available to participants depend on the reason for the
separation from service.
(i) 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.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The accompanying financial statements of the Plan have been
prepared on the accrual basis of accounting.
(Continued)
5
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(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.,
common stock and mutual funds are stated at quoted market
value. Investment transactions are accounted for on the trade
date basis.
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
accounting principles generally accepted in the United States
of America requires management to make estimates and
assumptions that affect the reported amounts of net assets and
changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
(e) INCOME TAXES
In a determination letter dated June 23, 2000, 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. In the opinion
of the Plan Administrator, this 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
Effective October 1, 2000, the cost of all investments sold is
determined based on the individual cost of each issue. Prior
to October 1, 2000, the cost of stock and mutual fund shares
sold was determined based on the average cost of the shares
while the cost of other investments was determined based on
the individual cost of each issue.
(g) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(h) RECLASSIFICATIONS
Certain 2000 amounts have been reclassified to conform with
the 2001 presentation.
(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.
Fidelity Trust Company (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.
(Continued)
6
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(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, 2001 and 2000, no acquisition loans had been
incurred by the Plan.
(5) UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
During the years ended December 31, 2001 and 2000, the Plan's
investments (including bought, sold and held during the year)
appreciated (depreciated) in value as follows:
2001 2000
------------ ------------
Mutual funds $ (5,724,140) (3,426,194)
ChemFirst Inc. common stock 806,181 109,271
Placer Dome Inc. common stock -- (1,022,202)
Mississippi Chemical Corporation
common stock -- 157,752
------------ ------------
$ (4,917,959) (4,181,373)
============ ============
(6) PLAN INVESTMENTS
The following investments exceeded 5% of net assets available for
benefits at December 31, 2001 and 2000:
DECEMBER 31, 2001
---------------------------
SHARES
OR FACE FAIR
AMOUNT VALUE
------------ ------------
Mutual funds:
Fidelity Aggressive Growth Fund 123,132 $ 2,341,963
Fidelity Balanced Fund 479,615 7,146,270
Fidelity Growth Company Fund 196,718 10,469,314
Fidelity Managed Income Portfolio Fund 4,125,924 4,125,924
Fidelity Retirement Money Market Fund 3,199,732 3,199,732
Fidelity Spartan U.S. Equity Index Fund 57,892 2,352,723
ChemFirst Inc. common stock:
Participant-directed 229,302 5,496,352
Nonparticipant-directed 113,136 2,711,880
(Continued)
7
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(6) Continued
DECEMBER 31, 2000
---------------------------
SHARES
OR FACE FAIR
AMOUNT VALUE
------------ ------------
Mutual funds:
Fidelity Aggressive Growth Fund 102,589 $ 3,710,635
Fidelity Balanced Fund 493,799 7,500,810
Fidelity Growth Company Fund 201,753 14,411,224
Fidelity Managed Income Portfolio 3,918,632 3,918,632
Fidelity Retirement Money Market Fund 2,944,808 2,944,808
Fidelity Spartan U.S. Equity Index Fund 59,282 2,774,987
ChemFirst Inc. common stock:
Participant-directed 275,824 6,085,873
Nonparticipant-directed 123,598 2,726,580
(7) NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed
investments is as follows:
DECEMBER 31,
---------------------------
2001 2000
------------ ------------
Net assets:
ChemFirst Inc. common stock,
nonparticipant-directed $ 2,711,880 2,726,580
============ ============
YEAR ENDED
DECEMBER 31,
----------------------------
2001 2000
------------ ------------
Changes in net assets:
Contributions $ 121,462 161,026
Dividends 49,747 52,111
Net appreciation 236,415 34,968
Withdrawals and terminations (422,324) (150,168)
------------ ------------
$ (14,700) 97,937
============ ============
(8) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. However, no
such action may deprive any participant or beneficiary under the Plan
of any vested right.
(Continued)
8
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Plan Sponsor: ChemFirst Inc.
Plan Sponsor EIN: 64-0679456
Plan Number: 002
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2001
SHARES OR FAIR
COST FACE VALUE VALUE
---- ---------- ------------
Mutual funds
* Fidelity Retirement Money Market Fund b. 3,199,732 $ 3,199,732
* Fidelity Managed Income Portfolio Fund b. 4,125,924 4,125,924
* Fidelity Balanced Fund b. 479,615 7,146,270
* Fidelity Spartan U.S. Equity Index Fund b. 57,892 2,352,723
* Fidelity Fund b. 3,706 107,025
* Fidelity Growth Company Fund b. 196,718 10,469,314
* Fidelity Aggressive Growth Fund b. 123,132 2,341,963
* Fidelity Diversified International Fund b. 27,634 527,266
* Fidelity Freedom Income Fund b. 122 1,328
* Fidelity Freedom 2000 Fund b. 25,851 297,809
* Fidelity Freedom 2010 Fund b. 16,149 203,638
* Fidelity Freedom 2020 Fund b. 11,574 145,604
* Fidelity Freedom 2030 Fund b. 14,686 184,458
* BrokerageLink b. 362,121 362,121
------------
Total mutual funds 31,465,175
------------
*Participant loans, 1 month to 10 years maturity
with interest rates 6% to 10.5% b. 1,223,579 1,223,579
*ChemFirst Inc. common stock a. 342,438 8,208,232
------------
$ 40,896,986
============
a. Historical cost information is not available.
b. Historical cost information is not required.
* A party-in-interest as defined by ERISA.
See accompanying independent auditors' report.
9
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 26, 2002 /s/ J. Steve Chustz
-------------------
J. Steve Chustz
Member, Employee Benefits Committee
Date: June 26, 2002 /s/ William Kemp
----------------
William Kemp
Member, Employee Benefits Committee
Date: June 26, 2002 /s/ George Simmons
------------------
George Simmons
Member, Employee Benefits Committee
Date: June 26, 2002 /s/ R. Michael Summerford
-------------------------
R. Michael Summerford
Member, Employee Benefits Committee
CHEMFIRST INC.
401(K) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
23.1 Independent Auditors' Consent