<PAGE> 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, 1998
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
<PAGE> 2
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Financial Statements and Schedules
December 31, 1998, 1997, 1996 and June 30, 1996
(With Independent Auditors' Report Thereon)
<PAGE> 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, 1998 and 1997
Statements of Changes in Net Assets Available for Benefits for the years ended
December 31, 1998 and 1997, six months ended December 31, 1996, and year ended
June 30, 1996
Notes to Financial Statements
Supplemental Schedules:
I. Item 27a - Schedule of Assets Held for Investment Purposes as of December
31, 1998
II. Item 27d - Schedule of Reportable Transactions for the year ended December
31, 1998
All other schedules are omitted because they are not required under Department
of Labor Regulations.
<PAGE> 4
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 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, 1998 and
1997 and the changes in net assets available for benefits for the years ended
December 31, 1998 and 1997, six months ended December 31, 1996, and year 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 are not a
required part of the basic financial statements but are 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. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ KPMG Peat Marwick LLP
June 18, 1999
<PAGE> 5
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Benefits
December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Investments:
Mutual funds, at fair value (cost $35,298,195
and $30,547,600, respectively) $37,976,352 32,487,121
Participant loans, at cost which approximates
fair value 2,113,205 2,026,549
ChemFirst Inc. common stock, at fair value
(cost $7,968,854 and $7,223,665, respectively)
(note 1(a)) 9,207,944 13,151,307
Getchell Gold Corporation common stock,
at fair value (cost $547,614 and $680,324,
respectively) (note 1(a)) 2,040,317 2,299,203
Mississippi Chemical Corporation common stock,
at fair value (cost $952,218 and $1,285,618,
respectively) (note 1(a)) 574,518 1,000,374
----------- -----------
Total investments 51,912,336 50,964,554
Receivables:
Employers' contributions 374,399 319,901
Participants' contributions 273,037 239,013
----------- -----------
Total employers' and participants' contributions 647,436 558,914
Due from participants -- 770
----------- -----------
Total receivables 647,436 559,684
----------- -----------
Net assets available for benefits $52,559,772 51,524,238
=========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 6
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1998 and 1997, six months ended
December 31, 1996, and year ended June 30, 1996
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 30,
1998 1997 1996 1996
------------ ------------ ---------------- ------------
<S> <C> <C> <C> <C>
Contributions (note 6):
Participants $ 3,062,823 2,538,650 1,261,378 2,411,273
Employers 1,879,664 1,582,170 698,150 1,366,279
------------ ------------ ------------ ------------
Total contributions 4,942,487 4,120,820 1,959,528 3,777,552
------------ ------------ ------------ ------------
Net investment income:
Interest income 205,011 180,292 86,126 125,679
Dividend income:
ChemFirst Inc. common stock 187,617 185,331 56,836 102,070
Mississippi Chemical Corporation
common stock 19,408 32,507 -- --
Mutual funds 2,568,072 3,667,340 1,743,620 1,664,078
------------ ------------ ------------ ------------
Total dividend income 2,775,097 3,885,178 1,800,456 1,766,148
Realized gains (losses) on investments,
net (note 5):
Mutual funds 414,069 609,712 789,885 578,166
ChemFirst Inc. common stock 440,434 916,031 1,441,326 861,525
Getchell Gold Corporation
common stock 220,096 544,213 510,129 1,384,241
Mississippi Chemical Corporation
common stock (47,487) (73,169) -- --
------------ ------------ ------------ ------------
Net realized gains 1,027,112 1,996,787 2,741,340 2,823,932
------------ ------------ ------------ ------------
Unrealized appreciation (depreciation)
of investments, net (note 8) (4,168,548) (297,879) 696,374 969,120
Advisory fees (79,692) (133,698) (21,489) (109,095)
------------ ------------ ------------ ------------
Net investment income (loss) (241,020) 5,630,680 5,302,807 5,575,784
------------ ------------ ------------ ------------
Rollovers (note 7) 770,718 522,231 351,534 240,514
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 (4,436,651) (2,903,167) (1,563,277) (1,870,551)
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 1,035,534 7,976,541 6,050,592 4,772,430
Net assets available for benefits:
Beginning of period 51,524,238 43,547,697 37,497,105 32,724,675
------------ ------------ ------------ ------------
End of period $ 52,559,772 51,524,238 43,547,697 37,497,105
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 7
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(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) 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.
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.
(Continued)
4
<PAGE> 8
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
The Plan is a defined contribution plan subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
The Plan currently covers substantially all employees of the
Company and its subsidiaries.
(c) PARTICIPATION
Effective January 1, 1998, an employee becomes a participant in
the Plan on the first day of employment. Prior to January 1, 1998,
an employee was eligible to participate in the Plan on the first
day of the month which coincided with or next followed the
completion of six months of employment. Also effective January 1,
1998, 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. Prior to January 1,
1998, the Plan was 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 included
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, 1998, 1997, and 1996, and June 30, 1996,
849, 809, 925, and 924 participants, respectively, were
participating in the Plan.
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 - Seeks to provide maximum
current income that is consistent with the preservation
of capital.
(ii) Short-term Stability Fund - Seeks to preserve capital
and modestly out perform inflation over time.
(iii) Mid-term Balanced Fund - Seeks income and long-term
growth of principal and income through investment in
U.S. and international stocks and bonds.
(iv) Long-term Growth Fund - Seeks growth potential over the
long-term by investing in stocks of larger U.S.
corporations and international companies.
(Continued)
5
<PAGE> 9
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(v) Aggressive Growth Fund - Primarily invests in small to
medium size companies, including emerging markets.
(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 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. 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:
(Continued)
6
<PAGE> 10
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
<TABLE>
<CAPTION>
PARTICIPANTS' CONTRIBUTIONS
----------------------------------------------------------------------------------------------------
GETCHELL GOLD
CAPITAL SHORT-TERM MID-TERM LONG-TERM AGGRESSIVE CHEMFIRST INC. CORPORATION
PRESERVATION STABILITY BALANCED GROWTH GROWTH COMMON COMMON
FUND FUND FUND FUND FUND STOCK STOCK
------------- ---------- -------- --------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of participants:
December 31, 1998 57 459 547 746 234 439 184
December 31, 1997 34 458 487 654 164 394 207
December 31, 1996 30 596 507 657 44 401 260
June 30, 1996 27 684 500 635 -- 384 293
</TABLE>
<TABLE>
<CAPTION>
EMPLOYERS' CONTRIBUTIONS
----------------------------------------------------------------------------------------------------
GETCHELL GOLD
CAPITAL SHORT-TERM MID-TERM LONG-TERM AGGRESSIVE CHEMFIRST INC. CORPORATION
PRESERVATION STABILITY BALANCED GROWTH GROWTH COMMON COMMON
FUND FUND FUND FUND FUND STOCK STOCK
------------- ---------- -------- --------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of participants:
December 31, 1998 57 489 550 744 235 445 201
December 31, 1997 35 485 487 656 164 404 230
December 31, 1996 31 622 510 666 44 414 286
June 30, 1996 27 695 502 640 -- 411 321
</TABLE>
(g) PARTICIPANT ACCOUNTS
Individual accounts are maintained for each participant to reflect
the participant's contributions, related matching contribution,
and allocated earnings or loss 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.
(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.
(Continued)
7
<PAGE> 11
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
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) 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.
(k) 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.
(l) RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform with
the current year presentation.
(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.
(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 values.
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.
(Continued)
8
<PAGE> 12
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(d) USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles 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 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.
The Plan has been amended since the effective date of the April
22, 1998, determination letter. The amended Plan documents are
being 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.
(g) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(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.
(Continued)
9
<PAGE> 13
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
Financed shares are allocated to the participants only as payments are
made on the acquisition loan.
As of December 31, 1998 and 1997, no acquisition loans had been incurred
by the Plan.
(5) INVESTMENT SALES
A summary follows of net realized gains on sales of investments for the
years ended December 31, 1998 and 1997, six months ended December 31,
1996, and year ended June 30, 1996:
<TABLE>
<CAPTION>
PROCEEDS NET REALIZED
FROM SALES COST GAINS
------------ ------------ ------------
<S> <C> <C> <C>
December 31, 1998
Common stock $ 2,016,554 1,403,511 613,043
Mutual funds 9,812,895 9,398,826 414,069
------------ ------------ ------------
$ 11,829,449 10,802,337 1,027,112
============ ============ ============
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
============ ============ ============
</TABLE>
(Continued)
10
<PAGE> 14
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(6) PARTICIPANTS' AND EMPLOYERS' 401(k) AND ESOP CONTRIBUTIONS
A summary follows of contributions by company for the years ended
December 31, 1998 and 1997, six months ended December 31, 1996, and year
ended June 30, 1996:
<TABLE>
<CAPTION>
PARTICIPANTS' EMPLOYERS'
CONTRIBUTIONS CONTRIBUTIONS
------------- -------------
<S> <C> <C>
December 31, 1998
ChemFirst Inc. $ 406,543 246,998
First Chemical Corporation 951,337 530,221
Plasma Energy Corporation 24,789 12,902
Quality Chemicals, Inc. 408,413 289,504
FirstMiss Steel Inc. 171,030 112,591
EKC Technology, Inc. 347,205 195,407
Callidus Technologies, Inc. 753,506 492,041
------------- -------------
$ 3,062,823 1,879,664
============= =============
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
============= =============
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
============= =============
</TABLE>
(Continued)
11
<PAGE> 15
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(6), CONTINUED
<TABLE>
<CAPTION>
PARTICIPANTS' EMPLOYERS'
CONTRIBUTIONS CONTRIBUTIONS
------------- -------------
<S> <C> <C>
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
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
============= =============
</TABLE>
(7) ROLLOVERS AND TRANSFERS
During the years ended December 31, 1998 and 1997, six months ended
December 31, 1996, and the year ended June 30, 1996, assets and
participant accounts were rolled over or transferred from other qualified
employee benefit plans to the Plan as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 30,
1998 1997 1996 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ChemFirst Inc. $ 2,065 2,224 4,529 76,919
First Chemical Corporation 30,113 153,165 91,626 18,926
Plasma Energy Corporation -- 39,948 -- 30,813
Quality Chemicals, Inc. 27,486 -- -- 5,088
FirstMiss Steel Inc. 3,568 59,897 61,844 3,006
EKC Technology, Inc. 394,903 9,669 -- 34,857
Plasma Processing Corporation -- -- -- 77
Callidus Technologies, Inc. 312,583 257,328 193,535 70,828
------------ ------------ ------------ ------------
$ 770,718 522,231 351,534 240,514
============ ============ ============ ============
</TABLE>
In April 1996, ChemFirst Inc. obtained a 50% interest in FirstMiss
Fertilizer, LP, an ammonia storage terminal facility. As a part of this
acquisition, seven employees were hired 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.
(Continued)
12
<PAGE> 16
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(8) UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
During the years ended December 31, 1998 and 1997, six months ended
December 31, 1996, and year ended June 30, 1996, unrealized appreciation
(depreciation) of the Plan's investments was as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 30,
1998 1997 1996 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Mutual funds $ 738,636 551,628 (496,629) 768,018
ChemFirst Inc. common stock (4,688,552) 1,362,994 542,862 (1,328,202)
Getchell Gold Corporation common
stock (126,176) (1,869,383) 602,177 1,529,304
Mississippi Chemical Corporation
common stock (92,456) (343,118) 47,964 --
------------ ------------ ------------ ------------
$ (4,168,548) (297,879) 696,374 969,120
============ ============ ============ ============
</TABLE>
(Continued)
13
<PAGE> 17
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(9) INVESTMENT OPTION ALLOCATION
The allocation of net assets available for benefits to investment option
as of December 31, 1998 and 1997 follows:
<TABLE>
<CAPTION>
CAPITAL SHORT-TERM MID-TERM LONG-TERM AGGRESSIVE
PRESERVATION STABILITY BALANCED GROWTH GROWTH
FUND FUND FUND FUND FUND
------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
December 31, 1998
Mutual funds $ 1,094,822 5,661,904 10,494,318 19,363,718 1,361,590
Participant loans 91,793 816,991 803,780 494,560 8,065
ChemFirst Inc. common stock -- -- -- -- --
Getchell Gold Corporation
common stock -- -- -- -- --
Mississippi Chemical Corporation
common stock -- -- -- -- --
------------ ----------- ------------ ------------ ------------
Total investments 1,186,615 6,478,895 11,298,098 19,858,278 1,369,655
Contributions receivable 14,775 43,009 101,702 194,283 38,118
------------ ----------- ------------ ------------ ------------
Net assets available for benefits $ 1,201,390 6,521,904 11,399,800 20,052,561 1,407,773
============ =========== ============ ============ ============
December 31, 1997
Mutual funds $ 1,001,211 4,844,715 8,284,373 17,001,744 1,355,078
Participant loans 74,449 829,329 761,443 421,755 (10,560)
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 1,344,518
------------ ----------- ------------ ------------ ------------
Receivables:
Contributions 4,191 39,704 89,884 177,094 28,537
Due from participants 770 -- -- -- --
------------ ----------- ------------ ------------ ------------
Total receivables 4,961 39,704 89,884 177,094 28,537
------------ ----------- ------------ ------------ ------------
Net assets available for benefits $ 1,080,621 5,713,748 9,135,700 17,600,593 1,373,055
============ =========== ============ ============ ============
<CAPTION>
CHEMFIRST INC. GETCHELL GOLD
COMMON CORPORATION
STOCK COMMON STOCK COMBINED
------------- ------------- ------------
December 31, 1998
<S> <C> <C> <C>
Mutual funds -- -- 37,976,352
Participant loans (99,418) (2,566) 2,113,205
ChemFirst Inc. common stock 9,207,944 -- 9,207,944
Getchell Gold Corporation
common stock -- 2,040,317 2,040,317
Mississippi Chemical Corporation
common stock 574,518 -- 574,518
------------ ------------ ------------
Total investments 9,683,044 2,037,751 51,912,336
Contributions receivable 255,549 -- 647,436
------------ ------------ ------------
Net assets available for benefits 9,938,593 2,037,751 52,559,772
============ ============ ============
December 31, 1997
Mutual funds -- -- 32,487,121
Participant loans (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 14,104,378 2,296,639 50,964,554
------------ ------------ ------------
Receivables:
Contributions 219,504 -- 558,914
Due from participants -- -- 770
------------ ------------ ------------
Total receivables 219,504 -- 559,684
------------ ------------ ------------
Net assets available for benefits 14,323,882 2,296,639 51,524,238
============ ============ ============
</TABLE>
(Continued)
14
<PAGE> 18
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(9), CONTINUED
The allocation of changes in net assets available for benefits to
investment option for the years ended December 31, 1998 and 1997, six
months ended December 31, 1996, and year ended June 30, 1996 follows:
<TABLE>
<CAPTION>
CAPITAL SHORT-TERM MID-TERM LONG-TERM AGGRESSIVE
PRESERVATION STABILITY BALANCED GROWTH GROWTH
FUND FUND FUND FUND FUND
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
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 --
Participants' contributions 10,557 171,313 311,837 632,574 13,795
Employers' contributions 6,173 94,420 183,599 341,214 6,150
Net investment income 30,853 156,405 524,367 1,389,452 1,634
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) 269,790 418,251
----------- ----------- ----------- ----------- -----------
Net assets available for benefits
at December 31, 1996 1,272,866 6,375,793 8,170,290 14,018,558 439,830
Participants' contributions 27,535 296,112 598,227 1,194,152 176,995
Employers' contributions 15,707 167,968 351,338 635,144 89,384
Net investment income (loss) 43,803 309,188 1,151,391 3,291,070 81,471
Rollovers 57,265 36,916 108,041 265,937 32,422
Transfers of ESOP participant
account balances -- -- -- -- --
Withdrawals and terminations, net (1,183,496) (397,064) (371,589) (803,209) (12,473)
Transfers due to participants' selection
of investment option 853,500 (465,569) (235,715) 456,777 565,426
Transfer of fertilizer business participant
account balances (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 1,373,055
Participants' contributions 53,841 298,347 693,491 1,437,942 296,482
Employers' contributions 28,758 174,497 388,166 760,335 152,763
Net investment income (loss) 39,933 335,018 1,387,388 2,097,709 (19,335)
Rollovers 86,877 2,583 130,463 320,812 195,127
Withdrawals and terminations, net (1,333,916) (561,337) (671,548) (921,472) (158,278)
Transfers due to participants' selection
of investment option 1,245,276 559,048 336,140 (1,243,358) (432,041)
----------- ----------- ----------- ----------- -----------
Net assets available for benefits
at December 31, 1998 $ 1,201,390 6,521,904 11,399,800 20,052,561 1,407,773
=========== =========== =========== =========== ===========
<CAPTION>
CHEMFIRST INC. GETCHELL GOLD
COMMON CORPORATION
STOCK COMMON STOCK COMBINED
----------- ------------ -----------
<S> <C> <C> <C>
Net assets available for benefits at
June 30, 1995 8,359,098 1,560,797 32,724,675
Participants' contributions 170,566 18,770 2,411,273
Employers' contributions 103,667 9,899 1,366,279
Net investment income (loss) (1,282,911) 3,875,098 5,575,784
Rollovers 32,941 -- 240,514
Transfers from PSC Phosphates, Inc.
Employee Savings Plan 659 -- 133,944
Withdrawals and terminations, net (81,791) (68,644) (1,870,551)
Transfers due to participants' selection
of investment option (1,031,066) (648,914) --
Transfer of Getchell Gold Corporation
participant account balances (90,726) (161,583) (3,084,813)
----------- ----------- -----------
Net assets available for benefits at
June 30, 1996 6,180,437 4,585,423 37,497,105
Participants' contributions 121,302 -- 1,261,378
Employers' contributions 66,594 -- 698,150
Net investment income 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 244,261 (933,759) --
----------- ----------- -----------
Net assets available for benefits
at December 31, 1996 8,971,094 4,299,266 43,547,697
Participants' contributions 245,629 -- 2,538,650
Employers' contributions 322,629 -- 1,582,170
Net investment income (loss) 2,080,923 (1,327,166) 5,630,680
Rollovers 21,650 -- 522,231
Transfers of ESOP participant
account balances 3,432,074 -- 3,432,074
Withdrawals and terminations, net (117,301) (18,035) (2,903,167)
Transfers due to participants' selection
of investment option (517,162) (657,257) --
Transfer of fertilizer business participant
account balances (115,654) (169) (2,826,097)
----------- ----------- -----------
Net assets available for benefits at
December 31, 1997 14,323,882 2,296,639 51,524,238
Participants' contributions 282,720 -- 3,062,823
Employers' contributions 375,145 -- 1,879,664
Net investment income (loss) (4,174,765) 93,032 (241,020)
Rollovers 34,856 -- 770,718
Withdrawals and terminations, net (731,693) (58,407) (4,436,651)
Transfers due to participants' selection
of investment option (171,552) (293,513) --
----------- ----------- -----------
Net assets available for benefits
at December 31, 1998 9,938,593 2,037,751 52,559,772
=========== =========== ===========
</TABLE>
(Continued)
15
<PAGE> 19
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(10) PLAN INVESTMENTS
The following investments exceeded 5% of net assets available for
benefits at December 31, 1998 and 1997:
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------
SHARES
OR FACE CARRYING
AMOUNT COST VALUE
------- ----------- -----------
<S> <C> <C> <C>
Mutual funds:
Frank Russell Fixed Income III 443,452 $ 4,334,304 4,532,082
Frank Russell Equity I 126,513 3,754,867 4,449,467
Frank Russell Equity II 96,080 2,848,588 2,972,709
Frank Russell Equity Q 329,825 11,172,110 13,265,566
ChemFirst Inc. common stock 466,225 7,968,854 9,207,944
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1997
--------------------------------------
SHARES
OR FACE CARRYING
AMOUNT COST VALUE
------- ----------- -----------
<S> <C> <C> <C>
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
</TABLE>
(11) PLAN TERMINATION
Although is 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.
(12) YEAR 2000 (UNAUDITED)
Management is aware of the potentially significant implications of the
Year 2000 issue for the Plan. Generally, such implications are in three
primary areas:
(a) Principal information technology hardware and software operating
systems;
(b) So-called "embedded systems" with production and similar
equipment; and
(c) Ability of the Company's and Plan's vendors and customers to
effectively manage the Year 2000 issue within their own
organizations.
(Continued)
16
<PAGE> 20
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1998 and 1997
A significant portion of the Company's and Plan's vendors' hardware and
systems is date-dependent for effective operation. Thus, the inability to
achieve Year 2000 readiness in such systems would likely have an impact
on the Plan's operations. To that end, management believes that, based on
the results thus far of Year 2000 processes and vendor inquiries, the
Company and Plan expect to achieve Year 2000 readiness in all material
respects before the arrival of the new millennium.
17
<PAGE> 21
SCHEDULE 1
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Plan Sponsor: ChemFirst Inc.
Plan Sponsor EIN: 64-0679456
Plan Number: 002
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
SHARES OR CURRENT
FACE VALUE COST VALUE
------------------------- ------------ ------------
<S> <C> <C> <C> <C>
Mutual funds:
Baron Asset 0.7% 6,913 $ 311,105 349,407
Managers Special Equity 0.6% 5,412 315,954 331,301
Morley Stable Value 4.9% 190,089 2,321,157 2,551,153
PBHG Growth 1.1% 21,694 536,030 554,076
Charles Schwab Retirement Money 2.1% 1,094,822 1,094,822 1,094,822
Warburg Pincus Emerging Markets 0.2% 18,703 174,242 126,805
Frank Russell Fixed Income I 3.0% 72,760 1,534,161 1,583,252
Frank Russell Fixed Income II 2.9% 82,746 1,523,056 1,527,499
Frank Russell Fixed Income III 8.6% 443,452 4,334,304 4,532,082
Frank Russell Equity I 8.5% 126,513 3,754,867 4,449,467
Frank Russell Equity II 5.7% 96,080 2,848,588 2,972,709
Frank Russell International 2.9% 39,778 1,463,439 1,512,770
Frank Russell Emerging Markets 4.3% 263,452 2,948,183 2,234,072
Frank Russell Real Estate Securities 1.7% 36,472 966,177 891,371
Frank Russell Equity Q 25.2% 329,825 11,172,110 13,265,566
------------ ------------
35,298,195 37,976,352
Participant loans, interest rates of 7.25% to
10.0%, maturities from 6 months to 10 years 4.0% 2,113,205 2,113,205 2,113,205
*ChemFirst Inc. common stock 17.5% 466,225 7,968,854 9,207,944
Getchell Gold Corporation common stock 3.9% 74,874 547,614 2,040,317
Mississippi Chemical Corporation common stock 1.1% 41,037 952,218 574,518
------------ ------------
$ 46,880,086 51,912,336
============ ============
</TABLE>
* ChemFirst Inc. is a party-in-interest.
See accompanying independent auditors' report.
Note - Percentages are determined by dividing the fair value of investments by
net assets available for benefits.
18
<PAGE> 22
SCHEDULE 2
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
Plan Sponsor: ChemFirst Inc.
Plan Sponsor EIN: 64-0679456
Plan Number: 002
Item 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
PURCHASES
--------------------------------
SHARES
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET NUMBER OR UNITS COST
- -------------------------- ---------------------------------- ------ -------- -----------
<S> <C> <C> <C> <C>
Charles Schwab Trust Company Frank Russell Equity Q mutual fund 118 81,134 $ 3,087,306
<CAPTION>
SALES
---------------------------------------------
SHARES NET GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET NUMBER OR UNITS COST OR LOSS
- -------------------------- ---------------------------------- ------ -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Charles Schwab Trust Company Frank Russell Equity Q mutual fund 253 72,418 $ 2,410,259 $ 355,057
</TABLE>
See accompanying independent auditors' report.
19
<PAGE> 23
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 25, 1999 /s/ J. Steve Chustz
-----------------------------------
J. Steve Chustz
Member, Employee Benefits Committee
Date: June 25, 1999 /s/ William Kemp
-----------------------------------
William Kemp
Member, Employee Benefits Committee
Date: June 25, 1999 /s/ George Simmons
-----------------------------------
George Simmons
Member, Employee Benefits Committee
Date: June 25, 1999 /s/ R. Michael Summerford
-----------------------------------
R. Michael Summerford
Member, Employee Benefits Committee
<PAGE> 24
CHEMFIRST INC.
401(k) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<S> <C>
23.1 Independent Auditors' Consent
</TABLE>
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
ChemFirst Inc.:
We consent to incorporation by reference in the registration statement (No.
333-18691) on Form S-8 of ChemFirst Inc. of our report dated June 18, 1999
relating to the financial statements and supplemental schedules of ChemFirst
Inc. 401(k) Savings and Employee Stock Ownership Plan as of December 31, 1998
and 1997, and for the years ended December 31, 1998 and 1997, six months ended
December 31, 1996, and year ended June 30, 1996, which report appears in the
December 31, 1998 annual report on Form 11-K of ChemFirst Inc. 401(k) Savings
and Employee Stock Ownership Plan.
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
Jackson, Mississippi
June 28, 1999
