<PAGE>
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
For the fiscal year ended December 31, 1997
or
[ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934 for the transition period from ________ to ________
MISSISSIPPI CHEMICAL CORPORATION
P.O. BOX 388
YAZOO CITY, MISSISSIPPI 39194
(601) 746-4131
Commission File No. 1-12217
<PAGE>
A. Full title of the plans and the address of the plans, if different
from that of the issuer named below:
Mississippi Chemical Corporation
Thrift Plan Plus
Mississippi Phosphates Corporation
401(k) Retirement Plan
Eddy Potash, Inc. 401(k) Plan
For Bargaining Unit Employees
Mississippi Phosphates Corporation and Eddy Potash, Inc. are
wholly-owned subsidiaries of Mississippi Chemical Corporation.
B. Name of issuer of the securities held pursuant to the plans and the
address of its principal executive office:
Mississippi Chemical Corporation
P.O. Box 388
Yazoo City, Mississippi 39194
(601) 746-4131
Financial Statements and Exhibits
---------------------------------
(A) Financial Statements:
Mississippi Chemical Corporation
Thrift Plan Plus
Report of Independent Public Accountants
Financial Statements Prepared in Accordance with
the Financial Reporting Requirements of ERISA
Notes to Financial Statements
Schedules to Financial Statements
Mississippi Phosphates Corporation
401(k) Retirement Plan
Report of Independent Public Accountants
Financial Statements Prepared in Accordance with
the Financial Reporting Requirements of ERISA
Notes to Financial Statements
Schedule to Financial Statements
<PAGE>
Eddy Potash, Inc. 401(K) Plan
For Bargaining Unit Employees
Report of Independent Public Accountants
Financial Statements Prepared in Accordance with
the Financial Reporting Requirements of ERISA
Notes to Financial Statements
Schedules to Financial Statements
(B) Exhibits:
23.1 Consent of Arthur Andersen LLP
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Trustees of the Mississippi Chemical Corporation Thrift Plan Plus,
Mississippi Phosphates Corporation 401(k) Retirement Plan and the Eddy Potash
401(K) Plan For Bargaining Unit Employees have duly caused this annual report to
be signed by the undersigned thereunto duly authorized.
Dated: June 30, 1998
MISSISSIPPI CHEMICAL CORPORATION
THRIFT PLAN PLUS
By: MISSISSIPPI CHEMICAL
CORPORATION, Plan Administrator
By:/s/ Charles O. Dunn
-------------------
Charles O. Dunn
President and Chief Executive Officer
MISSISSIPPI PHOSPHATES CORPORATION
401(k) RETIREMENT PLAN
By: MISSISSIPPI PHOSPHATES
CORPORATION, Plan Administrator
By:/s/ Charles O. Dunn
-------------------
Charles O. Dunn
President and Chief Executive Officer
EDDY POTASH, INC.
401(K) PLAN FOR BARGAINING
UNIT EMPLOYEES
By: EDDY POTASH, INC., Plan
Administrator
By:/s/ Charles O. Dunn
-------------------
Charles O. Dunn
President and Chief Executive Officer
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS
-------------------------------------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
AS OF DECEMBER 31, 1997 AND 1996
--------------------------------
TOGETHER WITH AUDITORS' REPORT
------------------------------
INDEX
-----
PAGE
----
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS:
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 3
NOTES TO FINANCIAL STATEMENTS 4-10
SUPPLEMENTAL SCHEDULES:
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES 11
SCHEDULE OF REPORTABLE TRANSACTIONS 12
<PAGE>
Report of Independent Public Accountants
----------------------------------------
To the Thrift Plan Plus Committee of the
Mississippi Chemical Corporation
Thrift Plan Plus:
We have audited the accompanying statements of net assets available for benefits
of the Mississippi Chemical Corporation Thrift Plan Plus (the "Plan") as of
December 31, 1997 and 1996, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1997. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and 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 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 the Plan as of
December 31, 1997 and 1996, and the changes in net assets available for benefits
for the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for
purposes of additional analysis and 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. The Fund Information in
the statements of net assets available for benefits and the statement of changes
in net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information 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.
Arthur Andersen LLP
Memphis, Tennessee,
June 12, 1998.
-1-
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS
-------------------------------------------------
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
-----------------------------------------------
AS OF DECEMBER 31
-----------------
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Investments:
- -----------
Investments at Contract Value:
MCC Investment Contract Fund $30,308,956 $30,184,776
Investments at Fair Value:
Vanguard Bond Index Fund 777,331 417,850
Vanguard Wellington Fund 10,361,142 6,971,441
Vanguard 500 Portfolio Fund 9,921,232 6,158,816
Vanguard U. S. Growth Fund 7,595,125 5,076,108
Vanguard Extended Market Portfolio Fund 81,093 -
Vanguard International Growth Portfolio Fund 33,661 -
Vanguard LifeStrategy Growth Portfolio Fund 3,114 -
Vanguard LifeStrategy Moderate Growth Portfolio Fund 122 -
Mississippi Chemical Corporation Stock Fund 716,505 844,538
Participant Loan Fund 2,286,296 670,757
----------- -----------
Total Investments 62,084,577 50,324,286
Receivables:
- ------------
Contributions Receivable 222,010 212,826
Interest Receivable - 1,628
----------- -----------
Total Receivables 222,010 214,454
Payables:
- --------
Securities Purchased not Settled - 16,686
Participant Refunds - 20,269
----------- -----------
Total Payables - 36,955
Net Assets Available for Benefits $62,306,587 $50,501,785
=========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
-2-
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS
-------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
<TABLE>
<CAPTION>
Participant Directed
------------------------------------------------------------
MCC Vanguard Vanguard Vanguard
Investment Bond Vanguard 500 U.S.
Contract Index Wellington Portfolio Growth
Total Fund Fund Fund Fund Fund
----------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Additions to Net Assets Attributed to:
Investment Income:
Net Appreciation/(Depreciation)
in Fair Value of Investments $ 4,288,613 $ 52 $ 17,487 $ 1,087,852 $2,137,232 $1,262,047
Interest and Dividends 3,109,633 1,707,511 36,032 869,775 202,837 295,989
----------- ----------- ---------- ----------- ---------- ----------
7,398,246 1,707,563 53,519 1,957,627 2,340,069 1,558,036
----------- ----------- ---------- ----------- ---------- ----------
Contributions:
Participants' 3,766,523 997,722 104,569 700,311 897,897 725,959
Employer's 1,053,982 303,281 35,132 218,936 217,124 186,234
----------- ----------- ---------- ----------- ---------- ----------
4,820,505 1,301,003 139,701 919,247 1,115,021 912,193
----------- ----------- ---------- ----------- ---------- ----------
Total Additions 12,218,751 3,008,566 193,220 2,876,874 3,455,090 2,470,229
Deductions from Net Assets
Attributed to:
Benefits Paid to Participants 3,791,399 2,790,393 14,634 463,397 356,818 139,773
Other 205 - - - - -
----------- ----------- ---------- ----------- ---------- ----------
Total Deductions 3,791,604 2,790,393 14,634 463,397 356,818 139,773
----------- ----------- ---------- ----------- ---------- ----------
Net Increase (Decrease) Prior to
Transfers 8,427,147 218,173 178,586 2,413,477 3,098,272 2,330,456
Transfers from Other Plans 3,377,655 970,372 109,622 796,371 466,136 399,543
Interfund Transfers - (1,064,365) 71,273 179,853 198,008 (210,982)
----------- ----------- ---------- ----------- ---------- ----------
Net Increase (Decrease) 11,804,802 124,180 359,481 3,389,701 3,762,416 2,519,017
Net Assets Available for Benefits:
Beginning of Year 50,501,785 30,184,776 417,850 6,971,441 6,158,816 5,076,108
----------- ----------- ---------- ----------- ---------- ----------
End of Year $ 62,306,587 $30,308,956 $ 777,331 $10,361,142 $9,921,232 $7,595,125
============ =========== ========== =========== ========== ==========
<CAPTION>
Participant Directed
---------------------------------------------------------------------------------
Vanguard
Vanguard Vanguard Vanguard LifeStrategy
Extended International LifeStrategy Moderate MCC
Market Growth Growth Growth Stock
Portfolio Fund Portfolio Fund Portfolio Fund Portfolio Fund Fund
-------------- -------------- -------------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Additions to Net Assets Attributed to:
Investment Income:
Net Appreciation/(Depreciation)
in Fair Value of Investments $ (3,067) $ (738) $ 11 $ (3) $ (212,260)
Interest and Dividends 4,686 1,425 103 4 13,970
-------------- -------------- -------------- -------------- ----------
1,619 687 114 1 (198,290)
-------------- -------------- -------------- -------------- ----------
Contributions:
Participants' 519 412 - 50 171,932
Employer's 260 163 - 25 37,969
-------------- -------------- -------------- -------------- ----------
779 575 - 75 209,901
-------------- -------------- -------------- -------------- ----------
Total Additions 2,398 1,262 114 76 11,611
Deductions from Net Assets
Attributed to:
Benefits Paid to Participants - - - - 26,384
Other 205 - - - -
Total Deductions 205 - - - 26,384
-------------- -------------- -------------- -------------- ----------
Net Increase (Decrease) Prior to
Transfers 2,193 1,262 114 76 (14,773)
Transfers from Other Plans - - - - 37,605
Interfund Transfers 78,900 32,399 3,000 46 (150,865)
-------------- -------------- -------------- -------------- ----------
Net Increase (Decrease) 81,093 33,661 3,114 122 (128,033)
Net Assets Available for Benefits:
Beginning of Year - - - - 844,538
-------------- -------------- -------------- -------------- ----------
End of Year $ 81,093 $ 33,661 $ 3,114 $ 122 $ 716,505
============== ============== ============== ============== ==========
<CAPTION>
Participant Directed
------------------------
Participant
Loan
Fund Other
------------ ----------
<S> <C> <C>
Additions to Net Assets Attributed to:
Investment Income:
Net Appreciation/(Depreciation)
in Fair Value of Investments $ - $ -
Interest and Dividends 154,800 (177,499)
------------ ----------
154,800 (177,499)
------------ ----------
Contributions:
Participants' - 167,152
Employer's - 54,858
------------ ----------
- 222,010
------------ ----------
Total Additions 154,800 44,511
Deductions from Net Assets
Attributed to:
Benefits Paid to Participants - -
Other - -
------------ ----------
Total Deductions - -
------------ ----------
Net Increase (Decrease) Prior to
Transfers 154,800 44,511
Transfers from Other Plans 598,006 -
Interfund Transfers 862,733 -
------------ ----------
Net Increase (Decrease) 1,615,539 44,511
Net Assets Available for Benefits:
Beginning of Year 670,757 177,499
------------ ----------
End of Year $ 2,286,296 $ 222,010
============ ==========
</TABLE>
The accompanying notes to financial
statements are an integral part of this statement.
-3-
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS
-------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1997
-----------------
1. DESCRIPTION OF THE PLAN:
-----------------------
General
The Mississippi Chemical Corporation Thrift Plan Plus (the "Plan") is designed
to encourage and assist employees in a long-range program of savings. The Plan
became effective as of January 1, 1984 and is an amendment to and restatement of
the Mississippi Chemical Corporation Thrift Plan which resulted from the merger
on January 1, 1983 of the Mississippi Chemical Corporation Savings and
Investment (Thrift) Plan, established July 1, 1973, and the Mississippi Chemical
Corporation New Mexico Facility Savings and Investment (Thrift) Plan,
established September 1, 1975. The Plan was amended and restated as of January
1, 1985, in order to comply with Part I of the Deficit Reduction Act of 1984 and
the Retirement Equity Act of 1984. The Plan was amended and restated as of July
1, 1997, in order to permit daily valuation of the participants' accounts.
The Plan is organized with the intent to comply with the provisions of Section
401(k) of the Internal Revenue Code (the "IRC"), whereby the participant can
defer the amount of his compensation contributed to the Plan from his taxable
income until withdrawn from the Plan.
Eligibility and Contributions
Effective July 1, 1997, new employees of Mississippi Chemical Corporation
("MCC") and non-union employees of Mississippi Potash, Incorporated and its
subsidiary (collectively the "Company") became eligible to participate in the
Plan on the date of their employment. Mississippi Potash, Incorporated is a
wholly owned subsidiary of MCC. Prior to July 1, 1997, employees of the Company
working 1,000 hours within twelve months after their employment date were
eligible to participate in the Plan. Former participants who were reemployed on
a regular, full-time basis became eligible to participate in the Plan
immediately.
Participants may elect to make a salary deferral contribution up to 17.6% of
base compensation. The salary deferral contributions cannot exceed the maximum
allowable under IRS guidelines. The Company matches 50% of participants'
contributions, but not in excess of 3% of base compensation.
-4-
<PAGE>
1. DESCRIPTION OF THE PLAN (Continued):
-----------------------------------
Included in employee contributions in the accompanying statement of changes in
net assets available for benefits are participant account balances which were
received as rollovers from a plan in which employees acquired by Mississippi
Potash, Incorporated had participated. The amounts transferred, by fund
balance, were as follows:
<TABLE>
<CAPTION>
<S> <C>
MCC Investment Contract Fund $242,732
Vanguard Bond Index Fund 9,288
Vanguard Wellington Fund 81,525
Vanguard 500 Portfolio Fund 255,408
Vanguard U.S. Growth Fund 187,126
MCC Stock Fund 55,233
--------
Total $831,312
========
</TABLE>
Participant Accounts
Each participant's deferred account is credited with their contributions and the
investment earnings on the account. Each participant also has a Company
matching account, which is credited with the Company's contributions made on the
participant's behalf and the investment earnings on the account.
Vesting
A participant is fully vested in the portion of his account related to his own
contributions. Upon death, disability, retirement at the normal retirement age,
or completion of 5 years of service, a participant will be fully vested in the
employer's contribution. Upon termination of the Plan, all funds in each
participant's account shall be fully vested and non-forfeitable.
Trustee
The Vanguard Fiduciary Trust Company ("Vanguard") became the trustee of the Plan
effective August 1, 1997. Prior to August 1, 1997, NationsBank served as the
trustee of the Plan.
Investment Options
The MCC Stock Fund invests in securities of the Company. The Plan limits the
amount of participant contributions to the MCC Stock Fund to 20% of total
contributions. Additionally, investment in the MCC Stock Fund is limited to 20%
of a participant's total account balance.
Upon enrollment in the Plan, a participant may direct employee contributions in
any of the following investment options:
a. MCC Investment Contract Fund - Funds are invested in a pool of
investment contracts issued by insurance companies and banks.
b. Vanguard Bond Index Fund - Funds are invested in a diversified portfolio
of U.S. Government and corporate bonds and mortgage-backed securities.
-5-
<PAGE>
1. DESCRIPTION OF THE PLAN (Continued):
-----------------------------------
c. Vanguard Wellington Fund - Funds are invested in a diversified portfolio
of common stocks and bonds, with common stocks expected to represent 60%
to 70% of the fund's total assets.
d. Vanguard 500 Portfolio Fund - Funds are invested in all of the stocks
comprising the S&P 500.
e. Vanguard U.S. Growth Fund - Funds are invested in equity securities of
companies in the U.S.
f. Vanguard Extended Market Portfolio Fund - Funds are invested in stocks
of medium-sized and small U.S. companies (none of which is included in
the Standard & Poor's 500 Index).
g. Vanguard International Growth Portfolio Fund - Funds are invested in
stocks of non-U.S. companies in up to 30 foreign stock markets.
h. Vanguard LifeStrategy Growth Portfolio Fund - Funds are invested in
other Vanguard funds, with funds emphasizing U.S. stocks representing 50%
of the total assets of the fund.
i. Vanguard LifeStrategy Moderate Growth Portfolio Fund - Funds are
invested in other Vanguard funds, with funds emphasizing U.S. Government
and corporate bonds and stocks representing 65% of the total assets of
the fund.
j. MCC Stock Fund - Funds are invested in common stock of Mississippi
Chemical Corporation.
Participants may request a change in their investment options daily via a voice
response system. Prior to Vanguard serving as trustee, participants could
request a change in their investment options by the fifteenth of any month to
become effective at the beginning of the following month.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of the participant's vested
account balance. The maximum term for loans is 5 years, except for loans to
purchase the participant's primary residence. The loans are secured by the
vested balance in the participant's account and bear interest at a fixed rate
for the term of the loan. The interest rate shall be the prime rate of Chase
Manhattan as of the date of the loan plus 2%. The Plan allows participants a
maximum of three outstanding loans - one for the purchase of a home and two for
personal reasons. Interest rates on loans outstanding as of December 31, 1997
range from 7.25% to 11%.
Included in transfers from other plans in the accompanying statement of changes
in net assets available for benefits are participant loans totaling $576,893.
These loans were received as part of rollovers received from a plan in which
employees acquired by Mississippi Potash, Incorporated had participated.
-6-
<PAGE>
1. DESCRIPTION OF THE PLAN (Continued):
-----------------------------------
Administration
The operations of the Plan are administered and supervised by the MCC Thrift
Plan Plus Committee (the "Committee"), which is appointed by the Board of
Directors of MCC. Administration expenses of the Plan are paid by MCC and were
approximately $138,000 during 1997.
Payment of Benefits
Upon termination of service due to death, disability or normal retirement date,
a participant may elect to receive either a lump-sum amount equal to the value
of the participant's vested account or a combination of payments, on the dates
and in the amounts specified by the participant subject to a minimum
distribution of $500.
Forfeitures
Forfeitures represent the non-vested portions of the accounts of participants
who have terminated or incurred a break in service during the Plan year.
Forfeitures are used to reduce employer contributions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
Basis of Accounting
The financial statements of the Plan have been prepared on the accrual basis of
accounting.
Investment Valuation and Income Recognition
In accordance with the American Institute of Certified Public Accountants'
Statement of Position 94-4 ("SOP 94-4"), "Reporting of Investment Contracts Held
by Health and Welfare Benefit Plans and Defined-Contribution Pension Plans,"
fully benefit-responsive investment contracts (as defined in SOP 94-4) are
valued at contract value. Contract value represents contributions made under
the contract plus interest at the contract rate less funds withdrawn by the
participants.
The MCC Investment Contract Fund meets the requirements of a fully benefit-
responsive guaranteed investment contract ("GIC"), and consists of the
following:
<TABLE>
<CAPTION>
December 31
------------------------
1997 1996
----------- -----------
<S> <C> <C>
Vanguard Retirement Savings Trust $29,372,778 $27,181,461
Metropolitan Life Insurance Policy GAC-18595B 936,178 1,991,144
Nations Prime Fund - 1,012,171
----------- -----------
Total $30,308,956 $30,184,776
=========== ===========
</TABLE>
-7-
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
------------------------------------------------------
Performance and other information regarding the funds are as follows:
1997 1996
----- -----
Vanguard Retirement Savings Trust
Average yield 6.2% 6.1%
Crediting interest rate 6.2% 6.1%
Metropolitan Life Insurance Policy
Average yield 7.4% 6.9%
Crediting interest rate 7.4% 6.9%
Contract value on both of the above GIC's approximates fair value.
For the Vanguard Retirement Savings Trust (the "Trust"), the crediting rate
resets for alternative contracts held by the Trust on a calendar quarter basis
after the initial rate for the contract is established. The reset calculation
considers the book value of the contract, the market value and yield of the
underlying investment, the duration of the investment, management and contract
fees. The crediting rates of the alternative contracts have a contractual floor
that does not fall below zero. The Trust has no valuation reserves.
The Plan's investments are stated at fair value except for the GICs, which are
valued at contract value. Shares of registered investment companies are valued
at quoted market prices which represent the net asset value of shares held by
the Plan at year-end. The MCC stock is valued at its quoted market price.
Participant loans are valued at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Investment income is recorded on an accrual basis.
Benefit Payments
Benefits are recorded when paid. Benefit payments and withdrawals are made by
the Plan trustee at the direction of the Committee.
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 assets and liabilities and disclosures of
contingent assets and liabilities at the date of financial statements and
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates.
-8-
<PAGE>
3. INVESTMENTS:
-----------
The fair values of individual investments that represent 5% or more of the
Plan's assets are as follows at December 31:
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
MCC Investment Contract Fund $30,308,956 $30,184,776
Vanguard Wellington Fund 10,361,142 6,971,441
Vanguard 500 Portfolio Fund 9,921,232 6,158,816
Vanguard U.S. Growth Fund 7,595,125 5,076,108
</TABLE>
4. PLAN MERGER:
-----------
The Mississippi Phosphates Corporation 401(k) Retirement Plan (the "MPC Plan")
was merged with the Plan effective May 31, 1997. Assets totaling $2,800,762
were transferred from the MPC Plan to the Plan. All former participants and
persons who would otherwise be eligible to participate in the MPC Plan are now
eligible to participate in the Plan subject to the provisions of the Plan.
5. PLAN TERMINATION:
----------------
The Board of Directors of the Company has the right to terminate the Plan, but
has expressed no intention to do so. In the event of termination of the Plan,
the account balances of all affected participants become fully vested and non-
forfeitable. Each participant, retired participant or beneficiary shall then be
entitled to receive all amounts credited to his account.
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
---------------------------------------------------
The following is a reconciliation of net assets available for benefits between
the financial statements and Form 5500:
<TABLE>
<CAPTION>
December 31
-------------------------
1997 1996
----------- -----------
<S> <C> <C>
Net assets available for benefits per the
financial statements $62,306,587 $50,501,785
Contribution receivable per the financial statements
not reflected in Form 5500 (222,010) (69,935)
Benefits payable per Form 5500 not reflected
in the financial statements - (70,562)
Refunds payable to participants per the financial
statements not reflected in Form 5500 - 20,269
----------- -----------
Net assets available for benefits per
Form 5500 $62,084,577 $50,381,557
=========== ===========
</TABLE>
-9-
<PAGE>
7. TAX STATUS:
----------
The IRS has determined and informed the Company by a letter dated July 31, 1995,
that the Plan is designed in accordance with applicable sections of the IRC.
The Plan has been amended since receiving the determination letter. However,
the Plan's administrator and the Plan's tax counsel believe that the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC. Accordingly, no provision for federal income taxes
has been made in the accompanying financial statements.
8. RELATED PARTY TRANSACTIONS:
--------------------------
Certain Plan investments are shares of MCC stock and funds managed by Vanguard.
As the Company is the Plan sponsor and Vanguard serves as the trustee of the
Plan, these transactions qualify as party-in-interest transactions.
Additionally, participant loan transactions qualify as party-in-interest
transactions.
9. SUBSEQUENT EVENTS:
-----------------
Effective January 1, 1998, the Plan changed the salary deferral percentage from
17.6% of base compensation to 22.0% of base compensation.
The Eddy Potash, Inc. 401(k) Plan for Bargaining Unit Employees (the "Eddy
Potash Plan") was merged with the Plan effective May 1, 1998, at which time all
assets of the Eddy Potash Plan were transferred to the Plan. The merger of the
Eddy Potash Plan into the Plan did not result in any new active participants in
the Plan.
-10-
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS
-------------------------------------------------
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
-----------------------------------------------
AS OF DECEMBER 31, 1997
-----------------------
<TABLE>
<CAPTION>
Market/Contract
Description of Investment Cost Value
- ------------------------------------- ------------ ---------------
<S><C> <C> <C>
* Vanguard Retirement Savings Trust $29,372,778 $29,372,778
Metropolitan Life Insurance Policy
(GAC-18595B) 936,178 936,178
* Vanguard Bond Index Fund 771,874 777,331
* Vanguard Wellington Fund 10,806,297 10,361,142
* Vanguard 500 Portfolio Fund 9,813,506 9,921,232
* Vanguard U.S. Growth Fund 7,846,513 7,595,125
* Vanguard Extended Market Portfolio Fund 84,145 81,093
* Vanguard International Growth Portfolio Fund 34,824 33,661
* Vanguard LifeStrategy Growth Portfolio Fund 3,103 3,114
* Vanguard LifeStrategy Moderate Growth Portfolio Fund 124 122
* MCC Stock Fund 881,962 716,505
* Participant Loan Fund 2,286,296 2,286,296
</TABLE>
* Indicates an investment with a party-in-interest.
-11-
<PAGE>
MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS
-------------------------------------------------
SCHEDULE OF REPORTABLE TRANSACTIONS
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
<TABLE>
<CAPTION>
Number Net Gain
of Total Number Sales or (Loss)
Description of Asset Purchases Purchases of Sales Proceeds on Sales
-------------------- ---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
* MCC Investment
Contract Fund 75 $35,942,322 87 $4,527,826 $ -
* Nations Prime Fund 275 3,670,271 145 4,681,719 -
* Vanguard Wellington
Fund 41 11,415,640 54 606,410 (2,933)
* Vanguard 500
Portfolio Fund 48 10,666,737 60 852,540 (691)
* Vanguard U.S. Growth
Fund 41 8,463,912 61 598,464 (18,935)
</TABLE>
* Indicates a transaction with a party-in-interest.
-12-
<PAGE>
MISSISSIPPI PHOSPHATES CORPORATION 401(k) RETIREMENT PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
AS OF MAY 31, 1997 AND DECEMBER 31, 1996
TOGETHER WITH AUDITORS' REPORT
<PAGE>
MISSISSIPPI PHOSPHATES CORPORATION 401(K) RETIREMENT PLAN
---------------------------------------------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
----------------------------------------------
AS OF MAY 31, 1997 AND DECEMBER 31, 1996
----------------------------------------
TOGETHER WITH AUDITORS' REPORT
------------------------------
INDEX
-----
PAGE
----
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS:
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 3
NOTES TO FINANCIAL STATEMENTS 4-8
SUPPLEMENTAL SCHEDULE:
SCHEDULE OF REPORTABLE TRANSACTIONS 9
<PAGE>
Report of Independent Public Accountants
----------------------------------------
To the Retirement Plan Committee of the
Mississippi Phosphates Corporation
401(k) Retirement Plan:
We have audited the accompanying statements of net assets available for benefits
of the Mississippi Phosphates Corporation 401(k) Retirement Plan (the "Plan") as
of May 31, 1997 and December 31, 1996, and the related statement of changes in
net assets available for benefits for the five months ended May 31, 1997. These
financial statements and the schedule referred to below are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 the Plan as of
May 31, 1997 and December 31, 1996, and the changes in its net assets available
for benefits for the five months ended May 31, 1997, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of reportable
transactions is presented for purposes of additional analysis and 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 Fund
Information in the statements of net assets available for benefits and the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for benefits and changes in net assets available for benefits of each fund. The
supplemental schedule and Fund Information 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.
Arthur Andersen LLP
Memphis, Tennessee,
June 12, 1998.
-1-
<PAGE>
MISSISSIPPI PHOSPHATES CORPORATION 401(k) RETIREMENT PLAN
---------------------------------------------------------
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
-----------------------------------------------
AS OF MAY 31, 1997 AND DECEMBER 31, 1996
----------------------------------------
1997 1996
---------- ----------
Investments:
- -----------
At Contract Value:
Vanguard Investment Contract Trust Fund $ - $ 845,012
At Fair Value:
Vanguard Bond Index Fund - 95,741
Vanguard Wellington Fund - 655,341
Vanguard 500 Portfolio Fund - 361,081
Vanguard U. S. Growth Fund - 314,468
Mississippi Chemical Corporation Stock Fund - 31,920
Participant Loan Fund - 6,880
---------- ----------
Total Investments - 2,310,443
Receivables:
- -----------
Contributions Receivable 26,776 40,850
Interest Receivable - 11
Other - 35,307
---------- ----------
Total Receivables 26,776 76,168
Payables:
- --------
Due to other plan 26,776 -
---------- ----------
Net Assets Available for Benefits $ - $2,386,611
========== ==========
The accompanying notes to financial statements
are an integral part of these statements.
-2-
<PAGE>
MISSISSIPPI PHOSPHATES CORPORATION 401(k) RETIREMENT PLAN
---------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
FOR THE FIVE MONTHS ENDED MAY 31, 1997
--------------------------------------
<TABLE>
<CAPTION>
Participant Directed
----------------------------------
Vanguard Vanguard
Investment Bond Vanguard
Contract Index Wellington
Fund Fund Fund
---------- --------- ----------
<S> <C> <C> <C>
Additions to Net Assets Attributed to:
Investment Income
Net Appreciation/(Depreciation)
in Fair Value of Investments $ (27) $ (981) $ 56,498
Interest and Dividends 22,382 2,797 5,344
--------- --------- ---------
22,355 1,816 61,842
--------- --------- ---------
Contributions:
Participants' 78,973 7,708 52,436
Employer's 28,785 3,438 18,043
--------- --------- ---------
Total Contributions 107,758 11,146 70,479
--------- --------- ---------
Total Additions 130,113 12,962 132,321
Deductions from Net Assets
Attributed to:
Benefits Paid to Participants (812) - (184)
Other - - -
--------- --------- ---------
Total Deductions (812) - (184)
--------- --------- ---------
Net Increase Prior to Transfers 129,301 12,962 132,137
Interfund Transfers (13,918) (93) 1,593
Transfer to Other Plan (960,395) (108,610) (789,071)
--------- --------- ---------
Net Decrease (845,012) (95,741) (655,341)
Net Assets Available for Benefits:
Beginning of Year 845,012 95,741 655,341
--------- --------- ---------
End of Year $ - $ - $ -
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------
Vanguard Vanguard Mississippi
500 U.S. Chemical
Portfolio Growth Corporation
Fund Fund Stock Fund
--------- --------- -----------
<S> <C> <C> <C>
Additions to Net Assets Attributed to:
Investment Income
Net Appreciation/(Depreciation)
in Fair Value of Investments $ 56,538 $ 47,699 $ (2,064)
Interest and Dividends 1,724 - 294
--------- --------- --------
58,262 47,699 (1,770)
--------- --------- --------
Contributions:
Participants' 32,958 25,855 3,419
Employer's 12,526 9,591 1,220
--------- --------- --------
Total Contributions 45,484 35,446 4,639
--------- --------- --------
Total Additions 103,746 83,145 2,869
Deductions from Net Assets
Attributed to:
Benefits Paid to Participants (1,465) - -
Other - - -
--------- --------- --------
Total Deductions (1,465) - -
--------- --------- --------
Net Increase Prior to Transfers 102,281 83,145 2,869
Interfund Transfers (2,340) (1,517) 2,342
Transfer to Other Plan (461,022) (396,096) (37,131)
--------- --------- --------
Net Decrease (361,081) (314,468) (31,920)
Net Assets Available for Benefits:
Beginning of Year 361,081 314,468 31,920
--------- --------- --------
End of Year $ - $ - $ -
========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
----------------------
Participant
Loan Fund Other Total
----------- -------- -----------
<S> <C> <C> <C>
Additions to Net Assets Attributed to:
Investment Income
Net Appreciation/(Depreciation)
in Fair Value of Investments $ - $ - $ 157,663
Interest and Dividends 834 5 33,380
-------- -------- -----------
834 5 191,043
-------- -------- -----------
Contributions:
Participants' - (10,137) 191,212
Employer's - (3,937) 69,666
-------- -------- -----------
Total Contributions - (14,074) 260,878
-------- -------- -----------
Total Additions 834 (14,069) 451,921
Deductions from Net Assets
Attributed to:
Benefits Paid to Participants - - (2,461)
Other - (35,323) (35,323)
-------- -------- -----------
Total Deductions - (35,323) (37,784)
-------- -------- -----------
Net Increase Prior to Transfers 834 (49,392) 414,137
Interfund Transfers 13,933 - -
Transfer to Other Plan (21,647) (26,776) (2,800,748)
-------- -------- -----------
Net Decrease (6,880) (76,168) (2,386,611)
Net Assets Available for Benefits:
Beginning of Year 6,880 76,168 2,386,611
-------- -------- -----------
End of Year $ - $ - $ -
======== ======== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
-3-
<PAGE>
MISSISSIPPI PHOSPHATES CORPORATION 401(k) RETIREMENT PLAN
---------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
MAY 31, 1997
------------
1. DESCRIPTION OF THE PLAN:
-----------------------
General
The Mississippi Phosphates Corporation 401(k) Retirement Plan (the "Plan") was
designed to encourage and assist employees of Mississippi Phosphates Corporation
("MPC," or the "Company"), a wholly owned subsidiary of Mississippi Chemical
Corporation ("MCC"), in a long-range program of savings. The Plan was effective
as of January 1, 1993. The Plan was amended and restated as of August 1, 1995.
As discussed in Note 7, the Company voted to merge the Plan into the MCC Thrift
Plan Plus (the "Thrift Plan") effective May 31, 1997.
The Plan was organized with the intent to comply with the provisions of Section
401(k) of the Internal Revenue Code (the "IRC"), whereby the participant could
defer the amount of their compensation contributed to the Plan from their
taxable income until withdrawn from the Plan.
Eligibility and Contributions
Employees working for the Company 1,000 hours within twelve months after their
employment date were eligible to participate in the Plan after one year of
service. A participant could elect to make a salary deferral contribution up to
16% of their base compensation. The Company matched 50% of the employee's
contribution, but not in excess of 3% of the employee's base compensation.
Contributions were subject to certain limitations set forth by IRS guidelines.
Participant Accounts
Each participant's deferred account was credited with the participant's
contributions and the investment earnings on the account. Each participant also
had a Company matching account, which was credited with the Company's
contributions made on the participant's behalf and the investment earnings on
the account.
Vesting
A participant was fully vested in the portion of his account related to his own
contributions. Upon death, disability, retirement at normal retirement age or
completion of 5 years of service, a participant would be fully vested in the
employer's contribution. Upon termination of the Plan, all funds in each
participant's account would be fully vested and non-forfeitable.
-4-
24
<PAGE>
1. DESCRIPTION OF THE PLAN (Continued):
-----------------------------------
Investment Options
The Plan elected to utilize The Vanguard Group of Investment Companies
("Vanguard") as investment manager. Contributions were invested, at the
discretion of the individual participant, in investment funds managed by
Vanguard. Participants also had the option to invest in the MCC Stock Fund
which purchased securities of MCC. The Plan limited the amount of participant
contributions to the MCC Stock Fund to 20% of total contributions.
Additionally, investment in the MCC Stock Fund was limited to 20% of a
participant's total account balance.
Upon enrollment in the Plan, a participant could direct employee contributions
in any of the six following investment options:
a. Vanguard Investment Contract Trust Fund - Funds are invested in a pool
of investment contracts issued by insurance companies and banks.
b. Vanguard Bond Index Fund - Funds are invested in a diversified portfolio
of U.S. Government and corporate bonds and mortgage-backed securities.
c. Vanguard Wellington Fund - Funds are invested in a diversified portfolio
of common stocks and bonds, with common stocks expected to represent 60%
to 70% of the fund's total assets.
d. Vanguard 500 Portfolio Fund - Funds are invested in all of the stocks
that comprise the S&P 500.
e. Vanguard U.S. Growth Fund - Funds are invested in equity securities of
companies in the U.S.
f. Mississippi Chemical Corporation Stock Fund - Funds are invested in
common stock of MCC.
Participants could request a change in their investment options by the 15th of
any month to become effective at the beginning of the following month.
Participant Loans
Participants could borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of the participant's vested
account balance. The maximum term for loans was 5 years, except for loans to
purchase the participant's primary residence. The loans were secured by the
balance in the participant's account and bore interest at a fixed rate for the
term of the loan. The interest rate was the prime rate of NationsBank as of the
date of the loan plus 2%.
-5-
25
<PAGE>
1. DESCRIPTION OF THE PLAN (Continued):
-----------------------------------
Payment of Benefits
Upon termination of service due to death, disability or normal retirement date,
a participant could elect to receive either a lump-sum amount equal to the value
of the participant's vested account or a combination of payments, on the dates
and in the amounts specified by the participant subject to a minimum
distribution of $100.
Forfeitures
Forfeitures represented the non-vested portions of the accounts of participants
who had terminated or incurred a break in service during the Plan year.
Forfeitures were used to reduce employer contributions.
Administrative Expenses
The operations of the Plan were administered and supervised by the MPC 401(k)
Plan Committee (the "Committee"), which was appointed by the Board of Directors
of MPC. Administration expenses of the Plan were paid by MPC, and were
approximately $13,000 during 1997.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
Basis of Accounting
The financial statements of the Plan have been prepared on the accrual basis of
accounting.
Investment Valuation and Income Recognition
In accordance with the American Institute of Certified Public Accountants'
Statement of Position 94-4 ("SOP 94-4"), "Reporting of Investment Contracts Held
by Health and Welfare Benefit Plans and Defined-Contribution Pension Plans,"
fully benefit-responsive investment contracts (as defined in SOP 94-4) were
valued at contract value. Contract value represented contributions made under
the contract plus interest at the contract rate less funds withdrawn by the
participants.
-6-
26
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
------------------------------------------------------
The Vanguard Investment Contract Trust Fund met the requirements of a fully
benefit-responsive guaranteed investment contract ("GIC"), and consisted of the
following:
1997 1996
-------- --------
Vanguard Investment Contract Trust $ - $836,935
Nations Prime Fund - 8,077
-------- --------
Total $ - $845,012
======== ========
1997 1996
-------- --------
Vanguard Investment Contract Trust Fund
Average Yield 6.2% 6.1%
Crediting Interest Rate 6.2% 6.1%
Contract Value on the above GIC approximated fair value.
The Vanguard Investment Contract Trust Fund's (the "Trust") crediting rate reset
for alternative contracts held by the Trust on a calendar quarter basis after
the initial rate for the contract was established. The reset calculation
considered the book value of the contract, the market value and yield of the
underlying investment, the duration of the investment, and management and
contract fees. The crediting rates of the alternative contracts had a
contractual floor that did not fall below zero. The Trust had no valuation
reserves.
The Plan's investments were stated at fair value, except for the GIC, which was
valued at contract value. Shares of registered investment companies were valued
at quoted market prices which represented the net asset value of shares held by
the Plan at year-end. The MCC stock was valued at its quoted market price at
the end of the period. Participant loans were valued at cost which approximated
fair value.
Purchases and sales of securities were recorded on a trade-date basis.
Investment income was recorded on an accrual basis.
Benefit Payments
Benefits were recorded when paid. Benefit payments and withdrawals were made by
the Plan trustee at the direction of the Committee.
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 assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the amounts of income and expenses during the reporting period. Actual results
could differ from those estimates.
-7-
27
<PAGE>
3. INVESTMENTS:
-----------
The fair value of individual investments that represented 5% or more of the
Plan's assets as of December 31, 1996 were as follows:
Vanguard Investment Contract Trust Fund $845,012
Vanguard Wellington Fund 655,341
Vanguard 500 Portfolio Fund 361,081
Vanguard U.S. Growth Fund 314,468
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
---------------------------------------------------
The following is a reconciliation of net assets available for benefits between
the financial statements and Form 5500 as of December 31, 1996.
Net assets available for benefits per the
financial statements $2,386,611
Contributions receivable per the financial
statements not reflected in Form 5500 (15,573)
Other receivable per financial statements
not reflected in Form 5500 (35,307)
----------
Net assets available for benefits per
Form 5500 $2,335,731
==========
5. TAX STATUS:
----------
The IRS had determined and informed the Company by a letter dated March 26,
1996, that the Plan was designed in accordance with applicable sections of the
IRC. The Plan had been amended since receiving the determination letter.
However, the Plan's administrator and the Plan's tax counsel believe that the
Plan was designed and was being operated in compliance with the applicable
requirements of the IRC. Accordingly, no provision for federal income taxes has
been made in the accompanying financial statements.
6. RELATED PARTY TRANSACTIONS:
--------------------------
Certain Plan investments were shares of MCC stock. As MCC is the parent company
of the plan sponsor, MPC, these transactions qualify as party-in-interest
transactions.
7. PLAN MERGER:
-----------
The Committee elected to merge the Plan into the Thrift Plan effective May 31,
1997, subject to the provisions set forth by ERISA. Accordingly, on May 31,
1997, all of the assets of the Plan were transferred into the Thrift Plan, and
all participants under the Plan became eligible to participate in the Thrift
Plan subject to the provisions thereof.
-8-
28
<PAGE>
MISSISSIPPI PHOSPHATES CORPORATION 401(k) RETIREMENT PLAN
---------------------------------------------------------
SCHEDULE OF REPORTABLE TRANSACTIONS
-----------------------------------
FOR THE FIVE MONTHS ENDED MAY 31, 1997
--------------------------------------
Number Net Gain
of Total Number Sales or (Loss)
Description of Asset Purchases Purchases of Sales Proceeds on Sales
---------------------- --------- --------- -------- -------- ---------
* Nations Prime Fund
Primary A shares 120 $265,222 64 $273,299 -
Vanguard Investment
Contract Trust Fund 15 128,840 5 5,390 -
-9-
* Indicates a transaction with a party-in-interest
29
<PAGE>
EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
30
<PAGE>
EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES
-----------------------------------------------------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
-----------------------------------------------
AS OF DECEMBER 31, 1997 AND 1996
--------------------------------
TOGETHER WITH AUDITORS' REPORT
------------------------------
INDEX
-----
PAGE
----
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS:
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 3
NOTES TO FINANCIAL STATEMENTS 4 - 9
SUPPLEMENTAL SCHEDULES:
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES 10
SCHEDULE OF REPORTABLE TRANSACTIONS 11
<PAGE>
Report of Independent Public Accountants
----------------------------------------
To the Retirement Plan Committee of the
Eddy Potash, Inc. 401(k) Plan for
Bargaining Unit Employees:
We have audited the accompanying statements of net assets available for benefits
of the Eddy Potash, Inc. 401(k) Plan for Bargaining Unit Employees (the "Plan")
as of December 31, 1997 and 1996, and the related statement of changes in net
assets available for benefits for the year ended December 31, 1997. These
financial statements and the schedules referred to below are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements and 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 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 the Plan as of
December 31, 1997 and 1996, and the changes in net assets available for benefits
for the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for
purposes of additional analysis and 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. The Fund Information in
the statements of net assets available for benefits and the statement of changes
in net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information 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.
ARTHUR ANDERSEN LLP
Memphis, Tennessee,
June 12, 1998.
-1-
<PAGE>
EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES
-----------------------------------------------------------
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
-----------------------------------------------
AS OF DECEMBER 31
-----------------
1997 1996
---------- --------
Investments:
- -----------
Investments at Contract Value:
MCC Investment Contract Fund $ - $318,309
Vanguard Retirement Savings Trust 361,879 -
Investments at Fair Value:
Vanguard Bond Index Fund 42,917 31,428
Vanguard Wellington Fund 169,800 108,821
Vanguard 500 Portfolio Fund 556,450 316,221
Vanguard U.S. Growth Fund 149,942 43,584
Mississippi Chemical Corporation Stock Fund 39,084 61,680
Participant Loans 127,819 -
---------- --------
Total Investments 1,447,891 880,043
Receivables:
- -----------
Contributions Receivable - 31,738
Interest Receivable - 2,812
Securities Sold not Settled - 1,548
---------- --------
Total Receivables - 36,098
---------- --------
Payables:
- --------
Securities Purchased not Settled - 4,232
---------- --------
Net Assets Available for Benefits $1,447,891 $911,909
========== ========
The accompanying notes to financial statements
are an integral part of these statements.
-2-
<PAGE>
EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES
-----------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
<TABLE>
<CAPTION>
Participant Directed
------------------------------------------------------------------------
MCC Vanguard Vanguard Vanguard
Investment Bond Vanguard 500 U.S
Contract Index Wellington Portfolio Growth
Total Total Fund Fund Fund Fund Fund
- --------------------------- ----------- ----------- ---------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Additions to Net Assets
Attributable to:
Investment Income:
Net Appreciation
(Depreciation)
in Fair Value of
Investments $122,063 $ - $ 1,249 $12,416 $112,099 $12,594
Interest and Dividends 68,597 14,861 2,960 19,003 15,144 7,219
----------- ----------- ---------- --------- ---------- ---------
190,660 14,861 4,209 31,419 127,243 19,813
----------- ----------- ---------- --------- ---------- ---------
Contributions:
Participants' 367,778 78,221 16,310 59,347 126,658 49,939
Employer's 108,183 26,609 5,190 16,958 33,631 11,845
----------- ----------- ---------- --------- ---------- ---------
475,961 104,830 21,500 76,305 160,289 61,784
----------- ----------- ---------- --------- ---------- ---------
Loans Rolled-over to Plan 66,348 - - - - -
Other - - - - - -
----------- ----------- ---------- --------- ---------- ---------
66,348 - - - - -
----------- ----------- ---------- --------- ---------- ---------
Total Additions 732,969 119,691 25,709 107,724 287,532 81,597
Deductions from Net Assets
Attributable to:
Benefits Paid to Participants 196,987 41,869 15,512 27,986 37,803 17,057
Other - - - - - 3,037
----------- ----------- ---------- --------- ---------- ---------
Total Deductions 196,987 41,869 15,512 27,986 37,803 20,094
----------- ----------- ---------- --------- ---------- ---------
Net Increase (Decrease)
Prior to Interfund
Transfers 535,982 77,822 10,197 79,738 249,729 61,503
Interfund Transfers - (396,131) 1,292 (18,759) (9,500) 44,855
----------- ----------- ---------- --------- ---------- ---------
Net Increase (Decrease) 535,982 (318,309) 11,489 60,979 240,229 106,358
Net Assets Available
for Benefits:
Beginning of Year 911,909 318,309 31,428 108,821 316,221 43,584
----------- ----------- ---------- --------- ---------- ---------
End of Year $1,447,891 $ - $42,917 $169,800 $556,450 $149,942
=========== =========== ========== ========= ========== =========
<CAPTION>
Participant Directed
-------------------------------------------------
Vanguard Mississippi
Retirement Chemical
Savings Corporation Participant
Total Trust Stock Fund Loans Other
- --------------------------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Additions to Net Assets
Attributable to:
Investment Income:
Net Appreciation
(Depreciation)
in Fair Value of
Investments $ - $(16,295) $ - $ -
Interest and Dividends 9,937 2,285 - (2,812)
--------- ---------- ----------- -----------
9,937 (14,010) - (2,812)
--------- ---------- ----------- -----------
Contributions:
Participants' 32,441 27,062 - (22,200)
Employer's 16,215 7,273 - (9,538)
--------- ---------- ----------- -----------
48,656 34,335 - (31,738)
--------- ---------- ----------- -----------
Loans Rolled-over to Plan - - 66,348 -
Other - 1,548 - (1,548)
--------- ---------- ----------- -----------
- 1,548 66,348 (1,548)
--------- ---------- ----------- -----------
Total Additions 58,593 21,873 66,348 (36,098)
Deductions from Net Assets
Attributable to:
Benefits Paid to Participants 42,898 13,928 (66) -
Other - 1,195 - (4,232)
--------- ---------- ----------- -----------
Total Deductions 42,898 15,123 (66) (4,232)
--------- ---------- ----------- -----------
Net Increase (Decrease)
Prior to Interfund
Transfers 15,695 6,750 66,414 (31,866)
Interfund Transfers 346,184 (29,346) 61,405 -
--------- ---------- ----------- -----------
Net Increase (Decrease) 361,879 (22,596) 127,819 (31,866)
Net Assets Available for
Benefits:
Beginning of Year - 61,680 - 31,866
--------- ---------- ----------- -----------
End of Year $361,879 $ 39,084 $127,819 $ -
========= ========== =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
-3-
<PAGE>
EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES
-----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1997
-----------------
1. DESCRIPTION OF THE PLAN:
-----------------------
General
The Eddy Potash, Inc. 401(k) Plan for Bargaining Unit Employees (the "Plan") is
designed to encourage and assist qualified employees of Eddy Potash, Inc. (the
"Company"), a wholly-owned subsidiary of Mississippi Chemical Corporation
("MCC"), in a long-range program of savings. The Plan was established pursuant
to the acquisition of the Company by MCC. In conjunction with the formation of
the Plan, participants were allowed to transfer their historical cumulative
account balances from a prior plan of the Company. The account balances were
transferred at fair value effective with the Plan formation on August 16, 1996.
The Plan is organized with the intent to comply with the provisions of Section
401(k) of the Internal Revenue Code (the "IRC"), whereby the participant can
defer the amount of his compensation contributed to the Plan from his taxable
income until withdrawn from the Plan.
Eligibility and Contributions
Collective bargaining unit employees working for the Company one hour are
eligible to participate in the Plan at the beginning of the first month
following 90 days of employment with the Company. An eligible employee may
elect to make a salary deferral contribution up to 17.6% of base compensation.
The Company matches 25% of the participant's contribution, but not in excess of
2% of the participant's base compensation. The Company also makes qualified
non-elective contributions in the amount of 1% of the participant's base
compensation for the year. Contributions are subject to certain limitations set
forth by Internal Revenue Service ("IRS") guidelines.
Participant Accounts
Each participant's deferred account is credited with the participant's
contributions and the investment earnings on the account. Each participant also
has a Company matching account, which is credited with the Company's
contributions made on the participant's behalf, and the investment earnings on
the account.
Vesting
A participant is fully vested at all times in the portion of his account related
to his own contributions, the Company's matching contributions and the Company's
non-elective contributions.
-4-
<PAGE>
1. DESCRIPTION OF THE PLAN (Continued):
-----------------------------------
Trustee
The Vanguard Fiduciary Trust Company ("Vanguard") became the trustee of the Plan
effective August 1, 1997. Prior to August 1, 1997, NationsBank served as the
trustee of the Plan.
Investment Options
The Plan elected to utilize Vanguard as its investment manager. Contributions
are invested, at the discretion of the individual participant, in investment
funds managed by Vanguard. Participants also have the option to invest in the
MCC Stock Fund which invests in securities of MCC. The Plan limits the amount
of participant contributions to the MCC Stock Fund to 20% of total
contributions. Additionally, investment in the MCC Stock Fund is limited to 20%
of a participant's total account balance.
Upon enrollment in the Plan, a participant may direct employee contributions in
any of the six following investment options:
a. MCC Investment Contract Fund - Funds are invested in a pool of
investment contracts issued by insurance companies and banks.
b. Vanguard Retirement Savings Trust Fund - Funds are invested in a pool
of investment contracts issued by insurance companies and other fixed-
term investments.
c. Vanguard Bond Index Fund - Funds are invested in a diversified
portfolio of U.S. Government and corporate bonds and mortgage-backed
securities.
d. Vanguard Wellington Fund - Funds are invested in a diversified
portfolio of common stocks and bonds, with common stocks expected to
represent 60% to 70% of the fund's total assets.
e. Vanguard 500 Portfolio Fund - Funds are invested in all of the stocks
comprising the S&P 500.
f. Vanguard U.S. Growth Fund - Funds are invested in equity securities of
companies in the U.S.
g. Mississippi Chemical Corporation Stock Fund - Funds are invested in
common stock of MCC.
Participants may request a change in their investment options daily via a voice
response system. Prior to Vanguard serving as trustee, participants could
request a change in their investment options by the fifteenth of any month to
become effective at the beginning of the following month.
-5-
<PAGE>
1. DESCRIPTION OF THE PLAN (Continued):
-----------------------------------
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of the participant's vested
account balance. The maximum term for loans is 5 years, except for loans to
purchase the participant's primary residence. The loans are secured by the
balance in the participant's account and bear interest at a fixed rate for the
term of the loan. The interest rate shall be the prime rate of Chase Manhattan
as of the date of the loan plus 2%. The Plan allows participants a maximum of
three outstanding loans - one for the purchase of a home and two for personal
reasons. Interest rates on loans outstanding as of December 31, 1997 range from
7.25% to 10.5%.
Payment of Benefits
On termination of service due to death, disability or normal retirement date, a
participant may elect to receive either a lump-sum amount equal to the value of
the participant's vested account or a combination of payments, on the dates and
in the amounts specified by the participant subject to a minimum distribution of
$100.
Administration
The operations of the Plan are administered and supervised by the Eddy Potash,
Inc. 401(k) Plan for Bargaining Unit Employees Committee, which is appointed by
the Board of Directors of the Company. Administration expenses of the Plan are
paid by the Company, and were approximately $26,000 in 1997.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
Basis of Accounting
The financial statements of the Plan have been prepared on the accrual basis of
accounting.
Investment Valuation and Income Recognition
In accordance with the American Institute of Certified Public Accountants'
Statement of Position 94-4 ("SOP 94-4"), "Reporting of Investment Contracts Held
by Health and Welfare Benefit Plans and Defined-Contribution Pension Plans,"
fully benefit-responsive investment contracts (as defined in SOP 94-4) are
valued at contract value. Contract value represents contributions made under
the contract plus interest at the contract rate less funds withdrawn by the
participants.
-6-
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
------------------------------------------------------
The MCC Investment Contract Fund and the Vanguard Retirement Savings Trust meet
the requirements of fully benefit-responsive guaranteed investment contracts
("GIC's"). The MCC Investment Contract Fund consists of the following as of
December 31, 1996:
Vanguard Retirement Savings Trust $317,085
Nations Prime Fund 1,224
--------
Total $318,309
========
The average yields and crediting interest rates of the GIC's during 1997 and
1996 were as follows:
1997 1996
---- ----
MCC Investment Contract Fund
Average Yield 6.2% 6.1%
Crediting Interest Rate 6.2% 6.1%
Vanguard Retirement Savings Trust
Average Yield 6.2% N/A
Crediting Interest Rate 6.2% N/A
Contract value on both of the above GIC's approximates fair value.
The Vanguard Retirement Savings Trust's (the "Trust") crediting rate resets for
alternative contracts held by the Trust on a calendar quarter basis after the
initial rate for the contract is established. The reset calculation considers
the book value of the contract, the market value and yield of the underlying
investment, the duration of the investment, management and contract fees. The
crediting rates of the alternative contracts have a contractual floor that does
not fall below zero. The Trust has no valuation reserves.
The Plan's investments are stated at fair value except for the GIC's, which are
valued at contract value. Shares of registered investment companies are valued
at quoted market prices which represent the net asset value of shares held by
the Plan at year-end. The MCC stock is valued at its quoted market price.
Participant loans are valued at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Investment income is recorded on an accrual basis.
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 assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the amounts of income and expense during the reporting period. Actual results
could differ from those estimates.
-7-
<PAGE>
3. INVESTMENTS:
-----------
The fair values of individual investments that represent 5% or more of the
Plan's assets are as follows:
December 31
---------------------
1997 1996
-------- --------
MCC Investment Contract Fund $ - $318,309
Vanguard Retirement Savings Trust 361,879 -
Vanguard Wellington Fund 169,800 108,821
Vanguard 500 Portfolio Fund 556,450 316,221
Vanguard U.S. Growth Fund 149,942 43,584
Mississippi Chemical Corporation Stock Fund 39,084 61,680
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
---------------------------------------------------
The following is a reconciliation of net assets available for benefits between
the financial statements and Form 5500 as of December 31, 1996:
Net assets available for benefits per the
financial statements $911,909
Contributions receivable per the financial
statements not reflected in Form 5500 (12,356)
Other receivable per Form 5500 not reflected
in the financial statements 7,599
--------
Net assets available for benefits per Form 5500 $907,152
========
5. TAX STATUS:
----------
The IRS has determined and informed the Company by a letter dated March 24,
1997, that the Plan is designed in accordance with applicable sections of the
IRC. Accordingly, no provision for federal income taxes has been made in the
accompanying financial statements.
6. RELATED PARTY TRANSACTIONS:
--------------------------
Certain Plan investments are shares of MCC stock and funds managed by Vanguard.
As the Company is a wholly-owned subsidiary of MCC and Vanguard serves as the
trustee of the Plan, these transactions qualify as party-in-interest
transactions. Additionally, participant loan transactions qualify as party-in-
interest transactions.
-8-
<PAGE>
7. SUBSEQUENT EVENT:
----------------
The Company ceased operations during December 1997. In conjunction with this
cessation, the Plan was merged into the MCC Thrift Plan Plus (the "Thrift Plan")
effective May 31, 1998, subject to the provisions set forth by the Employee
Retirement Income Security Act of 1974. Accordingly, on May 31, 1998, all of
the assets of the Plan were transferred into the Thrift Plan.
-9-
<PAGE>
EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES
-----------------------------------------------------------
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
-----------------------------------------------
AS OF DECEMBER 31, 1997
-----------------------
Market/Contract
Description of Investment Cost Value
- ------------------------------------ -------- ---------------
* Vanguard Retirement Savings Trust $361,879 $361,879
* Vanguard Bond Index Fund 42,571 42,917
* Vanguard Wellington Fund 176,900 169,800
* Vanguard 500 Portfolio Fund 550,808 556,450
* Vanguard U.S. Growth Fund 153,594 149,942
* Mississippi Chemical Corporation
Stock Fund 49,226 39,084
* Participant Loans 127,819 127,819
* Indicates an investment with a party-in-interest.
-10-
<PAGE>
EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES
------------------------------------------------------------
SCHEDULE OF REPORTABLE TRANSACTIONS
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
Number Net Gain
of Total Number Sales or (Loss)
Description of Asset Purchases Purchases of Sales Proceeds on Sales
- ---------------------------- --------- --------- -------- --------- ---------
* MCC Investment
Contract Fund 28 $124,941 10 $ 44,631 $ (43)
* Vanguard Retirement
Savings Trust 35 466,602 20 104,947 -
* Nations Prime Fund
Primary A Share 209 349,237 110 350,264 -
* Vanguard Bond Index Fund 31 57,359 6 14,831 48
* Vanguard Wellington Fund 43 266,073 20 72,178 2,432
* Vanguard 500 Portfolio Fund 53 707,314 23 73,187 2,799
* Vanguard U.S. Growth Fund 42 223,066 15 23,327 797
* Mississippi Chemical
Corporation Stock Fund 22 76,154 14 28,876 (5,842)
* Indicates a transaction with a party-in-interest.
-11-
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our reports dated June 12, 1998, included in this Form 11-K for
each of the Mississippi Chemical Corporation Thrift Plan Plus for the year ended
December 31, 1997, Mississippi Phosphates Corporation 401(k) Retirement Plan for
the five months ended May 31, 1997, and Eddy Potash, Inc. 401(K) Plan For
Bargaining Unit Employees for the year ended December 31, 1997, into Mississippi
Chemical Corporation's previously filed Registration Statement Files No.
33-59577 and No. 333-13069. It should be noted that we have not audited any
financial statements of the Plans subsequent to December 31, 1997 or performed
any audit procedures subsequent to the date of our reports.
ARTHUR ANDERSEN LLP
Memphis, Tennessee
June 30, 1998
