<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 333-58275
A. Full title of the plans and the address of the plans, if different from that
of the issuer below:
THE PIONEER COMPANIES SAVINGS PLAN FOR SALARIED EMPLOYEES
THE PIONEER COMPANIES SAVINGS PLAN FOR HENDERSON BARGAINING UNIT EMPLOYEES,
THE PIONEER COMPANIES SAVINGS PLAN FOR TACOMA BARGAINING UNIT EMPLOYEES,
THE KEMWATER NORTH AMERICA SAVINGS PLAN, AND
THE ALL PURE SAVINGS PLAN
B. Name of the issuer of the securities held pursuant to the plans and the
address of its principal executive office:
PIONEER COMPANIES, INC.
4300 BANK OF AMERICA CENTER
700 LOUISIANA STREET
HOUSTON, TEXAS 77002
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TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PIONEER COMPANIES SAVINGS PLAN FOR SALARIED EMPLOYEES
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 5
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits As of December 31, 1998 and 1997 6
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 1998 and 1997 7
Notes to Financial Statements 8
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes As of December 31, 1998 14
Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 15
PIONEER COMPANIES SAVINGS PLAN FOR
HENDERSON BARGAINING UNIT EMPLOYEES
INDEPENDENT AUDITORS' REPORT 17
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits As of December 31, 1998 and 1997 18
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 1998 and 1997 19
Notes to Financial Statements 20
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes As of December 31, 1998 26
Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 27
PIONEER COMPANIES SAVINGS PLAN FOR
TACOMA BARGAINING UNIT EMPLOYEES
INDEPENDENT AUDITORS' REPORT 29
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits As of December 31, 1998 and 1997 30
Statements of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1998 and for the Period from June 16, 1997 (Inception)
to December 31, 1997 31
Notes to Financial Statements 32
</TABLE>
2
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<TABLE>
<CAPTION>
PIONEER COMPANIES SAVINGS PLAN FOR
TACOMA BARGAINING UNIT EMPLOYEES (CONT.)
PAGE
<S> <C>
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes As of December 31, 1998 37
Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 38
KEMWATER NORTH AMERICA SAVINGS PLAN
INDEPENDENT AUDITORS' REPORT 40
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits As of December 31, 1998 and 1997 41
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 1998 and 1997 42
Notes to Financial Statements 43
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes As of December 31, 1998 48
Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 50
ALL PURE SAVINGS PLAN
INDEPENDENT AUDITORS' REPORT 52
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits As of December 31, 1998 and 1997 53
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 1998 and 1997 54
Notes to Financial Statements 55
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes As of December 31, 1998 60
Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 61
LIST OF EXHIBITS 62
</TABLE>
3
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PIONEER COMPANIES SAVINGS PLAN
FOR SALARIED EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
SAVINGS INVESTMENT PLAN AND TRUST)
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 5
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits As of December 31, 1998 and 1997 6
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 1998 and 1997 7
Notes to Financial Statements 8
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes As of December 31, 1998 14
Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 15
</TABLE>
4
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INDEPENDENT AUDITORS' REPORT
The Plan Administrator of the
Pioneer Companies Savings Plan
for Salaried Employees:
We have audited the accompanying statements of net assets available for
benefits of the Pioneer Companies Savings Plan for Salaried Employees (formerly
Pioneer Chlor Alkali Company, Inc. Savings Investment Plan and Trust) (the
"Plan") as of December 31, 1998 and 1997, and the related statements of changes
in net assets available for benefits for the years then ended. 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 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1998 and 1997, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1998 and of
reportable transactions for the year ended December 31, 1998 are presented for
the purpose 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. These schedules are the
responsibility of the Plan's management. Such schedules have been subjected to
the auditing procedures applied in our audit of the basic 1998 financial
statements and, in our opinion, are fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
The schedule of reportable transactions that accompanies the Plan's financial
statements does not disclose the historical cost of certain fund transactions
reported by the Plan trustee. Disclosure of this information is required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974.
DELOITTE & TOUCHE LLP
June 16, 1999
Houston, Texas
5
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FOR SALARIED EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
SAVINGS INVESTMENT PLAN AND TRUST)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998 AND 1997
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<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
ASSETS:
Investments, at fair value:
CIGNA Large Company Stock Index Fund $ 892,811 $ --
Fidelity Advisor Growth Opportunities Account 5,626,756 --
Janus Worldwide Account 1,155,687 --
Other equity funds 3,210,548 --
Pioneer Companies, Inc. Common Stock 37,734 --
Short-Term Securities Pooled Account -- 307,645
Equity A Pooled Account -- 3,924,567
Balanced Account -- 421,630
High Quality Bond Account -- 48,630
Participant loans 634,579 475,679
Investments, at contract value:
Guaranteed Income Fund 5,610,709 --
Guaranteed Interest Account -- 4,330,638
----------- -----------
Total investments 17,168,824 9,508,789
Contributions receivable 140,035 9,326
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $17,308,859 $ 9,518,115
=========== ===========
</TABLE>
See notes to financial statements.
6
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PIONEER COMPANIES SAVINGS PLAN
FOR SALARIED EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
SAVINGS INVESTMENT PLAN AND TRUST)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
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<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 1,405,183 $ 783,760
Interest 305,666 306,617
Contributions:
Employee 1,522,281 684,545
Employer 333,642 243,801
------------ ------------
Total additions 3,566,772 2,018,723
------------ ------------
TRANSFERS FROM OTHER PLANS 4,930,583 --
------------ ------------
BENEFITS PAID TO PARTICIPANTS (706,611) (170,059)
------------ ------------
NET INCREASE IN NET ASSETS AVAILABLE FOR
BENEFITS 7,790,744 1,848,664
NET ASSETS AVAILABLE FOR BENEFITS AT:
Beginning of year 9,518,115 7,669,451
------------ ------------
End of year $ 17,308,859 $ 9,518,115
============ ============
</TABLE>
See notes to financial statements.
7
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PIONEER COMPANIES SAVINGS PLAN
FOR SALARIED EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
SAVINGS INVESTMENT PLAN AND TRUST)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
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1. DESCRIPTION OF THE PLAN
The following description of the Pioneer Companies Savings Plan for
Salaried Employees (formerly Pioneer Chlor Alkali Company, Inc. Savings
Investment Plan and Trust) (the "Plan") provides only general
information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
GENERAL - The Plan is a defined contribution plan covering all Pioneer
Chlor Alkali Company, Inc. ("PCAC") employees who are not leased
employees or members of, or covered by, a collective bargaining unit
which has a bargaining agreement with Pioneer Companies, Inc. (the
"Company"). Effective July 1, 1998, the Company merged the Pioneer Tacoma
Salaried 401(k) Plan (the "Tacoma Plan") into the Plan. In connection
with the merger, $4,930,583 of investments was transferred from the
Tacoma Plan into the Plan. Also effective July 1, 1998, the Plan changed
trustees from Manufacturer's Life Insurance Company ("ManuLife") to
Connecticut General Life Insurance Company ("CIGNA").
CONTRIBUTIONS - Participants may contribute up to 15% of their annual
compensation. The total annual contribution may not exceed the maximum
amount established by the Internal Revenue Code (the "Code"). The Company
makes an employer matching contribution of 50% of a participant's
contribution up to 6%, for a maximum match of 3% of the participant's
annual compensation. In addition, the Company may make discretionary
employer contributions to the Plan for all eligible participants. There
were no such contributions during the years ended December 31, 1998 and
1997.
PARTICIPANT ACCOUNTS AND VESTING - Each participant's account is credited
with their contributions and withdrawals and allocations of Company
contributions and investment earnings. Participants are always fully
vested in their contributions and cumulative earnings thereon.
Participants hired before July 1, 1998 vest immediately in Company
matching contributions, whereas participants hired after June 30, 1998
vest in Company matching contributions after three years of credited
service.
BENEFITS - A participant may make a partial withdrawal of after-tax
contributions (but not earnings thereon) made by the participant prior to
1987 as of any quarter end. If a participant has withdrawn all of their
pre-1987 contributions, the participant may withdraw any remaining amount
of their after-tax contribution account, including earnings.
If a participant has made the maximum partial withdrawals allowed, the
participant may also withdraw the full amount of the Company matching
account provided the participant has made contributions to the Plan for
any 60 months prior to the date of the total withdrawal.
8
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Loans may be granted in a uniform manner to a participant from the
balance in their accounts. Loans shall be limited to the lesser of
$50,000 or one-half of the value of the vested portion of the
participant's account and bear interest at prevailing market rates. Loans
are to be repaid through monthly payroll deductions over a period not to
exceed five years unless used to purchase a principal residence.
INVESTMENTS - Effective July 1, 1998, each participant may direct that
contributions to their account be invested in the following options:
o Large Company Stock Index Fund - invests in securities that reflect
the composition of the Standard and Poor's 500 Stock Index.
o Fidelity Advisor Growth Opportunities Account - invests mainly in
securities of companies believed to have long-term growth potential.
o Janus Worldwide Account - invests primarily in common stocks of
foreign and domestic issuers.
o Pioneer Companies, Inc. Common Stock - invests exclusively in the
common stock of Pioneer Companies, Inc.
o Guaranteed Income Fund - invests in six month, fixed interest rate
securities. All principal and interest is guaranteed by CIGNA.
o American Century - Twentieth Century Ultra Account - invests in the
equity securities of large companies that offer the potential for
better-than-average prospects for capital appreciation.
o CIGNA Lifetime Funds - invest in a combination of high yield bonds,
high grade bonds, and equity securities of small companies, large
companies, growth companies, and international companies.
o Neuberger & Berman Guardian Account - invests in equity securities
that have good potential capital appreciation.
o PBHG Growth Account - invests mainly in common stocks and
convertible securities of small- and medium-sized growth companies.
o Invesco Total Return Account - invests in a combination of equity
and fixed income securities.
o Founders Balanced Account - invests primarily in equity securities,
corporate obligations, and preferred stock.
o Founders Growth Account - invests mainly in the common stock of
companies with strong performance records and solid market
positions.
o Warburg Pincus Advisor Growth & Income Account - invests mainly in
dividend-paying equity securities.
o Warburg Pincus Advisor Emerging Growth Account - invests in
securities of high growth companies.
o Invesco Dynamics Account - invests primarily in common stock of
companies traded on U.S. securities exchanges, as well as
over-the-counter.
o AIM Constellation Account - invests primarily in securities growth
companies and companies that have a history of strong performance.
o Templeton Growth Account - invests in common stock.
o Warburg Pincus Advisor International Equity Account - invests in
securities of corporations located in a number of foreign countries.
o Templeton Foreign Account - invests primarily in common stock.
Participants may change their investment elections and/or transfer funds
at any time.
Prior to July 1, 1998, the Plan included the following investment options
offered by ManuLife: Guaranteed Interest Account, Short-Term Securities
Pooled Account, Equity A Pooled Account, Balanced Account and High
Quality Bond Account. The Guaranteed Interest Account invested in
ManuLife general funds. Transfers and withdrawals from the Guaranteed
Interest Account were subject to a market value adjustment. The
Short-Term Securities Pooled Account invested primarily in U.S. Treasury
Bills, certificates of deposit of major banks, or commercial paper, all
with maturity dates of one year or less. The Balanced Account
9
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invested primarily in debt and equity securities for long-term,
consistent growth of capital. The High Quality Bond Account invested
primarily in corporate and U.S. government bonds. The Equity A Pooled
Account invested in common stocks and securities convertible into common
stocks with an emphasis on high quality growth stocks.
DISTRIBUTIONS OF ACCOUNTS - Distribution of a participant's account
balance may occur due to termination of employment, retirement,
disability or death. Upon termination of service, distributions shall be
made in a lump-sum amount unless a participant makes the proper election
to receive another form of payment as provided by the Plan document. If
the participant is married on the benefit date and elects not to receive
a lump-sum payment, distributions shall be in the form of a joint and
survivor annuity. If the participant is not married on the benefit date,
distributions shall be in the form of a single life annuity. As of
December 31, 1998 and 1997, there were no amounts payable to participants
who have terminated or withdrawn from the Plan.
FORFEITURES - Forfeited nonvested accounts are used to reduce future
employer contributions. Such forfeited amounts were not significant
during the years ended December 31, 1998 and 1997.
PLAN TERMINATION - Although the Company has not expressed any intention
to do so, it may terminate the Plan subject to the provisions of ERISA.
In the event of termination of the Plan, each participant shall be fully
vested in his account balance. Distribution of participant account
balances will be made in accordance with the modes of distribution
provided for under the Plan.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements are presented
on the accrual basis of accounting.
INVESTMENTS - The Guaranteed Income Fund and the Guaranteed Interest
Account are valued at contract value. Contract value represents the
contributed amounts plus accumulated interest less funds used to pay
benefits. Contract value approximates fair market value as estimated by
CIGNA and ManuLife. Other investments are reported in the financial
statements at fair values based on the quoted market prices. Loans are
valued at cost which approximates fair value.
PLAN EXPENSES - Administrative expenses, to the extent not paid by the
Company, are paid from Plan assets.
TAX STATUS - The Plan obtained its latest determination letter dated
March 1, 1995 in which the Internal Revenue Service stated that the Plan,
as then designed, was in compliance with the applicable requirements of
the Code. The Company believes that the Plan is currently designed and
being operated in compliance with the Code. Therefore, no provision for
income taxes has been included in the Plan's financial statements.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires Plan management to
make estimates and assumptions that affect the reported amounts of
assets, liabilities, and changes therein, and disclosure of contingent
assets and liabilities. Actual results could differ from these estimates.
RECLASSIFICATIONS - Certain prior year amounts have been reclassified to
conform with the current year presentation.
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3. SUPPLEMENTAL FUND INFORMATION
Prior to July 1, 1998, the Plan's investments were held in trust by ManuLife.
As of July 1, 1998, all investments were transferred to CIGNA. The following is
a summary of the contributions, benefit payments, investment income, plan
transfers, and interfund transfers by fund for the years ended December 31,
1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
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EMPLOYEE CONTRIBUTIONS
CIGNA:
Large Company Stock Index Fund $ 16,556 $ --
Fidelity Advisor Growth Opportunities Account 324,524 --
Janus Worldwide Account 30,661 --
Other equity funds 160,443 --
Guaranteed Income Fund 231,163 --
ManuLife:
Short-Term Securities Pooled Account 28,092 36,204
Equity A Pooled Account 402,041 487,819
Balance Account 248,818 72,473
High Quality Bond Account 20,195 9,538
Guaranteed Interest Account 226,484 294,214
Pioneer Companies, Inc. Common Stock 22,923 --
Participant Loans (189,619) (215,703)
----------- -----------
Total Employee Contributions $ 1,522,281 $ 684,545
=========== ===========
EMPLOYER CONTRIBUTIONS
CIGNA:
Large Company Stock Index Fund $ 2,425 $ --
Fidelity Advisor Growth Opportunities Account 64,716 --
Janus Worldwide Account 2,395 --
Other equity funds 25,264 --
Guaranteed Income Fund 48,062 --
ManuLife:
Short-Term Securities Pooled Account 8,258 10,851
Equity A Pooled Account 98,475 124,394
Balance Account 23,569 23,824
High Quality Bond Account 3,614 2,903
Guaranteed Interest Account 49,988 81,829
Pioneer Companies, Inc. Common Stock 6,876 --
----------- -----------
Total Employer Contributions $ 333,642 $ 243,801
=========== ===========
</TABLE>
11
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<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
BENEFIT PAYMENTS
CIGNA:
Large Company Stock Index Fund $ (1,486) $ --
Fidelity Advisor Growth Opportunities Account (68,120) --
Janus Worldwide Account (1,778) --
Other equity funds (36,403) --
Guaranteed Income Fund (274,361) --
ManuLife:
Short-Term Securities Pooled Account (17,665) (16,616)
Equity A Pooled Account (406,903) (198,956)
Balance Account (9,851) (19,847)
High Quality Bond Account (4,407) (10,921)
Guaranteed Interest Account (87,362) (191,572)
Pioneer Companies, Inc. Common Stock (1,397) --
Participant Loans 203,122 267,853
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Total Benefit Payments $ (706,611) $ (170,059)
========== ==========
INTEREST INCOME
CIGNA - Guaranteed Income Fund $ 150,076 $ --
ManuLife - Guaranteed Interest Account 120,463 274,487
Participant Loans 35,127 32,130
---------- ----------
Total Interest Income $ 305,666 $ 306,617
========== ==========
NET APPRECIATION IN FAIR VALUE OF INVESTMENTS
CIGNA:
Large Company Stock Index Fund $ 54,581 $ --
Fidelity Advisor Growth Opportunities Account 474,826 --
Janus Worldwide Account 92,350 --
Other equity funds 217,564 --
ManuLife:
Short-Term Securities Pooled Account 7,116 14,854
Equity A Pooled Account 505,339 708,103
Balanced Account 45,193 57,340
High Quality Bond Account 2,210 3,463
Pioneer Companies, Inc. Common Stock 6,004 --
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Total Net Appreciation in Fair Value of Investments $1,405,183 $ 783,760
========== ==========
</TABLE>
12
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<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
PLAN TRANSFERS
CIGNA:
Guaranteed Income Fund $ 5,472,985 $ --
Large Company Stock Index Fund 708,600 --
Fidelity Advisor Growth Opportunities Account 5,237,805 --
Janus Worldwide Account 910,180 --
Other equity funds 2,793,549 --
ManuLife:
Guaranteed Interest Account (4,626,319) --
Short-Term Securities Pooled Account (326,605) --
Equity A Pooled Account (4,525,309) --
Balanced Account (765,141) --
High Quality Bond Account (62,729) --
Pioneer Companies, Inc. Common Stock 3,297 --
Participant Loans 110,270 --
----------- -----------
Total Net Transfers In (Out) $ 4,930,583 $ --
=========== ===========
INTERFUND TRANSFERS
CIGNA:
Guaranteed Income Fund $ 30,303 $ --
Large Company Stock Index Fund 119,697 --
Fidelity Advisor Growth Opportunities Account (359,340) --
Janus Worldwide Account 131,667 --
Other equity funds 77,673 --
ManuLife:
Guaranteed Interest Account (18,363) $ (205,026)
Short-Term Securities Pooled Account (7,159) (83,520)
Equity A Pooled Account (2,262) 235,499
Balanced Account 35,347 49,521
High Quality Bond Account (7,563) 3,526
----------- -----------
Total Net Interfund Transfers $ -- $ --
=========== ===========
</TABLE>
4. GUARANTEED INTEREST ACCOUNTS
The stated interest rate for the Guaranteed Income Fund held by CIGNA was 6% as
of December 31, 1998. The stated interest rate for the Guaranteed Interest
Account held by ManuLife was 6% as of December 31, 1997. The average yield for
the Guaranteed Income Fund held by CIGNA was 6.15% for the year ended December
31, 1998. The average yield for the Guaranteed Interest Account held by
ManuLife was 5.38% and 6.81% for the years ended December 31, 1998 and 1997,
respectively.
******
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PIONEER COMPANIES SAVINGS PLAN
FOR SALARIED EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
SAVINGS INVESTMENT PLAN AND TRUST)
Item 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
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<TABLE>
<CAPTION>
(c)
(b) DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUE, INCLUDING MATURITY DATE, (e)
BORROWER, LESSOR, RATE OF INTERESTS, PAR (d) CURRENT
(a) OR SIMILAR PARTY OR MARKET VALUE COST VALUE
<S> <C> <C> <C> <C>
* Connecticut General Life Insurance Large Company Stock Index Fund $ 715,596 $ 892,811
* Connecticut General Life Insurance Fidelity Advisor Growth Opportunities Account 4,823,895 5,626,756
* Connecticut General Life Insurance Janus Worldwide Account 1,020,283 1,155,687
* Pioneer Companies, Inc. Pioneer Companies, Inc. Common Stock 132,277 37,734
* Connecticut General Life Insurance Guaranteed Income Fund 5,610,709 5,610,709
* Connecticut General Life Insurance American Century - 20th Century Ultra Account 417,826 483,117
* Connecticut General Life Insurance CIGNA Lifetime 60 22,850 25,962
* Connecticut General Life Insurance CIGNA Lifetime 50 167,794 190,622
* Connecticut General Life Insurance CIGNA Lifetime 40 28,681 32,449
* Connecticut General Life Insurance CIGNA Lifetime 30 38,911 43,882
* Connecticut General Life Insurance CIGNA Lifetime 20 1,881 2,103
* Connecticut General Life Insurance Neuberger & Berman Guardian Account 132,725 144,202
* Connecticut General Life Insurance PBHG Growth Account 291,077 156,446
* Connecticut General Life Insurance Invesco Total Return Account 746,761 808,675
* Connecticut General Life Insurance Founders Balanced Account 348,128 398,152
* Connecticut General Life Insurance Founders Growth Account 188,413 219,250
* Connecticut General Life Insurance Warburg Pincus Advisor Growth & Income Account 127,315 138,129
* Connecticut General Life Insurance Warburg Pincus Advisor Emerging Growth Account 99,732 109,784
* Connecticut General Life Insurance Invesco Dynamics Account 70,828 80,279
* Connecticut General Life Insurance AIM Constellation Account 154,692 177,377
* Connecticut General Life Insurance Templeton Growth Account 111,872 107,080
* Connecticut General Life Insurance Warburg Pincus Advisor International Equity Account 23,006 21,455
* Connecticut General Life Insurance Templeton Foreign Account 77,984 71,584
* Loans to participants Maturities up to five years with interest rates
from 7% to 8.5% 634,579 634,579
----------- -----------
$15,987,815 $17,168,824
=========== ===========
</TABLE>
* Party-in-interest
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PIONEER COMPANIES SAVINGS PLAN
FOR SALARIED EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
SAVINGS INVESTMENT PLAN AND TRUST)
Item 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (g)
IDENTITY OF DESCRIPTION PURCHASE SELLING COST OF
PARTY INVOLVED OF ASSET PRICE PRICE ASSET
<S> <C> <C> <C> <C>
INDIVIDUAL TRANSACTIONS IN EXCESS OF 5%
OF PLAN ASSETS AS OF DECEMBER 31, 1997
*Connecticut General Life Large Company Stock Index Fund $ 691,575 $ 691,575
Insurance
*Connecticut General Life Janus Worldwide Account 890,405 890,405
Insurance
*Connecticut General Life Fidelity Advisor Growth 4,296,926 4,296,926
Insurance Opportunities Account 603,117 603,117
*Connecticut General Life Invesco Total Return Account
Insurance 752,141 752,141
*The Manufacturers Life Guaranteed Interest Account $ 4,626,319 **
Insurance Company
*The Manufacturers Life Equity A Pooled Account 4,525,309 **
Insurance Company
*The Manufacturers Life Balanced Account 765,141 **
Insurance Company
SERIES OF TRANSACTIONS IN EXCESS OF 5%
OF PLAN ASSETS AS OF DECEMBER 31, 1997
*Connecticut General Life Guaranteed Income Fund 6,080,054 6,080,054
Insurance $ 587,974 587,974
*Connecticut General Life Invesco Total Return Account 983,655 983,655
Insurance 235,073 226,251
*Connecticut General Life Large Company Stock Index Fund 839,717 839,717
Insurance 1,486 1,430
*Connecticut General Life Fidelity Advisor Growth 5,436,221 5,436,221
Insurance Opportunities Account 532,673 528,596
*Connecticut General Life American Century - 20th Century 506,853 506,853
Insurance Ultra Account 73,672 73,711
*Connecticut General Life Janus Worldwide Account 1,127,951 1,127,951
Insurance 64,614 63,999
*The Manufacturers Life Guaranteed Interest Account 324,847 **
Insurance Company 4,878,976
*The Manufacturers Life Equity A Pooled Account 585,025 585,025
Insurance Company 4,728,933 **
*The Manufacturers Life Balanced Account 247,555 247,555
Insurance Company 777,492 **
<CAPTION>
(h)
CURRENT
VALUE
(a) (b) OF ASSET ON (i)
IDENTITY OF DESCRIPTION TRANSACTION NET GAIN
PARTY INVOLVED OF ASSET DATE OR LOSS
<S> <C> <C> <C>
INDIVIDUAL TRANSACTIONS IN EXCESS OF 5%
OF PLAN ASSETS AS OF DECEMBER 31, 1997
*Connecticut General Life Large Company Stock Index Fund $ 691,575
Insurance
*Connecticut General Life Janus Worldwide Account 890,405
Insurance
*Connecticut General Life Fidelity Advisor Growth 4,296,926
Insurance Opportunities Account 603,117
*Connecticut General Life Invesco Total Return Account
Insurance 752,141
*The Manufacturers Life Guaranteed Interest Account 4,626,319 **
Insurance Company
*The Manufacturers Life Equity A Pooled Account 4,525,309 **
Insurance Company
*The Manufacturers Life Balanced Account 765,141 **
Insurance Company
SERIES OF TRANSACTIONS IN EXCESS OF 5%
OF PLAN ASSETS AS OF DECEMBER 31, 1997
*Connecticut General Life Guaranteed Income Fund 6,080,054
Insurance 587,974
*Connecticut General Life Invesco Total Return Account 983,655
Insurance 235,073 $ 8,822
*Connecticut General Life Large Company Stock Index Fund 839,717
Insurance 1,486 56
*Connecticut General Life Fidelity Advisor Growth 5,436,221
Insurance Opportunities Account 532,673 4,067
*Connecticut General Life American Century - 20th Century 506,853
Insurance Ultra Account 73,672 (39)
*Connecticut General Life Janus Worldwide Account 1,127,951
Insurance 64,614 615
*The Manufacturers Life Guaranteed Interest Account 324,847 324,847
Insurance Company 4,878,976 **
*The Manufacturers Life Equity A Pooled Account 585,025
Insurance Company 4,728,933 **
*The Manufacturers Life Balanced Account 247,555
Insurance Company 777,492 **
</TABLE>
*Party-in-interest
**Cost is not determinable based on the information maintained by The
Manufacturers Life Insurance Company
15
<PAGE> 16
PIONEER COMPANIES SAVINGS PLAN FOR
HENDERSON BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
BARGAINING UNIT SAVINGS INVESTMENT PLAN)
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 17
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits As of December 31, 1998 and 1997 18
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 1998 and 1997 19
Notes to Financial Statements 20
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes As of December 31, 1998 26
Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 27
</TABLE>
16
<PAGE> 17
INDEPENDENT AUDITORS' REPORT
The Plan Administrator of the
Pioneer Companies Savings Plan for
Henderson Bargaining Unit Employees:
We have audited the accompanying statements of net assets available for
benefits of the Pioneer Companies Savings Plan for Henderson Bargaining Unit
Employees (formerly Pioneer Chlor Alkali Company, Inc. Bargaining Unit Savings
Investment Plan) (the "Plan") as of December 31, 1998 and 1997, and the related
statements of changes in net assets available for benefits for the years then
ended. 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 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1998 and 1997, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1998 and of
reportable transactions for the year ended December 31, 1998, are presented for
the purpose 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. These schedules are the
responsibility of the Plan's management. Such schedules have been subjected to
the auditing procedures applied in our audit of the basic 1998 financial
statements and, in our opinion, are fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
The schedule of reportable transactions that accompanies the Plan's financial
statements does not disclose the historical cost of certain fund transactions
reported by the Plan trustee. Disclosure of this information is required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974.
DELOITTE & TOUCHE LLP
June 16, 1999
Houston, Texas
17
<PAGE> 18
PIONEER COMPANIES SAVINGS PLAN FOR
HENDERSON BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
BARGAINING UNIT SAVINGS INVESTMENT PLAN)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
ASSETS:
Investments, at fair value:
Invesco Total Return Account $ 191,357 $ --
Fidelity Advisor Growth Opportunities Account 475,169 --
Founders Balanced Account 6,583 --
Invesco Dynamics Account 3,914 --
Short-Term Securities Pooled Account -- 55,662
Equity A Pooled Account -- 335,421
Balanced Account -- 176,798
High Quality Bond Account -- 13,699
Pioneer Companies, Inc. Common Stock 4,380 --
Participant loans 180,684 177,069
Investments, at contract value:
Guaranteed Income Fund 1,499,953 --
Guaranteed Interest Account -- 1,307,636
---------- ----------
Total investments 2,362,040 2,066,285
Contributions receivable 46,819 18,724
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $2,408,859 $2,085,009
========== ==========
</TABLE>
See notes to financial statements.
18
<PAGE> 19
PIONEER COMPANIES SAVINGS PLAN FOR
HENDERSON BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
BARGAINING UNIT SAVINGS INVESTMENT PLAN)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 114,292 $ 80,663
Interest 88,392 93,722
Contributions:
Employer 90,001 78,248
Employee 328,508 258,298
----------- -----------
Total additions 621,193 510,931
----------- -----------
BENEFITS PAID TO PARTICIPANTS (297,343) (97,753)
----------- -----------
NET INCREASE IN NET ASSETS AVAILABLE
FOR BENEFITS 323,850 413,178
NET ASSETS AVAILABLE FOR BENEFITS AT:
Beginning of year 2,085,009 1,671,831
----------- -----------
End of year $ 2,408,859 $ 2,085,009
=========== ===========
</TABLE>
See notes to financial statements.
19
<PAGE> 20
PIONEER COMPANIES SAVINGS PLAN FOR
HENDERSON BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
BARGAINING UNIT SAVINGS INVESTMENT PLAN)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Pioneer Companies Savings Plan for Henderson
Bargaining Unit Employees (formerly the Pioneer Chlor Alkali Company, Inc.
Bargaining Unit Savings Investment Plan) (the "Plan") provides only general
information. Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
GENERAL - The Plan is a defined contribution plan covering all Henderson
employees who are covered by a collective bargaining unit which has a
bargaining agreement with Pioneer Chlor Alkali Company, Inc. (the "Company").
Effective July 1, 1998, the Plan changed trustees from Manufacturer's Life
Insurance Company ("ManuLife") to Connecticut General Life Insurance Company
("CIGNA").
CONTRIBUTIONS - Participants may contribute up to 15% of their annual
compensation. The total annual contribution may not exceed the maximum amount
established by the Internal Revenue Code (the "Code"). The Company makes an
employer matching contribution of 50% of a participant's contribution up to 6%,
for a maximum match of 3% of the participant's annual compensation. In
addition, the Company may make discretionary employer contributions to the Plan
for all eligible participants. There were no such contributions during the
years ended December 31, 1998 and 1997.
PARTICIPANT ACCOUNTS AND VESTING - Each participant's account is credited with
their contributions and withdrawals and allocations of Company contributions
and investment earnings. Participants are always fully vested in their
contributions and cumulative earnings thereon. Participants hired before July
1, 1998 vest immediately in Company matching contributions, whereas
participants hired after June 30, 1998 vest in Company matching contributions
after three years of credited service.
BENEFITS - A participant may make a partial withdrawal of after-tax
contributions (but not earnings thereon) made by the participant prior to 1987
as of any quarter-end. If the participant has withdrawn all of their pre-1987
contributions, the participant may withdraw any remaining amount of their
after-tax contribution account, including earnings.
If a participant has made the maximum partial withdrawals allowed, the
participant may also withdraw the full amount of the Company matching account
provided the participant has made contributions to the Plan for any 60 months
prior to the date of the total withdrawal.
Loans may be granted in a uniform manner to participants from the balance in
their accounts. Loans shall be limited to the lesser of $50,000 or one-half of
the value of the vested portion of the participant's account and bear interest
at prevailing market rates. Loans are to be repaid through
20
<PAGE> 21
monthly payroll deductions over a period not to exceed five years unless used
to purchase a principal residence.
INVESTMENTS - Effective July 1, 1998, each participant may direct that
contributions to their account be invested in the following options:
o Invesco Total Return Account - invests in a combination of equity and fixed
income securities.
o Fidelity Advisor Growth Opportunities Account - invests mainly in securities
of companies believed to have long-term growth potential.
o Founders Balanced Account - invests primarily in equity securities, corporate
obligations, and preferred stock.
o Invesco Dynamics Account - invests primarily in common stock of companies
traded on U.S. securities exchanges, as well as over-the-counter.
o Pioneer Companies, Inc. Common Stock - invests exclusively in the common
stock of Pioneer Companies, Inc.
o Guaranteed Income Fund - invests in six month, fixed interest rate
securities. All principal and interest is guaranteed by CIGNA.
o Large Company Stock Index Fund - invests in securities that reflect the
composition of the Standard and Poor's 500 Stock Index.
o Janus Worldwide Account - invests primarily in common stocks of foreign and
domestic issuers.
o American Century - Twentieth Century Ultra Account - invests in the equity
securities of large companies that offer the potential for
better-than-average prospects for capital appreciation.
o CIGNA Lifetime Funds - invest in a combination of high yield bonds, high
grade bonds, and equity securities of small companies, large companies,
growth companies, and international companies.
o Neuberger & Berman Guardian Account - invests in equity securities that have
good potential capital appreciation.
o PBHG Growth Account - invests mainly in common stocks and convertible
securities of small- and medium-sized growth companies.
o Founders Growth Account - invests mainly in the common stock of companies
with strong performance records and solid market positions.
o Warburg Pincus Advisor Growth & Income Account - invests mainly in
dividend-paying equity securities.
o Warburg Pincus Advisor Emerging Growth Account - invests in securities of
high-growth companies.
o AIM Constellation Account - invests primarily in securities growth companies
and companies that have a history of strong performance.
o Templeton Growth Account - invests in common stock.
o Warburg Pincus Advisor International Equity Account - invests in securities
of corporations located in a number of foreign countries.
o Templeton Foreign Account - invests primarily in common stock.
Participants may change their investment elections and/or transfer funds at any
time.
Prior to July 1, 1998, the Plan included the following investment options
offered by ManuLife: Guaranteed Interest Account, Short-Term Securities Pooled
Account, Equity A Pooled Account, Balanced Account and High Quality Bond
Account. The Guaranteed Interest Account invested in ManuLife general funds.
Transfers and withdrawals from the Guaranteed Interest Account were subject to
a market value adjustment. The Short-Term Securities Pooled Account invested
21
<PAGE> 22
primarily in U.S. Treasury Bills, certificates of deposit of major banks, or
commercial paper, all with maturity dates of one year or less. The Balanced
Account invested primarily in debt and equity securities for long-term,
consistent growth of capital. The High Quality Bond Account invested primarily
in corporate and U.S. government bonds. The Equity A Pooled Account invested in
common stocks and securities convertible into common stocks with an emphasis on
high quality growth stocks.
DISTRIBUTIONS OF ACCOUNTS - Distribution of a participant's account balance may
occur due to termination of employment, retirement, disability or death. Upon
termination of service, distributions shall be made in a lump-sum amount unless
a participant makes the proper election to receive another form of payment as
provided by the Plan document. If the participant is married on the benefit
date and elects not to receive a lump-sum payment, distributions shall be in
the form of a joint and survivor annuity. If the participant is not married on
the benefit date, distributions shall be in the form of a single life annuity.
As of December 31, 1998 and 1997, there were no amounts payable to participants
who have terminated or withdrawn from the Plan.
FORFEITURES - Forfeited nonvested accounts are used to reduce future employer
contributions. Such forfeited amounts were not significant during the years
ended December 31, 1998 and 1997.
PLAN TERMINATION - Although the Company has not expressed any intention to do
so, it may terminate the Plan subject to the provisions of ERISA. In the event
of termination of the Plan, each participant shall be fully vested in his
account balance. Distribution of participant account balances will be made in
accordance with the modes of distribution provided for under the Plan.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements are presented on
the accrual basis of accounting.
INVESTMENTS - The Guaranteed Income Fund and the Guaranteed Interest Account
are valued at contract value. Contract value represents the contributed amounts
plus accumulated interest less funds used to pay benefits. Contract value
approximates fair market value as estimated by CIGNA and ManuLife. Other
investments are reported in the financial statements at fair values based on
the quoted market prices. Loans are valued at cost which approximates fair
value.
PLAN EXPENSES - Administrative expenses, to the extent not paid by the Company,
are paid from Plan assets.
TAX STATUS - The Plan obtained its latest determination letter dated March 1,
1995 in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the Code. The
Company believes that the Plan is currently designed and being operated in
compliance with the Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires Plan management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from these estimates.
RECLASSIFICATIONS - Certain prior year amounts have been reclassified to
conform to the current year presentation.
22
<PAGE> 23
3. SUPPLEMENTAL FUND INFORMATION
Prior to July 1, 1998, the Plan's investments were held in trust by ManuLife. As
of July 1, 1998, all investments were transferred to CIGNA. The following is a
summary of the contributions, benefit payments, investment income, plan
transfers and interfund transfers by fund for the years ended December 31, 1998
and 1997:
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
EMPLOYEE CONTRIBUTIONS:
CIGNA:
Invesco Total Return Account $ 28,112 $ --
Fidelity Advisor Growth Opportunities Account 65,625 --
Founders Balanced Account 141 --
Invesco Dynamics Account 363 --
Guaranteed Income Fund 138,861 --
ManuLife:
Short-Term Securities Pooled Account 9,371 12,092
Equity A Pooled Account 57,749 85,956
Balanced Account 27,824 40,685
High Quality Bond Account 673 6,691
Guaranteed Interest Account 98,222 210,427
Pioneer Companies, Inc. Common Stock 4,315 --
Participant Loans (102,748) (97,553)
--------- ---------
Total Employee Contributions $ 328,508 $ 258,298
========= =========
EMPLOYER CONTRIBUTIONS:
CIGNA:
Invesco Total Return Account $ 5,473 $ --
Fidelity Advisor Growth Opportunities Account 12,225 --
Invesco Dynamics Account 140 --
Guaranteed Income Fund 23,079 --
ManuLife:
Short-Term Securities Pooled Account 2,678 3,203
Equity A Pooled Account 13,776 19,385
Balanced Account 6,961 9,439
High Quality Bond Account 525 1,414
Guaranteed Interest Account 24,402 44,807
Pioneer Companies, Inc. Common Stock 742 --
--------- ---------
Total Employer Contributions $ 90,001 $ 78,248
========= =========
</TABLE>
23
<PAGE> 24
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
BENEFITS PAID TO PARTICIPANTS:
CIGNA:
Invesco Total Return Account $ (13,965) $ --
Fidelity Advisor Growth Opportunities Account (27,721) --
Guaranteed Income Fund (145,122) --
ManuLife:
Short-Term Securities Pooled Account -- (16,668)
Equity A Pooled Account (26,666) (32,756)
Balanced Account (5,039) (14,272)
Guaranteed Interest Account (172,646) (147,590)
Participant Loans 93,816 113,533
--------- ---------
Total Benefits Paid to Participants $(297,343) $ (97,753)
========= =========
INTEREST INCOME:
CIGNA - Guaranteed Income Fund $ 41,735 $ --
ManuLife - Guaranteed Interest Account 34,109 80,925
Participant Loans 12,548 12,797
--------- ---------
Total Interest Income $ 88,392 $ 93,722
========= =========
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE
OF INVESTMENTS:
CIGNA:
Invesco Total Return Account $ 10,562 $ --
Fidelity Advisor Growth Opportunities Account 453 --
Founders Balanced Account 42,490 --
Invesco Dynamics Account 800 --
ManuLife:
Short-Term Securities Pooled Account 1,416 2,372
Equity A Pooled Account 43,488 58,834
Balanced Account 15,066 18,534
High Quality Bond Account 537 923
Pioneer Companies, Inc. Common Stock (520) --
--------- ---------
Total Net Appreciation in Fair Value of Investments $ 114,292 $ 80,663
========= =========
</TABLE>
24
<PAGE> 25
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
PLAN TO PLAN TRANSFERS:
CIGNA:
Guaranteed Income Fund $ 1,350,761 $ --
Invesco Total Return Account 228,237 --
Fidelity Advisor Growth Opportunities Account 446,427 --
ManuLife:
Guaranteed Interest Account (1,251,590) --
Short-Term Securities Pooled Account (69,828) --
Equity A Pooled Account (455,383) --
Balanced Account (232,604) --
High Quality Bond Account (16,020) --
Participant Loans -- --
----------- -----------
Total Net Transfers In (Out) $ -- $ --
=========== ===========
INTERFUND TRANSFERS:
CIGNA:
Guaranteed Income Fund $ 63,404 $ --
Invesco Total Return Account (41,518) --
Founders Balanced Account 6,130 --
Fidelity Advisor Growth Opportunities Account (30,711) --
Invesco Dynamics Account 2,695 --
ManuLife:
Guaranteed Interest Account (33,314) (47,094)
Short-Term Securities Pooled Account -- (501)
Equity A Pooled Account 24,100 8,209
Balanced Account 9,214 40,822
High Quality Bond Account -- (1,436)
Participant Loans -- --
----------- -----------
Total Net Interfund Transfers $ -- $ --
=========== ===========
</TABLE>
4. GUARANTEED INTEREST ACCOUNTS
The stated interest rate for the Guaranteed Income Fund held by CIGNA was 6% as
of December 31, 1998. The stated interest rate for the Guaranteed Interest
Account held by ManuLife was 6% as of December 31, 1997. The average yield for
the Guaranteed Income Fund held by CIGNA was 6.15% for the year ended December
31, 1998. The average yield for the Guaranteed Interest Account held by
ManuLife was 5.38% and 6.81% for the years ended December 31, 1998 and 1997,
respectively.
******
25
<PAGE> 26
PIONEER COMPANIES SAVINGS PLAN FOR
HENDERSON BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
BARGAINING UNIT SAVINGS INVESTMENT PLAN)
Item 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(c)
(b) DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUE, INCLUDING MATURITY DATE, (e)
BORROWER, LESSOR, RATE OF INTERESTS, PAR (d) CURRENT
(a) OR SIMILAR PARTY OR MARKET VALUE COST VALUE
<S> <C> <C> <C> <C>
* Connecticut General Life Insurance Invesco Total Return Account $ 177,899 $ 191,357
* Connecticut General Life Insurance Founders Balanced Account
6,130 6,583
* Connecticut General Life Insurance Fidelity Advisor Growth Opportunities Account
412,214 475,169
* Connecticut General Life Insurance Invesco Dynamics Account
3,114 3,914
* Pioneer Companies, Inc. Pioneer Companies, Inc. Common Stock
4,963 4,380
* Connecticut General Life Insurance Guaranteed Income Fund
1,499,953 1,499,953
* Loans to participants Maturities up to five years with interest rates
from 7.25% to 9%
180,684 180,684
---------- ----------
$2,284,957 $2,362,040
========== ==========
</TABLE>
*Party-in-interest
26
<PAGE> 27
PIONEER COMPANIES SAVINGS PLAN FOR
HENDERSON BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER CHLOR ALKALI COMPANY, INC.
BARGAINING UNIT SAVINGS INVESTMENT PLAN)
Item 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (g)
IDENTITY OF DESCRIPTION PURCHASE SELLING COST OF
PARTY INVOLVED OF ASSET PRICE PRICE ASSET
Individual transactions in excess of 5%
of Plan assets as of December 31, 1997
<S> <C> <C> <C> <C>
*Connecticut General Life Guaranteed Income Fund $ 1,350,761 $ 1,350,761
Insurance
*Connecticut General Life Invesco Total Return Account 228,237 228,237
Insurance
*Connecticut General Life Fidelity Advisor Growth 446,427 446,427
Insurance Opportunities Account
*The Manufacturers Life Guaranteed Interest Account $ 1,251,590 **
Insurance Company
*The Manufacturers Life Equity A Pooled Account 455,383 **
Insurance Company
*The Manufacturers Life Balanced Account 232,604 **
Insurance Company
SERIES OF TRANSACTIONS IN EXCESS OF 5%
OF PLAN ASSETS AS OF DECEMBER 31, 1997
*Connecticut General Life Guaranteed Income Fund $ 1,591,373 $ 1,591,373
Insurance $ 124,399 124,399
*Connecticut General Life Invesco Total Return Account 257,304 257,304
Insurance 81,744 79,405
*Connecticut General Life Fidelity Advisor Growth 523,378 523,378
Insurance Opportunities Account 115,268 111,164
*The Manufacturers Life Guaranteed Interest Account 71,160 71,160
Insurance Company 1,306,936 **
*The Manufacturers Life Equity A Pooled Account 128,254 128,254
Insurance Company 499,988
*The Manufacturers Life Balanced Account 54,229 54,229
Insurance Company 235,309 **
<CAPTION>
(h)
CURRENT
VALUE
(a) (b) OF ASSET ON (i)
IDENTITY OF DESCRIPTION TRANSACTION NET GAIN
PARTY INVOLVED OF ASSET DATE OR LOSS
Individual transactions in excess of 5%
of Plan assets as of December 31, 1997
<S> <C> <C> <C>
*Connecticut General Life Guaranteed Income Fund $ 1,350,761
Insurance
*Connecticut General Life Invesco Total Return Account 228,237
Insurance
*Connecticut General Life Fidelity Advisor Growth 446,427
Insurance Opportunities Account
*The Manufacturers Life Guaranteed Interest Account 1,251,590 **
Insurance Company
*The Manufacturers Life Equity A Pooled Account 455,383 **
Insurance Company
*The Manufacturers Life Balanced Account 232,604 **
Insurance Company
SERIES OF TRANSACTIONS IN EXCESS OF 5%
OF PLAN ASSETS AS OF DECEMBER 31, 1997
*Connecticut General Life Guaranteed Income Fund $ 1,591,373
Insurance 124,399
*Connecticut General Life Invesco Total Return Account 257,304
Insurance 81,744 $ 2,339
*Connecticut General Life Fidelity Advisor Growth 523,378
Insurance Opportunities Account 115,268 4,104
*The Manufacturers Life Guaranteed Interest Account 71,160
Insurance Company 1,306,936 **
*The Manufacturers Life Equity A Pooled Account 128,254
Insurance Company 499,988 **
*The Manufacturers Life Balanced Account 54,229
Insurance Company 235,309 **
</TABLE>
*Party-in-interest
**Cost is not determinable based on the information maintained by The
Manufacturers Life Insurance Company
27
<PAGE> 28
PIONEER COMPANIES SAVINGS PLAN FOR
TACOMA BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER TACOMA BARGAINING UNIT 401(K) PLAN)
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 29
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits As of December 31, 1998 and 1997 30
Statements of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1998 and for the Period from June 16, 1997 (Inception)
to
December 31, 1997 31
Notes to Financial Statements 32
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes As of December 31, 1998 37
Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 38
</TABLE>
28
<PAGE> 29
INDEPENDENT AUDITORS' REPORT
The Plan Administrator of the
Pioneer Companies Savings Plan for
Tacoma Bargaining Unit Employees:
We have audited the accompanying statements of net assets available for
benefits for the Pioneer Companies Savings Plan for Tacoma Bargaining Unit
Employees (formerly the Pioneer Tacoma Bargaining Unit 401(k) Plan) (the
"Plan") as of December 31, 1998 and 1997, and the related statements of changes
in net assets available for benefits for the year ended December 31, 1998 and
for the period from June 16, 1997 (Inception) to December 31, 1997. 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 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1998 and 1997, and the changes in net assets available for benefits for the
year ended December 31, 1998 and for the period from June 16, 1997 (Inception)
to December 31, 1997 in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1998 and of
reportable transactions for the year ended December 31, 1998 are presented for
the purpose 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. These schedules are the
responsibility of the Plan's management. Such schedules have been subjected to
the auditing procedures applied in our audit of the basic 1998 financial
statements and, in our opinion, are fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
June 16, 1999
Houston, Texas
29
<PAGE> 30
PIONEER COMPANIES SAVINGS PLAN FOR
TACOMA BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER TACOMA BARGAINING UNIT 401(k) PLAN)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
ASSETS:
Investments, at fair value:
CIGNA Lifetime 40 Fund $ 245,786 $ 183,578
CIGNA Large Company Stock Index Fund 1,121,047 810,782
American Century - Twentieth Century Ultra Account 283,439 133,828
Janus Worldwide Account 835,435 559,706
Fidelity Advisor Growth Opportunities Account 346,550 237,675
Neuberger & Berman Guardian Account 105,813 176,019
PBHG Growth Account 171,409 186,067
Other equity funds 877,547 734,146
Pioneer Companies, Inc. Common Stock 10,091 --
Participant loans 216,213 156,496
Guaranteed Income Fund, at contract value 341,668 217,760
---------- ----------
Total investments 4,554,998 3,396,057
Contributions receivable 43,497 23,417
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $4,598,495 $3,419,474
========== ==========
</TABLE>
See notes to financial statements.
30
<PAGE> 31
PIONEER COMPANIES SAVINGS PLAN FOR
TACOMA BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER TACOMA BARGAINING UNIT 401(k) PLAN)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD FROM JUNE 16, 1997 (INCEPTION) TO DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 578,119 $ 7,041
Interest 28,542 10,143
Contributions:
Employer 126,618 79,238
Employee 472,829 192,271
Transfers-in -- 3,155,032
----------- -----------
Total additions 1,206,108 3,443,725
----------- -----------
BENEFITS PAID TO PARTICIPANTS (27,087) (24,251)
----------- -----------
NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 1,179,021 3,419,474
NET ASSETS AVAILABLE FOR BENEFITS AT:
Beginning of period 3,419,474 --
----------- -----------
End of period $ 4,598,495 $ 3,419,474
=========== ===========
</TABLE>
See notes to financial statements.
31
<PAGE> 32
PIONEER COMPANIES SAVINGS PLAN FOR
TACOMA BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER TACOMA BARGAINING UNIT 401(K) PLAN)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD FROM JUNE 16, 1997 (INCEPTION) TO DECEMBER 31, 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Pioneer Companies Savings Plan for Tacoma
Bargaining Unit Employees (formerly the Pioneer Tacoma Bargaining Unit 401(k)
Plan) (the "Plan") provides only general information. Participants should refer
to the Plan document for a more complete description of the Plan's provisions.
GENERAL - The Plan is a defined contribution plan covering all employees who
are covered by a collective bargaining unit which has a bargaining agreement
with Pioneer Tacoma (the "Company"). Connecticut General Life Insurance Company
("CIGNA") is the trustee of the Plan's assets.
CONTRIBUTIONS - Participants may contribute up to 15% of their annual
compensation. The total annual contribution may not exceed the maximum amount
established by the Internal Revenue Code (the "Code"). The Company makes an
employer matching contribution of 50% of a participant's contribution up to 6%,
for a maximum match of 3% of the participant's annual compensation. In
addition, the Company may make discretionary employer contributions to the Plan
for all eligible participants. There were no such contributions during the year
ended December 31, 1998 or during the period ended December 31, 1997.
PARTICIPANT ACCOUNTS AND VESTING - Each participant's account is credited with
their contributions and withdrawals and allocations of Company contributions
and investment earnings. Participants are always fully vested in their
contributions and cumulative earnings thereon. Participants hired before July
1, 1998 vest immediately in Company matching contributions, whereas
participants hired after June 30, 1998 vest in Company matching contributions
after three years of credited service.
BENEFITS - The Plan provides for participant withdrawals in the event of a
participant attaining the age of 59-1/2 or a serious financial hardship (as
defined by the Plan). Participants may elect to receive distributions in the
form of a lump sum, life annuity or installment payments.
PARTICIPANT LOANS - Loans may be granted in a uniform manner to participants
from the balance in their accounts. Loans shall be limited to the lesser of
$50,000 or one-half of the value of the vested portion of the participant's
account and bear interest at prevailing market rates. Loans are to be repaid
through monthly payroll deductions over a period not to exceed five years
unless used to purchase a principal residence.
32
<PAGE> 33
INVESTMENTS - Each participant may direct that contributions to their account
be invested in the following investment options:
o CIGNA Lifetime Funds - invest in a combination of high yield bonds,
high-grade bonds, and equity securities of small companies, large
companies, growth companies, and international companies.
o Large Company Stock Index Fund - invests in securities that reflect the
composition of the Standard and Poor's 500 Stock Index.
o American Century - Twentieth Century Ultra Account - invests in the equity
securities of large companies that offer the potential for
better-than-average prospects for capital appreciation.
o Janus Worldwide Account - invests primarily in common stocks of foreign
and domestic issuers.
o Fidelity Advisor Growth Opportunities Account - invests mainly in
securities of companies believed to have long-term growth potential.
o Neuberger & Berman Guardian Account - invests in equity securities that
have good potential capital appreciation.
o PBHG Growth Account - invests mainly in common stocks and convertible
securities of small- and medium-sized growth companies.
o Pioneer Companies, Inc. Common Stock - invests exclusively in the common
stock of Pioneer Companies, Inc.
o Guaranteed Income Fund - invests in six month, fixed interest rate
securities. All principal and interest is guaranteed by CIGNA.
o Invesco Total Return Account - invests in a combination of equity and
fixed income securities.
o Founders Balanced Account - invests primarily in equity securities,
corporate obligations, and preferred stock.
o Founders Growth Account - invests mainly in the common stock of companies
with strong performance records and solid market positions.
o Warburg Pincus Advisor Growth & Income Account - invests mainly in
dividend-paying equity securities.
o Warburg Pincus Advisor Emerging Growth Account - invests in securities of
high growth companies.
o Invesco Dynamics Account - invests primarily in common stock of companies
traded on U.S. securities exchanges, as well as over-the-counter.
o AIM Constellation Account - invests primarily in securities growth
companies and companies that have a history of strong performance.
o Templeton Growth Account - invests in common stock.
o Warburg Pincus Advisor International Equity Account - invests in
securities of corporations located in a number of foreign countries.
o Templeton Foreign Account - invests primarily in common stock.
Participants may change their investment elections and/or transfer funds at any
time.
DISTRIBUTIONS OF ACCOUNTS - Distribution of a participant's account balance may
occur due to termination of employment, retirement, disability or death. Upon
termination of service, distributions shall be made in a lump-sum amount unless
a participant makes the proper election to receive another form of payment as
provided by the Plan document. If the participant is married on the benefit
date and elects not to receive a lump-sum payment, distribution shall be in
33
<PAGE> 34
the form of a joint and survivor annuity. If the participant is not married on
the benefit date, distribution shall be in the form of a single life annuity.
As of December 1998 and 1997, there were no amounts payable to participants
who have terminated or withdrawn from the Plan.
FORFEITURES - Forfeited nonvested accounts are used to reduce future employer
contributions. Such forfeited amounts were not significant during the year
ended December 31, 1998 and during the period ended December 31, 1997.
PLAN TERMINATION - Although the Company has not expressed any intention to do
so, it may terminate the Plan subject to the provisions of ERISA. In the event
of termination of the Plan, each participant shall be fully vested in his
account balance. Distribution of participant account balances will be made in
accordance with the modes of distribution provided for under the Plan.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements are presented on
the accrual basis of accounting.
INVESTMENTS - The Guaranteed Income Fund is valued at contract value. Contract
value represents the contributed amounts plus accumulated interest less funds
used to pay benefits. Contract value approximates fair value as estimated by
CIGNA. Other investments are reported in the financial statements at fair
values based on the quoted market prices. Loans are valued at cost which
approximates fair value.
PLAN EXPENSES - Administrative expenses, to the extent not paid by the Company,
are paid from Plan assets.
TAX STATUS - The Plan obtained its latest determination letter dated May 18,
1999 in which the Internal Revenue Service stated that the Plan was in
compliance with the applicable requirements of the Code. The Company believes
that the Plan is currently designed and being operated in compliance with the
Code. Therefore, no provision for income taxes has been included in the Plan's
financial statements.
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires Plan management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from these estimates.
34
<PAGE> 35
3. SUPPLEMENTAL FUND INFORMATION
The following is a summary of the contributions, benefit payments, investment
income, and interfund transfers by fund for the year ended December 31, 1998
and the period ended December 31, 1997:
<TABLE>
<CAPTION>
FOR THE PERIOD FROM
FOR THE JUNE 16, 1997
YEAR ENDED (INCEPTION) TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
EMPLOYEE CONTRIBUTIONS:
CIGNA Lifetime 40 Fund $ 31,533 $ 12,073
Large Company Stock Index Fund 135,019 46,020
American Century - Twentieth Century Ultra Account 28,331 9,026
Janus Worldwide Account 106,868 36,623
Fidelity Advisor Growth Opportunities Account 43,955 15,571
Neuberger & Berman Guardian Account 21,520 13,749
PBHG Growth Account 29,450 10,174
Other equity funds 120,088 46,927
Pioneer Companies, Inc. Common Stock 6,752 --
Participant loans (76,777) (15,325)
Guaranteed Income Fund 26,090 17,433
--------- ---------
Total Employee Contributions $ 472,829 $ 192,271
========= =========
EMPLOYER CONTRIBUTIONS:
CIGNA Lifetime 40 Fund $ 8,251 $ 4,629
Large Company Stock Index Fund 29,612 18,236
American Century - Twentieth Century Ultra Account 6,508 2,614
Janus Worldwide Account 25,005 14,258
Fidelity Advisor Growth Opportunities Account 10,004 5,890
Neuberger & Berman Guardian Account 5,058 3,907
PBHG Growth Account 6,948 4,774
Other equity funds 27,750 18,900
Pioneer Companies, Inc. Common Stock 1,324 --
Guaranteed Income Fund 6,158 6,030
--------- ---------
Total Employer Contributions $ 126,618 $ 79,238
========= =========
BENEFIT PAYMENTS:
CIGNA Lifetime 40 Fund $ (75) $ --
Large Company Stock Index Fund (48,102) (38,633)
American Century - Twentieth Century Ultra Account (7,842) (6,688)
Janus Worldwide Account (23,401) (24,940)
Fidelity Advisor Growth Opportunities Account (15,279) (9,751)
Neuberger & Berman Guardian Account (4,922) --
PBHG Growth Account (10,279) (6,069)
Other equity funds (13,562) (20,740)
Pioneer Companies, Inc. Common Stock (28,701) --
Participant loans 120,768 99,227
Guaranteed Income Fund 4,308 (16,657)
--------- ---------
Total Benefit Payments $ (27,087) $ (24,251)
========= =========
</TABLE>
35
<PAGE> 36
<TABLE>
<CAPTION>
FOR THE PERIOD FROM
FOR THE JUNE 16, 1997
YEAR ENDED (INCEPTION) TO
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
INTEREST INCOME
Guaranteed Income Fund $ 12,816 $ 10,143
Participant Loans 15,726 --
--------- ---------
Total Interest Income $ 28,542 $ 10,143
========= =========
Net Appreciation (Depreciation) in Fair Value of Investments
CIGNA Lifetime 40 Fund $ 26,562 $ 2,605
Large Company Stock Index Fund 220,819 29,672
American Century - Twentieth Century Ultra Account 60,551 (2,724)
Janus Worldwide Account 143,127 (15,383)
Fidelity Advisor Growth Opportunities Account 62,749 11,762
Neuberger & Berman Guardian Account -- (9,408)
PBHG Growth Account -- (4,960)
Other equity funds 64,926 (4,523)
Pioneer Companies, Inc. Common Stock (615) --
--------- ---------
Total Net Appreciation (Depreciation) in Fair Value of Investments $ 578,119 $ 7,041
========= =========
INTERFUND TRANSFERS
CIGNA Lifetime 40 Fund $ (2,926) $ 165,598
Large Company Stock Index Fund (21,705) 761,348
American Century - Twentieth Century Ultra Account 64,905 131,600
Janus Worldwide Account 28,459 553,194
Fidelity Advisor Growth Opportunities Account 9,202 215,921
Neuberger & Berman Guardian Account (81,466) 172,618
PBHG Growth Account (45,410) 179,918
Other equity funds (58,788) 699,856
Pioneer Companies, Inc. Common Stock 31,342 --
Guaranteed Income Fund 76,387 --
--------- ---------
Total Net Interfund Transfers $ -- $ --
========= =========
</TABLE>
4. GUARANTEED INCOME FUND
The stated interest rates for the Guaranteed Income Fund held by CIGNA was 6%
as of December 31, 1998 and 1997. The average yield for the Guaranteed Income
Fund held by CIGNA was 6.15% and 6.75% for the years ended December 31, 1998
and 1997, respectively.
******
36
<PAGE> 37
PIONEER COMPANIES SAVINGS PLAN FOR
TACOMA BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER TACOMA BARGAINING UNIT 401(k) PLAN)
Item 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(c)
(b) Description of Investment,
Identity of Issue, Including Maturity Date, (e)
Borrower, Lessor, Rate of Interests, Par (d) Current
(a) or Similar Party or Market Value Cost Value
<S> <C> <C> <C> <C>
* Connecticut General Life Insurance CIGNA Lifetime 60 Fund $ 46,957 $ 52,797
* Connecticut General Life Insurance CIGNA Lifetime 50 Fund 72,799 80,528
* Connecticut General Life Insurance CIGNA Lifetime 40 Fund 222,678 245,786
* Connecticut General Life Insurance CIGNA Lifetime 30 Fund 23,407 26,597
* Connecticut General Life Insurance CIGNA Lifetime 20 Fund 19,483 21,696
* Connecticut General Life Insurance Large Company Stock Index Fund 881,220 1,121,047
* Connecticut General Life Insurance American Century - 20th Century Ultra Account 226,036 283,439
* Connecticut General Life Insurance Janus Worldwide Account 714,728 835,435
* Connecticut General Life Insurance Fidelity Advisor Growth Opportunities Account 276,400 346,550
* Connecticut General Life Insurance Neuberger & Berman Guardian Account 109,046 105,813
* Connecticut General Life Insurance PBHG Growth Account 210,926 171,409
* Pioneer Companies, Inc. Pioneer Companies, Inc. Common Stock 40,859 10,091
* Connecticut General Life Insurance Guaranteed Income Fund 341,668 341,668
* Connecticut General Life Insurance Invesco Total Return Account 84,334 96,180
* Connecticut General Life Insurance Founders Balanced Account 127,012 143,205
* Connecticut General Life Insurance Founders Growth Account 107,465 131,052
* Connecticut General Life Insurance Warburg Pincus Advisor Growth & Income Account 2,828 32,017
* Connecticut General Life Insurance Warburg Pincus Advisor Emerging Growth Account 111 118
* Connecticut General Life Insurance Invesco Dynamics Account 21,682 24,722
* Connecticut General Life Insurance AIM Constellation Account 79,900 90,728
* Connecticut General Life Insurance Templeton Growth Account 108,178 102,517
* Connecticut General Life Insurance Warburg Pincus Advisor International Equity Account 4,046 3,650
* Connecticut General Life Insurance Templeton Foreign Account 82,838 71,740
* Loans to participants Maturities up to five years with interest rates
from 5% to 8.5% 216,213 216,213
---------- ----------
$4,020,814 $4,554,998
========== ==========
* Party-in-interest
</TABLE>
37
<PAGE> 38
PIONEER COMPANIES SAVINGS PLAN FOR
TACOMA BARGAINING UNIT EMPLOYEES
(FORMERLY PIONEER TACOMA BARGAINING UNIT 401(k) PLAN)
Item 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(h)
Current
Value
(a) (b) (c) (d) (g) of Asset on (i)
Identity of Description Purchase Selling Cost of Transaction Net Gain
Party Involved of Asset Price Price Asset Date or Loss
Individual transactions in excess of 5%
of Plan assets as of December 31, 1997
None
Series of transactions in excess of 5%
of Plan assets as of December 31, 1997
<S> <C> <C> <C> <C> <C> <C>
*Connecticut General Life Guaranteed Income Fund $ 399,334 $ 399,334 $ 399,334
Insurance $ 288,242 288,242 288,242
*Connecticut General Life Large Company Stock Index 291,996 291,996 291,996
Insurance Fund 209,624 192,447 209,624 $ 17,177
*Connecticut General Life Janus Worldwide Account 378,281 378,281 378,281
Insurance 245,678 237,890 245,678 7,788
* Party-in-interest
</TABLE>
38
<PAGE> 39
KEMWATER NORTH AMERICA SAVINGS PLAN
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page
<S> <C>
INDEPENDENT AUDITORS' REPORT 40
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits As of December 31, 1998 and 1997 41
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 1998 and 1997 42
Notes to Financial Statements 43
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes As of December 31, 1998 48
Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 50
</TABLE>
39
<PAGE> 40
INDEPENDENT AUDITORS' REPORT
The Plan Administrator of the
Kemwater North America Savings Plan:
We have audited the accompanying statements of net assets available for
benefits of the Kemwater North America Savings Plan (the "Plan") as of December
31, 1998 and 1997, and the related statements of changes in net assets
available for benefits for the years then ended. 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 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1998 and 1997, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1998 and of
reportable transactions for the year ended December 31, 1998 are presented for
the purpose 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. These schedules are the
responsibility of the Plan's management. Such schedules have been subjected to
the auditing procedures applied in our audit of the basic 1998 financial
statements and, in our opinion, are fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
June 16, 1999
Houston, Texas
40
<PAGE> 41
KEMWATER NORTH AMERICA SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
ASSETS:
Investments, at fair value:
CIGNA Large Company Stock Index Fund $ 419,208 $ 298,476
Fidelity Advisor Growth Opportunities Account 395,302 358,967
Warburg Pincus Advisor Emerging Growth Account 524,755 439,100
Invesco Total Return Account 145,908 134,950
Other equity funds 69,528 24,021
Pioneer Companies, Inc. Common Stock 352 --
Participant loans 133,968 73,997
Guaranteed Income Fund, at contract value 169,850 146,853
---------- ----------
Total investments 1,858,871 1,476,364
Contributions receivable 25,770 11,156
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $1,884,641 $1,487,520
========== ==========
</TABLE>
See notes to financial statements.
41
<PAGE> 42
KEMWATER NORTH AMERICA SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 200,399 $ 217,327
Interest income 13,584 9,839
Contributions:
Employee 286,643 295,273
Employer 72,088 75,441
----------- -----------
Total additions 572,714 597,880
----------- -----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid directly to participants (174,887) (122,514)
Administrative expenses (706) (3,019)
----------- -----------
Total deductions (175,593) (125,533)
----------- -----------
NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 397,121 472,347
NET ASSETS AVAILABLE FOR BENEFITS AT:
Beginning of year 1,487,520 1,015,173
----------- -----------
End of year $ 1,884,641 $ 1,487,520
=========== ===========
</TABLE>
See notes to financial statements.
42
<PAGE> 43
KEMWATER NORTH AMERICA SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Kemwater North America Savings Plan (the
"Plan") provides only general information. Participants should refer to the
Plan document for a more complete description of the Plan's provisions.
General - The Plan is a defined contribution plan covering all employees who
have completed six months of service and are 18 years or older, and who are not
a leased employee or a member of, or covered by, a collective bargaining unit
which has a bargaining agreement with Kemwater North America (the "Company").
Connecticut General Life Insurance Company ("CIGNA") is the trustee of the
Plan's assets.
Contributions - Participants may contribute up to 15% of their annual
compensation. The total annual contribution may not exceed the maximum amount
established by the Internal Revenue Code (the "Code"). The Company contributes
50% of a participant's elected contribution up to 4%, for a maximum match of
2%.
Participant Accounts and Vesting - Each participant's account is credited with
their contributions and withdrawals and allocations of Company contributions
and investment earnings. Participants are immediately vested in their voluntary
contributions plus actual earnings thereon. Vesting in the remainder of their
account is based on years of continuous service. A participant is 100% vested
after three years of credited service. Forfeitures of discretionary employer
contributions are allocated to remaining participants. Forfeitures of employer
matching contributions are used to reduce future matching contributions. There
were no forfeitures in 1998 or 1997.
Benefits - A participant may elect to withdraw any dollar amount of the vested
portion of their account balance before termination of employment, retirement,
disability, or death, in times of severe immediate financial hardship, and for
participant loans. Loans may be granted in a uniform manner to participants
from the balance in their accounts. Loans shall be limited to the lesser of
$50,000 or one-half of the value of the vested portion of the participant's
account and bear interest at prevailing market rates. Loans are to be repaid
through monthly payroll deductions over a period not to exceed five years
unless used to purchase a principal residence.
Investments - Each participant may direct that contributions to their account
be invested in the following options:
o Large Company Stock Index Fund - consists of securities that reflect the
composition of the Standard and Poor's 500 Stock Index.
o Fidelity Advisor Growth Opportunities Account - invests mainly in
securities of companies believed to have long-term growth potential.
o Warburg Pincus Advisor Emerging Growth Account - invests in securities of
high growth companies.
o Invesco Total Return Account - invests in a combination of equity and
fixed income securities.
o Pioneer Companies, Inc. Common Stock - invests and reinvests exclusively
in the common stock of Pioneer Companies, Inc.
o CIGNA Guaranteed Income Fund - invests in six month, fixed interest rate
securities. All principal and interest is guaranteed by CIGNA.
43
<PAGE> 44
o CIGNA Lifetime Funds - invest in a combination of high yield bonds,
high-grade bonds, and equity securities of small companies, large
companies, growth companies, and international companies.
o Neuberger & Berman Guardian Account - invests in equity securities that
have good potential capital appreciation.
o Founders Growth Account - invests mainly in the common stock of companies
with strong performance records and solid market positions.
o Warburg Pincus Advisor Growth & Income Account - invests mainly in
dividend-paying equity securities.
o PBGH Growth Account - invests mainly in common stocks and convertible
securities of small- and medium-sized growth companies.
o American Century - Twentieth Century Ultra Account - invests in the equity
securities of large companies that offer the potential for
better-than-average prospects for capital appreciation.
o AIM Constellation Account - invests primarily in securities growth
companies and companies that have a history of strong performance.
o Templeton Growth Account - invests in common stocks.
o Janus Worldwide Account - invests primarily in common stocks of foreign
and domestic issuers.
o Templeton Foreign Account - invests primarily in common stocks.
o Founders Balanced Account - invests primarily in equity securities,
corporate obligations and preferred stock.
o Invesco Dynamics Account - invests primarily in common stock of companies
traded on U.S. securities exchanges, as well as over-the-counter.
o Warburg Pincus Advisor International Equity Account - invests in
securities of corporations located in a number of foreign countries.
Participants may change their investment elections and/or transfer funds at any
time.
Distributions of Accounts - Distribution of a participant's account balance may
occur due to termination of employment, retirement, disability, or death. Upon
termination of employment, distributions shall be made in a lump-sum amount
unless a participant makes the proper election to receive another form of
payment as provided by the Plan document.
Plan Termination - Although the Company has not expressed any intention to do
so, it may terminate the Plan subject to the provisions of ERISA. Due to the
termination of a large number of plan participants by the Company during the
fourth quarter of 1998 and the first quarter of 1999, in accordance with
Section 411 of the Internal Revenue Code, the Company believes that a partial
termination of the Plan has occurred. As a result, all affected participants
became 100% vested in their accrued employer contributions and interest earned
thereon at the time of their termination. Distribution of participant account
balances will be made in accordance with the modes of distribution provided for
under the Plan.
44
<PAGE> 45
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements are presented on
the accrual basis of accounting.
INVESTMENTS - The Guaranteed Income Fund is valued at contract value. Contract
value represents the contributed amounts plus accumulated interest less funds
used to pay benefits. Contract value approximates fair market value as
estimated by CIGNA. Other investments are reported in the financial statements
at fair values based on the quoted market prices. Loans are valued at cost which
approximates fair value.
PLAN EXPENSES - Administrative expenses, to the extent not paid by the Company,
are paid from Plan assets.
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires Plan management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
3. SUPPLEMENTAL FUND INFORMATION
The following is a summary of the contributions, benefit payments, investment
income and interfund transfers by fund for the years ended December 31, 1998 and
1997:
<TABLE>
<CAPTION>
1998 1997
EMPLOYEE CONTRIBUTIONS:
<S> <C> <C>
Large Company Stock Index Fund $ 67,998 $ 68,666
Fidelity Advisor Growth Opportunities Account 70,135 76,246
Warburg Pincus Advisor Emerging Growth Account 84,185 98,469
Invesco Total Return Account 23,981 29,833
Other equity funds 34,939 4,634
Participant loans (30,004) (17,875)
Guaranteed Income Fund 35,409 35,300
--------- ---------
Total Employee Contributions $ 286,643 $ 295,273
========= =========
EMPLOYER CONTRIBUTIONS:
Large Company Stock Index Fund $ 14,866 $ 14,183
Fidelity Advisor Growth Opportunities Account 16,238 18,063
Warburg Pincus Advisor Emerging Growth Account 19,539 23,297
Invesco Total Return Account 5,842 8,119
Other equity funds 6,980 1,118
Guaranteed Income Fund 8,623 10,661
--------- ---------
Total Employer Contributions $ 72,088 $ 75,441
========= =========
</TABLE>
45
<PAGE> 46
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
BENEFIT PAYMENTS:
Large Company Stock Index Fund $ (17,740) $ (16,452)
Fidelity Advisor Growth Opportunities Account (67,393) (10,505)
Warburg Pincus Advisor Emerging Growth Account (12,289) (75,196)
Invesco Total Return Account (13,506) (6,942)
Other equity funds (2,352) --
Participant loans (18,321) --
Guaranteed Income Fund (43,286) (13,419)
--------- ---------
Total Benefit Payments $(174,887) $(122,514)
========= =========
INTEREST INCOME:
Guaranteed Income Fund $ 6,818 $ 6,550
Participant loans 6,766 3,289
--------- ---------
Total Interest Income $ 13,584 $ 9,839
========= =========
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS:
Large Company Stock Index Fund $ 85,020 $ 59,561
Fidelity Advisor Growth Opportunities Account 69,678 64,700
Warburg Pincus Advisor Emerging Growth Account 23,250 70,971
Invesco Total Return Account 17,247 22,402
Other equity funds 5,204 (307)
--------- ---------
Total Net Appreciation (Depreciation) in Fair Value of Investments $ 200,399 $ 217,327
========= =========
INTERFUND TRANSFERS:
Large Company Stock Index Fund $ (4,723) $ 8,692
Fidelity Advisor Growth Opportunities Account (37,011) (891)
Warburg Pincus Advisor Emerging Growth Account (2,632) (34,254)
Invesco Total Return Account (2,349) --
Guaranteed Income Fund 34,882 7,870
Other equity funds 11,833 18,583
--------- ---------
Total Net Interfund Transfers $ -- $ --
========= =========
</TABLE>
4. TAX STATUS
The Plan obtained its latest determination letter, dated August 2, 1995, in
which the Internal Revenue Service stated that the Plan, as then designed, was
in compliance with the applicable requirements of the Code. The
46
<PAGE> 47
Company believes that the Plan is currently designed and being operated in
compliance with the Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
5. GUARANTEED INCOME FUND
The stated interest rate for the Guaranteed Income Fund held by CIGNA was 6% as
of December 31, 1998 and 1997. The average yield for the Guaranteed Income Fund
held by CIGNA was 6.15% and 6.75% for the years ended December 31, 1998 and
1997, respectively.
******
47
<PAGE> 48
KEMWATER NORTH AMERICA SAVINGS PLAN
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(c)
(b) DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUE, INCLUDING MATURITY DATE, (e)
BORROWER, LESSOR, RATE OF INTERESTS, PAR (d) CURRENT
(a) OR SIMILAR PARTY OR MARKET VALUE COST VALUE
<S> <C> <C> <C>
* Connecticut General
Life Insurance Co. Large Company Stock Index Fund $ 275,320 $ 419,208
* Connecticut General Fidelity Advisor Growth Opportunities
Life Insurance Co. Account 268,221 395,302
* Connecticut General Warburg Pincus Advisor Emerging
Life Insurance Co. Growth Account 436,363 524,755
* Connecticut General
Life Insurance Co. Invesco Total Return Account 109,668 145,908
* Pioneer Companies, Inc. Pioneer Companies, Inc. Common Stock 352 352
* Connecticut General
Life Insurance Co. Guaranteed Income Fund 169,850 169,850
* Connecticut General
Life Insurance Co. Cigna Lifetime 60 Fund 4,427 4,712
* Connecticut General
Life Insurance Co. CIGNA Lifetime 50 Fund 1,824 1,947
* Connecticut General
Life Insurance Co. CIGNA Lifetime 40 Fund 4,427 4,712
* Connecticut General
Life Insurance Co. CIGNA Lifetime 30 Fund 5,493 5,853
* Connecticut General
Life Insurance Co. CIGNA Lifetime 20 Fund 2,744 2,885
* Connecticut General
Life Insurance Co. Neuberger & Berman Guardian Account 1,170 1,177
* Connecticut General
Life Insurance Co. Founders Growth Account 2,988 3,337
</TABLE>
(Continued)
48
<PAGE> 49
KEMWATER NORTH AMERICA SAVINGS PLAN
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(c)
(b) DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUE, INCLUDING MATURITY DATE, (e)
BORROWER, LESSOR, RATE OF INTERESTS, PAR (d) CURRENT
(a) OR SIMILAR PARTY OR MARKET VALUE COST VALUE
<S> <C> <C> <C>
* Connecticut General Warburg Pincus Advisor Growth &
Life Insurance Co. Income Account $ 775 $ 829
* Connecticut General
Life Insurance Co. PBHG Growth Account 313 310
* Connecticut General American Century - 20th Century Ultra
Life Insurance Co. Account 1,313 1,512
* Connecticut General
Life Insurance Co. AIM Constellation Account 343 407
* Connecticut General
Life Insurance Co. Templeton Growth Account 1,410 1,369
* Connecticut General
Life Insurance Co. Janus Worldwide Account 36,466 42,073
* Connecticut General
Life Insurance Co. Templeton Foreign Account 654 609
* Connecticut General
Life Insurance Co. Founders Balanced Account 608 633
* Connecticut General
Life Insurance Co. Invesco Dynamics 1,125 1,279
* Connecticut General Warburg Pincus Advisor Growth &
Life Insurance Co. Income Account 245 231
* Loans to participants Maturities range from one to five years with
interest rates ranging from 7.75% to 10% 133,968 133,968
---------- ----------
$1,455,983 $1,858,871
========== ==========
</TABLE>
* Party-in-interest (Concluded)
49
<PAGE> 50
KEMWATER NORTH AMERICA SAVINGS PLAN
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(h)
CURRENT
VALUE
(a) (b) (c) (d) (g) OF ASSET ON (i)
IDENTITY OF DESCRIPTION PURCHASE SELLING COST OF TRANSACTION NET GAIN
PARTY INVOLVED OF ASSET PRICE PRICE ASSET DATE (LOSS)
<S> <C> <C> <C> <C> <C> <C>
INDIVIDUAL TRANSACTIONS IN EXCESS OF 5%
OF PLAN ASSETS AS OF DECEMBER 31, 1997
None
SERIES OF TRANSACTIONS IN EXCESS OF 5%
OF PLAN ASSETS AS OF DECEMBER 31, 1997
*Connecticut General
Life Insurance Co. Guaranteed Income Fund $ 84,952 $ 84,952 $ 84,952
$ 68,773 68,773 68,773
*Connecticut General 86,289 86,289 86,289
Life Insurance Co. Large Company Stock Index Fund 50,576 35,486 50,576 $15,090
*Connecticut General 83,442 83,442 83,442
Life Insurance Co. Fidelity Advisor Growth Opportunities Account 116,836 90,356 116,836 26,480
*Connecticut General 100,289 100,289 100,289
Life Insurance Co. Warburg Pincus Advisor Emerging Growth Account 37,885 32,128 37,885 5,757
</TABLE>
* Party-in-interest
50
<PAGE> 51
ALL PURE SAVINGS PLAN
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 52
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits As of December 31, 1998 and 1997 53
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 1998 and 1997 54
Notes to Financial Statements 55
SUPPLEMENTAL SCHEDULES:
Item 27(a) - Schedule of Assets Held for Investment Purposes As of December 31, 1998 60
Item 27(d) - Schedule of Reportable Transactions for the Year Ended December 31, 1998 61
</TABLE>
51
<PAGE> 52
INDEPENDENT AUDITORS' REPORT
The Plan Administrator of the
All Pure Savings Plan:
We have audited the accompanying statements of net assets available for
benefits of the All Pure Savings Plan (the "Plan") as of December 31, 1998 and
1997, and the related statements of changes in net assets available for
benefits for the years then ended. 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 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1998 and 1997, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1998 and of
reportable transactions for the year ended December 31, 1998 are presented for
the purpose 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. These schedules are the
responsibility of the Plan's management. Such schedules have been subjected to
the auditing procedures applied in our audit of the basic 1998 financial
statements and, in our opinion, are fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
June 16, 1999
Houston, Texas
52
<PAGE> 53
ALL PURE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
ASSETS:
Investments, at fair value:
CIGNA Large Company Stock Index Fund $ 341,058 $ 251,156
Fidelity Advisor Growth Opportunities Account 292,851 221,555
Warburg Pincus Advisor Emerging Growth Account 213,249 199,816
Invesco Total Return Account 222,096 211,155
Other equity funds 113,343 37,838
Pioneer Companies, Inc. Common Stock 231 --
Participant loans 152,700 79,679
Guaranteed Income Fund, at contract value 188,527 228,461
---------- ----------
Total investments 1,524,055 1,229,660
Contributions receivable 22,973 11,105
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $1,547,028 $1,240,765
========== ==========
</TABLE>
See notes to financial statements.
53
<PAGE> 54
ALL PURE SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 165,374 $ 150,405
Interest 20,831 15,908
Contributions:
Employee 268,432 342,207
Employer 75,195 77,501
----------- -----------
Total additions 529,832 586,021
----------- -----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (220,064) (171,090)
Administrative expenses (3,505) (3,191)
----------- -----------
Total deductions (223,569) (174,281)
----------- -----------
NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 306,263 411,740
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 1,240,765 829,025
----------- -----------
End of year $ 1,547,028 $ 1,240,765
=========== ===========
</TABLE>
See notes to financial statements.
54
<PAGE> 55
ALL PURE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the All Pure Savings Plan (the "Plan") provides
only general information. Participants should refer to the Plan document for a
more complete description of the Plan's provisions.
GENERAL - The Plan is a defined contribution plan covering all employees who
have completed six months of service and are 18 years or older, and who are not
a leased employee or a member of, or covered by, a collective bargaining unit
which has a bargaining agreement with All Pure Chemical Company (the
"Company"). Connecticut General Life Insurance Company ("CIGNA") is the trustee
of the Plan's assets.
CONTRIBUTIONS - Participants may contribute up to 15% of their annual
compensation. The total annual contribution may not exceed the maximum amount
established by the Internal Revenue Code (the "Code"). As of April 1, 1996, the
Company contributes 50% of a participant's elected contribution up to 4%, for a
maximum match of 2%.
PARTICIPANT ACCOUNTS AND VESTING - Each participant's account is credited with
their contributions and withdrawals and allocations of Company contributions
and investment earnings. Participants are immediately vested in their voluntary
contributions plus actual earnings thereon. Vesting in the remainder of his/her
account is based on years of continuous service. A participant is 100% vested
after three years of credited service. Forfeitures of discretionary employer
contributions are allocated to remaining participants. Forfeitures of employer
matching contributions are used to reduce future matching contributions. There
were no forfeitures in 1998 or 1997.
BENEFITS - A participant may elect to withdraw any dollar amount of the vested
portion of their account balance before termination of employment, retirement,
disability, or death, in times of severe immediate financial hardship, and for
participant loans. Loans may be granted in a uniform manner to participants
from the balance in their accounts. Loans shall be limited to the lesser of
$50,000 or one-half of the value of the vested portion of the participant's
account and bear interest at prevailing market rates.
INVESTMENTS - Each participant may direct that contributions to his/her account
be invested in the following options:
o Large Company Stock Index Fund - consists of securities that reflect the
composition of the Standard and Poor's 500 Stock Index.
o Fidelity Advisor Growth Opportunities Account - invests mainly in
securities of companies believed to have long-term growth potential.
o Warburg Pincus Advisor Emerging Growth Account - invests in securities of
high growth companies.
o Invesco Total Return Account - invests in a combination of equity and fixed
income securities.
55
<PAGE> 56
o Pioneer Companies, Inc. Common Stock - invests exclusively in the common
stock of Pioneer Companies, Inc.
o CIGNA Guaranteed Income Fund - invests in six month, fixed interest rate
securities. All principal and interest is guaranteed by CIGNA.
o CIGNA Lifetime Funds - invests in a combination of high yield bonds, high
grade bonds, and equity securities of small companies, large companies,
growth companies, and international companies.
o Founders Balanced Account - invests primarily in equity securities,
corporate obligations, and preferred stock.
o Neuberger & Berman Guardian Account - invests in equity securities that
have good potential capital appreciation.
o Founders Growth Account - invests mainly in the common stock of companies
with strong performance records and solid market positions.
o American Century - Twentieth Century Ultra Account - invests in the equity
securities of large companies that offer the potential for
better-than-average prospects for capital appreciation.
o AIM Constellation Account - invests primarily in securities growth
companies and companies that have a history of strong performance.
o Templeton Growth Account - invests in common stocks.
o Janus Worldwide Account - invests primarily in common stocks of foreign and
domestic issuers.
o Warburg Pincus Advisor International Equity Account - invests in securities
of corporations located in a number of foreign countries.
o Templeton Foreign Account - invests primarily in common stocks.
o Invesco Dynamics Account - invests primarily in common stock of companies
traded on U.S. securities exchanges, as well as over-the-counter.
Participants may change their investment elections and/or transfer funds at any
time.
DISTRIBUTIONS OF ACCOUNTS - Distribution of a participant's account balance may
occur due to termination of employment, retirement, disability, or death. Upon
termination of service, distributions shall be made in a lump-sum amount unless
a participant makes the proper election to receive another form of payment as
provided by the Plan document.
PLAN TERMINATION - Although the Company has not expressed any intention to do
so, it may terminate the Plan subject to the provisions of ERISA. Due to the
termination of a large number of plan participants by the Company during the
fourth quarter of 1998 and the first quarter of 1999, in accordance with
Section 411 of the Internal Revenue Code, the Company believes that a partial
plan termination has occurred. As a result, all affected participants became
100% vested in their accrued employer contributions and interest earned thereon
at the time of the termination. Distribution of participant account balances
will be made in accordance with the modes of distribution provided for under
the Plan.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements are presented on
the accrual basis of accounting.
INVESTMENTS - The Guaranteed Income Fund is valued at contract value. Contract
value represents the contributed amounts plus accumulated interest less funds
used to pay benefits.
56
<PAGE> 57
Contract value approximates fair market value as estimated by CIGNA. Other
investments are reported in the financial statements at fair values based on the
quoted market prices. Loans are valued at cost which approximates fair value.
PLAN EXPENSES - Administrative expenses, to the extent not paid by the Company,
are paid from plan assets.
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires Plan management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
3. SUPPLEMENTAL FUND INFORMATION
The following is a summary of the contributions, benefit payments, investment
income and interfund transfers by fund for the years ended December 31, 1998
and 1997:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
EMPLOYEE CONTRIBUTIONS:
Large Company Stock Index Fund $ 67,117 $ 87,517
Fidelity Advisor Growth Opportunity Account 69,090 65,673
Warburg Pincus Advisor Emerging Growth Account 49,038 67,457
Invesco Total Return Account 35,583 62,670
Other equity funds 50,396 11,261
Guaranteed Income Fund 41,958 80,267
Pioneer Companies, Inc. Common Stock 271 --
Participant Loans (45,021) (32,638)
--------- ---------
Total Employee Contributions $ 268,432 $ 342,207
========= =========
EMPLOYER CONTRIBUTIONS:
Large Company Stock Index Fund $ 16,588 $ 14,936
Fidelity Advisor Growth Opportunity Account 15,203 17,192
Warburg Pincus Advisor Emerging Growth Account 12,678 16,006
Invesco Total Return Account 9,705 12,291
Other equity funds 10,071 2,651
Guaranteed Income Fund 10,915 14,425
Pioneer Companies, Inc. Common Stock 35 --
--------- ---------
Total Employer Contributions $ 75,195 $ 77,501
========= =========
</TABLE>
57
<PAGE> 58
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
BENEFIT PAYMENTS:
Large Company Stock Index Fund $ (28,223) $ (42,856)
Fidelity Advisor Growth Opportunity Account (32,236) (38,917)
Warburg Pincus Advisor Emerging Growth Account (25,410) (31,742)
Invesco Total Return Account (39,672) (12,980)
Other equity funds (5,016) (582)
Guaranteed Income fund (86,744) (44,013)
Participant Loans (2,763) --
--------- ---------
Total Benefit Payments $(220,064) $(171,090)
========= =========
INVESTMENT INCOME:
Guaranteed Income Fund $ 10,966 $ 11,052
Participant Loans 9,865 4,856
--------- ---------
Total Investment Income $ 20,831 $ 15,908
========= =========
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS:
Large Company Stock Index Fund $ 69,278 $ 51,260
Fidelity Advisor Growth Opportunity Account 52,684 39,545
Warburg Pincus Advisor Emerging Growth Account 11,512 27,439
Invesco Total Return Account 25,242 33,288
Other equity funds 6,423 (1,127)
Pioneer Companies, Inc. Common Stock 235 --
--------- ---------
Total Net Appreciation (Depreciation) in Fair Value of Investments $ 165,374 $ 150,405
========= =========
INTERFUND TRANSFERS:
Large Company Stock Index Fund $ (123) $ --
Fidelity Advisor Growth Opportunity Account (5,364) (3,259)
Warburg Pincus Advisor Emerging Growth Account (9,898) (15,356)
Invesco Total Return Account (2,639) --
Other equity funds 2,136 --
Guaranteed Income fund (2,413) (7,274)
Participant Loans 18,301 25,889
--------- ---------
Total Net Interfund Transfers $ -- $ --
========= =========
</TABLE>
4. TAX STATUS
The Plan obtained its latest determination letter dated August 2, 1995 in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Code. The Company believes
that the Plan is currently designed and being operated in compliance with the
Code. Therefore, no provision for income taxes has been included in the Plan's
financial statements.
58
<PAGE> 59
5. GUARANTEED INCOME FUND
The stated interest rate for the Guaranteed Income Fund held by CIGNA was 6% as
of December 31, 1998 and 1997. The average yield for the Guaranteed Income Fund
held by CIGNA was 6.15% and 6.75% for the years ended December 31, 1998 and
1997, respectively.
6. SUBSEQUENT EVENTS
During the first quarter of 1999, the Company elected to merge the Plan into
the Pioneer Companies Savings Plan for Salaried Employees (the "Pioneer Plan").
The Plan and the Pioneer Plan contain similar provisions, and the Plan merger
will not have a material effect on net assets available for benefits. The Plan
merger is expected to occur in the third or fourth quarter of 1999.
******
59
<PAGE> 60
ALL PURE SAVINGS PLAN
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(c)
(b) DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUE, INCLUDING MATURITY DATE, (e)
BORROWER, LESSOR, RATE OF INTERESTS, PAR (d) CURRENT
(a) OR SIMILAR PARTY OR MARKET VALUE COST VALUE
<S> <C> <C> <C> <C>
* Connecticut General Life Insurance Co. Large Company Stock Index Fund $ 227,023 $ 341,058
* Connecticut General Life Insurance Co. Fidelity Advisor Growth Opportunities Account 209,199 292,851
* Connecticut General Life Insurance Co. Warburg Pincus Advisor Emerging Growth Account 183,724 213,249
* Connecticut General Life Insurance Co. Invesco Total Return Account 170,861 222,096
* Pioneer Companies, Inc. Pioneer Companies, Inc. Common Stock 111 231
* Connecticut General Life Insurance Co. Guaranteed Income Fund 188,527 188,527
* Connecticut General Life Insurance Co. CIGNA Lifetime 50 Fund 1,444 1,524
* Connecticut General Life Insurance Co. CIGNA Lifetime 40 Fund 8,295 8,989
* Connecticut General Life Insurance Co. CIGNA Lifetime 30 Fund 8,218 9,846
* Connecticut General Life Insurance Co. CIGNA Lifetime 20 Fund 1,283 1,376
* Connecticut General Life Insurance Co. Founders Balanced Account 461 495
* Connecticut General Life Insurance Co. Neuberger & Berman Guardian Account 6,090 5,978
* Connecticut General Life Insurance Co. Founders Growth Account 1,350 1,524
* Connecticut General Life Insurance Co. American Century - 20th Century Ultra Account 1,548 1,789
* Connecticut General Life Insurance Co. Aim Constellation Account 9,945 10,899
* Connecticut General Life Insurance Co. Templeton Growth Account 15,316 14,575
* Connecticut General Life Insurance Co. Janus Worldwide Account 41,868 45,911
* Connecticut General Life Insurance Co. Warburg Pincus Advisor International Equity Account 1,167 1,140
* Connecticut General Life Insurance Co. Templeton Foreign Account 9,623 8,719
* Connecticut General Life Insurance Co. Invesco Dynamics Account 498 578
* Loans to participants Maturities range from one to five years with
interest rates ranging from 7.25% to 10% 152,700 152,700
---------- ----------
Total investments $1,239,251 $1,524,055
========== ==========
</TABLE>
* Party-in-interest
60
<PAGE> 61
ALL PURE SAVINGS PLAN
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(h)
CURRENT
VALUE
(a) (b) (c) (d) (g) OF ASSET ON (i)
IDENTITY OF DESCRIPTION PURCHASE SELLING COST OF TRANSACTION NET GAIN
PARTY INVOLVED OF ASSET PRICE PRICE ASSET DATE (LOSS)
<S> <C> <C> <C> <C> <C> <C>
INDIVIDUAL TRANSACTIONS IN EXCESS OF 5%
OF PLAN ASSETS AS OF DECEMBER 31, 1997
None
SERIES OF TRANSACTIONS IN EXCESS OF 5%
OF PLAN ASSETS AS OF DECEMBER 31, 1997
*Connecticut General Life $53,226 $ 53,226 $ 53,226
Insurance Co. Guaranteed Income Fund $ 104,127 104,127 104,127
*Connecticut General Life 50,341 50,341 50,341
Insurance Co. Invesco Total Return Account 62,249 49,703 62,249 $12,546
*Connecticut General Life 82,831 82,831 82,831
Insurance Co. Large Company Stock Index Fund 62,171 45,330 62,172 16,842
*Connecticut General Life 82,635 82,635 82,635
Insurance Co. Fidelity Advisor Growth Opportunities
Account 64,203 49,947 64,203 14,256
*Connecticut General Life 60,121 60,121 60,121
Insurance Co. Warburg Pincus Emerging Growth Account 58,200 49,831 58,200 8,369
</TABLE>
* Party-in-interest
61
<PAGE> 62
LIST OF EXHIBITS
23.1 Independent Auditors' Consent
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrators of the Plans have duly caused this annual report to be signed by
the undersigned thereunto duly authorized.
THE PIONEER COMPANIES SAVINGS PLAN
FOR SALARIED EMPLOYEES
THE PIONEER COMPANIES SAVINGS
PLAN FOR HENDERSON BARGAINING
UNIT EMPLOYEES
THE PIONEER COMPANIES SAVINGS PLAN
FOR TACOMA BARGAINING UNIT EMPLOYEES
THE KEMWATER NORTH AMERICA SAVINGS
PLAN
THE ALL-PURE SAVINGS PLAN
Date: June 28, 1999 By: PIONEER CHLOR-ALKALI CO., INC.
EMPLOYEE BENEFITS COMMITTEE
By: /s/ Jerry B. Bradley
-------------------------------
Jerry B. Bradley
Chairman
62
<PAGE> 63
EXHIBIT INDEX
EXHIBIT
NUMBER
- ------
23.1 Independent Auditor's Consent
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-58275 of Pioneer Companies, Inc. on Form S-8 of our reports dated June 16,
1999, appearing in this Annual Report on Form 11-K of the Pioneer Companies
Savings Plan for Salaried Employees, the Pioneer Companies Savings Plan for
Henderson Bargaining Unit Employees, the Pioneer Companies Savings Plan for
Tacoma Bargaining Unit Employees, the Kemwater North America Savings Plan and
the All Pure Savings Plan for the year ended December 31, 1998.
DELOITTE & TOUCHE LLP
Houston, Texas
June 25, 1999
62
