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 calendar year ended December 31, 2000
OR
[ ] Transition report pursuant to Section 15 (d) of the Securities
Exchange Act of 1934
For the transition period from ________ to _________
Commission file number 0-30270
A. Full title of the Plan and the address of the Plan, if different
from that of the issuer named below:
CROMPTON CORPORATION
INDIVIDUAL ACCOUNT RETIREMENT PLAN
B. Name of issuer of the securities held pursuant to the Plan and
the address of its principal executive office:
Crompton Corporation
One American Lane
Greenwich, Connecticut 06831
CROMPTON CORPORATION
INDIVIDUAL ACCOUNT RETIREMENT PLAN
Index to Financial Statements
Independent Auditors' Report
Statements of Net Assets Available for Plan Benefits as of December 31, 2000
and 1999
Statements of Changes in Net Assets Available for Plan Benefits for the Years
Ended December 31, 2000 and 1999
Notes to Financial Statements
Schedule of Assets Held for Investment Purposes at End-of-Year December 31,
2000
Signature
CROMPTON CORPORATION
INDIVIDUAL ACCOUNT RETIREMENT PLAN
Financial Statements and Schedule
December 31, 2000 and 1999
(With Independent Auditors' Report Thereon)
CROMPTON CORPORATION
INDIVIDUAL ACCOUNT RETIREMENT PLAN
INDEX
Independent Auditors' Report
Statements of Net Assets Available for Plan Benefits as of December 31, 2000
and 1999
Statements of Changes in Net Assets Available for Plan Benefits for the Years
Ended December 31, 2000 and 1999
Notes to Financial Statements
Schedule
Schedule of Assets Held for Investment Purposes
at End-of-Year December 31, 2000 I
Independent Auditors' Report
The Board of Directors
Crompton Corporation:
We have audited the accompanying statements of net assets available
for plan benefits of Crompton Corporation Individual Account
Retirement Plan (the Plan) as of December 31, 2000 and 1999, and
the related statements of changes in net assets available for plan
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 auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of the
Plan as of December 31, 2000 and 1999, and the changes in net assets
available for plan benefits for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule
of Assets Held for Investment Purposes at End of Year is presented for
the purpose of additional analysis and is not a required part of the
basic financial statements but is supplementary information required
by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974.
This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/KPMG LLP
June 15, 2001
CROMPTON CORPORATION
INDIVIDUAL ACCOUNT RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 2000 and 1999
2000 1999
Assets
Investments, at fair value:
Fixed Income Fund $ 64,786,624 $ 71,787,466
Mutual Funds 140,465,062 152,014,290
Crompton Corporation - Common Stock 867,668 1,249,412
Participant loans 442,063 732,485
Contribution receivable from Crompton
Corporation 673,536 824,777
Contributions receivable from plan
Participants 587,834 663,801
Cash and cash equivalents 52,841 96,996
Accrued income 388,511 533,493
Net assets available for plan
Benefits $ 208,264,139 $ 227,902,720
See accompanying notes to financial statements
CROMPTON CORPORATION
INDIVIDUAL ACCOUNT RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2000 and 1999
2000 1999
Additions attributed to:
Investment Income:
Interest and dividends $ 16,819,942 $ 14,991,669
Net (depreciation) appreciation
in fair value of investments (20,721,918) 15,479,386
Net Investment (Loss) Income (3,901,976) 30,471,055
Contributions:
Employer 8,457,416 8,831,797
Employee 7,557,978 8,208,972
16,015,394 17,040,769
Rollovers from qualified plans 165,280 320,148
Transfer of Uniroyal Chemical Company,
Inc.
Retirement Reserve Fund Plan assets - 117,333,650
Total Additions 12,278,698 165,165,622
Deductions attributed to:
Benefits paid to participants (17,616,563) (14,928,054)
Ingredient Technology Corporation
Divestiture - plan to plan transfer - (6,443,372)
C&K Colors Divestiture - plan to plan
transfer (14,300,716) -
Total Deductions (31,917,279) (21,371,426)
Net (decrease) increase (19,638,581) 143,794,196
Net assets available for plan benefits
at beginning of year 227,902,720 84,108,524
Net assets available for plan benefits
at end of year $208,264,139 $227,902,720
See accompanying notes to financial statements
CROMPTON CORPORATION
INDIVIDUAL ACCOUNT RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 and 1999
1. Basis of Presentation
The accompanying financial statements have been prepared on the accrual
basis of accounting and present the net assets available for plan benefits
and changes in those net assets.
2. Description of Plan
Effective January 1, 1983, the Board of Directors of Crompton Corporation
(the "Company") adopted the Individual Account Retirement Plan (the "Plan").
The following description of the Plan provides only general information.
Reference should be made to the Plan agreement for a more complete
description of the Plan's provisions. The Plan is a defined contribution
plan and is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Fleet Bank (the "Trustee") has been selected by the Company as the custodial
trustee. The Trustee has custodial responsibility for a trust fund on behalf
of the Plan and maintains accounting records for all plan assets.
Eligibility Effective January 1, 1999, employees of participating divisions
of the Company are eligible to participate in the Plan after the completion
of thirty consecutive days of employment. Prior to January 1, 1999,
employees of the participating divisions of the Company were eligible to
participate on the first day of the month subsequent to attaining the age
of 21 and completing 1,000 hours of service during the 12-month period
following the date of hire. Employees participating in the Crompton
Corporation Retirement Income Plan (the Predecessor Plan) automatically
became participants in this Plan.
Contributions and Vesting
Each year, the Company will contribute to the Plan an amount equal to at
least 4 1/2% of each participant's compensation. The first 2% is designated
as a Basic Company Contribution and immediately vests with the participant.
The remaining 2 1/2% plus any additional contribution provided by the Company
that is designated as a Supplemental Company Contribution vests
100% over a five-year period at a rate of 40% after two years of service and
an additional 20% per year thereafter. One hundred percent vesting is
attained after five years of service, and upon retirement, disability,
death or upon change of control of the Company. For vesting purposes,
participants in the Predecessor Plan receive credit for all years of
service from age 18. During 2000 and 1999, the Company elected to
contribute 6.5% and 6.0% of each participant's compensation, respectively.
Prior to January 1, 1999, participants could elect to contribute up to 6%
of their compensation to the Plan (Voluntary Participant Contributions) by
means of a payroll deduction. Effective January 1, 1999, non-highly
compensated participants and highly compensated participants may elect to
contribute up to 15% and 8%, respectively, of their compensation to the Plan.
A highly compensated employee is defined as an eligible employee who owns
more than a 5% interest in the Company or receives more than $85,000 ($80,000
in 1999) of annual compensation. Voluntary Participant Contributions are
pre-tax contributions, as the participants will not be subject to Federal
income tax on the pre-tax amounts contributed to the Plan.
Participant Accounts
Company and Voluntary Participant Contributions are accounted for in
Individual Accounts established for each participant. Each Individual
Account consists of the Basic Company Contribution Account, the Supplemental
Company Contribution Account, the Voluntary Participant Contribution Account,
if applicable, and an allocation of Plan earnings. Earnings allocations are
based upon the participant's proportionate share of assets in the Plan.
Any interest or income earned will accumulate tax-free within the respective
account until distribution.
Participant Loans
Part of the transfer of the assets of the Uniroyal Chemical Company, Inc.
Retirement Reserve Plan ("Uniroyal Plan") to the Plan included participant
loan balances that were allowed under the Uniroyal Plan. These loans bear
interest at a rate equal to 1.0% above the prime rate. Loans are payable
within five years except for those used to acquire a principal residence
which are payable within fifteen years.
Investments
The Plan provides for investment of contributions in ten funds under a
program administered by Fleet Investment Management:
Fleet Stable Asset Fund - This fund invests primarily in guaranteed
investment contracts issued by highly rated life insurance companies and also
includes the Pyramid GIC Fund maintained by Bankers Trust Company which was
part of another investment program that was terminated as of September 15,
1997. The funds are being paid out to the Fleet Stable Asset Fund in three
annual installments every April 1, with the final installment paid out April
1, 2001 and will continue to earn interest at the normal blended rate as
experienced by the assets invested in the fund.
Fidelity Advisor Government Fund - This fund invests primarily in obligations
issued or guaranteed by the U.S. Government or any of its agencies.
George Putnam Fund of Boston (Class A shares) - This fund's primary objective
is to provide a diversified portfolio of stocks and bonds that will provide
both capital growth and income.
Putnam Voyager Fund (Class A shares) - This fund's objective is to provide
capital appreciation by investing in stocks of companies with above average
growth potential.
Putnam International Growth Fund (Class A shares) - This fund's objective is
to invest in equity securities of companies located outside the United
States.
Invesco Industrial Income Fund - This fund's objective is to provide income
with secondary consideration to capital appreciation by investing in stocks,
bonds and mortgages.
Galaxy Growth and Income Fund - This fund's objective is to provide high
total returns through long-term capital appreciation and income by investing
primarily in common stock.
Galaxy Asset Allocation Fund - This fund's objective is to provide a high
total return with a combination of income and long term growth in assets held
by investing in equity securities, fixed income securities and cash
equivalents.
Galaxy Large Company Index Fund - This fund's objective is to provide
investment results that mirror investment results of U.S. common stocks with
large stock market capitalization as represented by the Standard & Poor's 500
Index.
Galaxy Small Cap Value Fund - This fund's objective is to provide long-term
capital appreciation by investing in companies that have market
capitalization of up to $1 billion.
Assets in any of the funds may be invested in short-term government or other
securities pending permanent investment. Earnings on each fund will be
reinvested in that fund. Both the Company and participant contributions are
invested at the discretion of the participant into any fund the Plan
provides.
Fund transfers can be made on a daily basis in a minimum of 1% increments.
Benefits
Upon the attainment of a participant's normal retirement date, the entire
Individual Account (Basic Company Account, Supplemental Company Account and
Voluntary Participant Account) is payable to the participant.
If a participant dies while employed with the Company, the participant's
beneficiary will receive his entire Individual Account.
If employment is terminated for a reason other than retirement, disability or
death, participants will receive their entire Basic Company Account and
Voluntary Participant Account. In addition, the participants may be entitled
to a portion of their Supplemental Company Account, as determined by the
vesting schedule. Any forfeited amounts resulting from non-vesting will be
allocated to all remaining participants.
3. Federal Tax Status
The Internal Revenue Service has determined and has informed the Company by a
letter dated November 16, 1994 that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (the
"IRC").
The Plan has been amended since receiving the determination letter. However,
the Plan administrator and the Plan's tax counsel believe that the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC.
4. Investments
Mutual Funds
The mutual funds sponsored by registered investment companies are recorded at
market valuations that are based on published market prices. Purchases and
sales are recorded on a trade-date basis. Interest income is accrued when
earned. Dividend income is recorded on the ex-dividend date.
Crompton Corporation Stock Fund
The Crompton Corporation Stock Fund is valued at its year-end closing price.
Stable Asset Fund
The Stable Asset Fund is valued at cost plus accrued interest. The carrying
amount approximates fair value because of the short maturity of those
instruments. The aggregate yield for these investments at the end of 2000
and 1999 were 6.3% and 6.08%, respectively.
Guaranteed Investment Contracts
The guaranteed investment contracts with various insurance companies are
valued at contract value that approximates fair value. Such investments
earned interest at rates ranging from 5.3% to 7.1% during 2000, and earned
interest at rates ranging from 5.32% to 8.0% during 1999.
Investments Exceeding 5% of Net Assets
The Plan's investments which exceeded 5% of net assets available for plan
benefits as of December 31, 2000 and 1999 are as follows:
2000 1999
Bankers Trust Co. BT Pyramid GIC
Fund & various GIC Contracts $11,989,697 $22,415,347
Fleet Stable Asset Fund 52,796,927 49,372,119
Putnam International Fund 14,096,678 12,487,042
George Putnam Fund of Boston 14,251,771 18,120,208
Putnam Voyager Fund 41,269,590 51,375,561
Galaxy Growth and Income Fund 28,813,898 31,197,704
Galaxy Large Co. Index Fund 18,658,646 19,323,717
Galaxy Small Cap Value Fund 10,841,500 8,310,366
Appreciation/(Depreciation) in Investments
During 2000 and 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated/
(depreciated) in value as follows:
2000 1999
Mutual Funds ($20,466,557) $16,219,727
Common Stock of Crompton
Corporation ( 255,361) ( 740,341)
($20,721,918) $15,479,386
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event the Plan
terminates, participants will become 100% vested in their accounts.
6. Administrative Expenses
The Company pays the costs of plan administration (record keeping fees).
Trustee fees are paid by the Plan.
7. Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the
Plan Administrator to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported changes
in net assets available for plan benefits during the reporting period. Actual
results could differ from those estimates.
8. Party-in-Interest Transactions
The Fleet Bank and Bankers Trust are parties-in-interest as defined in
Section 3 (14) of the Employee Retirement Income Security Act of 1974. During
the years 2000 and 1999, there were no prohibited party-in-interest
transactions.
9. Plan to Plan Transfers
The Textiles Division of C&K Colors Incorporated, a wholly owned affiliate of
the Company, was sold to Yorkshire PLC in December 1999. Account balances of
those employees of the Textiles Division of C&K Colors Incorporated were
transferred to a successor plan maintained by Yorkshire PLC in a plan to plan
transfer during 2000.
During 1999, the Retirement Reserve Fund Plan of Uniroyal Chemical Company,
Inc. was terminated and merged into the Plan. The entire account balances of
the participants in the Uniroyal Plan were transferred by the Trustee to the
Plan on January 1, 1999 in a plan to plan transfer.
Ingredient Technology Corporation, a wholly owned affiliate of the Company,
was sold to Chr. Hansen Holding S.A. in January 1999. Account balances of
those employees of Ingredient Technology Corporation were transferred to a
successor plan maintained by Chr. Hansen in a plan to plan transfer.
10. Subsequent Event - Plan Merger
Effective January 1, 2001, the Plan was merged with the Witco Corporation
Employee Retirement Savings Plan and the OSI Specialties, Inc. 401(k) Savings
and Investment Plan (both of which were also sponsored by the Company) to
form the Crompton Corporation Employee Savings Plan ("New Plan"). Fidelity
Investments, Inc. ("Fidelity") will be the trustee and record keeper of the
New Plan. The provisions of the Plan as a result of this merger have
remained unchanged. All assets of the Plan were transferred to similar funds
in the New Plan maintained by Fidelity on January 2, 2001.
Schedule I
CROMPTON CORPORATION
INDIVIDUAL ACCOUNT RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END-OF-YEAR
DECEMBER 31, 2000
Identity of Issue, Description of Investment
Borrower, Lessor Including Maturity Date,
or Similar Party Rate of Interest, Collateral,
Par or Maturity Value Current Value
State Street Bank Guaranteed Investment Contracts $ 11,989,697
Crompton Corporation Common Stock 867,668
Fleet Investment Advisors Stable Asset Fund 52,796,927
Fidelity Advisor Funds Advisors Government Investment
Fund Class T 6,771,041
Putnam Mutual Funds George Putnam Fund Of Boston
Class M Shares 14,251,771
Putnam Mutual Funds Putnam International Fund 14,096,678
Putnam Mutual Funds Putnam Voyager Fund Class M Shares 41,269,590
Invesco Industrial Income Fund 3,331,329
Galaxy Money Market Trust 52,841
Galaxy Asset Allocation Fund 2,430,609
Galaxy Large Company Index Fund 18,658,646
Galaxy Growth & Income Fund 28,813,898
Galaxy Small Cap Value Fund 10,841,500
Participant Loans Loans Earn Interest At The
Prime Rate Plus 1% 442,063
TOTAL INVESTMENTS $ 206,614,258
Party-in-interest - All parties listed above
SIGNATURE
The Plan. Pursuant to the requirements of the Securities and
Exchange Act of 1934, the trustees (or other persons who administer
the employee benefit plan) have duly caused this annual report to
be signed on its behalf by the undersigned hereunto duly authorized.
CROMPTON CORPORATION
INDIVIDUAL ACCOUNT RETIREMENT PLAN
Date: June 26, 2001 By:/s/Peter Barna
Peter Barna
Senior Vice President &
Chief Financial Officer