SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2001
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number 001-12547
ChemFirst Inc.
(Exact name of Registrant as specified in its charter)
Mississippi 64-0679456
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 North Street, P. O. Box 1249
Jackson, Mississippi 39215-1249
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (601) 948-7550
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -----------------------
Common Stock, Par Value $1 New York Stock Exchange
Common Stock Purchase Rights
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES [X] NO [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of March 13, 2002 (based on the closing sale price of $26.20
of the Registrant's Common Stock, as reported on the New York Stock Exchange
Composite Tape on such date) was approximately $332,013,893.
The number of shares of the Registrant's Common Stock outstanding as of
March 13, 2002 was 14,071,824.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information required to be disclosed in Parts I, II and III of this
Form 10-K is incorporated by reference to: (1) the Company's 2001 Annual
Report to Stockholders (the "2001 Annual Report"), which has been furnished to
the Commission, and (2) the Company's definitive Proxy Statement for the May
21, 2002 annual meeting of stockholders (the "Proxy Statement"), which has
been filed with the Commission pursuant to Regulation 14A.
PART I
ITEM 1. BUSINESS
General
The principal businesses of ChemFirst Inc. (the "Company") involve the
production of electronic and other specialty chemicals for use in the
semiconductor industry and in pharmaceutical, photographic, dyes and pigments,
rubber and agricultural applications, as well as the production of
polyurethane chemicals.
The Company had previously reclassified its engineered products and
services segment and its steel segment as discontinued operations pending
disposition of these businesses. The Company completed disposition of the
engineered products and services operation in December 1999 and its steel
operation in February 2000. To further the Company's strategy to concentrate
on chemicals for the semiconductor industry and on polyurethane chemicals, in
June 2001 the Company sold its custom and fine chemicals business. See Recent
Developments below for more information regarding dispositions.
At March 1, 2002, the Company had 489 employees, which includes employees
of the parent company and all subsidiaries. The Company did not experience a
work stoppage during 2001, and none of its employees are covered by a union or
bargaining agreement. As of March 1, 2002, the Company believes its
relationship with its employees is good.
Recent History
The Company was incorporated in Mississippi in 1983 under the name Omnirad,
Inc., as a wholly-owned subsidiary of First Mississippi Corporation ("First
Mississippi"). In November 1996, in anticipation of the Distribution (as
defined below), the Company's name was changed from Omnirad, Inc. to ChemFirst
Inc. On December 23, 1996 (the "Distribution Date"), First Mississippi
contributed all of its assets and subsidiaries, other than those relating to
its fertilizer business, to the Company, which at that time was a wholly owned
subsidiary of First Mississippi and had engaged in no activities during the
previous five years. First Mississippi then spun off the Company in a tax-free
distribution of the Company's common stock to First Mississippi shareholders
(the "Distribution") on the Distribution Date. The Distribution occurred
immediately prior to and in connection with the merger of First Mississippi
with a wholly owned subsidiary of Mississippi Chemical Corporation on December
24, 1996, pursuant to an Agreement and Plan of Merger and Reorganization dated
as of August 27, 1996. The Company has operated as a publicly held entity
since the Distribution Date. Prior to the Distribution Date, the Company's
subsidiaries which were in existence on that date were subsidiaries of First
Mississippi and the Company's operations were conducted through subsidiaries
of First Mississippi.
Recent Developments
In October 2001, the Company acquired the minority interest in its limited
partnership subsidiary that produces specialty polymer resins which are used
by others in formulating deep ultraviolet photoresists.
In May 2001, the Company's board of directors approved a plan to exit the
custom and fine chemicals business and on June 13, 2001, the Company executed
an agreement to sell the business to Albemarle Corporation in an all cash
transaction. The transaction was completed on July 6, 2001, with an effective
date of June 30, 2001. Proceeds received by the Company were $78.8 million.
Post-closing adjustments to the transaction are pending but are not expected
to be material. The sales agreement also provided for potential additional
payments to the Company contingent upon the profit contribution from a
specific toll-manufactured product from 2002 through 2004. These additional
potential payments are not expected to exceed $10.0 million, and could be
significantly less. Assets sold in the transaction included the Company's
plant site at Tyrone, Pennsylvania and the current Good Manufacturing
Practices (cGMP) pilot plant equipment located at the Company's Dayton, Ohio
facility. The Company leased to Albemarle Corporation, under a long-term
lease, that portion of the Dayton facility on which the cGMP pilot plant is
located. The Company's pharmaceutical contract
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research and development business and fine chemicals product lines, including
FirstCure(R) performance polymer products, were also included in the sale. The
Company's contract research and development business and batch fine chemicals
manufacturing at Pascagoula, Mississippi were discontinued and these assets
have been written off.
In December 1999 and February 2000, the Company sold its engineered
products and services business and its steel business, respectively. Both of
these businesses had been reported as discontinued operations prior to their
sale. The Company's disposition of these businesses was to further its
strategy to focus on chemicals.
Additional information regarding these dispositions and other recent
developments is provided in Note 2 to the Consolidated Financial Statements
and Management's Discussion and Analysis of Financial Condition and Results of
Operations, which are incorporated herein by reference to the 2001 Annual
Report.
Forward-Looking Statements
In addition to historical information, this Form 10-K contains "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements, as well as other forward-
looking statements made from time to time by the Company or in the Company's
press releases, Annual Report to Stockholders and other filings with the
Securities and Exchange Commission, are based on certain underlying
assumptions and expectations of management. These forward-looking statements
are subject to risks and uncertainties which could cause actual results to
differ materially from those expressed in such forward-looking statements.
Such risks and uncertainties include, but are not limited to, general economic
conditions including inflation and fluctuations in interest rates and foreign
currency exchange rates; availability and pricing of utilities and raw
materials, including but not limited to electricity, natural gas, nitric acid,
4-hydroxyacetophenone (4-HAP), the primary starting raw material in the
Company's specialty polymer resins sold for use in formulating deep
ultraviolet photoresists, and free-base hydroxylamine, which is a key raw
material in cleaner and remover products; changes in laws, regulations or
governmental policies in countries where the Company operates or conducts
business; supply/demand balance for key products; new product development;
changes in customers' processes or the methods of manufacture or introduction
of new technologies, which could reduce the demand for the Company's products;
occurrence of significant litigation adverse to the Company, including product
liability, patent infringement, environmental and antitrust claims;
manufacturing efficiencies; conditions of and product demand by key customers;
the timely completion and start-up of construction projects; pricing pressure
as a result of domestic and international market forces; environmental
factors; insurance coverage and timing of any claim payments related to the
disruption in supply of free-base hydroxylamine; and other factors as may be
discussed herein and in the Management's Discussion and Analysis of Financial
Condition and Results of Operations. The foregoing list of factors is not
inclusive, or necessarily in order of importance.
The following contains further discussion of the Company's business and
properties as grouped by its Electronic and Other Specialty Chemicals segment
and its Polyurethane Chemicals segment. Certain information required by Item 1
of Form 10-K and financial information regarding the Company's segments, which
includes sales, pretax operating results, capital expenditures, identifiable
assets and depreciation/amortization, are provided in Notes 2, 5 and 12 to the
Consolidated Financial Statements in the 2001 Annual Report, and are
incorporated by reference. As used in this report, the term "Company" includes
ChemFirst Inc. and its subsidiaries.
Electronic and Other Specialty Chemicals
General
The Company's Electronic and Other Specialty Chemicals segment produces
specialty chemicals for use by others in electronic, pharmaceutical,
photographic, optical brightening, agricultural, thermoplastic materials,
coatings and structural composites and other applications. These products are
sold based on specification requirements and many must also meet performance
criteria and achieve customer qualification. These electronic and other
specialty chemicals are produced at Company-owned facilities in Hayward,
California; East Kilbride, Scotland; Pascagoula, Mississippi; and Dayton,
Ohio. In addition, certain of these products are produced for the Company by
contract and toll manufacturers.
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Purchasers of electronic chemicals, who are typically end users, generally
acquire the product to achieve a specific performance objective. As with most
other specialty chemicals, these chemicals have very specific uses, although
the customer base is typically broader than for the Company's other specialty
chemicals. The production and sale of the Company's electronic chemicals are
generally labor intensive and are usually dependent on highly technical
proprietary formulae and sophisticated, well-trained technical and
applications engineering staff.
The Company's electronic chemicals are primarily used in the semiconductor
and related industries. These products include organic post metal cleaning
solutions which remove photoresist and dry-etch residue formed during the
manufacture of semiconductors. These remover products are the Company's
largest volume electronic chemicals. In addition, the Company produces and
sells specialty polymer resins used in formulating deep ultraviolet ("DUV")
photoresists. These DUV resins are the "imageable" ingredients in photoresists
used to "print" semiconductor circuitry. The Company also produces oxidizers
and slurries used in chemical mechanical planarization ("CMP") of
semiconductor substrate surfaces, and other performance chemicals and products
for the semiconductor and related industries.
Most of the Company's other specialty chemicals and certain of its
electronic chemicals are sold to a narrow base of customers. The Company's
other specialty chemicals include nitrotoluenes and their various derivatives.
The Company is the sole North American producer of nitrotoluene. A key to
successful production of these specialty chemicals is developing an efficient,
low cost production process. Nitrotoluenes and derivatives are typically sold
as intermediates to other specialty chemical producers and to pharmaceutical,
photographic and agricultural companies for use in a broad array of
applications, including pharmaceutical applications, dyestuffs and pigments,
photographic developers, rubber chemicals, herbicides and pesticide
intermediates, and optical brightners in consumer products. In addition, the
Company also supplies specialty polymer enhancement materials that are used to
produce non-electronic products including thermoplastic materials, coatings
and structural composites.
The Company owns and operates electronic chemical manufacturing facilities
in Hayward, California; East Kilbride, Scotland; and Dayton, Ohio.
The Company's 65,000 square-foot facility in Hayward includes research and
development labs, separate applications laboratories for CMP and remover
products, offices and facilities for manufacturing its removers and other
products, quality control testing and packaging. An additional 13,400 square
feet of warehouse and office space is leased in an adjacent building. Various
improvements were made at the Hayward facility in 2001, including installation
of state-of-the-art, fully automated blending and filling operations, which
increased production capacity and efficiencies. Annual production capacity for
remover products at the Hayward facility is approximately 3.5 million gallons
per year on a three-shift, seven-day basis, depending upon the product mix and
the processing required. The Hayward facility is currently operating on a two-
shift, five-day basis and utilizes approximately 30% of production capacity.
In order to free up additional space for technical staff and operations at
the Hayward facility and accommodate future growth, in 2001 the Company leased
11,000 square feet of office space in nearby Danville, California, for
management, finance and marketing offices.
The Company's 26,300 square-foot facility in East Kilbride, Scotland
includes manufacturing and quality control capabilities, offices, and remover
research and applications laboratories. The facility is equipped with
production systems designed to meet the semiconductor industry's requirements
for ultra-pure chemicals. Annual production capacity for removers and other
products at the East Kilbride facility is approximately 1.05 million gallons
per year on a three-shift, seven-day basis, depending on the product mix and
the processing required. The facility is currently operating on a one-shift,
five-day basis and utilizes approximately 28% of production capacity.
Therefore, the Company has substantial unused capacity at both the California
and Scotland facilities to increase production.
4
The Company's Dayton, Ohio facility produces electronic chemicals,
primarily resins for use in DUV photoresists used for advanced semiconductor
manufacturing. Production of electronic chemicals at the facility in 2001 was
approximately 125,500 pounds. The Company has the ability to produce these
products in specialty solutions or dry powders. Plant modifications and new
equipment installation during 2001 increased the capacity for production of
resins at the facility by approximately 25%. Annual production capacity for
electronic chemicals at Dayton is approximately 308,500 pounds, depending on
the product mix and the type of processing required. As the market for the
Company's resins increases, additional expansions may be necessary.
The Company produces other specialty chemicals by continuous process at its
facility in Pascagoula, Mississippi. Production capacity for nitrotoluene
products at Pascagoula is approximately 84.0 million pounds, depending on the
product mix and the processing required. Specialty chemical production of
nitrotoluene and its derivatives at this facility was approximately 53.0
million pounds during 2001. A Company-owned site, the Pascagoula complex is
also one of two sites where the Company produces polyurethane chemicals. The
facility is supported by storage, truck, rail and barge and has its own ocean-
going port.
The Company also produces various electronic chemicals through contract and
toll manufacturers in California, Missouri, North Carolina and Japan. The
Company's CMP products are contract manufactured in North Carolina and Japan
pursuant to the Company's proprietary formulations and processes. The
Company's specialty polymer enhancement materials are toll manufactured in
Wisconsin and Pennsylvania.
The Company leases 14,000 square feet of office and laboratory space in
Kanagawa, Japan to conduct research and provide technical and engineering
services, as well as technical and marketing support.
The Company's electronic and other specialty chemicals accounted for
approximately 49%, 53% and 55% of the Company's consolidated sales for 2001,
2000 and 1999, respectively.
Marketing and Sales
Electronic chemicals are marketed domestically and also internationally,
principally in Europe, Japan and the Pacific Rim. Most of these chemicals are
generally distributed in liter, gallon, returnable drum or other large volume
dedicated containers, although the DUV resins, which may be distributed either
in the form of dry powder or in specialty solutions, are shipped in
appropriate small volume containers. In North America and Europe, the
Company's electronic chemicals are principally sold through its internal sales
force, although the Company utilizes independent sales representatives as
well. In Japan and the Pacific Rim, sales are generally conducted through
distributors or sales agents supported by the Company's regional technical
sales representatives. In 1999, the Company began manufacturing certain of its
electronic chemicals products for the Japanese market through a contract
manufacturing arrangement with the Company's Japanese distributor. DUV resins,
manufactured at the Dayton site, are sold and shipped directly to photoresist
manufacturers. Electronic chemicals are typically sold by purchase order.
Domestic shipments are typically by truck or rail, whereas international
shipments are usually by ocean-going vessels.
The Company's other specialty chemicals are marketed globally. Most of
these chemicals are sold under long-term contracts. Sales of these chemicals
are made primarily through the Company's internal sales force. These specialty
chemicals are typically sold in bulk, although product is also sold in drums.
Domestic shipments are typically by truck or rail and export shipments by
ship, primarily to European, Far East and South American markets.
Raw Materials
The primary raw materials for the manufacture of electronic chemicals,
other than for the Company's DUV resins, include free-base hydroxylamine,
catechol, diglycolamine and N-methylpyrrolidone. Although these raw materials
are currently available only from single source suppliers who meet the
Company's strict quality requirements, each is currently available in adequate
quantities. The Company is currently seeking additional
5
sources for these raw materials. In June 2000, an explosion disrupted the
supply of free-base hydroxylamine from the Nissin Chemical plant in Japan.
Free-base hydroxylamine is a key ingredient in the Company's important HDA(R)
patented remover products. The Nissin plant was the Company's sole supplier,
and until late 1999 the only producer of free-base hydroxylamine, when a new
BASF plant in Germany started up. Initially, production from BASF was not able
to keep pace with the worldwide demand for free-base hydroxylamine. As a
result, BASF placed its customers, including the Company, on allocation and,
likewise, for a time the Company was forced to put its customers on allocation
for products that contain free-base hydroxylamine. Subsequent capacity
expansions by BASF and customer conservation methods taught by the Company
contributed to the elimination of the free-base hydroxylamine shortage and
enabled the Company to suspend allocation of its HDA(R) remover products
during 2001. The Company believes that BASF's current capacity is similar to
Nissin's capacity prior to the 2000 explosion. Although both Nissin and
Honeywell International, Inc. previously announced plans to construct new
free-base hydroxylamine plants, it now appears that a new Nissin plant is on
hold indefinitely. Honeywell has announced a delay and that its anticipated
free-base hydroxylamine plant will not be completed until 2004. Free-base
hydroxylamine supply currently exceeds worldwide demand and the Company is
optimistic that this trend will continue for the next several years and
beyond. However, availability of adequate supply could be affected by such
factors as increased future demand for free-base hydroxylamine by the
semiconductor and pharmaceutical industries as the economy recovers and the
ability of Honeywell, Nissin or others to bring a new free-base hydroxylamine
plant on line, although there can be no assurance that any new plant will be
completed in a timely manner, or at all. New remover technology introduced by
the Company based on different chemical platforms is providing customers with
alternative products, and over time is expected to help ease reliance on free-
base hydroxylamine. Please see Management's Discussion and Analysis of
Financial Condition and Results of Operations and Note 10 to the Consolidated
Financial Statements in the 2001 Annual Report for a discussion of the effect
of the free-base hydroxylamine shortage on the Company and its business
interruption insurance coverage with respect thereto.
The primary starting raw material for the Company's DUV resins, 4-
hydroxyacetophenone (4-HAP), is currently available from a single source under
a long-term contract. Under a tolling arrangement with a domestic
manufacturer, the 4-HAP is converted into an acetoxystyrene monomer which the
Company uses as a direct raw material for production of its DUV resins. Other
raw materials for DUV resins include other monomers, solvents and process
materials and essentially all are available in adequate quantities from
alternative suppliers. A few specialty monomers are available in adequate
quantities but from only one or two suppliers.
Primary raw materials for the production of the Company's other specialty
chemicals include hydrogen, toluene, ethanol, ammonia, natural gas, 4-HAP and
phenol. With the exception of 4-HAP as described above, these raw materials
are available from a number of different sources and the Company does not
believe that any one source for raw materials used in the production of these
chemicals is material to the Company's business.
Competition
Competition regarding the Company's electronic specialty chemicals is based
on service, product performance, quality, product development capabilities and
cost of ownership. The Company is one of the largest producers of post metal
cleaning solutions for semiconductor production. Although there are
approximately twelve companies participating in this market worldwide, the
Company believes that significant market share for the advanced and post metal
cleaning solutions needed for current and future state-of-the-art
semiconductor production and related industries is concentrated among the
Company and two competitors, Ashland Chemical and Tokyo Ohka Kogyo of Japan.
The Company has entered into a cross-licensing agreement with a competitor
whereby the Company licenses certain of its patented free-base hydroxylamine
remover technology. The agreement results from a patent infringement complaint
brought by the Company against the competitor in federal court. The agreement
allows the competitor to continue to market its products which utilize the
Company's hydroxylamine technology, but provides for the Company to receive a
royalty and license fee. The agreement also requires the Company to pay
royalties to the competitor on the Company's HDA(R) products under certain
circumstances. However, an arbitration proceeding in 2000 determined that none
of the Company's HDA(R) products are covered by the competitor's patents and
therefore the Company pays no royalties to the competitor on the production
and sale of the Company's products.
6
Regarding CMP slurry products, there are a number of competitors in the
oxide slurry world market but it is dominated by Cabot Microelectronics
Corporation, who holds an estimated 80% market share. In the smaller, high-
growth tungsten slurry world market, the Company is now estimated to be the
third largest supplier for this application based on volume.
The Company is one of the largest suppliers of resins for use in DUV
photoresists and the only known United States producer of these resins. There
are two Japanese companies, Maruzen Petrochemical and Nippon Soda, which are
major competitors and sell resins in the global merchant market in direct
competition with the Company. In addition, two other Japanese companies
produce DUV resins as a captive supply source for their own DUV photoresist
production. The Company produces a broad spectrum of resins and believes that
it is a leading supplier for advanced resin products for newer photoresist
technology (for chip fabrication in the range of 0.13 to 0.18 microns).
Regarding its other specialty chemicals, the Company competes domestically
and internationally with a limited number of producers. Competitors are both
smaller and larger companies. Competition is strong and is based on cost,
efficient processing, customer service and quality. The Company is the second
largest producer of nitrotoluenes and derivatives, behind Bayer Corporation
("Bayer"). Bayer has an estimated 31% of global capacity for nitrotoluene and
the Company has an estimated 14% of global capacity. While few competitors
market the chemical equivalent of the Company's specialty polymer enhancement
materials, the Company competes in the market place with producers of
materials that have similar functions and uses.
Seasonality of Business
Generally, certain of the Company's electronic chemicals may be subject to
seasonally lower sales during the first quarter, and practices in the
electronics industry require that significant Company inventory be available
near many of its customer sites. With the exception of sales for agricultural
purposes, the Company's other specialty chemical sales are generally not
seasonal and working capital requirements do not vary significantly from
period to period.
Polyurethane Chemicals
General
The Company produces aniline and nitrobenzene by continuous production
processes at its facilities in Pascagoula, Mississippi and Baytown, Texas.
Unlike electronic chemicals, these chemicals generally require additional
processing steps and chemical reactions by the Company's customers to produce
the end product used by consumers and are primarily sold under long-term
contracts.
Typically, polyurethane chemicals are more sensitive to the business cycle
and the cost of raw materials than are most electronic and specialty
chemicals, although, as described below, the Company's sales contracts provide
certain protection from fluctuation in raw material price for most of the
polyurethane chemicals sold. These chemicals are typically sold in large
volumes to industrial customers that purchase on the basis of product
specifications. The key to successful production of these chemicals is
efficient chemical conversion of large quantities of raw materials and
productive use of plant capacity. Providing technical services to customers is
generally less important than for the Company's electronic products and
certain of its other specialty products.
Aniline is the Company's largest volume product. The Company is the largest
merchant marketer of aniline in the United States. Most of the aniline
produced in the United States is used to manufacture MDI (methylene diphenyl
diisocyanate). MDI's primary end use is in rigid polyurethane foam, an
insulation material that is widely used in residential and commercial
construction. MDI is also used in the manufacture of impact-resistant plastic
that is used as a replacement for metal in automobile parts such as bumpers,
where flexibility and impact resistance are important. Aniline's other primary
applications are in the production of an antioxidizing (anti-cracking) agent
used in the manufacture of synthetic rubber, in a widely used herbicide for
corn and soybeans, and in plastics for consumer goods.
7
Nitrobenzene is used to make aniline and is also sold separately for the
manufacture of an intermediate used in the production of a large volume over-
the-counter analgesic (acetaminophen), and in the production of iron-oxide
pigments used in decorative and protective coatings for architectural
applications, bridge maintenance and other applications.
The Company's polyurethane manufacturing facility in Pascagoula is
supported by storage, rail, truck, barge and ship distribution facilities.
This facility utilizes state-of-the-art, energy efficient nitration technology
and a proprietary continuous hydrogenation process. The annual polyurethane
chemical production capacity at the facility, less internal consumption, is
between 315 and 350 million pounds depending on the product mix being
produced. Production of polyurethane chemicals at the Pascagoula facility,
less internal consumption, during 2001 was approximately 284 million pounds. A
majority of the aniline currently produced at the Pascagoula facility is sold
to Bayer. If Phase II of the Baytown facility, as described below, is
constructed, Bayer's obligation to purchase aniline from the Pascagoula
facility terminates.
In 1996, the Company entered into a long-term agreement with Bayer to
build, own and operate a world-scale adiabatic nitrobenzene and aniline
facility at Bayer's Baytown, Texas chemical complex to supply Bayer's MDI
manufacturing operations. Phase I of the facility, with a design capacity of
250 million pounds of aniline, was completed in 1998 and is operating at
design capacity. If a potential Phase II to the facility is constructed, it
would add another 250 million pounds of capacity. All of the aniline produced
at the Baytown facility is sold to Bayer under long-term contracts. Bayer is
the Company's largest customer, both in terms of volume of product sold and in
sales revenue, and the loss of this customer would have a material adverse
effect on the Company as a whole.
Polyurethane chemicals accounted for approximately 51%, 47% and 45% of the
Company's consolidated sales for 2001, 2000 and 1999, respectively.
Marketing and Sales
The Company's polyurethane chemicals are sold primarily in the United
States under long-term contracts to a small number of customers. The Company's
internal sales force accounts for essentially all of the sales in this
segment. These products are generally sold in bulk. Domestic shipments are by
barge, rail or tank trucks, and exports are shipped in ocean-going tankers,
iso-containers or drums.
Raw Materials
Raw materials for polyurethane chemicals are readily available from many
sources. Benzene, which is the principal raw material for the Company's
polyurethane chemicals production, is a readily available commodity by-product
of oil refining. Like most commodities, the price of benzene is subject to
fluctuation. Benzene prices are affected by the demand for a variety of
products, principally including styrene and phenolic resins and the underlying
cost of crude oil. Other significant raw materials include ammonia, nitric
acid, hydrogen and natural gas. The Company purchases ammonia at market
prices. The Company captively produces for its own use all of its hydrogen and
most of its nitric acid requirements for the Pascagoula facility. For the
Baytown facility, the Company purchases its needs for hydrogen and nitric acid
from Bayer. Natural gas is purchased in the spot market for use in producing
the hydrogen necessary for the Pascagoula manufacturing processes. This gas is
transported into the Pascagoula plant through an interstate pipeline under
firm and interruptible contracts. While most of the aniline produced by the
Company is sold under long-term contracts that provide for price adjustments
based on the cost of raw materials, abrupt changes in costs are not always
matched by equal changes in the sales price of the aniline. The remainder of
aniline production and most of the nitrobenzene production is sold either
under long-term contracts which have similar protections against price
fluctuations for most major raw materials, or under short-term contracts or
purchase orders which generally reflect actual raw material costs.
8
Competition
The Company is one of five major United States producers of aniline with
approximately 20% of current domestic production capacity. These five
producers, in descending order of capacity, are Huntsman, BASF, the Company,
DuPont and Sunoco. The Company is one of twelve major world producers of
aniline, with an estimated 6.5% of current world production capacity.
Regarding nitrobenzene, the Company is one of four major United States
producers and ten major world producers, with approximately 28% of domestic
production capacity and 8% of world production capacity. Major competitors are
large chemical companies. Competition for the products produced in this
segment is based on price, service, quality and marketing.
Seasonality of Business
Generally, the Company's polyurethane chemical sales are not seasonal and
working capital requirements do not vary significantly from period to period.
Research and Development
The Company conducts research and development to improve existing products,
to develop and produce new electronic, specialty and performance chemicals and
to develop and improve production processes. The Company spent approximately
$8.0 million, $8.0 million and $7.4 million on research and development in
2001, 2000 and 1999, respectively. These research and development expenditures
do not include the cost of the Company's important applications labs and
engineers, which are dedicated to providing strong customer support and
helping customers to modify or develop their production processes to integrate
the Company's products. The Company's electronic chemicals research and
development and applications engineering labs in California, Texas, Scotland
and Japan are strategically located near key regional semiconductor production
centers, enabling its researchers and engineers to work closely with customers
to develop unique chemical solutions to semiconductor manufacturing needs,
provide customer support and to test developmental products.
The Company continues to focus research efforts on developing new and
improved electronic chemicals, including removers, CMP products and resins for
use in DUV photoresists. The Company also sponsors applied research at leading
universities in the United States, the United Kingdom and Canada. These
closely directed programs have led to the development and introduction of
proprietary technology in electronic and other specialty chemicals. In 1999,
the Company obtained an exclusive license to further develop and commercialize
a promising process that utilizes light in combination with metallic compounds
to directly deposit metal and metal oxides on a substrate. Research on this
technology is ongoing and is being conducted in cooperation with a North
American university and others. In addition, the Company has entered into a
joint development arrangement with an industry consortium to develop advanced
products to meet future semiconductor manufacturing technology.
Intellectual Property
The Company owns, or is licensed under, a number of patents, patent
applications and trade secrets covering its products and processes. The
Company has approximately 16 United States and 18 foreign patents regarding
its HDA(R) technology and products. The earliest of these patents expires in
2011. The Company considers its HDA(R) remover patents referenced above to be
of material importance. See also "Electronic and Other Specialty Chemicals-
Competition" for a description of a cross-licensing agreement with a
competitor regarding its HDA(R) technology. In addition, the Company has
approximately 13 United States and 36 foreign patents which are of material
importance to its DUV resin business. The earliest of these patents begins to
expire in 2006. The Company believes that, while in the aggregate, the rights
under its other patents and licenses are of importance, it does not consider
any other patent or license, or group thereof related to a specific process or
product, to be of material importance when viewed from the standpoint of the
applicable segment's or the Company's overall business.
Environmental Considerations
Company operations are subject to a wide variety of environmental laws and
regulations governing emissions to the air, discharges to water sources and
the handling, storage, treatment and disposal of waste materials, as well as
other laws and regulations concerning health and safety conditions. The
Company holds a
9
number of environmental permits and licenses regulating air emissions, water
discharges and hazardous waste disposal and, to the best of its knowledge, is
in material compliance with such requirements at all locations. The Company
makes capital and other expenditures in a continuing effort to comply with
environmental laws and regulations, or changing interpretations of existing
laws and regulations. The Company's environmental capital expenditures for
2001 were $0.6 million. Projected environmental capital expenditures for 2002
and 2003 are $1.4 million and $0.6 million, respectively. In addition to
complying with environmental laws and regulations, these expenditures may also
reduce operating expenses and improve efficiencies.
The Company monitors and participates in the environmental regulatory
development process which enables the Company to evaluate new laws and
regulations. The Company does not anticipate a material increase in expenses
related to current environmental regulations, but because federal and state
environmental laws and regulations are constantly changing, the Company is
unable to predict their future impact.
The Company has received notices from the United States Environmental
Protection Agency or similar state agencies that it has been deemed a
potentially responsible party ("PRP") under Superfund or a comparable state
statute at several sites and, thus, may be liable for a share of the
associated remediation cost. It is difficult to estimate the Company's
ultimate liability relating to these sites due to several uncertainties such
as, but not limited to, the method and extent of remediation, the percentage
of material attributable to the Company at the site relative to that
attributable to other parties, and the financial capabilities of the other
PRPs. Based on currently available information, however, the Company does not
believe that its future liability at these sites will be material to its
financial condition, results of operations, cash flow or competitive position.
ITEM 2. PROPERTIES
A description of various properties and the segments to which they relate
is included in the business discussion of Item 1. In addition to those
described above, the Company owns or leases the following properties:
The Company owns an approximately 26,000 square-foot office building in
Jackson, Mississippi, which is its corporate headquarters.
The Company leases 4.2 acres from Bayer Corporation within Bayer's complex
for the Baytown, Texas aniline plant with a term equivalent to the aniline
contractual supply agreement.
The Company leases 7 acres of waterfront property in Pascagoula,
Mississippi from the Jackson County Port Authority. This property, utilized by
both the Electronics and Other Specialty Chemicals segment and the
Polyurethane Chemicals segment, is used for loading and unloading ocean-going
vessels and barges at the Pascagoula facility. The lease expires in 2003, but
the Company anticipates either extending the current lease or entering into a
new lease for this property.
The Company-owned Pascagoula plant site, which is utilized by both the
Polyurethane Chemicals segment and Electronic and Other Specialty Chemicals
segment, consists of 57 acres, 23 of which are undeveloped. The Company also
owns an additional 50 acres of undeveloped industrial land, located within 2
miles of the Pascagoula site.
The Company leases office space in Dallas, Texas and research and
development laboratory space in Corpus Christi, Texas to support its DUV resin
and other specialty chemicals businesses.
The Company believes that all of its properties are currently suitable and
adequate for the manufacturing of the Company's chemical products and the
other purposes for which they are used.
ITEM 3. LEGAL PROCEEDINGS
The Company has pending several claims incurred against it in the normal
course of business which, in the opinion of management and legal counsel, can
be disposed of without material effect on the Company's business or financial
condition.
10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders of the Company,
through the solicitation of proxies or otherwise, during the fourth quarter of
2001.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
This information is incorporated by reference to the section entitled
"Stock Market Information" found on page 40 of the 2001 Annual Report.
ITEM 6. SELECTED FINANCIAL DATA
This information is incorporated by reference to page 12 of the 2001 Annual
Report. See also Note 2 to the Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations, incorporated by reference to the 2001 Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This information is incorporated by reference to pages 13-17 of the 2001
Annual Report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This information is incorporated by reference to the section entitled
"Market Risk" found on page 17 of the 2001 Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's Consolidated Financial Statements are incorporated by
reference to pages 18-37 of the 2001 Annual Report. The supplementary data is
incorporated by reference to Note 13 on page 36 of the 2001 Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
This information is incorporated by reference to the following pages of the
Proxy Statement: 7-9 and 14-15.
ITEM 11. EXECUTIVE COMPENSATION
This information is incorporated by reference to the following pages of the
Proxy Statement: 6; 10-11; 16-17; and 20-21.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
This information is incorporated by reference to pages 2; 12-14; and 18 of
the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
This information is incorporated by reference to page 6 of the Proxy
Statement.
11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Financial Statements and Schedules
(a)(1) Financial Statements incorporated by reference to the 2001 Annual
Report:
Pages in 2001
Annual Report
Incorporated
Herein by Reference
-------------------
Consolidated Balance Sheets as of December 31, 2001
and 2000........................................... p. 18
Consolidated Statements of Operations years ended
December 31, 2001, 2000 and 1999................... p. 19
Consolidated Statements of Stockholders' Equity,
years ended December 31, 2001, 2000 and 1999....... p. 20
Consolidated Statements of Cash Flows, years ended
December 31, 2001, 2000 and 1999................... p. 21
Notes to Consolidated Financial Statements.......... pp. 22-37
Independent Auditors' Report ....................... p. 38
(a)(2) Supplementary Data is incorporated by reference to the 2001 Annual
Report. Additional schedules are either not required or are inapplicable and
have therefore been omitted.
(a)(3) EXHIBITS:
2(a) Agreement and Plan of Merger and Reorganization, dated as of August 27,
1996, among Mississippi Chemical Corporation, MISS SUB, INC. and First
Mississippi Corporation, was filed as Exhibit 2.1 to Amendment No. 1 to
the Company's Form S-1 (Registration No. 333-15789) filed on November
18, 1996, and is incorporated herein by reference.
2(b) Agreement and Plan of Distribution between First Mississippi
Corporation and the Company dated December 18, 1996 was filed as
Exhibit 2.2, Form of Agreement and Plan of Distribution, to Amendment
No. 1 to the Company's Form S-1 (Registration No. 333-15789) filed on
November 18, 1996, and is incorporated herein by reference. The only
modification to the text of the Form of Agreement and Plan of
Distribution which is incorporated herein by reference was the
substitution of "ChemFirst Inc." for "Newco" as a party to this
agreement and the dating of the agreement as of December 18, 1996.
2(c) Tax Disaffiliation Agreement between First Mississippi Corporation and
the Company dated December 18, 1996 was filed as Exhibit 2.3, Form of
Tax Disaffiliation Agreement, to Amendment No. 1 to the Company's Form
S-1 (Registration No. 333-15789) filed on November 18, 1996, and is
incorporated herein by reference. The only modification to the text of
the Form of Tax Disaffiliation Agreement which is incorporated herein
by reference was the substitution of "ChemFirst Inc." for "Newco" as a
party to this Agreement and the dating of the agreement as of December
18, 1996.
2(d) Employee Benefits and Compensation Agreement between First Mississippi
Corporation and the Company dated December 18, 1996 was filed as
Exhibit 2.4, Form of Employee Benefits and Compensation Agreement, to
Amendment No. 1 to the Company's Form S-1 (Registration No. 333-15789)
filed on November 18, 1996, and is incorporated herein by reference.
The only modification to the text of the Form of Employee Benefits and
Compensation Agreement which is incorporated herein by reference was
the substitution of "ChemFirst Inc." for "Newco" as a party to this
Agreement and the dating of the agreement as of December 18, 1996.
12
2(e) Asset Purchase Agreement by and between ChemFirst Fine Chemicals, Inc.
and First Chemical Corporation, as sellers, and Albemarle Corporation,
as buyer, effective June 30, 2001, regarding the sale of the Company's
custom and fine chemicals business assets. Schedules and exhibits to
this agreement are omitted in accordance with rules of the Commission.
The Company agrees to furnish supplementally to the Commission copies
of such schedules and exhibits upon request.
3(a) Amended and Restated Articles of Incorporation of the Company were
filed as Exhibit 3.1 to Amendment No. 1 to the Company's Form S-1
(Registration No. 333-15789) filed on November 18, 1996, and are
incorporated herein by reference.
3(b) Bylaws of the Company as amended were filed as Exhibit 4.3 to the
Company's Form S-8 (Registration No. 333-69965) filed on December 30,
1998, and are incorporated herein by reference.
4(a) Articles III, IV, V, VI, VII, VIII, IX and X of the Company's Amended
and Restated Articles of Incorporation and the Statements of Resolution
establishing the Company's 1987-A, 1988-A, 1988-1, 1989-A, 1989-1,
1989-2, 1990-1, 1990-2, 1991-1, 1991-2, and 1992-1 Series Convertible
Preferred Stock and the Company's Series X Junior Participating
Preferred Stock are included in Exhibit 3(a).
4(b) Articles II, IV, IX and XII of the Company's Bylaws are included in
Exhibit 3(b).
4(c) ChemFirst Inc. 401(k) Savings and Employee Stock Ownership Plan and
Trust, as amended and restated on January 1, 1997, was filed as Exhibit
4.6 to Post-Effective Amendment No. 2 to the Company's Registration
Statement on Form S-8 (Registration No. 333-18691) filed on July 27,
1999 and is incorporated herein by reference.
4(d) First Amendment to ChemFirst Inc. 401(k) and Employee Stock Ownership
Plan and Trust was filed as Exhibit 4.7 to Post-Effective Amendment No.
2 to the Company's Registration Statement on Form S-8 (Registration No.
333-18691) filed on July 27, 1999, and is incorporated herein by
reference.
4(e) Second Amendment to ChemFirst Inc. 401(k) and Employee Stock Ownership
Plan and Trust was filed as Exhibit 4.10 to Post-Effective Amendment
No. 2 to the Company's Registration Statement on Form S-8 (Registration
No. 333-18691) filed on July 27, 1999, and is incorporated herein by
reference.
4(f) Third Amendment to ChemFirst Inc. 401(k) and Employee Stock Ownership
Plan and Trust was filed as Exhibit 4.9 to the Company's Registration
Statement on Form S-8 (Registration No. 333-51002) filed on November
30, 2000, and is incorporated herein by reference.
4(g) Fourth Amendment to ChemFirst Inc. 401(k) and Employee Stock Ownership
Plan and Trust was filed as Exhibit 4.10 to the Company's Registration
Statement on Form S-8 (Registration No. 333-51002) filed on November
30, 2000, and is incorporated herein by reference.
4(h) ChemFirst Savings and Employee Stock Ownership Plan and Trust, restated
effective January 1, 1997 (supersedes Exhibits 4(c), 4(d), 4(e), 4(f)
and 4(g)).
4(i) Rights Agreement, dated as of October 30, 1996, between the Company and
KeyCorp Shareholder Services, Inc., was filed as Exhibit 4 to Amendment
No. 1 to the Company's Form S-1 (Registration No. 333-15789) filed on
November 18, 1996 and is incorporated herein by reference.
4(j) First Amendment to Rights Agreement dated effective May 1, 1997, by and
among the Company, KeyCorp Shareholder Services, Inc. and The Bank of
New York, was filed as Exhibit 4.5 to the Company's Form S-8 (File No.
333-69965) filed on December 30, 1998, and is incorporated herein by
reference.
4(k) Second Amendment to Rights Agreement dated effective October 1, 2001,
by and among the Company, The Bank of New York and American Stock
Transfer & Trust Company, was filed as Exhibit 4(c) to Amendment No. 1
to the Company's Form 8-A/A (Registration No. 333-35221) filed on
November 2, 2001, and is incorporated herein by reference.
13
4(l) Post Spin-Off Agreement between First Mississippi and FirstMiss Gold
Inc. dated as of September 24, 1995, which was assigned to the Company
in connection with the Distribution, was filed as Exhibit 99.1 to First
Mississippi's Form 8-K dated September 24, 1995, and is incorporated
herein by reference.
4(m) Note Purchase Agreement between ChemFirst Inc., State Farm Life
Insurance Company and Nationwide Life Insurance Company dated October
15, 1998, was filed as Exhibit 4(j) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, and is
incorporated herein by reference.
4(n) Form of the Company's stock certificate was filed as Exhibit 4(d) to
Amendment No. 1 to the Company's Form 8-A/A (Registration No. 333-
35221) filed on November 2, 2001, and is incorporated herein by
reference.
10(a)* Termination Agreement, dated May 29, 1996 and effective June 1, 1996,
and amended March 15, 1999, between the Company and its Chief
Executive Officer, was filed as Exhibit 10(a) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998, and
is incorporated herein by reference.
10(b)* Form of Termination Agreement between the Company and each of the
following executive officers of the Company, which was assigned to the
Company in connection with the Distribution and which form the Company
continues to use, was filed as Exhibit 10(d) to First Mississippi's
Annual Report on Form 10-K for the fiscal year ended June 30, 1996,
and is incorporated herein by reference. The Company has executed a
Termination Agreement with each of the following executive officers:
Daniel P. Anderson, J. Steven Chustz, Paul J. Coder, George M. Simmons
and R. Michael Summerford, each dated effective June 1, 1996; Max P.
Bowman, Troy B. Browning, William B. Kemp and James L. McArthur, each
dated effective July 1, 1997; and William R. Jordan, dated effective
May 25, 1999.
10(c)* Amendment to Termination Agreement, effective February 19, 2002, by
and between the Company and its Chief Executive Officer.
10(d)* Form of Amendment to Termination Agreement, effective February 19,
2002, by and between the Company and each of the following executive
officers of the Company (the Company's Amendment to Termination
Agreement with each such individual contains substantially identical
provisions to those contained in the form): Daniel P. Anderson, Max P.
Bowman, Troy B. Browning, J. Steve Chustz, P. Jerry Coder, William R.
Jordan, William B. Kemp, James L. McArthur, George M. Simmons and R.
Michael Summerford.
10(e)* ChemFirst Inc. 1988 Long-Term Incentive Plan was filed as Exhibit 4.5
to the Company's Registration Statement on Form S-8 (Registration No.
333-18693) filed on December 24, 1996, and is incorporated herein by
reference.
10(f)* ChemFirst Inc. 1995 Long-Term Incentive Plan was filed as Exhibit 4.4
to the Company's Registration Statement on Form S-8 (Registration No.
333-18693) filed on December 24, 1996, and is incorporated herein by
reference.
10(g)* ChemFirst Inc. 1998 Long-Term Incentive Plan, as amended, was included
as Appendix A to the Company's Proxy Statement filed in connection
with the Annual Meeting of Stockholders held on May 23, 2000, and is
incorporated herein by reference.
10(h)* 1991 Restatement of the First Mississippi Directors' Retirement Plan,
as revised and restated on May 14, 1991, which was assigned to and
assumed by the Company pursuant to the Benefits Agreement, was filed
as Exhibit 10(f) to First Mississippi's Annual Report on Form 10-K for
the fiscal year ended June 30, 1991, and is incorporated herein by
reference.
10(i)* First Mississippi Corporation 1989 Deferred Compensation Plan for
Outside Directors ("Plan B"), as amended on September 12, 1994, which
was assigned to and assumed by the Company pursuant to the Benefits
Agreement, was filed as Exhibit 10(g) to First Mississippi's Annual
Report on Form 10-K for the fiscal year ended June 30, 1995, and is
incorporated herein by reference.
14
10(j)* A description of the Company's Deferred Income Plan for Directors,
Officers and Key Employees ("Plan A") is included in the Company's
Proxy Statement filed in connection with the Annual Meeting of
Stockholders to be held on May 22, 2001, and is incorporated herein by
reference.
10(k)* Form of Indemnification Agreement between the Company and the
following former directors or executive officers of the Company, which
was assigned to and assumed by the Company in connection with the
Distribution (Company's Indemnification Agreements with each such
individual contains substantially identical provisions to those
contained in the form): Charles R. Gibson, Charles P. Moreton, Maurice
T. Reed, Jr., Frank G. Smith, O. E. Wall, Charles M. McAuley and
Thomas G. Tepas was filed as Exhibit 10(t) to First Mississippi's
Annual Report on Form 10-K for the fiscal year ended June 30, 1988,
and is incorporated herein by reference.
10(l)* Form of Indemnification Agreement entered between the Company and the
following current or former directors or executive officers of the
Company on March 17, 1999 or subsequently thereto was filed as Exhibit
10(k) to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 and is incorporated herein by reference.
(Company's Indemnification Agreement with each such individual
contains substantially identical provisions to those contained in the
form): Richard P. Anderson, Paul A. Becker, James W. Crook, Michael J.
Ferris, James E. Fligg, Robert P. Guyton, Paul W. Murrill, John F.
Osborne, William A. Percy, II, Dan F. Smith, Leland R. Speed, R.
Gerald Turner, J. Kelley Williams, Daniel P. Anderson, Max P. Bowman,
Troy B. Browning, J. Steve Chustz, P. Jerry Coder, William R. Jordan,
William B. Kemp, Scott A. Martin, James L. McArthur, George M.
Simmons, R. M. Summerford and Roger Van Duyne.
10(m) ChemFirst Inc. 1997 Employee Stock Purchase Plan was filed as Exhibit
4.3 to the Company's Registration Statement on Form S-8 (Registration
No. 333-35221) filed on September 9, 1997, and is incorporated herein
by reference.
10(n)* ChemFirst Inc. Benefits Restoration Plan, dated effective January 1,
1997, was filed as Exhibit 10(l) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2000, and is
incorporated herein by reference.
10(o) First Amended and Restated Loan Agreement dated September 12, 2001
between the Company and SunTrust Bank, as amended on October 10, 2001
and November 29, 2001, and the First Amended and Restated Revolving
Credit Note related thereto.
10(p) Loan Agreement dated September 24, 2001 between the Company and AmSouth
Bank, as amended on October 17, 2001 and December 3, 2001 and the
Revolving Credit Note related thereto.
13 ChemFirst Inc. 2001 Annual Report to Stockholders (such Annual Report
is not, except for those portions thereof which are expressly
incorporated by reference, to be deemed "filed" as part of this Form10-
K).
21 List of the subsidiaries of the Company.
23 Consent regarding incorporation of auditor's report into Registration
Statement Nos. 333-18691, 333-18693, 333-35221, 333-69965, 333-38556
and 333-51002.
--------
* Indicates management contract or compensatory plan or arrangement.
Certain debt instruments have not been filed. The Company agrees to
furnish a copy of such agreement(s) to the Commission upon request.
(b) No reports on Form 8-K were filed by the Company during the fourth quarter
of 2001.
(c) Please see (a)(3) above.
The exhibits filed with the Commission are not included in the printed copy
of the Form 10-K. A copy of the exhibits will be provided upon payment of a
reasonable fee, to be specified at the time a request is made.
(d) Please see (a)(2) above.
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CHEMFIRST INC.
Date: March 27, 2002 /s/ J. Kelley Williams
By: _________________________________
J. Kelley Williams,
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ J. Kelley Williams Chairman of the Board of March 27, 2002
______________________________________ Directors, Chief
J. Kelley Williams Executive Officer
(Principal Executive
Officer) and Director
/s/ R. M. Summerford President and Chief March 27, 2002
______________________________________ Operating Officer
R. M. Summerford
/s/ Max P. Bowman Vice President, Finance March 27, 2002
______________________________________ and Chief Financial
Max P. Bowman Officer (Principal
Financial Officer)
/s/ Troy B. Browning Controller (Principal March 27, 2002
______________________________________ Accounting Officer)
Troy B. Browning
/s/ Richard P. Anderson Director March 27, 2002
______________________________________
Richard P. Anderson
/s/ Paul A. Becker Director March 27, 2002
______________________________________
Paul A. Becker
/s/ Michael J. Ferris Director March 27, 2002
______________________________________
Michael J. Ferris
/s/ James E. Fligg Director March 27, 2002
______________________________________
James E. Fligg
/s/ Robert P. Guyton Director March 27, 2002
______________________________________
Robert P. Guyton
/s/ Paul W. Murrill Director March 27, 2002
______________________________________
Paul W. Murrill
/s/ John F. Osborne Director March 27, 2002
______________________________________
John F. Osborne
16
Signature Title Date
--------- ----- ----
/s/ William A. Percy, II Director March 27, 2002
______________________________________
William A. Percy, II
/s/ Dan F. Smith Director March 27, 2002
______________________________________
Dan F. Smith
/s/ Leland R. Speed Director March 27, 2002
______________________________________
Leland R. Speed
/s/ R. Gerald Turner Director March 27, 2002
______________________________________
R. Gerald Turner
17
INDEX TO EXHIBITS
2(a) Agreement and Plan of Merger and Reorganization, dated as of August 27,
1996, among Mississippi Chemical Corporation, MISS SUB, INC. and First
Mississippi Corporation, was filed as Exhibit 2.1 to Amendment No. 1 to
the Company's Form S-1 (Registration No. 333-15789) filed on November
18, 1996, and is incorporated herein by reference.
2(b) Agreement and Plan of Distribution between First Mississippi
Corporation and the Company dated December 18, 1996 was filed as
Exhibit 2.2, Form of Agreement and Plan of Distribution, to Amendment
No. 1 to the Company's Form S-1 (Registration No. 333-15789) filed on
November 18, 1996, and is incorporated herein by reference. The only
modification to the text of the Form of Agreement and Plan of
Distribution which is incorporated herein by reference was the
substitution of "ChemFirst Inc." for "Newco" as a party to this
agreement and the dating of the agreement as of December 18, 1996.
2(c) Tax Disaffiliation Agreement between First Mississippi Corporation and
the Company dated December 18, 1996 was filed as Exhibit 2.3, Form of
Tax Disaffiliation Agreement, to Amendment No. 1 to the Company's Form
S-1 (Registration No. 333-15789) filed on November 18, 1996, and is
incorporated herein by reference. The only modification to the text of
the Form of Tax Disaffiliation Agreement which is incorporated herein
by reference was the substitution of "ChemFirst Inc." for "Newco" as a
party to this Agreement and the dating of the agreement as of December
18, 1996.
2(d) Employee Benefits and Compensation Agreement between First Mississippi
Corporation and the Company dated December 18, 1996 was filed as
Exhibit 2.4, Form of Employee Benefits and Compensation Agreement, to
Amendment No. 1 to the Company's Form S-1 (Registration No. 333-15789)
filed on November 18, 1996, and is incorporated herein by reference.
The only modification to the text of the Form of Employee Benefits and
Compensation Agreement which is incorporated herein by reference was
the substitution of "ChemFirst Inc." for "Newco" as a party to this
Agreement and the dating of the agreement as of December 18, 1996.
2(e) Asset Purchase Agreement by and between ChemFirst Fine Chemicals, Inc.
and First Chemical Corporation, as sellers, and Albemarle Corporation,
as buyer, effective June 30, 2001, regarding the sale of the Company's
custom and fine chemicals business assets. Schedules and exhibits to
this agreement are omitted in accordance with rules of the Commission.
The Company agrees to furnish supplementally to the Commission copies
of such schedules and exhibits upon request.
3(a) Amended and Restated Articles of Incorporation of the Company were
filed as Exhibit 3.1 to Amendment No. 1 to the Company's Form S-1
(Registration No. 333-15789) filed on November 18, 1996, and are
incorporated herein by reference.
3(b) Bylaws of the Company as amended were filed as Exhibit 4.3 to the
Company's Form S-8 (Registration No. 333-69965) filed on December 30,
1998, and are incorporated herein by reference.
4(a) Articles III, IV, V, VI, VII, VIII, IX and X of the Company's Amended
and Restated Articles of Incorporation and the Statements of Resolution
establishing the Company's 1987-A, 1988-A, 1988-1, 1989-A, 1989-1,
1989-2, 1990-1, 1990-2, 1991-1, 1991-2, and 1992-1 Series Convertible
Preferred Stock and the Company's Series X Junior Participating
Preferred Stock are included in Exhibit 3(a).
4(b) Articles II, IV, IX and XII of the Company's Bylaws are included in
Exhibit 3(b).
4(c) ChemFirst Inc. 401(k) Savings and Employee Stock Ownership Plan and
Trust, as amended and restated on January 1, 1997, was filed as Exhibit
4.6 to Post-Effective Amendment No. 2 to the Company's Registration
Statement on Form S-8 (Registration No. 333-18691) filed on July 27,
1999 and is incorporated herein by reference.
4(d) First Amendment to ChemFirst Inc. 401(k) and Employee Stock Ownership
Plan and Trust was filed as Exhibit 4.7 to Post-Effective Amendment No.
2 to the Company's Registration Statement on Form S-8 (Registration No.
333-18691) filed on July 27, 1999, and is incorporated herein by
reference.
1
4(e) Second Amendment to ChemFirst Inc. 401(k) and Employee Stock Ownership
Plan and Trust was filed as Exhibit 4.10 to Post-Effective Amendment
No. 2 to the Company's Registration Statement on Form S-8 (Registration
No. 333-18691) filed on July 27, 1999, and is incorporated herein by
reference.
4(f) Third Amendment to ChemFirst Inc. 401(k) and Employee Stock Ownership
Plan and Trust was filed as Exhibit 4.9 to the Company's Registration
Statement on Form S-8 (Registration No. 333-51002) filed on November
30, 2000, and is incorporated herein by reference.
4(g) Fourth Amendment to ChemFirst Inc. 401(k) and Employee Stock Ownership
Plan and Trust was filed as Exhibit 4.10 to the Company's Registration
Statement on Form S-8 (Registration No. 333-51002) filed on November
30, 2000, and is incorporated herein by reference.
4(h) ChemFirst Savings and Employee Stock Ownership Plan and Trust, restated
effective January 1, 1997 (supersedes Exhibits 4(c), 4(d), 4(e), 4(f)
and 4(g)).
4(i) Rights Agreement, dated as of October 30, 1996, between the Company and
KeyCorp Shareholder Services, Inc., was filed as Exhibit 4 to Amendment
No. 1 to the Company's Form S-1 (Registration No. 333-15789) filed on
November 18, 1996 and is incorporated herein by reference.
4(j) First Amendment to Rights Agreement dated effective May 1, 1997, by and
among the Company, KeyCorp Shareholder Services, Inc. and The Bank of
New York, was filed as Exhibit 4.5 to the Company's Form S-8 (File No.
333-69965) filed on December 30, 1998, and is incorporated herein by
reference.
4(k) Second Amendment to Rights Agreement dated effective October 1, 2001,
by and among the Company, The Bank of New York and American Stock
Transfer & Trust Company, was filed as Exhibit 4(c) to Amendment No. 1
to the Company's Form 8-A/A (Registration No. 333-35221) filed on
November 2, 2001, and is incorporated herein by reference.
4(l) Post Spin-Off Agreement between First Mississippi and FirstMiss Gold
Inc. dated as of September 24, 1995, which was assigned to the Company
in connection with the Distribution, was filed as Exhibit 99.1 to First
Mississippi's Form 8-K dated September 24, 1995, and is incorporated
herein by reference.
4(m) Note Purchase Agreement between ChemFirst Inc., State Farm Life
Insurance Company and Nationwide Life Insurance Company dated October
15, 1998, was filed as Exhibit 4(j) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, and is
incorporated herein by reference.
4(n) Form of the Company's stock certificate was filed as Exhibit 4(d) to
Amendment No. 1 to the Company's Form 8-A/A (Registration No. 333-
35221) filed on November 2, 2001, and is incorporated herein by
reference.
10(a)* Termination Agreement, dated May 29, 1996 and effective June 1, 1996,
and amended March 15, 1999, between the Company and its Chief
Executive Officer, was filed as Exhibit 10(a) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998, and
is incorporated herein by reference.
10(b)* Form of Termination Agreement between the Company and each of the
following executive officers of the Company, which was assigned to the
Company in connection with the Distribution and which form the Company
continues to use, was filed as Exhibit 10(d) to First Mississippi's
Annual Report on Form 10-K for the fiscal year ended June 30, 1996,
and is incorporated herein by reference. The Company has executed a
Termination Agreement with each of the following executive officers:
Daniel P. Anderson, J. Steven Chustz, Paul J. Coder, George M. Simmons
and R. Michael Summerford, each dated effective June 1, 1996; Max P.
Bowman, Troy B. Browning, William B. Kemp and James L. McArthur, each
dated effective July 1, 1997; and William R. Jordan, dated effective
May 25, 1999.
10(c)* Amendment to Termination Agreement, effective February 19, 2002, by
and between the Company and its Chief Executive Officer.
2
10(d)* Form of Amendment to Termination Agreement, effective February 19,
2002, by and between the Company and each of the following executive
officers of the Company (the Company's Amendment to Termination
Agreement with each such individual contains substantially identical
provisions to those contained in the form): Daniel P. Anderson, Max P.
Bowman, Troy B. Browning, J. Steve Chustz, P. Jerry Coder, William R.
Jordan, William B. Kemp, James L. McArthur, George M. Simmons and R.
Michael Summerford.
10(e)* ChemFirst Inc. 1988 Long-Term Incentive Plan was filed as Exhibit 4.5
to the Company's Registration Statement on Form S-8 (Registration No.
333-18693) filed on December 24, 1996, and is incorporated herein by
reference.
10(f)* ChemFirst Inc. 1995 Long-Term Incentive Plan was filed as Exhibit 4.4
to the Company's Registration Statement on Form S-8 (Registration No.
333-18693) filed on December 24, 1996, and is incorporated herein by
reference.
10(g)* ChemFirst Inc. 1998 Long-Term Incentive Plan, as amended, was included
as Appendix A to the Company's Proxy Statement filed in connection
with the Annual Meeting of Stockholders held on May 23, 2000, and is
incorporated herein by reference.
10(h)* 1991 Restatement of the First Mississippi Directors' Retirement Plan,
as revised and restated on May 14, 1991, which was assigned to and
assumed by the Company pursuant to the Benefits Agreement, was filed
as Exhibit 10(f) to First Mississippi's Annual Report on Form 10-K for
the fiscal year ended June 30, 1991, and is incorporated herein by
reference.
10(i)* First Mississippi Corporation 1989 Deferred Compensation Plan for
Outside Directors ("Plan B"), as amended on September 12, 1994, which
was assigned to and assumed by the Company pursuant to the Benefits
Agreement, was filed as Exhibit 10(g) to First Mississippi's Annual
Report on Form 10-K for the fiscal year ended June 30, 1995, and is
incorporated herein by reference.
10(j)* A description of the Company's Deferred Income Plan for Directors,
Officers and Key Employees ("Plan A") is included in the Company's
Proxy Statement filed in connection with the Annual Meeting of
Stockholders to be held on May 22, 2001, and is incorporated herein by
reference.
10(k)* Form of Indemnification Agreement between the Company and the
following former directors or executive officers of the Company, which
was assigned to and assumed by the Company in connection with the
Distribution (Company's Indemnification Agreements with each such
individual contains substantially identical provisions to those
contained in the form): Charles R. Gibson, Charles P. Moreton, Maurice
T. Reed, Jr., Frank G. Smith, O. E. Wall, Charles M. McAuley and
Thomas G. Tepas was filed as Exhibit 10(t) to First Mississippi's
Annual Report on Form 10-K for the fiscal year ended June 30, 1988,
and is incorporated herein by reference.
10(l)* Form of Indemnification Agreement entered between the Company and the
following current or former directors or executive officers of the
Company on March 17, 1999 or subsequently thereto was filed as Exhibit
10(k) to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 and is incorporated herein by reference.
(Company's Indemnification Agreement with each such individual
contains substantially identical provisions to those contained in the
form): Richard P. Anderson, Paul A. Becker, James W. Crook, Michael J.
Ferris, James E. Fligg, Robert P. Guyton, Paul W. Murrill, John F.
Osborne, William A. Percy, II, Dan F. Smith, Leland R. Speed, R.
Gerald Turner, J. Kelley Williams, Daniel P. Anderson, Max P. Bowman,
Troy B. Browning, J. Steve Chustz, P. Jerry Coder, William R. Jordan,
William B. Kemp, Scott A. Martin, James L. McArthur, George M.
Simmons, R. M. Summerford and Roger Van Duyne.
10(m) ChemFirst Inc. 1997 Employee Stock Purchase Plan was filed as Exhibit
4.3 to the Company's Registration Statement on Form S-8 (Registration
No. 333-35221) filed on September 9, 1997, and is incorporated herein
by reference.
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10(n)* ChemFirst Inc. Benefits Restoration Plan, dated effective January 1,
1997, was filed as Exhibit 10(l) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2000, and is
incorporated herein by reference.
10(o) First Amended and Restated Loan Agreement dated September 12, 2001
between the Company and SunTrust Bank, as amended on October 10, 2001
and November 29, 2001, and the First Amended and Restated Revolving
Credit Note related thereto.
10(p) Loan Agreement dated September 24, 2001 between the Company and AmSouth
Bank, as amended on October 17, 2001 and December 3, 2001 and the
Revolving Credit Note related thereto.
13 ChemFirst Inc. 2001 Annual Report to Stockholders (such Annual Report
is not, except for those portions thereof which are expressly
incorporated by reference, to be deemed "filed" as part of this Form10-
K).
21 List of the subsidiaries of the Company.
23 Consent regarding incorporation of auditor's report into Registration
Statement Nos. 333-18691, 333-18693, 333-35221, 333-69965, 333-38556
and 333-51002.
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* Indicates management contract or compensatory plan or arrangement.
(Note: The exhibits filed with the Commission are not included in this copy
of the Form 10-K. A copy of the exhibits will be provided upon payment
of a reasonable fee, to be specified at the time a request is made.)
4