-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KmTrdg9UoGBlxsvZmFvOqoK0KkaCJ7JK+eDqtrpU16NTHwW972tCt8JzilH6piuF JTUC6K2TnZdOgmGkjIPoRw== 0000930661-97-001641.txt : 19970701 0000930661-97-001641.hdr.sgml : 19970701 ACCESSION NUMBER: 0000930661-97-001641 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970630 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSISSIPPI CHEMICAL CORP /MS/ CENTRAL INDEX KEY: 0000066895 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 640292638 STATE OF INCORPORATION: MS FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12217 FILM NUMBER: 97632703 BUSINESS ADDRESS: STREET 1: HIGHWAY 49 EAST CITY: YAZOO CITY STATE: MS ZIP: 39194 BUSINESS PHONE: 6017464131 MAIL ADDRESS: STREET 1: P O BOX 388 CITY: YAZOO CITY STATE: MS ZIP: 39194 FORMER COMPANY: FORMER CONFORMED NAME: MISSISSIPPI CHEMICAL CORP DATE OF NAME CHANGE: 19920703 11-K 1 FORM 11-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K [x] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1996 or [ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 for the transition period from ________ to ________ MISSISSIPPI CHEMICAL CORPORATION Commission File No. 1-12217 A. Full title of the plans and the address of the plans, if different from that of the issuer named below: Mississippi Chemical Corporation Thrift Plan Plus Mississippi Phosphates Corporation 401(k) Retirement Plan Eddy Potash, Inc. 401(k) Plan for Bargaining Unit Employees Mississippi Phosphates Corporation and Eddy Potash, Inc. are wholly owned subsidiaries of Mississippi Chemical Corporation B. Name of issuer of the securities held pursuant to the plans and the address of its principal executive office: Mississippi Chemical Corporation P.O. Box 388 Yazoo City, Mississippi 39194 Financial Statements and Exhibits --------------------------------- (A) Financial Statements: Mississippi Chemical Corporation Thrift Plan Plus Report of Independent Accountants Financial Statements Prepared in Accordance with the Financial Reporting Requirements of ERISA Notes to Financial Statements Schedules to Financial Statements Mississippi Phosphates Corporation 401(k) Retirement Plan Report of Independent Accountants Financial Statements Prepared in Accordance with the Financial Reporting Requirements of ERISA Notes to Financial Statements Schedules to Financial Statements Eddy Potash, Inc. 401(k) Plan for Bargaining Unit Employees Report of Independent Accountants Financial Statements Prepared in Accordance with the Financial Reporting Requirements of ERISA Notes to Financial Statements Schedules to Financial Statements (B) Exhibits: 23.1 Consents of Arthur Andersen LLP SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustees of the Mississippi Chemical Corporation Thrift Plan Plus, the Mississippi Phosphates Corporation 401(k) Retirement Plan and the Eddy Potash 401(k) Plan for Bargaining Unit Employees have duly caused this annual report to be signed by the undersigned thereunto duly authorized. Dated: June 30, 1997 MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS By: MISSISSIPPI CHEMICAL CORPORATION, Plan Administrator By:/s/ Charles O. Dunn ------------------------------------- Charles O. Dunn President and Chief Executive Officer MISSISSIPPI PHOSPHATES CORPORATION 401(k) RETIREMENT PLAN By: MISSISSIPPI PHOSPHATES CORPORATION, Plan Administrator By:/s/ Charles O. Dunn ------------------------------------- Charles O. Dunn President and Chief Executive Officer EDDY POTASH, INC. 401(K) PLAN FOR BARGAINING UNIT EMPLOYEES By: EDDY POTASH, INC., Plan Administrator By:/s/ Charles O. Dunn ------------------------------------- Charles O. Dunn President and Chief Executive Officer MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1996 AND 1995 TOGETHER WITH AUDITORS' REPORT MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS ------------------------------------------------- FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES ----------------------------------------------- AS OF DECEMBER 31, 1996 AND 1995 -------------------------------- TOGETHER WITH AUDITORS' REPORT ------------------------------ INDEX ----- PAGE ---- REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1 FINANCIAL STATEMENTS: STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 2 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 3 NOTES TO FINANCIAL STATEMENTS 4 - 9 SUPPLEMENTAL SCHEDULES: SCHEDULE OF REPORTABLE TRANSACTIONS 10 SCHEDULE OF ASSETS HELD FOR INVESTMENT 11 Report of Independent Public Accountants To the Thrift Committee of the Mississippi Chemical Corporation Thrift Plan Plus: We have audited the accompanying statements of net assets available for benefits of the Mississippi Chemical Corporation Thrift Plan Plus (the "Plan") as of December 31, 1996 and 1995, and the related statement of changes in net assets available for benefits for the year ended December 31, 1996. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the year ended December 31, 1996, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of reportable transactions and assets held for investment, as noted at Exhibit I and Exhibit II, respectively, are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ ARTHUR ANDERSEN LLP Memphis, Tennessee, June 12, 1997. -1- MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS ------------------------------------------------- STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS ----------------------------------------------- AS OF DECEMBER 31 -----------------
1996 1995 ------------ ----------- Investments: - ----------- Investments at Contract Value: Vanguard Investment Contract Trust Fund $30,184,776 $29,345,360 Investments at Fair Value: Vanguard Bond Index Fund 417,850 236,532 Vanguard Wellington Fund 6,971,441 5,146,975 Vanguard 500 Portfolio Fund 6,158,816 3,727,801 Vanguard U. S. Growth Fund 5,076,108 2,854,981 Mississippi Chemical Corporation Stock Fund 844,538 240,418 Participant Loan Fund 670,757 519,953 ----------- ----------- Total Investments 50,324,286 42,072,020 Receivables: - ----------- Contributions Receivable 212,826 144,434 Interest Receivable 1,628 151,692 ----------- ----------- Total Receivables 214,454 296,126 Payables: - -------- Securities Purchased not Settled 16,686 - Participant Refunds 20,269 - ----------- ----------- Total Payables 36,955 - Net Assets Available for Benefits $50,501,785 $42,368,146 =========== ===========
The accompanying notes to financial statements are an integral part of these statements. -2- MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS ------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS --------------------------------------------------------- FOR THE YEAR ENDED DECEMBER 31, 1996 ------------------------------------
Participant Directed -------------------------------------------------------------------------------- Vanguard Vanguard Vanguard Vanguard Investment Bond Vanguard 500 U.S. MCC Participant Contract Index Wellington Portfolio Growth Stock Loan Total Fund Fund Fund Fund Fund Fund Fund Other ----------- ----------- -------- ---------- ---------- ---------- -------- ----------- --------- Additions to Net Assets Attributed to: Investment Income: Net Appreciation/ (Depreciation) in Fair Value of Investments $ 2,187,505 $ - $ (5,738) $ 639,330 $ 801,419 $ 739,747 $ 12,747 $ - $ - Interest and Dividends 2,043,545 1,733,543 15,427 166,533 88,910 30,050 7,454 - 1,628 ----------- ----------- -------- ---------- ---------- ---------- -------- -------- --------- 4,231,050 1,733,543 9,689 805,863 890,329 769,797 20,201 - 1,628 ----------- ----------- -------- ---------- ---------- ---------- -------- -------- --------- Contributions: Participants' 6,650,733 2,267,207 187,797 1,088,419 1,270,142 1,195,505 484,489 - 157,174 Employer's 776,355 315,317 15,243 138,852 121,103 110,525 19,663 - 55,652 ----------- ----------- -------- ---------- ---------- ---------- -------- -------- --------- 7,427,088 2,582,524 203,040 1,227,271 1,391,245 1,306,030 504,152 - 212,826 ----------- ----------- -------- ---------- ---------- ---------- -------- -------- --------- Total Additions 11,658,138 4,316,067 212,729 2,033,134 2,281,574 2,075,827 524,353 - 214,454 Deductions from Net Assets Attributed to: Benefits Paid to Participants 3,487,544 3,252,559 3,766 124,539 61,429 44,680 571 - - Other 36,955 - - - - - - - 36,955 ----------- ----------- -------- ---------- ---------- ---------- -------- -------- --------- Total Deductions 3,524,499 3,252,559 3,766 124,539 61,429 44,680 571 - 36,955 Net Increase Prior to Interfund Transfers 8,133,639 1,063,508 208,963 1,908,595 2,220,145 2,031,147 523,782 - 177,499 Interfund Transfers - (224,092) (27,645) (84,129) 210,870 189,980 80,338 150,804 (296,126) ----------- ----------- -------- ---------- ---------- ---------- -------- -------- --------- Net Increase (Decrease) 8,133,639 839,416 181,318 1,824,466 2,431,015 2,221,127 604,120 150,804 (118,627) Net Assets Available for Benefits: Beginning of Year 42,368,146 29,345,360 236,532 5,146,975 3,727,801 2,854,981 240,418 519,953 296,126 ----------- ----------- -------- ---------- ---------- ---------- -------- -------- --------- End of Year $50,501,785 $30,184,776 $417,850 $6,971,441 $6,158,816 $5,076,108 $844,538 $670,757 $ 177,499 =========== =========== ======== ========== ========== ========== ======== ======== =========
The accompanying notes to financial statements are an integral part of this statement. -3- MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS ------------------------------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- DECEMBER 31, 1996 ----------------- 1. DESCRIPTION OF THE PLAN: ------------------------ General The Mississippi Chemical Corporation Thrift Plan Plus (the "Plan") is designed to encourage and assist employees in a long-range program of savings. The Plan became effective as of January 1, 1984 and is an amendment to and restatement of the Mississippi Chemical Corporation Thrift Plan which resulted from the merger on January 1, 1983 of the Mississippi Chemical Corporation Savings and Investment (Thrift) Plan, established July 1, 1973, and the Mississippi Chemical Corporation New Mexico Facility Savings and Investment (Thrift) Plan, established September 1, 1975. The Plan was amended and restated as of January 1, 1985, in order to comply with Part I of the Deficit Reduction Act of 1984 and the Retirement Equity Act of 1984. The Plan is organized with the intent to comply with the provisions of Section 401(k) of the Internal Revenue Code (the "IRC"), whereby the participant can defer the amount of his compensation contributed to the Plan from his taxable income until withdrawn from the Plan. Eligibility and Contributions Employees of Mississippi Chemical Corporation ("MCC") or non-union employees of Mississippi Potash, Incorporated and its subsidiary (collectively the "Company") working 1,000 hours within twelve months after their employment date are eligible to participate in the Plan after one year of service. Mississippi Potash, Incorporated is a wholly-owned subsidiary of MCC. Participants may elect to make a salary deferral contribution up to 17.6% of base compensation. The salary deferral contributions cannot exceed the maximum allowable under IRS guidelines. The Company matches 50% of participants' contributions, but not in excess of 3% of base compensation. Former participants who are reemployed on a regular, full-time basis become eligible to participate in the Plan immediately. Participant Accounts Each participant's deferred account is credited with their contributions and the investment earnings on the account. Each participant also has a Company matching account, which is credited with the Company's contributions made on the participant's behalf and the investment earnings on the account. -4- 1. DESCRIPTION OF THE PLAN (Continued): ------------------------------------ Vesting A participant is fully vested in the portion of his account related to his own contributions. Upon death, disability, retirement at the normal retirement age, or completion of 5 years of service, a participant will be fully vested in the employer's contribution. Upon termination of the Plan, all funds in each participant's account shall be fully vested and non-forfeitable. Investment Options Effective July 1, 1995, the Plan offered a new investment option, the MCC Stock Fund. The MCC Stock Fund invests in securities of the Company. The Plan limits the amount of participant contributions to the MCC Stock Fund to 20% of total contributions. Additionally, investment in the MCC Stock Fund is limited to 20% of a participant's total account balance. Upon enrollment in the Plan, a participant may direct employee contributions in any of the six following investment options: a. Vanguard Investment Contract Trust Fund - Funds are invested in a pool of investment contracts issued by insurance companies and banks. b. Vanguard Bond Index Fund - Funds are invested in a diversified portfolio of U.S. Government and corporate bonds and mortgage-backed securities. c. Vanguard Wellington Fund - Funds are invested in a diversified portfolio of common stocks and bonds, with common stocks expected to represent 60% to 70% of the fund's total assets. d. Vanguard 500 Portfolio Fund - Funds are invested in six different portfolios, each of which correspond to a particular stock market index. e. Vanguard U.S. Growth Fund - Funds are invested in equity securities of companies in the U.S. f. MCC Stock Fund - Funds are invested in common stock of Mississippi Chemical Corporation. Participants may request a change in their investment options by the fifteenth of any month to become effective at the beginning of the following month. -5- 1. DESCRIPTION OF THE PLAN (Continued): ------------------------------------ Participant Loans Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of the participant's vested account balance. The maximum term for loans is 5 years, except for loans to purchase the participant's primary residence. The loans are secured by the balance in the participant's account and bear interest at a fixed rate for the term of the loan. The interest rate shall be the prime rate of NationsBank as of the date of the loan plus 2%. The Plan allows participants a maximum of three outstanding loans - one for the purchase of a home and two for personal reasons. Administration The operations of the Plan are administered and supervised by the MCC Thrift Plan Committee (the "Committee"), which is appointed by the Board of Directors of MCC. Administration expenses of the Plan are paid by MCC, and were approximately $79,000 in 1996. Payment of Benefits On termination of service due to death, disability or normal retirement date, a participant may elect to receive either a lump-sum amount equal to the value of the participant's vested account or a combination of payments, on the dates and in the amounts specified by the participant subject to a minimum distribution of $500. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ------------------------------------------- Basis of Accounting The financial statements of the Plan have been prepared on the accrual basis of accounting. Substantially all information in the accompanying financial statements was derived from information certified by NationsBank, the Plan trustee. The Plan administrator has certified that there were no party in interest transactions or any obligations in default during the Plan year. Investment Valuation and Income Recognition The American Institute of Certified Public Accountants issued Statement of Position 94-4 ("SOP 94-4"), "Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined-Contribution Pension Plans," effective for fiscal years beginning after December 15, 1994. The Plan adopted SOP 94-4 during the 1995 plan year. SOP 94-4 changes the reporting for certain investment contracts from contract value to fair market value. Fully-benefit responsive investment contracts (as defined in SOP 94-4) are valued at contract value, which represents contributions made under the contract, plus interest at the contract rate less funds withdrawn by the participants. -6- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): ------------------------------------------------------- The Vanguard Investment Contract Trust Fund meets the requirements of a fully benefit-responsive guaranteed investment contract ("GIC"), and consists of the following:
1996 1995 ----------- ----------- Vanguard Investment Contract Trust $27,181,461 $26,045,671 Metropolitan Life Insurance Policy GAC-18595B 1,991,144 3,206,723 Nations Prime Fund 1,012,171 92,966 ----------- ----------- Total $30,184,776 $29,345,360 =========== ===========
Performance and other information regarding the funds are as follows: 1996 1995 ---- ---- Vanguard Investment Contract Trust Fund Average yield 6.1% 6.3% Crediting interest rate 6.1% 6.3% Metropolitan Life Insurance Policy Average yield 6.9% 7.0% Crediting interest rate 6.9% 7.0% Contract value on both of the above GIC's approximates fair value. For the Vanguard Investment Contract Trust Fund (the "Trust"), the crediting rate resets for alternative contracts held by the Trust on a calendar quarter basis after the initial rate for the contract is established. The reset calculation considers the book value of the contract, the market value and yield of the underlying investment, the duration of the investment, management and contract fees. The crediting rates of the alternative contracts have a contractual floor that does not fall below zero. The Trust has no valuation reserves. The crediting interest rate for the Metropolitan Life Insurance GAC-18595B was determined at the initiation of the contract and does not reset. The Plan's investments are stated as follows: The GICs are valued at contract value. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year- end. MCC stock is valued at its quoted market price and participant loans are valued at cost which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Investment income is recorded on an accrual basis. -7- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): ------------------------------------------------------- Benefit Payments Benefits are recorded when paid. Benefit payments and withdrawals are made by the Plan trustee at the direction of the Committee. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 3. FORFEITURES: ------------ Forfeitures represent the non-vested portions of the accounts of participants who have terminated or incurred a break in service during the Plan year. Forfeitures are used to reduce employer contributions. 4. PLAN TERMINATION: ----------------- The Board of Directors of the Company has the right to terminate the Plan, but has expressed no intention to do so. In the event of termination of the Plan, the account balances of all affected participants become fully vested and non- forfeitable. Each participant, retired participant or beneficiary shall then be entitled to receive all amounts credited to his account. 5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500: ---------------------------------------------------- The following is a reconciliation of net assets available for benefits between the financial statements and Form 5500:
December 31, -------------------------- 1996 1995 ------------ ------------ Net assets available for benefits per the financial statements $50,501,785 $42,368,146 Contribution receivable per the financial statements not reflected in Form 5500 (69,935) (32,574) Benefits payable per Form 5500 not reflected in the financial statements (70,562) (12,581) Refunds payable to participants per the financial statements not reflected in Form 5500 20,269 -- ----------- ----------- Net assets available for benefits per Form 5500 $50,381,557 $42,322,991 =========== ===========
-8- 6. TAX STATUS: ----------- The IRS has determined and informed the Company by a letter dated July 31, 1995, that the Plan is designed in accordance with applicable sections of the IRC. The Plan has been amended since receiving the determination letter. However, the Plan's administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. -9- Exhibit I MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS ------------------------------------------------- SCHEDULE OF REPORTABLE TRANSACTIONS ----------------------------------- FOR THE YEAR ENDED DECEMBER 31, 1996 ------------------------------------
Number Net Gain of Total Number Sales or (Loss) Description of Asset Purchases Purchases of Sales Proceeds on Sales - -------------------- --------- --------- --------- -------- --------- Vanguard Investment Contract Trust Fund 36 $3,919,351 17 $2,788,909 $ - Nations Government Money Market Fund A Shares - - 5 2,160,773 - Nations Prime Fund Primary A Shares 108 5,763,919 84 4,751,747 - Vanguard Wellington Fund - - 14 408,969 335,519
-10- Exhibit II MISSISSIPPI CHEMICAL CORPORATION THRIFT PLAN PLUS ------------------------------------------------- SCHEDULE OF ASSETS HELD FOR INVESTMENT -------------------------------------- AS OF DECEMBER 31, 1996 -----------------------
Market/Contract Description of Investment Cost Value - ------------------------------------ ----------- --------------- Vanguard Investment Contract Trust $27,181,461 $27,181,461 Metropolitan Life Insurance Company (GAC-18595B) 1,991,144 1,991,144 Nations Prime Fund 1,012,171 1,012,171 Vanguard Bond Index Fund 416,447 417,850 Vanguard Wellington Fund 5,810,837 6,971,441 Vanguard 500 Portfolio Fund 4,542,477 6,158,816 Vanguard U.S. Growth Fund 4,036,060 5,076,108 MCC Stock Fund 820,068 844,538 Participant Loan Fund 670,757 670,757
-11- MISSISSIPPI PHOSPHATES CORPORATION 401(K) RETIREMENT PLAN FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1996 AND 1995 TOGETHER WITH AUDITORS' REPORT MISSISSIPPI PHOSPHATES CORPORATION 401(K) RETIREMENT PLAN --------------------------------------------------------- FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES ----------------------------------------------- AS OF DECEMBER 31, 1996 AND 1995 -------------------------------- TOGETHER WITH AUDITORS' REPORT ------------------------------ INDEX ----- PAGE ---- REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1 FINANCIAL STATEMENTS: STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 2 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 3 NOTES TO FINANCIAL STATEMENTS 4 - 8 SUPPLEMENTAL SCHEDULES: SCHEDULE OF REPORTABLE TRANSACTIONS 9 SCHEDULE OF ASSETS HELD FOR INVESTMENT 10 Report of Independent Public Accountants ---------------------------------------- To the Retirement Plan Committee of the Mississippi Phosphates Corporation 401(k) Retirement Plan: We have audited the accompanying statements of net assets available for benefits of Mississippi Phosphates Corporation 401(k) Retirement Plan (the "Plan") as of December 31, 1996 and 1995, and the related statement of changes in net assets available for benefits for the year ended December 31, 1996. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the year ended December 31, 1996, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of reportable transactions and assets held for investment, as noted at Exhibit I and Exhibit II, respectively, are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ ARTHUR ANDERSEN LLP Memphis, Tennessee, June 12, 1997. -1- MISSISSIPPI PHOSPHATES CORPORATION 401(k) RETIREMENT PLAN --------------------------------------------------------- STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS ----------------------------------------------- AS OF DECEMBER 31 -----------------
1996 1995 ---------- ----------- Investments: - ----------- At Contract Value: Vanguard Investment Contract Trust Fund $ 845,012 $ 571,272 At Fair Value: Vanguard Bond Index Fund 95,741 71,595 Vanguard Wellington Fund 655,341 434,392 Vanguard 500 Portfolio Fund 361,081 211,751 Vanguard U. S. Growth Fund 314,468 154,115 Mississippi Chemical Corporation Stock Fund 31,920 22,789 Participant Loan Fund 6,880 12,609 ---------- ---------- Total Investments 2,310,443 1,478,523 Receivables: - ----------- Contributions Receivable 40,850 33,154 Interest Receivable 11 10,626 Other 35,307 - ---------- ---------- Total Receivables 76,168 43,780 ---------- ---------- Net Assets Available for Benefits $2,386,611 $1,522,303 ========== ==========
The accompanying notes to financial statements are an integral part of these statements. -2- MISSISSIPPI PHOSPHATES CORPORATION 401(k) RETIREMENT PLAN --------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS --------------------------------------------------------- FOR THE YEAR ENDED DECEMBER 31, 1996 ------------------------------------
Participant Directed ------------------------------------------------------------------------ Mississ- ippi Vanguard Vanguard Vanguard Vanguard Chemical Investment Bond Vanguard 500 U.S. Corpora- Partici- Contract Index Wellington Portfolio Growth tion pant Total Fund Fund Fund Fund Fund Fund Loan Fund Other ---------- ---------- --------- ---------- ---------- --------- --------- --------- -------- Additions to Net Assets Attributed to: Investment Income Net Appreciation/(Depreciation) in Fair Value of Investments $ 164,234 $ - $(1,754) $ 62,541 $ 52,378 $ 49,705 $ 1,364 $ - $ - Interest and Dividends 67,853 42,121 5,354 13,586 5,195 1,068 518 - 11 ---------- -------- ------- -------- -------- -------- ------- ------- ------- 232,087 42,121 3,600 76,127 57,573 50,773 1,882 - 11 ---------- -------- ------- -------- -------- -------- ------- ------- ------- Contributions: Participants' 456,931 160,369 15,204 110,896 59,136 76,352 5,227 - 29,747 Employer's 155,180 60,602 6,883 34,389 22,078 18,465 1,660 - 11,103 ---------- -------- ------- -------- -------- -------- ------- ------- ------- 612,111 220,971 22,087 145,285 81,214 94,817 6,887 - 40,850 ---------- -------- ------- -------- -------- -------- ------- ------- ------- Other 35,307 - - - - - - - 35,307 ---------- -------- ------- -------- -------- -------- ------- ------- ------- Total Additions 879,505 263,092 25,687 221,412 138,787 145,590 8,769 - 76,168 Deductions from Net Assets Attributed to: Benefits Paid to Participants 15,197 12,708 728 1,000 389 266 106 - - ---------- -------- ------- -------- -------- -------- ------- ------- ------- Net Increase Prior to Interfund Transfers 864,308 250,384 24,959 220,412 138,398 145,324 8,663 - 76,168 Interfund Transfers - 23,356 (813) 537 10,932 15,029 468 (5,729) (43,780) ---------- -------- ------- -------- -------- -------- ------- ------- ------- Net Increase/(Decrease) 864,308 273,740 24,146 220,949 149,330 160,353 9,131 (5,729) 32,388 Net Assets Available for Benefits: Beginning of Year 1,522,303 571,272 71,595 434,392 211,751 154,115 22,789 12,609 43,780 ---------- -------- ------- -------- -------- -------- ------- ------- ------- End of Year $2,386,611 $845,012 $95,741 $655,341 $361,081 $314,468 $31,920 $ 6,880 $76,168 ========== ======== ======= ======== ======== ======== ======= ======= =======
The accompanying notes to financial statements are an integral part of this statement. -3- MISSISSIPPI PHOSPHATES CORPORATION 401(k) RETIREMENT PLAN --------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- DECEMBER 31, 1996 ----------------- 1. DESCRIPTION OF THE PLAN: ------------------------ General The Mississippi Phosphates Corporation 401(k) Retirement Plan (the "Plan") is designed to encourage and assist employees of Mississippi Phosphates Corporation ("MPC," the "Company"), a wholly owned subsidiary of Mississippi Chemical Corporation ("MCC"), in a long-range program of savings. The Plan became effective as of January 1, 1993. The Plan was amended and restated as of August 1, 1995. The Plan is organized with the intent to comply with the provisions of Section 401(k) of the Internal Revenue Code (the "IRC"), whereby the participant can defer the amount of his compensation contributed to the Plan from his taxable income until withdrawn from the Plan. Eligibility and Contributions Employees working for the Company 1,000 hours within twelve months after their employment date are eligible to participate in the Plan after one year of service. A participant may elect to make a salary deferral contribution up to 16% of his base compensation. The Company matches 50% of the employee's contribution, but not in excess of 3% of the employee's base compensation. Contributions are subject to certain limitations set forth by IRS guidelines. Participant Accounts Each participant's deferred account is credited with the participant's contributions and the investment earnings on the account. Each participant also has a Company matching account, which is credited with the Company's contributions made on the participant's behalf and the investment earnings on the account. Vesting A participant is fully vested in the portion of his account related to his own contributions. Upon death, disability, retirement at normal retirement age or completion of 5 years of service, a participant will be fully vested in the employer's contribution. Upon termination of the Plan, all funds in each participant's account shall be fully vested and non-forfeitable. -4- 1. DESCRIPTION OF THE PLAN (Continued): ------------------------------------ Investment Options The Plan elected to utilize The Vanguard Group of Investment Companies ("Vanguard") as investment manager. Contributions are invested, at the discretion of the individual participant, in investment funds managed by Vanguard. Participants also have the option to invest in the MCC Stock Fund which invests in securities of MCC. The Plan limits the amount of participant contributions to the MCC Stock Fund to 20% of total contributions. Additionally, investment in the MCC Stock Fund is limited to 20% of a participant's total account balance. Upon enrollment in the Plan, a participant may direct employee contributions in any of the six following investment options: a. Vanguard Investment Contract Trust Fund - Funds are invested in a pool of investment contracts issued by insurance companies and banks. b. Vanguard Bond Index Fund - Funds are invested in a diversified portfolio of U.S. Government and corporate bonds and mortgage-backed securities. c. Vanguard Wellington Fund - Funds are invested in a diversified portfolio of common stocks and bonds, with common stocks expected to represent 60% to 70% of the fund's total assets. d. Vanguard 500 Portfolio Fund - Funds are invested in six different portfolios, each of which correspond to a particular stock market index. e. Vanguard U.S. Growth Fund - Funds are invested in equity securities of companies in the U.S. f. Mississippi Chemical Corporation Stock Fund - Funds are invested in common stock of MCC. Participants may request a change in their investment options by the 15th of any month to become effective at the beginning of the following month. Participant Loans Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of the participant's vested account balance. The maximum term for loans is 5 years, except for loans to purchase the participant's primary residence. The loans are secured by the balance in the participant's account and bear interest at a fixed rate for the term of the loan. The interest rate shall be the prime rate of NationsBank as of the date of the loan plus 2%. The Plan allows participants a maximum of three outstanding loans - one for the purchase of a home and two for personal reasons. -5- 1. DESCRIPTION OF THE PLAN (Continued): ------------------------------------ Payment of Benefits On termination of service due to death, disability or normal retirement date, a participant may elect to receive either a lump-sum amount equal to the value of the participant's vested account or a combination of payments, on the dates and in the amounts specified by the participant subject to a minimum distribution of $100. Administrative Expenses The operations of the Plan are administered and supervised by the MPC 401(k) Plan Committee (the "Committee"), which is appointed by the Board of Directors of MPC. Administration expenses of the Plan are paid by MPC, and were approximately $22,000 in 1996. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ------------------------------------------- Basis of Accounting The financial statements of the Plan have been prepared on the accrual basis of accounting. Substantially all information in the accompanying financial statements was derived from information certified by NationsBank, the Plan trustee. The Plan administrator has certified that there were no party in interest transactions or any obligations in default during the Plan year. Investment Valuation and Income Recognition The American Institute of Certified Public Accountants issued Statement of Position 94-4 ("SOP 94-4"), "Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined-Contribution Pension Plans," effective for fiscal years beginning after December 15, 1994. The Plan adopted SOP 94-4 during the 1995 plan year. SOP 94-4 changes the Plan's reporting for certain investment contracts from contract value to fair market value. Fully-benefit responsive investment contracts (as defined in SOP 94-4) are valued at contract value, which represents contributions made under the contract plus interest at the contract rate less funds withdrawn by the participants. The Vanguard Investment Contract Trust Fund meets the requirements of a fully benefit-responsive guaranteed investment contract ("GIC"), and consists of the following:
1996 1995 ---------- ---------- Vanguard Investment Contract Trust $836,935 $571,272 Nations Prime Fund 8,077 - -------- -------- Total $845,012 $571,272 ======== ========
-6- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): -------------------------------------------------------
1996 1995 ---------- ---------- Vanguard Investment Contract Trust Fund Average Yield 6.1% 6.3% Crediting Interest Rate 6.1% 6.3%
Contract Value on the above GIC approximates fair value. The Vanguard Investment Contract Trust Fund's (the "Trust") crediting rate resets for alternative contracts held by the Trust on a calendar quarter basis after the initial rate for the contract is established. The reset calculation considers the book value of the contract, the market value and yield of the underlying investment, the duration of the investment, management and contract fees. The crediting rates of the alternative contracts have a contractual floor that does not fall below zero. The Trust has no valuation reserves. The Plan's investments are stated at fair value except for the GIC, which is valued at contract value. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. The MCC stock is valued at its quoted market price. Participant loans are valued at cost which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Investment income is recorded on an accrual basis. Benefit Payments Benefits are recorded when paid. Benefit payments and withdrawals are made by the Plan trustee at the direction of the Committee. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 3. FORFEITURES: ------------ Forfeitures represent the non-vested portions of the accounts of participants who have terminated or incurred a break in service during the Plan year. Forfeitures are used to reduce employer contributions. -7- 4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500: ---------------------------------------------------- The following is a reconciliation of net assets available for benefits between the financial statements and Form 5500:
December 31, ----------------------- 1996 1995 ---------- ---------- Net assets available for benefits per the financial statements $2,386,611 $1,522,303 Contributions receivable per the financial statements not reflected in Form 5500 (15,573) (10,336) Other liabilities per Form 5500 not reflected in the financial statements - (2,551) Other receivable per financial statements not reflected in Form 5500 (35,307) - ---------- ---------- Net assets available for benefits per Form 5500 $2,335,731 $1,509,416 ========== ==========
6. TAX STATUS: ----------- The IRS has determined and informed the Company by a letter dated September 29, 1993, that the Plan is designed in accordance with applicable sections of the IRC The Plan has been amended since receiving the determination letter. However, the Plan's administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 7. SUBSEQUENT EVENT: ----------------- Effective May 31, 1997, the Committee voted to merge the Plan into the MCC Thrift Plan Plus. -8- Exhibit I MISSISSIPPI PHOSPHATES CORPORATION 401(k) RETIREMENT PLAN --------------------------------------------------------- SCHEDULE OF REPORTABLE TRANSACTIONS ----------------------------------- FOR THE YEAR ENDED DECEMBER 31, 1996 ------------------------------------
Number Net Gain of Total Number Sales or (Loss) Description of Asset Purchases Purchases of Sales Proceeds on Sales - --------------------------- --------- --------- -------- -------- -------- Nations Prime Fund Primary A shares 54 $153,370 34 $145,293 - Vanguard Investment Contract Trust Fund 36 289,088 - - - Vanguard 500 Portfolio Fund 34 111,909 - - - Vanguard Wellington fund 34 257,269 - - - Vanguard U.S. Growth Fund 32 127,240 - - -
-9- Exhibit II MISSISSIPPI PHOSPHATES CORPORATION 401(k) RETIREMENT PLAN --------------------------------------------------------- SCHEDULE OF ASSETS HELD FOR INVESTMENT -------------------------------------- AS OF DECEMBER 31, 1996 -----------------------
Market/Contract Description of Investment Cost Value - --------------------------------------- -------- --------------- Vanguard Investment Contract Trust Fund $845,012 $845,012 Vanguard Bond Index Fund 95,088 95,741 Vanguard Wellington Fund 570,055 655,341 Vanguard 500 Portfolio Fund 270,196 361,081 Vanguard U.S. Growth Fund 253,594 314,468 Mississippi Chemical Corporation Stock Fund 29,334 31,290 Participant Loan Fund 6,880 6,880
-10- EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1996 TOGETHER WITH AUDITORS' REPORT EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES ----------------------------------------------------------- FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES ----------------------------------------------- AS OF DECEMBER 31, 1996 ----------------------- TOGETHER WITH AUDITORS' REPORT ------------------------------ INDEX ----- PAGE ---- REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1 FINANCIAL STATEMENTS: STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS 2 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 3 NOTES TO FINANCIAL STATEMENTS 4 - 8 SUPPLEMENTAL SCHEDULES: SCHEDULE OF REPORTABLE TRANSACTIONS 9 SCHEDULE OF ASSETS HELD FOR INVESTMENT 10 Report of Independent Public Accountants ---------------------------------------- To the Retirement Plan Committee of the Eddy Potash, Inc. 401(k) Plan for Bargaining Unit Employees: We have audited the accompanying statement of net assets available for benefits of Eddy Potash, Inc. 401(k) Plan for Bargaining Unit Employees (the "Plan") as of December 31, 1996, and the related statement of changes in net assets available for benefits for the period from Plan inception (August 16, 1996) to December 31, 1996. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996, and the changes in net assets available for benefits for the period from Plan inception (August 16, 1996) to December 31, 1996, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of reportable transactions and assets held for investment, as noted at Exhibit I and Exhibit II, respectively, are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ ARTHUR ANDERSEN LLP Memphis, Tennessee, June 12, 1997. -1- EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES ----------------------------------------------------------- STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS ---------------------------------------------- AS OF DECEMBER 31 -----------------
1996 -------- Investments: - ----------- Investments at Contract Value: Vanguard Investment Contract Trust Fund $318,309 Investments at Fair Value : Vanguard Bond Index Fund 31,428 Vanguard Wellington Fund 108,821 Vanguard 500 Portfolio Fund 316,221 Vanguard U. S. Growth Fund 43,584 Mississippi Chemical Corporation Stock Fund 61,680 -------- Total Investments 880,043 Receivables: - ----------- Contributions Receivable 31,738 Interest Receivable 2,812 Securities Sold not Settled 1,548 -------- Total Receivables 36,098 -------- Payables: - -------- Securities Purchased not Settled 4,232 -------- Net Assets Available for Benefits $911,909 ========
The accompanying notes to financial statements are an integral part of this statement. -2- EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES ----------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS --------------------------------------------------------- FOR THE PERIOD FROM PLAN INCEPTION (AUGUST 16, 1996) TO DECEMBER 31, 1996 -------------------------------------------------------------------------
Participant Directed ------------------------------------------------------------------- Vanguard Vanguard Vanguard Vanguard Mississippi Investment Bond Vanguard 500 U.S. Chemical Contract Index Wellington Portfolio Growth Corporation Total Fund Fund Fund Fund Fund Stock Fund Other -------- ---------- ------- -------- --------- ------- ----------- ------- Additions to Net Assets Attributable to: Investment Income Net Appreciation (Depreciation) in Fair Value of Investments $ (2,117) $ - $ (62) $ (1,064) $ 1,721 $(2,336) $ (376) $ - Interest and Dividends 10,556 1,128 143 2,352 1,016 3,050 55 2,812 -------- -------- ------- -------- -------- ------- ------- ------- 8,439 1,128 81 1,288 2,737 714 (321) 2,812 -------- -------- ------- -------- -------- ------- ------- ------- Contributions: Participants' 860,668 304,524 29,613 101,704 303,853 39,073 59,701 22,200 Employer's 45,755 12,815 1,734 5,883 9,631 3,797 2,357 9,538 -------- -------- ------- -------- -------- ------- ------- ------- 906,423 317,339 31,347 107,587 313,484 42,870 62,058 31,738 -------- -------- ------- -------- -------- ------- ------- ------- Other 1,548 - - - - - - 1,548 -------- -------- ------- -------- -------- ------- ------- ------- Total Additions 916,410 318,467 31,428 108,875 316,221 43,584 61,737 36,098 Deductions from Net Assets Attributable to: Benefits Paid to Participants 269 158 - 54 - - 57 - Other 4,232 - - - - - - 4,232 -------- -------- ------- -------- -------- ------- ------- ------- 4,501 158 - 54 - - 57 4,232 -------- -------- ------- -------- -------- ------- ------- ------- Net Increase 911,909 318,309 31,428 108,821 316,221 43,584 61,680 31,866 Net Assets Available for Benefits: Beginning of Year - - - - - - - - -------- -------- ------- -------- -------- ------- ------- ------- End of Year $911,909 $318,309 $31,428 $108,821 $316,221 $43,584 $61,680 $31,866 ======== ======== ======= ======== ======== ======= ======= =======
The accompanying notes to financial statements are an integral part of this statement. -3- EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES ----------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- DECEMBER 31, 1996 ----------------- 1. DESCRIPTION OF THE PLAN: ------------------------ General The Eddy Potash, Inc. 401(k) Plan for Bargaining Unit Employees (the "Plan") is designed to encourage and assist qualified employees of Eddy Potash, Inc. (the "Company"), a wholly-owned subsidiary of Mississippi Chemical Corporation ("MCC"), in a long-range program of savings. The Plan was established pursuant to the acquisition of the Company by MCC. In conjunction with the formation of the Plan, participants were allowed to transfer their historical cumulative account balances from a prior plan of the Company. The account balances were transferred at fair value effective with the Plan formation, on August 16, 1996. The Plan is organized with the intent to comply with the provisions of Section 401(k) of the Internal Revenue Code (the "IRC"), whereby the participant can defer the amount of his compensation contributed to the Plan from his taxable income until withdrawn from the Plan. Eligibility and Contributions Collective bargaining unit employees working for the Company one hour are eligible to participate in the Plan at the beginning of the first month following 90 days of employment with the Company. An eligible employee may elect to make a salary deferral contribution up to 17.6% of base compensation. The Company matches 25% of the participant's contribution, but not in excess of 2% of the participant's base compensation. The Company also makes qualified non-elective contributions in the amount of 1% of the participant's base compensation for the year. Contributions are subject to certain limitations set forth by IRS guidelines. Included in employee contributions in the accompanying statement of changes in net assets available for benefits are participant account balances transferred from a prior plan of the Company, as discussed above. The amounts transferred, by fund balance, were as follows:
Vanguard Investment Contract Trust Fund $284,663 Vanguard Bond Index Fund 26,427 Vanguard Wellington Fund 88,986 Vanguard 500 Portfolio Fund 280,022 Vanguard U.S. Growth Fund 30,411 MCC Stock Fund 54,883 -------- Total $765,392 ========
-4- 1. DESCRIPTION OF THE PLAN (Continued): ------------------------------------ Participant Accounts Each participant's deferred account is credited with the participant's contributions and the investment earnings on the account. Each participant also has a Company matching account, which is credited with the Company's contributions made on the participant's behalf, and the investment earnings on the account. Vesting A participant is fully vested at all times in the portion of his account related to his own contributions, the Company's matching contributions and the Company's non-elective contributions. Investment Options The Plan elected to utilize The Vanguard Group of Investment Companies ("Vanguard") as its investment manager. Contributions are invested, at the discretion of the individual participant, in investment funds managed by Vanguard. Participants also have the option to invest in the MCC Stock Fund which invests in securities of MCC. The Plan limits the amount of participant contributions to the MCC Stock Fund to 20% of total contributions. Additionally, investment in the MCC Stock Fund is limited to 20% of a participant's total account balance. Upon enrollment in the Plan, a participant may direct employee contributions in any of the six following investment options: a. Vanguard Investment Contract Trust Fund - Funds are invested in a pool of investment contracts issued by insurance companies and banks. b. Vanguard Bond Index Fund - Funds are invested in a diversified portfolio of U.S. Government and corporate bonds and mortgage-backed securities. c. Vanguard Wellington Fund - Funds are invested in a diversified portfolio of common stocks and bonds, with common stocks expected to represent 60% to 70% of the fund's total assets. d. Vanguard 500 Portfolio Fund - Funds are invested in six different portfolios, each of which correspond to a particular stock market index. e. Vanguard U.S. Growth Fund - Funds are invested in equity securities of companies in the U.S. f. Mississippi Chemical Corporation Stock Fund - Funds are invested in common stock of MCC. -5- 1. DESCRIPTION OF THE PLAN (Continued): ------------------------------------ Participants may request a change to their investment options by the 15th of any month to become effective at the beginning of the following month. Participant Loans Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of the participant's vested account balance. The maximum term for loans is 5 years, except for loans to purchase the participant's primary residence. The loans are secured by the balance in the participant's account and bear interest at a fixed rate for the term of the loan. The interest rate shall be the prime rate of NationsBank as of the date of the loan plus 2%. The Plan allows participants a maximum of three outstanding loans - one for the purchase of a home and two for personal reasons. Payment of Benefits On termination of service due to death, disability or normal retirement date, a participant may elect to receive either a lump-sum amount equal to the value of the participant's vested account or a combination of payments, on the dates and in the amounts specified by the participant subject to a minimum distribution of $100. Administration The operations of the Plan are administered and supervised by the Eddy Potash, Inc. 401(k) Plan for Bargaining Unit Employees Committee, which is appointed by the Board of Directors of the Company. Administration expenses of the Plan are paid by the Company, and were approximately $5,000 in 1996. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ------------------------------------------- Basis of Accounting The financial statements of the Plan have been prepared on the accrual basis of accounting. Substantially all information in the accompanying financial statements was derived from information certified by NationsBank, the Plan trustee. The Plan administrator has certified that there were no party in interest transactions or any obligations or leases in default during the Plan year. Investment Valuation and Income Recognition The American Institute of Certified Public Accountants issued Statement of Position 94-4 ("SOP 94-4"), "Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined-Contribution Pension Plans," effective for fiscal years beginning after December 15, 1994. SOP 94-4 requires the Plan to report certain investment contracts at fair market value. Fully-benefit responsive investment contracts (as defined in SOP 94-4) are valued at contract value, which represents contributions made under the contract plus interest at the contract rate less funds withdrawn by the participants. -6- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued): ------------------------------------------------------- The Vanguard Investment Contract Trust Fund meets the requirements of a fully benefit-responsive guaranteed investment contract ("GIC"), and consists of the following:
1996 -------- Vanguard Investment Contract Trust $317,085 Nations Prime Fund 1,224 -------- Total $318,309 ========
1996 ---- Vanguard Investment Contract Trust Fund Average Yield 6.1% Crediting Interest Rate 6.1% Contract value on the above GIC approximates fair value. The Vanguard Investment Contract Trust Fund's (the "Trust") crediting rate resets for alternative contracts held by the Trust on a calendar quarter basis after the initial rate for the contract is established. The reset calculation considers the book value of the contract, the market value and yield of the underlying investment, the duration of the investment, management and contract fees. The crediting rates of the alternative contracts have a contractual floor that does not fall below zero. The Trust has no valuation reserves. The Plan's investments are stated at fair value except for the GIC, which is valued at contract value. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. The MCC stock is valued at its quoted market price. Participant loans are valued at cost which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Investment income is recorded on an accrual basis. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the amounts of income and expense during the reporting period. Actual results could differ from those estimates. -7- 3. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500: ---------------------------------------------------- The following is a reconciliation of net assets available for benefits between the financial statements and Form 5500:
December 31, 1996 ------------ Net assets available for benefits per the financial statements $911,909 Contributions receivable per the financial statements not reflected in Form 5500 (12,356) Other receivable per Form 5500 not reflected in the financial statements 7,599 -------- Net assets available for benefits per Form 5500 $907,152 ======== 4. TAX STATUS: ----------- The IRS has determined and informed the Company by a letter dated March 24, 1997, that the Plan is designed in accordance with applicable sections of the IRC. -8- Exhibit I EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES ----------------------------------------------------------- SCHEDULE OF REPORTABLE TRANSACTIONS ----------------------------------- FOR THE PERIOD FROM PLAN INCEPTION (AUGUST 16, 1996) TO DECEMBER 31, 1996 -------------------------------------------------------------------------
Number Net Gain of Total Number Sales or (Loss) Description of Asset Purchases Purchases of Sales Proceeds on Sales - ------------------------ --------- --------- -------- -------- --------- Vanguard Investment Contract Fund 16 $324,035 1 $ 4,536 $(2,414) Nations Prime Fund Primary A Share 72 835,380 64 834,156 - Vanguard Bond Index Fund 17 31,490 0 - - Vanguard Wellington Fund 17 110,176 1 289 (2) Vanguard 500 Portfolio Fund 15 317,449 1 3,024 75 Vanguard U.S. Growth Fund 16 45,919 0 - - Mississippi Chemical Corporation Stock Fund 14 63,674 2 1,598 (20)
-9- Exhibit II EDDY POTASH, INC. 401(k) PLAN FOR BARGAINING UNIT EMPLOYEES ----------------------------------------------------------- SCHEDULE OF ASSETS HELD FOR INVESTMENT -------------------------------------- AS OF DECEMBER 31, 1996 -----------------------
Market/Contract Description of Investment Cost Value - ----------------------------- -------- --------------- Vanguard Investment Contract Fund $318,309 $318,309 Vanguard Bond Index Fund 31,490 31,428 Vanguard Wellington Fund 109,885 108,821 Vanguard 500 Portfolio Fund 314,500 316,221 Vanguard U.S. Growth Fund 45,919 43,584 Mississippi Chemical Corporation Stock Fund 62,056 61,680
-10- EX-23.1 2 CONSENT OF INDEPENDANT PUBLIC ACCOUNTANTS Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS ----------------------------------------- As independent public accountants, we hereby consent to the incorporation of our report dated June 12, 1997, included in this Form 11-K for the Plan year ended December 31, 1996, into Mississippi Chemical Corporation's previously filed Registration Statement File No. 33-59577. It should be noted that we have not audited any financial statements of the Plan subsequent to December 31, 1996 or performed any audit procedures subsequent to the date of our report. /s/ ARTHUR ANDERSEN LLP Memphis, Tennessee, June 24, 1997. Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS ----------------------------------------- As independent public accountants, we hereby consent to the incorporation of our report dated June 12, 1997, included in this Form 11-K for the Plan year ended December 31, 1996, into Mississippi Chemical Corporation's previously filed Registration Statement File No. 33-59577. It should be noted that we have not audited any financial statements of the Plan subsequent to December 31, 1996 or performed any audit procedures subsequent to the date of our report. /s/ ARTHUR ANDERSEN LLP Memphis, Tennessee, June 24, 1997. EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS ----------------------------------------- As independent public accountants, we hereby consent to the incorporation of our report dated June 12, 1997, included in this Form 11-K for the period from Plan inception (August 16, 1996) to December 31, 1996, into Mississippi Chemical Corporation's previously filed Registration Statement File No. 333-13069. It should be noted that we have not audited any financial statements of the Plan subsequent to December 31, 1996 or performed any audit procedures subsequent to the date of our report. /s/ ARTHUR ANDERSEN LLP Memphis, Tennessee, June 24, 1997. -----END PRIVACY-ENHANCED MESSAGE-----