SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED, EFFECTIVE
OCTOBER 7, 1996)
For the Fiscal Year Ended December 31, 2002.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _______ to _______
Commission File Number 333-53139
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A. Full title of the Plan and the address of the
Plan, if different from that of the issuer named below:
MILLENNIUM CHEMICALS INC.
SALARY AND BONUS DEFERRAL PLAN
(the "Plan")
B. Name of the issuer of the securities held
pursuant to the Plan and the address of its principal
executive office:
Millennium Chemicals Inc.
230 Half Mile Road
Red Bank, New Jersey 07701
Millennium Chemicals Inc.
Salary and Bonus Deferral Plan
December 31, 2002 and 2001
Millennium Chemicals Inc.
Salary and Bonus Deferral Plan
Table of Contents to the Financial Statements
Page
Financial Statements:
Statements of Financial Condition ....................... 1
Statements of Income and Changes in Plan Equity.......... 2
Notes to Financial Statements............................ 3
Millennium Chemicals Inc.
Salary and Bonus Deferral Plan
Statements of Financial Condition
December 31,
---------------------------
2002 2001
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Assets
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Investments
Investment in Company common stock,
at fair value (Note 4) $ 4,194,193 $ 5,824,837
----------- ------------
Total investments 4,194,193 5,824,837
----------- ------------
Receivables
Employee contributions 27,158 63,132
Employer contributions 1,222 2,841
----------- ------------
Total receivables 28,380 65,973
----------- ------------
Cash 832 9,349
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Total Assets 4,223,405 5,900,159
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Liabilities
-----------
Accounts payable (832) (2,296)
------------ -------------
Total Liabilities (832) (2,296)
------------ -------------
------------ -------------
Plan Equity $ 4,222,573 $ 5,897,863
============ =============
The accompanying notes are an integral part of these financial statements.
1
Millennium Chemicals Inc.
Salary and Bonus Deferral Plan
Statements of Income and Changes in Plan Equity
For the Years Ended December 31, 2002 and 2001
December 31,
----------------------------
2002 2001
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Additions
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Dividends and interest $ 232,995 $ 250,766
Participant contributions 33,845 275,571
Employer contributions 1,523 12,393
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Total additions 268,363 538,730
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Deductions
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Realized loss $ 246,099 $ 160,195
Unrealized depreciation 1,113,880 2,407,999
Distributions to participants 583,674 1,462,445
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Total deductions 1,943,653 4,030,639
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Net decrease during year (1,675,290) (3,491,909)
Plan equity, beginning of year 5,897,863 9,389,772
------------- ------------
Plan equity, end of year $ 4,222,573 $ 5,897,863
============= ============
The accompanying notes are an integral part of these financial statements.
2
Millennium Chemicals Inc.
Salary and Deferral Plan
Notes to Financial Statements
---------------------------------------------------------------
1.Plan Description
----------------
On October 8, 1996, Millennium Chemicals Inc. (the "Company")
adopted the Millennium Chemicals Inc. Salary and Bonus
Deferral Plan (the "Plan") for the benefit of a select group
of management and highly compensated employees. The Plan is
intended to be an unfunded plan of deferred compensation and
is not intended to be covered by ERISA.
The purpose of the Plan is to permit eligible employees to
defer from 5% to 100% of their salary and up to 100% of their
bonus (both in 5% increments). The deferred amount is
invested in common stock of the Company. Participants are
immediately vested in their contributions and earnings
thereon, subject to applicable withholding taxes. The Company
matches 4.5% of employee contributions. A participant is
immediately vested in Company contributions and earnings.
The Plan is administered by a committee of three or more
employees of the Company appointed by the Board of Directors
(the "Committee"). Merrill Lynch Trust Company (the
"Trustee") acts as trustee and recordkeeper for the Plan.
Participation in the Plan is limited to eligible individuals,
other than nonresident aliens of the United States receiving
no United States source income within the meaning of sections
861(a)(3) or 911(d)(2) of the Internal Revenue Code,
designated by the Committee, who are employees of a unit of
the Company (or of one of its subsidiaries) which has adopted
the Plan.
Distributions
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Deferred accounts will be paid in shares of common stock to
the participant or his or her beneficiary, except that awards
deferred pursuant to special elections will continue to be
subject to the forfeiture provisions of the incentive plan
under which the award was granted. Deferred amounts generally
will be paid in the form of (i) a lump sum payment, (ii) in
five approximately equal annual installments or (iii) in ten
approximately equal annual installments, as elected by the
participant at the time of the deferred salary election,
deferred bonus election or special election; provided,
however, that payments shall only be in a single lump sum in
the case that payment commences (i) while the participant is
still an employee of the Company or of a subsidiary of the
Company or (ii) due to termination for cause.
If the participant suffers permanent or total disability,
dies, or terminates employment prior to the deferral date,
then, except in the case of termination for cause, payment
shall be made (or begin to be made) following the occurrence
of the event making payment necessary or, if so elected in
the deferred salary election and/or deferred bonus election,
on January 31st of the calendar year immediately following
such event.
The Company reserves the right to amend, modify, or terminate
the Plan at any time. No amendment to or termination of the
Plan will impair any rights to benefits that have accrued.
Upon a Change of Control (as defined by Plan documents), the
amount of a participant's Deferred Accounts shall be
distributed to such participant as soon as practicable
thereafter and any Deferred Salary Election and/or Deferred
Bonus Election shall terminate and be null and void following
such Change in Control.
Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
3
2.Summary of Significant Accounting Policies
------------------------------------------
Method of Accounting
--------------------
The Plan's financial statements are prepared on the accrual
basis of accounting, except for benefit payments, which are
recorded when paid. The preparation of the Plan financial
statements in conformity with generally accepted accounting
principles requires the Company to make estimates and
assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could
differ from these estimates.
Investment Valuation and Income Recognition
-------------------------------------------
The common stock of the Company is valued at fair value which
is determined based on quoted market prices.
Dividend income is accrued on the ex-dividend date.
Purchases and sales of common stock and realized gains and
losses are recorded on a trade-date basis.
Payment of Benefits
-------------------
Distributions to participants are recorded upon actual
payment of benefits. There were no distributions of the
Company's common stock approved and payable at December 31,
2002 and December 31, 2001.
3.Administration of Plan Assets
-----------------------------
The Plan's assets, which consist principally of the Company's
common stock, are held by the Trustee of the Plan.
Contributions are held and managed by the Trustee, which
invests cash received and dividend income and makes
distributions to the participants.
Certain administrative functions are performed by officers or
employees of the Company or its subsidiaries. No such
officer or employee receives compensation from the Plan.
Administrative expenses for the Trustee's fees are paid by
the Company.
4
4. Investments
-----------
The Plan's investments were:
December 31,
2002 2001
------------ -----------
Number of Shares of Company Stock 440,567 462,289
------------ -----------
Historical Cost $ 8,979,133 $ 9,743,326
------------ -----------
Market $ 4,194,193 $ 6,623,640
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5. Subsequent Events
-----------------
Effective January 1, 2003, no future salary or bonus
deferrals shall be permitted under this Plan.
On or after September 1, 2003, Fidelity Management Trust
Company will become the recordkeeper and trustee of the Plan.
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the Plan)
have duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
MILLENNIUM CHEMICALS INC. SALARY AND
BONUS DEFERRAL PLAN
Date: June 27, 2003 By: /s/ C. William Carmean
------------------------------
C. William Carmean
Member, Benefits Administration
Committee