<PAGE>
<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Giant Industries, Inc.
(Name of Registrant as Specified In Its Charter)
----------------------------
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
........................................................
2) Aggregate number of securities to which transaction
applies:
........................................................
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
........................................................
4) Proposed maximum aggregate value of transaction:
........................................................
5) Total fee paid:
........................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
........................................................
2) Form, Schedule or Registration Statement No.:
........................................................
3) Filing Party:
........................................................
4) Date Filed:
........................................................<PAGE>
<PAGE>
GIANT INDUSTRIES, INC. LOGO
23733 NORTH SCOTTSDALE ROAD
SCOTTSDALE, ARIZONA 85255
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Giant Industries, Inc.:
The Annual Meeting of Stockholders of Giant Industries, Inc. (the
"Company") will be held at the Radisson Resort Scottsdale, 7171 North
Scottsdale Road, Scottsdale, Arizona 85253, on Thursday, May 8, 1997, at
10:00 a.m., for the following purposes:
1. To elect two directors to Class II of the Board of Directors in
accordance with Article FIFTH of the Restated Certificate of
Incorporation;
2. To consider and act upon a proposal to ratify the appointment by
the Board of Directors of Deloitte & Touche LLP as independent auditors for
the Company and its subsidiaries for the year ending December 31, 1997; and
3. To transact such other business as may properly be brought before
the meeting or any postponement or adjournment thereof.
Only holders of record of the Company's common stock at the close of
business on March 20, 1997, will be entitled to notice of, and to vote at,
such meeting. A list of stockholders entitled to vote at the meeting will
be open for inspection at the Company's corporate headquarters for any
purpose germane to the meeting during ordinary business hours for ten days
prior to the date of the meeting.
Your attention is directed to the accompanying Proxy Statement. It is
important that your shares be represented and voted whether or not you
expect to attend the meeting in person. Therefore, please date, sign and
complete the enclosed proxy and return it without delay in the enclosed
envelope, which requires no postage stamp if mailed in the United States.
By Order of the Board of Directors
/s/ James E. Acridge
----------------------------------
James E. Acridge
Chairman of the Board of Directors
Scottsdale, Arizona
March 27, 1997
<PAGE>
<PAGE>
GIANT INDUSTRIES, INC.
23733 NORTH SCOTTSDALE ROAD
SCOTTSDALE, ARIZONA 85255
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Giant Industries, Inc., a Delaware corporation
(the "Company"), of proxies for use at the Annual Meeting of Stockholders
to be held on May 8, 1997, at 10:00 a.m., or at any postponement or
adjournment thereof. The Annual Meeting will be held at the Radisson
Resort Scottsdale, 7171 North Scottsdale Road, Scottsdale, Arizona 85253.
This Proxy Statement and the accompanying form of proxy are being
first mailed to stockholders on or about March 27, 1997. The stockholder
giving the proxy may revoke it at any time before it is exercised at the
meeting by: (a) delivering to the Secretary of the Company a written
instrument of revocation bearing a date later than the date of the proxy;
or (b) duly executing and delivering to the Secretary a subsequent proxy
relating to the same shares; or (c) attending the meeting and voting in
person (attendance at the meeting will not in and of itself constitute
revocation of a proxy). Any proxy which is not revoked will be voted at the
Annual Meeting in accordance with the stockholder's instructions. If you
return a properly signed and dated proxy card but do not mark any choices
on one or more items, your shares will be voted in accordance with the
recommendations of the Board of Directors as to such items. The proxy card
gives authority to the proxies to vote your shares in their discretion on
any other matter properly presented at the Annual Meeting.
Proxies will be solicited from the Company's stockholders by mail. The
Company will pay all expenses in connection with the solicitation,
including postage, printing and handling, and the expenses incurred by
brokers, custodians, nominees and fiduciaries in forwarding proxy material
to beneficial owners. It is possible that directors, officers and regular
employees of the Company may make further solicitation personally or by
telephone or mail.
Only holders (the "Stockholders") of the Company's common stock, par
value $0.01 per share (the "Company Common Stock"), at the close of
business on March 20, 1997 (the "Record Date"), are entitled to notice of,
and to vote at, the Annual Meeting and any postponement or adjournment
thereof. On the Record Date there were 11,097,867 shares of Company Common
Stock outstanding. Each share of Company Common Stock is entitled to one
vote on each matter to be considered at the Annual Meeting. An affirmative
vote of a majority of the shares of Company Common Stock represented and
entitled to vote at the Annual Meeting is required for approval of all
items being submitted to the Stockholders for their consideration. With
regard to the election of directors, votes may be cast in favor of or
withheld from each nominee. Votes that are withheld will have the effect
of a negative vote. Abstentions may be specified on all proposals except
the election of directors. Abstentions are included in the determination
of the number of shares represented for a quorum. Abstentions will have
the effect of a negative vote on a proposal. Broker non-votes are not
counted for purposes of determining whether a quorum is present or whether
a proposal has been approved. Proxies will be tabulated by the Company's
transfer agent. The Company shall, in advance of the Annual Meeting,
appoint one or more Inspectors of Election to count all votes and ballots
at the Annual Meeting and make a written report thereof.
The Annual Report of the Company for the year ended December 31, 1996,
is being mailed to Stockholders with this Proxy Statement.
<PAGE>
<PAGE>
ELECTION OF DIRECTORS
NOMINEES
The Board of Directors of the Company consists of six directors. In
accordance with the terms of the Company's Restated Certificate of
Incorporation, the directors are divided into three classes. There are
currently two Class III directors, two Class II directors and two Class I
directors. The term of office of the two Class II directors expires at the
1997 Annual Meeting of Stockholders.
The Board of Directors proposes that Mr. Fredric L. Holliger and Mr.
Harry S. Howard, Jr. be elected to serve as the Class II directors for a
term of three years until the Annual Meeting of Stockholders in 2000 and
until their successors are elected and qualified. Both of these nominees
are currently serving as Class II directors, and a brief description of the
business experience of each nominee for the last five years is set forth
below. UNLESS OTHERWISE INSTRUCTED, THE PERSONS NAMED IN THE ACCOMPANYING
PROXY WILL VOTE FOR THE ELECTION OF SUCH NOMINEES. Both nominees have
consented to being named herein and have indicated their intention to serve
if elected. If for any reason either nominee should become unable to serve
as a director, the accompanying proxy may be voted for the election of a
substitute nominee designated by the Board of Directors.
NOMINEE AGE, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
- ------- -------------------------------------------------
Fredric L. Holliger Fredric L. Holliger, age 49, has served as a director,
Executive Vice President and Chief Operating
Officer of the Company since October 1989. Mr.
Holliger joined Giant Industries Arizona, Inc.
( Giant ), the Company s principal wholly-owned
subsidiary, as Senior Vice President and President
of the Giant refining division in February 1989 and
continues to serve as a director, Executive Vice
President and Chief Operating Officer of Giant.
Since May 1993, Mr. Holliger has also served as a
director, President and Chief Executive Officer of
Giant Exploration and Production Company ( Giant E&P ),
which was the Company s other principal wholly-owned
subsidiary until the Company sold substantially all
of its oil and gas assets in August 1996.
Harry S. Howard, Jr. Harry S. Howard, Jr., age 79, has served as a
director of the Company since January 1992. He also
serves as Chairman of the Audit Committee and as a
member of the Compensation Committee. He is the
retired President and Chief Operating Officer of
American Can Company.
OTHER DIRECTORS AND EXECUTIVE OFFICERS
The remaining directors and executive officers of the
Company, as of January 1, 1997, are listed below:
NAME AGE POSITION CLASS(1)
- ---- --- ------------------------ --------
James E. Acridge 56 Chairman of the Board, III
President and Chief 1998
Executive Officer
Anthony J. Bernitsky 67 Director I
1999
F. Michael Geddes 57 Director I
1999
Richard T. Kalen, Jr. 54 Director III
1998
A. Wayne Davenport 48 Vice President and
Chief Financial Officer
Morgan Gust 49 Vice President and General
Counsel, Vice President
Administration and Secretary
_______________
(1) Each director's term of office expires in the year set forth
opposite his name above. Directors elected at the Annual
Meeting of Stockholders shall be elected for a term of three
years and will hold office until their successors have been
elected and qualified. Each officer serves until his
successor is chosen and qualified or until his earlier
resignation or removal.
James E. Acridge has served as Chairman of the Board of Directors,
President and Chief Executive Officer of the Company since October 1989.
Mr. Acridge also serves as Chairman of the Nominating Committee. Mr.
Acridge started Giant in 1969 and has served continuously as its Chairman
of the Board of Directors, President and Chief Executive Officer. Mr.
Acridge is also Chairman of the Board of Directors of Giant E&P.
Anthony J. Bernitsky has served as a director of the Company since
August 1996. Mr. Bernitsky is co-owner of Sandia Oil Company ( Sandia ), a
wholesale and retail gasoline business with service stations and
convenience stores located in New Mexico and on the Navajo Indian
Reservation. Mr. Bernitsky started Sandia in 1982 and has served
continuously on its Board of Directors and as its President. Mr. Bernitsky
is also a director of the New Mexico Petroleum Marketers Association.
F. Michael Geddes has served as a director of the Company since
September 1991 and is a member of the Audit Committee. He has been the
Chairman and President of Geddes and Company, a private investment and
consulting firm, since October 1978. He also serves as Chairman and Chief
Executive Officer of Coe & Van Loo Consultants, Inc., an engineering and
land planning firm; CVL Consultants, Inc., a corporation engaged in
engineering and land planning; GS&B Holding, Inc., a holding company with
ownership interests in a financial futures brokerage firm; Eagle Western
Properties Company, a firm involved in real estate management, development
and brokerage; and Athearn, Inc., a manufacturer of HO scale model trains.
Richard T. Kalen, Jr. has served as a director of the Company since
December 1989. Mr. Kalen also serves as Chairman of the Compensation
Committee and as a member of the Audit and Nominating Committees. He has
been the President and owner of Kalen & Associates, an executive search and
consulting firm, since April 1988.
A. Wayne Davenport served as Vice President and Corporate Controller
commencing May 1994 and, since May 1995, serves as Vice President and Chief
Financial Officer of the Company. He also serves in such positions for
Giant and Giant E&P. Prior to joining the Company in March 1994, Mr.
Davenport was an investor in crude oil and natural gas properties and a
consultant to the industry. From February 1987 to September 1992, he
served in various positions, the last being Executive Vice President and
Chief Financial Officer, with Hondo Oil & Gas Company, a company engaged in
refining, marketing, exploration and production.
Morgan Gust has served as Secretary and General Counsel of the Company
since August 1990 and as Vice President since September 1990. In addition,
he has served as Vice President Administration since October 1992. He also
serves in such capacities and as a director of Giant and Giant E&P.
BOARD MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors held seven meetings during 1996. The Board has
established an Audit Committee, a Compensation Committee and a Nominating
Committee.
The Audit Committee of the Board of Directors is comprised of Messrs.
Howard (Chairman), Geddes and Kalen. The Audit Committee, among other
functions: (i) reviews and recommends the engagement each year of the
Company's independent auditors; (ii) consults with independent auditors on
the adequacy of the Company's internal controls; (iii) reviews with the
independent auditors the auditors' reports on the Company's financial
statements and submits such reports to the Board of Directors with the
Committee's recommendations and comments; and (iv) takes such other steps
as the Committee deems necessary to carry out the normal functions of an
audit committee. The Audit Committee held three meetings during 1996.
The Compensation Committee of the Board of Directors is comprised of
Messrs. Kalen (Chairman) and Howard. The Compensation Committee determines
the compensation of the Chief Executive Officer and Chief Operating
Officer. It reviews, modifies if necessary and approves recommendations by
the Chief Executive Officer as to the compensation of other officers and
key personnel. It also establishes the Company's annual bonus plans for
management each year. In addition, the Compensation Committee oversees the
administration of the Company s 1989 Stock Incentive Plan, as amended,
( Stock Incentive Plan ) but, to the extent required under Section 16 of
the Securities Exchange Act of 1934, as amended, ( Exchange Act ), any
transaction between the Company or the Plan and an executive officer of the
Company that involves a grant, award or other acquisition of the Company s
equity securities is approved by the Board of Directors. The Compensation
Committee held two meetings during 1996.
The Nominating Committee of the Board of Directors, comprised of
Messrs. Acridge (Chairman) and Kalen, studies and makes recommendations
concerning the composition of the Board of Directors and the committees
thereof, reviews the qualifications of potential candidates for director of
the Company and recommends to the Board nominees for election as directors.
The Nominating Committee will also consider as nominees for director
persons recommended by the stockholders. Such recommendations should be
sent to the Secretary of the Company not later than 120 days preceding the
next Annual Meeting of Stockholders at which directors are to be elected
and should include the address of the person and a brief description of his
or her qualifications. The Nominating Committee did not meet during 1996,
and its functions were performed as a part of two of the meetings of the
full Board of Directors.
During 1996, all incumbent directors attended 75% or more of the
aggregate of (i) the total number of meetings of the Board of Directors
(held during the period for which each such person was a director) and (ii)
the total number of meetings held by all committees on which such director
served (during the periods that such director so served).
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company are entitled to
compensation for services rendered as a board member calculated as follows:
(i) $1,500 per month for each calendar month or portion thereof during
which such person was a director, (ii) $1,500 for each in-person meeting
and $500 for each telephonic meeting of the Board of Directors attended by
such director, and (iii) $750 for the Chairman and $500 for each member of
the Board's Audit, Compensation and Nominating Committees for each in-
person meeting attended by such director. In addition, all directors are
reimbursed for reasonable out-of-pocket expenses incurred in connection
with attendance at Board of Directors and Committee meetings.
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to the Chief
Executive Officer and to the three additional executive officers of the
Company who were serving as executive officers at the end of 1996 for
services rendered to the Company and its subsidiaries during the periods
indicated.(1)
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-----------------------
ANNUAL COMPENSATION AWARDS
------------------------------------- -----------------------
OTHER(2) RESTRICTED SECURITIES ALL(3)
ANNUAL STOCK UNDERLYING OTHER
NAME AND SALARY BONUS COMPEN- AWARDS OPTIONS/ COMPEN-
PRINCIPAL POSITION YEAR ($) ($) SATION ($) ($) SARS (#) SATION ($)
- ----------------------------- ---- --------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
James E. Acridge 1996 $521,366 $95,750 $ -- -0- -0- $2,388
Chairman of the Board, 1995 514,500 -0- -- -0- -0- 5,455
President and Chief Executive 1994 514,500 -0- -- -0- -0- 5,136
Officer
Fredric L. Holliger 1996 294,309 79,000 -- -0- -0- 7,138
Director, Executive Vice 1995 281,635 -0- -- -0- -0- 6,062
President and Chief 1994 273,104 -0- -- -0- -0- 5,852
Operating Officer
Morgan Gust 1996 215,396 66,600 -- -0- -0- 7,138
Vice President and General 1995 202,650 -0- -- -0- -0- 6,062
Counsel, Vice President 1994 180,339 -0- -- -0- -0- 5,852
Administration and Secretary
A. Wayne Davenport(4) 1996 172,404 30,250 -- -0- -0- 5,836
Vice President and 1995 157,827 -0- 17,081 -0- -0- 6,062
Chief Financial Officer 1994 112,500 -0- 37,710 -0- 5,000 -0-
</TABLE>
_______________
(1) In addition to the Chief Executive Officer, during 1996 only
three individuals served as executive officers of the Company
whose total annual salary and bonuses exceeded $100,000.
(2) Excluded from this column in relation to all of the named
executive officers, other than Mr. Davenport for 1994 and 1995,
are perquisites and other personal benefits (including any
car allowances and any amounts paid for group medical
insurance premiums in excess of amounts paid generally for
all salaried employees) which in no case were in aggregate
in an amount in excess of the lesser of either $50,000 or
10% of the total annual salary and bonus of any such named
executive officer. Mr. Davenport received compensation in
the form of perquisites and other personal benefits
totaling $17,081 in 1995, including $7,200 as a car
allowance and $9,001 of relocation expenses, and totaling
$37,710 in 1994, including $31,499 of relocation expenses.
(3) The amounts disclosed in this column for 1996 represent
401(k) Company matching contributions of $4,750 for Mr.
Holliger, $4,750 for Mr. Gust, and $3,448 for Mr. Davenport.
Mr. Acridge did not participate in the Company's 401(k) Plan.
The balance of the amounts disclosed for 1996 are the value of
Company contributions allocated to each of the Employee Stock
Ownership Plan accounts of the named executive officers.
(4) Mr. Davenport joined the Company on March 21, 1994.
<PAGE>
<PAGE>
The following table provides information on option exercises
during 1996 by the named executive officers and the value of such
officers' unexercised options at December 31, 1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/ IN-THE-MONEY
SARS AT FISCAL OPTIONS/SARS AT
SHARES YEAR-END (#) FISCAL YEAR-END($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#)(1) REALIZED ($) UNEXERCISABLE UNEXERCISABLE(2)
- --------------------- --------------- ------------ --------------------- -------------------
<S> <C> <C> <C> <C>
James E. Acridge..... -0- -0- 121,714/ 0 $604,869/$ 0
Fredric L. Holliger.. -0- -0- 40,143/ 0 200,141/ 0
Morgan Gust.......... -0- -0- 23,000/2,000 150,000/ 17,500
A. Wayne Davenport... -0- -0- 3,333/1,667 15,832/ 7,918
</TABLE>
_______________
(1) No stock options were exercised in 1996 by the named
executive officers.
(2) Calculated based upon the difference between the closing
market price per share for Company Common Stock at the end
of 1996 as reported by the New York Stock Exchange and the
exercise price.
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with Mr. Acridge and
Mr. Holliger effective December 21, 1989, and Mr. Gust effective August 1,
1990. The agreements currently provide for base salary at an annual rate
as follows: Mr. Acridge - $525,000; Mr. Holliger - $300,000; and Mr. Gust
- - $220,000. The amounts are subject to change during the respective terms
of such agreements as the Board of Directors deems appropriate consistent
with the normal historical business practices of the Company and the salary
adjustments of other executive officers. Mr. Acridge s and Mr. Holliger s
agreements expire on April 30, 1997, and Mr. Gust s expires on July 31,
1997. In the event of a change in control of the Company (as defined in the
agreements), the expiration date of each agreement is automatically
extended to a date no earlier than three years following the date of such
change in control. Each agreement provides that the executive is entitled
to participate in any stock option, stock purchase, annual bonus, pension,
profit sharing, life insurance and medical benefit plans and such other
fringe benefits that may be applicable to the Company's senior executive
employees.
If the executive's employment is terminated by reason of his death, by
the Company for cause (as defined in the agreement) or disability (as
defined in the agreement), or by the executive for any reason (other than
for good reason as defined in the agreement following the occurrence of a
change in control of the Company), the executive is entitled to his
compensation through the date of his termination.
If, absent a change in control of the Company, the executive's
employment is terminated by the Company other than for cause or disability,
the executive will continue to receive, at the time such payments would be
payable, his full base salary and bonus payments that would otherwise have
been payable to him through the term of the agreement, as if he had not
been terminated.
If, following a change in control of the Company, the executive's
employment is terminated by the Company other than for cause or disability,
or by the executive for good reason, the executive will receive a lump sum
payment of the salary and bonus payments that would have been payable
through the term of the agreement, as if he had not been terminated. For
Federal income tax purposes, Section 280G of the Internal Revenue Code of
1986, as amended, may limit the deductibility by the Company of any such
lump sum payment.
For purposes of the preceding two paragraphs, the executive's salary
following his termination through the remaining term of the agreement will
be considered to be equal to his salary on his date of termination; and his
bonus through such term shall be considered to be equal to the average of
the annual bonuses paid to the executive in the last three fiscal years.
The Company anticipates that new employment agreements will be entered
into with all three executive officers during 1997. It is anticipated that
the new agreements will provide, among other things, for benefits similar
to the old agreements with respect to a change in control of the Company.
<PAGE>
<PAGE>
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors makes this report
on executive compensation pursuant to Item 402 of Regulation S-K.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the
Exchange Act that might incorporate future filings, including this Proxy
Statement, in whole or in part, this report and the total return graph
which follows this report shall not be incorporated by reference into any
such filings, and such information shall be entitled to the benefits
provided in Item 402(a)(9).
The duties of the Compensation Committee include (i) establishing the
appropriate level of compensation for the Chief Executive Officer and the
Chief Operating Officer, (ii) reviewing, modifying if necessary, and
approving the Chief Executive Officer's recommendations for compensation of
other officers and certain key personnel, (iii) formulating and adopting
annual bonus plans for management, and (iv) overseeing the administration
of the Company's 1989 Stock Incentive Plan, which Plan was adopted by the
Board of Directors and approved by the stockholders in 1989. Although the
Committee oversees the administration of the Stock Incentive Plan, to the
extent required under Section 16 of the Exchange Act, any transaction
between the Company or the Plan and an executive officer of the Company
that involves a grant, award or other acquisition of the Company s equity
securities must be approved by the Board of Directors.
Annual bonus plans generally include criteria for cash bonuses for key
personnel who, by the nature and scope of their positions, significantly
impact the overall results and success of the Company. The Stock Incentive
Plan states that its purpose is to enable the Company and its subsidiaries
to obtain and retain competent personnel who will contribute to the
Company's success by their ability, ingenuity and industry and to provide
incentives to the participating officers and other key employees that are
linked directly to increases in stockholder value.
The major elements considered by the Committee in establishing
executive compensation are the following:
(1) The level of compensation paid executive officers in
similar positions by other companies. To ensure that
pay is competitive, the Committee, from time to time,
compares the Company's total compensation and
benefits packages with those of other companies in
the same or similar industries or with other similar
attributes such as size or capitalization. Some, but
not all, of these companies are included in the S&P
Industrials Index and the S&P Energy Composite Index
which are used for comparative purposes in the total
return graph which follows this report. Many of the
companies used in such indexes are engaged in
different businesses than those engaged in by the
Company and almost all are larger. The Committee
recognizes that the Company's asset and business mix
is rather unique given the Company's relatively small
size, making direct comparisons of compensation
difficult. The Committee also recognizes, however,
that total compensation for similar positions must be
competitive to attract and retain competent employees.
(2) The individual performance of each executive officer.
Individual performance includes any specific
accomplishments of such executive officer,
demonstration of job knowledge and skills, teamwork
and demonstration of the Company's six core values as
set forth in the Company's Strategic Plan.
(3) The responsibility and authority of each position
relative to other positions within the Company.
(4) Corporate performance and business unit performance.
Corporate performance and business unit performance
are evaluated both subjectively and objectively.
Subjectively, the Compensation Committee discusses
and makes its own determination of how the Company
and each business unit performed relative to the
opportunities and difficulties encountered during the
year and relative to the performance of competitors
and business conditions. Objectively, corporate
performance and business unit performance are
measured respectively by earnings, cash flow and
other financial results compared to budgeted results.
(5) Incentives for executive officers to make decisions
and take actions which will increase the market value
of Company Common Stock over the long term and which
encourage such officers to remain with the Company
as long-term employees.
In the case of base salary and awards granted under the 1989 Stock
Incentive Plan to executive officers, the application and weight given each
of these factors is not done mechanically or quantitatively but rather the
Committee uses its discretion, best judgment and the experience of its
members to examine the totality of all of the relevant factors. In
exercising this discretion, the Committee believes that it tends to give
greater weight to factors (1), (2), and (3) above in fixing base salary and
any merit/cost of living increase and to factor (5) in making awards under
the 1989 Stock Incentive Plan. In applying factor (1), the Committee
believes it has set total compensation approximately in the mid-range of
amounts paid to equally competent employees in similar positions at other
companies, after giving effect to the fact that the Company does not have a
defined benefit or actuarial pension plan while contributions by companies
with such plans tend to be quite significant, and the Committee's belief
that the Company has historically granted fewer stock options than appears
to be the practice at other companies.
In the case of 1996 bonus plans for executive officers, the Company
utilized both a profit bonus plan and an executive bonus plan. The
Company s profit bonus plan tied cash bonuses directly to corporate
performance and individual performance as follows:
a. Corporate Performance. Earnings per share must have reached a
predetermined threshold before any profit bonus could be paid.
b. Individual Performance. To be eligible to receive a profit
bonus, a participant s performance must have been evaluated to
be at a level that is at least commendable. Commendable
performance is performance that is judged to be reliable,
accurate, effective and consistently meets expectations. In
addition, such participant must have been employed by the
Company on the date that the bonus was paid, which shall be no
later than March 15, 1997.
If each of these two criteria was met, executives were eligible to
receive a cash bonus in an amount up to 3% of the participant s base pay.
The Company s executive bonus plan for 1996 tied cash bonuses directly
to corporate performance and individual performance as follows:
a. Corporate Performance. Earnings per share must have achieved a
predetermined threshold before any bonus could be paid. At
the threshold, a bonus pool in a predetermined amount was
established. The amount in the bonus pool increased as
higher earnings per share thresholds were achieved.
b. Individual Performance. To be eligible to receive an executive
bonus, a participant s performance must have been evaluated to
be at a level that is at least commendable. In addition,
such participant must have been employed by the Company on the
date that the bonus was paid, which shall be no later than
March 15, 1997.
If each of these two criteria was met, a participant was eligible to
receive a cash bonus in an amount up to 90% of the participant s percentage
of the total wages of all participants participating in the bonus plan.
The employee s percentage is calculated by dividing the employee s wages by
the total wages of all participants in the plan. Employees with
extraordinary performance could receive an additional discretionary amount
from the remaining 10% of the bonus pool and from funds remaining in the
pool because other employees did not receive the maximum bonus. The amount
of bonus actually paid from the amount which a participant was eligible to
receive was determined at the discretion of a participant s supervisor
based upon goals and objectives achieved and accomplishments of the
participant.
In setting the earnings per share performance thresholds under the
profit bonus and executive bonus plans, as well as the percentage of base
salary which can be paid as a bonus, the Committee acted in its discretion
utilizing its best judgment and the experience of its members to weigh
total compensation and bonuses paid in the market place by other companies,
the relative difficulty and likelihood of achieving various earnings per
share thresholds, the Company's size and the volatility and competitiveness
of its business, and any other matters considered relevant by a member of
the Committee. The bonus plans are generally administered as to eligible
personnel other than the Chief Executive Officer and Chief Operating
Officer by an Administrative Committee consisting of the Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer, Vice President
Administration and General Counsel, and Director of Human Resources. As to
the Chief Executive Officer and Chief Operating Officer, the amount of cash
bonus to be paid pursuant to a plan is administered by the Compensation
Committee.
The Compensation Committee and the Board of Directors reserve the
right, in their sole discretion, to amend, modify or eliminate the annual
bonus plans or their application or administration, in whole or in part, in
future years. If the Compensation Committee determines to continue such a
plan to future years, the elements of the plan will be adjusted to reflect
the amount of earnings to be required before the plan becomes effective,
the range of bonuses which may be paid at various levels of earnings, and
other such matters.
The Revenue Reconciliation Act of 1993 includes a provision limiting
tax deductions for certain executive compensation in excess of $1,000,000
for each executive. The Committee understands that this limitation
generally applies to all compensation otherwise deductible for tax years
beginning after December 31, 1993. However, qualified performance based
compensation, payments made to tax qualified retirement plans and the
payment of excludable fringe benefits are not included in the deduction
limit. In addition, compensation otherwise subject to the limit paid
pursuant to a binding written contract in effect on February 17, 1993 and
at all times thereafter is not subject to the deduction limit. The
Compensation Committee has analyzed the impact of this tax law on the
compensation policies of the Company, has determined that historically the
effect of this provision on the taxes paid by the Company is not
significant, and has decided for the present to not modify the compensation
policies of the Company based on such tax law. The Committee will
periodically reconsider its decision as circumstances dictate.
In applying the foregoing compensation policies to the Chief Executive
Officer s compensation for services rendered in 1996, the Compensation
Committee authorized an increase in the Chief Executive Officer s base
salary of approximately $35,500. The Committee authorized this increase
after reviewing and considering the foregoing compensation policies, the
results of an executive compensation study conducted by the Committee, and
various other materials and information relating to compensation. The
Chief Executive Officer voluntarily chose to accept only a portion of the
authorized increase in base salary resulting in his base salary being
increased from $514,500 a year to $525,000 a year, effective May 1, 1996.
The earnings per share criteria under the profit bonus plan was
realized in 1996. The Committee concluded that the Chief Executive Officer
performed at a level above commendable during 1996. The level of
performance was determined by the Compensation Committee utilizing its best
judgment and based on its first-hand observations and the accomplishment of
the Company, including the sale of most of the assets of Giant Exploration
& Production Company, which was one of the Company s principal wholly-owned
subsidiaries. As a result the Chief Executive Officer was awarded a profit
bonus equal to 3% of his base salary.
The Committee awarded the Chief Executive Officer the full amount for
which he was eligible under the executive bonus plan for services rendered
in 1996 plus an additional discretionary amount based upon his
accomplishments and those of the Company including but not limited to
record earnings, the successful sale of oil and gas assets, the acquisition
by purchase of seven retail units, and significant reductions in long-term
debt. The Chief Executive Officer voluntarily chose to accept only a
portion of the bonus in the amount of $80,000.
No additional grants or options to acquire Company Common Stock under
the Stock Incentive Plan were recommended to the Board of Directors in 1996
in connection with the Chief Executive Officer. The Committee determined
that in light of previous grants, the Chief Executive Officer s level of
ownership of Company Common Stock, the increase in the Chief Executive
Officer s base salary approved by the Board of Directors in 1996, and the
bonuses awarded to the Chief Executive Officer in 1996, no additional
grants to the Chief Executive Officer linking incentives directly to
increases in shareholder value were required in 1996.
Chief Executive Officer: Compensation Committee:
James E. Acridge Richard T. Kalen, Jr.
Harry S. Howard, Jr.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, S&P INDUSTRIALS INDEX,
AND S&P ENERGY COMPOSITE INDEX
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Giant Industries, Inc. 100.00 110.26 210.26 153.85 257.26 298.21
S&P Industrials 100.00 105.70 115.24 119.64 161.03 198.01
S&P Energy Composite 100.00 102.04 118.09 122.62 160.34 201.67
</TABLE>
<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning the
beneficial ownership of Company Common Stock as of February 28, 1997
(unless otherwise noted) by: (i) each stockholder who is known by the
Company to own beneficially in excess of 5% of the outstanding
Company Common Stock; (ii) each director of the Company and each
executive officer named in the Summary Compensation Table; and (iii)
all executive officers and directors of the Company as a group.
Except as otherwise indicated, to the knowledge of the Company, all
persons listed below have sole voting and investment power with
respect to their shares of Company Common Stock, except to the extent
that authority is shared by spouses under applicable law. The Company
Common Stock constitutes the only outstanding class of equity
securities of the Company. As of February 28, 1997, there were 267
record holders of Company Common Stock.
NAME AND ADDRESS AMOUNT OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ---------------------------------- -------------------- --------
<S> <C> <C>
James E. Acridge (1)(7) 2,775,866 24.74%
23733 North Scottsdale Road
Scottsdale, Arizona 85255
Anthony J. Bernitsky (2) 15,000 *
F. Michael Geddes 10,200 *
Fredric L. Holliger (3)(7) 70,614 *
Harry S. Howard, Jr. (4) 3,500 *
Richard T. Kalen, Jr. 100 *
A. Wayne Davenport (5)(7) 6,138 *
Morgan Gust (6)(7) 27,252 *
BankAmerica Corporation and
Bank of America NT&SA (7)
as Trustee of Giant Industries, Inc.
Employee Stock Ownership Plan
555 California Street
San Francisco, California 94104 1,331,849 12.00%
Ingalls & Snyder LLC (8)
61 Broadway
New York, New York 10006 735,505 6.63%
Dimensional Fund Advisors Inc. (9)
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 606,300 5.46%
The Guardian Life Insurance
Company of America(10)
201 Park Avenue South
New York, New York 10003 572,700 5.16%
Executive officers and directors
as a group (8 persons)
(1)(2)(3)(4)(5)(6)(7) 2,908,670 25.77%
</TABLE>
_______________
*Less than 1%
(1) Includes 163,260 shares of Company Common Stock held by the ESOP and
allocated to Mr. Acridge as of December 31, 1995, the most recent
date for which information as to individual allocations is
available. Includes 121,714 shares subject to presently
exercisable options. Mr. Acridge has pledged 2,132,409 shares
of Company Common Stock to various financial institutions as
security for loans the proceeds of which were used for general
purposes and not to finance the acquisition of Company Common Stock.
Mr. Acridge retains the right to direct the voting and disposition
of such shares and the right to receive all dividends, subject
to standard default provisions.
(2) Shares are held in a living trust where Mr. Bernitsky and his
spouse are settlors, co-trustees and beneficiaries.
(3) Includes 6,329 shares of Company Common Stock held by the
ESOP and allocated to Mr. Holliger as of December 31, 1995,
the most recent date for which information as to individual
allocations is available. Includes 40,143 shares subject to
presently exercisable options. Includes 3,000 shares of Company
Common Stock owned by Mr. Holliger's three minor children as to
which Mr. Holliger disclaims beneficial ownership.
(4) Shares are held in a living trust where Mr. Howard and his
spouse are settlors, co-trustees and beneficiaries.
(5) Includes 638 shares of Company Common Stock held by the ESOP
and allocated to Mr. Davenport as of December 31, 1995, the most
recent date for which information as to individual allocations
is available. Includes 5,000 shares subject to presently
exercisable options and options exercisable within 60 days of
February 28, 1997.
(6) Includes 3,752 shares of Company Common Stock held by the
ESOP and allocated to Mr. Gust as of December 31, 1995, the
most recent date for which information as to individual
allocations is available. Includes 23,000 shares subject to
presently exercisable options.
(7) Shares of Company Common Stock allocated to the accounts of
executive officers are reported under the share ownership
totals of both the ESOP and such executive officers. Each ESOP
participant has the right to direct the Trustee to vote the
participant's proportionate share of all shares of Company
Common Stock held by the ESOP with such proportionate share
being determined by multiplying the total number of shares
held by the ESOP by a fraction, the numerator of which is
the number of shares allocated to such participant and the
denominator of which is the number of shares allocated to
all participants' accounts as of the Record Date. The
Trustee of the ESOP and the participants have shared
dispositive power with respect to the shares allocated to a
participant's account. Such shares are as reported on the
Schedule 13G dated February 12, 1997 filed by BankAmerica
Corporation ( BAC ) and Bank of America NT&SA, as a trustee
and a co-trustee ( BANTSA ). This Schedule 13G states that by
virtue of the corporate relationships between BAC and BANTSA,
BAC may be deemed to possess indirect beneficial ownership of
shares beneficially owned directly by its subsidiaries.
According to the 13G, higher tier BAC subsidiaries may be deemed
to possess indirect beneficial ownership of shares beneficially
owned directly by lower tier BAC subsidiaries, and the power
to vote and to dispose of shares may be deemed to be shared
between entities due to their corporate relationships. The
13G further states that the BANTSA beneficial ownership is due
primarily to the bank s trustee position in connection with the
Company s Employee Stock Ownership Plan and Trust.
(8) Such shares are as reported on Ingalls & Snyder LLC s Amendment
No. 2 to Schedule 13G dated January 22, 1997. Ingalls & Snyder
is a New York Limited Liability Company.
(9) Such shares are as reported on Dimensional Fund Advisors Inc. s
( Dimensional ) Schedule 13G dated February 5, 1997. This
Schedule 13G states that Dimensional, a registered investment
advisor, is deemed to have beneficial ownership of 606,300
shares as of December 31, 1996, all of which shares are held
in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in series of the
DFA Investment Trust Company, a Delaware business trust, or
the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all
of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
(10) Such shares are as reported on The Guardian Life Insurance
Company of America's ("Guardian Life") Schedule 13G dated
February 14, 1996. This Schedule 13G states that Guardian Life
is an insurance company with sole voting and dispositive power
as to 199,000 of such shares; its wholly-owned subsidiary,
Guardian Investor Services Corporation, is investment
advisor to The Guardian Park Ave. Fund and The Guardian Stock
Fund, Inc., each a mutual fund with shared voting and
dispositive power as to 129,500 and 192,500, respectively, of
such shares; and employees of Guardian Life participate in The
Guardian Employees' Incentive Savings Plan and The Guardian Life
Insurance Company of America Master Pension Trust which have
shared voting and dispositive power as to 31,000 and 20,700,
respectively, of such shares.
<PAGE>
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's
officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities
and Exchange Commission ("SEC") and the New York Stock Exchange.
Officers, directors and greater than 10% stockholders are
required by SEC regulations to furnish the Company with copies of
all Section 16(a) reports they file. Based solely upon a review
of Forms 3 and 4 and any amendments thereto furnished to the
Company during 1996, and Forms 5 and any amendments thereto
furnished to the Company with respect to 1996, or written
representations that no Forms 5 were required, the Company
believes that each person who at any time during 1996 was a
director, officer, or greater than 10% beneficial owner filed on
a timely basis reports required by Section 16(a) during 1996 and
prior fiscal years.
<PAGE>
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Kalen and Howard served on the Compensation Committee
throughout 1996. Mr. George C. Hixon served on the Compensation Committee
until his resignation from the Board of Directors in December 1996. No
member of the Committee was an officer or employee or former officer or
employee of the Company or any of its subsidiaries. During 1996, there
were no relationships required to be disclosed pursuant to Items
402(j)(1)(iii) and 402(j)(3) of Regulation S-K.
<PAGE>
<PAGE>
CERTAIN TRANSACTIONS
Giant leases approximately 46,467 square feet of land as a service
station site in a shopping center owned by a partnership owned by Mr.
Acridge. The service station site is located immediately adjacent to the
Company's headquarters. The 1991 lease agreement established a base rent
of $7,887 per month, subject to adjustment upwards every five years based
on changes in the Consumer Price Index, for an initial lease term of ten
years with four renewal options of five years each. Giant and the
partnership each have a right of first refusal upon any sale of the site or
the service station, respectively, during the lease term. During 1996,
Giant paid $107,517 as rent, rental taxes, and common area maintenance
expenses under the terms of the lease. The partnership rents excess office
space from Giant consisting of eight offices and the associated work areas
in the headquarters building. The partnership pays rent at the rate of
$17.50 a square foot per year. The rental arrangement is cancelable by
either party on ten days notice. In addition, the partnership reimburses
Giant for the costs and expenses of any maintenance or other services
performed by Giant for the benefit of the shopping center. During 1996,
the partnership paid Giant $37,839 as rent, rental taxes and expense
reimbursement. Mr. Harvey L. Acridge, a licensed real estate broker and
Mr. James E. Acridge s brother, provides real estate and management
services to the partnership. He also provides marketing services to Giant
on a contract basis. Giant paid Mr. Harvey L. Acridge $90,660 for services
rendered to Giant in 1996 and reimbursed him for out-of-pocket expenses
incurred in connection with the performance of these services. Giant and
the partnership share the cost of providing transportation for Mr. Harvey
L. Acridge s use.
During 1996, Sandia made purchases of petroleum products from Giant in
the ordinary course of business totaling $1,576,063. These purchases were
made pursuant to several supply agreements between Giant and Sandia.
Certain of these agreements expired during 1996 while others contained
provisions providing for their continuation until canceled by either party
upon thirty days notice. The Company believes that these supply agreements
are fair to the Company and Giant and are in the Company's and Giant's best
interests. Further, principal, interest and rental payments were made to
Sandia during 1996 in the aggregate amount of $1,124,614 in connection with
the deferred balance of the purchase price for Sandia s interest in nine
service stations and certain other assets. These assets were acquired
under a 1993 purchase and sale agreement between Sandia and Giant Four
Corners, Inc., one of Giant s subsidiary companies. Mr. Anthony J.
Bernitsky is the founder, co-owner and President of Sandia, and serves on
its Board of Directors. Mr. Bernitsky did not become a director of the
Company until 1996.
The Company believes that the foregoing transactions are fair to the
Company and Giant and are in the Company's and Giant's best interests.
Certain other related party transactions are described above under the
heading "Compensation Committee Interlocks and Insider Participation." It
is the policy of the Board of Directors to review all related party
transactions at least once a year.
<PAGE>
<PAGE>
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP
as independent auditors for the Company for the year ending
December 31, 1997, subject to final approval of the Audit
Committee and ratification by the Stockholders at the Annual
Meeting. Deloitte & Touche LLP were also independent auditors
for the Company for the year ended December 31, 1996.
Representatives of Deloitte & Touche LLP will be present at the
Annual Meeting of Stockholders and will have an opportunity to
make a statement if they so desire and to respond to appropriate
questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS
INDEPENDENT AUDITORS.
<PAGE>
<PAGE>
STOCKHOLDERS' PROPOSALS
The Company welcomes comments or suggestions from its
stockholders. In the event that a stockholder desires to have a
proposal formally considered at the 1998 Annual Meeting of
Stockholders, and evaluated by the Board for inclusion in the
Proxy Statement for that meeting, the proposal must be received
in writing by the Secretary of the Company at the address set
forth on the first page hereof on or before November 27, 1997.
<PAGE>
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any other matters to
be presented at the Annual Meeting. If any other matter proper
for action at the Annual Meeting should be properly presented,
the holders of the accompanying proxy will vote the shares
represented by the proxy on such matter in accordance with their
best judgment. If any matter not proper for action at the Annual
Meeting should be presented, the holders of the proxy will vote
against consideration thereof or action thereon.
By Order of the Board of Directors
/s/ Morgan Gust
----------------------------------------------
Morgan Gust
Secretary, Vice President and General Counsel
Scottsdale, Arizona
March 27, 1997<PAGE>
<PAGE>
APPENDIX A
PROXY GIANT INDUSTRIES, INC. PROXY
23733 NORTH SCOTTSDALE ROAD
SCOTTSDALE, ARIZONA 85255
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF GIANT INDUSTRIES, INC.
Morgan Gust, A. Wayne Davenport and Mark B. Cox, and each of them, are
appointed proxies, with full power of substitution, to vote all of the stock
of the undersigned shown on the reverse side hereof at the Annual Meeting of
Stockholders of Giant Industries, Inc., to be held on Thursday, May 8, 1997,
or at any postponement or adjournment thereof, with the same effect as if the
undersigned were present and voting the stock on all matters set forth in the
Notice of Annual Meeting of Stockholders, dated March 27, 1997, and the Proxy
Statement, dated March 27, 1997, as directed on the reverse side hereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. UNLESS OTHERWISE DIRECTED, OR IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ALL OF THE NOMINEES IN ITEM
1, FOR ITEM 2 AND IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXIES OR ANY
OF THEM ON ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING.
PLEASE COMPLETE, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED PREPAID ENVELOPE.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE.)
<PAGE>
<PAGE>
GIANT INDUSTRIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED BELOW AND
FOR ITEM 2.
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
1. Election of Directors-
Nominees: Fredric L. Holliger and [ ] [ ] [ ]
Harry S. Howard, Jr.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
MARK THE FOR ALL EXCEPT BOX AND WRITE THAT NOMINEE S NAME IN THE
SPACE PROVIDED BELOW.)
_____________________________________
FOR AGAINST ABSTAIN
2. Ratification of the appointment of [ ] [ ] [ ]
Deloitte & Touche LLP by the Board of
Directors as the independent auditors of
the Company and its subsidiaries for the
fiscal year ending December 31, 1997.
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement.
Dated:______________________, 1997 Signature(s)_____________________
_________________________________
Please date and sign EXACTLY as
your name or names appear herein.
Persons signing in a fiduciary
capacity or as corporate officers
should so indicate.
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED PREPAID ENVELOPE<PAGE>
<PAGE>
APPENDIX B
DESCRIPTION OF GRAPHIC AND IMAGE MATERIAL
1. Location: Proxy Statement under the heading "Comparison
of Cumulative Total Return Among the Company,
S&P Industrials Index, and S&P Energy
Composite Index"
Item: Performance Graph
Description: The description and interpretation of the data
in the graph is described in the body of the
Proxy Statement.
2. Location: Back side of Proxy Card Appendix A, second line
after the word "ONLY"
Item: Method of Marking Vote
Description: Oval filled-in in dark ink.
3. Location: Back side of Proxy Card Appendix A, before and
after the words FOLD AND DETACH HERE
Item: Method of detaching Proxy Card
Description: Carets indicating where to fold and detach
the Proxy Card.
