<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>
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 Friday, May 8,
1998, at 10:00 a.m., for the following purposes:
1. To elect two directors to Class III 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, 1998; 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, 1998, 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 30, 1998
<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, 1998, 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 30, 1998. 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 "Common Stock"), at the close of
business on March 20, 1998 (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 10,993,267 shares
of Common Stock outstanding. Each share of 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 Common Stock entitled
to vote at the Annual Meeting is required for the election of directors,
and an affirmative vote of a majority of the shares of Common Stock
represented and entitled to vote at the Annual Meeting is required for
approval of all other 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,
1997, 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 members.
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 I directors, two Class II directors and two
Class III directors. The term of office of the two Class III
directors expires at the 1998 Annual Meeting of Stockholders.
The Board of Directors proposes that Mr. James E. Acridge and
Mr. Richard T. Kalen, Jr. be elected to serve as the Class III
directors for a term of three years until the Annual Meeting of
Stockholders in 2001 and until their successors are elected and
qualified. Both of these nominees are currently serving as Class III
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
- ------- -------------------------------------------------
James E. Acridge Mr. James E. Acridge, age 58, 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 Industries Arizona, Inc. ("Giant"), the
Company's principal wholly-owned subsidiary, 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 Phoenix Fuel Co., Inc. ("Phoenix
Fuel"), an industrial/commercial petroleum
products distributor, all of whose stock was
acquired by Giant in June 1997. Additionally, Mr.
Acridge is Chairman of the Board of Directors 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.
Richard T. Kalen, Jr. Richard T. Kalen, Jr., age 55, 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.
<PAGE>
<PAGE>
OTHER DIRECTORS AND EXECUTIVE OFFICERS
The remaining directors and executive officers of the Company, as
of January 1, 1998, are listed below:
NAME AGE POSITION CLASS(1)
- ---- --- ------------------------ --------
Anthony J. Bernitsky 68 Director I
1999
F. Michael Geddes 58 Director I
1999
Fredric L. Holliger 49 Director, Executive Vice II
President and Chief 2000
Operating Officer
Harry S. Howard, Jr. 79 Director II
2000
A. Wayne Davenport 49 Vice President and
Chief Financial Officer
Morgan Gust 50 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.
Anthony J. Bernitsky has served as a director of the Company since
August 1996. Mr. Bernitsky also serves as a member of the Compensation
Committee and the Nominating Committee. 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 also is 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.
Fredric L. Holliger has served as a director, Executive Vice
President and Chief Operating Officer of the Company since October 1989.
Mr. Holliger joined Giant 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.
Mr. Holliger has served as a director and Chief Executive Officer of
Phoenix Fuel since June 1997 and has served as a director, President and
Chief Executive Officer of Giant E&P since May 1993.
Harry S. Howard, Jr. 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.
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 and serves as Vice President of
Phoenix Fuel. 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. He
has served as Vice President Administration since October 1992. He also
serves in such capacities for, and is a director of, Giant and Giant E&P
and serves as Secretary, General Counsel and Vice President, and as a
director, of Phoenix Fuel.
BOARD MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors held eight meetings during 1997. The Board
has established an Audit Committee, a Compensation Committee and a
Nominating Committee. In 1997, the Board established a Pricing
Committee, composed of Messrs. Acridge, Geddes, Holliger and Howard, in
connection with the Company's $150 million offering of 9% senior
subordinated notes due 2007 which was completed in 1997 ("Bond
Offering"). The Pricing Committee met once during its existence.
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 1997.
The Compensation Committee of the Board of Directors is comprised
of Messrs. Kalen (Chairman), Bernitsky 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 and the Company's 1998 Phantom Stock Plan, as both
may have been amended (collectively, the "Stock Plans") 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
Plans 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 1997.
The Nominating Committee of the Board of Directors, comprised of
Messrs. Acridge (Chairman), Bernitsky 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 1997, and
its functions were performed as a part of a meeting of the full Board of
Directors.
During 1997, all incumbent directors attended seventy-five percent
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 $500 for
each member of the Board's Audit, Compensation and Nominating Committees
for each in-person meeting attended by such director. In addition, all
directors are reimbursed for reasonable out-of-pocket expenses incurred
in connection with attendance at Board of Directors and Committee
meetings.
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to the Chief
Executive Officer and to the three additional executive officers of the
Company who were serving as executive officers at the end of 1997 for
services rendered to the Company and its subsidiaries during the periods
indicated.(1)
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-----------------------
ANNUAL COMPENSATION AWARDS
------------------------------------ -----------------------
OTHER(2) RESTRICTED SECURITIES ALL(3)
ANNUAL STOCK UNDERLYING OTHER
NAME AND SALARY BONUS COMPEN- AWARDS OPTIONS/ COMPEN-
PRINCIPAL POSITION YEAR ($) ($) SATION ($) ($) SARS (#) SATION ($)
- ----------------------------- ---- -------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
James E. Acridge 1997 $540,385 $101,000 $ -- -0- -0- $6,787
Chairman of the Board, 1996 521,366 95,750 -- -0- -0- 2,388
President and Chief Executive 1995 514,500 -0- -- -0- -0- 5,455
Officer
Fredric L. Holliger 1997 315,385 72,500 -- -0- -0- 6,787
Director, Executive Vice 1996 294,309 79,000 -- -0- -0- 7,138
President and Chief 1995 281,635 -0- -- -0- -0- 6,062
Operating Officer
Morgan Gust 1997 232,308 59,800 -- -0- -0- 6,787
Vice President and General 1996 215,396 66,600 -- -0- -0- 7,138
Counsel, Vice President 1995 202,650 -0- -- -0- -0- 6,062
Administration and Secretary
A. Wayne Davenport 1997 181,154 18,700 -- -0- -0- 6,787
Vice President and 1996 172,404 30,250 -- -0- -0- 5,836
Chief Financial Officer 1995 157,827 -0- 17,081 -0- -0- 6,062
</TABLE>
_______________
(1) In addition to the Chief Executive Officer, during 1997 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 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 ten percent 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.
(3) The amounts disclosed in this column for 1997 represent
401(k) Company matching contributions of $4,314 for each
of the named executive officers. The balance of the amounts
disclosed for 1997 are the value of Company contributions
allocated to each of the Employee Stock Ownership Plan
accounts of the named executive officers.
<PAGE>
<PAGE>
The following table provides information on option exercises
during 1997 by the named executive officers and the value of such
officers' unexercised options at December 31, 1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/ IN-THE-MONEY
SARS AT FISCAL OPTIONS/SARS AT
SHARES YEAR-END (#) FISCAL YEAR-END($)
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 $1,213,439 / $0
Fredric L. Holliger.. 0 0 40,143 / 0 400,856 / 0
Morgan Gust.......... 0 0 25,000 / 0 292,500 / 0
A. Wayne Davenport... 0 0 5,000 / 0 48,750 / 0
</TABLE>
_______________
(1) No stock options were exercised in 1997 by the named
executive officers.
(2) Calculated based upon the difference between the closing
market price per share for Common Stock at the end
of 1997 as reported by the New York Stock Exchange and the
exercise price.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Mr.
Acridge, Mr. Holliger and Mr. Gust. These agreements currently
provide for base salary at an annual rate as follows: Mr. Acridge -
$550,000, Mr. Holliger - $325,000, and Mr. Gust - $240,000. The
amounts are subject to change during the respective terms of such
agreements as the Board of Directors deems appropriate. All three
employment agreements expire on December 10, 2000 and automatically
extend for successive one-year periods thereafter unless notice of
termination is given by the executive or the Company. Each agreement
provides that the executive is entitled to participate in any
discretionary bonus, stock option, profit sharing, life insurance,
hospitalization and medical coverage, and such other benefit plans
that may be applicable to the Company's senior executive employees.
If, absent a change in control of the Company (as defined in the
agreement), the executive's employment is terminated by reason of his
death or disability (as defined in the agreement), by the Company
with cause or by the executive with or without good reason (as
defined in the agreement), the executive is entitled to his
compensation through the date of his termination.
If, absent a change in control of the Company (as defined in the
agreement), the executive's employment is terminated by the Company
without cause or the Company or the Board of Directors give written
notice to the executive of its intention not to renew the term of the
employment agreement, the executive is entitled to receive a lump sum
payment equal to his full annual base salary.
If, at any time within a three-year period following a change in
control of the Company (as defined in the agreement), the executive's
employment is terminated by reason of the executive's death or
disability (as defined in the agreement), by the Company with or
without cause or by the executive with good reason (as defined in the
agreement), or if during such three-year period the term of the agreement
is not extended, the executive will receive a lump sum payment in an
amount equal to three times the sum of: (i) the executive's base salary,
and (ii) the average of the annual bonuses paid to the executive for the
three fiscal years immediately preceding the fiscal year in which the
termination occurs. 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.
<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 ("Securities Act"), or the Securities Exchange Act of 1934,
as amended ("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, and the 1998
Phantom Stock Plan, which plan was adopted by the Board of Directors
to be effective in 1998 (collectively, the "Stock Plans"). Although
the Committee oversees the administration of the Stock Plans, to the
extent required under Section 16 of the Exchange Act, any transaction
between the Company or the Stock Plans 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 Plans state that their 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 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 the 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 Stock
Plans 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 Stock Plans. 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 1997 bonus plans for executive officers, the
Company utilized both a profit bonus plan and a senior 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 overall performance must have been
evaluated to be at a level that is at least satisfactory. 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, 1998.
If each of these two criteria was met, executives were eligible
to receive a cash bonus in an amount up to two percent of their base
pay. All of the Company's employees were eligible to participate in
the profit bonus plan.
The Company's senior executive bonus plan for 1997 tied cash
bonuses directly to corporate performance and the performance of the
Company's Common Stock 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. Stock Performance. The average price of the Common Stock
during the month of December 1997 must have exceeded the
average price of the Common Stock during the month of
December 1996 by a predetermined percentage 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 average stock price
thresholds were achieved. The amount in the bonus pool
further increased if the percentage increase in the average
December 1997 price of the Common Stock plus any increase
in dividends paid in 1997 as compared to dividends paid in
1996 exceeded, by predetermined thresholds, the performance
of companies identified as the Company's peer group.
If one or both of these two criteria was met, a participant was
eligible to receive a cash bonus. The plan specified that the amount
of the bonus was generally to be calculated by multiplying the
participant's December 31, 1997 base salary by predetermined
percentages for the plan's earnings per share and average stock price
thresholds. The participant's supervisor was responsible for
recommending the amount of bonus actually to be paid from the bonus
pool based upon goals achieved, accomplishments of the participant
and the discretion of the supervisor. A participant must be employed
on the date that the bonus payment is made, which was no later than
March 15, 1998.
In setting the earnings per share performance thresholds and the
stock performance thresholds under the profit bonus and senior
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 marketplace 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
payable 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 1997, the
Compensation Committee authorized an increase in the Chief Executive
Officer's base salary of $25,000, resulting in his base salary being
increased from $525,000 a year to $550,000 a year, effective May 1,
1997. 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 earnings per share criteria under the profit bonus plan was
realized in 1997. The Committee concluded that in 1997 the Chief
Executive Officer performed at a level far exceeding the individual
performance level specified in the profit bonus plan. The Chief
Executive Officer's level of performance was determined by the
Compensation Committee utilizing its best judgment and based on its
first-hand observations and the accomplishments of the Company,
including the successful completion of the Company's $150 million
offering of 9% senior subordinated notes due 2007 which was completed
in 1997 ("Bond Offering"), the acquisition of ninety-six retail
service station/convenience stores and certain additional assets from
Thriftway Marketing Corp., Clayton Investment Company and companies
related to these sellers ("Thriftway Acquisition"), and the purchase
of all of the issued and outstanding stock of Phoenix Fuel Co., Inc.,
an independent industrial/commercial petroleum products distributor
whose operations include nine bulk distribution plants, twenty-two
cardlock fueling operations and a lubricant storage and distribution
facility ("Phoenix Fuel Acquisition"). As a result the Chief Executive
Officer was awarded a profit bonus equal to two percent of his base salary.
The Committee awarded the Chief Executive Officer the full amount
for which he was eligible under the senior executive bonus plan for
services rendered in 1997 based upon the accomplishments of the
Company including, but not limited to, the Bond Offering, the
Thriftway Acquisition and the Phoenix Fuel Acquisition. The Chief
Executive Officer voluntarily chose to accept only a portion of the
bonus in the amount of $90,000.
No additional grants or options to acquire Common Stock under
the Stock Plans were recommended to the Board of Directors in 1997 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 Common Stock, the increase in the Chief Executive
Officer's base salary in 1997, and the bonuses awarded to the Chief
Executive Officer in 1997, no additional grants to the Chief Executive
Officer were required in 1997.
Chief Executive Officer: Compensation Committee:
James E. Acridge Richard T. Kalen, Jr.
Anthony J. Bernitsky
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
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Giant Industries, Inc. 100 190.70 139.53 233.33 270.47 372.00
S&P Industrials 100 109.03 113.19 152.35 187.33 245.43
S&P Energy Composite 100 115.73 120.17 157.13 197.64 247.54
</TABLE>
<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning the
beneficial ownership of Common Stock as of February 27, 1998 (unless
otherwise noted) by: (i) each stockholder who is known by the Company
to own beneficially in excess of five percent of the outstanding
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 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 27, 1998, there were 267 record holders of
the Company's Common Stock.
NAME AND ADDRESS AMOUNT OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ---------------------------------- -------------------- --------
<S> <C> <C>
James E. Acridge (1)(7) 2,607,298 23.46%
23733 North Scottsdale Road
Scottsdale, Arizona 85255
Anthony J. Bernitsky (2) 15,000 *
F. Michael Geddes 10,200 *
Fredric L. Holliger (3)(7) 70,664 *
Harry S. Howard, Jr. (4) 4,500 *
Richard T. Kalen, Jr. 100 *
A. Wayne Davenport (5)(7) 6,188 *
Morgan Gust (6)(7) 29,303 *
BankAmerica Corporation and 1,223,911 11.13%
Bank of America NT&SA (7)
as Trustee of Giant Industries, Inc.
Employee Stock Ownership Plan
555 California Street
San Francisco, California 94104
Ingalls & Snyder LLC (8) 572,719 5.21%
61 Broadway
New York, New York 10006
Dimensional Fund Advisors Inc. (9) 783,900 7.13%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
The Guardian Life Insurance 572,700 5.21%
Company of America(10)
201 Park Avenue South
New York, New York 10003
Executive officers and directors 2,743,253 24.53%
as a group (8 persons)
(1)(2)(3)(4)(5)(6)(7)
</TABLE>
_______________
*Less than 1%
(1) Includes: (i) 163,262 shares of Common Stock held by the ESOP
and allocated to Mr. Acridge as of December 31, 1996, the most
recent date for which information as to individual allocations
is available, (ii) 6,430 shares of Common Stock over which Mr.
Acridge has sole voting and dispositive power as the personal
representative of his father's estate subject to pending probate
and Mr. Acridge's obligations as personal representative, and
(iii) 121,714 shares subject to presently exercisable options.
Mr. Acridge has pledged 2,212,206 shares of Common Stock to
various lenders as security for loans the proceeds of which were
used for general purposes and not to finance the acquisition of
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: (i) 6,379 shares of Common Stock held by the
ESOP and allocated to Mr. Holliger as of December 31, 1996,
the most recent date for which information as to individual
allocations is available, (ii) 40,143 shares subject to
presently exercisable options, and (iii) 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: (i) 688 shares of Common Stock held by the ESOP
and allocated to Mr. Davenport as of December 31, 1996, the most
recent date for which information as to individual allocations
is available, and (ii) 5,000 shares subject to presently
exercisable options.
(6) Includes: (i) 3,803 shares of Common Stock held by the
ESOP and allocated to Mr. Gust as of December 31, 1996, the
most recent date for which information as to individual
allocations is available, and (ii) 25,000 shares subject to
presently exercisable options.
(7) Shares of 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 6, 1998 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.
(8) Such shares are as reported on Ingalls & Snyder LLC's Schedule
13G dated February 5, 1998. 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 9, 1998. This
Schedule 13G states that Dimensional, a registered investment
advisor, is deemed to have beneficial ownership of 783,900
shares as of December 31, 1997, 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 ten percent 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 ten percent 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
1997, and Forms 5 and any amendments thereto furnished to the Company
with respect to 1997, or written representations that no Forms 5 were
required, the Company believes that each person who at any time
during 1997 was a director, officer, or greater than ten percent
beneficial owner filed on a timely basis reports required by Section
16(a) during 1997 and prior fiscal years.
<PAGE>
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Kalen and Howard served on the Compensation Committee
throughout 1997. Mr. Bernitsky was appointed to the Compensation
Committee on May 8, 1997. No member of the Committee was an officer
or employee or former officer or employee of the Company or any of
its subsidiaries. During 1997, there were no relationships required
to be disclosed pursuant to Item 402(j)(3) of Regulation S-K.
Mr. Bernitsky is the founder, co-owner and President of Sandia,
and serves on its Board of Directors. During 1997, Sandia made
purchases of petroleum products from Giant in the ordinary course of
business totaling $757,608. These purchases were made pursuant to
several supply agreements between Giant and Sandia. Certain of these
agreements expired during 1997 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.
During 1997, Giant made purchases of petroleum products from
Sandia in the ordinary course of business totaling $356,494. These
purchases were pursuant to a short-term supply agreement. The Company
believes that the terms of the supply agreement were fair to the
Company and Giant, and were in the Company's and Giant's best
interests.
Principal, interest and rental payments were made to Sandia
during 1997 in the aggregate amount of $1,001,302 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. Giant
also made miscellaneous payments to Sandia during 1997 in the amount
of $4,865.
<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 1997, Giant paid
$112,649 as rent, rental taxes, and common area maintenance expenses
under the terms of the lease.
The partnership owned by Mr. Acridge rents excess office space
from Giant consisting of fifteen offices and associated work areas in
the headquarters building. The partnership pays annual rent of $17.75
per square foot. 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 services performed by Giant for the
benefit of the shopping center. During 1997, the partnership paid
Giant $57,888 as rent and expense reimbursement.
Mr. Harvey L. Acridge, a licensed real estate broker and the
brother of Mr. James E. Acridge, 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 $53,337
for services rendered to Giant in 1997 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, and the Company
provides him with automobile insurance.
The Board of Directors authorized Giant to purchase 1.76 acres
of land in Phoenix, Arizona at the offered price of $890,000 from a
limited liability company owned by Mr. Acridge for the construction
of a retail service station/convenience store. This site is part of a
parcel of land approximately fourteen gross acres in size purchased
by the company owned by Mr. Acridge in September 1996 at a price of
$1,389,465. The 1.76 acre site was appraised for $915,000 as of
September 5, 1997 by an appraiser not affiliated with the Company or
Mr. Acridge. After reviewing the appraisal as well as other pertinent
information, the Board authorized Giant to purchase the site.
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,
1998, subject to final approval of the Audit Committee and
ratification by the Stockholders at the Annual Meeting. Deloitte &
Touche LLP served as independent auditors for the Company for the
year ended December 31, 1997. 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 1999 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 30, 1998.
<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 30, 1998
<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 Friday, May 8, 1998, 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 30, 1998, and the Proxy
Statement, dated March 30, 1998, 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: James E. Acridge and [ ] [ ] [ ]
Richard T. Kalen, 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, 1998.
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:______________________, 1998 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.
