<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 11-K
_____________
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period ______ to ______.
Commission File Number: 1-10398
(A) Full title of the plan and address of the plan if different
from that of the issuer named below:
EMPLOYEE STOCK OWNERSHIP PLAN OF
GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES
(B) Name of the issuer of the securities held pursuant to the plan
and the address of its principal executive office:
GIANT INDUSTRIES, INC.
23733 North Scottsdale Road
Scottsdale, Arizona 85255
<PAGE>
REQUIRED INFORMATION
Employee Stock Ownership Plan of Giant Industries, Inc. and Affiliated
Companies (the "Plan") is subject to the Employee Retirement Income Security
Act of 1974 ("ERISA"). Therefore, in lieu of the requirements of Items 1-3
of Form 11-K, the financial statements and schedules of the Plan for the two
fiscal years ended December 31, 1999 and 1998, which have been prepared in
accordance with the financial reporting requirements of ERISA, are attached
hereto as Appendix 1 and incorporated herein by this reference.
EXHIBITS
Exhibit 23.1 - Independent Auditors' Consent
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Committee has duly caused this annual report
to be signed by the undersigned thereunto duly authorized.
EMPLOYEE STOCK OWNERSHIP PLAN OF GIANT
INDUSTRIES, INC. AND AFFILIATED COMPANIES
Date: May 26, 2000 Signature: /s/ Kim H. Bullerdick
-------------------------------
Kim H. Bullerdick
Vice President, Legal Department
Director, and Secretary
Date: May 26, 2000 Signature: /s/ Gary R. Dalke
-------------------------------
Gary R. Dalke, Vice President,
Controller, Accounting Officer
and Assistant Secretary
Date: May 26, 2000 Signature: /s/ Charley Yonker, Jr.
-------------------------------
Charley Yonker, Jr.,
Vice President, Human Resources
<PAGE>
APPENDIX 1
EMPLOYEE STOCK OWNERSHIP PLAN OF
GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES
FINANCIAL STATEMENTS AS OF AND
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998,
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1999, AND INDEPENDENT AUDITORS' REPORT
<PAGE>
EMPLOYEE STOCK OWNERSHIP PLAN OF
GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-7
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1999:
Item 27a - Assets Held for Investment Purposes 8
Item 27d - Schedule of Reportable Transactions 9
<PAGE>
INDEPENDENT AUDITORS' REPORT
Administrative Committee
Employee Stock Ownership Plan of
Giant Industries, Inc. and Affiliated Companies
Scottsdale, Arizona
We have audited the accompanying statements of net assets available for
benefits of the Employee Stock Ownership Plan of Giant Industries, Inc.
and Affiliated Companies as of December 31, 1999 and 1998, and the
related statements of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility
of the Plan's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the net assets available for benefits of the
Employee Stock Ownership Plan of Giant Industries, Inc. and Affiliated
Companies as of December 31, 1999 and 1998, and the changes in net
assets available for benefits for the years then ended in conformity
with accounting principles generally accepted in the United States of
America.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules as
of and for the year ended December 31, 1999 on pages 8 and 9 are presented
for the purpose of additional analysis and are not a required part of the
basic financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These schedules are the
responsibility of the Plan's management. Such schedules have been subjected
to the auditing procedures applied in our audit of the basic 1999 financial
statements and, in our opinion, are fairly stated in all material respects
when considered in relation to the basic financial statements taken as a
whole.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
April 26, 2000
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<TABLE>
EMPLOYEE STOCK OWNERSHIP PLAN OF
GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
ASSETS
INVESTMENTS AT FAIR VALUE (Note 3):
Common stock of Giant Industries, Inc. $11,221,930 $10,778,803
Wells Fargo pooled equity and income funds 2,951,746
Bank of America Balanced Fund 3,333,351
ML Lee Acquisition Fund 5,559 5,733
Limited partnership 7,200 6,600
Loans to participants 35,732 33,955
----------- -----------
Total investments at fair value 14,222,167 14,158,442
INTEREST AND DIVIDENDS RECEIVABLE 624
OTHER RECEIVABLES 2,647 1,406
----------- -----------
Total assets 14,225,438 14,159,848
LIABILITIES
ACCRUED LIABILITIES 9,272 9,247
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $14,216,166 $14,150,601
=========== ===========
</TABLE>
See notes to financial statements.
-2-
<PAGE>
<TABLE>
EMPLOYEE STOCK OWNERSHIP PLAN OF
GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
ADDITIONS:
Employer contribution $ 3,000,000
Interest and dividend income 16,687 $ 186,571
Miscellaneous income 300
----------- -----------
Total additions 3,016,987 186,571
----------- -----------
DEDUCTIONS:
Distributions to participants 2,889,399 2,122,077
Net depreciation in fair value of
investments (Note 3) 62,023 10,671,117
----------- -----------
Total deductions 2,951,422 12,793,194
----------- -----------
NET INCREASE (DECREASE) 65,565 (12,606,623)
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 14,150,601 26,757,224
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $14,216,166 $14,150,601
=========== ===========
</TABLE>
See notes to financial statements.
-3-
<PAGE>
EMPLOYEE STOCK OWNERSHIP PLAN OF
GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
1. DESCRIPTION OF THE PLAN
GENERAL - The Employee Stock Ownership Plan of Giant Industries, Inc.
(the "Company") and Affiliated Companies (the "Plan") is a non-contributory
defined contribution plan which covers all eligible employees. The purpose of
the Plan is to enable participants to share in the ownership of the Company.
The Summary Plan Description describes the Plan, including contribution
allocations, termination, vesting and benefit provisions. The Plan is subject
to the requirements of the Employee Retirement Income Security Act of 1974
("ERISA"), as amended.
CONTRIBUTIONS - The Plan provides for a contribution from the Company
from its current or accumulated net income as may be determined annually at
the discretion of its Board of Directors.
DISTRIBUTIONS - No distributions from the Plan are made until a
participant retires, reaches age 59-1/2, dies, or otherwise terminates
employment. Distributions may be made in cash or, if a participant elects, in
the form of Company stock plus cash for any fractional shares.
PARTICIPATION AND VESTING - Each employee hired on or after July 1, 1993
shall become a participant on his or her participation date, which is defined
as the January 1 or July 1 coincident with or next following the date on
which the employee shall have completed one year of service. The
participation date of any employee hired prior to July 1, 1993 shall be
determined in accordance with the terms of the Plan prior to the seventh
amendment. Participants' interests in their accounts vest over a seven-year
period. In the event the Plan is terminated by the Company, all participants
would immediately become 100 percent vested in their accrued benefits as of
the date of Plan termination.
PARTICIPANT ACCOUNTS are maintained as follows:
a. ASSET ACCOUNT - For interests in assets of the Plan other than
Company stock.
b. SECTION 1042 EMPLOYER STOCK ACCOUNT - For interests in Company stock
acquired by the Plan prior to December 21, 1989 in a transaction which
qualified for nonrecognition of gain under Internal Revenue Code (the "Code")
Section 1042.
c. UNRESTRICTED EMPLOYEE STOCK ACCOUNT - For interests in Company stock
not acquired in a transaction qualifying for nonrecognition of gain under
Section 1042 of the Code.
ALLOCATIONS - Each participant's account is credited with an allocation
of the Company's contribution, investment income and forfeitures of
terminated participants' non-vested accounts. Allocations to participant
accounts are made on a formula based on the ratio that each participant's
compensation, as defined, during the Plan year, bears to the compensation of
all such participants.
PLAN ADMINISTRATION - The Company administers the Plan through an
administrative committee comprised of three employees who are appointed by
the Company's Board of Directors. Most expenses pertaining to the
administration of the Plan are being paid by the Company, at the Company's
option. Wells Fargo is the Plan's Trustee and Custodian and Boyce &
Associates is the Plan's recordkeeper.
-4-
<PAGE>
AMENDMENTS - The Plan was amended ten times prior to 1999.
An eleventh amendment was executed on March 24, 1998 to be effective as
of July 1, 1999 to provide for the inclusion of qualifying employees who
joined the Company because of the Company's acquisition of various assets
from Kaibab Industries, Inc. in July 1998.
A twelfth amendment was executed on March 16, 2000 to be effective
January 1, 1999 to allow participants who have been employed with the Company
at least 10 years and who are at least 59-1/2 years of age to take a complete
distribution of his or her Plan allocation account.
INVESTMENTS - The Plan's investments consist of the Company's common
stock, mutual and pooled funds, an investment in a limited partnership and
loans to participants. Effective February 2, 1999, the Plan changed its
custodian and trustee and mutual fund investments. For 1998, the mutual fund
investment consisted of the Bank of America Balanced Fund. For 1999, the
mutual fund investments consist primarily of Wells Fargo pooled equity and
fixed income funds.
TERMINATION - Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting records of the Plan are maintained on the accrual basis
of accounting, and accordingly, revenues and expenses are recorded in the
year earned or incurred.
Investments are stated at fair value. The fair value of the Company's
common stock is determined based on quoted market prices as of the Plan's
year-end. Fair values for the Wells Fargo pooled equity and income funds and
the Bank of America Balanced Fund are determined based on net asset values
for the funds as reported by the banks. The fair value of the limited
partnership is management's best estimate based on an independent appraisal
provided by Wells Fargo. Loans to participants are valued at cost which
approximates fair value. Interest and dividend income is recorded on the
accrual basis.
Distributions to participants are recorded when paid, or, for Plan
participants who have requested payment of their account in stock, at the
market value of the stock on the date that the shares are reregistered in the
name of the participant.
The preparation of financial statements in conformity with generally
accepted accounting principles in the United States of America necessarily
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of additions and deductions during the reporting period.
Actual results could differ from these estimates.
-5
<PAGE>
3. INVESTMENTS
The following tables present the fair value of the Plan's investments at
December 31, 1999 and 1998:
<TABLE>
<CAPTION>
NUMBER OF
DECEMBER 31, 1999 SHARES OR UNITS FAIR VALUE
- ----------------- --------------- -----------
<S> <C> <C>
Giant Industries, Inc. common stock 1,339,932 $11,221,930
-----------
Wells Fargo pooled equity and income funds:
Wells Fargo Core Equity Fund 2,197 790,906
Wells Fargo Growth Stock Fund 6,684 241,977
Wells Fargo International Value Stock Fund 4,469 258,689
Wells Fargo Small Cap Fund 7,019 304,768
Wells Fargo Short Intermediate Term Fund 75,791 1,117,598
Wells Fargo Large Cap Growth Index Fund 19,271 237,808
-----------
Total Wells Fargo funds 2,951,746
-----------
ML Lee Acquisition Fund 25 5,559
-----------
Limited partnership - Recorp. Mtg. Investors II 1.5 7,200
-----------
Loans to participants 35,732
-----------
Total $14,222,167
===========
DECEMBER 31, 1998
- -----------------
Giant Industries, Inc. common stock 1,149,739 $10,778,803
Bank of America Balanced Fund 115,668 3,333,351
ML Lee Acquisition Fund 25 5,733
Limited partnership - Recorp. Mtg. Investors II 1.5 6,600
Loans to participants 33,955
-----------
Total $14,158,442
===========
</TABLE>
Net depreciation in fair value of the Plan's investments (including
investments bought, sold and held during the period) for the years ended
December 31 consist of the following:
<TABLE>
<CAPTION>
1999 1998
--------- ------------
<S> <C> <C>
Giant Industries, Inc. common stock $(446,798) $(11,121,613)
Wells Fargo pooled equity and income funds 384,000
Bank of America Balanced Fund 446,458
ML Lee Acquisition Fund 175 3,534
Recorp. Mtg. Investors II 600 504
--------- ------------
Net depreciation $ (62,023) $(10,671,117)
========= ============
</TABLE>
-6
<PAGE>
4. FEDERAL INCOME STATUS
The Plan obtained its latest determination letter on April 2, 1997, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe that the
Plan is current designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no provision for income
taxes has been included in the Plan's financial statements.
5. RELATED PARTY TRANSACTIONS
Certain Plan investments are managed by Wells Fargo (and Bank of America
in 1998). Wells Fargo (and Bank of America in 1998) is the Trustee as defined
by the Plan and, therefore, these transactions qualify as party-in-interest.
* * * * * *
-7
<PAGE>
<TABLE>
EMPLOYEE STOCK OWNERSHIP PLAN OF
GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES
SUPPLEMENTAL SCHEDULE
DECEMBER 31, 1999
ITEM 27a - ASSETS HELD FOR INVESTMENT PURPOSES
<CAPTION>
COLUMN B COLUMN C COLUMN D COLUMN E
- ------------------- --------------------------------------------- ---------- -----------
IDENTITY OF ISSUER, DESCRIPTION OF INVESTMENT INCLUDING
BORROWER, LESSOR OR COLLATERAL, RATE OF INTEREST, MATURITY CURRENT
SIMILAR PARTY DATE, PAR OR MATURITY VALUE COST VALUE
- ------------------- --------------------------------------------- ---------- -----------
<S> <C> <C> <C>
Giant Industries, Inc. Common Stock - 1,339,932 shares $ 8,083,555 $11,221,930
Wells Fargo* Core Equity Fund - 2,197 shares 678,080 790,906
Growth Stock Fund - 6,684 shares 183,354 241,977
International Value Stock Fund - 4,469 shares 170,448 258,689
Small Cap Fund - 7,019 shares 167,194 304,768
Short Intermediate Term Fund - 75,791 shares 1,125,330 1,117,598
Large Cap Growth Index Fund - 19,271 shares 206,115 237,808
ML Lee Acquisition Mutual Fund - 25 shares 25,000 5,559
Recorp. Mtg.
Investors II Limited Partnership - 1.5 units 60,000 7,200
Loans to participants Loans at prime plus 3%, collaterialized by
vested accounts, due 2000 through 2004 35,732 35,732
----------- -----------
Total assets held for investment purposes $10,734,808 $14,222,167
=========== ===========
</TABLE>
*Party-in-Interest
-8
<PAGE>
<TABLE>
EMPLOYEE STOCK OWNERSHIP PLAN OF
GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES
SUPPLEMENTAL SCHEDULE
YEAR ENDED DECEMBER 31, 1999
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN G COLUMN H COLUMN I
- ---------------------- ------------------------------------- ---------- ---------- ---------- ----------- ----------
CURRENT
VALUE OF
ASSET ON
IDENTITY OF PURCHASE SELLING COST TRANSACTION
PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE OF ASSET DATE NET GAIN
- ---------------------- ------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Series of Transactions
Bank of America Short-Term Investment Fund $4,967,694 $4,967,694 $4,967,694
Bank of America Short-Term Investment Fund $4,967,694 4,967,694 4,967,694
Bank of America Balanced Fund 1,559 1,559 1,559
Bank of America Balanced Fund 3,259,526 2,635,822 3,259,526 $623,704
Wells Fargo Core Bond 850,000 850,000 850,000
Wells Fargo Core Bond 814,933 850,000 814,933 (35,067)
Wells Fargo Core Equity 960,000 960,000 960,000
Wells Fargo Core Equity 300,375 281,920 300,375 18,455
Wells Fargo Equity Value 525,000 525,000 525,000
Wells Fargo Equity Value 524,011 525,000 524,011 (989)
Wells Fargo Large Cap Growth 408,000 408,000 408,000
Wells Fargo Large Cap Growth 225,000 201,885 225,000 23,115
Wells Fargo S&P 500 810,000 810,000 810,000
Wells Fargo S&P 500 839,555 810,000 839,555 29,555
Wells Fargo Short Intermediate Term 1,145,000 1,145,000 1,145,000
Wells Fargo Short Intermediate Term 19,572 19,670 19,572 (98)
Wells Fargo Short-Term Income 4,551,142 4,551,142 4,551,142
Wells Fargo Short-Term Income 4,551,142 4,551,142 4,551,142
Wells Fargo Giant Industries, Inc. Common Stock 3,036,286 3,036,286
Wells Fargo Giant Industries, Inc. Common Stock 169,340 94,803 169,340 74,537
NOTE: Reportable transactions are those transactions which either singularly or in series of combined purchases and
sales during the year exceed 5% of the fair value of the Plan's assets at the beginning of the year.
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</TABLE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-35357 of Giant Industries, Inc. on Form S-8 of our report dated
April 26, 2000, appearing in this Annual Report on Form 11-K of Giant
Industries, Inc. for the year ended December 31, 1999.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
May 26, 2000
