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 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 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 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 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 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 -1- EMPLOYEE STOCK OWNERSHIP PLAN OF GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1999 AND 1998 1999 1998 ----------- ----------- 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 =========== =========== See notes to financial statements. -2- 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 1999 1998 ----------- ----------- 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 =========== =========== See notes to financial statements. -3- 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- 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 3. INVESTMENTS The following tables present the fair value of the Plan's investments at December 31, 1999 and 1998: NUMBER OF DECEMBER 31, 1999 SHARES OR UNITS FAIR VALUE - ----------------- --------------- ----------- 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 =========== 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: 1999 1998 --------- ------------ 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) ========= ============ -6 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 EMPLOYEE STOCK OWNERSHIP PLAN OF GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES SUPPLEMENTAL SCHEDULE DECEMBER 31, 1999 ITEM 27a - ASSETS HELD FOR INVESTMENT PURPOSES 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 - ------------------- --------------------------------------------- ---------- ----------- 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 =========== =========== *Party-in-Interest -8 EMPLOYEE STOCK OWNERSHIP PLAN OF GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES SUPPLEMENTAL SCHEDULE YEAR ENDED DECEMBER 31, 1999 ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS 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 - ---------------------- ------------------------------------- ---------- ---------- ---------- ---------- ---------- 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. -9-