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, 2002
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:
GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES
401(k) PLAN
(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
Giant Industries, Inc. and Affiliated Companies 401(k) Plan (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, 2002 and 2001, 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.
Exhibit 99.1 - Chief Executive Officer's Certification Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
Exhibit 99.2 - Chief Financial Officer's Certification Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
SIGNATURES
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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.
GIANT INDUSTRIES, INC. AND AFFILIATED
COMPANIES 401(k) PLAN
Date: June 30, 2003 Signature: /s/ KIM H. BULLERDICK
---------------------------------------
Kim H. Bullerdick
Vice President, General Counsel,
and Secretary
Date: June 30, 2003 Signature: /s/ MARK B. COX
---------------------------------------
Mark B. Cox
Vice President, Treasurer, Chief
Financial Officer and Assistant Secretary
Date: June 30, 2003 Signature: /s/ NATALIE R. DOPP
---------------------------------------
Natalie R. Dopp
Vice President, Human Resources
Date: June 30, 2003 Signature: /s/ CHARLES F. YONKER
---------------------------------------
Charles F. Yonker
Vice President, Administrative Services
APPENDIX 1
GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES
401(k) PLAN
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS
ENDED DECEMBER 31, 2002 AND 2001,
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2002, AND
INDEPENDENT AUDITORS' REPORT
GIANT INDUSTRIES, INC. AND
AFFILIATED COMPANIES 401(k) PLAN
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2002 AND 2001:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-8
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2002:
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets
(Held at End of Year) as of December 31, 2002 9
All other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 have been omitted because
they are not applicable.
INDEPENDENT AUDITORS' REPORT
To the Administrative Committee and Participants of the
Giant Industries, Inc. and Affiliated Companies 401(k) Plan
Scottsdale, Arizona
We have audited the accompanying statements of net assets available for
benefits of the Giant Industries, Inc. and Affiliated Companies 401(k)
Plan (the "Plan") as of December 31, 2002 and 2001, 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 Plan as of December
31, 2002 and 2001, 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 schedule
listed in the Table of Contents is presented for the purpose of additional
analysis and is not a required part of the basic financial statements, but
is 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. This schedule is the responsibility of the
Plan's management. The schedule has been subjected to the auditing
procedures applied in our audit of the basic 2002 financial statements
and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
June 24, 2003
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GIANT INDUSTRIES, INC. AND
AFFILIATED COMPANIES 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002 AND 2001
2002 2001
ASSETS
Investments at fair value (Notes 1, 2, 3 and 4) $28,392,677 $34,663,703
Employer contributions receivable 2,353,838 2,353,849
Participant contributions receivable - 95,786
----------- -----------
Net assets available for benefits $30,746,515 $37,113,338
=========== ===========
See notes to financial statements.
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GIANT INDUSTRIES, INC. AND
AFFILIATED COMPANIES 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2002 AND 2001
2002 2001
ADDITIONS:
Contributions:
Participants $ 3,276,026 $ 3,393,975
Employer 2,353,838 2,353,849
Rollover 14,762 255,708
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Total contributions 5,644,626 6,003,532
Interest and dividends 523,453 590,846
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Total additions 6,168,079 6,594,378
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DEDUCTIONS:
Distributions to participants 2,445,282 4,197,135
Administrative fees 16,495 24,113
Net depreciation in fair value of investments 10,073,125 1,948,869
----------- -----------
Total deductions 12,534,902 6,170,117
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NET (DECREASE) INCREASE (6,366,823) 424,261
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 37,113,338 36,689,077
----------- -----------
End of year $30,746,515 $37,113,338
=========== ===========
See notes to financial statements.
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GIANT INDUSTRIES, INC. AND
AFFILIATED COMPANIES 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002 AND 2001
1. DESCRIPTION OF THE PLAN
The following description of the Giant Industries, Inc. and
Affiliated Companies 401(k) Plan (the "Plan") is provided for general
information purposes only. Participants should refer to the Plan agreement
for more complete information.
GENERAL - The Plan was established on July 1, 1993. Employees of
Giant Industries, Inc. and Affiliated Companies (the "Company"), with the
exception of employees eligible to participate in the Giant Yorktown
401(k) Retirement Savings Plan, are eligible to participate in the Plan on
the January 1 or July 1 following 60 days of service for full-time
employees or one year of service for part-time employees. One year of
service means a minimum of 1,000 hours worked during a twelve month
period. Employees are able to make pre-tax contributions to the Plan, and
the Company may contribute to the Plan as well. The Plan is subject to the
Employee Retirement Income Security Act of 1974 ("ERISA").
In September 2000, the Company's Board of Directors approved the
merger of the Employee Stock Ownership Plan of Giant Industries, Inc. and
Affiliated Companies (the "ESOP") into the Plan. Effective January 1,
2001, the net assets of the ESOP were merged into the Plan, and the ESOP
was terminated. All ESOP participants who were employees of the Company on
or after January 1, 2001 became fully and immediately vested, unless their
account balances were previously forfeited under the terms of the ESOP,
the Plan and applicable law. The Plan was amended to permit participants
to elect to receive distributions from accounts transferred from the ESOP
to the Plan in the form of cash, or Company stock, or in cash and Company
stock, and to receive a distribution of all or any portion of their
account balances, without terminating employment, after attainment of age
59-1/2.
In April 2001, the net assets and participant account balances of the
terminated ESOP, which were merged into the Plan effective January 1, 2001
(recorded as a Plan receivable as of December 31, 2000), including
investment net earnings through the date of transfer, were transferred
from Wells Fargo, the Trustee and Custodian of the ESOP, to Fidelity
Management Trust Company, the Trustee, Custodian, and recordkeeper of the
Plan.
CONTRIBUTIONS - Voluntary salary reductions may be elected by the
participant. These pre-tax salary reductions are contributed to the Plan
by the participant and range from 1 percent to 25 percent of compensation,
subject to certain Internal Revenue Code ("IRC") limitations. Effective
June 24, 2003, the maximum voluntary pre-tax salary reduction allowed
under the Plan increased to 60% of compensation, subject to certain IRC
limitations. Effective January 1, 2002, the Plan was amended to allow
"catch-up" contributions, in which eligible participants 50 years of age
or older will be permitted additional contributions up to $1,000 during
2002, $2,000 during 2003, $3,000 during 2004, $4,000 during 2005, and
$5,000 during 2006 (or up to such other amount established by the IRC).
See Note 5 regarding an administrative error relating to matching and
discretionary contributions which was identified subsequent to the Plan's
year end.
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In 2002 and 2001, the Company made discretionary matching
contributions of 50 percent of every dollar contributed by eligible
participants up to a maximum of 6 percent of compensation, which totaled
$1,453,838 and $1,453,849, respectively. Participants become eligible for
the discretionary matching contribution on the first match date following
one year of service. In addition to the discretionary matching
contribution, in 2002 and 2001 the Company approved additional
discretionary contributions of $900,000, directed to the purchase of
Company stock, for participants who had met certain eligibility
requirements. All 2002 and 2001 discretionary contributions are reflected
as Employer Contributions Receivable in the accompanying Statement of Net
Assets Available for Benefits.
Participants must be employed by the Company on the last day of the
Plan year to be eligible for Company discretionary contributions.
DISTRIBUTIONS - Distributions to participants may occur upon
participant termination from the Company, total disability, retirement,
death or hardship as defined by government regulations. A participant may
elect to either receive a lump-sum amount equal to the value of the
participant's vested interest in his or her account or rollover the
balance to another qualified retirement account. The Plan had no
participant benefit distributions payable at December 31, 2002 and 2001.
VESTING - Contributions to the Plan and the earnings thereon are 100
percent vested and nonforfeitable at all times.
PARTICIPANT ACCOUNTS - For each participant, various accounts are
maintained to record employee pre-tax salary reductions, Company matching
contributions, Company discretionary contributions and rollovers. The
benefit to which a participant is entitled is the total benefit that can
be provided from the combined amount of these participant accounts.
PARTICIPANT LOANS - Participants may borrow from their fund accounts
a minimum of $1,000 up to a maximum of $50,000 or 50 percent of their
participant-directed account balances, whichever is less. The loans are
secured by the balance in the participant's account and bear interest at
rates that are established at 1 percent above the prime rate. The loan
shall be repaid within a period not to exceed five years, unless the loan
is used to acquire any dwelling unit as a principal residence of the
participant. In such circumstances, the loan's repayment term shall not
exceed 10 years.
PLAN ADMINISTRATION - The Company administers the Plan through a
401(k) Administrative Committee (the "Committee") comprised of four
employees who are appointed by the Company's Board of Directors. In May
2003, the Board of Directors increased the number of employees on the
Committee from four to five. Most expenses pertaining to the
administration of the Plan are paid by the Company, at the Company's
option. Fidelity Management Trust Company acts as the Plan's Trustee,
Custodian and recordkeeper.
AMENDMENTS - In January of 2003, the Plan was amended to allow for
after-tax contributions in addition to pre-tax distributions. The
Company's matching contribution will be made with respect to the pre-tax
contributions only.
The Plan was amended in June 2003 with an effective date of July 1,
2003 to allow both full and part-time employees to be eligible to
participate in the Plan immediately upon their date of hire.
-5-
PLAN TERMINATION - Although it has not expressed any intention to do
so, the Company has the right at any time to terminate the Plan subject to
the provisions set forth in ERISA. Since all participants are 100 percent
vested, participants would receive 100 percent of amounts credited to
their accounts upon liquidation and distribution of Plan assets.
INVESTMENTS - Participants direct the investment of their
contributions and any employer matching contribution into various
investment options offered by the Plan, with the exception of the
additional discretionary employer contribution, which is directed toward
the purchase of Company stock. In addition, effective January 1, 2001,
participants are permitted to direct the investment of their assets
transferred from the ESOP that are not invested in Company stock. The Plan
currently offers numerous mutual funds and the Company's common stock as
investment options for participants.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted in
the United States of America.
INVESTMENT VALUATION AND INCOME RECOGNITION - Plan investments are
stated at fair value, which is measured by quoted market prices. Purchases
and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the ex-
dividend date.
BENEFITS - Benefits are recorded when paid.
USE OF ESTIMATES - The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires Plan management to make estimates and
assumptions that affect the reported amounts of net assets available for
benefits and changes therein. Actual results could differ from those
estimates.
RISKS AND UNCERTAINTIES - The Plan utilizes various investment
instruments. Investment securities, in general, are exposed to various
risks, such as interest rate risk, credit risk, and overall market
volatility. Due to the level of risk associated with certain investment
securities, it is reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes
could materially affect the amounts reported in the financial statements.
-6-
3. INVESTMENTS
The following presents investments that represent 5 percent or more
of the Plan's net assets available for benefits:
2002 2001
Fidelity Contrafund $ 7,382,228 $ 7,838,647
Giant Industries, Inc. Stock Fund 3,606,825 9,189,093
Fidelity Asset Manager Growth Fund 2,916,372 3,376,574
Fidelity Government Income Fund 2,659,814 N/A
Fidelity Asset Manager Portfolio Fund 2,437,759 2,520,429
Fidelity Retirement Government Money Market Fund 2,187,938 2,245,229
Fidelity Aggressive Growth Fund 1,763,739 2,672,218
During the Plan years ended December 31, 2002 and 2001, the Plan's
investments (including gains and losses on investments bought and sold, as
well as held during the year) appreciated (depreciated) in value by
$(10,073,125) and $(1,948,869), respectively, as follows:
2002 2001
Company common stock $ (6,602,610) $ 3,211,550
Mutual funds (3,470,515) (5,160,419)
------------ -----------
Net depreciation in fair value of investments $(10,073,125) $(1,948,869)
============ ===========
4. NON PARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the non participant-directed investments is
as follows as of, and for the years ended December 31:
2002 2001
Net Assets:
Giant Industries, Inc. Stock Fund $ 3,146,255 $ 9,062,172
============ ===========
Change in net assets:
Net appreciation (depreciation) in fair value $ (4,413,896) $ 2,130,823
Employer contributions receivable 900,000 900,000
Benefits paid to participants (2,033,966) (1,523,896)
Transfers to participant-directed investments (361,349) (24,869)
Fees (6,706) -
------------ -----------
Net change (5,915,917) 1,482,058
------------ -----------
Giant Industries, Inc. Stock Fund
- beginning of year 9,062,172 7,580,114
------------ -----------
Giant Industries, Inc. Stock Fund
- end of year $ 3,146,255 $ 9,062,172
============ ===========
-7-
5. FEDERAL INCOME TAX STATUS
The Plan obtained its latest determination letter dated December 30,
1996, in which the Internal Revenue Service ("IRS") stated that the Plan,
as then designed, was in compliance with the applicable requirements of
the IRC. As discussed in Note 1, effective January 1, 2001, the ESOP
merged with the Plan. As a result of these changes, the Plan filed Form
5300 with the IRS in February of 2002 seeking a new determination letter.
The Plan agreement was amended and restated in June 2003. As a result of
these changes, the Plan must file an amended Form 5300 with the IRS by
September 30, 2003 seeking a new determination letter. In addition, the
Plan has been amended since receiving its determination letter in 1996.
The Plan Administrator and the Plan's tax counsel believe that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the IRC, and accordingly, no provision for income taxes
has been included in the Plan's financial statements.
The Plan recently discovered that a small number of employees that
may have been eligible for matching and discretionary contributions from
the Company failed to receive such contributions. The Plan Administrator
anticipates that the Company will make the corrective contributions plus
any required earnings, for the benefit of the effected participants, in
accordance with the voluntary correction procedures set forth in the IRS
Employee Plans Compliance Resolution System. While the exact amount of the
restorative contributions has not been quantified, the Plan Administrator
does not expect the amount to be material to the Plan's Financial
Statements.
6. RELATED-PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by
Fidelity Investments. Fidelity Investments is an affiliate of the Trustee
as defined by the Plan and, therefore, these transactions qualify as
party-in-interest transactions. Fees paid by the Plan for the investment
management services amounted to $16,495 and $24,113 for the years ended
December 31, 2002 and 2001, respectively.
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GIANT INDUSTRIES, INC. AND
AFFILIATED COMPANIES 401(k) PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2002
Identity of Issuer, Description of Investment Including
Borrower, Lessor or Maturity Date, Rate of Interest, Current
Similar Party Collateral, Par or Maturity Value Cost Value
- ---------------------------------------- ------------------------------------------- ---------- -----------
*Fidelity Retirement Government Money
Market Fund Money Market Fund $ ** $ 2,187,938
*Fidelity Retirement Money Market Fund Money Market Fund ** 6,766
*Fidelity Municipal Money Market fund Money Market Fund ** 77,436
*Fidelity Government Income Fund Mutual Fund ** 2,659,814
*Fidelity Asset Manager Portfolio Fund Mutual Fund ** 2,437,759
*Fidelity Asset Manager Growth Fund Mutual Fund ** 2,916,372
*Fidelity Contrafund Mutual Fund ** 7,382,228
*Fidelity Aggressive Growth Fund Mutual Fund ** 1,763,739
*Fidelity Diversified International Fund Mutual Fund ** 748,425
*Fidelity Freedom Income Mutual Fund ** 46,532
*Fidelity Freedom 2000 Mutual Fund ** 96,336
*Fidelity Freedom 2010 Mutual Fund ** 327,242
*Fidelity Freedom 2020 Mutual Fund ** 392,536
*Fidelity Freedom 2030 Mutual Fund ** 171,851
*Fidelity Freedom 2040 Mutual Fund ** 51,489
*Fidelity Spartan U.S. Equity Index Fund Mutual Fund ** 1,383,865
*Fidelity Puritan Mutual Fund ** 4,331
*Fidelity Trend Fund Mutual Fund ** 104
*Fidelity Ginnie Mae Fund Mutual Fund ** 578
*Fidelity Equity Income Fund Mutual Fund ** 278
*Fidelity Investment Grade Bond Fund Mutual Fund ** 54
*Fidelity Intermediate Bond Fund Mutual Fund ** 6,148
*Fidelity Value Fund Mutual Fund ** 137
*Fidelity OTC Portfolio Mutual Fund ** 1,570
*Fidelity Overseas Fund Mutual Fund ** 414
*Fidelity Real Estate Fund Mutual Fund ** 38,777
*Fidelity Balanced Fund Mutual Fund ** 2,345
*Fidelity Blue Chip Fund Mutual Fund ** 1,683
*Fidelity Disciplined Equity Fund Mutual Fund ** 104
*Fidelity Low Priced Stock Fund Mutual Fund ** 247,578
*Fidelity Equity Income II Fund Mutual Fund ** 46,760
*Fidelity Dividend Growth Fund Mutual Fund ** 78,379
*Fidelity New Market Income Fund Mutual Fund ** 262
*Fidelity Aggressive International Fund Mutual Fund ** 317
*Fidelity Small Cap Independence Mutual Fund ** 1,899
*Fidelity Mid Cap Stock Fund Mutual Fund ** 88,330
*Fidelity Large Cap Stock Fund Mutual Fund ** 1,571
*Fidelity Asset Manager Aggressive Mutual Fund ** 4,206
*Fidelity Southeast Asia Mutual Fund ** 14
*Fidelity Small Cap Retirement Mutual Fund ** 208
*Fidelity Fifty Mutual Fund ** 25,259
*Fidelity US Bond Index Fund Mutual Fund ** 11,806
*Fidelity Structured Large Cap Value Fund Mutual Fund ** 105
*Fidelity Structured Mid Cap Value Fund Mutual Fund ** 107
*Participant-directed - Giant
Industries, Inc. Stock Fund Stock Fund ** 460,570
*Non participant-directed - Giant
Industries, Inc. Stock Fund Stock Fund 6,645,192 3,146,255
Participant notes receivable Participant loan, interest at
prime + 1.00% (5.75% to 12.50% at December 31,
2002, maturing from 2003 to 2011) ** 1,572,200
-----------
Total assets held for investment purposes $28,392,677
===========
*Permitted party-in-interest
**Cost information is not required for participant-directed investments and therefore is not included.
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