EXHIBIT 10.4
NINTH AMENDMENT
OF THE
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
OF GIANT INDUSTRIES, INC.
AND AFFILIATED COMPANIES
Effective as of July 1, 1987, Giant Industries, Inc., an Arizona
corporation, and Ciniza Pipe Line, Inc., a New Mexico corporation,
amended and restated the Joint Profit Sharing Plan and Trust Agreement
of Giant Industries, Inc., Giant Western Service Stations, Inc., and
Ciniza Pipe Line Inc., as the Employee Stock Ownership Plan and Trust
Agreement of Giant Industries, Inc. and Affiliated Companies (the
"Plan"). Effective as of July 1, 1987, the plan was adopted by Ciniza
Production Company, a New Mexico corporation ("Ciniza"), and by J.E.A.
Company, Inc., an Arizona corporation.
Effective as of September 28, 1989, Ciniza Pipe Line Inc. was
merged into Giant Industries, Inc., an Arizona corporation. Effective
as of October 12, 1989, J.E.A. Company, Inc. was merged into Giant
Industries, Inc. and Giant Industries, Inc. changed its name to Giant
Industries Arizona, Inc. ("Giant Arizona").
On October 15, 1989, Giant Arizona entered into an Agreement and
Plan of Reorganization with ▇▇▇▇▇ Development Company, a Texas
corporation, ("▇▇▇▇▇") contemplating a merger whereby Giant Arizona
and ▇▇▇▇▇ would become wholly owned subsidiaries of Giant Industries,
Inc., a Delaware corporation ("Giant"). The stock of Giant became
publicly traded on December 15, 1989, and the merger was consummated
on December 21, 1989.
Effective as of December 21, 1989, the Plan was adopted by Giant
and by ▇▇▇▇▇. The name of ▇▇▇▇▇ was changed to Giant Exploration &
Production Company, a Texas corporation ("E&P"), effective June 12,
1990. Giant, Giant Arizona, E&P, Ciniza, Giant Stop-N-Go of New
Mexico, a New Mexico corporation, and Giant Four Corners, Inc., an
Arizona corporation, and such other entities described in section 1.14
of the Plan are hereinafter collectively referred to as the
"Employer". Under Section 11.1 of the Plan, Giant has been granted
the right to amend the Plan in whole or in part at any time and from
time to time, subject to certain restrictions set forth in the Plan,
on behalf of the Employer.
NOW THEREFORE, Giant deems it advisable to amend the Plan in the
manner hereinafter set forth and hereby adopts this ninth amendment.
Pages 1.7 through 1.18 and 11.2 through 11.4 of the existing Plan
are removed and replaced by the attached replacement pages numbered
1.7 through 1.19 and 11.2 through 11.4 which are incorporated herein
by this reference.
The terms used in this Ninth Amendment which are defined in the
Plan shall have the same meaning given to such terms in the Plan.
Except as modified by this Ninth Amendment, the Plan shall
continue in full force and effect and the Plan and all amendments
thereto shall be read, taken and construed as one and the same
document.
Executed on the 1st day of October, 1996 to be effective as of
January 1, 1996, except that the deletion of Section 11.1(f) is
effective August 15, 1996.
FOR THE EMPLOYER: ADMINISTRATIVE COMMITTEE:
GIANT INDUSTRIES, INC.
A Delaware Corporation /s/ ▇▇▇▇▇▇ ▇▇▇▇
---------------------------------
By /s/ A. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------
VP & CFO /s/ A. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------ ---------------------------------
A. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇▇ ▇▇▇▇
------------------------ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
VP ---------------------------------
------------------------ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
TRUSTEE:
BANK OF AMERICA, N.T. & S.A.
By /s/ ▇.▇. ▇▇▇▇▇▇▇▇, ▇▇.
-------------------------------
Its TRUST ADMINISTRATOR
terms of this Section any Leased Employee is included in the term
"Employee", all contributions or benefits provided for or on behalf of
such Leased Employee by a leasing organization which are attributable
to services performed for the Employer shall be treated as provided by
the Employer and shall offset any benefit otherwise provided under the
terms of this Plan.
1.14 "EMPLOYER," effective as of December 21, 1989, shall mean
Giant Industries, Inc., a Delaware corporation, Giant Industries
Arizona, Inc., an Arizona corporation, ▇▇▇▇▇ Development Company
(renamed Giant Exploration & Production Company, effective June 12,
1990), a Texas corporation, and Ciniza Production Company, a New
Mexico Corporation. The term "Employer" shall also include any other
corporation which becomes a member of a controlled group of
corporations (within the meaning of Section 1563(a) of the Code,
determined without regard to Sections 1563(a)(4) and (e)(3)(c) of the
Code) in which Giant is a component member and each entity (whether or
not incorporated) which comes under common control with Giant (as
defined in Section 414(c) of the Code and regulations issued
thereunder) effective as of the date the corporation or entity becomes
a member of a controlled group in which Giant is a member or comes
under common control with Giant, including Giant Stop-N-Go of New
Mexico, Inc., a New Mexico corporation, and Giant Four Corners, Inc.,
an Arizona Corporation, unless the Board of Directors or the
corporation or entity which becomes a member of such controlled group
affirmatively elects to exclude such corporation or entity from the
definition of Employer. In addition, for purposes of determining
Hours of Service and Years of
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Service, (i) all service completed by a prior employee of Shell Oil
Company and Shell Pipe Line Corporation who became an Employee on or
about April 1, 1982 in connection with the acquisition of the Ciniza
Refinery and Pipeline by Giant Industries, Inc., shall be included as
service with the Employer, (ii) all service completed by an Employee
of ▇▇▇▇▇ prior to December 21, 1989 who was employed by ▇▇▇▇▇ on
December 20, 1989 shall be included as service with the Employer under
this Plan, (iii) effective as of January 1, 1996, all service by a
prior employee of Bloomfield Refining Company ("Bloomfield") or The
▇▇▇▇-▇▇▇▇▇▇▇▇ Company ("▇▇▇▇-▇▇▇▇▇▇▇▇") for service with either
company or with any of their affiliates or predecessor employers to
the extent service was credited to the prior employee under The ▇▇▇▇
Tax Advantaged Savings Program and Profit-Sharing Plan on October 4,
1595, but only if such employee was employed by Bloomfield or ▇▇▇▇-
▇▇▇▇▇▇▇▇ on October 3, 1995, and became an Employee of the Employer on
October 4, 1995, in connection with the sale of assets of Bloomfield
to the Employer, and (iv) effective as of January 1, 1996, all service
by a prior employee of Meridian Oil Inc., Meridian Oil Gathering Inc.,
or Meridian Trading Inc. (collectively "Meridian") for service with
Meridian or with any affiliate or predecessor employer of Meridian to
the extent service was credited to the prior employee under the
Burlington Resources Retirement Savings Plan on August 18, 1995, but
only if such employee was employed by Meridian on August 17, 1995, and
became an Employee of the Employer on August 18, 1995, in connection
with the sale of assets of Meridian to the Employer.
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1.15 "EMPLOYER REAL PROPERTY" shall mean real property (and
related personal property) which is leased to an Employer or to an
affiliate of such Employer as defined under Section 407(d)(7) of
BRISA. Employer Real Property shall be deemed to be acquired by the
Plan on the date on which the Plan acquires the property or on the
date on which a lease from the Plan to the Employer (or affiliate) is
entered into, whichever is later.
1.16 "EMPLOYER STOCK" prior to December 21, 1989, shall mean
shares of common stock of Giant Industries Arizona, Inc., an Arizona
corporation, having a combination of voting power and dividend rights
equal to or in excess of that class of common stock having the
greatest voting power and that class of common stock having the
greatest dividend rights, and on or after December 21, 1989 shall mean
shares of common stock issued by Giant Industries, Inc., a Delaware
corporation. Any valuation of Employer Stock prior to December 21,
1989, and any valuation in the event shares of common stock of Giant
Industries, Inc. cease to be readily tradeable on an established
securities market after December 21, 1989, shall be performed by an
independent appraiser who meets the requirements of Code Section
410(a)(28)(c).
1.17 "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
1.18 "EXEMPT LOAN" shall mean an exempt loan within the meaning
of Code Section 4975(d)(3) and Treasury Regulations Section 54.4975-7
(b) (iii), the requirements of which are more fully set forth in
Section 9.2.
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1.19 "FIDUCIARY" shall mean, in accordance with Section 3(21) of
ERISA, any person who exercises any discretionary authority or
discretionary control respecting management of the Plan or any
authority or control respecting management or disposition of Plan
assets, who renders investment advice for a fee or other compensation
(direct or indirect) with respect to Plan assets or who has any
authority or responsibility to do so, and any person who has any
discretionary authority or discretionary responsibility in the
administration of the Plan. The term Fiduciary shall be construed as
including the term "Named Fiduciary" as defined in Section 402(a)(2)
of ERISA with respect to those Fiduciaries who are identified in the
Plan as "Named Fiduciaries".
1.20 "FISCAL YEAR" shall mean the year beginning on January 1
and ending on December 31, and such Fiscal Year shall be the plan year
for all purposes under ERISA and the Code.
1.21 "FORMER PARTICIPANT" shall mean a Participant whose
employment with the Employer has terminated but who has vested
Accounts under the Plan which have not been paid in full and which
continue to participate in the increase or decrease in Plan assets
including, for any Former Participant on or after December 21, 1989,
any increase or decrease in Employer Stock.
1.22 "GIANT" means Giant Industries, Inc., a Delaware
corporation.
1.23 "GIANT ARIZONA" means Giant Industries Arizona, Inc., an
Arizona corporation.
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1.24 "HIGHLY COMPENSATED EMPLOYEE" means, effective for any
Fiscal Year beginning on or after January 1, 1987, any Employee who is
a highly compensated employee as defined in Code Section 414(q) and
the applicable Treasury regulations. Generally, any Employee is
considered a Highly Compensated Employee if during the Determination
Year or the Look-Back Year such Employee:
(a) was a "5% owner" as defined in Code Section 416(i)(B)(i)
(i.e. who owns (or is treated as owning) more than five
percent (5%) of the outstanding stock of the Employer or
stock possessing more than five percent (5%) of the total
combined voting power of all stock of the Employer or, in
the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or
profits interest in the Employer.) In determining
percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c)
and (m) shall be treated as separate employers;
(b) received Section 415 Compensation from the Employer in
excess of $75,000;
(c) received Section 415 Compensation from the Employer in
excess of $50,000 and was in the "Top-Paid Group." An
Employee is in the Top-Paid Group if such Employee is in
the group consisting of the top twenty percent (20%) of
Employees when ranked on the
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basis of Section 415 Compensation (as adjusted below); or
(d) was an officer of the Employer whose Section 415
Compensation (as adjusted below) is greater than $45,000
(or such other amount which is equal to fifty percent
(50%) of the amount specified in Code Section
415(b)(1)(A) for the calendar year in which the
Determination Year or the Look-Back Year begins.
For purposes of this Section, the Determination Year shall be the
Plan Year in which testing is being performed. The Employer has elected
to treat the calendar year ending with or within the Determination Year
as the Look-Back Year as provided for in Treasury regulations. Solely
for purposes of identifying Highly Compensated Employees under the terms
of this Section and Code Section 414(q), Section 415 Compensation means
Section 415 Compensation as defined in Section 3.1(b) plus amounts
described under Code Sections 125, 402(e)(3) (formerly 402(a)(8)) or
402(h)(1)(B) that are otherwise excluded from Section 415 Compensation;
and the dollar threshold amount specified in subsections (b) and (c) of
this Section shall be adjusted at such time and in such manner as is
provided in the Code.
The term "Highly Compensated Employee" also includes a former
Employee who separated from service (or has a deemed separation from
service as determined under Treasury regulations) prior to the
Determination Year, performs no services for the Employer during the
Determination Year, and was a Highly
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Compensated Employee either for the Look-Back Year or any Determination
Year ending on or after his 55th birthday.
The Committee shall make the determination of who is a Highly
Compensated Employee, including the determination of the number and
identity of the Top-Paid Group, the number of officers includible in
subsection (d), the number and identity of former Employees considered
to be Highly Compensated Employees, the identity of "Excluded
Employees," and Section 415 Compensation, in a manner consistent with
Code Section 414(q).
For purposes of this Section, an "Excluded Employee" is defined
under Code Section 414(q)(8) and generally includes (i) Employees who
have not completed six (6) months of service; (ii)Employees who normally
work less than 17 1/2 hours per week; (iii) Employees who normally work
during not more than six (6) months during any Determination Year; (iv)
Employees who have not attained age 21; and (v) employees who are
included in a unit of employees covered by a collective bargaining
agreement. The number of officers taken into account under subsection
(d) will not exceed the greater of 3 or 10% of the total number of
Employees (after subtracting Excluded Employees) but will not exceed 50
officers. If no Employee satisfies the dollar threshold amount in
subsection (d) for the relevant Fiscal Year, the Committee will treat
the highest paid officer as satisfying subsection (d) for that Fiscal
Year.
For purposes of applying any nondiscrimination test in a manner
consistent with the applicable Treasury regulations, the Committee will
treat as a single Highly Compensated Employee any
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Highly Compensated Employee, who is a 5% owner or is one of the 10
Highly Compensated Employees with the greatest Section 415 compensation
for the Determination Year, and his spouse, lineal ascendants or
descendants or spouses of lineal ascendants or descendants even if such
family members are Highly Compensated Employees in their own right.
1.25 "▇▇▇▇▇" shall mean ▇▇▇▇▇ Development Company, a Texas
corporation.
1.26 "HOUR OF SERVICE" shall mean each hour for which the Employee
is directly or indirectly paid or entitled to payment by the Employer
for performance of duties for the Employer including each hour for which
back pay, irrespective of mitigation of damages, has been either awarded
or agreed to by the Employer, and including each hour for which payment
is made or payable to the Employee for periods during which the Employee
is on an Employer approved leave of absence for vacation, jury, sick, or
disability leave, or military service. Hours of Service shall, also
include hours during such additional periods of service as may be
required pursuant to Department of Labor regulations. Hours for
nonperformance of duties shall be credited in accordance with DOL
Regulations Section 2530.200b-2(b). Hours shall be credited to the
applicable computation period in accordance with DOL Regulations Section
2530.200b-2(c).
1.27 "INELIGIBLE PARTICIPANT" shall mean, for purposes of
allocating Section 1042 Employer Stock, (a) a Participant who is a more
than twenty-five percent (25%) owner (or a Participant who is treated
under Code Section 409(n) as a more than twenty-five
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percent (25%) owner) of any class of outstanding stock of Giant
Industries, Inc. (or prior to December 21, 1989, of Giant Industries
Arizona, Inc.) or of the total value of any class of outstanding stock
of Giant Industries, Inc. (or prior to December 21, 1989, of Giant
Industries Arizona, Inc.) whether he has elected nonrecognition of gain
under Section 1042 of the Code or not, or (b) a Participant (or a
Participant who is related within the meaning of Code Section 409(n) to
a Participant) who has elected nonrecognition of gain under Section 1042
of the Code in connection with the sale of Employer Stock to the Plan.
A Participant who is described in section 1.27(b) but not in Section
1.27(a) shall be an "Ineligible Participant" only for the period
beginning on the date on which the Employee Stock for which he elected
Code Section 1042 treatment was sold to the Plan and ending on the later
of (1) the date which is ten (10) years after the date of such sale or
(2) the date on which any allocation under the Plan is made which is
attributable to the final payment of any indebtedness incurred by the
Plan in connection with such sale.
1.28 "INVESTMENT MANAGER" shall mean a fiduciary (other than a
Trustee or Named Fiduciary) designated by the Committee under this Plan
to whom has been delegated the power to manage, acquire or dispose of
all or any of the assets of the Plan, who is registered as an investment
advisor under the Investment Advisers Act of 1940, is a bank as defined
under the Investment Advisers Act of 1940 or is an insurance company
qualified to manage, acquire, or dispose of assets under the laws of
more than one State, and who
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has acknowledged in writing that he is a fiduciary with respect to
the management, acquisition and control of Plan assets.
1.29 "PARTICIPANT" shall mean any Employee of the Employer who
becomes eligible for participation in accordance with the provisions of
this Plan.
1.30 "PLAN" shall mean the qualified stock bonus plan and trust
set forth in this Agreem6nt, which is intended to be a qualified
employee stock ownership plan and trust.
1.31 "QUALIFYING EMPLOYER REAL PROPERTY" shall mean Employer Real
Property:
(a) if a substantial number of the parcels are dispersed
geographically;
(b) if each parcel of real property and the improvements
thereon are suitable (or adaptable without excessive cost) for more than
one use;
(c) even if all such real property is leased to one lessee
(which may be an employer, or an affiliate of an employer); and
(d) if the acquisition and retention of such property comply
with the provisions of this part of ERISA (other than section
404(a)(1)(B) to the extent it requires diversification, and sections
404(a)(1)(C), 406, and subsection (a) of this section).
1.32 "SECTION 1042 EMPLOYER STOCK" shall mean Employer Stock
acquired by the Plan prior to December 21, 1989 in a transaction which
qualified for nonrecognition of gain under Code Section 1042.
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1.33 "SECTION 1042 EMPLOYER STOCK ACCOUNT" shall mean the account
used to reflect an interest in Section 1042 Employer Stock.
1.34 "SUSPENSE ACCOUNT" shall mean the account used to hold
Employer Stock purchased pursuant to Article IX of the Plan with the
proceeds of an Exempt Loan, prior to allocation of such stock to the
Accounts of Participants under the Plan.
1.35 "TEMPORARY STOCK ACCOUNT" shall mean the interim account used
to hold Employer Stock purchased by the Trustee, other than Employer
Stock purchased pursuant to Article IX of the Plan with the proceeds of
an Exempt Loan, and to hold Employer Stock contributed to the Plan by
the Employer, prior to the allocation of such stock to the Accounts of
Participants each Fiscal Year in accordance with Sections 4.4(a), 4.7(a)
and 4.7(c).
1.36 "TRUST" or "TRUST FUND" shall mean the trust which is
established herein to hold and invest contributions made under this
Plan.
1.37 "TRUSTEE" shall mean the one or more individuals, banks,
trust companies or other financial institutions, which are appointed in
accordance with Article VIII to hold and manage the assets of the Trust.
1.38 "UNION EMPLOYEE" shall mean any person employed by Employer
who is a member of a unit of employees covered by any collective
bargaining agreement between employee representatives and the Employer,
wherein retirement benefits were the subject of good faith bargaining
between the parties thereto, unless said agreement provides for
participation in this Plan.
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1.39 "UNRESTRICTED EMPLOYER STOCK" shall mean Employer Stock which
was not acquired in a transaction qualifying for nonrecognition of gain
under Section 1042 of the Code.
1.40 "UNRESTRICTED EMPLOYER STOCK ACCOUNT" shall mean the account
used to reflect an interest in Unrestricted Employer Stock.
1.41 "VALUATION DATE" shall mean the last day of each Fiscal Year
unless otherwise specifically indicated.
1.42 "YEAR OF SERVICE" shall mean, for purposes of eligibility
under the Plan, the twelve (12) consecutive month period commencing on
(a) the first day the Employee completes an Hour of
Service, or
(b) if the Employee incurs a Break in Service, the
first day the Employee completes an Hour of Service after such Break in
Service, and, each succeeding twelve (12) consecutive month period
beginning on anniversaries of that date during which the Employee
completes at least one thousand (1,000) Hours of Service. The twelve
(12) consecutive month period determined under this Section for the
calculation of a Year of Service for eligibility shall be the
Eligibility Computation Period.
1.43 "YEAR OF SERVICE" shall mean, for purposes of vesting under
the Plan, the Fiscal Year
(a) during which a Participant first completed an Hour of
Service either as an Employee or as a Union Employee; or
(b) if an Employee or a union Employee incurs a Break in
Service, the Fiscal Year during which the Employee or
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Union Employee completes an Hour of Service after such Break in Service,
and each succeeding Fiscal Year during which an Employee or a Union
Employee completes at least one thousand (1,000) Hours of Service;
provided, however, that any Employee or a Union Employee hired on or
before June 30, 1993 who becomes a Participant under the terms of
Section 2.1 prior to the Seventh Amendment shall be credited in all
events with one Year of Service for the Fiscal Year in which such
Employee or Union Employee becomes a Participant. The Fiscal Year shall
be the Vesting Computation Period.
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a Participant of his or her nonforfeitable rights to benefits accrued to
the date of the amendment. Further, effective for Fiscal Years beginning
on or after January 1, 1989, if the Vesting Schedule of the Plan is
amended each Participant with at least three (3) Years of Service with
the Employer may elect, within a reasonable period after the adoption of
the amendment, to have his or her nonforfeitable percentage computed
under the Plan without regard to such amendment. The period during which
the election may be made shall commence with the date the amendment is
adopted and shall end on the later of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Participant is issued written notice of the
amendment by the Employer or plan administrator; and
11.2 DISCONTINUANCE OF PLAN.
It is the Employer's expectation that this Plan and the payment of
contributions hereunder will be continued indefinitely, and the Trust
related to this Plan is irrevocable, but continuance of the Plan by the
Employer is not assumed as a contractual obligation, and the Employer
reserves the right at any time to reduce, temporarily suspend, or
discontinue contributions hereunder. In the event of the Employer's
complete discontinuance of contributions, the entire interest of each
Participant shall vest immediately and become non-forfeitable.
The Employer may terminate this Plan at any time upon written
notice to the Trustee. Upon termination or partial termination of the
Plan, the entire interest of each of the
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Participants shall immediately vest and become non-forfeitable. The
Trustee shall thereafter, upon direction of the Committee, distribute to
the Participants the amount in such Participants' accounts in the same
manner as set forth in Article V, subject, where appropriate, to Section
403(d)(1) of ERISA and regulations of the Secretary of Labor thereunder
as may affect allocation of assets upon termination of the Plan.
Notwithstanding any provision of Article XI to the contrary, upon
the termination of the Plan, the Trustee shall not be obligated to
distribute assets from the Plan, until the Plan has received a favorable
determination from the Internal Revenue Service that the Plan termination
has not adversely affected the qualification of the Plan under Section
401, or until the Employer agrees to indemnify the Trustee against any
income tax liability incurred by the Trust as a consequence of an adverse
determination, provided the Trustee agrees to accept the Employer's
indemnification.
11.3 MERGER OR CONSOLIDATION.
This Plan shall not be merged or consolidated with, nor shall its
assets or liabilities be transferred to, any other plan unless each
Participant in this Plan (if the Plan then terminated) would receive a
benefit immediately after the merger, consolidation or transfer which is
equal to or greater than the benefit such Participants, respectively,
would have been entitled to receive immediately before the merger,
consolidation, or transfer (if this Plan had been terminated). Where the
foregoing requirement is satisfied this Plan and its related Trust may be
merged or consolidated with another qualified plan and trust.
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11.4 FAILURE TO CONTRIBUTE.
Any failure by the Employer to contribute to the Trust in any year
when no contribution is required under this Plan shall not of itself be a
discontinuance of contributions under this Plan.
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