Alon USA Energy, Inc. (Form: 8-K, Received: 11/08/2005 17:45:18)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): November 8, 2005

ALON USA ENERGY, INC.

(Exact Name of Registrant as Specified in Charter)


Delaware (State or Other Jurisdiction of Incorporation)		001-32567 (Commission File Number)		74-2966572 (IRS Employer Identification No.)

7616 LBJ Freeway, Suite 300
Dallas, Texas 75251
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (972) 367-3600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

Management Employment Agreement Amendment

On November 7, 2005, the Board of Directors (the “Board”) of Alon USA Energy, Inc. (the “Company”) authorized an amendment to the Executive/Management Employment Agreement, dated October 1, 2002, as amended (the “Employment Agreement”), between Alon USA GP, LLC (an indirect wholly owned subsidiary of the Company) and Harlin R. Dean, Vice President, General Counsel and Secretary of the Company. The amendment increases the “Target Bonus Amount” (as set forth in Section 2(b) of the Employment Agreement) to one hundred percent (100%) of Mr. Dean’s base compensation. A copy of this amendment is attached to this Current Report on From 8-K as Exhibit 10.1, and incorporated by reference into this Item 1.01.

2005 Incentive Compensation Plan Amendment

On November 7, 2005, the Board approved an amendment to the Company’s 2005 Incentive Compensation Plan (as amended, the “Plan”). The amendment revised the definition of the term “Participant” (as set forth in Section 3(p) of the Plan). A copy of the amended Plan is attached to the Current Report on Form 8-K as Exhibit 10.2, and is incorporated by reference into this Item 1.01.

Restricted Stock Awards

On November 7, 2005, the Board, upon recommendation from the Compensation Committee of the Board, granted to (i) Harlin R. Dean, Vice President, General Counsel and Secretary, 15,669 restricted shares of the Company’s common stock, (ii) Joseph Israel, Vice President of Mergers and Acquisitions, 11,456 restricted shares of the Company’s common stock, and (iii) Shai Even, Vice President, Chief Financial Officer and Treasurer, 11,369 restricted shares of the Company’s common stock, pursuant to Section 8 of the Plan. The shares subject to each grant will vest in equal installments on the first, second and third anniversaries of the date of grant. These awards are evidenced by agreements in the form adopted by the Company for the purpose of evidencing grants of this type, which form is attached to this Current Report on Form 8-K as Exhibit 10.3, and is incorporated by reference into this Item 1.01.

On November 7, 2005, the Board, upon recommendation from the Compensation Committee of the Board, granted to Ron W. Haddock, a Director of the Company, the right to purchase 12,500 restricted shares of the Company’s common stock at a price per share of $12.00. The grant was made pursuant to Section 8 of the Plan and the shares subject to the grant will vest in equal installments on the first, second and third anniversaries of the date of grant. The award will be evidenced by an agreement in the form adopted by the Company for the purpose of evidencing grants of this type, which form was attached as Exhibit 10.01 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on August 23, 2005 (SEC File No. 001-32567), and is incorporated by reference into this Item 1.01.

Item 2.02. Results of Operations and Financial Condition.

On November 8, 2005, we issued a press release reporting our financial results for the quarter and nine-month period ended September 30, 2005. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K, and is incorporated by reference into this Item 2.02.

Item 9.01. Financial Statements and Exhibits.


Exhibit
Number		Description

10.1		Amendment to Executive/Management Employment Agreement, dated as of November 7, 2005, between Harlin R. Dean and Alon USA GP, LLC

10.2		The Company’s 2005 Incentive Compensation Plan, as amended on November 7, 2005

10.3		Form II of Restricted Stock Award Agreement relating to Participant Grants Pursuant to Section 8 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan

99.1		Press Release dated November 8, 2005

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	ALON USA ENERGY, INC.
	By:	/s/ Harlin R. Dean
		Harlin R. Dean
		Vice President, General Counsel and Secretary

Date: November 8, 2005

INDEX TO EXHIBITS


Exhibit
Number		Description

10.1		Amendment to Executive/Management Employment Agreement, dated as of November 7, 2005, between Harlin R. Dean and Alon USA GP, LLC

10.2		The Company’s 2005 Incentive Compensation Plan, as amended on November 7, 2005

10.3		Form II of Restricted Stock Award Agreement relating to Participant Grants Pursuant to Section 8 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan

99.1		Press Release dated November 8, 2005

Exhibit 10.1

Amendment to Executive/Management Employment Agreement

This Amendment is made as of November 7 ^th , 2005 by and among Alon USA GP, LLC (“Employer”) and Harlin R. Dean (“Executive”).

Whereas, the Employer and Executive entered into that certain Executive/Management Employment Agreement dated as of October 1, 2002 (as amended to date, the “Employment Agreement”); and

Whereas, it is necessary to amend the Employment Agreement to reflect a change in the target bonus amount of Executive.

Now, therefore, the parties agree as follows:

1.		Target Bonus Amount, as set forth in Section 2(b) of the Employment Agreement, shall be one hundred percent (100%) of Executive’s base compensation.

2.		Except as set forth in this Amendment, nothing contained herein is intended to modify or otherwise affect the terms and conditions of the Employment Agreement which shall remain in full force and effect.

In Witness Whereof, the parties have caused this Amendment to be executed and delivered as of the date first above written.



		ALON		USA GP, LLC

		By:		/s/ David Wiessman

				David Wiessman


		Executive:		/s/ Harlin R. Dean

				Harlin R. Dean

Exhibit 10.2

ALON USA ENERGY, INC.
2005 INCENTIVE COMPENSATION PLAN


SECTION		PAGE
1.	Purpose		1

2.	Term		1

3.	Definitions		1

4.	Shares Available Under Plan		5

5.	Limitations on Awards		5

6.	Stock Options		6

7.	Appreciation Rights		7

8.	Restricted Shares		9

9.	Restricted Stock Units		10

10.	Performance Shares and Performance Units		10

11.	Senior Executive Plan Bonuses		11

12.	Awards to Eligible Directors		12

13.	Transferability		13

14.	Adjustments		13

15.	Fractional Shares		14

16.	Withholding Taxes		14

17.	Administration of the Plan		14

18.	Amendments and Other Matters		15

19.	Governing Law		16

ALON USA ENERGY, INC.
2005 INCENTIVE COMPENSATION PLAN

Alon USA Energy, Inc., a Delaware corporation (the “Company”), establishes the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (the “Plan”), effective as of July 6, 2005, subject to stockholder approval.

Purpose . The purpose of the Plan is to attract and retain the best available talent and encourage the highest level of performance by directors, executive officers and selected employees, and to provide them incentives to put forth maximum efforts for the success of the Company’s business, in order to serve the best interests of the Company and its stockholders.

Term . The Plan will expire on the tenth anniversary of the date on which it is approved by the stockholders of the Company. No further Awards will be made under the Plan on or after such tenth anniversary. Awards that are outstanding on the date the Plan terminates will remain in effect according to their terms and the provisions of the Plan.

Definitions . The following terms, when used in the Plan with initial capital letters, will have the following meanings:

	(a)		Appreciation Right means a right granted pursuant to Section 7.

	(b)		Award means the award of a Senior Executive Plan Bonus; the grant of Appreciation Rights, Stock Options, Performance Shares, Performance Units or Restricted Stock Units; or the grant or sale of Restricted Shares.

	(c)		Board means the Board of Directors of the Company.

	(d)		Code means the Internal Revenue Code of 1986, as in effect from time to time.

	(e)		Committee means:

(i)

with respect to any matter arising under the Plan that relates to a Participant who is subject to Section 16 of the Exchange Act, the Incentive Compensation Plan Committee appointed by the Board, which committee at all times will consist of two or more members of the Board, all of whom are intended (A) to meet all applicable independence requirements of the New York Stock Exchange or the principal national securities exchange or principal market on or in which the Common Stock is traded and (B) to qualify as “non-employee directors” as defined in Rule 16b-3 and as “outside directors” as defined in regulations adopted under Section 162(m) of the Code, as such terms may be amended from time to time, provided, however, that the failure of a member of the Committee to so qualify will not invalidate any Award granted to such Participant under the Plan;

	(ii)		with respect to any matter arising under the Plan that relates to any other Participant, the Compensation Committee of the Board; and

	(iii)		to the extent the administration of the Plan has been assumed by the Board pursuant to Section 17, the Board.

(f)

Common Stock means the common stock, par value $.01 per share, of the Company or any security into which such Common Stock may be changed by reason of any transaction or event of the type described in Section 14.

(g)

Date of Grant means the date specified by the Committee on which an Award will become effective.

(h)

Deferral Period means the period of time during which Restricted Stock Units are subject to deferral limitations under Section 9.

(i)

Eligible Director means a member of the Board who is not (i) an employee of the Company or any Subsidiary or (ii) an officer, director or employee of (A) Alon Israel Oil Company or any of its affiliates other than the Company or any Subsidiary; (B) Africa Israel Investments Ltd. or any of its affiliates; (C) Bielsol Investments (1987) Ltd. or any of its affiliates; or (D) Kibbutz Movement or any of its affiliates.

(j)

Evidence of Award means an agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee which sets forth the terms and conditions of an Award. An Evidence of Award may be in any electronic medium, may be limited to a notation on the books and records of the Company and need not be signed by a representative of the Company or a Participant.

(k)

Exchange Act means the Securities Exchange Act of 1934, as amended.

(l)

Grant Price means the price per share of Common Stock at which an Appreciation Right is granted.

(m)

Management Objectives means the measurable performance objectives, if any, established by the Committee for a Performance Period that are to be achieved with respect to an Award. Management Objectives may be described in terms of company-wide objectives ( i.e., the performance of the Company and all of its Subsidiaries) or in terms of objectives that are related to the performance of the individual Participant or of the division, Subsidiary, department, region or function within the Company or a Subsidiary in which the Participant receiving the Award is employed or on which the Participant’s efforts have the most influence. The achievement of the Management Objectives established by the Committee for any Performance Period will be determined without regard to any change in accounting standards by the Financial Accounting Standards Board or any successor entity.

The Management Objectives applicable to any Award to a Participant who is, or is determined by the Committee to be likely to become, a “covered employee” within the meaning of Section 162(m) of the Code (or any successor provision) will be limited to specified levels of, growth in, or performance relative to peer company performance in, one or more of the following performance measures (excluding the effect of extraordinary or nonrecurring items unless the Committee specifically includes any such extraordinary or nonrecurring item at the time such Award is granted):

(i)

profitability measures;

	(ii)		revenue, sales and same store sales measures;

	(iii)		business unit performance;

	(iv)		leverage measures;

	(v)		stockholder return;

	(vi)		expense management;

	(vii)		asset and liability measures;

	(viii)		individual performance;

	(ix)		supply chain efficiency;

	(x)		customer satisfaction;

	(xi)		productivity measures;

	(xii)		cash flow measures;

	(xiii)		return measures; and

	(xiv)		product development and/or performance

If the Committee determines that, as a result of a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which the Company conducts its business, or any other events or circumstances, the Management Objectives are no longer suitable, the Committee may in its discretion modify such Management Objectives or the related minimum acceptable level of achievement, in whole or in part, with respect to a Performance Period as the Committee deems appropriate and equitable.

(n)

Market Value per Share means, at any date, the closing sale price of the Common Stock on that date (or, if there are no sales on that date, the last preceding date on which there was a sale) on the principal national securities exchange or in the principal market on or in which the Common Stock is traded.

(o)

Option Price means the purchase price per share payable on exercise of a Stock Option.

(p)

Participant means a person who is selected by the Committee to receive an Award under the Plan and who at that time is an executive officer or other key employee of the Company or any Subsidiary, or who at that time is an Eligible Director, provided that an Eligible Director shall be a Participant only for purposes of Awards of Restricted Shares.

(q)

Performance Share means a bookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant to Section 10.

(r)

Performance Period means, with respect to an Award, a period of time within which the Management Objectives relating to such Award are to be measured. The Performance Period for a Senior Executive Plan Bonus will be the fiscal year of the Company, and, unless otherwise expressly provided in the Plan, the Performance Period for all other Awards will be established by the Committee at the time of the Award.

(s)

Performance Unit means a unit equivalent to $1.00 (or such other value as the Committee determines) granted pursuant to Section 10.

(t)

Restricted Shares means shares of Common Stock granted or sold pursuant to Section 8 as to which neither the ownership restrictions nor the restrictions on transfer have expired.

(u)

Restricted Stock Units means an Award pursuant to Section 9 of the right to receive shares of Common Stock at the end of a specified Deferral Period.

(v)

Rule 16b-3 means Rule 16b-3 under Section 16 of the Exchange Act as amended (or any successor rule to the same effect), as in effect from time to time.

(w)

Senior Executive Plan Bonus means an Award of annual incentive compensation made pursuant to and subject to the conditions set forth in Section 11.

(x)

Spread means the excess of the Market Value per Share on the date an Appreciation Right is exercised over (i) the Option Price provided for in the Stock Option granted in tandem with the Appreciation Right or (ii) if there is no tandem Stock Option, the Grant Price provided for in the Appreciation Right, in either case multiplied by the number of shares of Common Stock in respect of which the Appreciation Right is exercised.

(y)

Stock Option means the right to purchase shares of Common Stock upon exercise of an option granted pursuant to Section 6.

(z)

Subsidiary means (i) any corporation of which at least 50% of the combined voting power of the then outstanding shares of Voting Stock is owned

directly or indirectly by the Company, (ii) any partnership of which at least 50% of the profits interest or capital interest is owned directly or indirectly by the Company and (iii) any other entity of which at least 50% of the total equity interest is owned directly or indirectly by the Company.

(aa)

Voting Stock means the securities entitled to vote generally in the election of directors or persons who serve similar functions.

Shares Available Under Plan . The aggregate number of shares of Common Stock that may be (i) subject to an Award of Appreciation Rights or Stock Options or (ii) issued or transferred as Restricted Shares and released from all restrictions or in payment of Performance Shares, Performance Units, Restricted Stock Units or Senior Executive Plan Bonuses will not exceed in the aggregate 2,200,000 shares. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing. The number of shares of Common Stock available under this Section 4 will be subject to adjustment as provided in Section 14 and will be further adjusted to include shares that relate to Awards that expire or are forfeited. The number of shares of Common Stock available under this Section 4 will not be adjusted to include (i) any shares withheld by, or tendered to, the Company in payment of the Option Price with respect to a Stock Option or in satisfaction of the taxes required to be withheld in connection with any Award granted under the Plan or (ii) any shares subject to an Appreciation Right that are not transferred to a Participant upon exercise of the Appreciation Right.

Limitations on Awards . Awards under the Plan will be subject to the following limitations:

(a)

No more than 2,200,000 shares of Common Stock, subject to adjustment as provided in Section 4, may be subject to an Award of Stock Options that are intended to qualify as incentive stock options under Section 422 of the Code.

(b)

The maximum number of shares of Common Stock that:

(i)

may be subject to Stock Options or Appreciation Rights granted to a Participant during any calendar year will not exceed 100,000 shares plus an additional 100,000 shares with respect to Stock Options or Appreciation Rights granted a Participant who has not previously been employed by the Company or any Subsidiary and

(ii)

may be granted to a Participant during any calendar year as Performance Shares, Restricted Shares or Restricted Stock Units may not exceed 50,000 shares plus an additional 50,000 shares with respect to Performance Shares, Restricted Shares or Restricted Stock Units granted a Participant who has not previously been employed by the Company or any Subsidiary.

The limitations set forth in this Section 5(b) will apply without regard to whether the applicable Award is settled in cash or in shares of Common Stock.

(c)

The maximum aggregate cash value of payments to any Participant for any Performance Period pursuant to an award of Performance Units will not exceed $1 million.

(d)

The payment of a Senior Executive Plan Bonus to any Participant will not exceed $1 million.

Stock Options . The Committee may from time to time authorize grants of options to any Participant to purchase shares of Common Stock upon such terms and conditions as it may determine in accordance with this Section 6. Each Participant who is a key employee of the Company or any Subsidiary will be eligible to receive a grant of Stock Options that are intended to qualify as incentive stock options within the meaning of Section 422 of the Code. Each grant of Stock Options may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

(a)

Each grant will specify the number of shares of Common Stock to which it relates.

(b)

Each grant will specify the Option Price, which will not be less than 100% of the Market Value per Share on the Date of Grant.

(c)

Each grant will specify whether the Option Price will be payable (i) in cash or by check acceptable to the Company, (ii) by the actual or constructive transfer to the Company of shares of Common Stock owned by the Participant for at least six months (or, with the consent of the Committee, for less than six months) having an aggregate Market Value per Share at the date of exercise equal to the aggregate Option Price, (iii) with the consent of the Committee, by authorizing the Company to withhold a number of shares of Common Stock otherwise issuable to the Participant having an aggregate Market Value per Share on the date of exercise equal to the aggregate Option Price or (iv) by a combination of such methods of payment; provided, however, that the payment methods described in clauses (ii) and (iii) will not be available at any time that the Company is prohibited from purchasing or acquiring such shares of Common Stock.

(d)

To the extent permitted by law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or broker of some or all of the shares to which such exercise relates.

(e)

Successive grants may be made to the same Participant whether or not any Stock Options or other Awards previously granted to such Participant remain unexercised or outstanding.

(f)

Each grant will specify the required period or periods of continuous service by the Participant with the Company or any Subsidiary that are necessary before the Stock Options or installments thereof will become exercisable.

(g)

Any grant may specify the Management Objectives that must be achieved as a condition to the exercise of the Stock Options.

(h)

Any grant may provide for the earlier exercise of the Stock Options in the event of a change in control or other similar transaction or event.

(i)

Stock Options may be (i) options which are intended to qualify under particular provisions of the Code, (ii) options which are not intended to so qualify or (iii) combinations of the foregoing.

(j)

On or after the Date of Grant, the Committee may provide for the payment to the Participant of dividend equivalents thereon in cash or Common Stock on a current, deferred or contingent basis.

(k)

The Committee will have the right to substitute Appreciation Rights for outstanding Options granted to one or more Participants, provided the terms and the economic benefit of the substituted Appreciation Rights are at least equivalent to the terms and economic benefit of such Options, as determined by the Committee in its discretion.

(l)

Any grant may provide for the effect on the Stock Options or any shares of Common Stock issued, or other payment made, with respect to the Stock Options of any conduct of the Participant determined by the Committee to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary.

(m)

Each grant will be evidenced by an Evidence of Award, which may contain such terms and provisions, consistent with the Plan, as the Committee may approve, including without limitation provisions relating to the Participant’s termination of employment or other termination of service by reason of retirement, death, disability or otherwise.

Appreciation Rights . The Committee may also from time to time authorize grants to any Participant of Appreciation Rights upon such terms and conditions as it may determine in accordance with this Section 7. Appreciation Rights may be granted in tandem with Stock Options or separate and apart from a grant of Stock Options. An Appreciation Right will be a right of the Participant to receive from the Company upon exercise an amount which will be determined by the Committee at the Date of Grant and will be expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise. An Appreciation Right granted in tandem with a Stock Option may be exercised only by surrender of the related Stock Option. Each grant of an Appreciation Right may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

(a)

Each grant will state whether it is made in tandem with Stock Options and, if not made in tandem with any Stock Options, will specify the number of shares of Common Stock in respect of which it is made.

(b)

Each grant made in tandem with Stock Options will specify the Option Price and each grant not made in tandem with Stock Options will specify the Grant Price, which in either case will not be less than 100% of the Market Value per Share on the Date of Grant.

(c)

Any grant may provide that the amount payable on exercise of an Appreciation Right may be paid (i) in cash, (ii) in shares of Common Stock having an aggregate Market Value per Share equal to the Spread (or the designated percentage of the Spread) or (iii) in a combination thereof, as determined by the Committee in its discretion.

(d)

Any grant may specify that the amount payable to the Participant on exercise of an Appreciation Right may not exceed a maximum amount specified by the Committee at the Date of Grant.

(e)

Successive grants may be made to the same Participant whether or not any Appreciation Rights or other Awards previously granted to such Participant remain unexercised or outstanding.

(f)

Each grant will specify the required period or periods of continuous service by the Participant with the Company or any Subsidiary that are necessary before the Appreciation Rights or installments thereof will become exercisable, and will provide that no Appreciation Rights may be exercised except at a time when the Spread is positive and, with respect to any grant made in tandem with Stock Options, when the related Stock Options are also exercisable.

(g)

Any grant may specify the Management Objectives that must be achieved as a condition to the exercise of the Appreciation Rights.

(h)

Any grant may provide for the earlier exercise of the Appreciation Rights in the event of a change in control or other similar transaction or event.

(i)

On or after the Date of Grant, the Committee may provide for the payment to the Participant of dividend equivalents thereon in cash or Common Stock on a current, deferred or contingent basis.

(j)

Any grant may provide for the effect on the Appreciation Rights or any shares of Common Stock issued, or other payment made, with respect to the Appreciation Rights of any conduct of the Participant determined by the Committee to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary.

(k)

Restricted Shares . The Committee may also from time to time authorize grants or sales to any Participant of Restricted Shares upon such terms and conditions as it may determine in accordance with this Section 8. Each grant or sale will constitute an immediate transfer of the ownership of shares of Common Stock to the Participant in consideration of the performance of services, entitling such Participant to voting and other ownership rights, but subject to the restrictions set forth in this Section 8. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

	(a)		Each grant or sale may be made without additional consideration or in consideration of a payment by the Participant that is less than the Market Value per Share at the Date of Grant, except as may otherwise be required by the Delaware General Corporation Law.

	(b)		Each grant or sale may limit the Participant’s dividend rights during the period in which the shares of Restricted Shares are subject to any such restrictions.

	(c)		Each grant or sale will provide that the Restricted Shares will be subject, for a period to be determined by the Committee at the Date of Grant, to one or more restrictions, including without limitation a restriction that constitutes a “substantial risk of forfeiture” within the meaning of Section 83 of the Code and the regulations of the Internal Revenue Service under such section.

	(d)		Any grant or sale may specify the Management Objectives that, if achieved, will result in the termination or early termination of the restrictions applicable to the shares.

	(e)		Any grant or sale may provide for the early termination of any such restrictions in the event of a change in control or other similar transaction or event.

	(f)		Each grant or sale will provide that during the period for which such restriction or restrictions are to continue, the transferability of the Restricted Shares will be prohibited or restricted in a manner and to the extent prescribed by the Committee at the Date of Grant (which restrictions may include without limitation rights of repurchase or first refusal in favor of the Company or provisions subjecting the Restricted Shares to continuing restrictions in the hands of any transferee).

	(g)		Any grant or sale may provide for the effect on the Restricted Shares or any shares of Common Stock issued free of restrictions, or other payment made, with respect to the Restricted Shares of any conduct of the Participant determined by the Committee to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary.

	(h)		Each grant or sale will be evidenced by an Evidence of Award, which may contain such terms and provisions, consistent with the Plan, as the Committee

may approve, including without limitation provisions relating to the Participant’s termination of employment or other termination of service by reason of retirement, death, disability or otherwise.

Restricted Stock Units . The Committee may also from time to time authorize grants or sales to any Participant of Restricted Stock Units upon such terms and conditions as it may determine in accordance with this Section 9. Each grant or sale will constitute the agreement by the Company to issue or transfer shares of Common Stock to the Participant in the future in consideration of the performance of services, subject to the fulfillment during the Deferral Period of such conditions as the Committee may specify. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

	(a)		Each grant or sale may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the Market Value per Share on the Date of Grant, except as may otherwise be required by the Delaware General Corporation Law.

	(b)		Each grant or sale will provide that the Restricted Stock Units will be subject to a Deferral Period, which will be fixed by the Committee on the Date of Grant, and any grant or sale may provide for the earlier termination of such period in the event of a change in control or other similar transaction or event.

	(c)		During the Deferral Period, the Participant will not have any right to transfer any rights under the Restricted Stock Units, will not have any rights of ownership in the Restricted Stock Units and will not have any right to vote the Restricted Stock Units, but the Committee may on or after the Date of Grant authorize the payment of dividend equivalents on such shares in cash or Common Stock on a current, deferred or contingent basis.

	(d)		Any grant or sale may provide for the effect on the Restricted Stock Units or any shares of Common Stock issued free of restrictions, or other payment made, with respect to the Restricted Stock Units of any conduct of the Participant determined by the Committee to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary.

	(e)		Each grant or sale will be evidenced by an Evidence of Award, which will contain such terms and provisions as the Committee may determine consistent with the Plan, including without limitation provisions relating to the Participant’s termination of employment or other termination of service by reason of retirement, death, disability or otherwise.

10.

Performance Shares and Performance Units . The Committee may also from time to time authorize grants to any Participant of Performance Shares and Performance Units, which will become payable upon achievement of specified Management Objectives, upon such terms and conditions as it may determine in

			accordance with this Section 10. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

	(a)		Each grant will specify the number of Performance Shares or Performance Units to which it relates.

	(b)		The Performance Period with respect to each Performance Share and Performance Unit will be determined by the Committee at the time of grant.

	(c)		Each grant will specify the Management Objectives that, if achieved, will result in the payment of the Performance Shares or Performance Units.

	(d)		Each grant will specify the time and manner of payment of Performance Shares or Performance Units which have become payable, which payment may be made in (i) cash, (ii) shares of Common Stock having an aggregate Market Value per Share equal to the aggregate value of the Performance Shares or Performance Units which have become payable or (iii) any combination thereof, as determined by the Committee in its discretion at the time of payment.

	(e)		Any grant of Performance Shares may specify that the amount payable with respect thereto may not exceed a maximum specified by the Committee on the Date of Grant. Any grant of Performance Units may specify that the amount payable, or the number of shares of Common Stock issued, with respect to the Performance Units may not exceed maximums specified by the Committee on the Date of Grant.

	(f)		On or after the Date of Grant, the Committee may provide for the payment to the Participant of dividend equivalents on Performance Shares in cash or Common Stock on a current, deferred or contingent basis.

	(g)		Any grant may provide for the effect on the Performance Shares or Performance Units or any shares of Common Stock issued, or other payment made, with respect to the Performance Shares or Performance Units of any conduct of the Participant determined by the Committee to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary.

	(h)		Each grant will be evidenced by an Evidence of Award, which will contain such terms and provisions as the Committee may determine consistent with the Plan, including without limitation provisions relating to the payment of the Performance Shares or Performance Units in the event of a change in control or other similar transaction or event and provisions relating to the Participant’s termination of employment or other termination of service by reason of retirement, death, disability or otherwise.

11.

Senior Executive Plan Bonuses . The Committee may from time to time authorize the payment of annual incentive compensation to a Participant who is, or is

determined by the Committee to be likely to become, a “covered employee” within the meaning of Section 162(m) of the Code (or any successor provision), which incentive compensation will become payable upon achievement of specified Management Objectives. Subject to Section 5(d), Senior Executive Plan Bonuses will be payable upon such terms and conditions as the Committee may determine in accordance with the following provisions:

	(a)		No later than 90 days after the first day of the Company’s fiscal year, the Committee will specify the Management Objectives that, if achieved, will result in the payment of a Senior Executive Plan Bonus for such year.

	(b)		Following the close of the Company’s fiscal year, the Committee will certify in writing whether the specified Management Objectives have been achieved. Approved minutes of a meeting of the Committee at which such certification is made will be treated as written certification for this purpose. The Committee will also specify the time and manner of payment of a Senior Executive Plan Bonus which becomes payable, which payment may be made in (i) cash, (ii) shares of Common Stock having an aggregate Market Value per Share equal to the aggregate value of the Senior Executive Plan Bonus which has become payable or (iii) any combination thereof, as determined by the Committee in its discretion at the time of payment.

	(c)		If a change in control occurs during a Performance Period, the Senior Executive Plan Bonus payable to each Participant for the Performance Period will be determined at the highest level of achievement of the Management Objectives, without regard to actual performance and without proration for less than a full Performance Period. The Senior Executive Plan Bonus will be paid at such time following the change in control as the Committee determines in its discretion, but in no event later than 30 days after the date of an event which results in a change in control.

	(d)		Each grant may be evidenced by an Evidence of Award, which will contain such terms and provisions as the Committee may determine consistent with the Plan, including without limitation provisions relating to the Participant’s termination of employment by reason of retirement, death, disability or otherwise.

12.

Awards to Eligible Directors .

	(a)		Effective upon the consummation of the Company’s initial public offering, each Eligible Director will be granted Restricted Shares having an aggregate Market Value per Share equal to $25,000 on the Date of Grant.

	(b)		Following the Company’s initial public offering, on the date of an Eligible Director’s first election to the Board, if such date is not also the date of an annual meeting of the stockholders of the Company, and immediately after each annual meeting of the stockholders of the Company, each Eligible Director will be

			granted Restricted Shares having an aggregate Market Value per Share equal to $25,000 on the Date of Grant.
	(c)		Each grant of Restricted Shares to an Eligible Director will vest in three equal installments on the first, second and third anniversaries of the Date of Grant and may not be sold or otherwise transferred (other than by will or the laws of descent and distribution) prior to such vesting date. If, prior to a vesting date, an Eligible Director voluntarily resigns or is removed from the Board, the Eligible Director’s unvested Restricted Shares will be forfeited and cancelled. In the event of an Eligible Director’s retirement from the Board, death or disability prior to a vesting date, all unvested Restricted Shares will become fully vested.

13.

Transferability . No Award may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, pursuant to a qualified domestic relations order or, with the consent of the Committee, by gifts to family members of the Participant, including to trusts in which family members of the Participant own more than 50% of the beneficial interests, to foundations in which family members of the Participant or the Participant controls the management of assets and to other entities in which more than 50% of the voting interests are owned by family members of the Participant or the Participant. No Stock Option or Appreciation Right granted to a Participant will be exercisable during the Participant’s lifetime by any person other than the Participant or the Participant’s guardian or legal representative or any permitted transferee.

14.

Adjustments .

(a)

The Committee may make or provide for such adjustments in (i) the maximum number of shares of Common Stock specified in Sections 4 and 5, (ii) the number of shares of Common Stock covered by outstanding Stock Options, Appreciation Rights, Performance Shares and Restricted Stock Units granted under the Plan, (iii) the Option Price or Grant Price applicable to any Stock Options and Appreciation Rights, and (iv) the kind of shares covered by any such Awards (including shares of another issuer), as the Committee in its discretion, exercised in good faith, may determine is equitably required to prevent dilution or enlargement of the rights of Participants that otherwise would result from (x) any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, or (y) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (z) any other corporate transaction or event having an effect similar to any of the foregoing. In the event of any such transaction or event, the Committee, in its discretion, may provide in substitution for any or all outstanding Awards such alternative consideration as it, in good faith, may determine to be equitable in the circumstances and may require in connection with such substitution the surrender of all Awards so replaced. Moreover, the Committee may on or after the Date of Grant provide in the Evidence of Award under the Plan that the holder of the Award may elect to receive an equivalent

			award in respect of securities of the surviving entity of any merger, consolidation or other transaction or event having a similar effect, or the Committee may provide that the holder will automatically be entitled to receive such an equivalent award.
	(b)		The Committee may accelerate the payment of, or vesting with respect to, any Award under the Plan upon the occurrence of a transaction or event described in this Section 14; provided, however, that in the case of any Award that constitutes a deferral of compensation within the meaning of Section 409A of the Code, the Committee will not accelerate the payment of the Award unless it determines in good faith that such transaction or event satisfies the requirements of a change in control event under guidance issued by the Secretary of the Treasury under Section 409A.

15.

Fractional Shares . the Company will not be required to issue any fractional share of Common Stock pursuant to the Plan. The Committee may provide for the elimination of fractions or for the settlement of fractions in cash.

16.

Withholding Taxes . To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under the Plan, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld. In addition, if permitted by the Committee, the Participant or such other person may elect to have any withholding obligation of the Company satisfied with shares of Common Stock that would otherwise be transferred to the Participant or such other person in payment of the Participant’s Award. However, without the consent of the Committee, shares of Common Stock will not be withheld in excess of the minimum number of shares required to satisfy the Company’s withholding obligation.

17.

Administration of the Plan .

	(a)		Unless the administration of the Plan has been expressly assumed by the Board pursuant to a resolution of the Board, the Plan will be administered by the Committee. A majority of the Committee will constitute a quorum, and the action of the members of the Committee present at any meeting at which a quorum is present, or acts unanimously approved in writing, will be the acts of the Committee.

	(b)		The Committee has the full authority and discretion to administer the Plan and to take any action that is necessary or advisable in connection with the administration of the Plan, including without limitation the authority and discretion to interpret and construe any provision of the Plan or of any agreement, notification or document evidencing an Award. The interpretation and construction by the Committee of any such provision and any determination by

			the Committee pursuant to any provision of the Plan or of any such agreement, notification or document will be final and conclusive. No member of the Committee will be liable for any such action or determination made in good faith.
	(c)		It is the Company’s intention that any Award granted under the Plan that constitutes a deferral of compensation within the meaning of Section 409A of the Code and the guidance issued by the Secretary of the Treasury under Section 409A satisfy the requirements of Section 409A. In granting such an Award, the Committee will use its best efforts to exercise its authority under the Plan with respect to the terms of such Award in a manner that the Committee determines in good faith will cause the Award to comply with Section 409A and thereby avoid the imposition of penalty taxes and interest upon the Participant receiving the Award.

	(d)		If the administration of the Plan is assumed by the Board pursuant to Section 17(a), the Board will have the same authority, power, duties, responsibilities and discretion given to the Committee under the terms of the Plan.

18.

Amendments and Other Matters .

	(a)		The Plan may be amended from time to time by the Committee or the Board but may not be amended without further approval by the stockholders of the Company if such amendment would result in the Plan no longer satisfying any applicable requirements of the New York Stock Exchange (or the principal national securities exchange on which the Common Stock is traded), Rule 16b-3 or Section 162(m) of the Code.

	(b)		Neither the Committee nor the Board will authorize the amendment of any outstanding Stock Option to reduce the Option Price without the further approval of the stockholders of the Company. Furthermore, no Stock Option will be cancelled and replaced with Stock Options having a lower Option Price without further approval of the stockholders of the Company. The provisions of this Section 18(b) are intended to prohibit the repricing of “underwater” Stock Options and will not be construed to prohibit the adjustments provided for in Section 14.

	(c)		The Plan may be terminated at any time by action of the Board. The termination of the Plan will not adversely affect the terms of any outstanding Award.

	(d)		The Plan does not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time.

	(e)		If the Committee determines, with the advice of legal counsel, that any provision of the Plan would prevent the payment of any Award intended to

qualify as performance-based compensation within the meaning of Section 162(m) of the Code from so qualifying, such Plan provision will be invalid and cease to have any effect without affecting the validity or effectiveness of any other provision of the Plan.

19.

Governing Law . The Plan, all Awards and all actions taken under the Plan and the Awards will be governed in all respects in accordance with the laws of the State of Delaware, including without limitation, the Delaware statute of limitations, but without giving effect to the principles of conflicts of laws of such State.

Exhibit 10.3

ALON USA ENERGY, INC.
RESTRICTED STOCK AWARD AGREEMENT


	Participant:
	No. of Restricted Shares:
	Date of Grant:

Under the terms and conditions of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (the “Plan”), a copy of which is attached hereto and incorporated herein by reference, Alon USA Energy, Inc., a Delaware corporation (the “Company”), grants to the individual whose name is set forth above (the “Participant”) the number of restricted shares of the Company’s Common Stock, par value $.01 per share (“Common Stock”), set forth above (the “Restricted Shares”). Terms not defined in this Agreement have the meanings set forth in the Plan.

The Restricted Shares may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by the Participant, except to the Company, until the Restricted Shares become vested in accordance with the schedule set forth below. Any purported transfer, encumbrance or other disposition of the Restricted Shares before they become vested will be null and void, and the other party to any such purported transaction will not obtain any rights to or interest in the Restricted Shares.


No. of Vested Shares		On and After
		First Anniversary of Date of Grant
		Second Anniversary of Date of Grant
		Third Anniversary of Date of Grant

Notwithstanding the vesting dates set forth above, in the event the Participant terminates employment with the Company by reason of retirement at or after the age of 60, disability (as determined by the Committee in good faith) or death, the unvested Restricted Shares will automatically become 100% vested. In the event the Participant terminates employment with the Company for any reason other than such retirement, disability or death, the unvested Restricted Shares will be forfeited immediately, and the certificates representing the unvested Restricted Shares will be canceled.

Upon each vesting date (in accordance with the forgoing table or immediately preceding paragraph, as applicable) the Company shall pay a bonus to Participant sufficient to gross up Participant for tax incurred as a result of such vesting; provided however, the foregoing shall be limited to a value per share equal to the lesser of the Market Value per Share of such vested shares on the vesting date or $16.00 per share. This paragraph shall be adjusted for any additional shares of Common Stock or other securities that the Participant may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company, and such additional shares of Common Stock or other securities will be subject to the same restrictions as the Restricted Shares.

Except as otherwise provided herein, the Participant will have all of the rights of a stockholder with respect to the Restricted Shares, including the right to vote such shares and receive any dividends that may be paid thereon; provided, however, that any additional shares of Common Stock or other securities that the Participant may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company will be subject to the same restrictions as the Restricted Shares.

The certificates representing the Restricted Shares will be held in custody by the Treasurer of the Company, together with a stock power endorsed in blank by the Participant, until the Restricted Shares vest in accordance with this Agreement. In order for this Agreement to be effective, the Participant must sign and return such stock power to the attention of the Treasurer of the Company.

The Participant hereby accepts and agrees to be bound by all the terms and conditions of the Plan and this Agreement. Any amendment to the Plan will be deemed to be an amendment to this Agreement to the extent that the Plan amendment is applicable hereto; provided, however, that no amendment will adversely affect the rights of the Participant under this Agreement without the Participant’s consent. This Agreement may be executed simultaneously in multiple counterparts, each of which will be deemed an original, but all of which together constitute one and the same instrument.


	ALON USA ENERGY, INC.

	By

		Name:
		Title:
ACCEPTED:


Signature of Participant

Exhibit 99.1

ALON USA REPORTS STRONG THIRD QUARTER RESULTS

Company schedules conference call for November 9, 2005 at 10:00 A.M. EST

DALLAS, TEXAS, November 8, 2005 — Alon USA Energy, Inc. (NYSE: ALJ) (“Alon”) today announced net income for the three months ended September 30, 2005 increased to $24.4 million compared to net income of $6.1 million for the three months ended September 30, 2004, an increase of $18.3 million. Third quarter earnings per share were $0.57 compared to $0.17 for the comparable quarter last year.

Net income for the three months ended September 30, 2005 included $5.0 million of after-tax gain recognized on disposition of assets (“after-tax gain”) relating to the contribution of certain pipeline and terminal assets to Holly Energy Partners, L.P. (“HEP) in the first quarter of this year. The amount of after-tax gain recognized was $4.2 million greater than planned due to the acceleration of a portion of the deferred gain relating to the HEP transaction. Net income for the three months ended September 30, 2005 excluding the effects of the accelerated deferred gain would have been $20.2 million, or $0.47 earnings per share, in line with Alon’s previously announced third quarter earnings per share estimates.

Net income for the nine months ended September 30, 2005 was $74.3 million, or $1.98 earnings per share, compared to net income of $22.9 million, or $0.65 earnings per share for the nine months ended September 30, 2004, an increase of $51.4 million. Excluding the accelerated $4.2 million of after-tax gain recognized in the third quarter, net income for the nine months ended September 30, 2005 would have been $70.1 million, or $1.86 earnings per share.

The increases in net income for the three and nine months periods ended September 30, 2005 over the comparable periods in 2004 were primarily attributable to continued strong industry refining margins and favorable differentials between WTI and WTS crude oil (“WTI/WTS”). For the third quarter 2005, Gulf Coast 3-2-1 crack spreads increased to an average of $17.13 per barrel compared to an average of $6.71 for the third quarter 2004, primarily due to production interruptions in the Gulf Coast region in connection with hurricanes Katrina and Rita. WTI/WTS crude oil differentials for the third quarter 2005 increased to an average of $4.09 per barrel compared to an average of $3.87 barrel for the third quarter 2004.

The positive impact of favorable refining margins and WTI/WTS crude oil differentials in the third quarter 2005 was partially offset by the Company’s acceleration of a reformer catalyst regeneration that was previously scheduled for January 2006. As a result of downtime associated with the regeneration, refinery throughput for the third quarter 2005 decreased by approximately 5,400 barrels per day as compared to the second quarter 2005. Despite this reduction in throughput, overall refinery production of 66,747 barrels per day in the third quarter 2005 was 13.5%, or 7,944 barrels per day, higher than third quarter 2004 production due to the expansion of the Big Spring refinery’s crude oil throughput capacity in the first quarter 2005.

Jeff Morris, Alon’s President and CEO, commented “In the third quarter, we were unexpectedly required to accelerate a reformer catalyst regeneration as previously disclosed on September 22, 2005. Now that this regeneration has been completed and the appropriate upgrades are being designed, we expect to avoid the regeneration previously scheduled in January of 2006 and to combine our next regeneration with our scheduled low sulfur fuel upgrade planned for April 2006. Operations are back to normal and we have returned to the consistent performance to which we have become accustomed.

“Turning to the fourth quarter, we ran well in October, decreased our inventories and improved our cash position. We expect our cash balance to be further enhanced in the fourth quarter as we convert approximately 300,000 barrels of unfinished product to finished gasoline and diesel. Sweet/sour spreads in October increased over third quarter levels and refining margins remained strong even as Gulf Coast refineries came back on line. Thus, we believe we are on schedule to reduce inventories and increase our cash balances back to planned levels by year end.

“During the remainder of 2005, we expect to complete an incremental expansion of our jet fuel hydrotreater from 4,000 barrels per day to 5,000 barrels per day. We expect to implement this expansion without impacting throughput at the Big Spring refinery. We also plan to begin investments in our asphalt facilities in Big Spring and in Bakersfield, California to grow our premium asphalt business. 2005 will be a record year for asphalt sales for us, as we sold out our entire Big Spring production of 150,000 tons and our Bakersfield facility will triple last year’s sales volumes. These results further evidence the quality of our asphalt business.”

The Company has scheduled a conference call for tomorrow, November 9, 2005, at 10:00 a.m. eastern time, to discuss the third quarter 2005 results. To access the call, please dial (800) 240-7305 or (303) 262-2141, for international callers, and ask for the Alon USA Energy call at least 10 minutes prior to the start time. Investors may also listen to the conference live on the Alon USA corporate website, http://www.alonusa.com by logging on that site and clicking “Investors”. A telephonic replay of the conference call will be available through November 23, 2005 and may be accessed by calling (800) 405-2236 or (303) 590-3000, for international callers, and using passcode 11042310. A web cast archive will also be available at www.alonusa.com shortly after the call and will be accessible for approximately 90 days. For more information, please contact Donna Washburn at DRG&E at (713) 529-6600 or email dmw@drg-e.com.

Alon USA Energy, Inc., headquartered in Dallas, Texas, is an independent refiner and marketer of petroleum products, operating primarily in the Southwestern and South Central regions of the United States. The Company owns and operates a sophisticated sour crude oil refinery in Big Spring, Texas, which has a crude oil throughput capacity of 70,000 barrels per day. Alon markets gasoline and diesel products under the FINA brand name and is a leading producer of asphalt in the State of Texas. The Company also operates convenience stores in West Texas and New Mexico under the 7-Eleven and FINA brand names and supplies motor fuels to these stores from its Big Spring refinery.

Any statements in this press release that are not statements of historical fact are forward-looking statements. Forward-looking statements reflect Alon’s current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Alon’s business and operations involve numerous risks and uncertainties, many of which are beyond Alon’s control, which could result in Alon’s expectations not being realized or otherwise materially affect Alon’s financial condition, results of operation and cash flows. Additional information regarding these and other risks is contained in Alon’s filings with the Securities and Exchange Commission.

ALON USA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED
EARNINGS RELEASE
(Unaudited)


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
	(dollars in thousands, except for per share data)

STATEMENT OF OPERATIONS DATA:
Net sales (1)	$	648,135		$	445,386		$	1,646,475		$	1,238,288
Operating costs and expenses:
Cost of sales (1)		565,820			389,976			1,415,421			1,058,002
Direct operating expenses		24,550			18,121			63,259			54,814
Selling, general and administrative expenses		16,083			15,364			51,731			51,890
Depreciation and amortization		5,470			4,893			15,322			14,159

Total operating costs and expenses		611,923			428,354			1,545,733			1,178,865

Gain on disposition of assets (2)		8,020			—			37,243			175

Operating income		44,232			17,032			137,985			59,598
Interest expense		4,827			5,888			14,579			17,579
Equity earnings in investee		(321	)		—			(733	)		—
Other income, net		(1,269	)		(63	)		(2,349	)		(207	)

Income before tax expense and minority interest in income of subsidiaries		40,995			11,207			126,488			42,226
Income tax expense		16,225			4,488			48,234			17,022

Income before minority interest in income of subsidiaries		24,770			6,719			78,254			25,204
Minority interest in income of subsidiaries		382			619			3,948			2,319

Net income	$	24,388		$	6,100		$	74,306		$	22,885


Earnings per share (3)	$	.57		$	.17		$	1.98		$	.65
Weighted average shares outstanding (3)		42,821,120			35,001,120			37,607,787			35,001,120

OTHER DATA:
Adjusted EBITDA (4)	$	43,272		$	21,988		$	119,146		$	73,789


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
	(dollars in thousands, except for per share data)
Capital expenditures, net of disposition proceeds		1,109			4,775			(100,432	)		17,797
Capital expenditures for turnarounds and catalysts		590			198			11,371			1,698

CASH FLOW DATA:
Net cash provided by (used in):
Operating activities	$	(16,494	)	$	5,602		$	32,482		$	29,528
Investing activities		(36,666	)		(5,553	)		54,601			(30,075	)
Financing activities		77,908			(5,688	)		42,845			26,995

BALANCE SHEET DATA (end of period):
Cash, cash equivalents and short-term investments							$	222,969		$	33,704
Working capital								250,213			47,909
Total assets								703,783			454,181
Total debt								132,877			194,678
Stockholders’ equity								249,749			69,948

OTHER OPERATING DATA
(Unaudited)


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2005		2004		2005		2004
	(dollars in thousands, except for per barrel data)

REFINING KEY OPERATING STATISTICS:
Refining and operating:
Margin information (per barrel of throughput):
Refinery operating margin (5)	$	12.35	$	7.74	$	11.70	$	8.32
Direct operating expenses (6)		4.00		3.34		3.73		3.27

Other information (per barrel):
Gulf Coast crack spread (3/2/1) (7)	$	17.13	$	6.71	$	11.37	$	7.51
WTI/WTS (sweet/sour spread) (8)		4.09		3.87		4.30		3.42


	For the Three Months Ended								For the Nine Months Ended
	September 30,								September 30,
	2005				2004				2005				2004
	Bpd		%		Bpd		%		Bpd		%		Bpd		%
Refinery crude throughput:
Sour crude		55,757		88.4		51,504		92.6		52,862		90.2		53,100		92.0
Sweet crude		7,286		11.6		4,114		7.4		5,732		9.8		4,603		8.0

Total crude throughput		60,043		100.0		55,618		100.0		58,594		100.0		57,703		100.0

Blendstocks		3,669				3,356				3,565				3,423

Total refinery throughput (9)		66,712				58,974				62,159				61,126

Refinery production (10):
Gasoline		29,934		44.8		26,212		44.6		27,643		44.7		28,215		46.2
Diesel/jet		22,974		34.4		19,200		32.6		21,386		34.5		19,690		32.2
Asphalt		6,976		10.5		6,402		10.9		5,892		9.5		5,945		9.7
Petrochemicals		3,975		6.0		4,234		7.2		4,247		6.9		4,579		7.5
Other		2,888		4.3		2,755		4.7		2,707		4.4		2,655		4.4

Total refinery production		66,747		100.0		58,803		100.0		61,875		100.0		61,084		100.0


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
	(dollars in thousands, except for per gallon data)
RETAIL KEY OPERATING STATISTICS:
Retail:
Number of stores (end of period)		167			167			167			167
Fuel sales (thousands of gallons)		21,706			24,780			69,772			73,493
Fuel margin (cents per gallon) (11)		20.4	¢		11.2	¢		14.3	¢		11.5	¢
Merchandise sales	$	35,391		$	34,046		$	100,246		$	98,992
Merchandise margin (12)		33.2	%		33.1	%		33.3	%		33.0	%


(1)		Alon’s buy/sell arrangements involve linked purchases and sales related to refined product contracts entered into to address location, or grade requirements. Included in cost of sales are amounts which approximate the revenues resulting from these transactions.

(2)		Gain on disposition of assets reported in the three ended September 30, 2005, reflects the $6.5 million accelerated pre-tax gain ($4.2 million after-tax gain) and the monthly recognition of deferred gain recorded in connection with the HEP transaction. Gain on disposition of assets reported in the nine months ended September 30, 2005 reflects the $26.7 million initial pre-tax gain, the monthly recognition of deferred gain and the $6.5 million accelerated pre-tax gain recorded in connection with the HEP transaction

(3)		Weighted average common shares outstanding and earnings per common share amounts for the three and nine months ended September 30, 2005 and 2004, have been restated to reflect the effect of a 33,600-for-one split of Alon’s common stock


		which was effected on July 6, 2005. On August 2, 2005, Alon completed an initial public offering of 11,730,000 shares of its common stock. Those shares are included in number of weighted average number of shares outstanding.

(4)		Adjusted EBITDA represents earnings before minority interest, income tax expense, interest expense, depreciation, amortization and gain on dispositions of assets. However, Adjusted EBITDA is not a recognized measurement under GAAP. Alon’s management believes that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industry. In addition, management believes that Adjusted EBITDA is useful in evaluating its operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of minority interests, interest expense, income taxes and dispositions of assets and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance. Adjusted EBITDA, with adjustments specified in its credit agreements, is also the basis for calculating selected financial ratios as required in the debt covenants in its credit agreements.

		Adjusted EBITDA has limitations as an analytical tool, and should not be considered it in isolation, or as a substitute for analysis of Alon’s results as reported under GAAP. Some of these limitations are:

	•		Adjusted EBITDA does not reflect Alon’s cash expenditures or future requirements for capital expenditures or contractual commitments;

	•		Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on Alon’s debt;

	•		Adjusted EBITDA does not reflect the prior claim that minority stockholders have on the income generated by Alon’s non-wholly- owned subsidiaries;

	•		Adjusted EBITDA does not reflect changes in or cash requirements for Alon’s working capital needs; and

	•		Alon’s calculation of Adjusted EBITDA may differ from the EBITDA calculations of other companies in Alon’s industry, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to Alon to invest in the growth of its business. Alon compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA only supplementally.

The following table reconciles net income to Adjusted EBITDA for the three months and nine months ended September 30, 2004 and 2005, respectively:


	For the Three Months Ended					For the Nine Months Ended
	September 30,					September 30,
	2005			2004		2005			2004
	(unaudited, dollars in thousands)
Net income	$	24,388		$	6,100	$	74,306		$	22,885
Minority interest		382			619		3,948			2,319
Income tax expense		16,225			4,488		48,234			17,022
Interest expense		4,827			5,888		14,579			17,579
Depreciation and amortization		5,470			4,893		15,322			14,159
Gain on disposition of assets		(8,020	)		—		(37,243	)		(175	)

Adjusted EBITDA	$	43,272		$	21,988	$	119,146		$	73,789

(5)		Refinery operating margin is a per barrel measurement calculated by dividing the margin between net sales and cost of sales attributable to Alon’s refining and marketing segment, exclusive of net sales and cost of sales relating to its non-integrated system, by its refinery’s throughput volumes.

(6)		Refinery direct operating expense is a per barrel measurement calculated by dividing direct operating expenses, exclusive of depreciation and amortization, by Alon’s refinery’s throughput volumes.

(7)		A 3/2/1 crack spread in a given region is calculated assuming that three barrels of crude oil are converted, or cracked, into two barrels of gasoline and one barrel of diesel. Alon calculates the Gulf Coast 3/2/1 crack spread using the market values of Gulf Coast conventional gasoline and low-sulfur diesel and the market value of WTI crude. Alon calculates the Group 3/2/1 crack spread using the market values of Group III conventional gasoline and low-sulfur diesel and the market value of WTI crude oil.

(8)		WTI/WTS or sweet/sour spread represents the differential between the average value per barrel of WTI crude oil and the average value per barrel of WTS crude oil.

(9)		Total refinery throughput represents the total of crude oil and blendstock inputs in the refinery production process.

(10)		Total refinery production represents the barrels per day of various finished products produced from processing crude and other refinery feedstocks through the crude units and other conversion units at Alon’s refinery.

(11)		Fuel margin represents the difference between motor fuel revenues and the net cost of purchased motor fuel, including transportation costs and associated motor fuel taxes, expressed on a cents per gallon basis.

(12)		Merchandise margin represents the difference between merchandise sales revenues and the delivered cost of merchandise purchases, net of rebates and commissions, expressed as a percentage of merchandise sales revenues.

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