Oil Prophets by Creative Marketing Concepts

Winter 2010

Whatâ&#x20AC;&#x2122;s Inside:

Meet Your New P&CMA Chairman

General Membership Meeting & Holiday Dinner Photos

AlaCOMP provides a safe, reliable and competitive Workersâ&#x20AC;&#x2122; Compensation market for members of the Petroleum & Convenience Marketers of Alabama. In addition, AlaCOMP has paid a dividend to eligible members every year since its inception.

AlaCOMP is professionally serviced by: Business Insurance Group P.O. Box 230517, Montgomery, AL 36123 Local: 334-215-8234, Toll Free: 888-661-7119 24 Hour Claims Reporting: 334-215-8480

P&CMA OFFICERS & BOARD OF DIRECTORS Chairman Mitzi West West Oil Company, Inc. Winfield, AL Vice Chairman A. Stratton Orr Petroleum Sales, Inc. Decatur, AL Secretary/Treasurer Dean Mack Turner Oil Company, Inc. Wetumpka, AL Immediate Past Chairman Michael A. Minto Minto Energy Corporation Mobile, AL Directors with Terms Expiring in 2010 Sam Gibson GOC, Ltd. Butler, AL Shayne Lord R. S. Lord, LLC Troy, AL Loring Perez Chattahoochee Oil Company, Inc. West Point, GA Directors with Terms Expiring in 2011 Mickey Crew Crew Distributing Company, Inc. Opp, AL

Mints McGowin Max Oil Company, Inc. Greenville, AL David Melton Quality Petroleum, Inc. Birmingham, AL Directors with Terms Expiring in 2012 Phil Baggett Baggett Oil Company Florence, AL Rahim Budhwani 6040, LLC Hoover, AL Kris Pierce Jet-Pep, Inc. Holly Pond, AL STAFF President Arleen Alexander, CAE Director, Member Relations Lynne Coker Director, Industry Relations and Meetings Lauren Hodge ASSOCIATION LEGAL COUNSEL H. Dean Mooty, Jr. Mooty & Associates, P.C. 600 Clay Street Montgomery, AL 36104 334/264-0400 334/264-0380 Fax

Features 06

Meet Your New P&CMA Chairwoman

in Birmingham

08 15 18 24 25

Commercial Driver’s License Award Ceremony Meet Your New Board Members 2010 P&CMA Sponsor Program

P&CMA PAC Contribution Form

Departments 02

Chairman’s Comments

Legal Corner

03 12 23 27

Published for: Petroleum & Convenience Marketers of Alabama 4264 Lomac Street Montgomery, AL 36106 Mailing Address: P. O. Box 231659 Montgomery, AL 36123-1659 Phone: 334/272-3800 Fax: 334/272-3837 Web: www.pcmala.org

P&CMA General Membership Meeting

26 Risk Management Strategies – Steer Clear of Winter Driving Risks

P&CMA Antitrust Policy All meetings and activities organized and endorsed by the P&CMA observe and strictly adhere to all provisions set forth in the Sherman Act, The Federal Trade Commission Act and all other applicable antitrust laws.

Contents

28 24

President’s Perspective Business Strategies Regulatory Corner

2010 P&CMA Annual Sponsors New P&CMA Members Calendar of Events Advertiser Index

Published by: Creative Marketing Concepts 1085 Chesson Hill Drive Fitzpatrick, AL 36029 334/725.0093 Fax: 334/272.3837

For Advertising Information Call 877/363-0832 or sales@cmconline.biz 2010 Creative Marketing Concepts. All rights reserved. The contents of this publication may not be reproduced, in whole or in part, without the prior written consent of the publisher. Published February 2010

WINTER 2010  OIL PROPHETS

Chairman’s Comments

Take Advantage of Your P&CMA Membership

appy New Year, and thank you for electing me as your Chairman for year 2010. It is true a privilege and honor to undertake this role, and I look forward to serving you and the association in the coming year. I, like many of you, grew up in this industry, and I hope my years of experience will be an asset to the association. As we face a new year, both as an association and in our own businesses, I ask you to remember why you are a member of the Petroleum and Convenience Marketers of Alabama. The P&CMA represents, advocates, educates and promotes the petroleum marketing industry in Alabama better than anyone. No one else cares about your business as much as P&CMA does. Last year was quite a year. We had some wins, but our industry continues to face some extraordinary challenges. And, as the saying goes, only the strong will survive. That’s why it’s so important that as an industry and an association that we have a strong and vital membership – that we are able to send a message to the State House that will protect our right to sell motor fuel at a fair competitive price and be allowed to make a reasonable profit; that we are not accused of price gouging every time there is a wholesale price increase in gasoline during a hurricane; and that we are wellrepresented when unfair regulations are enforced on our stores and businesses. A strong united industry voice is far more powerful than many fragmented and incomplete arguments. And while P&CMA may not always be able to find an ideal solution to our issues and concerns, it certainly isn’t for the lack of trying. So I encourage you, as members of P&CMA, to become more involved in the association this year. Your membership is more than sending a check to Montgomery every year. Take advantage of your membership. Utilize the staff and the resources they have available; call on them, or any member of your board of directors, when you have questions or concerns. Attend the meetings and events that the association puts on during the year. I hope you’ve made plans to go to Biloxi on

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February 2-4 for the Gulf Coast Food & Fuel Expo. Take advantage of the Driver Safety meetings in March. Bring your family to Sandestin this summer on July 8-11 for our Annual Convention. Play and be a sponsor in the Fall Golf Classic on September 20. Support our associate members. Refer to the P&CMA Buyers Guide in your membership directory when looking for products or services to run your petroleum marketing business or convenience stores. Encourage vendors and suppliers who aren’t members of the association to join P&CMA and participate in the Gulf Coast Food & Fuel Expo, Annual Convention and Fall Golf Classic. Finally and probably most important this coming year, support the association’s political action committee (PAC). It is critical now, more than ever, that we have a strong PAC. We need to be able to support candidates in this November’s statewide elections who support our industry and small business in general. On page 25 of this issue of Oil Prophets is a PAC Contribution Form. Please fill it out now and mail it to the association. Make an investment in your business’ future by making a contribution this year to the P&CMA PAC. Finally, if I can ever be assistance to you, I hope you will call or email me. Again, I look forward to working with all of you this year. Thank you for your support. Sincerely,

Mitzi West P&CMA Chairman

President’s Perspective

I’m Thankful

ecently, at a Sunday service, the Deacon at my church gave a simple but beautiful sermon on what we should be thankful for in our lives by reading a poem. As we start the new year, I thought I would ‘simply’ share this poem with you.

…for my huge heating bill, because it means I am warm.

~~~~~ I’M THANKFUL…

~~Author Unknown ~~~~~

…for the alarm that goes off in the early morning hours, because it means I am alive.

Let me simply add, I’m thankful the opportunities this association has presented me with over the past ten years. I’m thankful (and proud) to represent an industry of hard-working, dedicated small businessmen and women. I’m thankful for the leadership and direction provided by our Board of Directors. I’m thankful for the wonderful relationships and friendships that I’ve developed through this association and industry. I’m thankful for the chance to work with a great staff and legal counsel. I’m thankful for each one of you, as members of the Petroleum and Convenience Marketers of Alabama. Have a great year. Call us if you need us.

…for weariness and aching muscles at the end of the day, because it means I have been capable of working hard. …for my shadow that watches me work, because it means I am out in the sunshine. …for the taxes that I pay, because it means that I am employed. …for the clothes that fit a little too snug, because it means I have enough to eat. …for the teen-ager who is complaining about doing dishes because he is at home and not on the streets. …for the mess to clean up after a party, because it means that I have been surrounded by friends. …for a lawn that needs mowing, windows that need cleaning and need fixing, because it means I have a home. …for the lady behind me in church that sings off key, because it means that I can hear. …for all the complaining I hear about the government, because it means that I have freedom of speech.

…for the parking spot at the far end of the parking lot, because it means I am capable of walking and that I have been blessed with transportation.

Sincerely,

Arleen A. Alexander, CAE President P&CMA staff members, Arleen Alexander, CAE, and Lauren Hodge joined ACAE members on a Habitat for Humanity project in Biloxi, MS last October.

WINTER 2010  OIL PROPHETS 3

Legal Corner

Protecting Your Supply Contracts H. Dean Mooty, Jr., Mooty & Associates, PC In recent articles we’ve discussed protecting your “receivables” as well as protecting your business and personal assets in general. Briefly I want to discuss protecting your fuel supply contracts. Unless you are a marketer, who supplies only its own locations, your supply contracts are the “lifeline” of your business.1 As much as discussing how to protect your supply contracts, I also want to address some pitfalls that await a marketer who attempts – successfully or unsuccessfully – to take a dealer away from an existing jobber under a written supply contract. First, by definition, the supply contracts are the heart and soul of a jobber’s business. Historically, most are for 10 years and are of great significance to your business, including budgeting and long-range planning issues. It is a predictable – hopefully – income stream (fixed or otherwise) for the life of the contract. That income stream is itself an asset (a receivable) that can be used as collateral to borrow money. Hopefully it allows a return on any investments you might have at the location such as pumps, tanks, and canopies. It can help facilitate budgeting/planning, assistance for debt retirement and so forth. Of course with branded locations, good supply contracts provide stability that is critical to protecting against the liability exposure for image/incentive money obligations to major oil companies.2 In any event, you’ve got to protect your supply contracts. In both protecting your existing supply contracts as well as being an effective marketer of your business in obtaining new supply contracts with new businesses, there is an area of the law of which all marketers must be aware. There is a tort recognized at law and known as “tortious interference with business relationships.” What does this have to do with your supply contracts? In a nutshell, if there is a dealer under written supply contract with another jobber and you approach that dealer and convince him or her to leave, or breach that contract with its existing supplier and sign a contract with you, you create a rather classic case where you may be liable for tortious interference with a business relationship. This is a common and wide-ranging issue in the petroleum industry. I expect that I receive a couple of calls a month either from a jobber complaining that another jobber is calling on his contract customers; a jobber wanting

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to know if he can deliver fuel to a dealer he knows is under contract to another; or the dealer who typically needs a load of fuel and wants to know if they can buy from someone else other than their contract supplier. In all these scenarios there are “be carefuls” for everyone. What is the typical scenario? The typical scenario is a dealer calls you and says it needs a load of fuel and can you deliver one immediately. Their line is virtually always the same: (1) They need a load of fuel, (2) “My current supplier is jerking me around,” (3) “My current supplier is o.k. with my getting a load of fuel from you,” (4) “I don’t owe them any money,” or (5) “My current supplier has breached my supply contract, and I have the right to buy a load of fuel from you.” Nine times out of ten, every one of those statements – save one – is not true. The only true statement they’ve made to you is that yes, they do need a load of fuel. Almost always, the current supplier is owed money by the dealer. The current supplier is NEVER O.K. with its contract dealer getting a load of fuel from someone else. Finally, there are always two sides to the story that the contract supplier is jerking them around and/or has breached the contract. What should you do if you are contacted by a dealer wanting a load of fuel that you know or have every reason to believe is under a written supply contract with another marketer? First, you should demand that the dealer get a release from its current supplier. That is a process that you should stay out of if at all possible. Such a release is one you are rarely, if ever, going to get. The only circumstance in my mind where a current supplier would give you such a release is where that current supplier is so fed up with that dealer that he is more than happy to let him go do business with someone else. Even in that scenario, however, if the current supplier is owed money or has an investment at that location, you are not going to get that release unless those obligations are addressed satisfactorily to the current supplier. This presentation was given at the P&CMA General Membership meeting in Birmingham in December. It is reprinted here based on the many questions and comments raised by those in attendance.

As an analogy, it is exactly what major oil companies do with the advancement of image and incentive monies. They amortize those monies over typically a 10-year period that allows them a predictable return on their investment from rack margins they make on fuel supplied to those branded sites.

Second, you should get an indemnity agreement from the dealer that essentially says that it will indemnify you against any claims the current supplier or anyone might make against you if you begin supplying the dealer with fuel. Remember, such an indemnity is worth no more than the persons or entity giving it, so oftentimes such an indemnity agreement provides little comfort. My advice is almost always that without an express release from the jobber under contract to that dealer that he’s o.k. with you supplying the dealer with fuel, you should leave it alone. The other scenario is where you, as a jobber looking for new business, call on a dealer that is currently being supplied under contract by someone else. If you do so with full knowledge that such operator is under contract to someone else, not only do you subject yourself to civil damages, it is – in this humble lawyer’s opinion – UNETHICAL. As a lawyer working largely in this industry for most of the past 25 years, I know that the typical pitch to that potential new business includes the following: “You are unbranded. This is a great location for a Chevron store (or BP or Shell or whatever).” “My branded supplier will make available to you a whole bunch of image and incentive monies that will allow you to really fix this place up which can increase your business and double your volume, etc., etc.” “What’s your current supplier charging you for fuel? A nickel over his cost? I’ll sell to you at two-cents over cost!” “I have my own trucks. You’ll get your fuel quicker, and when you need it and there will never be delays.” And worse, “You don’t want to be doing business with that jobber. They’ve got a bad reputation in the business. You’d better check your invoices because they’ll overcharge you, short your fuel drops, etc., etc.” Never allow yourself to be the jobber making these kinds of pitches to a potential piece of business. Is it o.k. to go in and ask what their current supply contract relationship is and with whom? Of course. However, the line between being a good businessman looking for new opportunities and being guilty of tortious interference with a business relationship can be crossed very, very quickly. There is nothing wrong with determining that a dealer is in the ninth or tenth year of a 10-year supply contract and that their current contract will be up in the next 12 to 24 months. There is nothing wrong with telling that dealer that you would like to talk to them about becoming their supplier at the end of their current supply contract. However, anything that encourages, explicitly or implicitly, that dealer to leave its current contract supplier and come do business with you will open you up to civil liability. The proof is quite easy and the calculation of damages rather simple. Under the

claim of tortious interference with a business relationship, you can be liable for not only economic damages which consist essentially of the money the current supplier would have made had its contract been honored to its termination, but because of the nature of the tort, it exposes you, or allows the jury to consider an award of punitive damages. A simple example of the economic damages is as follows: Take a site doing 60,000 gallons per month historically. Assume the current supplier has a two-cents per gallon wholesale markup. 60,000 gallons times two-cents per gallon equals $1,200.00 per month times 12 months equals $14,400.00 per year and multiply that times the number of years remaining on the contract at the point you convinced that dealer to leave that supplier and come to you. For example, if there were seven years left in this example, economic loss damages would be $100,800.00. If the current supplier could show that you knew or had every reason to know that its contract dealer was under a written supply contract with it, the plaintiff is going to be able to have the issue of punitive damages go to the jury based on questions of intent or willfulness and then you are exposed to the veritable “black hole” of punitive damages. So consider these two issues carefully. One is protecting your supply contracts and two, being careful not to interfere with someone else’s supply contract. Your leverage as a jobber with dealers under written supply contract is those dealers not being able to get fuel elsewhere. You want them to have to deal with you if they owe you money, or if there are other relationship problems that have arisen that need to be resolved. It is simply too easy an out for them if they can simply go get fuel somewhere else. Most importantly, before accepting a piece of business that may be under contract to another supplier, always (1) BE CAREFUL and (2) CALL YOUR LAWYER. 

WINTER 2010  OIL PROPHETS 5

Meet Your New P&CMA Chairwoman: Mitzi West

he is a woman who loves to cook, enjoys knitting and spends most of her time running a large oil company and convenience store chain. Seems an unlikely combination, but Mitzi West does all of this with finesse. Mitzi’s grandfather started West Oil Company in 1934. After joining the company in the 1960’s, her father Harold soon began running the operation. In 1986, Harold West formed Token, Inc., which now boasts 16 convenience stores. Today, he has the opportunity to travel often as he leaves the business in the capable hands of his daughter, Mitzi. Mitzi grew up in the business with her father. “I have worked in some capacity in the business for as long as I can remember,” says Mitzi. She remembers sweeping the docks and helping out wherever she was needed as

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she was growing up. Mitzi earned her bachelors degree in education at the University of Alabama while working at West Oil Company and Token, Inc. When Mitzi returned to the business from the University of Alabama, she spent time working in some capacity in each department. Eventually, she became a manager in the business. Callers who have questions regarding oil are sometimes surprised to talk to a woman. But Mitzi learned from the master. She says before she makes a decision she thinks, “What would daddy do?” Mitzi says she has worked alongside her father for so long that she just knows how he would handle things. Sometimes, when he suggests that she might want to do something differently, she responds, “It’s worked your way for all these years, why would I want to change it?” Regarding her life, Mitzi says, “I spend most of my time at work.” But when she is away from work, she enjoys cooking and needlework. Friends love to be

invited over to taste Mitzi’s cooking! Recently, Mitzi taught the ladies in the office to knit. Soon, they joined a contest between the University of Alabama and Auburn University to see who could knit the most baby caps to benefit the babies in neonatal units. It became an exciting and competitive event led by Coach Saban’s wife, Terri. After the competition ended, wondering what they could do next, Mitzi found a source for them to supply chemo caps to the cancer clinic in Winfield. Away from work, Mitzi also showers love upon her pets including her two beagles Sumter and Isabella. Sumter was a stray who wandered into West Oil Company one day. Harold West laughs, “Walking into Mitzi’s office was the smartest thing that dog ever did.” The West’s have a family farm where Mitzi enjoys getting away and relaxing. The family enjoys fishing the pond. According to Harold, “Mitzi likes to fish if it is not too hot, if there are no mosquitoes, and if she doesn’t have to bait her hook or take the fish off the hook.”

Mitzi is also following in her father’s footsteps in P&CMA. Harold has been actively involved in the association for many years. Mitzi believes that her membership in P&CMA helps her business in many ways. The association keeps her informed about legislative issues affecting the industry. P&CMA serves as the voice of business owners regarding legislative issues. She also believes the association helps the business by keeping her informed about issues regarding weights and measures or information from ADEM. As Chairwoman of P&CMA in 2010, Mitzi’s vision for the coming year includes staying active regarding legislative matters and increasing membership. She hopes to help the association reach out to non-members and show them the benefits of being a member of P&CMA. 

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WINTER 2010  OIL PROPHETS 7

New Board Members Elected At P&CMA General Membership Meeting in Birmingham P&CMA’s General Membership Meeting was held Wednesday and Thursday, December 9-10, 2009 at The Wynfrey Hotel in Birmingham. Wednesday evening began with the association’s General Membership Meeting. After hearing from P&CMA Chairman Mike Minto on the “state of the association,” officers and board of directors for 2010 were elected by the membership. The following were elected to the association’s Board of Directors: Chairwoman

Mitzi West West Oil Company Winfield

Vice Chairman

A. Stratton Orr Petroleum Sales, Inc. Decatur

Secretary/Treasurer

Dean Mack Turner Oil Company Wetumpka

Directors with Terms Expiring in 2012: Phil Baggett Rahim Budhwani Baggett Oil Company 6040, LLC Florence Hoover

Kris Pierce Jet-Pep, Inc. Holly Pond

Recognition and thanks were also given to those board members who completed their terms of service this year on the P&CMA Board of Directors. Those members were Red Knott with Henry Oil Company; Dean Mack with Turner Oil Company; and Mike Segrest with The Spencer Companies.

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The Associate Board also held their board meeting prior to the membership meeting and elected the following individuals as their officers and directors for the year 2010: President

Zane Hood PPM Consultants, Inc. Birmingham

Vice President

Sean Halcomb Royal Cup Coffee Birmingham

Secretary

James Cochran Buffalo Rock/Pepsi Birmingham

Directors with Terms Expiring in 2012: Deborah Jones Jeff Parnell QORE Property Sciences Payliance Huntsville Prattville

Carroll Sanders W.L. Petrey Wholesale Montgomery

Recognition and thanks were also given to those members of the Associate Board who completed their terms of service. Those members were John Beck with MECO (Montgomery); Shane Heist with Associated Distributors (Baton Rouge, LA); and Rick Thompson with Montgomery Coca-Cola Bottling Company, (Montgomery).

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OILPROPHETS PROPHETS WINTER WINTER2010 2010 10 OIL

Following the election of the board members, newly-elected P&CMA Chairwoman Mitzi West made her remarks emphasizing the importance of member participation in P&CMA. Ms. West then recognized Arleen Alexander for ten years of service to the Alabama Oilmen’s Association and the Petroleum & Convenience Marketers of Alabama. After the membership meeting, attendees enjoyed cocktails and dined on a delicious dinner buffet, all while making the most of the opportunity to network with friends and colleagues. This year’s entertainment, the Hot Tamales, helped usher in the holiday season with their beautiful voices and witty humor. On Thursday morning, the Petroleum Marketers’ Educational Seminar featured three presentations: 1) PCI Compliance UpdateWhat You Need to Know, 2) Energy Act 2005…Where Are We Now?, and 3) Tortious Interference With A Business Relationship; the ‘Be Carefuls’ of Fuel Supply Contracts. Handouts from these seminars are available by contacting the Canopies and Building Mansards association office. P.O. Box 526 101 Shadetree Drive The P&CMA General Clanton, AL 35046 Clanton, AL 35045 Membership Meeting & Holiday Dinner was well-received by Keith Chambers - Owner Phone: 1-800-932-4549 all who were able to attend. David Thomas - Owner Fax: 205-755-8266 We hope that those who were Shafford Henderson – Sales Cell: 205-217-0805 unable to join us will make plans to do so next year.  Email: shafford2467@gmail.com WINTER WINTER2010 2010OIL OILPROPHETS PROPHETS 11

Business Strategies

Success Starts With Successful Planning Betsi Bixby

Now is the time to put plans in place for the new year and to apply the lessons learned from successes and failures to chart your course. The industry as a whole weathered last year well, but not without a few casualties.

wished they were better prepared for the economic tumult we’ve all been through. One of the keys to future success is the ability of a leadership team to “autopsy” failures without blame and then identify how to avoid future pitfalls. I must credit Jim Collins, author of Good to Great and more recently, Why Good Companies Fail, with the empirical data that proves this conclusion. As Take your team through the following process to clarify a success driven CEO with a positive attitude in your your lessons learned from the past year. The task of DNA, autopsying failure may seem to go against your the team is to 1) create a success list, 2) develop a grain, but the practice is needed in a healthy company. lessons learned list with subsequent actions, 3) analyze direct competitors, and 4) identify strengths. Then, So make your list of what didn’t work and then at using these four lists, develop a priority action plan least 3 actions you could take to be sure you never get with benchmarks for the coming year. Ideally, get the caught in the same situation again. For instance, one team off-site, undisturbed for a full day of focused of the most common “lessons learned” I hear from brainpower. the recession was we got caught in a cash pinch. Our supplier lines weren’t high enough, our bank lines got Create a success list. This is not the time to concentrate stretched, and when volumes dipped, it wasn’t much on reduced volumes or lack of profits. It’s acknowledging fun. So the autopsy exercise asks the question, what that while the seas got rough, the ship kept sailing! What can we do going forward so that won’t happen again? did you and your team do well? Did you put new focus A few possibilities are: manage our balance sheet on credit policies and procedures that are now working differently now that we know what can happen. Most smoothly? Did you focus on truck and driver efficiency CEOs I know are setting much more aggressive cash that has now translated into lower cost-per-gallon targets and lower debt/leverage ratios going forward. delivery expense. Did you see that cash was king and The recession lesson was it pays to have cash. reduce or eliminate debt? Did you eliminate marginally profitable sectors so you could focus on areas that were Scope out the Competition. This past year was one making money? Did you grow your customer base as of tumultuous change. It changed the competitive others shrunk? landscape. This is the perfect time to list your top competitors by sector and assess their strengths and As you develop this list, be aware of whether or not weaknesses in comparison to your products and service. your company celebrated these successes. One of the Are they faster or slower? Better quality or poorer? things we know about great companies is they are How do they price? How is their financial strength masters at acknowledgment and celebration. It’s likely compared with yours? Remember that old quote of your present staff worked harder this year and persisted get close with your friends and even closer with your through really tough times. As a company, did you take enemies? Nothing could be more true! time, that momentary breather as a team to bask in the light of glory for at least a moment? Often when doing on-site strategic work with companies, I find leadership teams who know the most about their Develop a “Lessons Learned” List. I don’t think I’ve direct competitors are the ones winning in the market, talked to one CEO who after seeing the past year hasn’t even if the competitor is big and tough. The knowledge 12 OIL PROPHETS  WINTER 2010

allows even the smaller players to capitalize on niches and service levels the large competitors can’t match. The smart companies not only know the differences, but market those differences. Clearly Identify your Current Strengths. As you review your successes, your lessons learned, and the competitive landscape, just the time spent on those sections will help bring clarity to your company’s clear strengths. What are you doing well that could be leveraged? For instance, I talked with one CEO who realized they had great customers, strong relationships with the customers and a fabulous distribution system that beat the pants off of most of their competitors. That’s a good thing to know as we’ll discuss in the next section. Leveraging strengths is exactly how the most successful companies in history achieved profitable, sustainable growth.

As you develop the steps and plan, including measures, accountabilities and timelines, also try to identify potential roadblocks or hurdles. Let’s face it – everyone starts out the year with great plans, but life happens. If we can think through the possible roadblocks, we’ll be more prepared when they come. And they will come! And now, back to my story of the marketer who analyzed strengths and made a great move. Realizing they had loyal customers and great delivery efficiency, they decided to expand their products beyond the typical petro offerings. The result? Huge increase in profits! How did they do it? By asking key customers what else they bought, compiling lists, and figuring out what they could do well and be profitable.

Personally, I think the next twelve months is going to be really exciting. While there will still be the aftershocks rumbling through the economy, we’ve already made To take this portion of the strategic work to an even it through the big one. Now is the time to look to the higher level, consider going beyond your leadership future and build the company you want. That’s what team planning session with a customer survey. This can I’ve been helping companies do for the past few years be as easy as each member of the executive team taking in my Hidden Profits Coaching. It’s been really exciting an “A” customer out to lunch and simply asking the to see companies come to grips with their strengths, question of them – what do we do well that is key for their lessons learned, their changing marketplace and you? And don’t be surprised if some customers focus on competitors. If you’d like to explore the profit and cash relationships (we love your dispatcher – always there you might be missing, I’d love to hear from you. when we need him, takes good care of us, etc.) while others focus on speed of delivery or quality issues. The In the meantime, how about taking action by going to main thing is ask and listen! your calendar right now and scheduling the day for your leadership team planning meeting? Action equals Prioritize and Plan. With the hard work you’ve done success! of identifying your successes, blamelessly looking at failures, being brutally honest about the competition and your own strengths, you’re now ready for the prioritization and plan. There are many ways to tackle prioritization, but the main thing is your whole team must be in agreement and unified about the plan – the items and the priority order. And, each piece of the plan must be specific and measurable. In fact the SMART goal acronym is a great test to be sure that each step of your game plan is: Specific Measurable Attainable Realistic Timely

WINTER 2010  OIL PROPHETS 13

Arleen Alexander elected to ACAE Board of Directors

P&CMA President Arleen Alexander, CAE, was recently elected to serve as Secretary/ Treasurer of the Alabama Council of Association Executives (ACAE), the state association for associations. Shown here with other newly-elected ACAE board members.

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Commercial Drivers License Award Ceremony Arleen Alexander, CAE, of the Petroleum & Convenience Marketers of Alabama, Officer Ruby Chappell of the Dept of Public Safety, Gene Vonderau of the Alabama Trucking Association and Major Charles Andrews Dept. of Public Safety. Andrews heads the Drivers License Division of DPS. Ms. Chappell is the winner of the 2009 Commercial Drivers License Examiner of the Year Award. The awards luncheon was held in October and was sponsored by the Alabama Trucking Association and the Petroleum & Convenience Marketers of Alabama.

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WINTER 2010 ď &#x201C; OIL PROPHETS 15

Nationwide® Agribusiness Nationwide

ADAM LEE LANGLEY EARNEST D. CORDELL Randy Jones Insurance Agency, Inc. Phone: 256-878-3271 Toll Free: 800-648-6584 Fax: 256-878-3624 jonesr8@nationwide.com 8600 US Highway 431 P.O. Box 1576 Albertville, AL 35950

16 OIL PROPHETS  WINTER 2010

EPA’s E-15 Waiver Delay – Sensible Yet Mystifying

Regulatory Corner

Mark S. Morgan, PMAA Regulatory Counsel

he U.S. EPA’s recent announcement delaying a decision on whether to allow E-15 gasoline blends for use in conventional-fueled vehicles until next summer is sensible but at the same time mystifying for petroleum marketers. First, some background. Last April, a group of ethanol producers asked the EPA to waive a provision in the Clean Air Act that limits ethanol blends used in conventional fueled vehicles to a maximum 10% content. Ethanol producers are concerned that without a waiver to clear the way for an E-15 blend, petroleum refiners will be unable to meet annual renewable fuel blending mandates required by Congress. Of course, petroleum marketers have important concerns of their own about E-15, but for different reasons. Marketers are concerned that allowing E-15 for use in conventional fueled vehicles will create a significant risk of liability for damaged auto emission control systems and failure of petroleum storage and dispensing equipment. There is also concern that introducing E-15 into USTS, piping and dispensers will void equipment warranties, insurance coverage and violate local fire marshal requirements. For its part, the EPA is concerned that E-15 could damage auto emission systems in conventional fueled vehicles resulting in an increase in tailpipe emissions. Finally, there is an array of additional E-15 concerns ranging from its effects on lawn care equipment to marine fuel tank and engines. Giving these concerns, it makes sense to the casual observer that the EPA should take the additional time to make a well reasoned decision on E-15 that is supported by sound research. After all, there are so many unknowns with regard to E-15, so little information available or studies completed on the effects of mid level ethanol blends on conventional fueled vehicles, underground storage tanks, marine equipment and even lawnmowers that it would be irresponsible to rush the decision making process. The delay makes sense, but what the EPA intends to do, or more accurately, not do with its extra time, is what is so mystifying to many petroleum marketers. The EPA said the delay is necessary to finish a test program that is currently in the works to determine the effects of ethanol blends between E-10 and E-20 on automobile emission systems. What is so mystifying is that the EPA’s efforts are solely focused on automobile emission systems. Despite the many issues raised by stakeholders affected by a possible E-15 waiver, the agency will not be studying or collecting information on E-15 effects on UST corrosion rates, degradation of plastic piping or rubber gaskets and seals in fuel dispensers. The EPA will not consider the burden placed on petroleum marketers from voided equipment warranties, cancelled insurance policies or increased

liability that is likely to result from the introduction of E-15, in its decision- making process. Nor will there be consideration of equipment replacement costs faced by petroleum marketers if the waiver is approved. The agency is aware of these issues. PMAA has raised them numerous times in different venues – directly with the EPA itself, through the Small Business Administration, at meetings and communications with the EPA Office of Underground Storage Tanks, with the EPA Small Business Ombudsman and with various stakeholder groups. It seems incomprehensible to most that the EPA could make a decision as important as an E-15 waiver with a total bureaucratic vacuum. Outrageous as this may be, it is nevertheless true. There are a couple of reasons why the EPA can get away with brushing marketer concerns aside. First, under the Clean Air Act, the EPA is only required to consider the effects of a waiver of the E-10 maximum blend requirement on air quality standards. Underground tanks, equipment liability insurance coverage and warranty revocation do not qualify for consideration under these criteria. This doesn’t mean the agency is barred from considering factors other than air quality. It simply means it doesn’t have to. And that brings us to the real reason why marketer issues are seemingly off the table with respect to an E-15 waiver. The EPA does not want to consider the wider implications of the E-15 waiver because it is politically untenable to do so. The agency risks not only the anger of the powerful farm lobby and its friends in Congress if it denies the waiver, but also jeopardizes derailing the entire renewable fuel standard by falling short of the statutory mandate to use 36 billion gallons of renewable fuels in gasoline and diesel fuel by 2022. Evidently, the EPA reasons it can take the heat from the myriad of interests brushed aside in the decision-making process by reminding stakeholders that a waiver would not mandate E-15, but simply allows its use. In other words, nobody is being forced by the EPA to use E-15. In other words, the EPA is telling marketers if you are concerned about putting E-15 in your UST systems, don’t use it. This argument, however true, conveniently dispenses with the broader concerns with regard to E-15, which may be too hot for the agency to handle. Unfortunately, the EPA’s response simply begs the question – will marketers really have the luxury of making a choice between E-10 and E-15? 

WINTER 2010  OIL PROPHETS 17

Meet Your New Board Members You might say petroleum runs in Phil Baggett’s veins. A third generation owner, Phil grew up painting gas stations. His grandfather, J.C. Butler, founded the company as a distributor in 1941. Phil’s father, Frank took over the business in 1967. After earning an accounting degree at the University of North Alabama in 1983, Phil helped his father expand the business into retail operations. Phil has run the company since his father’s death in 1996. Today, Baggett Oil owns and operates 15 gas stations and supplies approximately 25 dealer locations in Alabama and Tennessee.

Phil Baggett Baggett Oil Company Florence, AL

Phil married Becky, his high school sweetheart, in 1983. They have four children: Alison (23), Rachel (21), John (18) and James (11). Alison married Claudio Pita last year & lives in Cambridge, MA. while the other children are still in school. Phil would like to say his hobby is golf, but between work, family, church and the kids’, activities, he doesn’t find much time to play golf. Phil has been a P&CMA member since the late 1980’s. He believes the association helps its members by “being an advocate for our industry and helping members stay informed about issues in our state that affect us.” Phil looks forward to serving on the board of directors and hopes to help the association continue to represent the interests of the members.

Rahim Budhwani founded 6040, LLC shortly after coming to the United States. Formerly a computer programmer, he bought his first convenience store in 2001. He began the business with just one convenience store and in 10 busy years, has acquired 6 more stores. Rahim also owns a business that sells, installs and services digital surveillance systems and ATMs. Rahim’s wife, Kulsum, is the CFO of the company. They have two children: Alisha (9) and Zaid (2).

Rahim Budhwani 6040, LLC Hoover, AL

Rahim first learned of P&CMA after working on a NACS project with P&CMA president, Arleen Alexander. Rahim is currently serving on the NACS advisory board and has been involved in a number of national committees for several years. He joined P&CMA three years ago and became actively involved. Rahim is also involved in the Alabama Merchants Association and believes that the associations can work together on issues that affect the industry. Currently, he is involved with helping NACS fight the credit card fee issue. He believes associations can work together and be much more effective. Rahim believes that being involved in P&CMA has helped him in his business. He says, “The association offers insight that single store operators would not otherwise be privy to.” He believes it is all about working together, and Rahim looks forward to serving on the P&CMA board of directors and helping the industry leaders work together.

18 OIL PROPHETS  WINTER 2010

Meet Your New Board Members Kris Pierce first became aware of P&CMA when he was still in high school. He was dating Stephanie Norris, whose father, Robert Norris, invited Kris to attend his first P&CMA event with the family. Robert Norris started the first Jet-Pep in Holly Pond nearly 30 years ago; today there are more than 100 independent retail units across Alabama. Kris’ career at Jet-Pep really began while he was earning his degree at Auburn. He spent summers working on the Jet-Pep construction crew and joined JetPep’s construction crew full-time after graduation in 1999. After Kris moved into construction management, he soon saw the need to pursue further education and earned his Masters in Science & Engineering at the University of Alabama in Huntsville. Recently, Kris also earned a Professional Engineer (PE) license, which helps him as he is working with local building authorities.

Kris Pierce Jet-Pep, Inc. Holly Pond, AL

Kris says, “P&CMA events are an awesome place to meet people.” He believes “involvement in P&CMA creates a more favorable business environment – which in turn creates more success for our sales.” The next generation is also getting involved with P&CMA; Kris and Stephanie’s children Emma (9), Kenan (6) and Sadie (2) enjoy attending the summer meetings. As a new member of the board of directors, Kris hopes to be more involved in Department of Agriculture issues. He plans to be actively involved with Alabama tax audit procedures to protect members from unknown municipal tax. He also will continue to be active with upcoming state elections and the issues that affect the industry.

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WINTER 2010  OIL PROPHETS 19

r u o y e k Ma d ! r e a h voice Advertise with us! Oil Prophets and The P&CMA Annual Membership Directory & Buyers’ Guide are the only regional publications designed exclusively for the petroleum and convenience store industries in Alabama.

Creative Marketing Concepts Keeping you in touch…it’s what we do!

Oil Prophets reaches YOUR market!

Terri Mendez | terri@cmconline.biz 334-657-6575 877-363-0832 toll free

COOKS THE FOOD NOT THE COOK.

When you cook with electricity, your kitchen stays cooler, keeping your staff more comfortable. And a more comfortable staff means a more productive staff. Plus, with electric cooking, you get faster preheat and recovery times. Not only that, cleaning an electric oven is easier and quicker. So switch to electric today. Your business will be cooking like never before.

For more information about the advantages of electric cooking, call 1-888-430-5787. ÂŠ 2010 Alabama Power Company

22 OIL PROPHETS  WINTER 2010

PETROLEUM & CONVENIENCE MARKETERS OF ALABAMA

THANKS OUR

2010 ANNUAL SPONSORS PLATINUM

Federated Insurance Company

GOLD

C D G Engineers & Associates, Inc.

SILVER

Mooty & Associates, P.C. PPM Consultants, Inc.

BRONZE

MECO, Inc. Gallet, a Terracon Company QORE Property Sciences

P&CMA’s Annual Sponsor Program provides four levels of sponsorship opportunities for all associate and affiliate members – each level offering various benefits conducive to your company’s needs. Call the association office at 334/272-3800 or visit our website at www.pcmala.org if you would like information about becoming a P&CMA Annual Sponsor in 2010.

WINTER 2010  OIL PROPHETS 23

Petroleum &Convenience Marketers of Alabama

P&CMA’s sponsor program is designed to provide participating companies with high-level networking opportunities and mazimum exposure to our membership at P&CMA-sponsored events. The program provides four levels of opportunity: Platinum, Gold, Silver, and Bronze; each level offering benefits conducive to your companies needs. Please feel free to contact Lauren Hodge at the association office at (334) 272-3800 to further discuss any questions you may have or to discuss which level of participation is best suited for you.

2010 P&CMA SPONSOR PROGRAM

Platinum Sponsor $20,000

Gold Sponsor $10,000

Silver Sponsor $5,000

Bronze Sponsor $2,500

Name:

Company Name:

Please Invoice:

 One Time

 Monthly

 Quarterly

 One Time

 Monthly

 Quarterly

 MasterCard

 Visa

 American Express

 Check Enclosed

 Credit Card

Card Number:

Signature:

Mail or Fax this form to: P&CMA P.O. Box 231659 Montgomery, AL 36123-1659 Ph: 334-272-3800 Fax: 334-272-3837 24 OIL PROPHETS  WINTER 2010

P&CMA PAC Contribution Form

Petroleum &Convenience Marketers of Alabama

I’m serious about my petroleum marketing and convenience store business!! Count me in! I will help my industry speak with one powerful voice and protect my ability to earn a living in the petroleum marketing and convenience store industry in Alabama! I want to contribute the following amount to the P&CMA PAC:

 $140 Club (One dollar for each member of the State Legislature)

 $201 (For the 2010 Elections)

 $500

 $1,000

 Other $

Method of Payment:

 Check (Personal or Corporate) (Please make check payable to P&CMA PAC)

 Credit Card:

 MasterCard

 Visa

 American Express

Account Number:

Expires:

Name: Company: Address: City/State/Zip: Phone: State PAC contributions are for political purposes and are not tax-deductible. State law allows for personal or corporate funds to be used.

RETURN FORM TO P&CMA PAC P.O Box 231659 Montgomery, AL 36123-1659 (334) 272-3800 (334) 272-3837 Fax WINTER 2010  OIL PROPHETS 25

Driving

Risk Management Risk M anagement Risk M anagement Strategies Strategies Strategies

Driving Driving

For Business Owners

For Business Owners Steer Clear ofOWinter Driving Risks For B usiness wners

Across most of our country, winter brings with it snow, sleet, fog, and ice. These weather conditions Steer Clear of Winter Driving Risks Steer Clear of Winter Driving Risks often result in hazardous roadways, poor visibility, and stressed-out drivers—not a safe combination. Across most ofcountry, ourthrough country, winter it snow, sleet, fog, and ice. These weather conditions To help navigate safely winter’s challenges, make sure both you and your vehicle are prepared. Across most of our winter bringsbrings with itwith snow, sleet, fog, and ice. These weather conditions often result in hazardous roadways, poor visibility, and stressed-out drivers—not a safe combination. often result in hazardous roadways, poor visibility, and stressed-out drivers—not a safe combination. Ensure your vehicle is in optimal winter condition, including: To navigate help navigate through winter’s challenges, sure you bothand youyour and vehicle your vehicle are prepared. To help safelysafely through winter’s challenges, makemake sure both are prepared.  Battery fully charged Ensure vehicle is in optimal winter condition, including: Ensure your your vehicle is in optimal winter condition, including:  Fluids topped off  Battery fully charged  Battery fully charged  Tires have adequate tread for winter driving  Fluids topped  Fluids topped off off  Wiper blades and defrosters working properly  Tires have adequate for winter driving  Tires have adequate tread tread for winter driving Stock your vehicle with proper supplies for winter-related situations:  Wiper and defrosters working properly  Wiper bladesblades and defrosters working properly  Abrasive material (kitty litter, sand, salt, or traction mats) vehicle with proper supplies for winter-related situations: StockStock your your vehicle with proper supplies for winter-related situations:  Cell phone and battery-operated radio  Abrasive material salt, or traction  Abrasive material (kitty(kitty litter, litter, sand, sand, salt, or traction mats)mats)  First-aid supplies  phone Cell phone and battery-operated  Cell and battery-operated radio radio  Jumper cables, flashlight, and warning devices (reflective triangle or flares)  First-aid supplies  First-aid supplies  Snow shovel, broom, and ice scraper  Jumper cables, flashlight, and warning devices (reflective triangle or flares)  Jumper cables, flashlight, and warning devices (reflective triangle or flares)  Tire and tow chains  Snow shovel, broom, and ice scraper  Snow shovel, broom, and ice scraper  Warm clothing, boots, blankets, or sleeping bags  and Tiretow andchains tow chains  Tire  Water and high-energy food  Warm clothing, blankets, or sleeping  Warm clothing, boots,boots, blankets, or sleeping bags bags Best Advice: Avoid driving during adverse conditions. However, if driving is necessary, follow  Water and high-energy  Water anda high-energy food food these tips for safer journey: Best Advice: Avoid driving during adverse conditions. However, if driving is necessary, Advice: Avoid driving during adverse conditions. However, if driving is necessary, followfollow BestAdjust your speed these tips for a safer journey: these tips for a safer journey:  Avoid using cruise control  Adjust your speed  Adjust your speed  Clear windshields and mirrors of ice and snow  Avoid control  Avoid usingusing cruisecruise control  Increase your following distance  Clear windshields and mirrors icesnow and snow  Clear windshields and mirrors of iceof and  Pass with extreme caution  Increase your following distance  Increase your following distance  Start and stop smoothly  with Pass extreme with extreme caution  Pass caution  Wear your seat belts  and Startstop andsmoothly stop smoothly  Start  Give ample space to snow removal equipment ®

It’s Our Business to Protect Yours . ... ….. . . . . . . . . . . . . . . . . . . . . . . .®. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ® Business to Protect Yours This publication isProtect intended to provide general recommendations regarding risk prevention. It is not intended to include all steps or processes necessary to It’s It’s OurOur Business to Yours your . .. .. .. ..adequately . .protect .business. . ..your . business, .or..your . .. Mutual .should . .. consult . ..personal . .. ..and.. insurance . ....….. .. .... .….. ..and.. .your .. .you, .. .. .2009 .. .customers. .. ..You.Insurance .. ..always .Company. .. .All. .rights .. .. .attorney .. .. .. professional .. .. .. ..for..advice .. ..unique .. ..to.. . . you ©.Copyright Federated reserved. This publication is intended to provide general recommendations regarding risk prevention. It is not intended to include all steps or processes necessary to This publication is intended to provide general recommendations regarding risk prevention. It is not intended to include all steps or processes necessary to adequatelyInsurance protect you, your business, or your customers. You should always consult your personal attorney and insurance professional for advice unique to The FEDERATED Companies Home Office: Owatonna, 55060your ● Phone: (800) 533-0472 www.federatedinsurance.com adequately protect you, your business, or ●your customers. You shouldMinnesota always consult personal attorney and ● insurance professional for advice unique to you and your business. © Copyright 2009 Federated Mutual Insurance Company. All rights reserved. you and your business. © Copyright 2009 Federated Mutual Insurance Company. All rights reserved. The FEDERATED Insurance Companies ● Home Office: Owatonna, Minnesota 55060 ● Phone: (800) 533-0472 ● www.federatedinsurance.com The FEDERATED Insurance Companies ● Home Office: Owatonna, Minnesota 55060 ● Phone: (800) 533-0472 ● www.federatedinsurance.com

26 OIL PROPHETS  WINTER 2010

New P&CMA Members New Active Members

New Associate Members

4th Avenue, LLC 1101 4th Avenue North Birmingham, AL 35203-1535 Ph: 205/243-5555

Beall Corporation 415 Church Street, #1215 Nashville, TN 37219 Ph: 423/304-2155 Manufacturer of Petroleum Semi-Trailers and Pumper Trucks

Lewis & Raulerson, Inc. 1759 State Street Waycross, GA 31501-6714 Ph: 912/283-5951

Carr, Riggs & Ingram, LLP 7550 Halcyon Summit Drive Montgomery, AL 36117-7008 Ph: 334/271-6678 Certified Public Assountants

U S A Gasoline 648-B Boll Weevil Circle Enterprise, AL 36330 Ph: 334/347-6587

Dupre’ Logistics, LLC 201 Energy Parkway, Suite 500 Lafayette, LA 70508-3851 Ph: 800/356-3659 Petroleum Products Transportation Littlejohn Tank & Equipment 1720 Union Street P.O. Box 5177 Spartanburg, SC 29304-5177 Ph: 864/573-9314 New Polar Petroleum Tankers and Used Tankers R B S World Pay 4410 Glenwood Lane Anna, TX 75409-7686 Ph: 972/924-2350 Credit Card Processing

1 (800) 685-NUTS 4713 North Hale Ave. Tampa, FL 33614 (813) 872-0900 Fax: (813) 872-7358 E-mail: HawksPeanuts@att.net www.hawksboiledpeanuts.com

Ryko Manufacturing Company 1500 S. E. 37th Street Grimes, IA 50111-4951 Ph: 515/986-3700 Car Wash Manufacturer T N T Distribution P. O. Box 20126 Montgomery, AL 36120-0126 Ph: 334/531-4100 Souvenir Keepsakes: Key Rings, Magnets, Coffee Mugs, T-Shirts WINTER 2010  OIL PROPHETS 27

421920_HawksPeanut.indd 1

3/3/09 10:32:20 PM

Index of Advertisers Alabama Tank

Alabama Power

AlaCOMP Inside Front (Business Insurance Group) C&S Canopy Federated Insurance

11 Inside Back

Hawks Nuts, Inc

Littlejohn Inc.

Meridian Associates

Nationwide (Randy Jones Insurance)

Calendar 2010

P&CMA IMPORTANT DATES

March 2-4 and 9-11, 2010 Driver Safety Meetings Locations around the state July 8-11, 2010

P&CMA Annual Convention Sandestin Golf and Beach Resort Destin, FL

September 20, 2010

Fall Golf Classic Wynlakes Golf & Country Club Montgomery, AL

December 8-9, 2010

General Membership Meeting The Wynfrey Hotel Birmingham, AL

OTHER IMPORTANT DATES

PM Environmental

May 12-14, 2010

PPM Consultants

October 4-5, 2010

PMAA Fall Meeting Atlanta, GA

PURE Oil Jobbers

October 5-8, 2010

NACS Show Atlanta, GA

Werts Welding

Pesco, Inc

Back Cover

Please Support Our Advertisers! To advertise in Oil Prophets Call: 877.363.0832

28 OIL PROPHETS ď &#x201C; WINTER 2010

PMAA Washington Conference and Day on the Hill The Washington Court Hotel Washington, DC

Are your insurance premiums too

High

The key to cutting insurance costs is…

Controlling Losses Upcoming Classes for Petroleum/C-Store Marketers Designated Risk Managers Training Program

March 22-24, 2010 September 13-15, 2010

Key Agenda Items: Your Losses versus the Petroleum Industry How an Underwriter Views Your Business Industry Input Session Petroleum Marketers’ Loss Keys · Employee Training · MVRs /Drivers’ Standards · Tanker Rollovers · Hiring Practices · Distracted Driving · Employment Related Practices Liability · Business Planning · Disaster Planning Customer Slips, Trips, and Falls Workers Compensation Claims Management

AD-261.3 ad Ed. 10/09

To send your risk manager to our informative Designated Risk Managers Training Program, contact your local Federated Marketing Representative or Jina Duchnowski at Federated 1-800-533-0472, ext. 5604. “The session on employee driving and checking motor vehicle reports was the most beneficial. It explained the importance to the business to check MVRs and hire only good drivers.” “The amount of risk management knowledge shared is almost overwhelming. I was most impressed by Federated’s commitment to help us minimize risk.” “I would recommend this program to anyone in the petroleum business. It’s made me take a step back and realize that the ideas discussed could be put in place for minimal cost.” “This time was very well spent. Our business is doing many things right and now will do even more things correctly.”