<PAGE> 1
As filed with the Securities and Exchange Commission on July 24, 1996
Registration No. 333-______________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
KANEB SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1191271
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2435 N. CENTRAL EXPRESSWAY
RICHARDSON, TEXAS 75080
- -------------------------------------- ------------------------------
(Address of Principal Executive Offices) (Zip Code)
KANEB SERVICES, INC.
DEFERRED STOCK UNIT PLAN
(Full title of the plan)
MICHAEL B. GLAZER, CORPORATE COUNSEL
KANEB SERVICES, INC.
2435 N. CENTRAL EXPRESSWAY
RICHARDSON, TEXAS 75080
(Name and address of agent for service)
(214) 699-4000
(Telephone number, including area code, of agent for service)
-------------------------
Copy to:
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5151
ATTENTION: JOHN A. WATSON
-------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
Title of securities to be registered Amount to be Proposed Proposed maximum Amount of
registered(1) maximum offering aggregate registration fee
price per share (2) offering price (2)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 750,000 shares $2.75 $2,062,500 $712
========================================================================================================================
</TABLE>
(1) There are also registered hereby such indeterminate number of shares of
Common Stock as may become issuable by reason of the anti-dilution
provisions of the plan.
(2) Pursuant to Rule 457(h), the proposed maximum offering price is
estimated, solely for the purpose of determining the registration fee,
on the basis of the average high and low sales prices of a share of
Common Stock as reported by The New York Stock Exchange on July 23,
1996.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Kaneb Services, Inc., a Delaware corporation (the "Company"), hereby
incorporates by reference in this Registration Statement the following
documents:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since December 31, 1995.
(c) The description of the Company's common stock, no par value
(the "Common Stock"), contained in a registration statement on
Form 8-A filed pursuant to the Exchange Act, including any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, is hereby
deemed to be incorporated by reference in this Registration Statement and a
part hereof from the date of the filing of such documents.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The consolidated financial statements of the Company incorporated in
this Registration Statement by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1995, have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in accounting and auditing. The
validity of the issuance of the shares of Common Stock registered hereby will
be passed upon by Fulbright & Jaworski L.L.P., counsel to the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Twelve of the Company's Certificate of Incorporation provides
that no director of the Company will be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty by such
directors as a director; provided, however, that such article will not
eliminate or limit liability of a director to the extent provided by applicable
law (i) for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law, (iii) under Section
174 of the General Corporation Law of the State of Delaware (the "GCL"), or
(iv) for any transaction from which the director derived an improper personal
benefit.
Section 145 of the General Corporation Law of the State of Delaware
empowers the Company to, and the By-Laws of the Company provide that it shall,
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding by reason of
the fact that he is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; except that, in the case
of an action or suit by or in the right of the Company, no
<PAGE> 3
indemnification may be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Company unless
and only to the extent that the Court of Chancery or the court in which such
action or suit was brought shall determine that such person is fairly and
reasonably entitled to indemnity for proper expenses.
In 1986, the Company entered into individual Indemnification Assurance
Agreements (the "Agreements") with each person who was then a director or
executive officer of the Company. Pursuant to the Agreements, the Company has
agreed to indemnify such persons to the full extent provided by applicable law
and the By-laws of the Company.
ITEM 8. EXHIBITS.
4.1 Certificate of Designation related to the
Registrant's Adjustable Rate Cumulative Class A
Preferred Stock, filed as Exhibit 4 of the exhibits
to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1983, which exhibit
is hereby incorporated by reference.
4.2 Certificate of Designation, Preferences and Rights
related to the Registrant's Series B Junior
Participating Preferred Stock, filed as Exhibit 1 of
the exhibits to the Registrant's Current Report on
Form 8-K and Registration Statement on Form 8-A,
dated April 5, 1988, which exhibit is hereby
incorporated by reference.
4.3 Certificate of Designation related to the
Registrant's Adjustable Rate Cumulative Class A
Preferred Stock, Series C, dated April 23, 1991,
filed as Exhibit 4.4 of the exhibits to the
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1991, which exhibit is hereby
incorporated by reference.
4.4 Indenture between Moran Energy Inc. and First City
National Bank of Houston, dated as of January 15,
1984, under which Moran Energy Inc. issued the 8 3/4%
Subordinated Debentures due 2008, filed as Exhibit
4.1 to Moran Energy Inc.'s Registration Statement on
Form S-3 (SEC File No. 2-81227), which exhibit is
hereby incorporated.
4.5 First Supplemental Indenture between the Registrant
and First City, dated as of March 20, 1984, under
which the Registrant assumed obligations under the
Indenture listed as Exhibit 4.4 above, filed as
Exhibit 4.8 of the 1983 Form 10-K, which exhibit is
hereby incorporated by reference.
4.6 Deferred Stock Unit Plan.
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding the
legality of the securities being registered.
24.1 Consent of independent accountants, Price Waterhouse
LLP, filed herewith.
24.2 Consent of Fulbright & Jaworski L.L.P. (contained in
Exhibit 5.1 hereto).
25.1 Power of attorney (contained on page hereof).
<PAGE> 4
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(A) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "Securities
Act");
(B) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or
the most recent post-effective amendment hereof) which, individually
or in the aggregate, represent a fundamental change in the information
set forth in this Registration Statement; and
(C) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
Provided, however, that paragraphs (a)(i)(A) and (a)(i)(B) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Company pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in this Registration Statement.
(ii) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(iii) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Company's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference into this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel, the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Howard C. Wadsworth or Tony M. Regan to
act as his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all post-effective amendments to the
foregoing filing, and to file the same with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully and to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact or agent, or his
substitute or substitutes or all of them may lawfully do or cause to be done by
virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for the foregoing filing and had duly caused the
foregoing filing to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richardson, State of Texas, on the 24th day of July,
1996.
KANEB SERVICES, INC.
By: Howard C. Wadsworth
--------------------------------------------
Name: (Howard C. Wadsworth)
Title: Vice President, Secretary and Treasurer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE FOREGOING FILING HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES
AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
Name Title Date
- ----------------- ---------------------------------- -------------
- -
<S> <C> <C>
John R. Barnes Chairman of the Board, President July 24, 1996
- ----------------- and Chief Executive Officer
(John R. Barnes)
Tony M. Regan Controller (Principal Financial and July 24, 1996
- ----------------- Accounting Officer)
(Tony M. Regan)
Sangwoo Ahn Director July 24, 1996
- -----------------
(Sangwoo Ahn)
Charles R. Cox Director July 24, 1996
- -----------------
(Charles R. Cox)
Preston A. Peak Director July 24, 1996
- -----------------
(Preston A. Peak)
Ralph A. Rehm Director July 24, 1996
- -----------------
(Ralph A. Rehm)
James R. Whatley Director July 24, 1996
- -----------------
(James R. Whatley
</TABLE>
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Number Exhibit
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<S> <C>
4.1 Certificate of Designation related to the Registrant's Adjustable Rate Cumulative Class A
Preferred Stock, filed as Exhibit 4 of the exhibits to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1983, which exhibit is hereby incorporated by
reference.
4.2 Certificate of Designation, Preferences and Rights related to the Registrant's Series B Junior
Participating Preferred Stock, filed as Exhibit 1 of the exhibits to the Registrant's Current
Report on Form 8-K and Registration Statement on Form 8-A, dated April 5, 1988, which exhibit
is hereby incorporated by reference.
4.3 Certificate of Designation related to the Registrant's Adjustable Rate Cumulative Class A
Preferred Stock, Series C, dated April 23, 1991, filed as Exhibit 4.4 of the exhibits to
Registrant's Annual Report on From 10-K for the year ended December 31, 1991, which exhibit is
hereby incorporated by reference.
4.4 Indenture between Moran Energy Inc. and First City National Bank of Houston, dated as of
January 15, 1984, under which Moran Energy Inc. issued the 8 3/4% Subordinated Debentures due
2008, filed as Exhibit 4.1 to Moran Energy Inc.'s Registration Statement on Form S-3 (SEC File
No. 2-81227), which exhibit is hereby incorporated.
4.5 First Supplemental Indenture between the Registrant and First City, dated as of March 20, 1984,
under which the Registrant assumed obligations under the Indenture listed as Exhibit 4.4 above,
filed as Exhibit 4.8 of the 1983 Form 10-K, which exhibit is hereby incorporated by reference.
4.6 Deferred Stock Unit Plan.
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding the legality of the securities being
registered.
24.1 Consent of independent accountants, Price Waterhouse LLP, filed herewith.
24.2 Consent of Fulbright & Jaworski L.L.P. (contained in Exhibit 5.1 hereto).
25.1 Power of attorney (contained on page hereof).
</TABLE>
<PAGE> 1
EXHIBIT 4.6
KANEB SERVICES, INC.
DEFERRED STOCK UNIT PLAN
1.Purpose. This Deferred Stock Unit Plan of Kaneb Services, Inc., a
Delaware corporation, is intended to advance the best interests of the Company
by providing executives and other key personnel with additional incentive and
by increasing their proprietary interest in the success of the Company, thereby
encouraging them to continue their service to the Company. By this Plan (as
defined below) the Company (as defined below) seeks to establish an orderly
compensation plan to more closely align the interests of a Participant (as
defined below) with those of the Company's stockholders over a multi-year term,
in return for the Participant's service to the Company or its subsidiaries.
2.Definitions.
A. "Board of Directors" or "Board" means the Board of
Directors of the Company.
B."Change of Control" means, with respect to the Company, the
occurrence of any one or more of the following events:
(1) the acquisition by any individual or entity of
the legal or beneficial ownership of securities of
the Company resulting in such person having 20% or
more of the total votes that may be cast for the
election of directors of the Company;
(1)the approval by stockholders of the Company of the
sale or other disposition of all or substantially all
of the assets of the Company (including a plan of
liquidation or dissolution) or the merger or
consolidation of the Company with or into another
corporation, in accordance with the requirements of
Certificate of Incorporation of the Company and
applicable law; or
(1)as a result of, or in connection with, any tender
offer, exchange offer, merger or other business
combination which results in the failure of
individuals who are members of the Board of
Directors immediately prior to such event to continue
to constitute the majority of the Board.
C. "Committee" means the Compensation Committee of the Board
of Directors, or any successor committee appointed by
resolution of the Board.
D. " Company" means Kaneb Services, Inc. , a Delaware
Corporation.
E. "Common Stock" means the Common Stock of the Company, no
par value.
F. "Compensation" means, with respect to a salaried employee
of the Company or any of its subsidiaries, his or her regular
base salary in respect of his or her service as an employee
with the Company or any of its subsidiaries, unless otherwise
defined from time to time by the Committee.
G. "Initial Contribution Period" means the two-year period
commencing August 16, 1996 and ending August 15, 1998.
H. "Contributions" means the cumulative amount of
Compensation which has been credited to a Participant's
Deferred Stock Unit Ledger Account, in accordance with Section
7 hereof.
<PAGE> 2
I. "Deferred Stock Unit" or "DSU", means a unit credited to a
Participant's Deferred Stock Unit Ledger Account in accordance
with Section 7 hereof.
J."Deferred Stock Unit Ledger" or "DSU Ledger" means a
bookkeeping record maintained by the Company which, among
other things, reflects the name of each Participant, the
number of DSUs which have been purchased on his or her behalf
under the Plan and the vesting status of the DSUs for such
Participant.
K."Disability" means the inability of a Participant, through
life-threatening illness or other life- threatening cause or
event, as determined in the discretion of the Committee based
on the advice of competent physicians of their selection, to
continue in the employment of the Company for a consecutive
period of six (6) months or more, as determined by the
Committee.
L."Election Date" means the date on which an Eligible Employee
elects to become a Participant in the Plan by delivering to
the Company the election authorization described in Section 6
hereof and all periods of revocability of participation have
expired.
M."Eligible Employee" means any officer or other key employee
of the Company or any of its subsidiaries who is eligible to
participate in the Plan. In all cases, the determination of
whether an officer or other key employee is an "Eligible
Employee" shall be made solely by the Committee or its
delegate.
N. "Final Valuation Date" means, with respect to a
Participant, the earlier to occur of the following dates: (i)
the date of a Participant's severance from employment with the
Company or any subsidiary (including by reason of death or
Disability); (ii) the date on which the Company undergoes a
Change of Control; or, (iii) any date selected by the
Participant, as indicated on the Participant's election
authorization, which is on or after August 16, 1999.
O. "Initial Valuation Date" means August 16, 1996.
P. "Participant" means each Eligible Employee who elects to
participate in the Plan pursuant to Section 5 hereof.
Q. "Plan" means this Kaneb Services, Inc. Deferred Stock Unit
Plan as the same may be amended from time to time.
R. "DSU Value" means:
(1)on any Final Valuation Date on or after August 16,
1998, the dollar value of DSUs determined by
multiplying the number of DSUs credited to the DSU
Ledger account of a Participant by the closing sale
price per share of the Company's Common Stock on the
New York Stock Exchange on such date (or, if there is
no reported sale on such date, on the last preceding
date on which such sale occurred); or,
(2) on any Final Valuation Date after August 15,
1996 but before August 16, 1998, provided that the
Participant has not died or experienced a Disability,
the LESSER of: (i) the dollar amount of cash
compensation actually deferred by the Participant as
of such Final Valuation Date, or, (ii) the amount of
cash compensation actually deferred by the
Participant as of the Final Valuation Date divided by
the amount of total aggregate compensation that would
have been deferred by such Participant through the
end of the Contribution Period,
<PAGE> 3
multiplied by the number of DSU's credited to the DSU
Ledger account of a Participant, then multiplied by
the closing price of the Company's Common Stock on
the Final Valuation Date (or, if there is no reported
sale on such date, on the last preceding day on which
any such reported sale occurred); provided, however,
that, if the Final Valuation Date in this Section 2,
Item R (2) is caused by the death or Disability of
the Participant, DSU Value shall mean the GREATER
of: (i) the actual dollar amount of compensation
deferred as of the Final Valuation Date, or (ii) the
amount of cash compensation actually deferred by the
Participant as of the Final Valuation Date divided by
the amount of total aggregate compensation that would
have been deferred by such Participant through the
end of the Contribution Period, multiplied by the
number of DSU's credited to the DSU Ledger account of
a Participant, then multiplied by the closing price
of the Company's Common Stock on the Final Valuation
Date (or, if there is no reported sale on such date,
on the last preceding day on which any such reported
sale occurred).
S. "Fully Vested" shall mean a Participant's right to receive
the DSU Value when computed pursuant to Section 2, item R (1)
above.
T. "Partially Vested" shall mean Participant's right to
receive the DSU Value when computed pursuant to Section 2,
item R (2) above.
3. Administration.
A. The Plan shall be administered by the Committee. The
Committee may delegate the Administration of the Plan to an
officer or executive of the Company, however the Committee may
not delegate its authority to amend, change or terminate the
Plan.
B. The Committee may make such rules and regulations for the
conduct of its affairs, and subject to the provisions of the
Plan, interpret the Plan, amend the Plan and make all other
determinations and perform such actions as it deems necessary
or advisable to administer the Plan.
C. No member of the Committee shall be liable for any action
taken or determination made in good faith with respect to the
Plan or any Option granted hereunder.
D. The Company's Director of Human Resources shall report as
necessary to the Committee those events with respect to the
Plan requiring action, determination, or rulings from the
Committee.
4. Determination of Eligible Employees. The determination of which
executives or other key employees of the Company are Eligible Employees and
thus eligible to participate in the Plan shall be within the sole discretion of
the Committee. Upon determining that any executive or other key employee is an
Eligible Employee, the Committee shall notify such person in writing.
5. Method of Participation. Each Eligible Employee may elect to
participate in the Plan by executing and delivering to the Company, on or
before August 15, 1996 an election authorization described in Section 6 below.
Such eligible employee shall thereby become a Participant effective as of
August 16, 1996 and shall remain a Participant until such Participant or his or
her beneficiary, as the case may be, has received payment of the DSU Value of
such Participant's Deferred Stock Units in accordance with Section 9 hereof, or
until such Participant's rights are earlier forfeited as provided in Section 11
hereof. Upon the effectiveness of the Participant's election to participate,
each Participant shall be granted a non-qualified stock option to purchase
shares of Common Stock of the Company for a price equal to the closing sale
price of the Company's Common Stock on the Initial Valuation Date. The number
of shares subject to such non-qualified stock option and vesting provisions
attached thereto shall be determined by the
<PAGE> 4
Committee in its sole discretion. Upon the grant of such non-qualified stock
option to a Participant, the Company and the Participant shall execute a
non-qualified stock option agreement.
6. Election Authorization. The Company shall furnish to each Eligible
Employee an election authorization in such form or forms as the Committee shall
proscribe. The election authorization shall request a deferral of pay during
the Contribution Period of an amount up to 50% of such Participant's annual
Compensation (but not less than 5% of such Participant's annual compensation).
No election authorization shall be effective sooner than the next payroll
period that begins after the Company's receipt of the election authorization.
All amounts deferred in accordance with a Participant's election authorization
shall be credited to such Participant's account under the Deferred Stock Unit
Ledger, as more fully described herein. No interest shall be payable on such
accounts.
7. Establishment and Maintenance of Deferred Stock Unit Ledger.
Concurrent with the establishment of the Plan, the Company shall establish a
Deferred Stock Unit Ledger which shall be used as the official record and
method of identifying the number and value of DSU's credited to a Participant's
individual account under the DSU Ledger. The DSU Ledger will reflect, with
respect to each Participant's respective account thereunder: (i) the name of
each Participant; (ii) the amounts actually deferred (as of the relevant date)
from his or her Compensation in accordance with his or her election
authorization; (iii) the number of his or her Deferred Stock Units to which
such Participant's Contributions equate; (iv) the vesting status of the DSU's
credited to each respective Participant's DSU Ledger account; and, (v) such
other information as the Committee or its designee shall deem appropriate. For
this purpose, the number of DSUs to be initially credited to each Participant's
respective account shall be the number of DSUs determined by dividing (x) the
aggregate amount of the Participant's Compensation to be deferred over the
Contribution Period by (y) the closing price per share of the Company's Common
stock on the New York Stock Exchange on the Initial Valuation Date.
8. Amount and Form of Payment. On a Participant's Final Valuation
Date, such Participant or his or her beneficiary, as the case may be, shall be
entitled to receive an amount equal to the DSU Value of such Participant's
Fully Vested or Partially Vested DSUs determined as of such Final Valuation
Date, and to be distributed in the manner described herein. All amounts
distributed to Participants or beneficiaries with respect to Final Valuation
Dates prior to August 15, 1998 shall be paid in cash. All amounts distributed
to Participants or beneficiaries with respect to Final Valuation Dates after
August 15, 1998 shall be in shares of the Company's Common Stock, unless the
Committee in its sole discretion elects to make such payment in cash. The
Company may satisfy its obligation to deliver shares of stock hereunder from
treasury shares, from authorized but unissued shares of Common Stock, or by
repurchasing shares of its Common Stock on the open market. The Company
shall, where applicable, issue and deliver to the Participant certificates
representing shares of its Common Stock as soon as practicable after the DSU
Value of such Participant becomes due and payable hereunder; provided however,
that the obligation of the Company to deliver shares of Common Stock shall be
postponed for such period of time as may be necessary to register or qualify
such shares under the Securities Act of 1933, as amended, or any applicable
state securities law or in order to list such shares with the New York Stock
Exchange.
9. Timing of Payment. The Company shall pay to such Participant, or
to his or her beneficiary, as the case may be, the DSU Value of the
Participant's DSUs in the form determined in accordance with Section 8 above,
in a single lump-sum no later than sixty (60) days following such Participant's
Final Valuation Date; provided however, that on or before his or her Election
Date, the Participant may elect that his or her Unit Value be paid in
accordance with such alternate payment schedule as the Committee in its sole
discretion may approve.
10. Beneficiary Designation. Prior to the Initial Valuation Date,
each Participant shall file with the Company a beneficiary designation on such
form or forms as the Committee shall proscribe naming one or more beneficiaries
to succeed to the Participant's right to receive payments hereunder in the
event of his or her death. The Participant shall have the right to change such
beneficiary designation from time to time; provided, however, that no such
change shall become effective until received in writing by the Committee or its
designee.
<PAGE> 5
11. Forfeiture of Deferred Stock Units. Notwithstanding any other
provision hereof, on a Participant's Final Valuation Date, any DSUs not
Partially Vested or Fully Vested shall be forfeited.
12. Contingent Right to Receive DSU Value. The right of each
Participant to payment and distribution of the DSU Value is contingent only
upon, and subject to, forfeiture as provided in Sections 11 and 15. Title to
and beneficial ownership of any assets, whether cash or investments, tangible
or intangible, which the Company may set aside or designate to meet its
contingent deferred obligation hereunder shall at all times remain vested in
and with the Company and no Participant or beneficiary shall under any
circumstances acquire any interest in any general or specific assets in the
Company. Nothing contained herein shall be deemed to create a trust of any
kind or to create a fiduciary relationship between the Company or the Committee
(or its designee(s)) and a Participant. To the extent that any person acquires
a right to receive payments from the Company under this Plan, such right shall
be no greater than that of any unsecured general creditor of the Company.
13. Limitation on Rights. Nothing in this Plan shall be construed to:
A. give any employee of the Company any unilateral right to
be named an Eligible Employee or a Participant in the Plan;
B. give a Participant any rights whatsoever with respect to
shares of Common Stock of the Company;
C. give a Participant any rights of a shareholder of the
Company;
D. limit in any way the right of the Company to terminate a
Participant's employment with the Company at any time;
E. be evidence of any agreement or understanding, express or
implied, that the Company will engage the services of a
Participant in any particular position or at any particular
rate of remuneration.
14. Dividends and Dilution. The existence of outstanding Deferred
Stock Units shall not affect in any way the right or power of the Company or
its shareholders to make or authorize any adjustment, recapitalization,
reorganization, or any other change in the Company's capital structure or its
business, any merger or consolidation of the Company, any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the
Common Stock or any right thereto, the dissolution or liquidation of the
Company, any sale or transfer of all or any part of its assets or business, or
any other corporate act or proceeding whether of a similar character or
otherwise.
15. Transferability of Contingent Right to Future Payments. No right
or payment under this Plan shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber or charge the same shall be void. No
right or payment hereunder shall in any manner be liable for or subject to the
debts, contracts, liabilities or torts of any person entitled to such benefits.
If any Participant or beneficiary hereunder shall become bankrupt or attempt to
anticipate, alienate, assign, sell, pledge, encumber or charge any right or
benefit hereunder, or if any creditor shall attempt to subject the same to a
writ of garnishment, attachment, execution, sequestration, or any other form of
process or involuntary lien or seizure, then such right or payment shall, in
the discretion of the Committee, either cease and terminate absolutely or be
held by the Company for the sole benefit of the Participant or such
beneficiary, his or her spouse, children or other dependents, or any of them in
such manner and in such proportion as the Committee shall deem proper, free and
clear of the claims of any other party whatsoever.
16. Adjustments Upon Changes in Common Stock. In the event that the
Company shall effect a split of its Common stock or declare a dividend payable
in Common Stock, or in the event that the
<PAGE> 6
outstanding Common Stock shall be combined into a smaller number of shares, the
number of DSUs of any Participant shall be increased or decreased
proportionately, in a manner deemed appropriate by the Committee. In the event
of a reclassification of Common Stock not encompassed by the foregoing, or in
the event of a liquidation or reorganization of the Company, including a
merger, consolidation or sale of assets, the Committee shall make such
adjustments, if any, as it may deem appropriate in the number of DSUs of any
Participant that are subject to the Plan. The provisions of this Section shall
only be applicable if, and only to the extent that, the application thereof
does not conflict with any valid government statute, regulation or rule.
17. Financial Hardship. Upon written petition of the affected
Participant, in a manner specified by the Committee, the Committee may in its
sole discretion, with satisfactory documentation from the Participant,
determine a Final Valuation Date for the affected Participant. The value at
such Final Valuation Date shall be determined as provided for under Section 2,
Items R(1) and R(2) above.
18. Withholding Taxes. If the Company or any subsidiary in its
discretion determines that it is obligated to withhold any tax in connection
with the payment or vesting of benefits with respect to Deferred Stock Units,
the Company or such subsidiary may withhold from the Participant's wage or
other remuneration the appropriate amount of the tax. At the discretion of the
Company or such subsidiary, the amount required to be withheld may be withheld
in cash from such wages or other remuneration or in cash or in kind from cash
or the Common Stock, respectively deliverable to the Participant under the
terms hereof. If the Company or any subsidiary does not withhold an amount
from the Participant's wages or other remuneration sufficient to satisfy the
withholding obligation of the Company or such subsidiary, the Participant shall
be required to make reimbursement on demand, in cash, for the amount
underwithheld.
19. Amendment or Termination of Plan. The Company may amend this
Plan in whole or in part at any time and from time to time. Notice of any such
amendment shall be given in writing to each Participant and beneficiary of a
deceased participant. No amendment shall operate retroactively to deprive any
Participant or beneficiary of any benefit hereunder to which he or she is then
entitled. The Company may terminate the Plan at any time. Notice of any such
termination shall be given in writing to each participant and beneficiary of a
deceased Participant. No such termination shall be operate retroactively to
deprive any Participant or beneficiary of any benefit hereunder to which he or
she is then entitled.
20. Gender. Reference hereunder to the male gender shall be deemed
to include the female and neuter genders, unless otherwise stated or indicated
by the circumstances.
21. Headings. All the headings set forth in this Plan are intended
for convenience only and shall not control or affect the meaning, construction
or effect of this Plan.
22. Severability. In case any term in this Plan shall be held
invalid, illegal or unenforceable in whole or in part, neither the validity of
the remaining part of such term, nor the validity of the other terms of this
Plan, shall in any way be affected thereby.
23. Applicable Law. To the extent not in conflict with applicable
federal law, the laws of the State of Texas shall govern the validity,
construction and interpretation of this Plan.
24. Effective Date. This Plan has been approved by the Compensation
Committee, effective as of the 16th day of August, 1996.
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF FULBRIGHT & JAWORSKI L.L.P.]
July 24, 1996
Kaneb Services, Inc.
2435 N. Central Expressway
Suite 700
Richardson, Texas 75080
Gentlemen:
We have acted as counsel for Kaneb Services, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933 of 750,000 shares of the Company's common stock, no par
value (the "Shares"), to be awarded by the Company under its Deferred Stock
Unit Plan (the "Plan") upon the terms and subject to the conditions set forth
in the Company's Registration Statement on Form S-8 covering the Shares (the
"Registration Statement") to be filed with the Securities and Exchange
Commission.
In connection therewith, we have examined the Registration Statement,
originals or copies certified or otherwise identified to our satisfaction of
the Restated Certificate of Incorporation of the Company, as amended, the
By-laws of the Company and such other documents and instruments as we have
deemed necessary or appropriate for the expression of the opinions contained
herein.
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to us as copies, the authenticity and completeness of the originals
of those records, certificates and other instruments submitted to us as copies
and the correctness of all statements of fact contained in all records,
certificates and other instruments that we have examined.
Based on the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the
Shares have been duly and validly authorized for issuance and, upon issuance
thereof in accordance with the Plan, will be duly and validly issued, fully
paid and nonassessable.
The opinions expressed herein relate solely to, are based solely upon
and are limited exclusively to the laws of the State of Delaware and the
federal laws of the United States of America, to the extent applicable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Item 5.
Interest of Named Experts and Counsel" in the Registration Statement.
Very truly yours,
Fulbright & Jaworski L.L.P.
<PAGE> 1
EXHIBIT 24.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated March 5, 1996 appearing
on page F-1 of Kaneb Services, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1995. We also consent to the reference to us under the
heading "Interests of Named Experts and Counsel" in such Registration
Statement.
PRICE WATERHOUSE LLP
Dallas, Texas
July 24, 1996
