<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.
NON-EMPLOYEE DIRECTORS
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>
============================================================================================================================
<S> <C> <C> <C> <C>
Title of securities to be registered Amount to be Proposed maximum Proposed maximum Amount of
registered(1) offering price per aggregate offering registration fee
share(2) price(2)
- ----------------------------------------------------------------------------------------------------------------------------
Common Stock, no par value 300,000 shares $2.75 $825,000 $284
============================================================================================================================
</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 Non-Employee Directors 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
------------------
(John R. Barnes) and Chief Executive Officer
Tony M. Regan Controller (Principal Financial and July 24, 1996
------------------
(Tony M. Regan) Accounting Officer)
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 Non-Employee Directors 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.
NON-EMPLOYEE DIRECTORS DEFERRED STOCK UNIT PLAN
1. Purpose. This Non-Employee Directors Deferred Stock Unit Plan of Kaneb
Services, Inc., a Delaware corporation, is intended to advance the best
interests of the Company by providing non-employee directors of the Company
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;
(2) 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
(3) 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 Director, his regular
cash payment from the Company in respect of his service as a
Director.
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. "Entrance Date" means the date on which an Eligible Director
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 Director" or "Director" means any non-employee
Director of the Company.
N. "Final Valuation Date" means, with respect to a Participant,
the earlier to occur of the following dates: (i) the date on which
a Participant is not reelected to the Board; (ii) the date of a
Participant's death or Disability; (iii) the date on which the
Company undergoes a Change of Control; or, (iv) 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 Director who elects to
participate in the Plan pursuant to Section 5 hereof.
Q. "Plan" means this Kaneb Services, Inc. Non-Employee Directors
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, the amount of cash compensation
actually deferred by the Participant as of such 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 DSUs 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).
<PAGE> 3
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 a Participant's right to receive
the DSU Value when computed pursuant to Section 2, item R (2)
above.
U. "Early Final Valuation Date" means a Final Valuation Date prior
to August 15, 1998.
3. Administration.
A. The Plan shall be administered by the Committee.
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.
4. Notification of Eligibility. The Committee shall notify such person in
writing of their eligibility prior to the Initial Valuation Date.
5. Method of Participation. Each Eligible Director 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 Director 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 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
Director 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 100% of such Participant's annual
Compensation (but not less than 10% 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 DSUs 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 DSUs
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
<PAGE> 4
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 on a Final Valuation Date that is
prior to August 15, 1998, shall be paid in cash. All amounts distributed to
Participants or beneficiaries on a Final Valuation Date that is 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 Entrance Date,
the Participant may elect that his or her DSU 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.
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 obligations 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 of 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 Director or a Participant in the Plan;
<PAGE> 5
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 shareholders of the Company
to elect, or choose not to elect a Participant to the Board.
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 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. Should the affected Participant be a member of the
Committee, he or she shall abstain from any vote or decision with regard to his
own petition for Financial Hardship.
18. Withholding Taxes. As of the Effective Date of this Plan, the
Company believes that it has no obligation to withhold taxes from Eligible
Directors of the Company; however, if the Company 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 may
withhold from the Participant's
<PAGE> 6
remuneration the appropriate amount of the tax. At the discretion of the
Company, the amount required to be withheld may be withheld in cash from such
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 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 Board of
Directors, 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 300,000 shares of the Company's common stock, no par value (the
"Shares"), to be awarded by the Company under its Non-Employee Directors
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
