<PAGE> 1
As filed with the Securities and Exchange Commission on October 11, 1996
Registration No. 333-
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================================================================================
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
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(Address of Principal Executive Offices) (Zip Code)
KANEB SERVICES, INC.
1996 DIRECTORS STOCK INCENTIVE 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)
(972) 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 Amount to be Proposed maximum Proposed maximum Amount of
registered registered offering price per aggregate registration fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 100,000 shares $3.1875 $318,750 $97
===================================================================================================================
</TABLE>
(1) 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 October 8,
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 1996 Directors Stock Incentive 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 5 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 11th day of October, 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 October 11, 1996
- -------------------------- and Chief Executive Officer
(John R. Barnes)
Tony M. Regan Controller (Principal Financial and October 11, 1996
- -------------------------- Accounting Officer)
(Tony M. Regan)
Sangwoo Ahn Director October 11, 1996
- --------------------------
(Sangwoo Ahn)
Charles R. Cox Director October 11, 1996
- --------------------------
(Charles R. Cox)
Preston A. Peak Director October 11, 1996
- --------------------------
(Preston A. Peak)
Ralph A. Rehm Director October 11, 1996
- --------------------------
(Ralph A. Rehm)
James R. Whatley Director October 11, 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 1996 Directors Stock Incentive 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 5 hereof).
</TABLE>
<PAGE> 1
EXHIBIT 4.6
KANEB SERVICES, INC.
1996 DIRECTORS STOCK INCENTIVE PLAN
Purpose
This Plan is intended to assist the Company in recruiting and
retaining directors with ability and initiative by enabling them to participate
in the Company's future success and to associate their interests with those of
the Company and its shareholders. The Plan is intended to permit the grant of
SARs, and the grant of non-qualified stock options (options not qualified under
Section 422 of the Code as "incentive stock options"). The proceeds received
by the Company from the sale of Common Stock pursuant to this Plan shall be
used for general corporate purposes.
Article I - Definitions
1.01 "Agreement" means a written agreement (including any amendment or
supplement thereto) between the Company and a Participant specifying
the terms and conditions under which an Option or SAR is granted to
such Participant.
1.02 "Board" means the Board of Directors of the Company.
1.03 "Code" means the Internal Revenue Code of 1986, and any amendments
thereto.
1.04 "Common Stock" means the Common Stock, without par value, of the
Company.
1.05 "Company" means Kaneb Services, Inc., a Delaware corporation.
1.06 "Corresponding SAR" means an SAR that is granted in relation to a
particular Option and that can be exercised only upon surrender to the
Company, unexercised, of that portion of the Option to which the SAR
relates.
1.07 "Date of Exercise" means (i) with respect to a particular Option, the
date that the Option price is received by the Company and (ii) with
respect to an SAR, the date that the notice of exercise is received by
the Company.
1.08 "Director" means any duly elected member of the Company's Board of
Directors.
1.09 "Fair Market Value" means, on any given date, the closing price of the
Common Stock. If the Common Stock was not traded on such date, then
the "Fair Market Value" is determined with reference to the preceding
day that the Common Stock was so traded.
1.10 "Initial Value" means, with respect to an SAR, the Fair Market Value
of one share of Common Stock on the date of grant, as set forth in the
Agreement.
1.11 "Option" means a stock option that entitles the holder to purchase
from the Company a stated number of shares of Common Stock at the
price set forth in an Agreement.
1.12 "Participant" means a member of the Board, who satisfies the
requirements of Article III and is selected by the Board to receive an
Option, an SAR, or a combination thereof.
1.13 "Plan" means the Kaneb Services, Inc. 1996 Directors Stock Incentive
Plan.
1.14 "SAR" means a stock appreciation right that entitles the holder to
receive, with respect to each share of Common Stock encompassed by the
exercise of such SAR, the amount determined by the Board and
specified in the Agreement. In the absence of such a determination,
the holder shall be entitled to receive, with respect to each share of
Common Stock encompassed by the exercise of such SAR, the excess of
the Fair Market Value on the Date of Exercise over the Initial Value,
payable in cash or the equivalent value in Common Stock, at the
election of the Board. References to "SARs" include both
Corresponding SARs and SARs granted independently of Options unless
the context requires otherwise.
Article II - Administration
Except as provided in this Article II, the Plan shall be administered
by the Board. The Board shall have the authority to grant Options and SARs on
such terms (not inconsistent with this Plan) as the Board shall consider
appropriate. Such terms may include conditions (in addition to those contained
in this Plan) on the exercisability of all or any part of an Option or SAR.
Notwithstanding any such conditions, the Board may, in
<PAGE> 2
its discretion, accelerate the time at which any Option or SAR may be
exercised. In addition, the Board shall have complete authority to interpret
all provisions of this Plan; to prescribe the form of Agreements; to adopt,
amend, and rescind rules and regulations pertaining to the administration of
the Plan; and to make all other determinations desirable, necessary or
advisable for the administration of this Plan. The express grant in the Plan
of any specific power to the Board shall not be construed as limiting any power
or authority of the Board. Any decision made, or action taken, by the Board or
in connection with the administration of this Plan shall be final and
conclusive. No member of the Board shall be liable for any act done in good
faith with respect to this Plan or any Agreement, Option, or SAR award. All
expenses of administering this Plan shall be borne by the Company.
Article III - Eligibility
3.01 General. Each Director of the Company is eligible to participate in
this Plan. Any such Director may be granted one or more Options, SARs, or
Options and SARs. A Director of the Company who is an employee of the Company
or a Subsidiary may be granted Options or SARs under this Plan.
3.02 Grants. The Board will designate individuals to whom Options and SARs
are to be granted and will specify the number of shares of Common Stock subject
to each award or grant. An Option may be granted with or without a related
SAR. An SAR may be granted with or without a related Option. All Options and
SARs granted under this Plan shall be evidenced by Agreements which shall be
subject to the applicable provisions of this Plan and to such other provisions
as the Board may adopt. The Board may substitute new Options or SARs for
previously granted Options or SARs, including those previously granted having
higher exercise prices. The Board may also substitute new SARs for previously
granted Options or new Options for previously granted SARs including those SARs
or Options theretofore granted having higher exercise prices. No Participant
may be granted incentive stock options under this Plan.
Article IV - Stock Subject to Plan
4.01 Source of Shares. Upon the exercise of any Options or SARs, the
Company may use Common Stock held by the Company in its Treasury, or subject to
shareholder approval, the Company may issue authorized but unissued Common
Stock.
4.02 Maximum Number of Shares. The maximum aggregate number of shares of
Common Stock that may be utilized pursuant to the exercise of Options and SARs
under this Plan is 100,000, subject to increases and adjustments as provided in
Article VIII.
4.03 Forfeitures. If an option or SAR is terminated, in whole or in part,
for any reason other than its exercise, the number of shares of Common Stock
allocated to the Option or SAR or portion thereof may be reallocated to other
Options or SARs to be granted under this Plan.
Article V - Option Price
The price per share for Common Stock purchased on the exercise of an
Option shall be determined by the Board on the date of grant; provided,
however, that the price per share for Common Stock purchased on the exercise of
any Option, including an Option that is an incentive stock option, shall not be
less than the Fair Market Value on the date the Option is granted.
Article VI - Exercise of Options
6.01 Maximum Option or SAR Period. The maximum period in which an Option
or SAR may be exercised shall be determined by the Board on the date of grant
and any Corresponding SAR that relates to such Option shall be exercisable
after the expiration of 10 years from the date the Option or SAR was granted.
The terms of any Option or SAR may provide that it is exercisable for a period
less than such maximum period.
<PAGE> 3
6.02 Transferability. Any Option or SAR granted under this Plan shall be
transferable only by will, laws of descent and distribution or by a gift from a
Participant to a family member or a trust, partnership or similar entity for
the benefit of a family member. In the event of any such transfer, the Option
and any Corresponding SAR that relates to such Option must be transferred to
the same person or persons or entity or entities. No right or interest of a
Participant in any Option or SAR shall be liable for, or subject to, any lien,
obligation, or liability of such Participant, except in connection with a
permitted transfer.
6.03 Director Status. In the event that the terms of any Option or SAR
provide that it may be exercised only during active service or within a
specified period of time after termination of service, the Board may decide to
what extent leaves of absence for government or military service, illness,
temporary disability, or other reasons shall not be deemed interruptions of
continuous service. In the absence of terms established in an Option and or
SAR Agreement by the Board, the following shall apply:
(a) Death. In the event of death while in active service, Options and
SARs may be exercised for a period of one hundred eighty (180) days after the
Participant's death or until the expiration of the Option or SAR (if sooner),
to the extent of the shares with respect to which the Option or SAR could have
been exercised by the Participant on the date of the Participant's death, by
the Participant's estate or personal representative, or by the person who
acquired the right to exercise the Option or SAR by bequest or inheritance or
by reason of the Participant's death;
(b) Disability. In the event of termination of service as the result
of a permanent disability or life-threatening illness (as determined by the
Board), the Option or SAR may be exercised by the Participant or his guardian
for a period of 180 days after the Participant's termination or until
expiration of the Option or SAR period (if sooner) to the extent of the shares
with respect to which the Option or SAR could have been exercised by the
Participant on the date of such termination;
(c) Termination. A Participant may exercise such Option or SAR in the
event that he resigns or fails to be reelected for a period of ninety (90) days
after the Participant's termination from service or until expiration of the
Option or SAR period (if sooner) to the extent of the shares with respect to
which the Option or SAR could have been exercised by the Participant on the
date of termination of service.
6.04 Terms. The Board may provide for the terms of the Participant's
eligibility to exercise Options or SARs in installments or under any such
conditions and restrictions as it may determine. In the absence of such terms
established in an Option or SAR Agreement by the Board, the Option or SAR shall
be exercisable in its entirety on the date of grant, subject to any applicable
law or statute and as otherwise provided for in this Article VI.
Article VII - Method of Exercise
7.01 Exercise. An Option or SAR granted under this Plan shall be deemed to
have been exercised on the Date of Exercise. Subject to the provisions of
Articles VI and IX, an Option or SAR may be exercised in whole at any time or
in part at any time at such times and in compliance with such requirements as
the Board shall determine. An Option or SAR granted under this Plan may be
exercised with respect to any number of whole shares less than the full number
of whole shares for which the Option or SAR could be exercised. A partial
exercise of an Option or SAR shall not affect the right to exercise the Option
or SAR from time to time in accordance with this Plan and the applicable
Agreement with respect to remaining shares subject to the Option or related to
the SAR. The exercise of either an Option or Corresponding SAR shall result in
the termination of the other to the extent of the number of shares with respect
to which the Option or Corresponding SAR is exercised.
7.02 Payment. Unless otherwise provided by the Agreement, payment of the
Option price shall be made in cash, a cash equivalent acceptable to the Board,
or in Common Stock. With the approval of the Board, all or part of the Option
price may be paid by surrendering shares of Common Stock to the Company. If
Common Stock is used to pay all or part of the Option price, the shares
surrendered must have a Fair Market Value (determined as of the day preceding
the Date of Exercise) that is not less than such price or part thereof.
<PAGE> 4
A fractional share of Common Stock shall not be deliverable upon the exercise
of an SAR or Option but a cash payment will be made in lieu thereof.
7.03 Shareholder Rights. No Participant shall have any rights as a
stockholder with respect to shares subject to his Option or SAR until the Date
of Exercise of such Option or SAR.
Article VIII - Adjustment Upon Change in Common Stock
8.01 General. The maximum number of shares as to which Options and SARs
may be granted under this Plan shall be proportionately adjusted, and the terms
of outstanding Options and SARs shall be adjusted, as the Board shall determine
to be equitably required in the event that the Company effects one or more
stock dividends, stock split-ups, subdivisions or consolidations of shares.
Any determination made under this Article VIII by the Board shall be final and
conclusive. This issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services, either upon direct sale or upon exercise of rights or
warrants to subscribe therefore, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect
and no adjustment by reason thereof shall be made with respect to, outstanding
Options or SARs. The Board may grant Options, and may grant SARs in
substitution for stock awards, stock options, stock appreciation rights, or
similar awards held by an individual who becomes a member of the Board in
connection with a transaction described in the first paragraph of this Article
VIII. Notwithstanding any provision of the Plan, the terms of such substituted
Option or SAR grants shall be as the Board, in its discretion, determines is
appropriate.
8.02 Liquidation or Dissolution. In case the Company shall, at any time
while any unexercised Option or SAR shall be in force and remain unexpired
under this Plan, (i) sell all or substantially all its property and thereafter
distribute in partial or total liquidation of the Company, or (ii) dissolve,
liquidate, or wind up its affairs, then each Participant may thereafter receive
upon exercise of Options or SARs (in lieu of each share of Common Stock of the
Company which such Participant would have been entitled to receive) the same
kind and amount of any securities or assets as may be issuable, distributable
or payable upon any such sale, dissolution, liquidation, or winding up with
respect to each share of Common Stock of the Company. In the event that the
Company shall, at any time prior to the expiration of any Option or SAR, make
any partial distribution of its assets (but not including dividends payable in
capital stock of the Company), in the nature of a partial liquidation, whether
payable in cash or in kind (but excluding the distribution of a cash dividend
payable out of earned surplus and designated as such) then in such event the
exercise prices then in effect with respect to each outstanding Option or SAR
shall be reduced, on the payment date of such distribution, in proportion to
the percentage reduction in the tangible book value of the shares of the
Company's Common Stock (determined in accordance with generally accepted
accounting principles) resulting by reason of such distribution.
Article IX - Compliance With Law and Approval of Regulatory Bodies
No Option or SAR shall be exercisable, no Common Stock shall be
issued, no certificates for shares of Common Stock shall be delivered, and no
payment shall be made under this Plan except in compliance will all applicable
federal and state laws and regulations (including without limitation,
withholding tax requirements, if any) and the rules of all domestic stock
exchanges on which the Company's shares may be listed. The Company shall have
the right to rely on an opinion of its counsel as to such compliance. Any
share certificate issued to evidence Common Stock for which an Option or SAR is
exercised may bear such legends and statements as the Board may deem advisable
to assure compliance with applicable federal and state laws and regulations.
No Option or SAR shall be exercisable, no Common Stock Shall be issued, no
certificate for shares shall be delivered, and no payment shall be made under
this Plan until the Company has obtained such consent or approval as the Board
may deem advisable from regulatory bodies having jurisdiction over such
matters.
<PAGE> 5
Article X - General Provisions
10.01 Effect on Service. Neither the adoption of this Plan, its operation,
nor any documents describing or referring to this Plan (or any part thereof)
shall confer upon any Director any right to continue in the service of the
Company or in any way effect any right and power of the shareholders of the
Company to terminate the service of a director without assigning a reason
therefor.
10.02 Unfunded Plan. The Plan, insofar as it provides for grants, shall not
be required to segregate any assets that may at any time be represented by
grants under this Plan. Any liability of the Company to any person with
respect to any grant under this Plan shall be based solely upon any contractual
obligations that may be created pursuant to this Plan. No such obligation of
the Company shall be deemed to be secured by any pledge of, or other
encumbrance on, any property of the Company.
10.03 Rules of Construction. Headings are given to the articles and
sections of this Plan solely as a convenience to facilitate reference. The
reference to any statute, regulation, or other provision of law shall be
construed to refer, as well, to any amendment to or successor of such provision
of law.
Article XI - Amendment
The Board may amend or terminate this Plan from time to time,
provided, however, that no amendment may become effective until shareholder
approval is obtained if the amendment increases the aggregate number of shares
of Common Stock that may be issued under the Plan, other than through use
Common Stock held in its Treasury. No amendment shall without a Participant's
consent adversely affect any rights of such Participant under any Option or SAR
outstanding at the time such amendment is made.
Article XII - Duration of Plan
No Option or SAR may be granted under this Plan more than 10 years
after the date that the Plan is adopted by the Board.
Article XIII - Effective Date of Plan
Options and SARs may be granted under this Plan upon its adoption by
the Board.
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF FULBRIGHT & JAWORSKI L.L.P.]
October 11, 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 100,000 shares of the Company's common stock, no par
value (the "Shares"), to be awarded by the Company under its 1996 Directors
Stock Incentive 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
October 11, 1996
