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S-4/A
KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
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exercise of the warrant issued to CIT in connection with the New  Indebtedness),
assuming approval of the Key Charter  Amendment,  Key would have an aggregate of
approximately  12,311,490 shares of Key Common Stock authorized and unissued and
not reserved for issue.  The Board of Directors  believes that it is in the best
interests of Key and its stockholders to have available a significant  number of
shares of Key Common Stock,  which would be available to be issued in connection
with public and private equity financings or mergers and acquisitions,  or other
corporate transactions including benefit programs. Moreover, under the MGCL, the
Board of Directors has the power, without the need of any stockholder action, to
redesignate all or any of the  unauthorized  and unissued shares of Common Stock
into one or more series of preferred or  preference  stock and to establish  the
rights and  preferences  (including  without  limitation  dividend and liquidity
preferences,  voting  rights and  conversion  provisions),  except  that the Key
Articles  provides that no such class of series of shares (i) may have more than
one vote per share, (ii) may be issued in connection with any shareholder rights
plan, "poison pill" or other  anti-takeover  measure, or (iii) may be issued for
less  than  fair  consideration,  as  determined  in good  faith by the Board of
Directors. All of such shares, including any such preferred or preference stock,
could be  issued  by the  Board  of  Directors,  without  the  necessity  of any
stockholder action,  except to the extent otherwise required by the rules of the
American Stock Exchange.  Those rules generally require stockholder  approval if
more than 20% of the outstanding  common stock of a company is to be issued in a
single transaction or group of related transactions.

         The  Charter   Amendment  also  clarifies   certain  other   provisions
including:


         o Dividends on Key Common Stock may be paid in cash or property at such
time and in such amounts as Key Board of Directors  deems  advisable;  under the
terms of the New  Indebtedness,  however,  Key is  prohibited  from  paying cash
dividends  on  its  stock.   (See   "Business  and   Properties  of  Key--Recent
Developments--New Indebtedness.")


         o The holders of Key Common Stock are entitled to one vote per share.

         o Upon  liquidation,  dissolution  or winding up of Key, the holders of
Key Common  Stock are entitled to share  ratably  (based on the number of shares
held) in all assets available for distribution  after payment of debts and other
liabilities  and payment to any holders of a class of stock  having a preference
on distribution.

         o The Key Board of  Directors  will  consist  of six  directors,  which
number may be  increased or  decreased  pursuant to Key  By-Laws,  to the extent
permitted under MGCL.

         o The Board of Directors shall have the power, in its sole  discretion,
to determine  corporate profits,  earnings,  surplus or net assets,  reserves or
retained  earnings,  dividends  and  stockholder  rights to  inspect  the books,
accounts and  documents of Key, as well as the right to adopt,  alter and repeal
Key By-Laws, subject to rights vested in the stockholders under MGCL.

         o The Key Charter  Amendment removes the prohibition on the issuance of
a class of non-voting stock to the extent such prohibition was imposed under the
bankruptcy laws.

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