ITEM 3: ELECTION OF BOARD OF DIRECTORS
Another purpose of the Key Special Meeting is the election of the Board
of Directors of Key, including, assuming consummation of the Merger, two persons
nominated by WellTech. It is proposed that proxies for the Key Special Meeting
not limited to the contrary will be voted to elect Messrs. John, Greenfield,
Manly and Wolkowitz, four of the current members of the Board of Directors, and,
if the Merger is consummated, to elect Messrs. Collins and Marcum, the WellTech
Nominees. If the Merger is not consummated, it is proposed that proxies for the
Key Special Meeting will be voted to elect Mr. Edwards in addition to Messrs.
John, Greenfield, Manly and Wolkowitz and Messrs. Collins and Marcum will not be
elected to the Board.
In connection with Key's acquisition of WellTech's West Texas assets,
WellTech was granted the right to designate one nominee to serve on Key's Board
of Directors. WellTech's nominee resigned from Key's Board effective August 29,
1995. If the Merger is not consummated, WellTech will retain the right to
designate one nominee to serve on Key's Board.
The Board of Directors of Key meets to review significant developments
affecting Key and to act on matters requiring Board approval. During the fiscal
year ended June 30, 1995, the Board of Directors held 4 meetings, including
regular, special and telephonic meetings. Each director attended at least 75% of
the aggregate of the total number of meetings of the Board held during the
period for which he has been a director and any committee on which such director
served during the periods that he served.
Committees of the Board. In order to facilitate the various functions
of the Board of Directors, the Board has created an Audit Committee, the
Compensation Committee and an Executive Committee. There is no standing
Nominating Committee of the Board.
The Audit Committee meets with Key's independent auditors at least
twice annually to review financial results, internal financial controls and
procedures, audit plans and recommendations. The Audit Committee also recommends
the selection, retention or termination of independent public accountants,
approves services provided by the independent public accountants prior to
providing such services, and evaluates the possible effect performance of such
services will have on their independence. Messrs. Greenfield and Wolkowitz serve
on the Audit Committee with Mr. Wolkowitz serving as Chairman. The Audit
Committee held two meetings during fiscal year 1995 concerning audits and
financial statements in conjunction with meetings of the entire Board of
The Compensation Committee recommends to the Board the compensation of
Executive Officers and Directors and the adoption of stock grant and stock
option plans by Key and approves stock grants and stock options. Messrs.
Greenfield, Manly and Wolkowitz serve on the Compensation and Stock Grant Plan
Committee with Mr. Wolkowitz serving as Chairman. The Compensation and Stock
Grant Plan Committee held six meetings during fiscal year 1995 in conjunction
with meetings of the entire Board of Directors.