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SEC Filings

S-4/A
KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
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demand by Key and,  in any event,  no later  than  three  years from the date of
exercise;  and (c) the note shall bear  interest  at an annual rate equal to the
then applicable  short-term federal rate, payable monthly by payroll deductions;
provided  however,  that an amount  not less than the par value of the shares of
Common Stock with respect to which the Option is being exercised must be paid in
cash, cash equivalents, or shares of Common Stock.

         Alternatively,  if the option agreement permits, a NSO may be exercised
by means of a "cashless  exercise"  procedure in which a broker (i) transmits to
Key the exercise price in cash or cash  equivalents,  either as a margin loan or
against the Optionee's  notice of exercise and  confirmation by Key that it will
issue and deliver to the broker stock  certificates  for at least that number of
shares of Common  Stock  having an  aggregate  fair  market  value  equal to the
exercise  price, or (ii) agrees to pay the exercise price to Key in cash or cash
equivalents  upon its receipt of stock  certificates as described in clause (i),
subject to such conditions as the Committee shall reasonably require.

         Restrictions  on Exercise of Options.  The aggregate  fair market value
(determined  as of the time the  Option is  granted)  of the  Common  Stock with
respect  to which  ISOs may be  exercisable  for the first  time by an  Optionee
during  any  calendar  year  (under the 1995 Plan or any other  incentive  stock
option plan(s) of Key or any subsidiary) shall not exceed $100,000. The Optionee
shall  notify  Key  promptly  in the  event  that  he or she  sells,  transfers,
exchanges  or  otherwise  disposes  of any shares of Common  Stock  issued  upon
exercise of an ISO before the later of (a) the second anniversary of the date of
grant of the ISO,  and (b) the first  anniversary  of the date the  shares  were
issued upon his or her exercise of the ISO.

         The  Committee  may  further  restrict  the  exercise  of any Option by
prohibiting  such  exercise at any time during which and for such period of time
as any Optionee is engaged in any activity  determined by the  Committee,  after
full consideration of the facts presented on behalf of Key and the Optionee,  to
be detrimental to the best interests of Key and its shareholders.  The Committee
shall notify the Optionee in writing of any such  determination and of the scope
and duration of any such  restriction.  The decision of the  Committee as to the
detrimental  nature of the  Optionee's  activities  shall be final,  binding and
conclusive.

         Transferability  of  Options.  Options  are  not  transferable  by  the
Optionee  otherwise than by will or under the laws of descent and  distribution,
and are  exercisable  during his lifetime only by the Optionee.  Optionee may be
able  to  transfer  NSOs  to  members  of his  immediate  family  or  trusts  or
partnerships for the benefit of such person by gift. However,  Key may refuse to
permit transfer of shares of Common Stock or of any Option if, in the opinion of
its legal counsel,  such transfer would violate federal or state securities laws
or subject Key to liability thereunder.

         Effect of Certain  Corporate  Transactions  on  Options.  The number of
Reserved Shares, the number of shares of Common Stock covered by any outstanding
option  and  the  price  per  share  payable  upon  exercise  thereof,   may  be
proportionally adjusted for any increase or decrease in the number of issued and
outstanding   shares  of  Common   Stock   resulting   from  a   reorganization,
recapitalization,  exchange of shares,  stock  split,  combination  of shares or
dividend  payable  in shares or other  securities.  Any  adjustment  made by the
Committee shall be conclusive and binding upon all affected  persons,  including
Key and all Optionees.

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