Option under the 1995 Plan is not treated as a purchase of stock, provided that
the Optionee does not dispose of the stock acquired upon exercise of the Option
within six months after the date on which the Option was granted. If the
Optionee disposes of the stock acquired on exercise of the Option within six
months after the date that the Option was granted, then the grant of the Option
is treated as a purchase for purposes of the short-swing profit rules. The
exercise of an Option under the 1995 Plan is not treated as a purchase or a sale
for purposes of Section 16(b). An Optionee's delivery of stock in payment of the
exercise price of an Option will not be considered a sale of the delivered
shares. However, a "cashless exercise", does constitute a sale of the stock used
to pay the exercise price.
The shares to be issued upon exercise of options granted under the 1995
Plan have not been registered under the Securities Act are being issued in
reliance on an exemption from registration thereunder, and may not be sold or
otherwise transferred except pursuant to an effective registration statement or
an exemption from registration under the Securities Act.
The following table sets forth certain information relating to option grants
pursuant to Key 1995 Stock Option Plan, effective July 6, 1995.
Shares of Potential Realizable Value
Common Stock % of Total at Assumed Annual Rates of
Underlying Options Exercise Stock Price Appreciation
Options Granted to Price Expiration for Option Term(3)
Name Granted(1) Employees(2) per Share Date (in thousands)
---- ---------- --------- --------- ------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Francis D. John 350,000 36.8% $5.00 6/30/2005 $1,134 $2,989
150,000 15.8% $5.00 6/30/2005 (4) 1,281
C. Ron Laidley 80,000 8.4% $5.00 7/1/2005 259 683
45,000 4.7% $5.00 6/30/2005 146 384
D. Kirk Edwards 100,000 10.5% $5.00 6/30/2005 324 854
Danny Evatt 50,000 5.3% $5.00 6/30/2005 162 427
(1) With the exception of the options granted to Mr. John, the options vest
in four annual installments commencing upon the effective date of the
plan. Of options granted to Mr. John, options to purchase 350,000
shares vest in four annual installments commencing on the effective
date of the grant and options to purchase 150,000 shares will vest on
the first date (occurring on or after July 1, 1995 but prior to July 1,
1999) on which the fair market value of Key Common Stock equals at
least $9.50 per share.
(2) Based on options to purchase a total of 950,000 shares of Common Stock
granted under the 1995 Plan.
(3) Potential Realizable Value is based on the assumed growth rates for the
ten-year option term. 5% annual growth results in a stock price per
share of $8.24 and 10% results in a stock price per share of $13.54.
The actual value, if any, an executive may realize will depend on the
excess of the stock price over the exercise price on the date the
option is exercised, so that there is no assurance the value realized
by an executive will be at or near the amounts reflected in this table.
(4) Options to purchase 150,000 shares will not vest until the fair market
value of Key Common Stock equals at least $9.50 per share, therefore,
Potential Realizable Value cannot be calculated at 5% assumed growth