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S-4/A
KEY ENERGY SERVICES INC filed this Form S-4/A on 03/08/1996
Entire Document
 
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         For discussion of tax  considerations  of the Outside  Directors  Stock
Option Plan see discussion under Key 1995 Stock Option Plan.

The  following  table sets forth certain  information  relating to option grants
pursuant to the Outside  Directors  Stock Option  Plan,  effective as of July 6,
1995.


<TABLE>
<CAPTION>

                                                                                                      Potential Realizable Value
                      Number of Shares of                                                             at Assumed Annual Rates of
                         Common Stock                                                                   Stock Price Appreciation
                          Underlying        % of Total Options    Exercise Price     Expiration            for Option Term(3)
         Name         Options Granted(1)        Granted(2)           per Share          Date                (in thousands)
         ----         ------------------       ------------         -----------        ------               ---------------
                                                                                                          5%               10%
                                                                                                          --               ---
<S>                         <C>                  <C>                 <C>            <C>                <C>                <C>

Morton Wolkowitz             50,000               40%                 $5.00           7/6/2005          $162               $427
Van Greenfield               50,000               40%                 $5.00           7/6/2005           162               427
William Manly                25,000               20%                 $5.00           7/6/2005            81               214

</TABLE>


(1)      All options  granted to Group A Outside  Directors  and Group B Outside
         Directors on July 6, 1995 vested immediately upon such date.

(2)      Based on 125,000  shares of Common Stock  granted on July 6, 1995 under
         the Outside Directors Stock Option 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

   
                              RESALES OF SECURITIES

         The Key Common Stock,  including the Key Common Stock to be issued upon
exercise of the Warrants, and the Warrants  (collectively,  the "Securities") to
be issued to the  WellTech  stockholders  under this  Prospectus  will be freely
transferable  under the Securities Act, except for Securities  issued to persons
who may be deemed to be  "underwriters"  within the meaning of Section  2(11) of
the Securities Act and Rule 145(c) thereunder. Generally, these are persons, who
are deemed to control,  be controlled  by, or under common control with WellTech
("Affiliates").  The  Securities  issued (or  issuable) in  connection  with the
Merger to persons who  constitute  "underwriters"  within the meaning of Section
2(11) and Rule 145(c) may not be publicly  reoffered  or resold by such  persons
except pursuant to an effective  registration statement under the Securities Act
covering the Securities or, in certain circumstances, pursuant to Rule 145(d) or
any other  applicable  exemption under the Securities Act.  Because the WellTech
stockholders  listed in the table below (the "Selling  Securityholders")  may be
deemed to be underwriters of the Securities, this Prospectus will also cover any
offers or sales of the Securities by the Selling Securityholders.


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