SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Form 10-KSB/A
(Amendment No. 2)
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For fiscal year ended June 30, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1943 [No Fee Required]
For the transition period from to
Commission file no. 1-8038
KEY ENERGY GROUP, INC.
(Name of small business issuer in its charter)
Maryland 04-2648081
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
255 Livingston Ave., New Brunswick, NJ 08901
(Address of principal executive offices and ZIP Code)
Issuer's telephone number: (908) 247-4822
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, $.10 par value American Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.10 par value
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
The Registrant's revenues for the Year ended June 30, 1995 were $44,689,000.
The aggregate market value of the Common Shares held by nonaffiliates of the
Registrant as of August 1, 1995 was approximately $34,999,644.
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes X No ___
Common Shares outstanding at August 1, 1995: 6,913,510
DOCUMENTS INCORPORATED BY REFERENCE: None.
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FORM 10-KSB/A
AMENDMENT NO. 2
KEY ENERGY GROUP, INC. and Subsidiaries
INDEX
Part III.
Item 10. Executive Compensation.
Item 13. Exhibits.
Signatures.
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Item 10. Executive Compensation.
1995 Stock Option Plan
The following information amends the description of options granted
under the Company's 1995 Stock Option Plan (the "1995 Plan") set forth in Form
10-KSB/A (Amendment No. 1) previously filed. Except as amended hereby, the
Company's description of such option grants set forth in Form 10-KSB/A
(Amendment No. 1) is hereby confirmed.
Subject to shareholder approval, the following options were granted,
effective July 6, 1995, to Executive Officers and other key employees of the
Company under the 1995 Plan:
Optionee Options Granted
Francis D. John 500,000
C. Ron Laidley 125,000
D. Kirk Edwards 100,000
Danny Evatt 50,000
Other key employees 175,000
All of the options listed above will be exercisable at $5.00 per share, the
closing price of the Company's Common Stock on July 6, 1995, the date of grant,
and with the exception of the options granted to Mr. John, will generally vest
in four installments, with the first installment to vest on the effective date
of the grant, subject to acceleration of vesting upon the occurrence of certain
events. Of the options granted to Mr. John, options to purchase 350,000 shares
will vest in four installments with the first installment to vest on the
effective date of the grant, subject to acceleration of vesting upon the
occurrence of certain events, and options to purchase 150,000 shares will vest
on the first date (occurring on or after July 1, 1996 but prior to July 1, 1999)
on which the fair market value of the Company's Common Stock equals at least
$9.50 per share.
Employment Agreements
The following information amends the description of the employment
agreement with Francis D. John set forth in Form 10-KSB/A (Amendment No. 1)
previously filed. Except as amended hereby, the Company's description of such
employment agreement set forth in Form 10-KSB/A (Amendment No. 1) is hereby
confirmed.
Effective as of July 1, 1995, the Company entered into a new employment
agreement with Mr. John which provides that Mr. John will serve as President,
Chief Executive Officer and a Director of the Company for a three year term
commencing July 1, 1995 and continuing until June 30, 1998, and thereafter the
term will be automatically extended for successive one year terms unless
terminated no later than 30 days prior to the commencement of an extension term.
Under the agreement, Mr. John will receive base compensation of $325,000 per
year and will be eligible for annual incentive compensation of up to 30% of base
compensation contingent upon the Company's achievement of goals to be set forth
in a strategic plan to be developed by the Executive Committee. Base
compensation will be reviewed annually and may be increased (but not decreased)
by the Board in its discretion. Pursuant to the agreement, Mr. John will also
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receive a bonus of $250,000 upon and subject to completion of a significant
merger or other major corporate transaction during fiscal year 1996 or 1997,
payable in four equal installments, commencing upon completion of the merger or
other transaction and thereafter at equal intervals determined so that the final
installment is paid on January 1, 1998, together with interest at 6%. The bonus
will be paid in recognition of the Company's successful completion of a merger
or other major corporate transaction. In determining the amount of the bonus,
the Board also considered the Company's successful reorganization and
performance post-reorganization, for which no bonus had been paid to Mr. John,
and the fact that the Company's financial performance and results of operations
in each fiscal year during the three year period ended June 30, 1995 have
substantially excluded projections. The agreement also provides for the grant of
options to Mr. John described above and in the Company's Form 10-KSB/A
(Amendment No. 1) under "1995 Stock Option Plan". If during the term of the
agreement Mr. John is terminated by the Company for any reason other than for
cause, of if he terminates his employment for a good reason or following a
change of control, he will receive severance compensation equal to three times
his base compensation in effect at the time of termination, payable in 36 equal
monthly installments, provided, however, that if termination results from a
change of control, severance compensation will be payable in a lump sum on the
date of termination. Mr. John is also subject to restrictions on completion
during the term of the agreement and, with certain exceptions, the severance
period.
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Item 13. Exhibits:
Exhibit 10.1 Amendment No. 1 to Employment Agreement between the Company
and Francis D. John dated as of July 1, 1995.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 2 to its
Report on Form 10-KSB to be signed on its behalf by the undersigned, thereunto
duly authorized.
KEY ENERGY GROUP, INC.
(Registrant)
By /s/ Francis D. John
Francis D. John
President, Chief Executive and Chief
Dated: January 12, 1996 Financial Officer and Director
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
Amendment No. 1 to the Registrant's Report on Form 10-KSB has been signed below
by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.
By /s/ Francis D. John
Francis D. John
President, Chief Executive and Chief
Dated: January 12, 1996 Financial Officer and Director
By /s/ Morton Wolkowitz
Morton Wolkowitz
Dated: January 12, 1996 Chairman of the Board and Director
By /s/ Van Greenfield
Van Greenfield
Dated: January 12, 1996 Director
By /s/ William Manly
William Manly
Dated: January 12, 1996 Director
By /s/ D. Kirk Edwards
D. Kirk Edwards
Dated: January 12, 1996 Director
By /s/ Danny R. Evatt
Danny R. Evatt
Dated: January 12, 1996 Chief Accounting Officer
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Exhibit 10.1
EMPLOYMENT AGREEMENT
AMENDMENT NO. 1
This Amendment No. 1 to the Employment Agreement (the "Agreement")
dated as of July 1, 1995 by and between Francis D. John, an individual residing
at 33 Penn Oak Trail, Newtown, Pennsylvania 18940 (the "Executive") and Key
Energy Group, Inc., a Maryland corporation with its principal offices at 257
Livingston Avenue, New Brunswick, New Jersey 08901 (the "Company") is made this
11th day of January, 1996.
WHEREAS, the Executive and the Company agree that certain provisions
relating to the Executive's bonus and options were incorrectly stated in the
Agreement; and
WHEREAS, the Executive and the Company, in recognition of their mutual
mistake, desire to correct such provisions.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Executive and the Company hereby agree as follows.
1. Capitalized terms used herein without definition shall have the
meanings set forth in the Agreement.
2. Section 2(b) of the Agreement is hereby amended to read in its
entirety as originally intended by the parties as follows:
(b) The Executive shall receive upon and subject to completion of a
significant merger or other major corporate transaction during fiscal year 1996
or 1997 a cash bonus of $250,000 payable in four equal installments commencing
on the date of completion of the merger or other transaction and thereafter at
equal intervals determined so that the final installment is paid on January 1,
1998, provided, however, that installments payable subsequent to the date of
this
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Agreement shall bear interest at six percent (6%) per annum with interest to be
paid at the time such installment is payable. The Company's Board of Directors
shall determine when a merger is "significant" or other corporate transaction
"major" so as to entitle the Executive to the bonus under this subsection (b).
In determining the amount of the bonus the Executive is eligible to earn under
this subsection (b), the Company's Board of Directors considered, among other
things, (i) the successful reorganization of the Company in fiscal year 1993
under the leadership of the Executive, for which the Executive had not been
awarded any bonus; and (ii) the financial performance of the Company in fiscal
years 1993, 1994 and 1995, in each of which years the Company's actual results
of operations substantially exceeded projections.
3. Section 3(a)(i) of the Agreement is hereby amended to read in its
entirety as originally intended by the parties as follows:
(i) Options (the "350 Options") to acquire Three Hundred Fifty
Thousand (350,000) shares of the Common Stock of the Company at an exercise
price of $5.00 per share, which will vest in four equal annual installments
commencing as of the effective date of the grant (July 6, 1995) and, once
vested, will be exercisable at any time prior to July 1, 2005. The 350 Options
have been granted pursuant to the Company's 1995 Stock Option Plan and pursuant
to an agreement substantially in the form attached hereto as Exhibit A.
4. Section 5 of Exhibit A-2 to the Agreement is hereby amended to read
in its entirety as originally intended by the parties as follows:
6. Exercise Schedule: Subject to the provisions of Section 9
below, the Option shall be exercisable
with respect to 67,500 shares as
of July 6, 1995 and with respect to
an additional 87,500 shares on each
of July 6, 1996, July 6, 1997
and July 6, 1998.
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5. Except as specifically amended hereby, the Agreement is hereby
ratified and affirmed by the Executive and the Company.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Employment Agreement as of the day and year first above written.
KEY ENERGY GROUP, INC.
By: /s/ Morton Wolkowitz
Name: Morton Wolkowitz
Title: Co-Chairman of the Board
/s/ Francis D. John
Francis D. John
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