KEY ENERGY SERVICES, INC. (OTCMKTS:KEGXQ) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item 5.02Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.

On each of December 15, 2016 and December 20, 2016, the
Compensation Committee (the Committee)
of the Board of Directors of Key Energy Services, Inc., a
Delaware corporation (the Company)
approved the grant of equity compensation awards to certain
employees of the Company.Each equity compensation award described
below was granted to the Companys 2016 Equity and Cash Incentive
Plan (the ECIP).

On December 15, 2016, the Committee approved the grant of stock
option awards to certain employees of the Company.These stock
option grants were equally divided between time-based stock
options and performance-based stock options for each recipient.
Mr. Robert Drummond (President and Chief Executive Officer)
received a grant of 50,212 time-based stock options and 50,212
performance-based stock options, and Mr. Marshall Dodson (Senior
Vice President, Chief Financial Officer and Treasurer) received
25,506 time-based stock options and 25,506 performance-based
stock options.Mr. Jeff Skelly, Senior Vice President of
Operations Quality of Key Energy Services, LLC, who is still
considered to be a named executive officer to SEC disclosure
rules) received a grant of 4,796 time-based stock options and
4,796 performance-based stock options. The time-based and
performance-based stock options will be governed by a form of
stock option agreement that the Committee approved for use in
connection with the ECIP, the description below of which is
qualified in its entirety by reference to Exhibit 10.1 attached
hereto and incorporated by reference.

Each stock option was granted with a term of ten years and an
exercise price of $19.35, which was 1.5 times the Effective Date
Per Share Price as defined in the Companys Joint Prepackaged Plan
of Reorganization under Chapter 11 of the Bankruptcy Code by the
Company and certain of its affiliates filed with the United
States Bankruptcy Court for the District of Delaware on October
24, 2016.The time-based stock options will vest in equal
quarterly installments on each anniversary of the date of grant,
but will generally be forfeited without payment in the event that
the holders employment with the Company is terminated prior to
vesting for any reason.In the event that the holder of a
time-based stock option is terminated without cause or terminates
for good reason (each term as defined within the form of award
agreement), in either case within the twelve-month period
following a change in control (as defined within the form of
award agreement), all time-based stock options will become
immediately vested and exercisable. The performance-based stock
options will generally vest in equal quarterly installments over
four individual calendar year performance periods, beginning in
2017, so long as the Company generates at least $100,000,000 of
EBITDA (the Companys earnings before
interest, taxes, depreciation and amortization) in each annual
performance period; provided, however, that the first quarterly
installment will vest at the end of the 2017 performance period
if the holder has been continuously employed from the grant date
until the end of the 2017 year.The performance-based stock
options will generally be forfeited in the event that the holder
is terminated for any reason prior to vesting.

On December 20, 2016, the Committee approved the grant of
restricted stock unit awards (RSUs) and
additional grants of stock options to certain employees of the
Company.Each recipient received an equal amount of time-based and
performance-based RSUs, and an equal amount of time-based and
performance-based stock options. Mr. Drummond received 100,425
time-based RSUs, 100,425 performance-based RSUs, 50,212
time-based stock options and 50,212 performance-based stock
options.Mr. Dodson received 51,012 time-based RSUs, 51,012
performance-based RSUs, 25,506 time-based stock options and
25,506 performance-based stock options.Mr. Skelly received 9,591
time-based RSUs, 9,591 performance-based RSUs, 4,796 time-based
stock options and 4,796 performance-based stock options The stock
options were granted under the same time-based and
performance-based terms as described above with respect to the
December 15, 2016 grants and the form of award agreement
described above, with the exception that the exercise price for
these options was set at $47.99, which was the 1.5 times the fair
market value of the Companys common stock on the date of grant.

The time-based and performance-based RSUs will be governed by a
form of RSU agreement that the Committee approved for use in
connection with the ECIP, the description below of which is
qualified in its entirety by reference to Exhibit 10.2 attached
hereto and incorporated by reference.Each RSU will be settled in
the form of the Companys common stock on a one-for-one basis. The
time-based RSUs will vest in equal quarterly installments on each
anniversary of the date of grant, but will generally be forfeited
without payment in the event that the holders employment with the
Company is terminated prior to vesting for any reason.In the
event that the holder of a time-based RSU is terminated without
cause or terminates for good reason (each term as defined within
the form of award agreement), in either case within the
twelve-month period following a change in control (as defined
within

the form of award agreement), all time-based RSUs will become
immediately vested. The performance-based RSUs will generally
vest in equal quarterly installments over four individual
calendar year performance periods, beginning in 2017, so long as
the Company generates at least $100,000,000 of EBITDA in each
annual performance period; provided, however, that the first
quarterly installment will vest at the end of the 2017
performance period if the holder has been continuously employed
from the grant date until the end of the 2017 year.The
performance-based RSUs will generally be forfeited in the event
that the holder is terminated for any reason prior to vesting.

Item 9.01 Financial Statements and
Exhibits.

About KEY ENERGY SERVICES, INC. (OTCMKTS:KEGXQ)

Key Energy Services, Inc. is an onshore, rig-based well servicing contractor. The Company provides a range of well services to oil companies, foreign national oil companies, and independent oil and natural gas production companies. The Company operates in five segments: U.S. Rig Services, Fluid Management Services, Coiled Tubing Services, Fishing and Rental Services, and International. Its U.S. Rig Services, Fluid Management Services, Coiled Tubing Services, Fishing and Rental Services operate geographically within the United States. The International segment includes its operations in Mexico, Colombia, Ecuador, Russia, Bahrain and Oman. The Company’s services include rig-based and coiled tubing-based well maintenance and workover services, well completion and recompletion services, fluid management services, fishing and rental services, and other ancillary oilfield services. Additionally, certain of its rigs provide specialty drilling applications.

KEY ENERGY SERVICES, INC. (OTCMKTS:KEGXQ) Recent Trading Information

KEY ENERGY SERVICES, INC. (OTCMKTS:KEGXQ) closed its last trading session at 0.132 with 1,602,320 shares trading hands.