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Exhibit 4.6    
  

 
 

THIRD AMENDMENT TO LOAN AGREEMENT AND
  NOTE MODIFICATION AGREEMENT    
  

        THIS THIRD AMENDMENT TO LOAN AGREEMENT AND NOTE MODIFICATION AGREEMENT (the "Amendment") is entered into as of the
31 day of October, 2002, by and between PIONEER DRILLING COMPANY, a Texas corporation, formerly known as South Texas Drilling &
Exploration, Inc. ("Borrower"), and THE FROST NATIONAL BANK, a national banking association
("Lender") and this amendment is joined in by PIONEER DRILLING SERVICES, LTD., a Texas limited
partnership, formerly known as Pioneer Drilling Co., Ltd., ("Pioneer" or "Partnership"). 

R E C I T A L S 

        A.    On
August 11, 2000, Borrower and Lender entered into that certain Loan Agreement, as amended by that certain First Amendment to Loan Agreement dated effective
December 31, 2000 and that certain Second Amendment to Loan Agreement dated as of July 3, 2002 (as amended, the "Agreement") concerning
the terms, conditions and covenants of a certain Term Loan (as defined in the Agreement). 

        B.    The
Term Loan is evidenced by, and Lender is the sole owner and holder of, that one certain Promissory Note (the "Note")
dated August 11, 2000, executed by Borrower and payable to the order of Lender in the original principal face amount of NINE MILLION AND NO/100 DOLLARS ($9,000,000.00). 

        C.    Borrower
and Lender have agreed to extend the maturity date of the Note and to modify certain provisions of the Loan Agreement and Note, all as hereinafter provided, and
in consideration thereof Borrower has made certain agreements with Lender as hereinafter more fully set forth. 

        D.    All
capitalized terms not otherwise defined in this Third Amendment shall have the same meanings as are set forth in the Agreement. 

        NOW,
THEREFORE, for and in consideration of the mutual covenants and promises herein contained, Lender and Borrower agree as follows: 

AGREEMENTS 

        1.    Section 9
of the Agreement is hereby deleted in its entirety and replaced with the following: 

        9.    Financial Covenants. Until (i) the Note dated August 11, 2000 in the original principal amount of NINE
MILLION AND NO/100 DOLLARS ($9,000,000.00) executed by Borrower in favor of Lender and all other obligations and liabilities of Borrower under this Loan Agreement and the other Loan Documents are
fully paid and satisfied, and (ii) the Lender has no further commitment to lend hereunder, Borrower will maintain the following financial covenants (on a consolidated basis with the
Partnership): 

        (a)  Leverage Ratio. Borrower will maintain a Leverage Ratio not to exceed 3.0 to 1.0, to be tested annually. 

Defined
as: 

	

Funded Bank Debt
	
 Net Income + Interest + Taxes + Depreciation + Amortization

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        As used herein, "Funded Bank Debt" shall mean: all outstanding principal due to Lender and other non-equity lenders, but shall exclude any debt which is
subordinated to amounts due to Lender pursuant to a written subordination agreement satisfactory to Lender in its sole discretion. 

        (b)  Cash Flow Coverage Ratio. Borrower will maintain, as of the end of each fiscal year, a cash flow coverage ratio of not
less than 1.25 to 1.0. 

Defined
as: 

	Net Income + Interest + Taxes + Depreciation + Amortization—

Dividends—Maintenance Capital Expenditures
	
 Current Portion of Long-Term Debt + Interest Expense + Cash Taxes Paid

        As used herein, "Maintenance Capital Expenditures" shall mean: Amounts actually paid for the routine maintenance of the equipment serving as collateral for the
Loans to the extent such maintenance is required to keep that equipment in operating condition. 

        (c)  Debt to Worth Ratio. Borrower will maintain, at all times, to be tested quarterly on the last day of each fiscal quarter
of Borrower, a ratio of Debt to Worth of not greater than 1.00 to 1.0. 

Defined
as: 

	Total Liabilities—Subordinated Debt
	
 Tangible Net Worth + Subordinated Debt

        As used herein, the term "Tangible Net Worth" means, as of any date, Borrower's total assets excluding all intangible assets, less total liabilities excluding any
Subordinated Debt. As used herein, the term "Subordinated Debt" means any indebtedness owing by Borrower which has been subordinated by written agreement to all indebtedness now or hereafter owing by
Borrower to Lender, such agreement to be in form and substance acceptable to Lender. 

        4.    Section 10
of the Agreement is hereby deleted in its entirety and replaced with the following: 

        10.  Reporting Requirements.    Until (i) the Note dated August 11, 2000 in the original principal
amount of NINE MILLION AND NO/100 DOLLARS ($9,000,000.00) executed by Borrower in favor of Lender and all other obligations and liabilities of Borrower under this Loan Agreement and the other Loan
Documents are fully paid and satisfied, and (ii) the Lender has no further commitment to lend hereunder, Borrower will, unless Lender shall otherwise consent in writing, furnish, or cause to be
furnished to Lender (all on a consolidated basis with the Partnership): 

        (a)  Interim Financial Statements.    As soon as available, and in any event within forty-five (45) days
after the end of each month of each fiscal year of Borrower, (i) a balance sheet, income statement and statement of cash flows of Borrower as of the end of such month; (ii) an accounts
receivable aging report; (iii) a Borrowing Base Certificate; and (iv) a Rig Schedule/Utilization Report; all in form and substance and in reasonable detail satisfactory to Lender and
duly certified (as to item (i), subject to year-end review adjustments) by the President and/or Chief Financial Officer of Borrower and/or Chief Accounting Officer (A) as being true and correct
in all material aspects to the best of his or her knowledge and (B) (as to item (i) only), as having been prepared in accordance with generally accepted accounting principles,
consistently applied. 

        (b)  Quarterly Statements.    Within sixty (60) days after the end of each quarter of each fiscal year of
Borrower, a copy of the 10-Q Report of Borrower as filed with the Securities Exchange Commission ("SEC"). 

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        (c)  Annual Reporting.    As soon as available and in any event, within one hundred twenty days (120) days
after the end of each fiscal year of Borrower, (i) a copy of the 10-K Report of Borrower, as filed with the SEC, together with (ii) a certificate signed by the President and/or Chief
Financial Officer of Borrower and/or Chief Accounting Officer, stating that Borrower is in full compliance with all of its obligations under this Loan Agreement and all other Loan Documents and is not
in default of any term or provisions hereof or thereof, and demonstrating compliance with all financial ratios and covenants set forth in this Loan Agreement. 

        5.    The
reference to "August 11, 2003" in the first grammatical sentence of Section 1 of the Note is hereby deleted and replaced with "August 11, 2004." 

        6.    Except
as specifically modified or amended herein, all terms, provisions and requirements of the Loan Agreement and Note shall remain as written, and as amended from time
to time. Borrower hereby reaffirms all covenants, conditions, representations and warranties contained in the Loan Agreement and Note, as amended by this Amendment. 

[Balance of Page Intentionally Left Blank]

[Signature Appears on Next Page]

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        IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as of the date first above written. 

	 BORROWER:	 	LENDER:
	

PIONEER DRILLING SERVICES, LTD., a Texas limited partnership formerly known as Pioneer Drilling Co., Ltd., a Texas limited partnership	
 	
 THE FROST NATIONAL BANK

a national banking association
	

By:	
 	

PDC Mgmt. Co., a Texas corporation, General Partner	
 	

By:	
 	

	 	 	 	 	 	 	Name:	 	

	 	 	 	 	 	 	Title:	 	

	

 	
 	

By:	
 	

	
 	

 	
 	

 
	 	 	Name:	 	
	 	 	 	 
	 	 	Title:	 	
	 	 	 	 
	

AGREED TO:	
 	

 	
 	

 
	
PIONEER DRILLING COMPANY, a Texas corporation, formerly known as South Texas Drilling & Exploration, Inc., a Texas corporation (executing for purposes of joining in certain
specific provisions, as noted above)	
 	

 	
 	

 
	

By:	
 	

PDC Mgmt. Co., a Texas corporation, General Partner	
 	

 	
 	

 
	

By:	
 	

	
 	

 	
 	

 
	Name:	 	
	 	 	 	 
	Title:	 	
	 	 	 	 

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Guarantor Ratification of Agreement    
  

        By executing this Agreement, PIONEER DRILLING SERVICES, LTD., a Texas limited partnership formerly known as
Pioneer Drilling Co., Ltd., a Texas limited partnership, as a Guarantor of the indebtedness evidenced by the Note, as set forth in a Guaranty Agreement (the
"Guaranty") dated December 31, 2002, hereby expressly agrees (a) to all of the terms and provisions of this Agreement, (b) to the
continuing validity of the Guaranty and all duties and obligations thereunder, (c) that its liability under the Guaranty shall not be reduced, altered, limited, lessened or in any way affected
by the execution and delivery of this Agreement by the parties hereto, and (d) that the Guaranty shall remain in full force and effect and enforceable in accordance with its terms. 

	

 	
 	
PIONEER DRILLING SERVICES, LTD., a Texas limited partnership formerly known as Pioneer Drilling Co., Ltd., a Texas limited partnership
	

 	
 	

By:	
 	

PDC Mgmt. Co., a Texas corporation, General Partner
	

 	
 	

 	
 	

By:	
 	

	 	 	 	 	Name:	 	

	 	 	 	 	Title:	 	

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Exhibit 4.6

THIRD AMENDMENT TO LOAN AGREEMENT AND NOTE MODIFICATION AGREEMENT

Guarantor Ratification of AgreementQuickLinks
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EXHIBIT 10(l)    
  

 
 

AMENDED AND RESTATED
  WD-40 COMPANY
  1999
  NON-EMPLOYEE DIRECTOR RESTRICTED STOCK PLAN    
  

        The WD-40 Company 1999 Non-Employee Director Restricted Stock Plan (the "Plan") is amended and restated as of this 11th day of December,
2001 by the Board of Directors of WD-40 COMPANY, a Delaware corporation, (the "Company"). 

	1.
	ESTABLISHMENT AND PURPOSE

        The
purpose of the Plan is to authorize the issuance of shares of the Company's common stock to Directors who are not full time employees of the Company. The Board of Directors has
determined that it will be in the best interest of the Company and its shareholders for all Directors to maintain a minimum level of share ownership. 

	2.
	AMOUNT OF STOCK

        The
total number of shares of the Company's common stock that may be issued pursuant to the Plan shall not exceed 25,000 shares. In the event that there are not a sufficient number of
authorized but unissued shares available pursuant to the Company's Articles of Incorporation to cover the number shares called for by this Plan for any year as well as for any outstanding stock option
plan or other plan authorizing the future issuance of a specific number of shares, this Plan shall be suspended until a sufficient number of shares are duly authorized. 

	3.
	ADMINISTRATION

        The
Plan shall be administered by the Board of Directors. Subject to the express terms and conditions of the Plan, the Board of Directors shall have full power to construe and interpret
the Plan, to prescribe, amend and rescind rules and regulations relating to it, and to make all other determinations necessary or advisable, in the sole discretion of the Board of Directors, for its
administration. 

	4.
	ISSUANCE OF RESTRICTED SHARES

        (a)    Issuance of Restricted Shares. As soon as practicable following the first business day of March of each year, the Company
shall, in lieu of the payment of $5,000 of annual Director compensation, issue restricted shares of the Company's common stock to each non-employee Director who does not then own shares
having an aggregate fair market value of at least $50,000. The number of shares to be issued shall be determined as set forth in paragraph 4(c) below. Share ownership for purposes of the Plan
shall include all shares in which the Director has a direct or indirect pecuniary interest as defined under regulations promulgated pursuant to Section 16 of the Securities Exchange Act of
1934, but pecuniary interest shall not be established by attribution to family member ownership interest. 

        (b)    Elective Issuance of Restricted Shares. Any Director may elect, by written letter delivered to the President on or before
the date of the regularly scheduled meeting of the Board of Directors in September, but not later than November 30th if the meeting is scheduled for a later date, to receive
restricted shares of the Company's common stock in lieu of all or the balance of such Director's annual compensation, in increments of $5,000, excluding such compensation as may be payable for
attendance at or chairing of committee meetings and excluding any additional compensation payable to the Chairman of the Board. Any such election shall be subject to the formal election of such
Director at the next following Annual Meeting of Stockholders. The number of shares to be issued shall be determined as set forth in paragraph 4(c) below. 

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        (c)    Calculation of Shares to be Issued. The number of restricted shares of the Company's common stock to be issued pursuant
to the provisions of paragraph's 4(a) and 4(b) above shall be calculated by dividing the amount of compensation for which the shares are to be issued by an amount equal to ninety percent (90%) of the
closing price of the Company's shares on the first business day of March. Such resulting number of shares shall be rounded to the nearest integer. 

        (d)    Restricted Shares. All shares issued pursuant to the Plan shall be restricted for a period of five years or until such
Director's retirement from the Board of Directors following his or her 65th birthday, or such Director's earlier death or disability. During such period of restriction the shares may not
be sold
or disposed of. Until the restriction on sale or transfer has expired or until such Director's 65th birthday, whichever date is earlier, the shares shall be subject to forfeiture and
cancellation by the Company in the event such Director resigns or otherwise fails to continue to serve on the Board of Directors for any reason other than as a result of death or disability. 

        (e)    Removal of Restrictions on Merger or Sale. In the event the Company proposes to merge or consolidate with another
corporation or to sell or dispose of its assets and business or to dissolve, the restrictions upon resale shall be removed as of the closing or expiration of such transaction so that the shares may be
tendered for acceptance of any cash or exchange offer made in connection with such transaction. 

        (f)    Issuance of Shares to New Directors. In the event any vacancy on the Board of Directors is filled during the year and in
the case of Directors first elected to serve at the Annual Meeting of Stockholders, such Directors shall have thirty (30) days following their election or appointment to make any election
authorized pursuant to the provisions of paragraph 4(b) above. The terms of this Plan and any elections authorized hereunder shall apply to such prorated compensation payable to new Directors
pursuant to the director compensation policy then in effect. The number of shares to be issued to newly appointed directors shall be computed based upon the price of the Company's common shares as of
the first business day of the second month following such appointment and the shares shall be issued as soon as practicable thereafter. 

	5.
	SHARE CERTIFICATE ENDORSEMENTS

        Each
share certificate representing shares issued pursuant to the Plan shall bear the following restrictive endorsements which may be removed at such time as the restrictions provided by
the Plan have expired and provided that counsel for the Company has issued an opinion that the shares may be transferred free of restrictions imposed by the Securities Act of 1933 or the securities
laws of any state or any other law regulating the issuance of securities: 

(i)    "The
shares represented by this certificate are subject to transfer restrictions in accordance with the terms of a Non-Employee Director Restricted Stock Plan amended and
restated as of December 11, 2001, a copy of which may be obtained without charge by written request delivered to the Corporation." 

(ii)    "The
shares represented by this certificate have not be registered under the Securities Act of 1933 or any applicable state securities acts and cannot be transferred without an
opinion of counsel satisfactory to the Corporation's legal counsel that such transfer will not violate any such securities laws." 

	6.
	TAX REPORTING AND WITHHOLDING

        The
Company shall comply with all reporting and withholding requirements applicable to the compensatory issuance of shares to non-employee Directors under the Internal
Revenue Code and regulations thereunder. 

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	7.
	SUSPENSION, AMENDMENT OR TERMINATION OF THE PLAN

        The
Board of Directors may at any time amend, suspend or terminate the Plan. Unless the Plan shall theretofore have been terminated by the Board of Directors, the Plan shall terminate on
December 31, 2009. No shares may be issued during such suspension or after such termination. The termination of the Plan shall not, without the consent of a Director holding restricted shares
issued pursuant to the Plan, alter or impair any rights or obligations theretofore granted or imposed by the Plan. 

	8.
	DELIVERY OF SHARES SUBJECT TO DELAYS

        The
issuance and delivery of shares under the Plan shall be subject to and in compliance with the laws of any state or other governmental authority applicable thereto, the Board of
Directors being hereby authorized to cause to be prepared, filed and presented on the Company's behalf to any governmental official, agency or tribunal all such applications or other instruments or
papers and to maintain any and all proceedings as shall be required to cause the issuance to the Company of a permit or other authorization to issue or deliver any such shares. Neither the Company nor
any officer, director or employee shall be liable for any delay in issuance or delivery of any shares pending the filing of any such application, instrument or papers or the grant of a permit or other
authorization to enable such issuance or delivery to be made. 

        IN
WITNESS WHEREOF, the Plan is adopted this 11th day of December, 2001. 

	 	 	WD-40 COMPANY
	

 	
 	

By	

/s/  GARY O. RIDGE      
	 	 	 	
 Garry O. Ridge, President
	

Attest:	
 	

 	

 
	

/s/  JOHN B. SIDELL      
 John B. Sidell, Secretary	
 	

 	

 

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EXHIBIT 10(l)

AMENDED AND RESTATED WD-40 COMPANY 1999 NON-EMPLOYEE DIRECTOR RESTRICTED STOCK PLAN

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