Document:

exv10w1

 

Exhibit 10.1

FIRST AMENDMENT

TO

LOAN AGREEMENT

     THIS FIRST AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is entered into as of the
18th day of January 2006, by and among DAWSON GEOPHYSICAL COMPANY, whose address for
purposes of this Amendment is 508 West Wall Street, Suite 800, Midland, Texas 79701 (the
“Borrower”), and WESTERN NATIONAL BANK, a national banking association, whose address is 508 West
Wall, Suite 1100, Midland, Texas 79701 (the
“Bank”).

NOTICE IS TAKEN OF THE FOLLOWING:

	A.	 	Borrower and Bank have previously entered into that certain Loan Agreement, dated January
18, 2006 (the “Existing Loan Agreement”). Capitalized terms not otherwise defined herein
are defined in the Existing Loan Agreement.
	 
	B.	 	The Existing Loan Agreement provides for a revolving line of credit in the original principal
amount of Ten Million and No/100 Dollars ($10,000,000.00)(the “Loan”).
	 
	C.	 	The Borrower and the Bank have now agreed to amend the Existing Loan Agreement in
order to substitute new terms regarding the non-recourse nature of the revolving line of
credit.

     NOW,
THEREFORE, for and in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend the terms of the Existing Loan Agreement as follows:

	1.	 	Definitions.
	 
	 	 	Unless otherwise specifically defined herein, all defined terms used in this Amendment
shall have their respective meanings set forth in the Existing Loan Agreement.

 

 

	2.	 	Amendment.
	 
	 	 	That paragraph of the Existing Loan Agreement under the subheading of “Non-Recourse” is
hereby amended by deleting it in its entirety and substituting the following:
	 
	 	 	Non-Recourse
	 
	 	 	Although the Borrower is responsible on a corporate basis for the full repayment of principal
and interest due on the Obligations and for any other Event of Default for which the
Borrower is responsible, the Bank specifically acknowledges and agrees that neither any of
the directors, officers, or employees of the Borrower nor any of the Borrower’s
shareholders shall have any personal liability whatsoever for the repayment of the Loan.
The sole party responsible for repayment of the Loan shall be the Borrower, and the sole
security for the Loan shall be the Collateral covered by the Security Instruments.
	 
	3.	 	Effectiveness:
	 
	a.	 	Except to the extent specifically amended and supplemented hereby, all of the terms,
conditions and provisions of the Existing Loan Agreement shall remain unmodified, and the
Existing Loan Agreement, as amended and supplemented by this Amendment, is ratified and
confirmed as being in full force and effect.
	 
	b.	 	All references to the Existing Loan Agreement herein or in any other document or instrument
between Borrower and Bank shall hereinafter be construed to be references to the Existing
Loan Agreement as modified by this Amendment.
	 
	4.	 	Counterparts: This Amendment may be executed in any number of counterparts, each of
which when executed and delivered shall be deemed an original, but all of which constitute
one instrument. In making proof of this Amendment, it shall not be necessary to produce or
account for more than one counterpart thereof signed by each of the parties hereto.
	 
	5.	 	Notice of Final Agreement:
	 
	 	 	THIS WRITTEN AMENDMENT AND ANY OTHER INSTRUMENTS EXECUTED BY THE PARTIES
CONTEMPORANEOUSLY HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date and year
first above written.

-2-

 

	 	 	 	 	 
	 	BANK: 

WESTERN NATIONAL BANK

 	 
	 	By:  	/s/ James R. Kreuz
 	 
	 	 	James R. Kreuz 	 
	 	 	President 	 
	 

	 	 	 	 	 
	 	BORROWER:

DAWSON GEOPHYSICAL COMPANY

 	 
	 	By:  	/s/ Stephen C. Jumper
 	 
	 	 	Stephen C. Jumper 	 
	 	 	President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	 /s/ L. Decker Dawson
 	 
	 	 	L. Decker Dawson 	 
	 	 	Chairman of the Board 	 
	 

-3-exv10w1

 

Exhibit 10.1

April 7, 2006

Mr. Jack F. Callahan, Jr.

89 Logan Road

New Canaan, CT 06840

Dear Jack:

I am pleased to offer you the position of Executive Vice President and Chief Financial Officer
for Dean Foods Company. This position will report directly to me. We look forward to having
you join our team as soon as possible after you complete your existing commitments.

Here are the specifics of your offer:

Base Salary

You will be paid $19,166.66 on a semi-monthly basis, which equates to an annual salary of
$460,000. Your salary will be reviewed annually by our Compensation Committee.

Signing Bonus

You will receive a one-time signing bonus of $100,000.00, less payroll taxes, within 30 days
of employment.

Annual Bonus Opportunity

As Executive Vice President and Chief Financial Officer of Dean Foods, you will be eligible
to earn an annual bonus with a target amount equal to 70% of your annualized base salary,
subject to the achievement of certain operating targets for the group and certain individual
targets. You can earn up to 200% of your targeted bonus if operating targets are exceeded.

Annual Long Term Incentive Compensation

Upon commencement of your employment, you will be granted options to purchase shares of Dean
Foods common stock having a Black Scholes value, as determined by Mercer Consulting, of
$549,000 (representing approximately 45,000 options based on current valuation). The exercise
price of the options will be the closing price of a share of Dean Foods stock on the date
preceding the date of grant. The options will vest in equal installments over a period of
three years, beginning on the first anniversary of the date of the grant. You will also be
awarded restricted shares having a value (based on the fair market
value of Dean Foods shares) of $646,000 (representing 17,000 shares based on
current valuation). These restricted shares will vest in equal
installments over a five-year period, beginning on the first
anniversary of the date of grant, or earlier if certain financial
performance targets are met. You will be eligible for future equity
grants under the Dean Foods Long Term Incentive Program in the
future,

 

 

Mr. Jack Callahan

April 7, 2006

Page 2 of 4

commencing in January 2007. The amount and nature of future long-term incentive awards will
be determined by the Board of Directors.

Additional “Sign On” Long Term Incentive Awards

Upon commencement of your employment, you will be granted an additional number of options to
purchase shares of Dean Foods common stock having a Black Scholes value, as determined by Mercer
Consulting, of $793,000 (representing approximately 65,000 options based on current valuation).
These options will have the same terms and conditions as your annual stock option awards referenced
above. In addition, you will be granted restricted shares having a value of $855,000 (representing
approximately 22,500 restricted shares based on current valuation). These shares will vest in equal
installments over a three year period beginning on the first anniversary of the date of grant.

Management Deferred Compensation Plan

You will be eligible to participate in the Deferred Compensation Plan. The plan provides eligible
executives with the opportunity to save on a tax-deferred basis. You will receive general
information and enrollment materials at your home address approximately 30-45 days after your
start date.

Vacation Benefits

You will be granted four (4) weeks vacation. Unused vacation is not carried forward from year to
year.

COBRA Support

Should you elect COBRA (health insurance) coverage from your previous employer, Dean Foods will
pay your COBRA premiums (minus your normal Dean Foods contribution) until you become eligible for
Dean Foods benefits (approximately 60 days following hire).

Benefits Plan Reference

Attached to this letter is an overview of Dean Foods’ Health Benefits, savings and 401k programs,
and all other benefits. If you have questions regarding these programs or eligibility, please call
Robby Dunn at 214-303-3557.

Relocation Benefits

Dean Foods wants your move to Dallas to be a positive one. The relocation benefits provided to you
include: household goods move; temporary housing; home visits; in-transit expenses; home sale
assistance; duplicate housing costs; and, new home closing assistance. The policy describing these
benefits is enclosed. If you have questions regarding these programs or eligibility, please call
Robby Dunn at 214-303-3557.

Insider Trading

As an executive officer, you will have access to sensitive business and financial information.
Accordingly, you will be prohibited from trading Dean Foods securities (or, in some circumstances,
the securities of companies doing business with Dean Foods) from time to time in accordance with
the company’s Insider Trading Policy.

 

 

Mr. Jack Callahan

April 7, 2006

Page 3 of 4

Severance

If your employment is terminated at any time as a result of a “qualifying termination,” meaning
any termination as a result of death, disability, your voluntary termination for good reason, or
your involuntary termination without cause (as defined below), you will receive payment of all
base salary accrued through the date of termination, prior year’s bonus to the extent earned but
not paid, target bonus through the date of termination and all unused vacation. In addition, you
will receive a lump sum severance payment equivalent to two years of your base salary and target
bonuses, less lawful deductions. You will be required to execute a release of all claims and such
other agreements as the company may deem necessary or appropriate in order to receive such
severance pay.

The term “cause” shall mean: (a) your conviction of any crime deemed by the company to make your
continued employment untenable; (b) any act of gross negligence or willful misconduct in the
conduct of your employment; (c) your committing any act of dishonesty whether relating to the
company or any of its affiliates, its employees, agents or otherwise; or (d) your failure to comply
with the Company’s Code of Ethics, or any conduct which brings the Company or any of its affiliates
into disrepute, in each case as determined by the Board of Directors.

The term “good reason” shall have the meaning given in the Change in Control Agreement referenced
below.

Non-Qualifying Termination

In the event that your employment with Dean Foods is terminated either for cause or by you
voluntarily and without good reason, no severance payment will be made. If your employment is
terminated either for cause or by you voluntarily and without good reason, all unvested stock
option and other equity grants made to you and your rights thereunder will be automatically
terminated.

Change-In-Control Provisions

You will be provided a Change in Control agreement comparable to that currently provided to other
Dean Foods executive officers. In general, this agreement provides benefits of three times your
annual salary and target bonus, plus vesting of all equity awards and continued health coverage
for a two-year period in certain circumstances following a Change in Control. As stated in the
Change in Control Agreement, in order to receive these benefits, your employment must be
terminated, either by the company within two years after a Change in Control, or by you for good
reason within such two-year period, or by you for any reason during
the 13th month after a Change
in Control. The details of these provisions are set forth more fully in the enclosed Change of
Control Agreement.

New Hire Processes

You are required to comply with the Dean Foods Code of Ethics as a condition of employment. You
are required to sign the Compliance Certificate contained within the Code of Ethics at the time
your employment begins and periodically thereafter.

 

 

Mr. Jack Callahan

April 7, 2006

Page 4 of 4

Your position also requires that you sign a Non-Compete Agreement substantially in the form
enclosed.

Conclusion

Jack, I am very excited about the opportunities at Dean Foods and very excited to have you be a
part of our team. I am confident that with your experience, skills, vision and standards, you will
make significant contributions to our company in the years to come.

Best regards,

Gregg L. Engles

	 	 	 
	Agreed and accepted:

	 	 
	 
	 	 
	/s/
Jack F. Callahan, Jr. 
	 	 
	 
	 	 
	 
	 	 
	Jack F. Callahan, Jr.
	 	 
	 
	 	 
	April 27,
2006 
	 	 
	 
	 	 
	 
	 	 
	Date

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