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EXHIBIT 10(19)
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (this "Agreement") dated as of March 26,
2004
is by and among Layne Christensen Company,
a Delaware corporation (the
"Company"), and Wynnefield Partners Small
Cap Value, L.P., Wynnefield Small Cap
Value Offshore Fund, Ltd., Wynnefield
Partners Small Cap Value L.P. I, Channel
Partnership II, L.P., Wynnefield Capital
Management, LLC, Wynnefield Capital,
Inc., Wynnefield Capital, Inc. Profit
Sharing & Money Purchase Plan, Nelson Obus
and Joshua Landes (collectively, the
"Investors").
R E C I T A L S
A. The
Company has outstanding approximately 12,357,915 shares of
common
stock (the "Common Stock").
B. On
August 22, 2003, the Investors filed a Schedule 13D with the
SEC
reporting that they owned a total of
929,150 shares of the Common Stock and that
Mr. Obus planned to seek representation on
the Company's Board of Directors.
C. On
November 11, 2003, the Investors filed an amendment to the
Schedule
13D indicating that the Investors intended
to become activist shareholders with
respect to the Company.
D. On
February 4, 2004, the Investors delivered a notice to the Company
of
their intent to nominate two candidates
including Mr. Obus, to the Company's
Board of Directors at the Company's 2004
annual meeting of stockholders and to
solicit proxies in support of their
election.
E.
On February 11, 2004,
the Investors filed a second amendment to the
Schedule 13D reporting that (i) the
Investors had submitted a shareholder
proposal to the Company for inclusion in
the Company's proxy statement with
respect to the Company's 2004 annual
meeting of stockholders recommending that
the Board of Directors of the Company take
the necessary steps to amend the
Company's Certificate of Incorporation and
to take such other actions as may be
necessary in order to cause all directors
of the Company to be elected annually
and not by classes (the "Shareholder
Proposal") and (ii) indicating that they
planned to seek representation on the
Company's Board of Directors by nominating
a slate of two candidates, including Mr.
Obus, for election as directors at the
Company's 2004 annual meeting of
stockholders and by engaging in a competing
proxy solicitation to elect their nominated
slate.
F. The
Company and the Investors desire to establish in this
Standstill
Agreement certain restrictions concerning
the future actions by the Investors
relating to the Company and the appointment
of a representative of the Investors
to the Company's Board of Directors and the
nomination of such representative
for re-election to the Company's Board of
Directors at its 2004 annual meeting
of stockholders.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and
agreements contained herein, and for
other good and valuable consideration, the
receipt and sufficiency of which are
hereby acknowledged, each of the Company
and the Investors (each a "Party"),
intending to be legally bound, hereby
agrees as follows:
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ARTICLE I.
DEFINITIONS AND CONSTRUCTION
Section 1.1.
Certain Definitions. As used in this Agreement, the
following terms shall have the meanings
specified below:
"Affiliate" shall have the meaning set forth in Rule 12b-2 of
the
General Rules and Regulations under the
Exchange Act.
"Applicable Law" shall mean all applicable provisions of all
(a)
constitutions, treaties, statutes, laws
(including common law), rules,
regulations, ordinances or codes of any
Governmental Authority, and (b) orders,
decisions, injunctions, judgments, awards
and decrees of any Governmental
Authority.
"Associate" shall have the meaning ascribed to such term in Rule
12b-2
of the General Rules and Regulations of the
Exchange Act.
"Disinterested Directors" shall mean those members of the Board
of
Directors of the Company that are members
of the Incumbent Board.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as
amended, and the rules and regulations
thereunder.
"Governmental Authority" shall mean any federal, state, local
or
political subdivision, governmental or
administrative body, instrumentality,
department or agency or any court,
administrative hearing body, arbitration
tribunal, commission or other similar
dispute resolution panel or body, and any
other entity exercising executive,
legislative, judicial, regulatory or
administrative functions of a
government.
"Group" shall mean any group within the meaning of Section 13(d)(3)
of
the Exchange Act as in effect on the date
hereof or Rule 13d-5(b) thereunder.
"Incumbent Board" shall mean those individuals who, as of the
date
hereof, constitute the Board of Directors;
provided, however, that any
individual who becomes a director
subsequent to the date hereof whose election,
or nomination for election by the Company's
stockholders, was approved by a vote
of at least a majority of the directors
then comprising the Incumbent Board
shall be considered as though such
individual were a member of the Incumbent
Board, but excluding, for this purpose, any
such individual whose initial
assumption of office occurs as a result of
either an actual or threatened
election contest or other actual or
threatened solicitation of proxies or
consents by or on behalf of a Person other
than the Board of Directors. For the
avoidance of doubt, the Investor Nominee
shall not be a member of the Incumbent
Board.
"Investor Nominee" shall mean Nelson Obus.
"Person" shall mean an individual, a partnership, an association,
a
joint venture, a corporation, a limited
liability company, a business, a trust,
any entity organized under Applicable Law,
an unincorporated organization or any
Governmental Authority.
2
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"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall man the Securities Act of 1933, as amended,
and
the rules and regulations thereunder.
"Vote" shall mean, as to any entity, the ability to cast a vote at
a
stockholders' or comparable meeting of such
entity with respect to the election
of directors or other members of such
entity's governing body.
"Voting Securities" shall mean the Common Stock and any other
securities of the Company having the right
to Vote.
Section 1.2. Interpretation and
Construction of this Agreement. The definitions
in Section 1.1 shall apply equally to both
the singular and plural forms of the
terms defined. Whenever the context may
require, any pronoun shall include the
corresponding masculine, feminine and
neuter forms. The words "include,"
"includes" and "including" shall be deemed
to be followed by the phrase "without
limitation." All references herein to
Articles and Sections shall be deemed to
be references to Articles and Sections of
this Agreement unless the context
shall otherwise require. The headings of
the Articles and Sections are inserted
for convenience of reference only and are
not intended to be a part of or to
affect the meaning or interpretation of
this Agreement. Unless the context shall
otherwise require or provide, any reference
to any agreement or other instrument
or statute or regulation is to such
agreement, instrument, statute or regulation
as amended and supp
