Exhibit 10 (8)
December 2, 2008
Andrew B. Schmitt
1214 Ashford Way
Kingwood, Texas 77339

     Re:   Retirement Benefit (as Amended and
Restated to Comply with Section 409A)

Dear Andy:
          As a result of the tax legislation contained in the American Jobs
Creation Act of 2004 and the subsequent release of the final Treasury
Regulations relating thereto in 2007, we are further amending and restating your
existing supplemental retirement benefit originally set forth in the letter
agreement between yourself and Layne, Inc., predecessor to Layne Christensen
Company, dated April 3, 1995, and as amended and restated by our letter
agreement dated May 3, 2005 (the “Amended Agreement”). With this new letter
agreement, the Amended Agreement is null and void and replaced, in its entirety,
by the terms and conditions of this new agreement. Unless otherwise defined
herein, all capitalized terms shall have the meaning as defined in Appendix A.
          Layne Christensen Company (“Layne”) will provide you with an annual
retirement benefit equal to 40% of the average of your total Compensation
received during the highest five consecutive years out of your last ten years of
employment, less 60% of your annual primary Social Security benefit, and further
reduced, if at all, in the event your Separation from Service is prior to you
attaining age 65 by the Early Retirement Reduction Factor (the “Annual
Benefit”).
          A portion of your Annual Benefit will be deemed to have been funded by
the Layne funded portion of the Layne Capital Accumulation Plan (“CAP Plan”).
Accordingly, your Annual Benefit will be reduced by the annuity equivalent of
the value of the Layne funded portion of the CAP Plan. The annuity equivalent
shall be deemed to be equal to the annual amount payable if Layne had purchased
an annuity which would be (i) purchased on the date of your Separation from
Service, (ii) purchased from a company of Layne’s choice with a top Best rating
for life insurance companies, (iii) payable annually, beginning on the date your
Annual Benefit is to commence, for the remainder of your life (or the life of
the last to die of you and your wife, as applicable), and (iv) purchased for a
lump sum premium payment equal to the value of the Layne funded portion of your
CAP Plan account, including earnings, as of the date of your Separation from
Service.
          Except in the event of your death, payment of your Annual Benefit
shall commence on the first day of the seventh month after your Separation from
Service. If you are married at the time payment commences, your Annual Benefit
shall be paid in the form of a monthly joint and 100% survivor annuity benefit
such that you will receive a smaller benefit than

 

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Andrew B. Schmitt
December 2, 2008
Page 2
you otherwise would have if such annuity was based on your life expectancy
alone, however, one hundred percent (100%) of the amount of such benefit will
continue over the lifetime of your surviving spouse or you, whoever is the
survivor. If you are not married when your Annual Benefit payments commence,
your Annual Benefit shall be paid monthly in the form of a single lifetime
annuity based upon your life and shall terminate upon your death.
          You shall be eligible for a disability benefit as described in
Appendix A if your Separation from Service is on account of a Disability.
          You shall be eligible for a death benefit as described in Appendix A
if your Separation from Service is on account of your death.
          Your rights to payment under this agreement are those of a general
unsecured creditor of Layne and this agreement constitutes a mere promise by
Layne to make benefit payments in the future. It is the intention of the parties
that this arrangement be unfunded for tax purposes and for purposes of Title I
of ERISA. Further, your rights to benefit payments under this agreement are not
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment by your creditors or your
beneficiary’s creditors. All disputes regarding any payment made or to be made
under this agreement shall be handled in accordance with the Claims Procedure
attached as Appendix B.
          This letter (including, without limitation, the annuity assumptions
contained herein) does not alter the amount otherwise due to you or the terms of
payment under the CAP Plan.

            Sincerely,
      /s/ Jerry W. Fanska       Jerry W. Fanska           

     I have read, consulted with an advisor to the extent I believe necessary,
and fully understand this letter and Appendices A and B. I agree that this
letter agreement replaces, in its entirety, the letter agreement between myself
and Layne, Inc. dated May 3, 2005. I further agree that this letter and
Appendix A, along with the sums payable to me under the terms of the CAP Plan,
describe fully and completely all retirement or pension benefits due to me from
Layne, any of Layne’s predecessors, or any of its subsidiaries or affiliates.

                  /s/ A.B. Schmitt       Andrew B. Schmitt           

 

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APPENDIX A
Definitions
     “Code” means the Internal Revenue Code of 1986, as it may be amended from
time to time, and the rules and regulations promulgated thereunder.
     “Compensation” shall mean salary before withholding for taxes or any other
purpose plus incentive compensation payments, overtime, overtime premium,
commissions and bonuses, including any such amounts deferred under any plan or
arrangement whatsoever, but excluding the value of fringe benefits and any other
discretionary, nonrecurring or irregular payments.
     “Disability” means you (a) are unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (b) are, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan covering employees of Layne.
     “Early Retirement Reduction Factor” shall be that percentage set forth
below applicable to the age at which you Separate from Service.
     “Separation from Service,” “Separate from Service” or “Separated from
Service” shall have the same meaning as the term “separation from service” is
referred to under Code Section 409A(a)(2)(A)(i) and interpreted pursuant to the
applicable guidance issued thereunder.
Death Benefit
          The Death Benefit shall be equal to the Annual Benefit your surviving
spouse would have received if (i) you had Separated from Service on the date of
your death and had received the Annual Benefit, and (ii) you subsequently died;
provided, however, that the Death Benefit shall be reduced by the annuity
equivalent of the value of the Layne funded portion of the CAP Plan.
          Payment of the Death Benefit shall commence upon the last day of the
month in which your death occurred. Any Death Benefit payable hereunder shall
terminate upon the death of your surviving spouse entitled to receive such death
benefit. No Death Benefit shall be payable to any beneficiary other than your
surviving spouse.
Disability Benefit
          The Disability Benefit shall be determined in the same manner as the
Annual Benefit is determined in the attached letter as of the time of your
Separation from Service on account of Disability except that no Early Retirement
Reduction Factor shall be applied if such Disability occurs prior to your 65th
birthday. The Disability Benefit shall be reduced by the annuity equivalent of
the value of the Layne funded portion of the CAP Plan and shall be paid in the
same manner and commence at the same time as if you had Separated from Service
without a Disability.
Early Retirement Reduction Factor
          In the event your Separation from Service occurs prior to your 65th
birthday, the Annual Benefit so paid shall be the Annual Benefit (as computed in
the attached letter) multiplied by the following percentage depending upon your
age at the time you Separated from Service:

          Age at Separation from Service   Percentage of Annual Benefit
 
       
55
    48.81 %
56
    52.06 %
57
    55.59 %
58
    59.45 %
59
    63.68 %
60
    68.32 %
61
    73.43 %
62
    79.06 %
63
    85.31 %
64
    92.26 %

 

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APPENDIX B
Applicable Claims Procedures
          Layne has the exclusive right, power, and authority, in its sole and
absolute discretion, to administer, apply, and interpret your Agreement and to
decide all matters arising thereunder. All determinations made by Layne with
respect to any matter arising under the Agreement shall be final, binding and
conclusive. In the event you dispute any findings of Layne relating to the
operation of your Agreement, the Claims Procedures applicable to the Agreement
are set forth below.

I.   Initial Claim       A. Submitting the Claim. Upon request, Layne shall
provide you or your beneficiary (“Claimant”) with a claim form which the
Claimant can use to request benefits. In addition, Layne will consider any
written request for benefits under the Agreement to be a claim.      
B. Approval of Initial Claim. If a claim for benefits is approved, Layne shall
provide the Claimant with written or electronic notice of such approval. The
notice shall include:

  1.   The amount of benefits to which the Claimant is entitled.     2.   The
duration of such benefit.     3.   The time the benefit is to commence.     4.  
Other pertinent information concerning the benefit.

    C. Denial of Initial Claim. If a claim for benefits is denied (in whole or
in part) by Layne, Layne shall provide the Claimant with written or electronic
notification of such denial within ninety (90) days (forty-five (45) days in the
case of a claim for disability benefit) after receipt of the claim, unless
special circumstances require an extension of time for processing the claim.
(See Section III of this Claims Procedure concerning extensions of time.) The
notice of denial of the claim shall include:

  1.   The specific reason that the claim was denied.     2.   A reference to
the specific Agreement provisions on which the denial was based.     3.   A
description of any additional material or information necessary to perfect the
claim, and an explanation of why this material or information is necessary.    
4.   A description of the agreement’s appeal procedures and the time limits that
apply to such procedures, including a statement of the Claimant’s right to bring
a civil action under ERISA Section 502(a) if the claim is denied on appeal.    
5.   Any materials required under 29 C.F.R. § 2560.503-1(g)(1)(v).

The Claimant (or his duly authorized representative) may review pertinent
documents and submit issues and comments in writing to Layne. The Claimant may
appeal the denial as set forth in the next section of this procedure. IF THE
CLAIMANT FAILS TO APPEAL SUCH ACTION TO THE ADMINISTRATOR IN WRITING WITHIN THE
PRESCRIBED PERIOD OF TIME DESCRIBED IN THE NEXT SECTION, THE ADMINISTRATOR’S
DENIAL OF A CLAIM SHALL BE FINAL, BINDING AND CONCLUSIVE.

II.   Appeal Procedures       A. Filing the Appeal. In the event that a claim is
denied (in whole or in part), the Claimant may appeal the denial by giving
written notice of the appeal to Layne within 60 days (one hundred eighty
(180) days in the case of a claim for disability benefit) after the Claimant
receives the notice of denial of the claim. At the same time the Claimant
submits a notice of appeal, the Claimant may also submit written comments,
documents, records, and other information relating to the claim. Layne (or its
designee) shall review and consider this information without regard to whether
the information was submitted or considered in conjunction with the initial
claim.       B. General Appeal Procedure. Layne may hold a hearing or otherwise
ascertain such facts as it deems necessary and shall render a decision which
shall be binding upon both parties. Layne shall render a decision on appeal
within sixty (60) days (forty-five (45) days in the case of a claim involving
disability) after the receipt by Layne of the notice of appeal, unless special
circumstances require an extension of time. (See Section III for the procedures
concerning extensions of time.) The appeal decision of Layne shall be provided
in written or electronic form to the Claimant. If the appeal decision is adverse
to the Claimant, then the written decision shall include the following:

  1.   The specific reason or reasons for the appeal decision.     2.  
Reference to the specific Agreement provisions on which the appeal decision is
based.     3.   A statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the Claimant’s

 

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      claim for benefits. (Whether a document, record, or other information is
relevant to a claim for benefits shall be determined by reference to 29 C.F.R. §
2560.503-1 (m)(8).)     4.   A statement describing any voluntary appeal
procedures offered by the Agreement and the Claimant’s right to obtain the
information about such procedures.     5.   A statement of the Claimant’s right
to bring an action under Section 502(a) of the Employee Retirement Income
Security Act.

    C. Special Appeal Procedure for Disability Claims. For the purpose of any
appeal of an adverse benefit determination regarding a disability benefit, in
addition to the procedures set forth in Section II.B., the following procedures
shall also apply:

  1.   The appeal will be conducted by an appropriate named fiduciary (a
“Fiduciary”) designated by Layne. The Fiduciary will be neither the individual
who denied the claim initially, nor a subordinate of such individual.     2.  
In deciding the appeal, the Fiduciary shall not give any deference to the
initial determination that was made concerning the claim.     3.   If the
initial claim was denied based in whole or in part on a medical judgment
(including a judgment as to whether a particular treatment, drug, or other item
is experimental, investigational, or not medically necessary or appropriate),
then the Fiduciary shall consult with a health care professional who has
appropriate training and experience in the field of medicine involved in the
medical judgment. Any such professional shall be neither an individual who was
consulted in connection with the initial claim, nor the subordinate of any such
individual.     4.   If the Fiduciary obtains the advice of medical or
vocational experts in connection with the appeal, then the Fiduciary must
identify the expert(s), without regard to whether the fiduciary relied upon the
advice when deciding the appeal.     5.   In the event of an adverse
determination on appeal:

  a.   If an internal rule, guideline, protocol, or other similar criterion was
relied upon in making decision on appeal, then the written decision on appeal
shall include either (a) the specific rule, guideline, protocol, or other
similar criterion, or (b) a statement that such rule, guideline, protocol, or
other similar criterion was relied upon in making the adverse determination and
that a copy of the rule, guideline, protocol, or other similar criterion will be
provided to the Claimant free of charge upon request.     b.   If the decision
on appeal was based on a medical necessity or experimental treatment or similar
exclusion or limit, then the written decision on appeal shall include either
(a) an explanation of the scientific or clinical judgment for the determination,
applying the terms of the Agreement to the Claimant’s medical circumstances, or
(b) a statement that such explanation will be provided free of charge upon
request.     c.   The written decision on appeal shall include the following
statement: “You and your Agreement may have other voluntary alternative dispute
resolution options, such as mediation. One way to find out what may be available
is to contact your local U.S. Department of Labor Office and your State
insurance regulatory agency.”

III.   Extensions of Time       A. Notice of Extension. If Layne requires an
extension of time, Layne shall provide the Claimant with written or electronic
notice of the extension before the first day of the extension. The notice of the
extension shall include:

  1.   An explanation of the circumstances requiring the extension. These
circumstances must be matters beyond the control of the Agreement or Layne.    
2.   The date by which Layne expects to render a decision.     3.   The standard
on which the Claimant’s entitlement to a benefit is based.     4.   The
unresolved issues, if any, that prevent a decision on the claim or on appeal,
and the information needed to resolve those issues. In the event that such
information is needed:

  a.   The Claimant shall have at forty-five (45) days in which to provide the
specified information.     b.   The time for determining an initial claim shall
be tolled from the date on which the notice of extension is sent to the
Claimant, until the date on which the Claimant responds to the request for
additional information.

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    B. Length of Extension. For purposes of an initial claim not involving
disability, no more than one extension of ninety (90) days shall be allowed. For
purposes of an initial claim involving disability, no more than two extensions
of thirty (30) days each shall be allowed. For purposes of an appeal not
involving disability, no more than one extension of sixty (60) days shall be
allowed. For purposes of an appeal involving disability, no more than one
extension of forty-five (45) days shall be allowed.

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