Exhibit 10.18

FIRST AMENDMENT TO

SUN HYDRAULICS CORPORATION 401(K) AND ESOP RETIREMENT PLAN

(Final Section 415 Limit Regulations)

The Sun Hydraulics Corporation 401(k) and ESOP Retirement Plan (hereinafter
referred to as the “Plan”) provides in Section 8.1 for subsequent plan
amendments. Sun Hydraulics Corporation (“Company”) now wishes to amend the Plan
in the manner described below to make the changes required by the 2007 final
Treasury Regulations under Code section 415. The Plan is therefore, amended as
follows:

1. Section 4.10 of the Plan, entitled “Maximum on Annual Additions,” is revised
effective as of January 1, 2008 by the addition of the following paragraph at
the end of such Section 4.10:

“(i) For purposes of this Section 4.10 of the Plan and Section 415(c) of the
Code, “415 Compensation” shall be the Participant’s Compensation but shall not
include any payments the Employer makes to a retired or terminated Participant
after the Participant’s date of severance from employment (within the meaning of
Section 401(k)(2)(B)(i)(I) of the Code) with the Employer, except that for Plan
Years beginning on or after January 1, 2008, post-severance payments shall be
included in 415 Compensation for purposes of this Section to the extent that
such payments:

(i) are made to the Participant within 2- 1/2 months after the date of severance
from employment with the Employer or, if later, by the end of the limitation
year which includes such date of severance;

(ii) would have been paid to the Participant while the Participant continued in
employment with the Employer, absent a severance from employment; and

(iii) consist of (A) regular salary or wage payments for services during the
Participant’s regular employment (including overtime or shift differential,
commissions, bonuses, or other similar regularly scheduled components of the
Participant’s regular pay), (B) payments of vacation pay, sick time or other
paid time off accrued during the Participant’s active employment with the
Employer but not yet paid by the last day of active employment, or (C) military
differential pay.”

2. In all other respects, the terms of the Plan, as amended to date, are hereby
ratified and confirmed.

IN WITNESS WHEREOF, Sun Hydraulics Corporation has caused this First Amendment
to the Plan to be executed by its duly authorized representative this 22 day of
September, 2008.

 

    SUN HYDRAULICS CORPORATION Witness:     By:  

/s/ Tricia Fulton

 

      Tricia Fulton, Chief Financial Officer