Exhibit 10.18

SUN HYDRAULICS CORPORATION

Amendments to 401(K) and ESOP Retirement Plan

First Amendment

(Final Section 415 Limit Regulations)

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.

September 22, 2008

Second Amendment

(Non-spousal Rollovers)

1. Section 7.13 of the Plan, entitled “Direct Rollover,” is revised effective as
of January 1, 2009 by the addition of the following paragraph at the end of
Subsection 7.13(b)(3):

“(3) Effective for distributions payable after December 31, 2008 as a result of
an Employee’s death, the term distributee shall also include an individual who
is the deceased Employee’s designated beneficiary but is not the surviving
spouse of the deceased Employee, and a direct trustee-to-trustee transfer to an
Individual Retirement Account established on behalf of such non-spousal
beneficiary shall be treated as an eligible rollover distribution for purposes
of this Section 7.13 and Code Section 402(c), to the extent permitted by
Treasury Regulations or other guidance published under section 402(c) of the
Code.”

 

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

December 16, 2008

Third Amendment

(Pension Protection Act)

1. Section 1.11 of the Plan defining the term “Compensation” is amended by
adding the following to the end of Section 1.11, effective for Plan Years
beginning after December 31, 2008:

“For Plan Years beginning after December 31, 2008, any military differential pay
paid to a Participant by the Company shall be treated as Compensation. For this
purpose, military differential pay consists of any payments made by the Company
to a Participant for periods in which the Participant is on active military
duty, representing the difference between (A) the wages the Participant would
have received from the Company if the Participant were actively performing
services for the Company and (B) the Participant’s military compensation.”

2. Section 1.37 of the Plan defining the term “Income,” is hereby further
amended by inserting the following at the end of Subsection 1.37, effective for
Plan Years beginning after December 31, 2007:

“For Plan Years beginning after December 31, 2007, notwithstanding anything in
the preceding paragraph or elsewhere in this Section 1.37 to the contrary, the
requirement that gap period income be allocated pursuant to Treasury Regulations
Section 1.401(k)-2(b)(2) shall no longer apply to Excess Aggregate
Contributions, Excess Contributions, and Excess Deferred Compensation returned
to a Participant. Thus, with respect to such items, the Plan Administrator may
exclude gap period income that is allocated to Participants’ accounts prior to
distribution.”

3. Section 7.5 of the Plan, entitled “Distribution of Benefits” is amended by
replacing “ninety (90) days” with “180 days (or, prior to January 1, 2008, 90
days)”, effective on and after January 1, 2008.

4. Section 7.6 of the Plan, entitled “Distribution of Benefit Upon Death” is
amended by inserting the following as a new subsection (f):

“Effective on and after January 1, 2007, if a Participant dies while performing
qualified military service [within the meaning of Section 414(u) of the Code],
his or her surviving spouse or other Beneficiary shall be entitled to receive
the same death benefits from the Plan that would have been payable under this
Section 7.6 if the Participant had resumed active employment with the Company
immediately prior to the date of his death.

5. Section 7.13 of the Plan, entitled “Direct Rollover,” is revised effective as
of January 1, 2009 by the addition of the following at the end of Subsection
7.13(b)(2):

“For distributions made after December 31, 2007, an Eligible Retirement Plan
shall include a Roth IRA as described in Code Section 408A; however, for taxable
years beginning prior to January 1, 2010, the income restrictions that apply to
a rollover from a traditional IRA into a Roth IRA will continue to apply.”

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

December 22, 2009

 

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Fourth Amendment

1. Section 4.14 of the Plan, entitled “Directed Investment Account,” is hereby
further amended by revising the first sentence of Subsection 4.14(a) to read as
follows, effective for Plan Years beginning after December 31, 2010:

“Participants may, subject to a procedure established by the Administrator (the
Participant Direction Procedures) and applied in a uniform nondiscriminatory
manner, direct the Trustee, in writing (or in such other form which is
acceptable to the Trustee), to invest all of their accounts, excluding the
Participants’ ESOP Accounts, in specific assets, specific funds or other
investments permitted under the Plan and the Participant Direction Procedures,
including providing the Trustee with directions to invest the portions of their
account attributable to one or more specified sources or accounts in different
assets.”

2. Section 7.4 of the Plan, entitled “Determination of Benefits Upon Termination
of Employment” is amended by revising the fourth paragraph of Subsection 7.4(a)
to read as follows:

“Effective on and after March 28, 2005 but prior to January 1, 2011, there will
be no mandatory lump sum cashout distributions out of this Plan, and during such
period notwithstanding any other provision of the Plan, the Participant’s
consent to the distribution shall now be required before the Plan may make any
immediate lump sum cashout distribution.

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

December 4, 2010

 

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