**Exhibit10.1(bg)**

** **

**SECONDAMENDMENT**

**SAUER-SUNDSTRANDLASALLE FACTORY**

**EMPLOYEESAVINGS PLAN**

**(AsAmended and Restated as of January 1, 1998)**

 

**WHEREAS**, the Company maintains theSauer-Sundstrand LaSalle Factory Employee Savings Plan (As Amended and Restatedas of January 1, 1998) (the “Plan”); and

 

**WHEREAS**, the Company desires to amend the Planto (1) bring the Plan into compliance with the requirements of the SmallBusiness Job Protection Act of 1996, and the Taxpayer Relief Act of 1997; (2)add a Company stock fund as an investment option for its eligible employees,and (3) make certain other changes with respect to applicable interest rates onplan loans.

 

**NOWTHEREFORE, BE IT RESOLVED**, that pursuant to the amending power reserved to this Company bySection 14.1, the Plan be, and it hereby is, amended, effective as of the datesset forth below, in the following respects:

 

1.             Section 1.18 is amended, effective as of January 1,2000, to read as follows:

 

“1.18       A ‘Fund’ shall mean any of thefunds in which Plan assets may be invested as described in Section 8.2.”

 

2.             Section 6.3(f)(ii) is amended, effective as of January1, 1998, to read as follows:

 

“AParticipant’s ‘Compensation’ shall include that Participant’s wages,salaries, fees for professional services and other amounts received forpersonal services actually rendered in the course of employment with theEmployer (including, but not limited to, commissions paid to salesman,compensation for services on the basis of a percentage of profits, tips, andbonuses), and all Compensation actually paid or made available to theParticipant for an entire Limitation Year, including elective deferrals (asdefined in Code Section 402(g)(3)), and any amounts that would have beenreceived as cash, but for an election to receive benefits under a cafeteriaplan satisfying Code Section 125. Compensation shall exclude any other items or amounts paid to or for thebenefit of the Participant.”

 

3.             Sections 6.5(a) and 6.6(a) are amended, effective as ofJanuary 1, 1997, by adding the following at the end of the respectivesubsections:

 

“Notwithstandingthe foregoing, for Plan Years commencing on and after January 1, 1997 throughthe end of the remedial amendment period as described in Notice 97-41, andmodified by any subsequent Internal Revenue Service publication, the ADP forthe Nonhighly Compensated Employee Group may be determined on the basis of datafrom the current Plan Year.”

 

 

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4.             Section6.5(d)(ii) is amended, effective as of January 1, 1997, to read as follows:

 

“(ii)                            Distribution of Excess Contributions (and any incomeallocable thereto) to the appropriate Highly Compensated Employees.  Such distribution shall be determined andmade as follows:  First, the total dollaramount of excess contributions for each affected Highly Compensated Employeeshall be determined.  Second, such dollaramounts shall be aggregated for all affected Highly Compensated Employees.  Third, the Highly Compensated Employee withthe highest dollar amount in Participant Contributions shall be reduced by anamount necessary for such Highly Compensated Employee’s ParticipantContributions to equal that of the Highly Compensated Employee with the nexthighest dollar amount in Participant Contributions.  Such reduction is then distributed to theHighly Compensated Employee with the highest dollar amount.  However, if a lesser reduction, when added tothe total dollar amount already distributed under the foregoing, would equalthe total excess contributions, the lesser amount shall be distributed.  If Excess Contributions remain, the foregoingprocedures are repeated until the excess contributions are distributed.”

 

5.             Section 6.6(d)(ii) is amended, effective as of January1, 1997, to read as follows:

 

“(ii)                            Distribution of any vested Excess Aggregate Contributions(and any income allocable thereto) to the appropriate Highly CompensatedEmployees.  Distribution of vested ExcessAggregate Contributions shall be made in accordance with the procedures fordistributing Excess Contributions as set forth above in Section 6.5(d)(ii); or”

 

6.             Section 7.1 of the Plan is amended, effective as ofJanuary 1, 2000, to read as follows:

 

“7.1         Deposit of Employer and MatchingContributions.  Upon receipt ofEmployer or Matching Contributions, the Trustee shall deposit within 14business days such Contributions in accordance with the investment election ofeach Participant with respect to such Participant’s Participant Contributions. If no such election is received by the Trustee, such Contributions shallbe invested in the Default Fund (as defined in Section 8.2(b)).”

 

7.             Section 7.3 is amended, effective as of August 31, 1998to read as follows:

 

“7.3         Investment Election for ParticipantContributions at Time of Initial Participation.  Each Participant in Participant Contributionsshall, upon electing to become a Participant under the Plan pursuant to Section3.2 and on a form suitable to the Plan Administrator, make an election as to themanner in which Participant Contributions

 

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made by the Employer onhis behalf are to be invested by the Trustee. A Participant’s investment election shall specify the percentage of hisParticipant Contributions to be invested in one or more of the Funds describedin Section 8.2.  Unless changed by aParticipant under Section 7.4, the investment election initially made by aParticipant shall remain in effect until he ceases to be a Participant underthe Plan.”

 

9.             Section 8.2 is amended, in its entirety, effective as ofJanuary 1, 2000, to read as follows:

 

“8.2         Establishment of Funds. TheTrustee, at the direction of the Plan Administrator, shall establish thefollowing no-load investment Funds under the Trust Agreement:

 

(i)            IRT Stable Value Fund;

(ii)           INVESCO Select Income Fund;

(iii)          INVESCO Total Return Fund;

(iv)          Fidelity Equity Income Fund;

(v)            IRT 500 Index Fund;

(vi)          AIM Blue Chip Fund;

(vii)         INVESCO Small Company Value Fund; and

(viii)        IRT International Equity Fund

(ix)           The Transamerica Life Insurance Fund.

 

Notwithstanding theforegoing, effective January 1, 2000, the following provisions shall apply:

 

(a)                                  The Plan Administrator may direct theTrustee to add, change or eliminate from time to time one or more investmentfunds, without an amendment to the Plan and upon such terms and conditions asit deems appropriate.  Notwithstandingthe foregoing, the Plan Administrator shall direct the Trustee, in accordancewith Section 404(c) of ERISA, to make available at all times at least threeseparate investment alternatives each of which is diversified and which havematerially different risk and return characteristics.  The investment alternatives in the aggregateshall enable each Participant by choosing among them to achieve a portfoliowith aggregate risk and return characteristics at any point within a rangenormally appropriate for the Participant, and which in the aggregate tend tominimize through diversification the overall risk of the Participant’sportfolio.  The Plan intends to constitutea plan described in Section 404(c) of ERISA, such that to the extent permittedby law the fiduciaries of the Plan shall be relieved of liability for anylosses that are the direct and necessary result of the 

 

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                                                investment instructions given byParticipants and Beneficiaries under the Plan.

 

(b)                                 Notwithstanding the foregoing, theInvestment Funds shall, at all times, include: (i) a Fund used for theinvestment of Employer Matching Contributions and Participant Contributions forwhich no investment election is provided, which Fund is designed to preservecapital and provide fixed income until an investment election is made (‘DefaultFund’); (ii) a ‘Life Insurance Fund’ for the purpose of purchasing lifeinsurance under Article 8A; and, (iii) a Company Stock Fund, which is designedto permit Participants to invest in shares of common stock of Sauer Inc., theparent company of the Company (‘Company Stock’).”

 

10.           Section 8.3 is added, effective as ofJanuary 1, 2000, to read as follows, and the remaining sections of Article 8are renumbered accordingly:

 

“8.3         Company Stock Fund.  The provisions of this Section 8.3 set forthspecial rules governing the investment of Participant Contributions into theCompany Stock Fund.

 

(a)                                  Investments in Company Stock Fund. Participants may elect to invest a portion of their ParticipantContributions in the Company Stock Fund. The maximum amount permitted to be invested shall be 30% of a Participant’sAccount balances, determined at the time the amount is transferred to, ordeposited in, the Company Stock Fund. The Company shall have the right (i) to pay from amounts transferred toor deposited in the Company Stock Fund any brokerage fees and expensesassociated with such transfer and acquisition of Company Stock, and (ii) to payfrom the Participant’s Accounts any brokerage fees and expenses associated withthe conversion of such units to any other Investment Fund and/or cash.

 

(b)                                 Voting Rights. Participants with Contributions invested in Company stock shall be entitledto vote the shares allocated to the Participant’s Account.  Within a reasonable time prior to each annualor special meeting of the shareholders of the Sauer Inc., the Company shallsend to each Participant a copy of the proxy soliciting material (including anannual report) for the meeting, together with a form requesting instructions tothe Trustee on how to vote the proportional number of shares of Company Stock(and any fractional share thereof) attributable to the Participant’s interestin the Company Stock Fund.  Upon receiptof such 

 

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                                                instruction, the Trustee shall vote suchshares to the extent possible to reflect such Participants instructions.  If the Trustee does not receive voting instructionsfrom a Participant, the Trustee shall vote the Company Stock attributable toeach Participant’s interest in the same proportion as the Trustee votes theshares of Company Stock which are attributable to Participants’ interests inthe Company Stock Fund of which the Trustee received voting instructions.

 

Notwithstandingany provision of the Plan to the contrary, if a tender or exchange offer ismade for a majority of the outstanding shares of Company Stock, a Participantshall direct the Trustee as to the disposition of the proportional number ofshares of Company Stock attributable to his interest in the Company StockFund.  If a Participant does not directthe Trustee as to the disposition of the Company Stock attributable to hisCompany Stock Fund with the time specified, such Participant shall be deemed tohave timely instructed the Trustee not to tender or exchange such shares ofCompany Stock.

 

Informationrelating to the purchase, holding and sale of Company Stock and the exercise ofshareholder rights with respect to such Company Stock by Participants shall bemaintained in accordance with procedures designed by the Trustee to safeguardthe confidentiality of such actions by the Participant, except to the extentnecessary to comply with federal or state laws.

 

(c)                                  Compliance with Federal Securities Laws. The Company reserves the right to file with the Securities ExchangeCommission (the ‘SEC’)a Registration Statement on Form S-8 in connection withregistration of the shares of common stock of Sauer Inc. and the participationinterests to be offered and sold to the Plan.

 

Notwithstandingany provision of this Section to the contrary, if a Participant is a personsubject to Section 16 of the Securities and Exchange Act of 1934 (‘Section 16’)as of January 1, 2000, such Participant shall not be permitted to invest hisParticipant Contributions in the Company Stock Fund until such time as he is nolonger subject to Section 16.  If aParticipant is not subject to Section 16 as of January 1, 2000, but laterbecomes subject to Section 16, he shall not be permitted, as of the date hebecomes subject to such Section, to invest future Participant Contributions inthe Company Stock Fund.  With respect toinvestments already

 

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made in theCompany Stock Fund, such Participant shall, at his option, make an election totransfer out of the Common Stock Fund; provided that such transfer is made atleast six months after any investment election into the Common Stock Fund, orpurchase of Company stock under any other plan maintained by the Company.”

 

11.           Article VIII-A and Sections 7.4,10.1, and 12.4 are amended, effective as of January  1, 2000, by substituting “Life InsuranceFund” for “Transamerica Life Insurance Fund” wherever the latter appears, andby substituting “Default Fund” for “Norwest Stable Return Fund” wherever thelatter appears.

 

12.           Section 9.3 is amended, effective asof August 31, 1998, to read as follows:

 

“9.3         Interest Rate.  The interest rate to be paid by an ActiveParticipant on a new loan shall be the prime lending rate published by the *Wall Street Journal* on the first business day of the monthpreceding the month in which the application for the loan is received by thePlan Administrator, plus 1-1/2 percentage points.”

 

13.           Section 12.4(f) is added, effectiveas of January 1, 2000, to read as follows:

 

“(f)                              In-Kind Distributions. A Participant may elect to receive amounts distributed from his Accountinvested in the Company Stock Fund in whole shares of Company Stock, with anyfractional shares paid in cash.  Suchelection and the method of transfer of the shares shall be in such form andmanner as is established by the Plan Administrator.”

 

14.           Section 12.8(c) is amended, effectiveas of January 1, 1997, to read as follows:

 

“(c)                            In no event shall distribution withrespect to a Participant commence later than:

 

(i)                                     for a Participant who is not a fivepercent (5%) owner (as described in Code Section 416(i)), the later of (1) theApril 1 of the calendar year next following the calendar year in which theParticipant attains age 701⁄2, or (2) the April 1 of the calendar year in whichthe Participant terminates employment; and

 

(ii)                                  for a Participant who is a five percent(5%) owner, the  calendar year followingthe calendar year in which the Participant attains age 701⁄2, or such other dateas may be prescribed by applicable laws or regulations.

 

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Notwithstandingthe foregoing, if a Participant who is not a five percent (5%) owner attainsage 701⁄2 on or after January 1, 1996 and before January 1, 1999, andis still employed by the Employer on April 1 of the calendar yearfollowing the year in which he attained age 701⁄2, such Participant may elect tocommence distribution effective as of April 1 of the calendar yearfollowing the calendar year in which he attained age 701⁄2 or to delaycommencement of distribution until the Participant terminates employment.”

 

Dated this 6thday of December, 1999 at Ames, Iowa.
|   |   |   |   |   |   |   |   |   |                         |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|------------------------------|
|   |   |   |   |   |   |   | By:    |   | /s/ RONALD C. HANSON         |
|   |   |   |   |   |   |   |   |   | Ronald C. Hanson             |
|   |   |   |   |   |   |   |   |   | Director of Human  Resources |