Prepared by MerrillDirect





 


10.1(ai)


AMENDMENT
NUMBER ONE

TO THE JANUARY 1, 2000 RESTATEMENT OF THE

SAUER-DANFOSS EMPLOYEES' RETIREMENT PLAN


             WHEREAS,
Sauer-Danfoss (US) Company (formerly known as Sauer-Danfoss, Inc. and
Sauer-Sundstrand Company) sponsors the Sauer-Danfoss Employees' Retirement Plan
(the "Plan");


             WHEREAS,
Sauer-Danfoss (NA) Company (formerly known as Danfoss Fluid Power Inc.) was
acquired and became a Related Corporation under the Plan effective May 3,
2000; and


             WHEREAS,
both Sauer-Danfoss (US) Company and Sauer-Danfoss (NA) Company desire that
Sauer-Danfoss (NA) Company adopt the Plan for its employees effective
January 1, 2001.


             WHEREAS,
pursuant to Section 15.1 of the Plan and appropriate action of the Board
of Directors of each of Sauer-Danfoss (US) Company and Sauer-Danfoss (NA)
Company, Sauer-Danfoss (NA) Company has adopted the Plan for its employees,
effective January 1, 2001.


             NOW,
THEREFORE, pursuant to Section 16.2 of the Plan, Sauer-Danfoss
(US) Company hereby amends the Plan as follows, effective January 1, 2001,
except as otherwise provided:


1.          Section 1.10 is amended to read
as follows:


                           "1.10. An
"Employee" means any person employed by the Employer, provided that
such person:


	(a)	became an Employee
  under the Plan prior to January 1, 2001; or
	 	 
	(b)	is employed by the
  Employer on a regular full-time or part-time basis, (customarily works at
  least 20 hours per week), provided such person will not become an
  Employee until the first day of the pay period coincident with or following
  the date the person completes 6 consecutive months of employment by the
  Employer; or
	 	 
	(c)	is employed by the
  Employer on a temporary basis, provided such person will not become an
  Employee until the first day of the pay period coincident with or following
  the date the person completes 12 consecutive months of employment by the
  Employer with at least 1,000 Hours of Employment.
	 	 






In no event shall the
word "Employee" include any person who renders service to the
Employer solely as an independent contractor or a leased employee (as defined
in Section 414(n) of the Code), nor shall it include any person covered by
a collective bargaining 414(n) of the Code), nor shall it include any person
covered by a collective bargaining agreement between employee representatives
and the Employer if retirement benefits were the subject of good faith
bargaining between such employee representatives and the Employer (unless the
resulting bargaining agreement provides for such employee's coverage under this
Plan). A "former Employee" is a person who once was but is no longer
an Employee, but did not receive and is not currently receiving retirement
benefits under this Plan. A "retired Employee" is a person who once
was but is no longer an Employee, but who received or is receiving retirement
benefits under this Plan."






 


2.          Section 2.8 is amended to add the
following sentence to the end thereof:


                           "2.8.     Predecessors.  . 
 .  .  Employment by Sauer-Danfoss (NA) Company (formerly known as
Danfoss Fluid Power Inc.) prior to its May 3, 2000 date of acquisition
shall be included in determining eligibility and Years of Service, but not in
determining Years of Participation."


3.          Section 3.5 is added, effective
October 1, 2000, except as otherwise provided therein, to read in its
entirety as follows:


                           "3.5      Cash Balance Employees.
Notwithstanding any other provision of the Plan, except as provided in
Sections 6.4 and 8.4 of the Plan, as applicable, effective January 1,
2001, Retirement Benefits for Employees who are described in
subsections (a) and (b) of this Section 3.5 Plan shall be accrued
solely under the cash balance formula in accordance with Appendix D.


	(a)	Automatic
  Coverage Under Cash Balance Formula.
  Retirement Benefits shall be determined in accordance with the cash balance
  formula in Appendix D for all Employees who are:
	 	 
	 	(i)          hired by the Employer after
  October 1, 2000; or
	 	(ii)         employed at the Employer's West
  Branch, Iowa or Easley, South Carolina locations; or
	 	(iii)        employed by Sauer-Danfoss (NA) Company
  (formerly known as Danfoss Fluid Power Inc.).
	 	 
	(b)	Special
  Election for Coverage Under Cash Balance Formula.
  Retirement Benefits shall be determined under the cash balance formula in
  Appendix D for all Employees who are eligible to elect and do elect,
  pursuant to a one time election made in accordance with uniform,
  nondiscriminatory Plan procedures (during the fourth quarter of the 2000 Plan
  Year), to cease benefit accruals under the final average pay formula
  effective December 31, 2000 and begin accruing benefits, if any, under
  the cash balance formula in Appendix D, effective January 1, 2001.
  Employees eligible to make the election described in this subsection (b)
  are all persons who are Employees of the Employer on October 1, 2000,
  (except Employees employed at the Employer's West Branch, Iowa or Easley,
  South Carolina 
	 	 







 



4.          Section 6.4 is added to the end
of Article VI, effective December 31, 2000, to read in its entirety
as follows:


             "6.4      December 31,
2000 Sunset With Grandfather. Notwithstanding any other Plan provision,
Article VI shall only apply to persons who became Employees before
January 1, 2001. Article VI shall continue to apply to such Employees
without regard to whether they made the election under
Section 3.5(b)."



5.          Section 7.1 is amended, effective
December 31, 2000, to add the following paragraph to the end thereof:


                           "7.1.     Available Options


                           . . .


             Notwithstanding any other provision of the Plan,
Options B, C, E, F, G and H under this Section shall not be available  to any Employee who first becomes an
Employee after December 31, 2000."



6.          Section 8.4 is added to the end
of Article VIII, effective December 31, 2000, to read in its entirety
as follows:


             "8.4.     December 31,
2000 Sunset With Grandfather. Notwithstanding any other Plan provision,
Article VIII shall apply only to persons who became Employees before
January 1, 2001. Article VIII shall continue to apply to such
Employees without regard to whether they made the election under
Section 3.5(b)."



7.          Appendix D is added to the end of
the Plan (after Appendix C), in the form of the Appendix D attached
to this Amendment              Number One
and made a part hereof.


             IN
WITNESS WHEREOF, Sauer-Danfoss (US) Company has authorized the
execution on its behalf of this Amendment Number One this 15th day of December,
2000.


	 	By:	/s/  Ronald C. Hanson
	 	 	


	 	 	 
	 	Title:	Director
  Global Human Resources
	 	 	








 


APPENDIX D
TO SAUER-DANFOSS

EMPLOYEES' RETIREMENT PLAN


             This Appendix D to the
Sauer-Danfoss Employees' Retirement Plan is applicable, effective
January 1, 2001, only to those Employees identified in Section 3.5 of
the Plan whose benefits are accrued in accordance with the cash balance formula
(hereinafter referred to in this Appendix D as "Cash Balance
Employees"). The provisions of the Plan shall apply to such Cash Balance
Employees with the following modifications:


             1.          Cash
Balance Account. A notional account (hereinafter referred to as the
"Cash Balance Account") shall be established and maintained for each
Cash Balance Employee. The Cash Balance Account for each Cash Balance Employee
shall have an opening balance as determined under Section 2 of this
Appendix D. A Cash Balance Employee's Cash Balance Account shall be
credited with "Regular Contribution Credits", "Special
Contribution Credits", if applicable, and "Interest Credits" each
as defined under Sections 3, 4 and 5 of this Appendix D,
respectively. Cash Balance Accounts shall be bookkeeping accounts only, and
neither the establishment nor maintenance thereof shall create any right in any
Cash Balance Employee to any specific assets of the Plan. Upon a Cash Balance
Employee's Annuity Starting Date his Cash Balance Account shall cease to exist.
The term "Annuity Starting Date" shall mean the first day of the
first month for which a benefit is payable as an annuity to a Cash Balance
Employee.


             2.          Opening
Balance. Each Cash Balance Employee will have an opening balance in his
Cash Balance Account equal to $-0-.


             3.          Regular
Contribution Credits. For each Plan Year, an amount shall be credited to
the Cash Balance Account of each Cash Balance Employee who was employed as an
Employee during such Plan Year (the "Regular Contribution Credit").
In the case of a Cash Balance Employee who is employed on the last day of the
Plan Year, the Regular Contribution Credit shall be credited to the Cash
Balance Employee's Cash Balance Account as of the last day of such Plan Year.
In the case of a Cash Balance Employee who terminates employment during the
Plan Year, the Regular Contribution Credit shall be credited to his Cash
Balance Account as of the date of the Cash Balance Employee's termination of
employment. The Regular Contribution Credit shall be an amount equal to 2% of
the Cash Balance Employee's "Pay" received as an Employee during the
Plan Year. For purposes of this Section, "Pay" means Considered
Compensation plus overtime compensation. Notwithstanding the above, a Cash
Balance Employee who is absent from work due to a disability for which he is
entitled to benefits under a Disability Income Plan maintained by the Employer
shall continue to have Regular Contribution Credits credited to his Cash
Balance Account for as long as he is entitled to benefits under such Disability
Income Plan. Such Regular Contribution Credits shall be based on the disabled
Cash Balance Employees' rate of Considered Compensation just prior to becoming
disabled.





             4.          Special Contribution Credit.  In addition to the Regular Contribution
Credit described in Section 3 of this Appendix D, the Cash Balance
Account of each Transition Employee described in Section 7 of Appendix D
shall be credited with additional contribution credits (the "Special
Contribution Credits") provided under this Section 4. For each Plan
Year from January 1, 2001 through December 31, 2010, Special
Contribution Credits shall be credited to the Cash Balance Account of each
Transition Employee at the same time and manner as provided for the Regular
Contribution Credits under Section 3 of this Appendix D, but the
amount of such Special Contribution Credits shall be determined based on the
following schedule:


 


	Transition
  Employee's Age (in whole years and as of the last day of the applicable Plan
  Year, even if projection is necessary because the additional contribution
  credit will be credited prior to that day)	 	Special
  Contribution Credit (as a percentage of the Transition Employee's Pay for the
  applicable Plan Year)
	

	 	


	40 - 49	 	1%
	50 - 59	 	2%
	60 or more.	 	3%




             5.          Interest
Credits.  As of the last day of each
Plan Year, interest shall be credited to the Cash Balance Account of each Cash
Balance Employee who has a Cash Balance Account as of the first day of such
Plan Year (the "Interest Credit"). 
A Cash Balance Employee's Cash Balance Account shall continue to be
credited with Interest Credits until (i) the Cash Balance Employee's Annuity
Starting Date (as defined in Section 417(f)(2) of the Code) or (ii) solely in
the case of a Cash Balance Employee who terminates employment before becoming
vested, the date that the Cash Balance Employee's Period of Severance exceeds
the greater  of the total Years of Service
on his Severance from Service Date, or 5 Years of Service, at which point the
Cash Balance Employee will be deemed to have received a distribution of his
entire interest in the Plan accrued as of that date.  Interest Credit added to a Cash Balance Account for each Plan
Year shall be the amount determined by multiplying the balance of such Cash
Balance Account on the first day of the Plan Year by the one year Treasury bill
rate in effect as of the first business day of such Plan Year, as published in the
Wall Street Journal on such business day. Notwithstanding the prior provisions
of this Section 5, if the Cash Balance Employee's Annuity Starting Date occurs
during the applicable Plan Year, the Interest Credit shall be prorated on a
monthly basis for that portion of the Plan Year before such Annuity Starting
Date and shall be credited to the Cash Balance Employees' Cash Balance Account
as of such Annuity Starting Date.


             6.          Retirement
Benefit.  Except in the case of a
Transition Employee described in Section 7, as of any determination date, a
Cash Balance Employee's Retirement Benefit is equal to; (a) the amount of his
Cash Balance Account as of such date converted into a single life annuity on
the basis of the Actuarial Equivalent factors for lump sum distributions, and
(b) the Retirement Benefit expressed as a single life annuity that the Cash
Balance  Employee accrued under  the final average pay formula as of December
31, 2000 (including any early retirement subsidy for which the Cash Balance
Employee becomes eligible, whether before, on, or after that date, if
applicable). Transition Employees' benefits shall be determined as provided
under Section 7.


             7.          Retirement
Benefit for Transition Employees. 
Transition Employees shall have their Retirement Benefits determined
under this Section 7 rather than Section 6. A "Transition Employee"
is a Cash Balance Employee who has attained age 40 and has at least 5
consecutive years of employment with the Employer as of December 31, 2000 and
made an election.  A Cash Balance
Employee's consecutive years of employment shall be measured from his most
recent employment commencement date before December 31, 2000 (without an
intervening termination date), provided that any approved leave of absence
shall be bridged.  The Retirement
Benefit of a Transition Employee as of any determination date shall be the sum
of:  (a) the amount of his Cash Balance
Account as of such date converted into a single life annuity on the basis of
the Acturarial Equivalent factors for lump sum distributions; and (b) the
Retirement Benefit, expressed as a single life annuity, that the Employee had
accrued under the final average pay formula as of December 31, 2000 (including
any early retirement subsidy for which the Employee becomes eligible, whether
before, on, or after that date, if applicable), but adjusted to reflect any
increases in the Cash Balance Employee's Considered Compensation and Covered
Compensation after December 31, 2000 until the earliest of (i) December 31,
2010, (ii) the date the Cash Balance Employee completes 30 Years of Service or
(iii) the date the Cash Balance Employee terminates employment with the
Employer.


             8.          Death
Before Commencement.  The Surviving
Spouse of a deceased Cash Balance Employee shall be eligible to receive a
Survivor Benefit in accordance with the provisions of Article IX of the Plan,
provided that the amount of any such Survivor Benefit shall be determined based
on the methodology set forth in Section 6 or Section 7 of this Appendix D, as
applicable, for the deceased Cash Balance Employees' Retirement Benefit.