Exhibit 10.1(y)


 


FIRST
AMENDMENT

TO

SAUER-DANFOSS CHANGE OF CONTROL AGREEMENT


 


This FIRST AMENDMENT (the “Amendment”)
to the SAUER-DANFOSS CHANGE OF CONTROL
AGREEMENT (the “Agreement”) is made as of December 20, 2008,
between Charles K. Hall (the “Employee”) and SAUER-DANFOSS (US) Company, a
Delaware corporation (“Employer” or the “Company”).


 


WHEREAS, the Company
and the Employee are parties to the Change In Control Agreement dated as of March 8,
2004;


 


WHEREAS, Section 15
of the Agreement provides that the Agreement may be changed by an instrument in
writing signed by the parties thereto; and


 


WHEREAS, the Company
and the Employee have determined that it is desirable to make certain written
amendments to the Agreement, in order to be compliant with Section 409A of
the Internal Revenue Code of 1986, as amended (“Code Section 409A”), and
that such written amendments, pursuant to IRS Notice 2007-86, are permitted to
be made at any time on or before December 31, 2008.


 


NOW
THEREFORE, in consideration of the mutual promises and
agreements of the parties, the Agreement is hereby amended effective as of December 20,
2008 in the following particulars in order to ensure it is exempt from or
compliant with Code Section 409A in all regards:


 


1.             Subparagraphs (i) through
(iv) of paragraph (b) of Section 2 of the Agreement are hereby
deleted in their entirety and replaced with the following new Subparagraphs (i) through
(iv) as a part thereof:


 


“              (i)            An amount in cash equal to
the Employee’s unpaid base salary accrued through the date of termination of
employment, accrued vacation pay through the date of termination of employment,
unreimbursed business expenses incurred through the date of termination of
employment, and all other items earned by and owed to the Employee through and
including the date of termination (in full satisfaction for these amounts owed
to the Employee) which shall be payable in a lump sum no later than thirty (30)
days following the Employee’s date of termination of employment.


 


(ii)           An amount in cash equal to:


 


(A)          the actual annual incentive compensation the
Employee would have received, if any, under the Annual Management Performance
Incentive Plan, or a successor plan thereto (the “Annual Incentive Plan”), for
the fiscal year which includes his/her date of termination of employment and
assuming that the Employee had been employed through the payout date, multiplied by


 


(B)           a fraction (the numerator of which shall be the
number of whole months actually worked by the Employee during the Company’s fiscal
year in which the Employee’s date of termination of employment occurs and the
denominator of which shall be the number 12) (the “Pro Rata Annual Incentive”).


 

















 


The Pro Rata Annual Incentive shall be payable in a lump sum in
accordance with the terms of the relevant underlying Annual Incentive Plan and
at the same time payments are made to other Company executives pursuant to such
Annual Incentive Plan.


 


(iii)          An amount in cash equal to the sum of Employee’s annual base
salary and Target Incentive Opportunity under the Annual Incentive Plan in
effect on the Employee’s date of termination of employment with such amount
being payable as follows:


 


(A)          an
amount equal to the
lesser of:


 


(1)          the
sum of the Employee’s annual base salary plus Target Incentive Opportunity as in
effect on the Employee’s date of termination of employment; or


 


(2)           two
(2) times the Employee’s base salary as in effect on the Employee’s date
of termination of employment; or


 


(3)           two
(2) times the compensation limit of Code Section 401(a) (17) (i.e., $460,000 for 2008)


 


shall
be paid to Employee in a lump sum no later than thirty (30) days following the
Employee’s date of termination of employment; and


 


(B)           an
amount, if any, equal to:


 


(I)            the
sum of the Employee’s annual base salary plus Target Incentive Opportunity as in
effect on the Employee’s date of termination of employment, reduced by


 


(II)           the
amount paid to Employee under Clause (A) immediately above


 


shall be paid to Employee in a lump sum
no later 30 days following the seven month anniversary of the Employee’s date
of termination of employment.


 


(iv)          A amount in cash equal to ten percent (10%) of the
Employee’s then current annual base salary in lieu of health, dental, long-term
disability, and life insurance continuation with such amount being payable in a
lump sum no later than thirty (30) days following the Employee’s date of
termination of employment.  The Employee’s
participation in these and all other similar benefits shall cease upon the
termination of Employee’s employment with the Company under circumstance which
entitle the Employee to the payments set forth in this Section 2(iv)”


 


2.             Paragraph (d) of
Section 2 of the Agreement is hereby deleted in their entirety and
replaced with the following new Paragraph (d) as a part thereof:


 


“              (d)           Subsequent
Recalculation.  In the
event the Internal Revenue Service subsequently adjusts the excise tax
computation herein described, the Company shall reimburse the Employee for the
full amount necessary to make the Employee whole (less any amounts received by
the Employee that the Employee 


 


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would not have received had the computations
initially been computed as substantially adjusted), including the value of any
underpaid excise tax, and any related interest and/or penalties due to the
Internal Revenue Service.  Any such
reimbursement under this paragraph (d) shall be made by the Company to the
Employee no later than the December 31 of the calendar year following the
calendar year in which the Employee is assessed and pays any such additional
amounts to the IRS. ”


 


*              *              *              *              *


 


IN WITNESS WHEREOF, the parties have caused this
Amendment to be duly executed and delivered as of this 20th day of December,
2008.


 


	
  SAUER-DANFOSS
  (US) COMPANY

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Ronald C. Hanson

  	
   

  
	
   

  	
  Ronald
  C. Hanson

  	
   

  
	
   

  	
  Vice
  President — Human Resources

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EMPLOYEE

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Charles K. Hall

  	
   

  
	
  Charles K. Hall

  	
   

  



 


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