SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Sauer Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
804 137 107
- --------------------------------------------------------------------------------
(CUSIP Number)
Kenneth D. McCuskey
Treasurer
Sauer Inc.
2800 East 13th Street
Ames, Iowa 50010
(515) 239-6364
--------------
(Name, Address and Telephone Number
of Person Authorized to Receive Notices)
With Copies To:
Peter D. Lyons, Esq. Oliver Edwards, Esq.
Shearman & Sterling Haight Gardner Holland & Knight
599 Lexington Avenue 195 Broadway
New York, New York 10022 New York, New York 10007
Telephone:(212) 848-4000 Telephone: (212) 513-3500
February 22, 2000
(Date of Event which requires Filing of this Statement)
- --------------------------------------------------------------------------------
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss. 240.13d-1(e), ss. 240.13d-1(f) or ss. 240.13d-1(g),
check the following box.|_|
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Danfoss Murmann Holding A/S
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Denmark
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 10,361,500*
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 4,900,000*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 0
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 4,900,000*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,261,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 55.5%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) CO
- --------------------------------------------------------------------------------
* See Item 5.
Page 2 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Klaus H. Murmann
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 128,225
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 15,562,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 128,225
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 15,562,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,690,725*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [X]**
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 57.1%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) IN
- --------------------------------------------------------------------------------
* See Item 5.
** The amount in Row (11) excludes 267,100 shares owned by Hannelore
Murmann, Klaus H. Murmann's spouse, over which Klaus H. Murmann has no
voting or dispositive power; 1,000 shares owned by Nicola Keim, Klaus
H. Murmann's daughter, over which Klaus H. Murmann has no voting or
dispositive power; and 1,000 shares owned by Sven Murmann, Klaus H.
Murmann's son, over which Klaus H. Murmann has no voting or dispositive
power.
Page 3 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Klaus Murmann & Co. KG
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 0
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 15,562,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 0
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 15,562,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,562,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 56.6%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) PN
- --------------------------------------------------------------------------------
* See Item 5.
Page 4 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
K. Murmann Verwaltungsgesellschaft mbH
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 0
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 10,662,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 0
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 10,662,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
10,662,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 38.8%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) CO
- --------------------------------------------------------------------------------
* See Item 5.
Page 5 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Sauer GmbH
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 1,000
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 0
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 10,362,500*
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 0
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
10,362,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 37.7%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) CO
- --------------------------------------------------------------------------------
* See Item 5.
Page 6 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
EMF Marketing und Finanzmanagement AG
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 300,000*
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 0
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 300,000*
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 0
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
300,000*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 1.1%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) CO
- --------------------------------------------------------------------------------
* See Item 5.
Page 7 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Hannelore Murmann
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 267,100
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 15,562,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 267,100
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 15,562,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,829,600*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [X]**
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 57.6%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) IN
- --------------------------------------------------------------------------------
* See Item 5.
** The amount in Row (11) excludes 128,225 shares of Sauer Common Stock
owned by Klaus H. Murmann, Hannelore Murmann's spouse, over which
Hannelore Murmann has no voting or dispositive power; 1,000 shares
owned by Nicola Keim, Klaus H. Murmann's daughter, over which Klaus H.
Murmann has no voting or dispositive power; and 1,000 shares owned by
Sven Murmann, Klaus H. Murmann's son, over which Klaus H. Murmann has
no voting or dispositive power.
Page 8 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Sven Murmann
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 1,000
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 15,562,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 1,000
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 15,562,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,563,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 56.6%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) IN
- --------------------------------------------------------------------------------
* See Item 5.
Page 9 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Nicola Keim
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 1,000
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 15,562,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 1,000
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 15,562,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,563,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 56.6%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) IN
- --------------------------------------------------------------------------------
* See Item 5.
Page 10 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Ulrike Murmann-Knuth
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 0
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 15,562,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 0
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 15,562,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,562,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 56.6%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) IN
- --------------------------------------------------------------------------------
* See Item 5.
Page 11 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Jan Murmann
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 0
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 15,562,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 0
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 15,562,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,562,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 56.6%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) IN
- --------------------------------------------------------------------------------
* See Item 5.
Page 12 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Anja Murmann
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 0
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 15,562,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 0
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 15,562,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,562,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 56.6%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) IN
- --------------------------------------------------------------------------------
* See Item 5.
Page 13 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Christa Zoellner
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 0
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 15,562,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 0
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 15,562,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,562,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 56.6%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) IN
- --------------------------------------------------------------------------------
* See Item 5.
Page 14 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Britta Zoellner
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Federal Republic of Germany
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 0
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 15,562,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 0
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 15,562,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,562,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 56.6%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) IN
- --------------------------------------------------------------------------------
* See Item 5.
Page 15 of 38
<PAGE>
CUSIP NO. 804 137 107
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Danfoss A/S
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) 00
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e). |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Denmark
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power 0
SHARES --------------------------------------------------------
BENEFICIALLY 8 Shared Voting Power 15,261,500*
OWNED BY --------------------------------------------------------
EACH 9 Sole Dispositive Power 0
REPORTING --------------------------------------------------------
PERSON 10 Shared Dispositive Power 15,261,500*
WITH
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,261,500*
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [X]**
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 55.5%*
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) CO
- --------------------------------------------------------------------------------
* See Item 5.
** The amount in Row (11) excludes 58,000 shares owned by Jorgen Clausen,
President and Chief Executive Officer of Danfoss, over which Danfoss
has no voting or dispositive power.
Page 16 of 38
<PAGE>
Item 1. Security and Issuer
The class of equity securities to which this statement relates is the
common stock, par value $.01 per share, of Sauer Inc. (the "Sauer Common
Stock"), a Delaware corporation (the "Issuer"). The principal executive offices
of the Issuer are located at 2800 East 13th Street, Ames, Iowa, 50010 and
Krokamp 35, 24539 Neumunster, Federal Republic of Germany.
Item 2. Identity and Background
With the exception of the Holding Company and Danfoss, prior to the
date hereof, the Reporting Persons were required to file, and have jointly
filed, Statements on Schedule 13G. From the date hereof, the Reporting Persons
will be required to file Statements on Schedule 13D and, accordingly, will no
longer file amendments to Statements on Schedule 13G.
(a) The names of the entities and natural persons filing this
statement are (i) Danfoss Murmann Holding A/S, a corporation
organized under the laws of Denmark (the "Holding Company"), (ii)
Klaus Murmann & Co. KG ("Murmann KG"), a limited partnership
organized under the laws of Germany, (iii) K. Murmann
Verwaltungsgesellschaft mbH ("Murmann GmbH"), a limited liability
company organized under the laws of the Federal Republic of
Germany, (iv) Sauer GmbH, a limited liability company organized
under the laws of the Federal Republic of Germany, (v) EMF
Marketing und Finanzmanagement AG, a limited liability company
organized under the laws of the Federal Republic of Germany
("EMF"), (vi) Danfoss A/S, a corporation organized under the laws
of Denmark ("Danfoss" and, together with the Holding Company,
Murmann KG, Murmann GmbH, Sauer GmbH and EMF, the "Filing
Entities"), (vii) Klaus H. Murmann, a natural person, (viii)
Hannelore Murmann, a natural person, (ix) Sven Murmann, a natural
person, (x) Nicola Keim, a natural person, (xi) Ulrike
Murmann-Knuth, a natural person, (xii) Jan Murmann, a natural
person, (xiii) Anja Murmann, a natural person, (xiv) Christa
Zoellner, a natural person, and (xv) Britta Zoellner, a natural
person (all such natural persons, collectively, the "Filing
Persons" and, together with the Filing Entities, the "Reporting
Persons").
The name of the entity that controls Danfoss is Bitten & Mads
Clausens Fond, a trust organized under the laws of Denmark (the
"Danfoss Control Entity").
(b) With the exception of Danfoss, the address of the principal
business and the address of the principal office of each of the
Filing Entities is Krokamp 35, 24539 Neumunster, Germany. The
address of the principal business and the address of the principal
office of Danfoss is DK-6430 Nordborg, Denmark. Klaus H. Murmann,
Hannelore Murmann, Christa Zoellner and Britta Zoellner reside at
Bismarckallee 24, D-24105 Kiel, Germany. Sven Murmann resides at
Bottgerstr. 15, D-20148 Hamburg, Germany. Nicola Keim resides at
Dr. Max-Strasse 15, D- 82031 Grunwald, Kr. Munchen, Germany.
Ulrike Murmann-Knuth resides at Hansastrasse 47, D-20144 Hamburg,
Germany. Anja Murmann resides at 532 E. 5th Street, Apt. 2, New
York, New York 10009. Jan Murmann resides at
Liseltoote-Herman-Str. 34, D-10407 Berlin, Germany.
Page 17 of 38
<PAGE>
The address of the principal business and the address of the
principal office of the Danfoss Control Entity is DK-6430
Nordborg, Denmark.
(c) Set forth on Schedule I is the name, citizenship, business or
residence address and present principal occupation or employment
as well as the name and address of any corporation or other
organization in which such occupation or employment is conducted
of each of the directors and executive officers of each of the
Filing Entities.
Set forth on Schedule II is the name, citizenship, business or
residence address and present principal occupation or employment
as well as the name and address of any corporation or other
organization in which such occupation or employment is conducted
of each of the directors and executive officers of the Danfoss
Control Entity.
The Holding Company was formed solely to hold shares of Sauer
Common Stock and has conducted no other operations or activities.
The principal business of each of Murmann KG, Murmann GmbH (which
is a wholly owned subsidiary of Murmann KG) and Sauer GmbH (which
is a wholly owned subsidiary of Murmann GmbH) is asset management.
The principal business of EMF (which is a wholly owned subsidiary
of Murmann GmbH) is to function as an insurance intermediary. The
principal business of Danfoss is the design, manufacture and sale
of mobile hydraulics components and systems. The principal
business of the Danfoss Control Entity is to function as a trust
with respect to the securities of Danfoss.
Klaus H. Murmann is the Chairman and Chief Executive Officer of
the Issuer. The principal business of the Issuer is the design,
manufacture and sale of highly engineered hydraulic systems and
components. The address of the Issuer is provided in Item 1 above.
The present principal occupation of each of Sven Murmann and Jan
Murmann is Director of Murmann GmbH. The principal business of
Murmann GmbH is asset management. The address of Murmann GmbH is
provided in Item 2(b) above.
Ulrike Murmann-Knuth is a priest with the Nordelbische
Evangelisch-Lutherische Kirche. The address of the Nordelbische
Evangelisch-Lutherische Kirche is Daenische Strasse, Kiel,
Germany.
None of Britta Zoellner, Christa Zoellner, Nicola Keim or
Hannelore Murmann are presently employed. Anja Murmann is
presently self-employed as a film producer. The address of Anja
Murmann is provided in Item 2(b) above.
(d) During the last five years (i) none of the Reporting Persons, (ii)
to the knowledge of each Filing Entity, none of the natural
persons listed on Schedule I associated with such Filing Entity
and (iii) to the knowledge of the Danfoss, neither of the natural
persons listed on Schedule II nor the Danfoss Control Entity, have
been convicted in any criminal proceeding.
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(e) During the last five years, (i) none of the Reporting Persons,
(ii) to the knowledge of each Filing Entity, none of the natural
persons listed on Schedule I associated with such Filing Entity
and (iii) to the knowledge of Danfoss, neither of the natural
persons listed on Schedule II nor the Danfoss Control Entity, have
been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction, as a result of which it is or was
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with
respect to such laws.
(f) The citizenship of each of the Filing Persons is the Federal
Republic of Germany.
Item 3. Source and Amount of Funds or Other Consideration
Pursuant to an agreement, dated January 22, 2000, among Murmann GmbH,
Danfoss and the Holding Company, as amended by an amendment thereto, dated
February 22, 2000 (the "Holding Company Agreement"), prior to consummation of
the Transaction (as defined below), Danfoss is expected to contribute to the
Holding Company, in exchange for shares of the Holding Company's common stock,
all of the outstanding shares of common stock of Danfoss Fluid Power A/S, a
corporation organized under the laws of Denmark, and Danfoss Fluid Power Inc.,
an Illinois corporation (together, the "Danfoss Fluid Power Companies"), and
Murmann GmbH is expected to cause to be contributed to the Holding Company, in
exchange for shares of the Holding Company's common stock, 1,000 shares of Sauer
Common Stock. Additionally, pursuant to the Holding Company Agreement, Murmann
GmbH has granted the Holding Company an irrevocable proxy to vote 10,361,500
shares of Sauer Common Stock (the "Voting Proxy"). The Holding Company's voting
rights will be shared equally by Murmann GmbH and Danfoss.
The Voting Proxy will terminate upon the earlier of (a) the
contribution by Murmann GmbH of 10,361,500 shares of Sauer Common Stock to the
Holding Company, in exchange for shares of the Holding Company's common stock,
and (b) the dissolution of the Holding Company. Pursuant to the Holding Company
Agreement, Murmann GmbH will not be obligated make such contribution of shares
of Sauer Common Stock to the Holding Company unless the Holding Company receives
a ruling from the United States Internal Revenue Service confirming that the
Holding Company qualifies to receive certain benefits under the proposed
Convention Between the Government of the United States of America and the
Government of the Kingdom of Denmark for the Avoidance of Double Taxation and
the Prevention of Fiscal Evasion with Respect to Taxes on Income (the
"Confirmation"). If the Holding Company does not qualify for such benefits, the
Holding Company may be dissolved.
In addition, pursuant to the Holding Company Agreement, Murmann GmbH is
obligated (a) in connection with any vote of the holders of Sauer Common Stock,
to vote 6,812,500 shares of Sauer Common Stock, which includes 1,912,500 shares
of Sauer Common Stock expected to be issued to Murmann GmbH in connection with
the termination of the Limited Partnership Agreement (as defined below),
consistent with the Holding Company and (b) not to transfer any of 6,812,500
shares of Sauer Common Stock, which includes 1,912,500 shares of Sauer Common
Stock expected to be issued to Murmann GmbH in connection with the termination
of the Limited Partnership Agreement, outside of the entities and persons under
the control of Klaus H. Murmann (the "Murmann Family") without the prior written
consent of Danfoss.
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Pursuant to a Stock Exchange Agreement, dated as of January 22, 2000,
among the Issuer, Murmann GmbH, Danfoss and the Holding Company (the "Stock
Exchange Agreement"), among other things, the Issuer is expected to acquire all
of the outstanding common stock of Danfoss Fluid Power Companies from the
Holding Company in exchange for 16,149,812 shares of Sauer Common Stock (the
"Transaction"). In addition, on or before December 31, 2000, the Issuer is
expected to acquire from the Holding Company, for additional shares of Sauer
Common Stock, all of the assets of Danfoss related to the mobile hydraulics
operations of Danfoss in Australia, Belgium, Brazil, Holland, Hong Kong, Japan,
Mexico, New Zealand, Portugal, Spain and Switzerland (the "Secondary
Acquisition"). The number of shares of Sauer Common Stock to be issued to the
Holding Company in connection with the Secondary Acquisition will be based upon
the same financial parameters used to calculate the number of shares of Sauer
Common Stock issued by the Issuer in connection with the Transaction, including
the closing stock price of Sauer Common Stock as of the date of consummation of
the Transaction and, therefore, cannot be specifically calculated at this time.
However, the Issuer expects that the number of additional shares of Sauer Common
Stock to be issued in connection with the Secondary Acquisition will be between
approximately 2,000,000 shares and 3,000,000 shares of Sauer Common Stock.
The Stock Exchange Agreement was previously filed by the Issuer with
the Securities and Exchange Commission on February 10, 2000 as Annex A to the
Preliminary Proxy Statement on Schedule 14A and is hereby incorporated into this
Schedule 13D by reference.
In connection with the Transaction, the Issuer is expected to terminate
an amended and restated limited partnership agreement, dated April 14, 1998,
among the Issuer, Sauer-Sundstrand GmbH, Sauer GmbH, EMF and Sauer GmbH & Co.
Hydraulik KG (the "Limited Partnership Agreement"). Pursuant to the terms of the
Limited Partnership Agreement, upon termination thereof, among other things,
Sauer is required to issue 1,912,500, 225,000 and 112,500 shares of Sauer Common
Stock to Murmann GmbH (as the general partner of Sauer GmbH & Co.
Hydraulik KG), EMF and Sauer GmbH, respectively.
Jorgen Clausen, President, Chief Executive Officer and a director of
Danfoss, beneficially owns 58,000 shares of Sauer Common Stock. Such ownership
represents 0.2% of the outstanding shares of the Issuer. Jorgen Clausen has
acquired all such shares of Sauer Common Stock with personal funds.
Item 4. Purpose of Transaction
The Holding Company acquired the Voting Proxy in connection with the
Transaction and, upon consummation of the Transaction, will receive 16,149,812
shares of Sauer Common Stock. Jorgen Clausen acquired Sauer Common Stock for
investment purposes. Jorgen Clausen has not formulated any plans or proposals
that would result in any of the actions enumerated in Items 4(a)-(j) of Schedule
13D.
(a) As described more fully in Item 3 above, upon consummation
of the Transaction, the Holding Company will receive 16,149,812 shares of Sauer
Common Stock. Additionally, as described more fully in Item 3 above, immediately
upon receipt of the Confirmation, Murmann GmbH is obligated to cause to be
contributed to the Holding Company 10,361,500 shares of Sauer Common Stock.
Also, as described more fully in Item 3 above, upon termination of the Limited
Partnership Agreement, Murmann GmbH, EMF and Sauer GmbH will receive 1,912,500,
225,000 and 112,500 shares of Sauer Common Stock, respectively. Further, as
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described more fully in Item 3 above, as a result of the Secondary Acquisition,
it is expected that the Holding Company will receive between approximately
2,000,000 shares and 3,000,000 shares of Sauer Common Stock.
(b) As described more fully in Item 3 above, this statement
relates to certain transactions related to the acquisition by the Issuer of all
of the outstanding shares of the Danfoss Fluid Power Companies pursuant to the
Stock Exchange Agreement.
(c) Not applicable.
(d) Pursuant to the Holding Company Agreement, upon consummation
of the Transaction, the Certificate of Incorporation and Bylaws of the Issuer
will be amended to provide that the number of directors comprising the fully
constituted board of directors of the Issuer will be increased to ten. Director
candidates will be identified by a two member nominating committee comprised of
a representative of the Murmann Family and a representative of Danfoss. The
representative of each of the Murmann Family and Danfoss will be entitled to
identify for recommendation to the Issuer's board of directors three candidates
for director who may be associated or affiliated with the Murmann Family or
Danfoss. The representative of each of the Murmann Family and Danfoss will each
identify two additional candidates for director. One of the additional director
candidates recommended by the representative of the Murmann Family will be the
Chief Executive Officer and President of the Issuer and the remaining three
director candidates must be independent from and not associated or affiliated
with the Murmann Family or Danfoss. After the person serving as Chief Executive
Officer and President ceases to serve in such capacity, the representative of
the Murmann Family will be entitled to identify for recommendation to the
Issuer's board of directors a second independent director candidate to replace
the Chief Executive Officer and President.
Additionally, pursuant to the Holding Company Agreement, upon
consummation of the Transaction, Jorgen Clausen will become the Vice Chairman of
the Issuer's board of directors. At the time that Klaus H. Murmann ceases to act
as Chairman of the Issuer's board of directors and, in any event, no later than
the fourth anniversary of the consummation of the Transaction, Jorgen Clausen
will become the Chairman of the Issuer's board of directors, holding such office
until, at the latest, March 31, 2008.
Further, pursuant to the Holding Company Agreement and subject to the
approval of 80% of the outstanding shares of Sauer Common Stock, the Certificate
of Incorporation of the Issuer will be amended to remove the classifications of
the Issuer's board of directors and allow for removal of directors without cause
by the holders of a majority of the outstanding shares of Sauer Common Stock.
Accordingly, each director would serve a one-year term. Also, pursuant to the
Holding Company Agreement, upon consummation of the Transaction, the Bylaws of
the Issuer will be amended to provide that certain material actions of the
Issuer's board of directors will require the approval of at least 80% of the
fully constituted board of directors.
(e) As described more fully in Item 3 and Item 4(a) above, upon
consummation of the Transaction and the Secondary Acquisition and in connection
with the termination of the Silent Partnership Agreement, the Issuer is expected
to issue shares of Sauer Common Stock. Additionally, because the number of
shares of Sauer Common Stock to be issued to the Holding Company in connection
with the Transaction, when added to the number of shares of Sauer Common Stock
currently outstanding, would exceed the 45,000,000 shares of Sauer Common
Page 21 of 38
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Stock currently authorized, concurrent with the consummation of the Transaction,
the Issuer is expected to amend its Certificate of Incorporation to increase the
number of authorized shares of Sauer Common Stock by 30,000,000 from 45,000,000
to 75,000,000.
(f) Not applicable.
(g) Except as set forth in Item 4(d) above, not
applicable.
(h)-(i) Not applicable.
(j) Except as set forth above, neither the Reporting Persons nor
the Danfoss Control Persons currently have any plans or proposals which relate
to or would result in any of the actions described in, or similar to, the
actions enumerated in Items 4(a) - (j) of Schedule 13D (although the Reporting
Persons and the Danfoss Control Persons reserve the right to develop such
plans).
Item 5. Interest in Securities of the Issuer
1. The Holding Company
(a) The Holding Company may be deemed to beneficially own
15,261,500 shares of Sauer Common Stock, excluding 16,149,812 shares of Sauer
Common Stock expected to be received in connection with the Transaction,
1,912,500 shares of Sauer Common Stock expected to be received by Murmann GmbH
in connection with the termination of the Silent Partnership Agreement and 1,000
shares of Sauer Common Stock to be contributed by Sauer GmbH prior to
consummation of the Transaction in exchange for the Holding Company's common
stock. Such ownership represents 55.5% of the outstanding shares of the Issuer.
The Holding Company disclaims beneficial ownership of 4,900,000 shares of Sauer
Common Stock beneficially owned by Murmann KG. Other than as indicated in
Schedule I, to the knowledge of the Holding Company, no shares of Sauer Common
Stock are beneficially owned by any of the persons listed on Schedule I
associated with the Holding Company.
(b) Number of shares as to which the Holding Company has:
(i) sole power to vote or to direct the vote: 10,361,500
(ii) shared power to vote or to direct the vote: 4,900,000
(The Holding Company disclaims beneficial ownership
of all of these shares.)
(iii) sole power to dispose or to direct the disposition of: 0
(iv) shared power to dispose or direct the disposition of:
4,900,000
(The Holding Company disclaims beneficial ownership
of all of these shares.)
(c) Except for the transactions described in this Schedule 13D,
no transactions in securities of the Issuer have been effected during the last
60 days by the Holding Company or any of the persons named on Schedule I related
to the Holding Company.
(d)-(e) Not applicable.
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2. Klaus H. Murmann
(a) Klaus H. Murmann may be deemed to beneficially own
15,690,725 shares of Sauer Common Stock. Such ownership represents 57.1% of the
outstanding shares of the Issuer. Klaus H. Murmann disclaims beneficial
ownership of 15,562,500 shares of Sauer Common Stock, of which (i) 4,900,000 are
beneficially owned by Murmann KG, (ii) 10,362,500 are beneficially owned by
Sauer GmbH (10,361,500 of which may be deemed beneficially owned by the Holding
Company) and (iii) 300,000 are beneficially owned by EMF. Klaus H. Murmann is a
general partner of Murmann KG. Murmann GmbH is a wholly owned subsidiary of
Murmann KG and Sauer GmbH and EMF are wholly owned subsidiaries of Murmann GmbH.
(b) Number of shares as to which Klaus H. Murmann has:
(i) sole power to vote or to direct the vote: 128,225
(ii) shared power to vote or to direct the vote: 15,562,500
(Klaus H. Murmann disclaims beneficial ownership of all of
these shares.)
(iii) sole power to dispose or to direct the disposition of:
128,225
(iv) shared power to dispose or to direct the disposition of:
15,562,500
(Klaus H. Murmann disclaims beneficial ownership of
all of these shares.)
(c) Except for the transactions described in this Schedule 13D,
no transactions in securities of the Issuer have been effected during the last
60 days by Klaus H. Murmann.
(d)-(e) Not applicable.
3. Murmann KG
(a) Murmann KG may be deemed to beneficially own 15,562,500
shares of Sauer Common Stock. Such ownership represents 56.6% of the outstanding
shares of the Issuer. Murmann KG disclaims beneficial ownership of 10,662,500
shares of Sauer Common Stock, of which (i) 10,362,500 are beneficially owned by
Sauer GmbH (10,361,500 of which may be deemed beneficially owned by the Holding
Company) and (ii) 300,000 are beneficially owned by EMF. Murmann GmbH is a
wholly owned subsidiary of Murmann KG. EMF and Sauer GmbH are wholly owned
subsidiaries of Murmann GmbH. Other than as indicated in Schedule I, to the
knowledge of Murmann KG, no shares of Sauer Common Stock are beneficially owned
by any of the persons listed on Schedule I associated with Murmann KG.
(b) Number of shares as to which Murmann KG has:
(i) sole power to vote or to direct the vote: 0
(ii) shared power to vote or to direct the vote: 15,562,500
(Murmann KG disclaims beneficial ownership of
10,662,500 of these shares.)
(iii) sole power to dispose or to direct the disposition of:
0
(iv) shared power to dispose or to direct the disposition
of: 15,562,500
(Murmann KG disclaims beneficial ownership of
10,662,500 of these shares.)
(c) Except for the transactions described in this Schedule 13D,
no transactions in securities of the Issuer have been effected during the last
60 days by Murmann KG or any of the persons named on Schedule I associated with
Murmann KG.
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(d)-(e) Not applicable.
4. Murmann GmbH
(a) Murmann GmbH may be deemed to beneficially own 10,662,500
shares of Sauer Common Stock. Such ownership represents 38.8% of the outstanding
shares of the Issuer. Murmann GmbH disclaims beneficial ownership of 10,662,500
shares of which (i) 10,362,500 are beneficially owned by Sauer GmbH (10,361,500
of which may be deemed beneficially owned by the Holding Company and (ii)
300,000 are beneficially owned by EMF. Other than as indicated in Schedule I, to
the knowledge of Murmann GmbH, no shares of Sauer Common Stock are beneficially
owned by any of the persons listed on Schedule I associated with Murmann GmbH.
(b) Number of shares as to which Murmann GmbH has:
(i) sole power to vote or to direct the vote: 0
(ii) shared power to vote or to direct the vote: 10,662,500
(Murmann GmbH disclaims beneficial ownership of all of
these shares.)
(iii) sole power to dispose or to direct the disposition
of: 0
(iv) shared power to dispose or to direct the disposition
of: 10,662,500
(Murmann GmbH disclaims beneficial ownership of all
of these shares.)
(c) Except for the transaction described in this Schedule 13D,
no transactions in securities of the Issuer have been effected during the last
60 days by Murmann GmbH or any of the persons named on Schedule I associated
with Murmann GmbH.
(d)-(e) Not applicable.
5. Sauer GmbH
(a) Sauer GmbH beneficially owns 10,362,500 shares of Sauer
Common Stock, of which 10,361,500 may be deemed beneficially owned by the
Holding Company. Such ownership represents approximately 37.7% of the
outstanding shares of the Issuer. Other than as indicated in Schedule I, to the
knowledge of Sauer GmbH, no shares of Sauer Common Stock are beneficially owned
by any of the persons listed on Schedule I associated with Sauer GmbH.
(b) Number of shares as to which Sauer GmbH has:
(i) sole power to vote or to direct the vote: 1,000
(ii) shared power to vote or to direct the vote: 0
(iii) sole power to dispose or to direct the disposition of:
10,362,500
(iv) shared power to dispose or to direct the disposition
of: 0
(c) Except for the transaction described in this Schedule 13D,
no transactions in securities of the Issuer have been effected during the last
60 days by Sauer GmbH or any of the persons named on Schedule I associated with
Sauer GmbH.
(d)-(e) Not applicable.
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6. EMF
(a) EMF beneficially owns 300,000 shares of Sauer Common Stock.
Such ownership represents approximately 1.1% of the outstanding shares of the
Issuer. Other than as indicated in Schedule I, to the knowledge of EMF, no
shares of Sauer Common Stock are beneficially owned by any of the persons listed
on Schedule I associated with EMF.
(b) Number of shares as to which EMF has:
(i) sole power to vote or to direct the vote: 300,000
(ii) shared power to vote or to direct the vote: 0
(iii) sole power to dispose or to direct the disposition of:
300,000
(iv) shared power to dispose or to direct the disposition
of: 0
(c) Except for the transaction described in this Schedule 13D,
no transactions in securities of the Issuer have been effected during the last
60 days by EMF or any of the persons named on Schedule I associated with EMF.
(d)-(e) Not applicable.
7. Hannelore Murmann
(a) Hannelore Murmann may be deemed to beneficially own
15,829,600 shares of Sauer Common Stock. Such ownership represents 57.6% of the
outstanding shares of the Issuer. Hannelore Murmann disclaims beneficial
ownership of 15,562,500 shares of Sauer Common Stock, of which (i) 4,900,000 are
beneficially owned by Murmann KG, (ii) 10,362,500 are beneficially owned by
Sauer GmbH (10,361,500 of which may be deemed beneficially owned by the Holding
Company) and (iii) 300,000 are beneficially owned by EMF.
(b) Number of shares as to which Hannelore Murmann has:
(i) sole power to vote or to direct the vote: 267,100
(ii) shared power to vote or to direct the vote: 15,562,500
(Hannelore Murmann disclaims beneficial ownership of
all of these shares.)
(iii) sole power to dispose or to direct the disposition of:
267,100
(iv) shared power to dispose or to direct the disposition of:
15,562,500
(Hannelore Murmann disclaims beneficial ownership of
all of these shares.)
(c) Except for the transaction described in this Schedule 13D, no
transactions in securities of the Issuer have been effected during the last 60
days by Hannelore Murmann.
(d)-(e) Not applicable.
8. Sven Murmann
(a) Sven Murmann may be deemed to beneficially own 15,563,500
shares of Sauer Common Stock. Such ownership represents 56.6% of the outstanding
shares of the Issuer. Sven Murmann disclaims beneficial ownership of 15,562,500
shares of Sauer Common Stock, of
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which (i) 4,900,000 are beneficially owned by Murmann KG, (ii) 10,362,500 are
beneficially owned by Sauer GmbH (10,361,500 of which may be deemed beneficially
owned by the Holding Company) and (iii) 300,000 are beneficially owned by EMF.
(b) Number of shares as to which Sven Murmann has:
(i) sole power to vote or to direct the vote: 1,000
(ii) shared power to vote or to direct the vote: 15,562,500
(Sven Murmann disclaims beneficial ownership of all of
these shares.)
(iii) sole power to dispose or to direct the disposition of:
1,000
(iv) shared power to dispose or to direct the disposition of:
15,562,500
(Sven Murmann disclaims beneficial ownership of all
of these shares.)
(c) Except for the transaction described in this Schedule 13D, no
transactions in securities of the Issuer have been effected during the last 60
days by Sven Murmann.
(d)-(e) Not applicable.
9. Nicola Keim
(a) Nicola Keim may be deemed to beneficially own 15,563,500
shares of Sauer Common Stock. Such ownership represents 56.6% of the outstanding
shares of the Issuer. Nicola Keim disclaims beneficial ownership of 15,562,500
shares of Sauer Common Stock, of which (i) 4,900,000 are beneficially owned by
Murmann KG, (ii) 10,362,500 are beneficially owned by Sauer GmbH (10,361,500 of
which may be deemed beneficially owned by the Holding Company) and (iii) 300,000
are beneficially owned by EMF.
(b) Number of shares as to which Nicola Keim has:
(i) sole power to vote or to direct the vote: 1,000
(ii) shared power to vote or to direct the vote: 15,562,500
(Nicola Keim disclaims beneficial ownership of all of
these shares.)
(iii) sole power to dispose or to direct the disposition of:
1,000
(iv) shared power to dispose or to direct the disposition of:
15,562,500
(Nicola Keim disclaims beneficial ownership of all of
these shares.)
(c) Except for the transaction described in this Schedule 13D,
no transactions in securities of the Issuer have been effected during the last
60 days by Nicola Keim.
(d)-(e) Not applicable.
10. Ulrike Murmann-Knuth
(a) Ulrike Murmann-Knuth may be deemed to beneficially own
15,562,500 shares of Sauer Common Stock. Such ownership represents 56.6% of the
outstanding shares of the Issuer. Ulrike Murmann-Knuth disclaims beneficial
ownership of all 15,562,500 shares of Sauer Common Stock, of which (i) 4,900,000
are beneficially owned by Murmann KG, (ii) 10,362,500 are beneficially owned by
Sauer GmbH (10,361,500 of which may be deemed beneficially owned by the Holding
Company) and (iii) 300,000 are beneficially owned by EMF.
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(b) Number of shares as to which Ulrike Murmann-Knuth has:
(i) sole power to vote or to direct the vote: 0
(ii) shared power to vote or to direct the vote: 15,562,500
(Ulrike Murmann-Knuth disclaims beneficial ownership
of all of these shares.)
(iii) sole power to dispose or to direct the disposition of: 0
(iv) shared power to dispose or to direct the disposition
of: 15,562,500
(Ulrike Murmann-Knuth disclaims beneficial ownership
of all of these shares.)
(c) Except for the transaction described in this Schedule 13D, no
transactions in securities of the Issuer have been effected during the last 60
days by Ulrike Murmann-Knuth.
(d)-(e) Not applicable.
11. Jan Murmann
(a) Jan Murmann may be deemed to beneficially own 15,562,500
shares of Sauer Common Stock. Such ownership represents 56.6% of the outstanding
shares of the Issuer. Jan Murmann disclaims beneficial ownership of all
15,562,500 shares of Sauer Common Stock, of which (i) 4,900,000 are beneficially
owned by Murmann KG, (ii) 10,362,500 are beneficially owned by Sauer GmbH
(10,361,500 of which may be deemed beneficially owned by the Holding Company)
and (iii) 300,000 are beneficially owned by EMF.
(b) Number of shares as to which Jan Murmann has:
(i) sole power to vote or to direct the vote: 0
(ii) shared power to vote or to direct the vote: 15,562,500
(Jan Murmann disclaims beneficial ownership of all of
these shares.)
(iii) sole power to dispose or to direct the disposition of: 0
(iv) shared power to dispose or to direct the disposition
of: 15,562,500
(Jan Murmann disclaims beneficial ownership of all of
these shares.)
(c) Except for the transaction described in this Schedule 13D, no
transactions in securities of the Issuer have been effected during the last 60
days by Jan Murmann.
(d)-(e) Not applicable.
12. Anja Murmann
(a) Anja Murmann may be deemed to beneficially own 15,562,500
shares of Sauer Common Stock. Such ownership represents 56.6% of the outstanding
shares of the Issuer. Anja Murmann disclaims beneficial ownership of all
15,562,500 shares of Sauer Common Stock, of which (i) 4,900,000 are beneficially
owned by Murmann KG, (ii) 10,362,500 are beneficially owned by Sauer GmbH
(10,361,500 of which may be deemed beneficially owned by the Holding Company)
and (iii) 300,000 are beneficially owned by EMF.
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(b) Number of shares as to which Anja Murmann has:
(i) sole power to vote or to direct the vote: 0
(ii) shared power to vote or to direct the vote: 15,562,500
(Anja Murmann disclaims beneficial ownership of all of
these shares.)
(iii) sole power to dispose or to direct the disposition of: 0
(iv) shared power to dispose or to direct the disposition
of: 15,562,500
(Anja Murmann disclaims beneficial ownership of all
of these shares.)
(c) Except for the transaction described in this Schedule 13D, no
transactions in securities of the Issuer have been effected during the last 60
days by Anja Murmann.
(d)-(e) Not applicable.
13. Christa Zoellner
(a) Christa Zoellner may be deemed to beneficially own
15,562,500 shares of Sauer Common Stock. Such ownership represents 56.6% of the
outstanding shares of the Issuer. Christa Zoellner disclaims beneficial
ownership of all 15,562,500 shares of Sauer Common Stock, of which (i) 4,900,000
are beneficially owned by Murmann KG, (ii) 10,362,500 are beneficially owned by
Sauer GmbH (10,361,500 of which may be deemed beneficially owned by the Holding
Company) and (iii) 300,000 are beneficially owned by EMF.
(b) Number of shares as to which Christa Zoellner has:
(i) sole power to vote or to direct the vote: 0
(ii) shared power to vote or to direct the vote: 15,562,500
(Christa Zoellner disclaims beneficial ownership of
all of these shares.)
(iii) sole power to dispose or to direct the disposition of: 0
(iv) shared power to dispose or to direct the disposition
of: 15,562,500
(Christa Zoellner disclaims beneficial ownership of
all of these shares.)
(c) Except for the transaction described in this Schedule 13D, no
transactions in securities of the Issuer have been effected during the last 60
days by Christa Zoellner
(d)-(e) Not applicable.
14. Britta Zoellner
(a) Britta Zoellner may be deemed to beneficially own 15,562,500
shares of Sauer Common Stock. Such ownership represents 56.6% of the outstanding
shares of the Issuer. Britta Zoellner disclaims beneficial ownership of all
15,562,500 shares of Sauer Common Stock, of which (i) 4,900,000 are beneficially
owned by Murmann KG, (ii) 10,362,500 are beneficially owned by Sauer GmbH
(10,361,500 of which may be deemed beneficially owned by the Holding Company)
and (iii) 300,000 are beneficially owned by EMF.
(b) Number of shares as to which Britta Zoellner has:
(i) sole power to vote or to direct the vote: 0
(ii) shared power to vote or to direct the vote: 15,562,500
(Britta Zoellner disclaims beneficial ownership of
all of these shares.)
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(iii) sole power to dispose or to direct the disposition of: 0
(iv) shared power to dispose or to direct the disposition
of: 15,562,500
(Britta Zoellner disclaims beneficial ownership of
all of these shares.)
(c) Except for the transaction described in this Schedule 13D, no
transactions in securities of the Issuer have been effected during the last 60
days by Britta Zoellner.
(d)-(e) Not applicable.
15. Danfoss
(a) Danfoss may be deemed to beneficially own 15,261,500 shares
of Sauer Common Stock, representing approximately 55.5% of the outstanding
shares of the Issuer. Danfoss disclaims beneficial ownership of all 15,261,500
shares of Sauer Common Stock. Other than as indicated in Schedule I, to the
knowledge of Danfoss, no shares of Sauer Common Stock are beneficially owned by
any of the persons listed on Schedule I associated with Danfoss.
Other than as described herein or indicated in Schedule II, to the
knowledge of Danfoss, no shares of Sauer Common Stock are beneficially owned by
any persons listed on Schedule II associated with the Danfoss Control Entity.
Jorgen Clausen, President, Chief Executive Officer and a director of Danfoss,
beneficially owns 58,000 shares of Sauer Common Stock, representing
approximately 0.2% of the outstanding shares of Sauer Common Stock. Jorgen
Clausen has the sole power to vote, direct the vote, dispose or direct the
disposition of such shares of Sauer Common Stock. Jorgen Clausen does not share
the power to vote, direct the vote, dispose or direct the disposition of such
shares of Sauer Common Stock.
(b) Number of shares to which Danfoss has:
(i) sole power to vote or to direct the vote: 0
(ii) shared power to vote or to direct the vote: 15,261,500
(Danfoss disclaims beneficial ownership of all of these
shares.)
(iii) sole power to dispose or to direct the disposition of: 0
(iv) shared power to dispose or to direct the disposition
of: 15,261,500
(Danfoss disclaims beneficial ownership of all of
these shares.)
(c) Except for the transaction described in this Schedule 13D, no
transactions in securities of the Issuer have been effected during the last 60
days by Danfoss, any of the persons named on Schedule I associated with
Danfoss or any of the persons named on Schedule II associated with the Danfoss
Control Entity.
(d)-(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Other than the Stock Exchange Agreement and the Holding Company
Agreement, to the best knowledge of the Reporting Persons, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the persons named in Item 2 and between such persons and any person with
respect to any securities of the Issuer, including but not limited to transfer
or voting of any of the securities, finder's fees, joint ventures, loan or
option arrangements, put or calls, guarantors of profit, division of profit or
loss or the giving or withholding of proxies.
Page 29 of 38
<PAGE>
Item 7. Material to be Filed as Exhibits
Exhibit A - Joint Filing Agreement pursuant to Rule 13d-1(k)(1)
Exhibit B - Stock Exchange Agreement, dated as of January 22, 2000, among
Danfoss Murmann Holding A/S, Sauer Inc., Danfoss A/S and
K. Murmann
Verwaltungsgesellschaft mbH*
Exhibit C - Joint Venture Agreement, dated
January 22, 2000, among K. Murmann
Verwaltungsgesellschaft mbH, Danfoss A/S and Danfoss
Murmann Holding A/S
Exhibit D - Amendment to Joint Venture Agreement, dated February 22, 2000,
among K. Murmann Verwaltungsgesellschaft mbH, Danfoss A/S and
Danfoss Murmann Holding A/S
- --------------------------
* Incorporated herein by reference to the Schedule 14A of the Issuer
filed with the Securities and Exchange Commission on February 22, 2000.
Page 30 of 38
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Dated: March 3, 2000 Danfoss Murmann Holding A/S
By:/s/ Hannelore Murmann
Name: Hannelore Murmann
Title: Director
Dated: March 3, 2000 /s/ Klaus H. Murmann
----------------------------------
Klaus H. Murmann
Dated: March 3, 2000 Klaus Murmann & Co. KG
By: /s/ Klaus H. Murmann
------------------------------
Name: Klaus H. Murmann
Title: General Partner
Dated: March 3, 2000 K. Murmann Verwaltungsgeselleschaft mbH
By: /s/ Klaus H. Murmann
------------------------------
Name: Klaus H. Murmann
Title: Director
Dated: March 3, 2000 Sauer GmbH
By: /s/ Klaus H. Murmann
------------------------------
Name: Klaus H. Murmann
Title: Director
Dated: March 3, 2000 EMF Europaische Marketing
und Finanzmanagement AG
By: /s/ Klaus H. Murmann
------------------------------
Name: Klaus H. Murmann
Title: Director
Dated: March 3, 2000 /s/ Hannelore Murmann
--------------------------------------
Hannelore Murmann
Page 31 of 38
<PAGE>
Dated: March 3, 2000 By: *
-------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Sven Murmann
Dated: March 3, 2000 By: *
-------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Nicola Keim
Dated: March 3, 2000 By: *
-------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Ulrike Murmann-Knuth
Dated: March 3, 2000 By: *
-------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Jan Murmann
Dated: March 3, 2000 By: *
-------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Anja Murmann
Dated: March 3, 2000 By: *
-------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Christa Zoellner
Dated: March 3, 2000 By: *
-------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Britta Zoellner
Page 32 of 38
<PAGE>
* The Powers of Attorney signed by the filers above for whom Klaus H.
Murmann has signed as Attorney-in-Fact were previously filed with the Schedule
13G filed with the Securities and Exchange Commission on February 15, 2000 and
are hereby incorporated by reference herein.
Page 33 of 38
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Dated: March 3, 2000 Danfoss A/S
By: /s/ Ole Steen Andersen
----------------------------------
Name: Ole Steen Andersen
Title: Executive Vice President
Page 34 of 38
<PAGE>
Schedule I
Directors and Executive Officers
As of March 3, 2000
<TABLE>
<CAPTION>
Corporation: Danfoss Murmann Holding A/S
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares of Sauer Inc.
Supervisory Board and Citizenship Address Occupation Common Stock
Murmann, Dr. Klaus H. Krokamp 35, Chairman and Chief *
Federal Republic of Germany 24539 Neumunster Executive Officer of
Germany Sauer Inc.
Murmann, Dr. Sven Krokamp 35, Director *
Federal Republic of Germany 24539 Neumunster
Germany
Management Board and Citizenship Address Occupation
Murmann, Dr. Hannelore Bismarckallee 24 Not employed *
Federal Republic of Germany 24105 Kiel, Germany
Partnership: Klaus Murmann & Co. KG.
- -----------------------------------------------------------------------------------------------------------------------------------
Shares of Sauer Inc.
Directors and Citizenship Address Occupation Common Stock
Murmann, Dr. Klaus H. See information above See information above *
Murmann, Dr. Hannelore See information above See information above *
Officers and Citizenship Address Occupation
Barlage, Dr. Tonio P. Krokamp 35, 24539 President Sauer 300,000 Common Shares;
Federal Republic of Germany Neumunster, Germany Inc./Accountant Dr. Maria Barlage, the
spouse of Dr. Tonio
Barlage owns 250,000
Common Shares
Hoffrichter, Jurgen Krokamp 35, 24539 Accountant 2000 Common Shares
Federal Republic of Germany Neumunster, Germany
Langrick, John N. Fuhlendorfer Weg 30 Director of Corporate 300 Common Shares,
United Kingdom 24576 Bad Bramstedt Finance- Sauer - 7,500 Restricted Stock
Sundstrand GmbH & and 5,000 Restricted
Co./Chartered Stock Units
Accountant
Renders, Dirk Krokamp 35, 24539 Procurist 100 Common Shares
Federal Republic of Germany Neumunster, Germany
</TABLE>
Page 35 of 38
<PAGE>
<TABLE>
<CAPTION>
Corporation: K. Murmann Verwaltungsgesellschaft mbH
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares of Sauer Inc
Directors and Citizenship Address Occupation Common Stock
Murmann, Dr. Klaus H. See information above See information above *
Murmann, Jan Krokamp 35 Director *
24539 Neumunster
Germany
Murmann, Dr. Sven See information above See information above *
Barlage, Dr. Tonio P. See information above See information above See information above
Officers and Citizenship Address Occupation
Hoffrichter, Jurgen See information above See information above See information above
Langrick, John N. See information above See information above See information above
Renders, Dirk See information above See information above See information above
Corporation: Sauer GmbH
- -------------------------------------------------------------------------------------------------------------------------
Shares of Sauer Inc.
Directors and Citizenship Address Occupation Common Stock
Murmann, Dr. Klaus H. See information above See information above *
Barlage, Dr. Tonio P. See information above See information above See information above
Officers and Citizenship Address Occupation
Hoffrichter, Jurgen See information above See information above See information above
Langrick, John N. See information above See information above See information above
Renders, Dirk See information above See information above See information above
Corporation: EMF Marketing and Finanzmanagement
- -----------------------------------------------------------------------------------------------------------------------------------
Shares of Sauer Inc.
Directors and Citizenship Address Occupation Common Stock
Murmann, Dr. Klaus H. See information above See information above *
Murmann, Dr. Sven See information above See information above *
Officers and Citizenship Address Occupation
Langrick, John N. See information above See information above See information above
</TABLE>
Page 36 of 38
<PAGE>
<TABLE>
<CAPTION>
Corporation: Danfoss A/S
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares of Sauer Inc.
Directors and Citizenship Address Occupation Common Stock
Birger Riisager Vigerslev Alle 77 President None
Kingdom of Denmark 2500 Valby Denmark
Tom Kahler DK-2640 Hedehusene President and Chief None
Kingdom of Denmark Denmark Executive Officer
Henrik E. Nyegaard Attemoseveg 15 Engineer None
Kingdom of Denmark 1840 Holte
Denmark
Peter M. Clausen DK-6430 Nordborg Vice President None
Kingdom of Denmark Denmark
Jorgen M. Clausen DK-6430 Nordborg President and Chief 58,000 Common Shares
Kingdom of Denmark Denmark Executive Officer
Bente Skibsted DK-6430 Nordborg Director None
Kingdom of Denmark Denmark
Henning Wendelboe DK-6430 Nordborg Toolmaker None
Kingdom of Denmark Denmark
Bent M. Christensen DK-6430 Nordborg Blue Collar None
Kingdom of Denmark Denmark
Niels Chr. Jorgensen DK-6430 Nordborg Toolmaker None
Kingdom of Denmark Denmark
Shares of Sauer Inc.
Exec. Committee and Citizenship Address Occupation Common Stock
Jorgen M. Clausen See information above See information above See information above
Hans Kirk DK-6430 Nordborg Chief Operating Officer None
Kingdom of Denmark Denmark
Ole Steen Andersen DK-6430 Nordborg Executive Vice None
Kingdom of Denmark Denmark President
Peter Hansen-Damm DK-6430 Nordborg Chief Financial Officer None
Kingdom of Denmark Denmark
</TABLE>
Page 37 of 38
<PAGE>
Schedule II
Directors and Executive Officers
As of March 3, 2000
<TABLE>
<CAPTION>
Corporation: Bitten & Mads Clausens Fond
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares of Sauer Inc.
Directors and Citizenship Address Occupation Common Stock
Birger Riisager See information in See information in See information in
Kingdom of Denmark Schedule I Schedule I Schedule I
Tom Kahler See information in See information in See information in
Kingdom of Denmark Schedule I Schedule I Schedule I
Henrik E. Nyegaard See information in See information in See information in
Kingdom of Denmark Schedule I Schedule I Schedule I
Peter M. Clausen See information in See information in See information in
Kingdom of Denmark Schedule I Schedule I Schedule I
Jorgen M. Clausen See information in See information in See information in
Kingdom of Denmark Schedule I Schedule I Schedule I
Bente Skibsted See information in See information in See information in
Kingdom of Denmark Schedule I Schedule I Schedule I
Henning Wendelboe See information in See information in See information in
Kingdom of Denmark Schedule I Schedule I Schedule I
Bent M. Christensen See information in See information in See information in
Kingdom of Denmark Schedule I Schedule I Schedule I
Arno Knopfli Manager DK-6430 Nordborg None
Kingdom of Denmark Denmark
</TABLE>
Page 38 of 38
<PAGE>
EXHIBIT A
JOINT FILING AGREEMENT
The undersigned hereby agree that the Statement on Schedule 13D, dated
March 3, 2000 ("Schedule 13D"), with respect to the Common Stock, par value $.01
per share, of Sauer Inc. is, and any amendments thereto executed by each of us
shall be, filed on behalf of each of us pursuant to and in accordance with the
provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934, as
amended, and that this Agreement shall be included as an Exhibit to the Schedule
13D and each such amendment. Each of the undersigned agrees to be responsible
for the timely filing of the Schedule 13D and any amendments thereto, and for
the completeness and accuracy of the information concerning itself contained
therein. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument
IN WITNESS WHEREOF, the undersigned have executed this Agreement this
3rd day of March, 2000.
Danfoss Murmann Holding A/S
By: /s/ Hannelore Murmann
-----------------------------------
Name: Hannelore Murmann
Title: Director
/s/ Klaus H. Murmann
---------------------------------------
Klaus H. Murmann
Klaus Murmann & Co. KG
By: /s/ Klaus H. Murmann
-----------------------------------
Name: Klaus H. Murmann
Title: General Partner
K. Murmann Verwaltungsgesellschaft
mit beschrankter Haftung
By: /s/ Klaus H. Murmann
-----------------------------------
Name: Klaus H. Murmann
Title: Director
Sauer GmbH
By: /s/ Klaus H. Murmann
-----------------------------------
Name: Klaus H. Murmann
Title: Director
<PAGE>
EMF Europaische Marketing
und Finanzmanagement AG
By: /s/ Klaus H. Murmann
------------------------------------
Name: Klaus H. Murmann
Title: Director
/s/ Hannelore Murmann
----------------------------------------
Hannelore Murmann
By: *
------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Sven Murmann
By: *
------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Nicola Keim
By: *
------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Ulrike Murmann-Knuth
By: *
------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Jan Murmann
By: *
------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
<PAGE>
Anja Murmann
By: *
------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Christa Zoellner
By: *
------------------------------------
Name: Klaus H. Murmann
Title: Attorney-in-fact
Britta Zoellner
Danfoss A/S
By: /s/ J. Clausen
------------------------------------
Name: Jorgen Clausen
Title: CEO
* The Powers of Attorney signed by the parties to this Joint Filing
Agreement for whom Klaus H. Murmann has signed as Attorney-in-Fact were
previously filed with the Schedule 13G filed with the Securities and Exchange
Commission on February 15, 2000 and are hereby incorporated by reference herein.
<PAGE>
EXHIBIT C
JOINT VENTURE AGREEMENT
between
K. MURMANN Verwaltungsgesellschaft mbH, Kiel, Germany,
represented by Klaus H. Murmann,
- hereinafter referred to as "MURMANN" --
and
DANFOSS A/S, Nordborg, Denmark, represented by Jorgen Mads Clausen,
- hereinafter referred to as "DANFOSS" --
MURMANN and DANFOSS hereinafter each called "the Party" or also collectively
referred to as "the Parties" --
and
DANFOSS MURMANN Holding A/S, Nordborg, Denmark,
- hereinafter referred to as "Holding" --
Preamble
(a) MURMANN and related entities/persons control (directly or indirectly)
by majority stockholdership SAUER Inc., a Delaware corporation having
its headquarters in Ames, Iowa, USA (hereinafter referred to as "SAUER
Inc." or "the Company").
SAUER Inc. is active in the design, manufacture and sale of highly
engineered hydraulic systems and components for use primarily in
demanding applications of off-highway mobile equipment (hereinafter
referred to as "Mobile Hydraulics").
DANFOSS has -- inter alia -- also substantial activities in special
fields of the design, manufacture and sale of Mobile Hydraulics mainly
concentrated in the DANFOSS Fluid Power A/S, Nordborg, Denmark and the
DANFOSS Fluid Power Inc., Racine, Wisconsin, USA as further described
in the Stock Exchange Agreement (Appendix 1).
(b) Both, MURMANN and DANFOSS, have become convinced that a close
cooperation in the field of Mobile Hydraulics by way of combining the
respective activities of SAUER Inc. and DANFOSS will strongly improve
the competitive strength and would therefore be in the mutual interest
of SAUER Inc. and DANFOSS. The overall objective of such
1
<PAGE>
combination is to favour a growth and rationalisation strategy that
will position the combined business as an important player on the
markets with low costs, high quality and innovation will be a
substantial value driver compared with other solutions available.
(c) For this purpose, MURMANN and DANFOSS will concentrate the Mobile
Hydraulics Business of SAUER Inc. and DANFOSS by involving a new
corporation to be owned by the Parties, the Holding. The Holding will
hold the majority of SAUER Inc. ordinary common stock in direct
successorship of MURMANN's present majority position. To reach this
target MURMANN will contribute to Holding shares of SAUER Inc. ordinary
common stock and DANFOSS will contribute to Holding the DANFOSS Mobile
Hydraulics Business. The contribution from DANFOSS will be transferred
from Holding to SAUER Inc. against shares of SAUER Inc. ordinary common
stock newly to be issued to Holding according to the Stock Exchange
Agreement.
After the Closing Date as defined in the Stock Exchange Agreement, but before 31
December 2000, DANFOSS will further contribute its mobile hydraulics business
against shares in Holding in Holland, Belgium, Spain, Portugal, Switzerland,
Japan, Singapore (which also covers sales in ASEAN countries), Hong Kong, New
Zealand, Australia, Brazil (which also covers sales in South America) and Mexico
through Holding to SAUER Inc. The provisions of this Agreement, in particular
Articles 2 and 4, shall apply correspondingly. Furthermore, DANFOSS will after
the Closing Date on conditions described in the Stock Exchange Agreement
continue to act as a distributor for SAUER Inc. in Iceland, Russia, India and
South Africa.
SAUER Inc. will further on operate under the name "SAUER-DANFOSS Inc."
Now, therefore, in consideration of the premises and covenants set forth herein,
MURMANN and DANFOSS enter into this Joint Venture Agreement (hereinafter
referred to as "the Agreement") and hereby agree as follows:
A.
Formation of the Joint Venture
Article 1
Foundation of the Holding
MURMANN has acquired all shares of a corporation under Danish law with the name
Danfoss Murmann Holding A/S with a registered capital stock amounting to DK
500.000 and residing at Nordborg, Denmark. Danfoss Murmann Holding A/S shall
have 500,000 Class A shares and 26.512.312 Class B shares (such Class B shares
hereinafter referred to as "Shares") with the
2
<PAGE>
respective rights in connection therewith as stated in Holdings Articles of
Association (Appendix 4).
Article 2
Contributions of the Parties to the Holding
(a) The Parties shall make the following contributions in kind to the
Holding:
- MURMANN:
10.362.500 shares of SAUER Inc. ordinary common stock,
- DANFOSS:
the DANFOSS Mobile Hydraulics Business.
(b) By way of capital increase of the Holding, the Parties shall receive
Shares of the Holding in proportion to 10.362.500 (MURMANN) to the
number of SAUER Inc. ordinary common stock Holding has received as
compensation for the DANFOSS Mobile Hydraulics Business amounting to
16.149.812 (DANFOSS).
In the result, the parties receive for 1 (one) SAUER Inc. share (with a
nominal value of US-$ 0,01 each) 1 (one) Holding Share (with a nominal
value of DKK 1 each). The details of the contributions in kind are set
forth in the shareholders' resolution concerning the capital increase
based on MURMANN's contribution attached as draft hereto as Appendix 2
and in the shareholders' resolution based on the contribution of
DANFOSS attached as draft hereto as Appendix 3.
(c) DANFOSS will acquire 50% of the Class A shares amounting to DKK
500.000, which MURMANN has acquired according to Article 1 above, the
compensation being half of MURMANN's expenditures on acquiring the
Holding.
(d) The Parties agree to contribute additional shares of SAUER Inc.
ordinary common stock to Holding at an equal amount in case of capital
increase of SAUER Inc. by issuance of new shares of ordinary common
stock in order always to keep the majority position of the Holding
(more than 50%). As long as MURMANN has not contributed the number of
shares Holding has received as compensation for the DANFOSS Mobile
Hydraulics Business, first, before the equal commitment of both Parties
mentioned above, MURMANN shall contribute the missing shares to
maintain Holding's majority position with SAUER Inc.
3
<PAGE>
(e) MURMANN is entitled to contribute at any time additional shares of
SAUER Inc. ordinary common stock against new Shares of Holding at a
corresponding amount according to the provision of (b) above limited to
a 50% shareholdership in the Holding, however MURMANN is obligated on
or before December 31, 2003 to contribute and maintain ownership
thereafter of additional SAUER Inc. shares to Holding so his total
contribution to Holding of SAUER Inc. shares is minimum 25.1% of the
total issued SAUER Inc. shares calculated on a diluted basis.
(f) Each Party is entitled to withdraw at any time after December 31, 2003
shares of SAUER Inc. ordinary common stock against the return of Shares
of Holding, however each Party is obligated to keep at all times a
total contribution of minimum 25.1% of the total issued SAUER Inc.
shares calculated on a fully diluted basis. The Parties are further in
agreement to reduce the share capital of Holding, if it is necessary,
to provide for such withdrawal by one Party.
(g) One Holding Share shall always equal one SAUER Inc. share common stock.
This principle contains generally the formula for determining the
number of Shares of Holding which either Party shall receive or
contribute to Holding if such Party either contributes or withdraws
SAUER Inc. shares from Holding.
(h) MURMANN guarantees that the 6.812.500 shares owned by K. Murmann & Co.
KG and by MURMANN (conversion of silent partnership shares) will vote
together with Holding in any Shareholder/Board vote of SAUER Inc. The
above mentioned 6.812.500 shares shall not be transferred to a third
Party (outside the MURMANN group consisting of the K. Murmann & Co. KG
and its partners and MURMANN and its subsidiaries) without the prior
written consent of DANFOSS, such consent not to be unreasonably
withheld.
Article 3
Stock Exchange Agreement
(a) The Holding will contribute and transfer the acquired DANFOSS Mobile
Hydraulics Business to SAUER Inc. against 16,149.812 newly issued
shares of SAUER Inc. ordinary common stock.
(b) The contribution and assignment mentioned under subsection a) above is
set forth in detail in the Stock Exchange Agreement between SAUER Inc.
and the Holding.
4
<PAGE>
Article 4
Warranties of the Parties in connection with their contributions
(a) DANFOSS shall grant in favour of MURMANN and the Holding the identical
representations, warranties, covenants and indemnities regarding its
contribution as the Holding has to grant in favour of SAUER Inc.
according to the Stock Exchange Agreement, but shall only indemnify and
hold harmless SAUER Inc. from any such claims pursuant of the Stock
Exchange Agreement.
If a claim will be raised against Holding under the Stock Exchange
Agreement, DANFOSS shall hold harmless Holding from any such claims.
DANFOSS shall at its own expense choose and instruct counsel to defend
Holding in connection with such claims and shall decide the existence,
timing and details of any settlement by Holding of such claims as set
forth in the Stock Exchange Agreement.
(b) MURMANN and Holding shall grant in favour of DANFOSS with regard to the
compensation for the contribution of the DANFOSS Mobile Hydraulics
Business the representations, warranties, covenants and indemnities as
Sauer Inc. has to grant in favour of Holding according to the Stock
Exchange Agreement, except for claims under Section 9.04 and 905, which
Sauer Inc will pay to DANFOSS in full. As regards claims of DANFOSS the
Parties agree as follows:
Any claim of DANFOSS based on the representations, warranties,
covenants and indemnities described in (b) above is limited to the
amount equal to the percentage of shares of SAUER Inc. Holding has
received as compensation for the DANFOSS Mobile Hydraulics Business
contributed to SAUER Inc. at Closing.
In case of such claims of DANFOSS in accordance with the Stock Exchange
Agreement MURMANN agrees -- for the benefit of SAUER Inc. and its
minority shareholders -- to hold SAUER Inc. harmless from such claims
of Holding, and DANFOSS agrees that MURMANN can compensate DANFOSS by
paying DANFOSS 80% of the amount to be paid by MURMANN as described
above. SAUER Inc. has agreed that MURMANN is entitled at its own
expense to choose and instruct counsel to defend SAUER Inc. in
connection with such claims and shall decide the existence, timing and
the details of any settlement by SAUER Inc. of such claims.
MURMANN shall pay the amount to be paid by MURMANN as described above
by transferring shares of SAUER Inc. ordinary common stock to DANFOSS,
the valuation of the shares shall be the average price at which such
shares have been traded on the New York Stock Exchange during the last
two weeks before MURMANN'S indemnification is
5
<PAGE>
payable, or by transferring an equal number or Shares in Holding.
Instead of payment by shares, payment can also take place by cash.
The Parties agree that with the aforementioned 80% payment made by
MURMANN to DANFOSS, Holding is fully compensated for such claims
against SAUER Inc. and against MURMANN, and that DANFOSS is fully
compensated for such claims with respect to MURMANN's contribution to
the Holding and on payment to DANFOSS, Holding and DANFOSS shall give
full release regarding such claims.
The following example may clarify the agreement set forth above under
this subsection:
Damage with SAUER Inc.: US$ 8 million
Minus basket US$ 5 million
Relevant damage for indemnification: US$ 3 million
Participation of Holding on total SAUER Inc. outstanding stock received
as compensation for the contribution of the DANFOSS Mobile Hydraulics
Business:
1/3 (one third) of 3 million = US$ 1 million
MURMANN'S liability to pay to DANFOSS: 80% of US$ 1 million = US$
800.000
(In the above example Holding has received as compensation 1/3 of the
shares)
(c) Should a claim arise under a) or b) above, both Parties shall cause on
one hand SAUER Inc. and its subsidiaries and on the other hand DANFOSS
Fluid Power A/S and its subsidiaries and DANFOSS Fluid Power Inc. to
make full disclosure to the other Party in connection with such claims
consistent with litigation discovery procedure in the USA.
(d) MURMANN or DANFOSS shall in no event be obligated to indemnify twice
the same damage under the Stock Exchange Agreement and this Agreement.
This Agreement shall not expand the Parties' liability under the Stock
Exchange Agreement.
(e) Both Parties have been taken external tax advise on the tax conditions
of the Holding and neither Party has been granting the other Party any
warranty for present or future tax conditions of the Holding. This
shall, however, not affect the Parties' rights and obligations
regarding tax matters under the Stock Exchange Agreement.
6
<PAGE>
B.
Cooperation of the Parties in order to organise
the administration and management
of the Holding
Article 5
Holding Company
(a) The Parties shall agree on the Articles of Association and the Rules of
Procedure, the draft of which being attached hereto Appendix 4 and 5.
(b) The Parties agree that irrespectively of the percentages of their
Shares in Holding they have equal vote. It is agreed between DANFOSS
and MURMANN that DANFOSS and MURMANN will abstain from voting the
difference between MURMANN's and DANFOSS' shares in the Holding.
(c) This Agreement shall extend to any and all stock in the Holding which
the Parties currently own or subsequently acquire. The transfer or
pledge of any stock in the Holding to third Parties shall be subject to
the prior written approval of all Parties. The share certificates shall
bear a legend to this effect and any attempted transfer or pledge in
violation of this subparagraph shall be null and void. The foregoing
shall be reflected in Appendix 4.
Article 6
Supervisory Board and Management Board of the Holding
(a) The Supervisory Board shall have six members. Each Party shall nominate
three candidates and the Parties agree to vote in shareholders'
meetings in order to achieve that the nominated candidates shall be
duly appointed as members of the Supervisory Board. The same applies in
the event the nominating Party requests the removal of his nominee
candidate member of the Supervisory Board and the election of a new
member substituting the removed member.
The chairman of the Supervisory Board shall be Klaus H. Murmann for the
period, he acts as Chairman of the Board of SAUER Inc., and J.M.
Clausen for the period, he acts as Chairman of the Board of SAUER Inc.
(see Art. 9 below). Thereafter the chairmanship shall at an annual
basis rotate between DANFOSS and MURMANN. The Parties agree
7
<PAGE>
to use their best efforts to ensure that the members of the Supervisory
Board shall vote and support the necessary board Resolutions to effect
this result.
(b) The Management Board of the Holding consists of two members. The
members of the Management Board are one member of the Supervisory Board
nominated by MURMANN and one member of the Supervisor Board nominated
by DANFOSS, to be appointed each by MURMANN respectively DANFOSS. The
Parties agree to use their best efforts that the members of the
Supervisory Board shall vote and support the necessary board
resolutions to effect this result.
(c) The Supervisory Board may issue general principles for the Management
Board with respect to the management of the Holding, especially
concerning the requirement of prior approval of the Supervisory Board
for certain transactions and the right of the Supervisory Board to give
instructions to the Management Board. These general principles may
become part of the Rules of Procedure set forth in Appendix 5. The
Parties agree to use their best efforts that the members of the
Supervisory Board shall Vote and support the necessary Board
resolutions in connection with the issuance of the aforementioned
general principles to effect this result.
(d) In case employees have to be represented as member of the Supervisory
Board the Parties agree not to vote together with such employee members
against the vote of the three members of the other Party.
8
<PAGE>
C.
Principles to be observed by the Management
of the Holding in its capacity as majority shareholder
of SAUER Inc. (to be renamed to SAUER-DANFOSS Inc.)
and by the Parties
Article 7
Commencement of the Parties to vote and act as shareholders of the Holding
in accordance with this Agreement and principally to support
the targets of this Agreement
(a) For the lifetime of this Agreement, MURMANN and DANFOSS agree to vote
and to use their best efforts to cause the members of the Supervisory
Board nominated by them to vote and support the necessary resolutions,
especially in connection with instructions to the Management Board, in
a manner fully consistent with the terms of this Agreement.
(b) The Parties further agree to take all steps and measures being
necessary or appropriate to enforce this Agreement. To the extent the
targets and results of this Agreement need to be implemented or
approved by SAUER Inc.'s Board of Directors, the Parties shall use
their best efforts to achieve the necessary board resolutions. For this
purpose, it is envisaged that the Management of the Holding and
representatives of MURMANN and DANFOSS shall have pre-board meetings in
order to seek common understanding on issues to be decided at the board
meetings of SAUER Inc.
(c) For the implementation of the terms and conditions set forth in this
Agreement, the Parties have agreed to change and amend the Restated
By-laws of SAUER Inc. and the Articles of Incorporation (Charter) of
SAUER Inc.
Article 8
Nomination of the members of the Board of Directors of SAUER Inc.
(a) The Board of Directors of SAUER Inc. (hereinafter also referred to as
"the Board") shall consist of 10 (ten) members (hereinafter referred to
as "Director/Directors") to be elected at Closing of the Stock Exchange
Agreement and thereafter by the annual official stockholders' meeting.
(b) A nominating committee of the Board established in accordance with the
changed and amended Restated By-laws of SAUER Inc., shall be
responsible for identifying and
9
<PAGE>
recommending the candidates to be elected as Directors of the Company.
MURMANN and DANFOSS hereby agree that each will take, or will cause to
be taken, all actions necessary to support the election of the Director
nominee of the other Party as member of the nominating committee.
(c) Each Party shall be entitled to recommend to the nominating committee 3
(three) candidates for Director who may or may not be associated or
affiliated with MURMANN or DANFOSS, as the case may be (hereinafter
referred to as "Insider/Insiders"). The candidates to be recommended
shall be the same persons as the members of the Supervisory Board of
the Holding nominated by MURMANN respectively, as the case may be, by
DANFOSS and elected correspondingly.
In case any Insider is removed or otherwise ceases to serve as a
Director for whatever reason, MURMANN or DANFOSS, as the case may be,
who had originally recommended such Insider shall be entitled to
recommend a successor, and MURMANN and DANFOSS hereby agree that each
will take, or will cause to be taken, all actions necessary to support
the election of such successor Director. The Parties shall undertake
all formal steps necessary to achieve the aforementioned results.
(d) Each Party shall further be entitled to recommend to the nominating
committee 2 (two) more candidates for Director. One of the two to be
nominated by MURMANN shall be the first Chief Executive Officer and
President of the Company according to Art. 10 below. After such first
Chief Executive Officer and President of the Company ceases to serve in
such capacities, the Board of Directors shall choose a successor, and
MURMANN shall nominate a second independent director in place of the
individual who was also the first Chief Executive Officer and
President.
The other 3 (three) candidates shall be completely independent from and
not in any way associated with either MURMANN or DANFOSS (hereinafter
referred to as "Independent/Independents"). In case an Independent
ceases to serve as a Director for what ever reasons Art. 8 (c) third
sentence shall apply correspondingly.
Article 9
Chairman and Vice Chairman of SAUER Inc.
(a) For the period starting as of April 3, 2000 and ending on April 3, 2003
(respectively on the date of the then following Board meeting) Klaus H.
Murmann shall be the chairman and J.M. Clausen shall be the vice
chairman of the Board (hereinafter referred to as "Chairman" and "Vice
Chairman").
10
<PAGE>
Latest on April 3, 2002, Klaus H. Murmann has to declare if he wants to
extend his period as Chairman for another 2 years' period until April
3, 2004 (respectively on the date of the then following Board meeting).
If he decides so, J.M. Clausen continues as Vice Chairman. If Klaus H.
Murmann ceases to be a member of the Board of Directors or refuses to
be the Chairman of the Board of Directors prior to or on April 3, 2002
(respectively on the date of the then following Board meeting), J.M.
Clausen shall become the Chairman of the Board of Directors until April
3, 2004 (respectively on the date of the then following Board meeting),
and MURMANN may for the same period appoint a Director as Vice
Chairman, who may be part of the Murmann family or not. If, however,
Klaus H. Murmann ceases to be a member of the Board of Directors or
refuses to be the Chairman of the Board of Directors after April 3,
2002, but prior to or on April 3, 2004 (respectively on the date of the
then following Board meeting), J.M. Clausen shall become the Chairman
of the Board of Directors until April 3, 2008 (respectively on the date
of the then following Board meeting), and MURMANN may for the same
period appoint a Director as Vice Chairman, who may be part of the
Murmann family or not. In the event J.M. Clausen ceases to be a member
of the Board or refuses to be Vice Chairman of the Board during the
time period Klaus H. Murmann is still Chairman, DANFOSS may appoint any
other Director as Vice Chairman of the Board.
(b) In the event that J.M. Clausen does not, for any reason whatever,
become or continue as Chairman, MURMANN agrees to use its best efforts
to either cause the Vice Chairman to resign or cause the Board to
remove the Vice Chairman. The Board shall thereafter, in its sole
discretion, fill the vacancies in both offices. The same applies after
the expiration of the period of time J.M. Clausen serves as Chairman
according to subsection a) above.
(c) The Parties agree that the Vice Chairman shall have the same access to,
and receive the information concerning the Company as the Chairman is
entitled to receive in his position as Chairman and if this is the case
as an officer of the Company. Additionally, the Parties hereby agree to
use their best efforts to cause the Chairman, the Vice Chairman and
each member of the Board to be given full and complete copies of all
information regarding the Company to the Holding that it may from time
to time request.
If either Klaus H. Murmann or J.M. Clausen is the Chairman, the Parties
agree to take or cause to be taken, all actions necessary to secure all
Insiders access to the same information as described above.
(d) All present and future members of the board of SAUER DANFOSS Inc. will
only serve until they reach the age of 70. After having reached this
age level they cannot be re-elected and -- in case their term does
expire later -- they will resign from the Board at the annual meeting
following their birthday on which they turn 70 subject to the following
exception with respect to Klaus H. Murmann:
11
<PAGE>
Klaus H. Murmann will serve as Chairman for the period set forth under
(a) above. He will remain all period an officer of SAUER Inc. After
this period he will be entitled to serve for 2 years as Vice Chairman
of the Board of SAUER-DANFOSS Inc. without being an officer. After that
period Klaus Murmann shall serve as honorary chairman of SAUER-DANFOSS
Inc. The honorary chairman may attend board meetings but has no vote.
Article 10
Chief Executive Officer and President of SAUER Inc.
The Parties hereby agree that the office of the Chief Executive Officer and the
office of the President shall both be filled by the same person (hereinafter
referred to as the "Chief Executive Officer and President"). MURMANN has
announced its intention to nominate an individual as the first Chief Executive
Officer and President of the Company to be nominated pursuant to Art. 8 (d)
above and DANFOSS has agreed with such choice.
Article 11
Basic Organisation of SAUER Inc.
MURMANN and DANFOSS have agreed on the basic organisation schedule of the
Company in the form of Appendix 6 attached hereto.
Article 12
Super Majority for Board Resolutions of SAUER Inc.
It is MURMANN'S and DANFOSS' mutual understanding that certain major decisions
of the Board shall be only made by an 80% (eighty percent) majority of the fully
constituted Board (hereinafter referred to as "Super Majority"). The issues
which require a Super Majority vote are set forth in the changed and amended
Restated By-laws of the Company.
12
<PAGE>
D.
Lifetime of the Agreement
Article 13
Term and termination
(a) This Agreement shall commence -- subject to Article 23 below -- as of
the date of signing by both Parties and shall remain in force until the
Holding ceases to exist and the Parties cease to be shareholders of the
Holding.
(b) This Agreement can be terminated by one Party with 60 days written
notice in the event of material breach of contract by the other Party,
including but not limited to:
i) In the event of insolvency, dissolution, suspension of payments,
or bankruptcy by the other Party.
ii) Change of control, directly or indirectly, of the other Party,
with the result that a third Party receives control over such
Party. The above shall not apply: a) in case of MURMANN if the
third party is a person or legal entity listed in Appendix 7 and
b) in case of DANFOSS, any public listing of DANFOSS at any stock
exchange not connected with a change of control.
iii) Failure by the other party to have referred a matter to the
Holding Board of Directors, before taking decisions in either a
Board Meeting in SAUER Inc. or at a Shareholders' Meeting of
SAUER Inc., except when such a decision was either agreed amongst
the Parties or of an immaterial nature.
In case of a material breach as described above by one Party, the other
Party shall give the breaching Party the opportunity by written notice
to remedy the breach and its negative results within a period of 30
days from the receipt of such notice. If this remedy is not possible or
not performed within the 30 days period, the other party may terminate
this Agreement by written notice with effect of 60 days following the
receipt of the termination notice.
(c) In case this Agreement has terminated as described above, the
non-breaching Party may require (a) the dissolution of Holding
according to ss. 17 of Holding Articles of Association or (b) a
dissolution of Holding resulting in the securities of Holding being
distributed to each Party, rather than being sold as described in ss.
17 of Holding Articles of Association.
13
<PAGE>
E.
Miscellaneous
Article 14
Preference Shares and Dividend
Neither MURMANN nor DANFOSS shall vote for any issuance of preference shares of
SAUER Inc. with detrimental interest to the other Party.
All dividends from SAUER Inc. shall be distributed through Holding to MURMANN
and DANFOSS as soon as received by Holding.
Article 15
Entire Agreement
The making and execution of this Agreement by the Parties have been induced by
no statements or agreements other than those herein expressed. This Agreement
and its Appendices embody the entire understanding of the Parties and there are
no other or future agreements or understandings, written or oral, in effect
between the Parties relating to the subject matter hereof, including, without
limitations, any agreements or understandings, written or oral, relating to
capital stock of Holding and/or SAUER Inc.
Article 16
No waiver
The failure of any Party to assert any of its rights under this Agreement shall
not constitute a waiver of any such rights.
14
<PAGE>
Article 17
Notices
All notices, requests and other communications under this Agreement shall be
given or made to the other Party at the following address (or at such other
addresses specified in a written notice given in accordance with this
provision):
(a) if to MURMANN:
K. Murmann Verwaltungsgesellschaft mbH
attn: Geschaftsleitung
Krokamp 35
D-24539 Neumunster, Germany
with a copy to Dr. Klaus Murmann, Bismarckallee 24, D-24105 Kiel,
Germany
(b) if to DANFOSS:
DANFOSS A/S
attn: President
DK-6430 Nordborg, Denmark
with a copy to the Legal Department, attn: General Counsel
Article 18
Amendments
Amendments and changes of this Agreement are only valid, if they have been made
in writing signed by the Parties hereto or their duly authorized agents. The
same shall apply as to the waiver of this requirement.
15
<PAGE>
Article 19
Severability
Should any provision of this Agreement, or any provision to be incorporated in
the future, be or become invalid or unenforceable, the validlity of the balance
of this Agreement shall not be affected thereby. The same applies if this
Agreement contains any omissions. In lieu of the invalid or unenforceable
provision or in order to complete any omission, a fair provision shall apply
which, to the extent legally permissible, comes as close as possible to what the
Parties had intended or would have intended, according to the spirit and purpose
of this Agreement, if they had considered the matter at the time this Agreement
was executed.
Article 20
Governing law, arbitration
(a) This Agreement shall be governed by the laws of Denmark.
(b) The Parties shall endeavour to settle all disputes and conflicts
arising out of or in connection with this Agreement amicably and in
good faith.
Should those attempts fail, all disputes between the Parties arising out of or
in connection with this Agreement -- including disputes concerning the validity
of this Agreement -- shall be finally settled under the Arbitration Rules of the
International Chamber of Commerce, Paris, by three arbitrators to be appointed
in accordance with said Rules. The place of arbitration shall be Copenhagen. The
language of arbitration shall be English.
The jurisdiction of ordinary courts shall be excluded except for the right of
the Parties to seek for preliminary injunctions or similar release.
Article 21
Appendices
This Agreement has 8 Appendices, which shall be integrated parts of this
Agreement.
16
<PAGE>
Article 22
Corporate Name License Agreement
The Parties agree to cause Holding to enter into the Corporate Name License
Agreements as further described in Appendix 8.
Article 23
Transfer
This Agreement shall be binding upon the parties and upon their respective
permitted successors and assigns.
Article 24
Condition of Agreement
This Agreement shall only become effective if the Stock Exchange Agreement has
been duly signed. In case the Stock Exchange Agreement should not be
consummated, each Party may request the dissolution of Holding with the effect
that the contributions of both Parties shall be distrubuted to each contributing
Party.
Article 25
Amendment resulting from taxes
With regard to section 5.17 and 5.18 of the Stock Exchange Agreement Holding
shall be bound by a reasonable determination of one of the shareholders and both
shareholders will cooperate in the necessary restructuring.
17
<PAGE>
Glucksburg, the January 22, 2000
K. MURMANN
Verwaltungsgesellschaft mbH DANFOSS A/S
/s/ K. Murmann /s/ J. Clausen
DANFOSS Murmann Holding A/S
/s/ K. Murmann
/s/ H. Murmann
18
APPENDIX 2
SHAREHOLDERS' RESOLUTION
IN DANFOSS MURMANN HOLDING A/S
MURMANN'S CONTRIBUTION
To be provided at Closing
<PAGE>
APPENDIX 2
INFORMAL TRANSLATION
In the year 2000 on _______ April, an extraordinary general meeting was convened
in Danfoss Murmann Holding A/S (reg.no A/S [ ]) at the [ ]
The Management and the Board of Directors were present or represented, and
furthermore Mrs. Marianne Philip, Attorney-at-Law, participated.
The latter was elected Chairman of the general meeting. The Chairman noted that
all shareholders were represented and ascertained - with the approval of those
present - that the meeting was legally competent to transact business as to the
following agenda:
1. Proposal for the increase of the share capital of the Company by
nominal DKK [ ] to nominally DKK [ ] by a non-capital contribution of
10,362,500 shares of Sauer Inc.
2. Other items.
Re 1:
- -----
A proposal had been made for the increase of the share capital of the Company by
nominal DKK [ ] to nominal DKK [ ] by non-capital contribution of 10,362,500
shares of Sauer Inc. [reg.no] (hereinafter the Shares) at rate [ ]. The value of
the Shares have been determined by [ ]. The auditors report was examined and the
discussed by the shareholders. It was agreed to make the non-capital
contribution of 10,362,500 shares of Sauer Inc. at rate [ ] corresponding to a
nominal increase of DKK [ ].
The size of each new share is DKK [ ]. The subscription price amounts to [ ]
(DKK [ ] for each share of DKK [ ]). The capital increase shall have effect as
from the date of the general meeting.
The Boards decision on increase of the share capital included the following
decisions (cf. sections 32 and 33 of the Danish Companies Act):
1) The share capital increases with DKK [ ] at rate [ ] by a non-capital
contribution of the Shares in Danfoss Murmann Holding A/S reg.no [ ].
2) The company has only one class of share.
<PAGE>
3) Oversubscription may not take place.
4) The nominal value of the shares is [ ].
5) The new shares are issued on the shareholders name, are non-negotiable
and noted in the shareholders register.
6) The costs of the capital increase are estimated at DKK 20.000.
7) The transferability of the shares are not limited. The shareholders are
not obliged to let their shares be redeemed.
8) The new shares give right to full dividend for the year 2000.
The Chairman of the meeting ascertained that the provisions of the Danish
Limited Companies Act, Article 29 had been duly observed and that the statement
of the Board of Directors and the statement of the auditor in accordance with
sections 33 and 6a-6b of the Danish Limited Companies Act had been available in
due time.
Subsequently, the general meeting passed the proposal unanimously and with all
votes
Re 2:
- -----
As no further proposals were to be discussed at the general meeting, the
Chairman closed the meeting, stating that all resolutions had been passed
unanimously and with all votes.
The general meeting adjourned
---oo0oo---
As Chairman:
--------------------------------
Marianne Philip, Attorney-at-law
<PAGE>
The undersigned hereby confirm that we have each subscribed for shares of
nominal DKK [ ] in Danfoss Murmann Holding A/S at a price of by
non-capital contribution.
For K. Murmann Verwaltungsgesellschaft mbH For Danfoss A/S:
- ------------------------------------------ ----------------------
Name: Name:
Title: Title:
<PAGE>
APPENDIX 3
SHAREHOLDERS' RESOLUTION
IN DANFOSS MURMANN HOLDING A/S
DANFOSS' CONTRIBUTION
To be provided at Closing
<PAGE>
APPENDIX 3
INFORMAL TRANSLATION
--------------------
In the year 2000 on _______ April, an extraordinary general meeting was convened
in Danfoss Murmann Holding A/S (reg.no A/S [ ]) at the [ ]
The Management and the Board of Directors were present or represented, and
furthermore Mrs. Marianne Philip, Attorney-at-Law, participated.
The latter was elected Chairman of the general meeting. The Chairman noted that
all shareholders were represented and ascertained - with the approval of those
present - that the meeting was legally competent to transact business as to the
following agenda:
1. Proposal for the increase of the share capital of the Company by
nominal DKK [ ] to nominally DKK [ ] by a non-capital contribution of
shares with a total nominal value of DKK [ ] of Danfoss Fluid Power A/S
and of shares of Danfoss Fluid Power Inc. with a nominal value of DKK
[].
2. Other items.
Re 1:
- -----
A proposal had been made for the increase of the share capital of the Company by
nominal DKK [ ] to nominal DKK [ ] by non-capital contribution of shares with a
total nominal value of DKK [ ] of Danfoss Fluid Power A/S and of shares of
Danfoss Fluid Power Inc. with a nominal value of DKK [ ] (hereinafter the
Shares) at rate [ ]. The value of the Shares have been determined by [ ]. The
auditors report was examined and the discussed by the shareholders. It was
agreed to make the non-capital contribution of 10,362,500 shares of Sauer Inc.
at rate [ ] corresponding to a nominal increase of DKK [ ].
The size of each new share is DKK [ ]. The subscription price amounts to [ ]
(DKK [ ] for each share of DKK [ ]). The capital increase shall have effect as
from the date of the general meeting.
The Boards decision on increase of the share capital included the following
decisions (cf. sections 32 and 33 of the Danish Companies Act):
1) The share capital increases with DKK [ ] at rate [ ] by a non-capital
contribution of the Shares in Danfoss Murmann Holding A/S reg.no [ ].
<PAGE>
2) The company has only one class of share.
3) Oversubscription may not take place.
4) The nominal value of the shares is [ ].
5) The new shares are issued on the shareholders name, are non-negotiable
and noted in the shareholders register.
6) The costs of the capital increase are estimated at DKK 20.000.
7) The transferability of the shares are not limited. The shareholders are
not obliged to let their shares be redeemed.
8) The new shares gives right to full dividend for the year 2000.
The Chairman of the meeting ascertained that the provisions of the Danish
Limited Companies Act, Article 29 had been duly observed and that the statement
of the Board of Directors and the statement of the auditor in accordance with
sections 33 and 6a-6b of the Danish Limited Companies Act had been available in
due time.
Subsequently, the general meeting passed the proposal unanimously and with all
votes
Re 2:
- -----
As no further proposals were to be discussed at the general meeting, the
Chairman closed the meeting, stating that all resolutions had been passed
unanimously and with all votes.
The general meeting adjourned
---oo0oo---
As Chairman:
--------------------------------
Marianne Philip, Attorney-at-law
<PAGE>
The undersigned hereby confirm that we have each subscribed for shares of
nominal DKK [ ] in Danfoss Murmann Holding A/S at a price of by
non-capital contribution.
For K. Murmann Verwaltungsgesellschaft mbH For Danfoss A/S:
- ------------------------------------------ ----------------------
Name: Name:
Title: Title:
<PAGE>
APPENDIX 4
MEMORANDUM OF ASSOCIATION
FOR DANFOSS MURMANN HOLDING A/S
Memorandum of Association Clean 000121
<PAGE>
Company name, registered head office and objective
- --------------------------------------------------
ss.1 The company's name is DANFOSS MURMANN HOLDING A/S, and is registered
head office is in DK-6430 Nordborg, the municipality of Nordborg.
ss.2 The company's objective is to carry on industrial, manufacturing and
commercial business with investment activities, among other things
holding activities.
Company Capital and Shares
- --------------------------
ss.3 The company's share capital amounts to DKK 27.012.312.
The company's share capital is divided into DKK 500.000 (say DKK
fivehundredthousand) A Class Shares and DKK 26,512,312 (say DKK
twentysixmillion- fivehundredandtwelvethousandthreehundredandtwelve) B
Class Shares.
The shares nom. value are DKK 1 or multiples thereof.
The share capital is fully paid up.
The shares shall not be negotiable instruments and they shall carry a
clear and unambiguous legend to that effect; the shares shall be
registered and cannot be transferred to holder; the shares shall be
constantly registered in the company's register of shareholders.
Pledging and stock transfer of shares shall not take place without the
prior consent of the supervisory board of directors.
ss.4 Except that a) A Class Shares have no dividend rights and b) A Class
Shares shall be repaid at par value in case of a liquidation, no shares
have got special rights. No shareholders shall be under any obligation
to have their shares wholly or partially redeemed.
ss.5 Where it is rendered probable that a share certificate is lost, the
company supervisory board can, on the request and at the cost of the
registered owner, invite the person who might hold the share
certificate to appear at the company's registered office to prove his
title. This is effected through a notice in the Danish "Official
Gazette's" first issue in a quarter. The notice shall be at least 4
weeks.
Memorandum of Association Clean 000121
<PAGE>
Where nobody reacts to the notice, the supervisory board shall be
entitled to declare the lost share certificate null and void and to
issue a new share certificate to the person deemed to have lost it.
The new share certificate shall be issued pursuant to the provisions on
such issue of the Danish Companies Act.
General Meetings
- ----------------
ss.6 The company's general meetings shall be held at the registered office
of the company, DK-6430 Nordborg. The ordinary general meeting shall be
held by the end of the month of May each year. General meetings shall
be called by the supervisory board at a notice of at least 8 days and
at a notice of maximum 4 weeks by letter to registered shareholders at
the address such shareholders have notified to the company's register
of shareholders. The notice of the general meetings shall contain the
meeting's agenda. Where proposals are to be debated whose adoption
requires special majority, the notice of the general meeting shall
emphasize this.
To be debated at the ordinary general meeting, proposals from
shareholders shall be handed in to the supervisory board so early that
the topic can be put on the agenda for the general meeting.
Extraordinary general meetings shall be held on decision of the general
meeting or the supervisory board or on request in writing to the
supervisory board from shareholders holding at least 1/10 of the share
capital; notice of extraordinary general meetings shall be made at a
notice of 8 days no later than 14 days after such decision or request.
ss.7 The agenda ordinary general meetings shall include:
1. The supervisory board's report on company activities in the
past year.
2. Presentation of annual accounts for approval.
3. Adoption of report and accounts.
4. Decision on distribution of profits.
5. Election of supervisory board members.
6. Election of company auditors.
Memorandum of Association Clean 000121
<PAGE>
7. Proposals, if any, from supervisory board of shareholders.
ss.8 By simple majority the general meeting shall elect a chairman to chair
the meeting and decide procedures on all questions as regards mode of
treatment, voting and voting results. Voting shall be in writing unless
otherwise decided by the general meeting.
ss.9 Each share amount of DKK 1.00 is equal to one vote. Voting rights can
be exercised as per power of attorney.
ss.10 The general meting shall decide on the proposals included in the agenda
and any amendments.
Matters discussed at the general meeting shall be decided by simple
majority in so far as legislation or these articles do not require any
special majority.
Decisions on amendments to the articles of the company requires,
however, that two thirds of the share capital is represented at the
general meeting and that any such proposal is adopted by two thirds of
the votes cast as well as by two thirds of the vote-carrying capital
represented at the general meeting.
ss.11 Report of proceedings at the general meeting shall be entered in a
minute book authorized by the supervisory board. The report shall be
signed by the chairman of the general meeting.
Supervisory Board and Management
- --------------------------------
ss.12 The company shall be managed by a supervisory board of 6 members
elected by the general meeting,
DANFOSS A/S, Denmark, shall elect 3 members and MURMANN's
Verwaltungsgesellschaft m.b.H, Germany, shall elect 3 members.
Supervisory board members shall be elected for a period of 3 years at a
time. Supervisory board member need not be shareholders.
ss.13 The supervisory board shall be the top executive of the company's
affairs.
In rules of procedure, the supervisory board shall decide rules and
regulations on its own activities.
Memorandum of Association Clean 000121
<PAGE>
A report of proceedings at supervisory board meetings shall be made.
The report shall be signed by all supervisory board members present.
The auditor's records shall be submitted to any supervisory board
meeting, and any new entry shall be signed by all supervisory board
members.
The supervisory board shall appoint two manager of the management
boards to be in charge of day-to-day operations, and the supervisory
board shall lay down the rules for the appointments and authorities for
the managers' of the management board. One manager shall be appointed
by DANFOSS A/S, Denmark and one manager shall be appointed by MURMANN
Verwaltungsgesellschaft m.b.H., Germany.
ss.14 The company shall be bound by the supervisory board collectively and
furthermore
1. By the chairman of the supervisory board jointly with either a
member of the supervisory board or jointly with a manager of the
management board, or
2. By a manager of the managing board jointly with a member of
the supervisory board, or
3. By a manager of the management board jointly with the other
member of the management board.
All provided that any decision shall at all times be taken by one of
the following directors or managers appointed by Danfoss A/S: J0rgen M.
Clausen, Hans Kirk or Ole Steen Andersen jointly with one of the
following directors or managers appointed by MURMANN: Klaus H. Murmann,
Hanelore Murmann or Sven Murmann.
Auditing
- --------
ss.15 Company accounts shall be audited by a state-authorized public
accountant elected by the ordinary general meeting for one year at a
time
Accounting, appropriation of profits
- ------------------------------------
ss.16 The company's accounting year runs from January 1 to December 31. First
accounting year runs from October 12, 1999 to December 31, 2000.
Memorandum of Association Clean 000121
<PAGE>
Dissolution and Liquidation
- ---------------------------
ss.17 The company shall be dissolved by way of a liquidation according
to the rules and regulations set forth below and in chapter 14 of the
Companies Act regarding stock companies as of June 20, 1996, provided
the Shareholders holding one third (1/3) or more of the Company's
capital stock will request the dissolution at a general meeting and not
earlier than five years after April 3, 2000.
The general meeting shall appoint one or more liquidators, whose
assignment is to realize the company's assets, to assess and determine
its obligations, and thereby to turn the company's operating assets and
other assets into cash funds at an auction, which according to the
rules and regulations of the law can be distributed to the company's
creditors and shareholders. Realization of assets shall be done at an
auction like process that provides for the bidding parties the
opportunity for an increased bid. Any realization of assets shall be
finally approved by a general meeting subject to the following
provisions:
If the securities of the company shall be sold below average of the
last 4 months' quotations prior to the general meeting for the approval
of an intended sale of assets, Shareholders holding one third or more
of the company's capital stock may oppose such a sale.
If the securities of the company shall be sold above or equal to the
average of the last 4 months' quotations, Shareholders holding one
third or more of the company's capital stock are sufficient to approve
such a sale.
In the event that according to the regulations above a sale of the
Company's assets cannot be performed, the Company shall continue and
the liquidation shall cease. In such a case a new request for
dissolution and liquidation cannot be made earlier than one (1) year
following the date of the general meeting refusing the approval of a
sale of the Company's assets.
If a liquidation has not been exercised or initiated in compliance with
the above mentioned rules 10 years after April 3, 2000. Shareholders
holding one third (1/3) or more of the Company's capital stock may
demand at a general meeting the liquidation according to the rules and
regulations set forth in chapter 14 of the Companies Act and demand the
distribution of the net assets of the securities of the company to the
shareholders.
Memorandum of Association Clean 000121
<PAGE>
Nordborg,
- -------------------- --------------------
- -------------------- --------------------
The Articles of Association are changed on a extraordinary general meeting on
the April 2000.
Memorandum of Association Clean 000121
<PAGE>
APPENDIX 5
Unofficial translation
----------------------
RULES OF PROCEDURE FOR THE BOARD
of
DANFOSS MURMANN HOLDING A/S
<PAGE>
I. Competence and Activities of the Board
ss.1 The Board of Directors together with the general manager are in charge
of the management of the Company and must see to it that the activities
of the Company are properly organized.
The Board of Directors, in collaboration with the general manager, lay
down the general guide lines for the operation of the Company.
ss.2 The Board of Directors shall supervise the managing directors'
management of the Company and its subsidiaries.
The general manager is obliged to submit to the Board for consideration
and decision all important matters, including matters which,
considering the circumstances of the Company, are unusual or of
significant importance, unless the decision of the Board cannot be
awaited without appreciable inconvenience to the operations of the
Company. In such cases the general manager shall inform the Board of
the decisions made as soon as possible.
ss.3 At each board meeting the general manager shall report on the
activities of the Company and the activities of any subsidiaries since
the previous board meeting. This report shall include the basis of the
business, finances and the internal organisation. At the board meetings
the Board of Directors shall be responsible for obtaining from the
managing directors and from any senior managers called to appear before
the Board such information and documentation as are thought necessary
for the fulfilment of the Board's functions and for evaluating the
matters reviewed by the Board.
If a member of the Board wishes to be provided with information or
evidence about any matter outside a board meeting, the request for such
information or evidence must be made through the chairman, and a member
of the Board may not while executing his duties as a board member
approach the general manager or other employees, unless such an
approach takes place through the chairman or with his permission.
ss.4 The Board shall ensure that the Company is organised in a rational way
which ensures that the bookkeeping and the administration of the assets
can be supervised in a way which, considering the circumstances and
standards of the Company, is satisfactory, inter alia by establishing
and maintaining adequate internal check and control procedures thereby
making possible the basis for proper auditing.
The auditors elected by the general meeting is as part of the auditing
in charge of checking the bookkeeping of the Company, its accounting
system and the administration of the assets. The Board shall regularly
consider whether it is necessary to ask the auditors or others to
perform a more detailed control system. The Board shall regularly
<PAGE>
consider whether the books are kept in a well-planned and clear manner
in accordance with good accounting practice, and whether the
organisation of the company, hereunder the accounts department, the
computer organisation, budgeting, internal checks and controls and
administration of assets are conducted in a safe manner. The Board can
request that the auditors prepare a memorandum on these subjects which
the Board will evaluate.
The Board shall request that the auditors carry out checking of cash in
hand and the bank accounts at least one time each year. The auditors
must immediately inform the Board of Directors if the auditors become
aware of matters that are considered unsafe so that the Board may
consider such matters.
ss.5 The auditors shall be informed that the Board of Directors themselves
do not normally check the books of the Company or the presence of the
assets, and also that the auditors are obliged and authorized to do so
on behalf of the Board.
The auditors shall also be instructed to forthwith call the attention
of all the members of the Board to any matter which is, or may be
presumed to be, of such a nature that it ought to be known to the Board
and of which the auditors become aware in the course of the auditing.
When requested by a member of the Board the auditors shall be summoned
at a suitable notice to answer questions raised during board meetings.
The auditors shall furthermore be requested to attend any board meeting
which reviews and considers annual accounts and audit minutes.
ss.6 The audit minutes shall be presented at the meetings of the board. All
members of the Board shall sign the entries made in the minutes. The
Board shall instruct the auditors that they shall make an entry in the
minutes of all matters of importance for the Board to know, and also
that copies of audit minutes shall be sent directly to all members of
the Board.
ss.7 The Board shall instruct the general manager to prepare annual budgets
which shall include quarterly budgets together with detailed budget
assumptions and which shall be presented to the Board no later than
three weeks in advance of the beginning of the budget period. Quarterly
accounts together with budgetary control as well as commentaries
concerning any substantial deviations from the budget and expectations
for the annual result and the expected liquidity must be prepared so
that this material can be made available for the Board no less than
three weeks after the expiry of the period. The budgets shall reflect
and include comments on any future major changes or plans. The Board
shall independently review these quarterly accounts and review the
budgets and any discrepancies therefrom. Furthermore strategic plans
shall be drawn up for the coming year period. These plans must be
revised by the Board at least once a year.
<PAGE>
ss.8 The Board shall ensure that the Company is adequately insured and shall
at least once a year review the Company's major insurance policies. It
is furthermore the duty of the Board at all times to follow up on
plans, budgets etc. as well as consider reports on the Company's
liquidity, order book, substantial transactions, financing, cash-flow
and special risks.
The Board shall further consider whether the capital resources of the
Company at any one time is appropriate to ensure the continued
operations of the Company.
II. Election of Chairman
ss.9 Immediately after the ordinary general meeting the Board shall convene
and elect the Chairman and any Vice-chairman of the Board by a simple
majority of votes.
III. Board Meetings etc.
ss.10 The Board shall meet at no less than 4 months intervals and otherwise
according to need.
A member of the Board or the general manager may through the Chairman
demand that the Board be convened.
Board meetings shall he convened by the Chairman in writing and at
reasonable notice.
The agenda for the meeting shall be sent out as early as possible
before the meeting. The agenda shall be made out by the general manager
in consultation with the Chairman of the Board.
The general manager has the right to be present and to speak at the
meetings of the Board unless otherwise decided by the Board in any
particular case.
ss.11 The Chairman of the Board presides at the meetings.
The Board forms a quorum when at least half of the members of the Board
are present, provided that the meeting has been duly convened in
accordance with the provisions of ss. 10 above. Resolutions should not
be passed, however, unless all the members of the Board, as far as
possible, have had an opportunity to take part in the discussion of the
matter.
ss.12 The matters discussed by the Board shall be determined by a simple
majority of votes, unless otherwise is decided in the Articles of
Association.
<PAGE>
ss.13 The Chairman keeps, or arranges for the keeping of, minutes of the
negotiations that have taken place and of the decisions that have been
made. The minutes shall be signed by the members of the Board. Absent
members are obliged to acquaint themselves with the entries made in the
minutes during their absence and must sign the records, preceding their
signature by the word "read".
Minutes of a meeting shall be sent to the managing directors and to all
Board Members no later than eight days after each meeting. The minutes
shall show which written material that has been produced at the meeting
and this material shall be kept in a separate minute book.
Minutes of the preceding meeting shall be produced in the conference
room of the Board one hour before each meeting.
IV. Minute Books
ss.14 The Board of Directors shall ensure that a list of shareholders is kept
to ensure the recording of shareholders' names, occupations and private
residence/registered office in respect of each single share in the
company. Before any record is made it must be ensured whether the
shareholder in question possesses the share with a formally valid
title. Any record made shall, at request, be attested on the share
certificate.
The Board of Directors shall further ensure the keeping of all other
lists or minute books which must be kept according to law.
V. Deputy Members of the Board
ss.15 If a member of the Board is absent with due cause, and a deputy for
that member has been elected, then the deputy shall have access to
substitute the member in question during the period of that member's
absence.
VI. Confidentiality
ss.16 The meetings of the Board and those of its committees are confidential.
Each member of the Board is bound to observe confidentiality about all
matters that come to his knowledge in his capacity as a member of the
Board, apart from such matters as the Board have decided should be
published immediately. All decisions made by the Board which may be of
importance or interest to one or more of the employees of the Company
shall be made known to the employees only through the general manager
unless the Board decides otherwise in each individual case.
<PAGE>
All information and documentation delivered to Board members shall be
considered as strictly confidential and kept accordingly. A Board
member shall, upon his resignation from the Board, return all
documentation received by him to the Chairman of the Board. This duty
shall also, if circumstances require, apply to the estate after a
deceased Board member.
The Chairman shall represent the Company. A member of this Board may
not without the permission of the Chairman make any statement to the
media or approach the public concerning the Company's affairs.
Breach of the confidentiality provisions is punishable according to the
provisions of the Companies Act, provided that the offence is not
liable to heavier punishment under the Penal Code.
VII. Committees and Nominee Directors
ss.17 The Board may set up an executive committee as well as committees for
special purposes.
The Board may authorize one member to act with full legal effect on
behalf of the Board in specified, separate transactions. The
appointment shall require the unanimous decision of all the members of
the Board. Such appointment cannot be made in matters involving
decisions about purchase, sale and mortgaging of real property or
vessel.
VIII. Appointment of General Manager (managing director(s))
ss.18 The Board of Directors appoint and dismiss the general manager and lay
down more specific instructions for the general manager's conduct of
the daily management of the Company. The terms applicable to the
manager's appointment shall be laid down by the Board.
IX. Incompetence
ss.19 No member of the Board or the general manager may take part in the
consideration of matters concerning agreements between himself and the
Company or concerning any legal action against him or concerning
agreements between the Company and a third party or legal action
against a third party if he has a substantial direct or indirect
interest in the matter, and his interest may be contrary to that of the
company.
<PAGE>
Consequently, no member of the Board or a managing director may
participate in the Board's considerations of any question relating to
the relationship with any professional or industrial body of which he
is a member or in which he has a direct or indirect interest.
A Board member or a managing director has a duty to inform, of his own
accord, of any matter which may give rise to doubts as to his
competence.
ss.20 The Board shall approve any agreements between Board members or
managing directors and the Company as well as approve any of the
Company's agreements wherein Board members or managing directors may
have an interest which is contrary to that of the Company.
Board members may not obtain loans from the Company and the Board may
not grant loans or provide security therefor to shareholders or
managing directors.
X. Duties of the Members of the Board
ss.21 Members of the Board and members of the management shall not be
permitted to carry out or take part in speculative transactions
involving shares in the Company or shares in other companies in which
the Company has a deciding influence and essential share in the
operating result
The Chairman of the Board may not carry out for the Company such
assignments as are not usually a part of a Chairman's function, apart
from such specific assignments as he is requested to do by and on
behalf of the Board.
ss.22 Each member of the Board of the Company shall, when joining and each
manager of the Company at his appointment, advise the Board of their
holdings of shares in the companies mentioned in ss. 21 above. When
acquiring and disposing of such shares, he shall advise the Board
accordingly. The information thus given shall be recorded in a separate
minute book.
Furthermore, each member of the Board must notify the Company of any
position as a Board member of managing director of any Danish
companies, apart from 100% owned subsidiaries.
ss.23 When joining the Board, a new member of the Board shall be informed
about the present Rules of Procedure for the Board and by his signature
on the original copy of the Rules intimate that he is acquainted with
these.
<PAGE>
XI. Amendments to the Rules of Procedure
ss.24 The present Rules of Procedure have been adopted by the Board in
accordance with the provisions of the Companies Act, sect. 56,
paragraph 4.
Amendments to the present Rules of Procedure can be made by the Board
when adopted by the majority of votes mentioned in ss. 12 above.
------------
THE BOARD OF DIRECTORS
<PAGE>
Appendix 6
----------
Appendix 6 is an organizational chart for the Company as agreed upon by
Murmann and Danfoss. The organization will consist of: the Board of Directors,
which will have ten members, the Executive Office, which will consist of the CEO
(David Pfeifle), COO (Niels Erik Hansen) and the CFO (N.N.) and the Global
Management Team, which will consist of BU HST/US (N.N.), GBU EH(Albert Zahalka),
Sales US (Dave Anderson), Sales EU (Hans-J Cornett) IT (Per Have), GBU OC (N.N.)
GBU Valves (Henrik Krabsen), GBU M&S (Finn Lyhne), BU HST/EU (Tom Kittel)
<PAGE>
Appendix 7
----------
Murmann group
-------------
1) K. Murmann & Co. KG
2) K. Murmann Verwaltungsgesellschaft mbH
3) SAUER GmbH & Co. Hydraulik KG
4) SAUER GmbH
5) EMF Europaische Marketing and Finanzmanagement AG
6) All Partners of K. Murmann & Co. KG:
a) Klaus Murmann Stiftung
b) Dr. Klaus Murmann
c) Dr. Hannelore Murmann
d) Nicola Keim, geb. Murmann
e) Ulrike Murmann-Knuth, geb. Murmann
f) Anja Murmann
g) Jan Murmann
h) Sven Murmann
i) Britta Zoellner
j) Christa Zoellner
<PAGE>
APPENDIX 8
CORPORATE NAME LICENSE AGREEMENT
This Agreement is made on January 22, 2000 between Danfoss A/S, a corporation
registered in Denmark whose registered office is at DK-6430 Nordborg, Denmark
(hereinafter referred to as DANFOSS) and Klaus Murmann, [adresse], Germany
(hereinafter referred to as MURMANN) and the company Danfoss Murmann Holding
A/S, a corporation registered in Denmark whose registered office is at DK-6430
Nordborg, Denmark (hereinafter referred to as HOLDING).
All capitalized terms not defined herein shall have the meaning as described to
such terms in the Stock Exchange Agreement, dated as of January 22, 2000.
WHEREAS, HOLDING wishes to use the name Danfoss Murmann Holding A/S; and
WHEREAS, DANFOSS and MURMANN are in agreement herewith, now the Parties have
agreed to the following:
ss.1 Corporate Name License
HOLDING shall be licensed as its corporate name to use both the name
DANFOSS and the word MURMANN.
Upon winding up of HOLDING or if DANFOSS or MURMANN should cease to
become a direct or indirect shareholder in HOLDING either Party has the
right to terminate this Agreement giving the other Parties 60 days'
written notice hereof in advance.
The license to HOLDING to make use of the word DANFOSS and/or MURMANN
is a right for HOLDING only and does not give HOLDING a right to
assign, sublease or transfer such right.
ss.2 Provisions Relating to this Agreement
Whole Agreement
2.1 This Agreement (together with any documents referred to herein)
constitutes the whole agreement between the parties hereto relating to
its subject matter and no variations hereof shall be effective unless
made in writing.
<PAGE>
Invalidity
2.2 If any provision of this Agreement shall be held to be illegal or
unenforceable, the enforceability of the remainder of this Agreement
shall not be affected.
Notices
2.3 Any notice required to be given hereunder shall be in writing in the
English language and shall be served by sending the same by pre-paid
first class post, telex or telecopy or by delivering the same by hand
to the registered office for the time being of the addressee. Any
notice sent by post, as provided in this sub-clause, shall be deemed to
have been served forty-eight hours after dispatch and any notice sent
by telex or telecopy, as provided in this sub-clause, shall be deemed
to have been served at the time of dispatch and in proving the service
of the same it will be sufficient to prove, in the case of a letter,
that such letter was properly stamped, addressed and placed in the post
and, in the case of a telex or telecopy, that such telex or telecopy
was duly dispatched to a current telex or telecopy number of the
addressee.
Governing Law and Arbitration
2.4 This Agreement shall be governed by the laws of Denmark.
The Parties shall endeavour to settle all disputes and conflicts
arising out of or in connection with this Agreement amicably and in
good faith.
Should those attempts fail, all disputes between the Parties arising
out of or in connection with this Agreement -- including disputes
concerning the validity of this Agreement -- shall be finally settled
under the Arbitration Rules of the International Chamber of Commerce,
Paris, by three arbitrators to be appointed in accordance with said
rules. The place of arbitration shall be Copenhagen. The language of
arbitration shall be English.
The jurisdiction of ordinary courts shall be excluded except for the
right of the Parties to seek for preliminary injunctions or similar
release.
3. Costs
Each party to this Agreement shall pay its own costs of and incidental
to this Agreement and the exchange hereby agreed to be made.
<PAGE>
AS WITNESS the hands of duly authorized representatives of the parties the day
and year first before written.
Nordborg, Denmark 1999
--------, --,
DANFOSS A/S KLAUS MURMANN
By: By:
--------------------- ---------------------
Name: Name:
--------------------- ---------------------
Title: Title:
--------------------- ---------------------
DANFOSS MURMANN HOLDING A/S
By:
---------------------
Name:
--------------------->
Title:
---------------------
<PAGE>
EXHIBIT D
Amendment to the Joint Venture Agreement ("Agreement") between
K. Murmann Verwaltungsgesellschaft mbH,
Danfoss A/S,
Danfoss Murmann Holding A/S
dated 22nd January 2000.
Due to still outstanding decisions of certain tax authorities, the Parties agree
to the following amendment to the Joint Venture Agreement:
1. Murmann shall contribute to Holding in a first step only 1000 Sauer
Inc. Shares.
The remaining contribution of 10,361,500 shares shall be made
immediately after existence of a discretionary ruling of the US Inland
Revenue Services confirming that Holding is qualified for the benefits
of the US-Denmark Double Tax Treaty (5% US withholding tax). The same
shall apply to all further commitments of Murmann to contribute Sauer
Shares to Holding as provided for under Art. 2(d) and (e).
2. For the period until the dissolution of Holding, described under
subsection 5, Murmann hereby grants to Holding the irrevocable voting
proxy - and Holding hereby accepts such proxy - with respect to all
Voting Rights out of or in connection with the 10,361,500 shares to be
contributed to Holding at a later date.
3. Art. 2(h) shall apply accordingly to Murmann's 10,361,500 shares.
4. For the purpose of securement of the regulations above, Danfoss is
entitled to request an adequate escrow concerning the 10,361,500 Sauer
shares of Murmann.
5. In case the discretionary ruling has not been obtained, Danfoss may
decide the dissolution of Holding with effect of the distribution of
the Sauer Shares to the Shareholders: In such case, the Parties will
negotiate in good faith to find a solution which meets the intentions
of the Parties, especially, with regard to the joint ownership of the
majority in Sauer Inc., as close as possible.
Nordborg;....... February 2000
<PAGE>
Danfoss Murmann Holding A/S
/s/ H. Murmann
___________________________________
Danfoss A/S
/s/ P. Hansen Damm
___________________________________
/s/ Jorgen Clausen
___________________________________
K. MURMANN Verwaltungsgesellschaft mbH
/s/ K. Murmann
___________________________________
2
