On September 21, 2009, Sauer-Danfoss Inc. (the "Company") announced to its employees that it intends to close its Lawrence, Kansas plant. The decision to close the plant was taken as part of the Company's overall cost-reduction strategy in response to the continued downturn in customer orders. This plant is primarily a gear pumps and motors production facility for the Work Function Segment. The majority of the plant's operations are expected to be consolidated into the Company's Ames, Iowa and Freeport, Illinois facilities. The transition will commence immediately and is expected to be complete during the second quarter of 2010.

In connection with the plant closure, the Company anticipates incurring expenses in the following approximate amounts:

(amounts in millions)
Employee termination or relocation costs                 $ 2.3
Property and equipment impairment and relocation costs     6.4
Other costs                                                1.1
Total costs                                              $ 9.8

The Company anticipates that approximately forty percent of the foregoing expenses will result in cash expenditures.