The best way to achieve what you are describing is to go in and change Version 1 with all of their changes and run the
git commit -a -m "incorporated others changes into Version1"
That way Git will track those changes and create two versions of Version1 one being the original and one with changes.
If you want more separation than that I would create a branch since branches are so easy to do in Git.
You could one master or raw branch where you keep the originals, then one where you keep the changes.
it would look something like this
$> mkdir src
$> cd src && git init .
$> touch Version1 && touch Version2
$> git add . && git commit -a -m "initial commit"
$> git checkout -b changes # this creates a branch called changes
# Make changes to the files
$> git commit -a -m "made some changes"
$> git checkout -b master # back to your master branch.
Hope this helps.