Exhibit 10.1


 





 


Employment Contract


 


	
  Between

  	
  Sauer-Danfoss GmbH & Co. OHG,

  
	
   

  	
  Krokamp 35, 24539 Neumünster, Germany

  
	
   

  	
  (hereinafter referred to as “Employer”)

  
	
   

  	
   

  
	
  And

  	
  Mr. Jesper V. Christensen,

  
	
   

  	
  Kolonnevej 14,
  DK-6400 Sønderborg, Denmark

  
	
   

  	
  (hereinafter referred to as “Mr. Christensen”)

  



 


Preliminary Remarks


 


Effective May 1, 2009, Mr. Christensen’s position will be of Executive
Vice President and Chief Financial Officer of Sauer-Danfoss Inc. The parties
have agreed that Mr. Christensen shall be based at and work out of the
Neumünster site of Sauer-Danfoss GmbH & Co. OHG, an affiliate of
Sauer-Danfoss Inc., also effective from May 1, 2009.


 


Therefore, the parties agree to the following:


 


1)
Duties and Area of Work


 


a) Mr. Christensen shall commence his activities for the Employer
on May 1, 2009. Mr. Christensen is Executive Vice President and Chief
Financial Officer of Sauer-Danfoss Inc.  As
Executive Vice President and Chief Financial Officer, Mr. Christensen
shall be responsible for supervision of the finances of Sauer-Danfoss Inc.,
including all accounting matters, and shall perform such other duties and
exercise such other powers as may be granted to him by the Board of Directors
of Sauer-Danfoss Inc. or by its Chief Executive Officer and President.  Mr. Christensen may sign all bonds,
deeds, mortgages, conveyances and other instruments to the extent authorized by
the Chief Executive Officer and President of Sauer-Danfoss Inc., or its Board
of Directors, except in cases where the signing thereof shall be expressly
delegated by the Sauer-Danfoss Inc. Board of Directors or by the Sauer-Danfoss
Inc. bylaws to some other officer or agent of the corporation, or except as
required by law to be otherwise signed.  Mr. Christensen’s
tasks, rights and duties arise from this employment contract, the by-laws of
Sauer-Danfoss Inc. and the instructions from the Chief Executive Officer and
President of Sauer-Danfoss Inc.  Mr. Christensen
shall report to the Chief Executive Officer and President of Sauer-Danfoss Inc.


 


b) The principal place of work of Mr. Christensen is the business
of the Employer in Neumünster, Germany. Mr. Christensen is willing to take
business trips inside and outside Germany. Business travel is a substantial
part of the job.  By mutual agreement, Mr. Christensen’s
place of assignment may be relocated to another of Sauer-Danfoss’ offices or
plant sites, including those outside of Germany.


 


c) Mr. Christensen may serve from time to time as a director
and/or member of a committee of the Employer and/or as a director and/or member
of a committee and/or officer of one or more subsidiary or related or
affiliated companies or joint ventures of Sauer-Danfoss Inc. Mr. Christensen
agrees to fulfil his duties as such director, member of a committee or officer
without additional compensation other than the compensation provided for in
this agreement.


 


d) Mr. Christensen has the function of an executive employee for
the Employer.


 

















 


2)
The Term of Contract


 


The employment contract is to continue for an indefinite term. It can
be terminated pursuant to section 11 of this contract.


 


3)
Working Hours


 


Mr. Christensen undertakes to devote his entire working capacity
to the interests of the Employer and, if necessary, to work beyond the regular
working hours of the company. This shall include working on Saturdays, Sundays
and public holidays and apply to when Mr. Christensen is travelling on
business trips as well.


 


4)
Remuneration


 


a) Mr. Christensen shall receive an annual fixed salary of EUR 220,000.00
(two hundred twenty thousand Euros) gross, payable in 12 equal instalments at
the end of each month. The salary shall be paid in accordance with applicable
statutory tax and social security and insurance provisions into an account
stipulated by Mr. Christensen. The annual salary shall be reviewed each
year and adjusted as necessary.


 


b) In addition to the fixed salary in accordance with the above section
4 (a) Mr. Christensen shall be eligible to earn an annual incentive
under the prevailing Sauer-Danfoss Inc. Omnibus Incentive Plan (“Incentive Plan”).
The payment of an annual incentive is subject to certain performance or profit related
goals being achieved. For the 2009 plan year, the annual incentive award
program has been suspended.  Mr. Christensen
will participate in the annual incentive program when it is
re-established.  The payment of an annual
incentive is definitely subject to the employment relationship still existing
at the end of the fiscal year for which the annual incentive is to be paid. The
Incentive Plan can be amended or terminated in its entirety with effect for the
future provided there is an objective reason therefore. The following are
considered to be objective reasons for an amendment or termination: economic
reasons on a company or group level or a basic change to the remuneration
system for Sauer-Danfoss group executive officers.


 


c) Mr. Christensen is entitled to participate in the additional
benefits generally granted to all executive employees of the Sauer-Danfoss
group, in particular the long-term incentive plan for executive employees of
the Sauer-Danfoss group under the prevailing Sauer-Danfoss Inc. Omnibus
Incentive Plan, in accordance with the prevailing provisions and conditions of
such benefits. The Employer is entitled to adjust these benefits with effect in
the future or to revoke them completely also with effect in the future provided
there are objective reasons therefore. The following are considered to be
objective reasons for an amendment or termination: economic reasons on a
company or group level or a basic change to the remuneration system for
Sauer-Danfoss group executive officers.   Except as otherwise provided for in any award
agreement, Mr. Christensen shall only receive a payout of a Long-Term
Incentive Award if he is employed by the Employer or by any other company in
the Sauer-Danfoss group through the last day of the Performance Period with
respect to such Long-Term Incentive Award. 
Long-Term Incentive Awards are made on a fully discretionary basis by
the Compensation Committee of the Board of Directors of Sauer-Danfoss Inc.  The Long-Term Incentive program has been
suspended by Sauer-Danfoss Inc. for 2009 and no grant will be made in
2009.  The granting of a Long-Term Incentive
Award for any given period does not lead to a vested right to further Long-Term
Incentive awards in the future.


 

















 


d) The fixed salary specified under (a) shall cover all work
performed by Mr. Christensen including any work performed outside the
regular company working hours (overtime), time spent travelling and any work on
Saturdays, Sundays and public holidays.


 


e) Mr Christensen shall be entitled to participate in the existing
pension plan afforded to the executives employed by the Employer.


 


5)
Company Car


 


The Employer shall provide Mr. Christensen with a company car in
accordance with the applicable company car regulations. The Employer shall bear
the operating, service and maintenance costs of the car. Mr. Christensen
may also use the company car for private purposes free of charge. Any tax
incurred on the non-cash benefit for private use shall be borne by Mr. Christensen.
When the employment relationship ends Mr. Christensen shall return the
company car, vehicle documents and accessories without undue delay to the
Employer. Mr. Christensen shall not have any right of retention with
regard to the company car.


 


6)
Absence from Work / Sick Pay


 


a) Mr. Christensen shall inform the Employer of any inability to
work or extension of an inability to work and the expected length of absence,
irrespective of the reason and at the same time to inform the Employer verbally
of any urgent work that needs to be done.


 


b) In the event of illness, Mr. Christensen shall submit a medical
certificate stating that he is unable to work and stating the probable length
of absence at the latest by the third day of the illness. If the inability to
work lasts longer than that stated on the medical certificate Mr. Christensen
shall inform the Employer and provide a further medical certificate without
undue delay. This requirement to provide a medical certificate also applies
when the continued salary payments referred to below come to an end.


 


c) The statutory provisions of the Act on Continued Payment of
Remuneration (Entgeltfortzahlungsgesetz) apply to the continued payment of remuneration
in the event of inability to work as a result of illness. In so far as the
inability to work lasts for more than the statutory period for which
remuneration is continued, the Employer shall pay Mr. Christensen a
discretionary payment (net of tax and social security and insurance expenses)
constituting of the difference between the net salary in accordance with section
4 (a) of this contract received before the inability to work commenced and
the sickness benefit drawn by Mr. Christensen. This discretionary payment
shall take effect from the date of termination of the statutory period referred
to above for a period of no more than 24 weeks and not beyond the date of the
end of the employment relationship. If Mr. Christensen has private health
insurance the Employer shall pay the difference between the net salary in
accordance with section 4 (a) of this contract drawn before the inability
to work commenced and the sickness allowance provided by the insurance company,
but no more than the difference to the amount which Mr. Christensen would
receive from the statutory health insurance scheme as sickness benefit if he
were insured with a statutory health insurance scheme.


 


d) If Mr. Christensen has a statutory right to demand compensation
from a third party who caused his incapacity to work, this right shall pass to
the Employer to the extent that the Employer pays Mr. Christensen a salary
and any employer contributions due thereon to the statutory social insurance
scheme. Mr. Christensen shall provide the Employer without undue delay
with whatever information is necessary to assert such claims and shall
cooperate in asserting and enforcing them.


 

















 


7)
Leave


 


a) Mr. Christensen shall have 6 weeks of leave per calendar year.


 


b) In the event that the employment relationship begins or ends during
the course of a calendar year, the Employee shall be entitled to leave for each
full month on a pro rata basis to the extent that this exceeds the statutory
minimum.


 


c) The timing of the leave shall be determined taking into account the
business interests of the Employer in consultation with the Mr. Christensen’s
direct superior.


 


8)
Confidentiality / Business Documents


 


a) Mr. Christensen shall observe confidentiality regarding all
confidential matters, operating and business secrets and procedures which
become known to him during his employment; this shall apply during the period
of the employment relationship and to a period of 18 months following the
termination of this employment contract. The remuneration agreed upon in this
contract also covers this confidentiality obligation including operating and
business secrets of companies affiliated with the Employer and customers of the
Employer or of its affiliates.


 


b) Mr. Christensen shall not disclose documentation, documents,
files (irrespective of the medium on which they are saved) or items of any type
whatsoever to third parties any more than is necessary to fulfil the duties set
out in the employment contract. Any business documents concerning the Employer
and its interests are the property of the Employer irrespective of the
addressee; this also applies to any other business items.


 


c) On request, but no later than the end of the employment
relationship, Mr. Christensen shall return all items, documentation, documents
and files (irrespective of the medium on which they are saved) and all copies
thereof to the Employer’s registered office. Mr. Christensen shall return
any items, documentation, documents and files (irrespective of the medium on
which they are saved) and any copies thereof which he has received from the
Employer’s customers to the respective customers immediately on request, but no
later than the end of the employment relationship. Mr. Christensen shall
provide the Employer with a list of all passwords, write-protect codes, access
codes and similar which he has used in connection with his employment
relationship immediately on request, but no later than the day on which the
employment relationship comes to an end. Mr. Christensen shall have no
retention rights irrespective of legal grounds.


 


d) On request, but no later than at the end of the employment
relationship, Mr. Christensen shall delete any data or information saved
on private electronic data carriers concerning matters of the Employer or any
affiliated companies once he has returned these to the Employer in accordance
with 8 (c).


 


9)
Work Results / Copyright


 


a) Protectable inventions, know-how, software programs, production and
organizational procedures and improvements thereto and any other results of
work together with any realization rights (hereinafter referred to as “Results
of Work”) arising from the Mr. Christensen’s work for the Employer are the
property of the Employer.


 


b) On conclusion of this contract Mr. Christensen shall transfer
to the Employer all use and realization rights in copyrights and related
property rights which inure to him in connection with 


 

















 


this employment relationship exclusively and without restriction in
content, time or territory. Rights in “Results in Work” shall be covered by the
remuneration set out in section 4 (a); this shall also apply after this
employment relationship has ended. In addition the statutory provisions
regarding employee inventions and the implementation provisions and guidelines
associated therewith shall apply accordingly.


 


10)
Secondary Activities


 


Any additional paid or unpaid work may only be assumed by Mr. Christensen
after obtaining prior written consent from the Employer. Prior written consent
shall not be required for charitable, religious and political activities which
do not impair Mr. Christensen’s activities under this contract. In
addition to service contemplated by section 1 (c) above, prior written
consent will also not be required for service on the Board of Directors of up
to a maximum of two companies outside of the Sauer-Danfoss Group so long as
these companies do not compete with Sauer-Danfoss and provided that such
service does not impair Mr. Christensen’s activities under this contract.


 


11)
End of Contract / Termination


 


a) The employment relationship may be terminated by the Employer by
observing a notice period of eighteen (18) months to the end of the month or by
Mr. Christensen by observing a notice period of three (3) months to
the end of the month (ordinary termination).


 


b) The right to terminate the employment contract for good cause by
either party shall remain unaffected.


 


c) Termination must be in writing. Notice of termination which is not
in writing is legally invalid.


 


d) The employment relationship shall end automatically at the end of
the month in which the Employee reaches the regular retirement age provided for
under the state pension scheme; notice of termination is not necessary. If Mr. Christensen
becomes partly or fully unable to work the employment relationship shall end
without termination being necessary at the end of the month in which notice
from the competent pension insurance scheme on the granting of a pension on the
grounds of inability to work (Erwerbsminderung) takes effect.


 


e)  Notwithstanding any other
provision of this agreement, Mr. Christensen’s employment hereunder shall
terminate without notice upon Mr. Christensen’s death or if Mr. Christensen
is declared bankrupt.  If Mr. Christensen
dies during employment, an allowance of 6 months salary, excluding any Annual
Incentive and Long-Term Incentive, is to be paid by the Employer to his
wife.  In the event that Mr. Christensen
is not survived by his wife, the above stated allowance is to be distributed
among his children.


 


(6)  If the employment of Mr. Christensen is terminated by
the Employer for any reason other than breach by Mr. Christensen, the
Employer shall reimburse expenses incurred and paid by Mr. Christensen for
executive level career outplacement services by a mutually agreeable outplacement
firm.


 


(7)  If either party is in material breach of its duties pursuant
to this agreement or any relevant conditions under which it is made, the
non-breaching party shall notify the breaching part in writing specifying the
breach.  The breaching party has 30 days
to remedy such breach.  Should such
breach not be remedied within 30 days of receipt of the notice, the
non-breaching party may terminate this agreement with immediate effect at any
time during the 90 day period following the end of the 


 

















 


remedy period.  If the
non-breaching party does not terminate this agreement within such 90 day
period, the breach will be deemed to have been accepted and the contract will
revert to its original termination provisions. 
If such breach termination is a result of breach by Mr. Christensen,
he is entitled to remuneration only until the time of termination.  If such breach termination is a result of
breach by the Employer, Mr. Christensen shall be entitled to receive
remuneration as if he were receiving notice as per section 11(a) above.  Such notice period will begin on the day the
Employer receives written notice of termination as a result of breach provided
by Mr. Christensen.  The breaching
party shall be liable in damages for any loss the other party may have suffered
as a result of the breach.


 


12)
Release from Duty to Work


 


a) If there are objective reasons, including objective reasons based on
operational grounds, the Employer is entitled to release Mr. Christensen
from his contractual duty to work when the employment relationship is
terminated, in particular after notice has been issued, irrespective of who
issues such notice. In such a situation Mr. Christensen shall receive full
pay as per sections 4, 5 and 16 plus any additional benefits as specified in
this contract.


 


b) The Employee may only carry out gainful secondary employment during
the period in which he is released from his work duties subject to prior notice
to and consent from the Employer.  The
competition prohibition for the term of the contract continues to apply.


 


13)
Prohibition on Competition during the Term of the Contract


 


Mr. Christensen may not engage in any activity which competes with
that of the Employer or companies related or affiliated with the Employer
during the term of this employment contract. In particular Mr. Christensen
shall not engage in any employed or freelance activity or in any other capacity
for a company which competes directly or indirectly with the Employer or
companies related or affiliated with the Employer. Likewise, Mr. Christensen
is prohibited from establishing, acquiring or participating directly or
indirectly in a competing company of this type during the term of the contract.
The acquisition of shares in listed companies is not regarded as participation
within the aforementioned meaning provided no more than 2 % of the shares are
held.


 


14)
Post-contractual Prohibition on Competition


 


For a period of 18 months after termination of the employment contract Mr. Christensen
may not become active, either on his own account or as an employee or in any
other manner, for a company which competes, directly or indirectly, with the
Employer or a company related or affiliated with it. In the same way Mr. Christensen
may not during this prohibition either establish, acquire or participate
directly or indirectly in such company. The acquisition of shares in listed
companies is not regarded as participation within the aforementioned meaning
provided no more than 2 % of the shares are held.


 


This prohibition on competition clause shall not apply if Mr. Christensen
is dismissed by the Employer without reasonable cause or if Mr. Christensen
resigns from his office as a consequence of breach of this agreement by
Sauer-Danfoss Inc. or the employer.


 


15)
Prohibition on Solicitation


 


During the employment relationship resulting from this contract and for
a period of 18 months after termination of the employment relationship Mr. Christensen
may not actively solicit directly or indirectly, in favour of a third party, an
employee of the Employer or of a company associated with 


 

















 


the Employer or cause such employee to terminate his/her contractual
relationship with the Employer or with a company associated with the Employer.


 


16)
Outlays and Expenses


 


a) Travel costs and expenses will be reimbursed against receipts in
accordance with the Employer’s guidelines provided that they were necessary in
the interest of the Employer.  If Mr. Christensen’s
spouse also participates in the travelling at the request of the Sauer-Danfoss Inc.
Board of Directors, such expenses shall also be reimbursed.


 


b) Should Mr. Christensen wish to undertake a private course in
the German language the expense for this will be covered by the Employer.


 


c) The Employer will pay for tax advice and assistance from recognized
tax advice companies for Mr. Christensen both in Germany and in Denmark.


 


17)
Consent to Data Collection and Data Processing


 


Mr. Christensen agrees to his personal data being collected and
processed to the extent that this is required in connection with the employment
relationship (e.g. salary determination, salary statement, leave entitlement,
personnel planning and development). This consent also applies to this data
being passed on to third parties for the purposes of further data processing
within the employment relationship on the Employer’s instructions.


 


18)
Recognition of Years of Service


 


If the duration of service is of importance for the accumulation of
expectancies and rights Mr Christensen’s activities for Danfoss A/S from August 1,
1993 to April 30, 2009 shall be taken into account.


 


19)
Choice of Law, Place of Jurisdiction


 


a) The employment contract is subject to German law.


 


b) Neumünster employment court is competent for all legal disputes
arising from the employment relationship, its termination and settlement.


 


20)
Authoritative Language


 


The agreement has been prepared in English and is the authoritative
language of the contract.


 


21)
Final Provisions, Written Form Requirement, Severability Clause


 


a) The employment relationship shall be subject to the current version
of the Employer’s rules and guidelines as well as this employment
contract, in particular the prevailing “Code of Conduct”.


 


b) Amendments and additions to or termination of this contract shall be
in writing if they are to be considered valid. This shall also apply to any
departure from or waiver of the written form requirement itself. There are no
collateral oral agreements.


 

















 


c) If any provision of this contract should be or become invalid in
whole or in part, or should it transpire that there has been a lacuna, this
shall have no effect on the validity of the remaining provisions. The invalid
provision or lacuna shall be remedied by a suitable provision which — as far as
legally possible — most closely reflect the meaning and purpose of the contract
which the parties wanted or would have wanted had they considered this point.


 


d) This contract shall be executed in two originals. By placing their
signature below, both parties confirm that they have received an original copy
of this contract.


 


 


	
   

  	
   

  	
  SAUER-DANFOSS GMBH & CO. OHG

  
	
   

  	
   

  	
   

  
	
  /s/ Jesper V. Christensen

  	
   

  	
  /s/ Achim Heinzer

  
	
  Jesper V. Christensen

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
  April 6, 2009

  	
   

  	
  HR Director

  
	
  Date

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  April 6, 2009

  
	
   

  	
   

  	
  Date