Exhibit 10.1(bk)

SAUER-DANFOSS INC.  DEFERRED COMPENSATION PLAN  FOR SELECTED EMPLOYEES

Article 1. Establishment and Purpose

1.1   Establishment.
Sauer-Danfoss Inc., a Delaware corporation (the "Company"), hereby establishes, effective as of January 1, 2004, a deferred compensation
plan for selected employees of the Company or of a member of a Related Group with the Company. Such plan shall be known as the "Sauer-Danfoss Inc. Deferred Compensation Plan for Selected
Employees" (the "Plan").

1.2   Purpose.
The primary purpose of the Plan is to provide a select group of management or highly compensated employees of the Company with the opportunity to voluntarily
defer all or a portion of their Compensation subject to the terms of the Plan. By adopting the Plan, the Company desires to enhance the ability of the Company to attract and retain employees of
outstanding competence.

Article 2. Definitions

Whenever used herein, the following terms shall have the meanings set forth below, and, when the defined meaning is intended, the term is capitalized:



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Article 3. Administration

3.1   Administration
of the Plan. The Plan shall be administered by the Committee with respect to Company Officers and by the Executive Office with respect to Employees other
than Company Officers. Subject to the provisions set forth herein, the Committee and the Executive Office shall, for their respective constituencies, have full power to determine the terms and
conditions of each Employee's participation in the Plan; to construe and interpret the Plan and any agreement or instrument entered into under the Plan; to establish, amend or waive rules and
regulations for the Plan's administration; to amend (subject to the provisions of Article 10 herein) the terms and conditions of the Plan and any agreement or instrument entered into under the
Plan; and to make other determinations which may be necessary or advisable for the administration of the Plan.

Subject
to the terms of the Plan, the Committee and the Executive Office may, for their respective constituencies, delegate any or all of its authority granted under the Plan to a
committee appointed by the Board or to an executive or executives of the Company.

3.2   Decisions
Binding. For their respective constituencies, all determinations and decisions of the Committee and the Executive Office as to any disputed question arising
under the Plan, including questions of construction and interpretation, shall be final, conclusive and binding on all parties.

3.3   Indemnification.
Each person who is or shall have been a member of the Committee or the Executive Office or who is or shall have been a delegate pursuant to
Section 3.1 shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by such person in
connection with or resulting from any claim, action, suit or proceeding to which such person may be a party, or which such person may be involved by reason of any action taken or failure to act under
the Plan unless such action or failure to act is the result of intentional misconduct. The Company shall, subject to the requirements and limitations of Delaware law, pay such loss, cost, liability or
expense imposed on or incurred by such person promptly upon demand by such person, whether or not such person has actually advanced such amount prior thereto.

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Except
with respect to intentional misconduct, the Company shall also indemnify each such person who is or shall have been a member of the Committee and the Executive Office against and
from any and all amounts paid by such person in settlement thereof, with the Company's approval, or paid by such person in satisfaction of any judgment in any such action, suit or proceeding against
such person, provided such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on his or her own
behalf.

The
foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's Certificate of
Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

Article 4. Eligibility and Participation

4.1   Eligibility.
Eligibility to participate in this Plan shall be limited to a select group of management or highly compensated Employees of the Company or of a member of a
Related Group with the Company. The Committee shall, in its discretion, select the Company Officers who are eligible to participate in the Plan. The Executive Office shall, in its discretion, select
the Employees, other than Company Officers, who are eligible to participate in the Plan. The Company's Vice President-Human Resources shall notify such selected Company Officers and Employees of their
eligibility in writing. Once granted, eligibility will continue on a year to year basis unless otherwise cancelled by the Committee, in the case of Company Officers or by the Executive Office, in the
case of Employees other than Company Officers. No Employee shall be allowed to vote in any matter affecting his or her eligibility or participation in this Plan. In the event a Participant no longer
meets the requirements for eligibility to participate in the Plan, such Participant shall become an inactive Participant retaining all of the rights described under the Plan, except the right to make
any further deferrals hereunder.

4.2   Participation.
When an Employee first becomes eligible to participate in the Plan, such Employee shall, as soon as practicable thereafter, be notified of eligibility to
participate. At such time, the Company shall provide such Employee with an "Election to Defer Form" which shall be submitted by the Employee as provided in Section 5.1 hereof.

Unless
otherwise determined by the Committee and the Executive Office, once notified of eligibility to participate, each eligible Employee shall be entitled to make deferrals with
respect to each subsequent Plan Year by submitting an "Election to Defer Form" as provided in Section 5.1 hereof.

4.3   Partial
Plan Year Participation. In the event an Employee first becomes eligible to participate in the Plan after the beginning of a Plan Year, such Employee may
complete an "Election to Defer Form" within thirty (30) days of being notified of becoming eligible to participate; such election to be valid and applicable for the Plan Year then in progress.
A deferral election in an "Election to Defer Form" submitted pursuant to this Section 4.3 shall apply only to Compensation earned subsequent to the date on which a valid "Election to Defer
Form" is received by the Company from the Participant.

Article 5. Deferral Contributions

5.1   Amount
Which May Be Deferred by a Participant. A Participant may elect to defer up to one hundred percent (100%) of Compensation in any Plan Year. Participants shall
make their elections to defer Compensation under the Plan prior to the beginning of each Plan Year, or not later than thirty (30) calendar days following notification of initial eligibility to
participate for a partial Plan Year, as applicable. At the time a Participant makes a deferral election under this Section 5.1, the Participant may also make the election described in
Section 5.2 relating to time of distribution and must make the election in Section 5.3 relating to form of distribution. A Participant's election to defer shall be substantially in the
form of the attached Exhibit "B".

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5.2   Length
of Deferral Period.



5.3   Form
of Payment. At the time a Participant makes a deferral election under Section 5.1, the Participant must elect the form in which the Participant's entire
account will be distributed. The Participant must elect either:



If
the Participant makes the special election described in Section 5.2(b), the Participant may make separate payment form elections with respect to the portion of the
Participant's account that will be paid on the early distribution date and the portion of the account that will be paid upon the Participant's termination from service as an Employee.

Notwithstanding
the foregoing, any unpaid deferred amount in the Participant's account shall be paid to the Participant in the event that, at any time prior to full payment of such
deferred amounts the Participant's service as an Employee is terminated by reason of (i) death or Disability, or (ii) a Change in Control. In such event, payment shall be made in a
single lump sum, in cash, as soon as practical following the termination of the Participant's service as an Employee.

5.4   Revocation
of Deferral. After the beginning of a Plan Year a Participant may not increase or decrease the amount of Compensation deferred for that Plan Year under
Section 5.1 except that the Participant may revoke an election by written notice to the Company and have no deferrals made with respect to any Compensation such Participant has not yet earned.
A Participant who revokes an election under this Section 5.4 may make a new deferral election that shall take effect only as of the first day of a subsequent Plan Year.

5.5   Financial
Hardship. For their respective constituencies, the Committee and the Executive Office shall have the authority to alter the timing or manner of payments of
deferred amounts in the event that a Participant establishes, to the satisfaction of the Committee or the Executive Office, as appropriate, severe

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financial
hardship. In such event, the Committee or the Executive Office, as appropriate, may, in its sole discretion:



For
purposes of this Section 5.5, "severe financial hardship" shall mean any financial hardship resulting from extraordinary and unforeseeable circumstances arising as a result of
one or more recent events beyond the control of the Participant. In any event, payment may not be made to the extent such emergency is or may be relieved: (i) through reimbursement or
compensation by insurance or otherwise; (ii) by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; and
(iii) by cessation of deferrals under the Plan. Withdrawals of amounts because of a severe financial hardship may only be permitted to the extent reasonably necessary to satisfy the hardship.
Examples of what are not considered to be severe financial hardships include the need to send a Participant's child to college or the desire to purchase a home.

The
severity of the financial hardship shall be judged by the Committee or the Executive Office, as appropriate. The decision of the Committee or the Executive Office, as appropriate,
with respect to the severity of financial hardship and the manner in which, if at all, the Participant's future deferral opportunities shall be ceased, and/or the manner in which, if at all, the
payment of deferred amounts to the Participant shall be altered or modified, shall be final, conclusive, and not subject to appeal.

5.6   Default
Elections. If an Employee participates under the Plan for a given Plan Year, but does not file a timely election form for the next Plan Year, the Employee
shall be deemed to elect for the next Plan Year the same deferrals of Compensation elected for the prior Plan Year, unless the Employee revokes the prior election pursuant to Section 5.4.

Article 6. Deferred Compensation Accounts

6.1   Participants'
Accounts. The Company shall establish and maintain an individual bookkeeping account for deferrals made by each Participant, and earnings credited to the
deferrals. Each account shall be credited as soon as practicable after the date the amount deferred otherwise would have become due and payable to the Participant. The establishment and maintenance of
such accounts, however, shall not be construed as entitling any Participant to any specific assets of the Company.

6.2   Earnings
Credited on Deferred Amounts. In addition to deferred compensation amounts credited to the unfunded accounts described in Section 6.1, there shall be
credited to each account, on the last day of each calendar quarter, an amount determined by multiplying the account balance on the first day of such calendar quarter by the Earnings Credit Rate,
determined as of the first day of such calendar quarter. If there are changes to a Participant's deferred compensation balance during a calendar quarter due to contributions or distributions, the
earnings credited will be adjusted on a pro rata basis, using the Earnings Credit Rate as of the first day of such calendar quarter.

For
information purposes only, the Company will, at least annually, issue a statement to each Participant reflecting the unfunded account balance relating to that Participant. Any such
statement to a Participant shall not in any way alter the Participant's rights, duties or responsibilities as set forth in the Plan or the Participant's elections relating to the Plan.

6.3   Charges
Against Accounts. There shall be charged against each Participant's deferred compensation account any payments made to the Participant or to the Participant's
Beneficiary.

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Article 7. Beneficiary Designation

Each Participant shall designate a Beneficiary or Beneficiaries who, upon the Participant's death, will receive the amounts that otherwise would have been paid to
the Participant under the Plan. All designations shall be signed by the Participant, and shall be made on a "Beneficiary Designation Form", substantially in the form of Exhibit "A". Each designation
shall be effective as of the date delivered to the Company.

Participants
may change their designations of Beneficiary by completing a new Beneficiary Designation Form. The payment of amounts deferred under the Plan shall be in accordance with the
last unrevoked written designation of Beneficiary that has been signed by the Participant and delivered by the Participant to the Company prior to the Participant's death.

In
the event that all the Beneficiaries named by a Participant pursuant to this Article 7 predecease the Participant, the deferred amounts that would have been paid to the
Participant or the Participant's Beneficiaries under the Plan shall be paid first to the Participant's spouse, if any. If the Participant is not survived by a spouse, then the benefits shall be paid
to the Participant's surviving children in equal shares. In the event no spouse or children exist, any benefit payable under the Plan shall, upon the death of the Participant, be paid to the
Participant's.

In
the event a Participant does not designate a Beneficiary, or for any reason such designation is ineffective, in whole or in part, the amounts that otherwise would have been paid to
the Participant or the Participant's Beneficiaries under the Plan shall be paid first to the Participant's spouse, if any. If the Participant is not survived by a spouse, then the benefits shall be
paid to the Participant's surviving children in equal shares. In the event no spouse or children exist, any benefit payable under the Plan shall, upon the death of the Participant, be paid to the
Participant's estate.

Article 8. Rights of Participants

8.1   Contractual
Obligation. The Plan shall create a contractual obligation on the part of the Company to make payments from the Participants' accounts when due. Payment of
account balances shall be made out of the general funds of the Company.

8.2   Unsecured
Interest. No Participant or party claiming an interest in deferred amounts or contributions of a Participant shall have any interest whatsoever in any specific
asset of the Company. To the extent that any party acquires a right to receive payments under the Plan, such right shall be equivalent to that of an unsecured general creditor of the Company.

8.3   Service
as an Employee. Neither the establishment of the Plan, nor any action taken hereunder, shall in any way obligate the Company or any other member of the Group to
continue the employment of an Employee as an executive or in any other capacity.

Article 9. Amendment and Termination

The Company hereby reserves the right to amend, modify or terminate the Plan at any time by action of the Committee, with respect to changes impacting Company
Officers and by the Executive Office, with respect to changes impacting Employees other than Company Officers. No such amendment or termination shall in any material manner adversely affect any
Participant's rights to deferred amounts (including earnings and appreciation thereon) without the consent of the Participant.

Article 10. Miscellaneous

10.1 Notice.
Any notice or filing required or permitted to be given to the Company under the Plan shall be sufficient if in writing and hand delivered, or sent by regular
mail to the Vice PresidentHuman Resources. Such notice, if mailed, shall be addressed to the offices of the Company in Ames, Iowa. Notice

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sent
to a Participant by regular mail shall be at such address as is given in the records of the Company. Notices shall be deemed given as of the date of delivery or, if delivery is made by regular
mail, as of the date shown on the postmark.

10.2 Successors.
All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.

10.3 Nontransferability.
Participant's rights to deferred amounts, contributions and earnings credited thereon under the Plan may not be sold, transferred, assigned or
otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. In no event shall the Company make any payment under the Plan to any assignee or creditor of a
Participant.

10.4 Severability.
In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect any remaining parts
of the Plan, and the Plan shall be construed and enforced as if illegal or invalid provision had not been included.

10.5 Costs
of the Plan. All costs of implementing and administering the Plan shall be borne by the Company.

10.6 Gender
and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the
singular, and the singular shall include the plural.

10.7 Governing
Law. The Plan shall be governed by and construed in accordance with the laws of the state of Delaware without giving effect to any choice or conflict of law
provision or rule.

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|Executed at Ames, Iowa, this 9th day of December 2003.
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|SAUER-DANFOSS INC.                                    
|By                                                    

Approved
This 11th Day of December 2003

|/s/JOHANNES F. KIRCHHOFFJohannes F. Kirchhoff
ChairmanCompensation Committee
Sauer-Danfoss Inc. |  | 
|------------------------------------------------------------------------------------------------ |  | 

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