Document:

Exhibit
10.1(by)

 

Sauer-Danfoss Inc.

Non-Employee Director Restricted Stock Award Agreement

 

You have been selected to be a Participant in the
Sauer-Danfoss Inc. Non-Employee Director Stock Option
and Restricted Stock Plan (the “Plan”), as specified below:

 

Participant:

 

Date of Award: 
April 27,
2005

 

Number of Shares of Restricted Stock Awarded:
 1,500 (One thousand five hundred)

 

Vesting Date and Number of Shares Vested per
Vesting Date:

 

	
  Vesting
  Date

  	
   

  	
  Number of Shares Vested

  
	
   

  	
   

  	
   

  
	
  April 27, 2008

  	
   

  	
  1,500 (One thousand
  five hundred)

  

 

This document constitutes part of the prospectus
covering securities that have been registered under the Securities Act of 1933.

 

THIS AGREEMENT, effective as of the Date of Award set
forth above, represents the award of Restricted Stock by Sauer-Danfoss Inc., a Delaware corporation (the “Company”), to
the Participant named above, pursuant to the provisions of the Plan.

 

The Plan provides a complete description of the terms
and conditions governing the Restricted Stock. If there is any inconsistency
between the terms of this Agreement and the terms of the Plan, the Plan’s terms
shall completely supersede and replace the conflicting terms of this Agreement.
All capitalized terms shall have the meanings ascribed to them in the Plan,
unless specifically set forth otherwise herein. The parties hereto agree as
follows:

 

1.                                Certificate
Legend. Each certificate, or transfer agent book record, representing
shares of Restricted Stock granted pursuant to the Plan shall bear the
following legend:

 

“The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is subject
to certain restrictions on transfer set forth in the Sauer-Danfoss
Inc. Non-Employee Director Stock Option and Restricted Stock Plan, rules of
administration adopted pursuant to such Plan, and a Restricted Stock Award
Agreement dated May 16, 2001. A copy of the Sauer-Danfoss
Inc. Non-Employee Director Stock Option and Restricted Stock Plan, such rules,
and such Restricted Stock Award Agreement may be obtained from the Secretary of
Sauer-Danfoss Inc.”

 

2.                                Removal
of Restrictions. Except as may otherwise be provided
herein and in the Plan, the Restricted Stock awarded pursuant to this Agreement
shall become freely transferable by the Participant in accordance with the
Vesting Date and Number of Shares Vested per Vesting Date set forth above.
Once Restricted Stock is no longer subject to any restrictions, the Participant
shall be entitled to have the legend required by Section 2 of this
Agreement removed from his or her stock certificates that are no longer subject
to restrictions.

 

1

 

3.                                Voting
Rights and Dividends. Prior to the Vesting Date, the Participant may
exercise full voting rights and shall be entitled to dividends and other
distributions paid with respect to the shares of Restricted Stock while they
are held. If any such dividends or distributions are paid in shares of common
stock of the Company, the shares shall be subject to the same restrictions on
transferability as are the shares of Restricted Stock with respect to which
they were paid.

 

4.                                Termination
of Directorship. Unless otherwise designated by the Board, all unvested
Restricted Stock shall be forfeited upon the Participant’s termination of
service on the Board.

 

5.                                Change
in Control. In the event of a Change in Control (as defined in the Plan),
all restrictions on the transferability of outstanding awards of Restricted
Stock held by the Participant under the Plan shall immediately lapse, and
thereafter such shares shall be freely transferable by the Participant, subject
to applicable Federal and state securities laws.

 

6.                                Nontransferability. Prior to vesting, Restricted Stock
awarded pursuant to this Agreement may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated (“a Transfer”), other than by
will or by the laws of descent and distribution, except as provided in the
Plan. If any Transfer, whether voluntary or involuntary, of Restricted Stock is
made, or if any attachment, execution, garnishment, or lien shall be issued
against or placed upon the Restricted Stock, the Participant’s right to such
Restricted Stock shall be immediately forfeited by the Participant to the
Company, and this Agreement shall lapse.

 

7.                                Adjustments
in Authorized Shares. The Committee shall have the sole discretion to
adjust the number of shares of Restricted Stock awarded pursuant to this
Agreement, in accordance with Section 4.3 of the Plan.

 

8.                                Tax
Withholding.  The Company shall have
the power and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal, state, and local
taxes, domestic or foreign, required by law or regulation to be withheld with
respect to any taxable event arising as a result of this Agreement.

 

9.                                Share
Withholding.  With respect to
withholding required upon any other taxable event arising as a result of Awards
granted hereunder, the Participant may elect, subject to the approval of the
Board, to satisfy the withholding requirement, in whole or in part, by having
the Company withhold Shares having a Fair Market Value on the date the tax is
to be determined equal to the minimum statutory total tax which could be
withheld on the transaction.  All such
elections shall be irrevocable, made in writing, signed by the Participant, and
shall be subject to any restrictions or limitations that the Board, in its sole
discretion, deems appropriate.

 

10.                         Beneficiary
Designation. The Participant may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom any
benefit under this Agreement is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the Participant, shall be in a form prescribed
by the Company, and will be effective only when filed by the Participant in
writing with the Secretary of the Company during the Participant’s lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant’s death shall be paid to the Participant’s estate.

 

2

 

Beneficiary Designation (name, address, and relationship):

 

	
   

  
	
   

  
	
   

  

 

11.                         Administration.
This Agreement and the rights of the Participant hereunder are subject to all
the terms and conditions of the Plan, as the same may be amended from time to
time, as well as to such rules and regulations as the Committee may adopt for
administration of the Plan. It is expressly understood that the Committee is
authorized to administer, construe, and make all determinations necessary or
appropriate to the administration of the Plan and this Agreement, all of which shall
be binding upon the Participant. Any inconsistency between the Agreement and
the Plan shall be resolved in favor of the Plan.

 

12.                         Miscellaneous.

 

(a)                                  With
the approval of the Board, the Committee may terminate, amend, or modify the
Plan; provided, however, that no such termination, amendment, or modification
of the Plan may in any way adversely affect the Participant’s rights under this
Agreement, without the Participant’s written approval.

 

(b)                                 This
Agreement shall be subject to all applicable laws, rules, and regulations, and
to such approvals by any governmental agencies or national securities exchanges
as may be required.

 

(c)                                  All
obligations of the Company under the Plan and this Agreement, with respect to
this Restricted Stock, 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.

 

(d)                                 To
the extent not preempted by federal law, this Agreement shall be governed by,
and construed in accordance with, the laws of the state of Delaware.

 

IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed effective as of                                          .

 

	
  Participant

  	
  Sauer-Danfoss Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
					

Kenneth D. McCuskey

 

3Exhibit 10.1

 

THE ST. PAUL TRAVELERS
COMPANIES, INC.

SENIOR EXECUTIVE PERFORMANCE PLAN

 

1.               PURPOSE

 

The purpose of The St. Paul Travelers Companies, Inc.
Senior Executive Performance Plan is to permit The St. Paul Travelers
Companies, Inc. (the “Company”), through awards of annual incentive
compensation which satisfy the requirements for performance-based compensation
under Section 162(m) of the Internal Revenue Code, to attract and retain
executives and to motivate these executives to promote the profitability and
growth of the Company.

 

2.               DEFINITIONS

 

“AFTER-TAX OPERATING EARNINGS” shall mean, for each Performance Period,
the Company’s net income from continuing operations as reported in the Company’s
financial statements for the Performance Period, including accompanying
footnotes and management’s discussion and analysis, adjusted to eliminate the
after-tax effects of net realized investment gains or losses in the fixed
maturities and real estate portfolios, extraordinary items, and the cumulative
effect of accounting changes, each as defined by accounting principles
generally accepted in the United States. 
This amount will be further adjusted to eliminate the after-tax impact
of any restructuring charges (as reported in the Company’s financial statements
for the Performance Period, including accompanying footnotes and management’s
discussion and analysis), losses from catastrophes (as designated by the
Insurance Service Office’s Property Claims Service Group, the Lloyd’s Claim
Office, Swiss Reinsurance Company’s sigma report, or a comparable report or
organization generally recognized by the insurance industry) in the Company’s “ongoing”
businesses (to the extent reported in the Company’s financial statements for
the Performance Period, including accompanying footnotes and management’s
discussion and analysis ), and underwriting results for the Performance Period
of all businesses (except “voluntary pools and other”) previously included in
the Company’s “Other” segment to report exited businesses placed in runoff.

 

 “AWARD” shall
mean the amount granted to a Participant by the Committee for a Performance
Period.

 

“BEGINNING TOTAL COMMON STOCKHOLDERS’ EQUITY” shall
mean, for each Performance Period, the Company’s total common stockholders’
equity as reported in the Company’s balance sheet for the beginning of the
Performance Period, excluding net unrealized appreciation or depreciation of
investments.

 

“BOARD” shall mean the Board of Directors of the
Company.

 

“CODE” shall mean the Internal Revenue Code of 1986,
as amended.

 

“COMMITTEE” shall mean the Compensation Committee of
the Board or any subcommittee thereof which meets the requirements of Section 162(m)(4)(C) of the Code.

 

 

“EXCHANGE ACT” shall mean the Securities Exchange Act
of 1934, as amended.

 

“EXECUTIVE” shall mean any covered employee as defined
in Section 162(m) of the Code and, in the discretion of the Committee, any
other executive officer of the Company or its Subsidiaries.

 

 “PARTICIPANT”
shall mean, for each Performance Period, each Executive who is a “covered
employee” (as defined in Section 162(m) of the Code) for that Performance
Period, unless otherwise determined by the Committee in its sole discretion.

 

“PERFORMANCE PERIOD” shall mean the Company’s fiscal
year or any other period designated by the Committee with respect to which an
Award may be granted.

 

“PLAN” shall mean The St. Paul Travelers Companies,
Inc. Senior Executive Performance Plan, as amended from time to time.

 

“RETURN ON EQUITY” shall mean, for each Performance
Period, the percentage equivalent to the fraction resulting from dividing
After-Tax Operating Earnings by Beginning Total Common Stockholders’ Equity.

 

“STOCK PLANS” shall mean The St. Paul Companies, Inc.
Amended and Restated 1994 Stock Incentive Plan and/or any prior and successor
stock plans adopted or assumed by the Company.

 

“SUBSIDIARY” shall mean any entity that is directly or
indirectly controlled by the Company or any entity, in which the Company has at
least a 50% equity interest.

 

3.               ADMINISTRATION

 

The Plan shall be administered by the Committee, which
shall have full authority to interpret the Plan, to establish rules and
regulations relating to the operation of the Plan, to select Participants, to
determine the maximum Awards and the amounts of any Awards and to make all
determinations and take all other actions necessary or appropriate for the
proper administration of the Plan. 
Before any payments are made under the Plan, the Committee shall certify
in writing that the Return on Equity required by Section 4(b) has been
met.  The Committee’s interpretation of
the Plan, and all actions taken within the scope of its authority, shall be
final and binding on the Company, its stockholders and Participants,
Executives, former Executives and their respective successors and assigns.  No member of the Committee shall be eligible
to participate in the Plan.

 

4.               DETERMINATION OF
AWARDS

 

(a)   Prior to the beginning of each
Performance Period, or at such later time as may be permitted by applicable
provisions of the Code, the Committee shall establish for each Participant a
maximum Award, expressed as a percentage of the incentive pool for the
Performance Period pursuant to paragraph (b) of this section, provided that the
maximum percentage for any single Participant shall not exceed 50%.

 

(b)  If the Return on Equity for a
Performance Period is greater than 8%, the incentive pool for the Performance
Period shall be equal to 1.5% of After-Tax Operating Earnings.  If the 

 

 

Return on Equity for a Performance Period is equal to
or less than 8%, the incentive pool shall be $0.

 

(c)   Following the end of each
Performance Period, the Committee may determine to grant to any Participant an
Award, which may not exceed the maximum amount specified in paragraph (a) of
this section for such Participant. 
The aggregate amount of all Awards under the Plan for any Performance
Period shall not exceed 100% of the incentive pool pursuant to paragraph (b) of
this section.

 

5.               PAYMENT OF AWARDS

 

Each Participant shall be eligible to receive, as soon
as practicable after the amount of such Participant’s Award for a Performance
Period has been determined, payment of all or a portion of that Award.  Awards may be paid in cash, stock, restricted
stock, options, other stock-based or stock-denominated units or any combination
thereof determined by the Committee. 
Equity or equity-based awards may be granted under the terms and
conditions of the applicable Stock Plan. 
Payment of the award may be deferred in accordance with a written
election by the Participant pursuant to procedures established by the
Committee.

 

6.               AMENDMENTS

 

The Committee may amend the Plan at any time and from
time to time, provided that no such amendment that would require the consent of
the stockholders of the Company pursuant to Section 162(m) of the Code or
the Exchange Act, or any other applicable law, rule or regulation, shall be
effective without such consent.  No such
amendment which adversely affects a Participant’s rights to, or interest in, an
Award granted prior to the date of the amendment shall be effective unless the
Participant shall have agreed thereto in writing.

 

7.               TERMINATION

 

The Committee may terminate this Plan at any time, but
in no event shall the termination of the Plan adversely affect the rights of any
Participant to deferred amounts previously awarded such Participant, plus any
earnings thereon.

 

8.               OTHER PROVISIONS

 

(a)   No Executive or other person
shall have any claim or right to be granted an Award under this Plan until such
Award is actually granted.  Neither the
establishment of this Plan, nor any action taken hereunder, shall be construed
as giving any Executive any right to be retained in the employ of the
Company.  Nothing contained in this Plan
shall limit the ability of the Company to make payments or awards to Executives
under any other plan, agreement or arrangement.

 

(b)   The rights and benefits of a
Participant hereunder are personal to the Participant and, except for payments
made following a Participant’s death, shall not be subject to any voluntary or
involuntary alienation, assignment, pledge, transfer, encumbrance, attachment,
garnishment or other disposition.

 

(c)   Awards under this Plan shall
not constitute compensation for the purpose of determining participation or
benefits under any other plan of the Company unless specifically included as
compensation in such plan.

 

 

(d)   The Company shall have the
right to deduct from Awards any taxes or other amounts required to be withheld
by law.

 

(e)   All questions pertaining to
the construction, regulation, validity and effect of the provisions of the Plan
shall be determined in accordance with the laws of the State of Minnesota
without regard to principles of conflict of laws.

 

(f)   If any provision of this Plan
would cause Awards not to constitute “qualified performance-based compensation”
under Section 162(m) of the Code, that provision shall be severed from,
and shall be deemed not to be a part of, the Plan, but the other provisions
hereof shall remain in full force and effect.

 

(g)   No member of the Committee or
the Board, and no officer, employee or agent of the Company shall be liable for
any act or action hereunder, whether of commission or omission, taken by any
other member, or by any officer, agent, or employee, or, except in
circumstances involving bad faith, for anything done or omitted to be done in
the administration of the Plan.

 

9.               EFFECTIVE DATE

 

The Plan shall be effective as of January 1,
2002, subject to approval by the stockholders of the Company in accordance with
Section 162(m) of the Code.

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