Document:

CLF-2012.9.30 EX. 10.4

Exhibit 10.4 

FIRST AMENDMENT

TO THE

CLEVELAND-CLIFFS INC.

2000 VOLUNTARY NON-QUALIFIED
DEFERRED COMPENSATION PLAN
(AMENDED AND RESTATED AS OF JANUARY 1, 2000)

WHEREAS, Cliffs Natural Resources Inc. (the “Company”) sponsors the Cleveland-Cliffs Inc. Voluntary Non-Qualified Deferred Compensation Plan (the “2000 Plan Instrument”), which amended and restated the Cleveland-Cliffs Inc. Voluntary Non-Qualified Deferred Compensation Plan originally effective June 1, 1989 (the “Plan”);

WHEREAS, the Company adopted the Cliffs Natural Resources Inc. 2005 Voluntary Non-Qualified Deferred Compensation Plan (the “2005 Plan Instrument”) which amended the 2005 Plan Instrument;

WHEREAS, Article I, Section 1.1 of the 2005 Plan Instrument provides that the Accounts and Plan benefits of any Eligible Employee which were earned and vested prior to January 1, 2005 (together with earnings, gains and losses thereon), and the time, form and amount of payment thereof, shall be governed in accordance with the terms of the Plan prior to this amendment and restatement (i.e., the 2000 Plan Instrument as amended), and no provision of the 2005 Plan Instrument shall have any impact on the time, form and amount of payment of such Accounts and benefits; 

WHEREAS, the Company desires to outsource the administration of benefit payments and elections under both the 2005 and 2000 Plan Instruments; and

WHEREAS, in order to facilitate such outsourcing, both the 2005 and 2000 Plan Instruments must be amended;

NOW THEREFORE, THIS FIRST AMENDMENT to the 2000 Plan Instrument is made pursuant to Section 9.1 of the 2000 Plan Instrument by Cliffs Natural Resources Inc. (the “Company”), effective as of the date this amendment is adopted by the Company, except as otherwise specifically set forth below.

1.    All references in the 2000 Plan Instrument to “Cleveland-Cliffs Inc.” shall be changed to “Cliffs Natural Resources Inc.”.

2.    The name of the Plan shall be the “Cliffs Natural Resources Inc. Voluntary Non-Qualified Deferred Compensation Plan” and all references in the 2000 Plan Instrument shall be construed accordingly.

3.    The 2000 Plan Instrument is hereby amended by replacing Section 5.5 with the following:

5.5    Crediting of Dividend Equivalents.  Each Deferred Share Award Account shall be credited, as of the payment date of any cash dividend paid on Shares, with additional Units equal in value to the amount of cash dividends paid by the Company on that number of Shares equivalent to the Units in such Deferred Share Award Account on such payment date.  Such dividend equivalents shall be valued using Fair Market Value.  Until a Participant or his or her Beneficiary receives his or her entire Deferred Share Award Account, the unpaid balance thereof credited in Units shall earn dividend equivalents as provided in this Section 5.5.

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An election of a Participant prior to January 1, 2013 to convert Units representing dividend equivalents to cash to be credited to his or her Deferral Account under the provisions of this Section 5.5 as they existed prior to this First Amendment shall not be effective after December 31, 2012.

4.    The 2000 Plan Instrument is amended by adding the following to the end of Sections 6.3, Annex A.7.6, and Annex B 7.6:

Notwithstanding the foregoing or any other provision of the Plan to the contrary, effective October 1, 2012, withdrawals will no longer be permitted on account of an unforeseeable financial emergency.

5.    The 2000 Plan Instrument is hereby amended by adding the following new paragraph to the end of Section 6.5(a):

Notwithstanding any provision of this Plan instrument to the contrary, effective for changes on or after October 1, 2012 by the Participant made with respect to the date and/or form of payment of amounts deferred, the changes to the date or form of payment shall be subject to the following:

		
	(i)
	One Election.  A Participant shall be permitted only a single election under this paragraph of Section 6.5(a) with respect to his Deferral Benefit and a single election under this paragraph of Section 6.5(a) with respect to his Deferred Share Award Benefit.

		
	(ii)
	Form of Payment.  Each Participant, on a form made available by the Committee and subject to such other rules and requirements as the Committee may prescribe, may irrevocably elect to receive his Deferral Benefit or Deferred Share Award Benefit in either a lump sum distribution or an annual installment distribution from two (2) to ten (10) years.

		
	(iii)
	Time of Payment.  The payment of such lump sum or the first payment of an installment distribution elected above, shall commence on, or as soon as is practicable following, the Participant's termination of service as an employee with the Employer and all Selected Affiliates (“Termination Date”), and the remaining installments, if applicable, shall be paid on each anniversary of the Participant's Termination Date or as soon thereafter as is administratively practicable.  

6.    The 2000 Plan Instrument is hereby amended by adding the following sentence to the end of Section 6.5(c):

See Section 6.5(a) with respect to distribution elections made on or after October 1, 2012.

7.    The 2000 Plan Instrument is hereby amended by adding the following sentence to the end of Sections 6.7, Annex A 7.4 and Annex B 7.4:

Notwithstanding the foregoing provisions of this Section, effective October 1, 2012, withdrawals under this Section will no longer be permitted.

8.    The 2000 Plan Instrument is hereby amended by replacing Section 6.8 with the following:

6.8    Small Benefit.  In the event the Committee determines that the vested balance of the Participant's Account and Deferred Share Award Account is less than $50,000 at the time of commencement of payments, the Employer may pay the benefit in the form of a lump sum payment, notwithstanding any 

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provision of the Plan to the contrary.  Such lump sum payment shall be equal to the vested balance of the Participant's Account, or the portion thereof payable to a beneficiary.

9.    The 2000 Plan Instrument is amended by adding the following new sections to the end of Article X:

10.10    Employer's Liability.  An Employer's liability for the payment of benefits under this Plan is exclusively contained in this Plan instrument, Participation Agreements and other forms used to administer this Plan.  Neither the Company nor any other Employer shall have an obligation to a Participant under the Plan except as expressly provided in the Plan and his or her Participation Agreement and other administrative forms.

10.11    Deadline to File a Claim under Plan; Deadline to file Legal Action.  No claim for benefits may be made by a Participant or Beneficiary on any disputed matter pertaining to this Plan unless such claim is made within one (1) year following the occurrence of the earliest event upon which the claim may be made.  With respect to any claim relating to the contents of a notice pertaining to this Plan, the Participant or Beneficiary must make such claim within one (1) year following the date the notice was given.  No legal action to enforce or clarify rights under this Plan or under any provision of law, whether or not statutory, or any other action arising from, or related to, this Plan, may be brought by any Participant or Beneficiary on any matter pertaining to this Plan unless the legal action is commenced in the proper forum as prescribed by Section 10.12 before the earlier of:  (a) two (2) years after the Participant or Beneficiary knew or reasonably should have known of the principal facts on which the claim is based; or (b) one (1) year after the Participant or Beneficiary has exhausted any claim procedure applicable to this Plan.  For purposes of applying the foregoing provisions of this Section, knowledge of all of the facts that a Participant knew or reasonable should have known shall be imputed to every Participant or Beneficiary who is or claims to be a beneficiary of the Participant or otherwise claims to derive a benefit or entitlement under this Plan by reference to that Participant.

10.12    Venue.  Any legal actions, suits or proceedings pertaining to this Plan shall be brought in the courts of Ohio (whether federal or state) and the Participant, Beneficiary, persons claiming to be a beneficiary or any other persons who claim to derive a benefit or entitlement under this Plan by reference to the Participant irrevocably submit to the exclusive jurisdiction of Ohio courts.  The Participant, Beneficiary, persons claiming to be a Beneficiary or any other person who claim to derive a benefit or entitlement under this Plan by reference to the Participant waive, to the fullest extent permitted by law, any objection any such person may now or hereafter have to laying venue in any suit, action or proceeding hereunder in any court, as well as any right any such person may now or hereafter have to remove any such suit, action or proceeding once commenced to another court in any jurisdiction on the grounds of forum non-convenience or otherwise.  In the event that any such person resorts to an improper forum, such forum shall award the Company reasonable attorney's fees and costs incurred by the Company to enforce the provisions of this Plan, and such forum shall award the Company such other legal or equitable relief as the forum deems appropriate.

10.13    Use of Electronic Media and Written Communications.  All Plan notices and all Participant or Beneficiary notices, designations, elections, consents or waivers must be in writing (which may include an electronic communication) and made in a form the Plan specifies or otherwise approves.  Any person entitled to notice under the Plan may waive the notice or shorten the notice period unless such actions are contrary to applicable law.  The Plan, using any electronic medium, may give or receive any Plan notice, communicate any Plan policy, conduct any written Plan communication, satisfy any Plan filing or other compliance requirement and conduct any other Plan transaction to the extent permissible under applicable law.  A Participant, a Participant's spouse, or a Beneficiary, may use any electronic medium to provide any Beneficiary designation, election, notice, consent or waiver under the Plan, to the extent permissible under applicable law.  Any reference in this Plan to a "form," a "notice," an "election," a "consent," a "waiver," a "designation," a "policy" or to any other Plan-related communication includes an electronic version thereof as permitted under applicable law.

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10.    The definition “Settlement Date” in each of Section Annex A 2.1 and Section Annex B 2.1 of the 2000 Plan Instrument is hereby amended by striking “the later of the date” and inserting in lieu thereof “the earlier of the date”.

11.    Sections Annex A 6.4(a)(i) and Annex B 6.4(a)(i) of the 2000 Plan Instrument are amended by striking the following sentence:  “Fractional Shares shall be credited to the Cash Account.”

12.    The 2000 Plan Instrument is amended by adding the following sentence to the current end of Sections Annex A 6.4 (a)(ii), Annex A 7.2(b), Annex B 6.4(a)(ii), and Annex B 7.2(b):

Notwithstanding the foregoing, effective November 1, 2012, the conversion of dividend equivalent units to cash shall no longer be available and all cash dividends shall be deemed reinvested in dividend equivalent units. 

13.    The 2000 Plan Instrument is amended by adding the following to the end of Sections Annex A 7.3(b) and Annex B 7.3(b):

Notwithstanding the foregoing, effective November 1, 2012 any cash arising from a fractional Share shall be applied towards the Participant's withholding taxes as described in Section 10.4 of the Plan.

14.    The 2000 Plan Instrument is amended by adding the following new paragraph to the end of Section Annex A 7.3(d) and Section Annex B 7.3(d):

Notwithstanding any provision of this Plan instrument to the contrary, effective for changes on or after October 1, 2012 by the Participant made with respect to the date and/or form of payment of amounts deferred, the changes to the date or form of payment shall be subject to the following:

		
	(i)
	One Election.  A Participant shall be permitted only a single election under this paragraph of this Section with respect to his Account.

		
	(ii)
	Form of Payment.  Each Participant, on a form made available by the Committee and subject to such other rules and requirements as the Committee may prescribe, may irrevocably elect to receive his Account in either a lump sum distribution or an annual installment distribution from two (2) to ten (10) years.

		
	(iii)
	Time of Payment.  The payment of such lump sum or the first payment of an installment distribution elected above, shall commence on, or as soon as is practicable following, the Participant's Termination Date, and the remaining installments, if applicable, shall be paid on each anniversary of the Participant's Termination Date or as soon thereafter as is administratively practicable.  

15.    The benefits earned and vested before January 1, 2005 under the original Plan document and the 2000 Plan Instrument are intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, as described in the 2005 Plan Instrument.  The Company intends that the amendments made to the 2000 Plan Instrument by this First Amendment are not “material modifications” within the meaning of Treasury Regulation § 1.409A-6(a)(4) to such instrument.  The Plan, as amended by the 2000 Plan Instrument and this First Amendment, shall be interpreted, operated and administered in a manner consistent with this intention.

16.    Notwithstanding the foregoing provisions of this First Amendment and pursuant to Section 9.1 of the 2000 Plan Instrument, the Company hereby reserves the right to suspend or reinstate any or all 

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of the provisions of this First Amendment at any time and to the extent so suspended apply the provisions of the 2000 Plan Instrument as in effect immediately prior to the adoption of this First Amendment.

IN WITNESS WHEREOF, a duly authorized officer of the Company, pursuant to the authorization of the Board of Directors of the Company, has caused this FIRST AMENDMENT to be executed on this 11th day of September, 2012, effective as set forth above.

	
						
	 
	 
	 
	 
	 
	CLIFFS NATURAL RESOURCES INC.

	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	 
	/s/ James Michaud

	 
	 
	 
	 
	 
	Title:  Senior Vice President, Human Resources & Chief Human Resource Officer

5Exhibit 10.1 - 2012 Q3

Employment Contract 

between

Sauer-Danfoss GmbH & Co. OHG, 
Krokamp 35, 24539 Neumünster, Germany

hereinafter referred to as "Employer"

and

Eric Alström
Bekscher Berg 21, 33100 Paderborn, Germany

Hereinafter referred to as “Employee”

		
	1) 
	Duties and Area of Work

		
	a)
	Employee shall commence his activities for the Employer on September 10, 2012. Within his work Employee is President and Chief Executive Officer of Sauer-Danfoss Inc., the parent company of the Employer. In accordance with the Sauer-Danfoss Inc. by-laws, the Board of Directors of Sauer-Danfoss Inc. shall control and manage the property, business and affairs of Sauer-Danfoss Inc.  As President and Chief Executive Officer, Employee shall have general supervision of the business of Sauer-Danfoss Inc., shall see that all orders and resolutions of the Board of Directors are carried into effect subject, however, to the right of the directors to delegate any specific powers to any other officer or officers of Sauer-Danfoss Inc. except such as may be by statute exclusively conferred upon the President and Chief Executive Officer.  Employee's tasks, rights and duties arise from this employment contract, the by-laws of Sauer-Danfoss Inc. and the instructions from the Board of Directors of Sauer-Danfoss Inc.  Employee shall report to the Chairman of Sauer-Danfoss Inc. or to the Chairman's designee.

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

		
	c) 
	Employee 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 within the meaning of §§ 15 et seqq. German Stock Corporation Act or joint ventures of Sauer-Danfoss Inc. Employee 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. 

		
	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

Employee 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 Employee is travelling on business trips as well.

		
	4)
	Remuneration

		
	a) 
	Employee shall receive an annual fixed salary of EUR 500,000.00 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 Employee. The annual salary shall be reviewed each year and adjusted as necessary. Employee does not have an automatic entitlement to an increase in his annual fixed salary.

		
	b) 
	In addition to the fixed salary in accordance with the above section 4)a) Employee 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. Such goals shall be based on the prevailing conditions of the Incentive Plan. The Company reserves the right to decide each year anew on the targets and their weighting. This also includes the right that 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. In as far as the employer terminates the employment relationship for good cause within the meaning of § 626 German Civil Code no annual incentive will be paid for the financial year in which termination takes effect. Also, an annual incentive will only be paid pro rata temporis when the employment relationship begins or ends during the financial year.

		
	c) 
	Employee 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, Employee 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 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 section 4)a) shall cover all work performed by Employee including any work performed outside the regular company working hours (overtime), time spent travelling and any work on Saturdays, Sundays and public holidays.

		
	e) 
	Employee shall be entitled to participate in the respective valid existing pension plan afforded to the executives employed by the Employer, that might be amended from time to time. 

		
	5)
	Company Car

The Employer shall provide Employee 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. Employee 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 Employee. When the employment relationship ends Employee shall return the company car, vehicle documents and accessories without undue delay to the Employer. Employee shall not have any right of retention with regard to the company car.

		
	6)
	Absence from Work / Sick Pay

		
	a) 
	Employee 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) 
	If the inability to work lasts more than three calendar days the Employee, in the case of an inability to work owing to illness, must submit a medical certificate stating that he is unable to work and the probable length of illness no later than the following working day. If the inability to work lasts longer than that stated on the medical certificate Employee 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 Employee 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 Employee. 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 Employee 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 Employee would receive from the statutory health insurance scheme as sickness benefit if he were insured with a statutory health insurance scheme. 

		
	d) 
	If Employee 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 Employee a salary and any employer contributions due thereon to the statutory social 

insurance scheme. Employee 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) 
	Employee shall have 30 days of leave per calendar year. 20 working days of this entitlement are the statutory (minimum) leave under the prevailing German Federal Paid Holiday Act (Bundesurlaubsgesetz). Any leave in addition thereto is granted as contractual additional leave. Saturdays shall not be considered working days.

		
	b)
	If Employee joins or leaves the company in the course of a calendar year, he shall be entitled only to 1/12 of the annual leave entitlement for each full month of employment in that year unless mandatory provisions of the German Federal Paid Holiday Act provide for a higher entitlement. The leave entitlement set out in a), sentence 1, shall be reduced by 1/12 for each full month in which the employment relationship is suspended.

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

		
	d) 
	Annual leave must be taken during the current calendar year. Leave may only be carried forward to the next calendar year if this is justified by urgent operational requirements or for reasons in the person of the Employee. Leave entitlements shall be forfeited without compensation as of 31 March of the following year (carry-forward period); the statutory minimum leave shall, however, be maintained in whole or in part in such case, if the Employee was unable to use his entitlement in whole or in part owing to his inability to work during the carry-forward period - however for a maximum transitional period of 15 months after the period on which leave is based (calendar-year). Any remaining leave must then be taken without undue delay subject to agreement with the employer once he is no longer unable to work.

		
	e) 
	Leave that has been taken shall first be deducted from the statutory leave entitlement. Pay in lieu of leave shall be granted only for the statutory leave entitlement.

		
	8)
	Confidentiality / Business Documents

		
	a)
	Employee 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 the period thereafter. This confidentiality obligation shall also cover the remuneration agreed upon in this contract and operating and business secrets of companies affiliated with the Employer and customers of the Employer or of its affiliates within the meaning of §§ 15 et seqq. of the German Stock Corporation Act. 

		
	b) 
	Employee 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, Employee 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. Employee 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. Employee 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. Employee shall have no retention rights irrespective of legal grounds. 

		
	d) 
	On request, but no later than at the end of the employment relationship, Employee 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 section 8c). 

		
	9) 
	Work Results / Copyright

		
	a) 
	The provisions of the German Employee Inventions Act (Arbeitnehmererfindungsgesetz) shall apply to the rights in inventions or technical improvements which Employee has made or processed during in connection with or on the basis of his work for the Employer or on the basis of work results of Employee.

		
	b) 
	If work results are created by Employee while carrying out his duties or in accordance with the instructions from the Employer which are subject to the German Copyright Act (Urheberrechtsgesetz) the following shall apply:

		
	aa)
	If this takes the form of a computer programme, under § 69 b German Copyright Act the Employer alone is entitled to exercise all pecuniary law powers in the computer programmes.

		
	bb)
	Employee hereby grants the Employer in advance all utilisation acts regulated in §§ 15 to 24 German Copyright Act exclusively, transferable, with the right to issue sublicences, unrestricted in time, territory and in content and not ordinarily terminable for all known and unknown utilisation rights in all other works protected by copyright and all other performances protected under the Copyright Act. The Employer's rights shall not depend on the continued existence of the employment relationship.

		
	cc)
	The exercise of any revocation right to which the Employee may be entitled pursuant § 41 German Copyright Act owing to non-exercise of the utilisation rights granted in each case is excluded for a period of five years with effect from the date on which they were granted. In the event of a revocation Employee hereby grants the Employer a non-exclusive utilisation right subject to bb).

		
	d) 
	If Employee produces other protectable work results during employment relationship, in particular registered designs, trade marks and topographies the Employer has exclusive entitlement to utilisation of these work results and to their protection. This applies with regard to utilisation of work results which cannot be protected as well, in particular know-how.

		
	e)
	Employee is obliged to inform the Employer without undue delay in writing of the aforementioned work results arising.

		
	f)
	The handover of the work results and rights regulated in section 9)b) and 9)c) is deemed to be included in the remuneration agreed in the aforementioned section 4)a), also for the period after this employment relationship has ended.

    
		
	10)
	Secondary Activities 

Any additional paid or unpaid work may only be assumed by Employee 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 Employee's activities under this contract. In such cases, Employee is obliged only to notify the Employer in advance. 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 Employee's activities under this contract. 

		
	11) 
	End of Contract / Termination / Death allowance

		
	a) 
	The employment relationship may be terminated by the Employer by observing a notice period of twenty-four (24) months to the end of the month or by Employee by observing a notice period of twelve (12) 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 Employee reaches the standard retirement age for a state pension; notice of termination shall not be required. The employment relationship may be terminated by either party beforehand in accordance with the above provisions (ordinary termination). In the same way the employment relationship may also end without termination being necessary if Employee draws pension on grounds of age before he reaches the statutory pension age, following part-time-work for older employees or on grounds of full invalidity. 

		
	e) 
	Notwithstanding any other provision of this agreement, Employee's employment hereunder shall terminate without notice upon Employee's death.  If Employee dies during employment, the Employer will pay the fixed salary pursuant to section 4)a) above to Employee's spouse or registered partner for the month of death and six months thereafter, but not beyond the date on which the employment relationship would have ended if Employee not died and  excluding any Annual Incentive and Long-Term Incentive.  In the event that Employee is not survived by his wife or registered partner, the above stated allowance is to be distributed among his children, provided that they are entitled to receive maintenance and are younger than 25.

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

Employee and Employer cannot agree on the outplacement firm Employer shall decide. The costs of outplacement services are limited to EUR 20,000.00 gross.

		
	12) 
	Release from Duty to Work

		
	a) 
	The Employer is entitled to release Employee revocably or irrevocably on full pay 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, if there are objective reasons therefor. Objective reason for releasing Employee from work duties shall be impairment of company interests, in particular gross breach of contract by Employee which jeopardizes the basis of trust, suspicion of having betrayed operating or business secrets, competitive activity or if there is no further need to employ him on operational grounds.

		
	b) 
	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

Employee may not engage in any activity which competes with that of the Employer or companies related or affiliated with the Employer within the meaning of §§ 15 et seqq. German Stock Corporation Act during the term of this employment contract. In particular Employee 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, Employee 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 Employee 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 with another member of the Sauer-Danfoss group.  . In the same way Employee 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 Employee is dismissed by the Employer without reasonable cause or if Employee 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 24 months after termination of the employment relationship Employee 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 within the meaning of §§ 15 et seqq. German Stock Corporation Act or cause such employee to terminate his/her contractual relationship with the Employer or with a company associated with the Employer within the meaning of §§ 15 et seqq. German Stock Corporation Act. 

		
	16) 
	Outlays and Expenses

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 Employee's spouse or registered partner also participates in the travelling at the request of the Sauer-Danfoss Inc. Board of Directors, such expenses shall also be reimbursed.

		
	17) 
	Consent to Data Collection and Data Processing

		
	a) 
	Employee is advised that personal data (for example salary calculation, salary statements, leave records, personnel planning and development) will be collected, used and processed for administration purposes relating to employment relationship. The Employee agrees that such data may be collected, used and then processed and also agrees that such data maybe disclosed to third parties for further processing for administrative purposes if requested by the Employer.

		
	a)
	Employee is obliged to treat personal data as confidential. This applies to personal data relating to colleagues, employees and customers. These data privacy obligations shall continue to apply even when the employment relationship has ended. In all other respects, the provisions of the Data Protection Act shall apply (Bundesdatenschutzgesetz).

		
	18) 
	Preclusion Periods

		
	a)
	Claims arising from this employment relationship shall lapse if they are not asserted in writing against the other party within a three-month preclusion period. Any failure to meet this deadline shall lead to loss of the entitlement. The preclusion period shall begin when the claim is due and the claimant gains knowledge of the circumstances justifying the entitlement or could reasonably be held to have gained such knowledge without having been grossly negligent. This preclusion period shall not apply in the case of liability based on intent.

		
	b)
	If the other party rejects the claim in writing or does not state its position within one month after the claim has been asserted, the claim shall lapse unless it is asserted in court within three months of rejection or expiry of the deadline. Filing a lawsuit for protection against unfair dismissal shall not prevent a claim from being forfeited.

		
	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, Employer's Guidelines, 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; electronic form and text form are ruled out. The above Sentence 1 shall also apply to any departure from or waiver of the written form requirement itself. Individual agreements shall always take precedence and shall apply regardless of the form requirement (§ 305 b German Civil Code). 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. Statutory provisions (see § 306 (2) German Civil Code) shall apply instead of any general terms and conditions which are invalid or not referred to. The Parties shall agree on a valid provision in lieu of the invalid or ineffective provision which reflects as closely as possible the economic intention of the invalid or ineffective provision and supplementary interpretation is not preferential or possible. 

		
	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.

	
			
	Neumünster,              August 29, 2012
Place                         Date
	 
	Paderborn,                  August 30, 2012 
Place                           Date

	 
	 
	 

	/s/  Thomas Kaiser
	 
	/s/ Eric Alström

	Sauer-Danfoss GmbH & Co. OHG
Kaiser, Thomas
General Manager
	 
	Eric Alström

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