March 5,
It is my pleasure to invite you to the Information regarding the matters to be voted upon at the meeting is contained in the formal notice of the meeting and proxy statement on the following pages. It is important that your shares be represented at this meeting. A public news release covering voting results will be available after the meeting. The Autoliv, Inc. Annual Report for the fiscal year ended December 31, Sincerely,
1. Reelection of three directors for a term of office expiring on the date of the Annual Meeting of 2. Ratification of the appointment of Ernst & Young AB as the Company's 3. Any other business that may properly come before the meeting and/or any The close of business Attendance at the annual meeting will be limited to stockholders of record, beneficial owners of Company common stock entitled to vote at the meeting having evidence of ownership, a maximum of one authorized representative of an absent stockholder, and invited guests of management. Any person claiming to be an authorized representative of a stockholder must, upon request, produce written evidence of such authorization. The meeting will be conducted pursuant to the Company's by-laws and rules of order prescribed by the Chairman of the annual meeting. By order of the Board of Directors March 5,
AUTOLIV, INC. PROXY STATEMENT March 5, SOLICITATION OF PROXIES The shares represented by all properly executed and unrevoked proxies received in proper form in time for the meeting will be voted. Each stockholder is entitled to one vote for each share of Directors will be elected by a plurality of the votes of the shares present at the meeting in person or by proxy and entitled to vote thereon. Votes withheld as to one or more nominees will not be counted as votes cast for such individuals. Any other proposal brought before the meeting will be decided by a majority of votes represented at the meeting and entitled to vote thereat. Consequently, abstentions and broker non-votes (i.e., votes withheld by brokers in the absence of instructions from beneficial holders) will not be counted for purposes of determining whether a proposal has been approved, but The Company will bear the cost of the solicitation. In addition to solicitation by mail, the Company will request banks, brokers and other custodian nominees and fiduciaries to supply proxy materials to the beneficial owners of the Company's common stock of whom they have knowledge, and will reimburse them for their expenses in so doing. Certain directors, officers and other employees of the Company, not specially employed for the purpose, may solicit proxies, without additional remuneration therefor, by personal interview, mail, telephone or facsimile. In addition, the Company has retained Georgeson Shareholder Communication, Inc. to assist in the solicitation for a fee of $12,500 plus expenses, and WM-data AB for a fee of 1. ELECTION OF DIRECTORS
THE BOARD RECOMMENDS A VOTE "FOR" THE NOMINEES FOR DIRECTORS.
Directors who are employees of the Company or any subsidiary thereof do not receive any compensation for service on the Board or Board committees. Non-employee directors receive for their services a retainer of $35,000 per year, plus a fee of $1,200 for each Board meeting attended. The Chairman of the Board receives a retainer of $70,000 per year, plus a fee of $2,400 for each Board meeting attended. In addition, non-employee directors who are chairmen of the Audit and Compensation Committees each receive additional annual retainers of $3,000; and all committee chairmen and members receive $800 except the Chairman of the Board of Directors who receives $1,600 for attendance at each meeting of their particular committees. Non-employee directors who are elected or continuing as such at annual stockholders meetings also receive annual grants of shares of Company common stock with a market value of $15,000 and the Chairman of the board with a value of $30,000, at the time of grant. The Chairman of the board is also entitled to a one time grant of Company common stock with a market value of $110,000 at the time of grant.
S. Jay Stewart, age Roger W. Stone, age
Per Welin, age 65, has been a director of Autoliv since May 1997 and of Autoliv AB since 1995. Mr. Welin served as Executive Vice President and director of the investment company L-E Lundberg-foretagen AB from 1991 until 1998 and INCUMBENT DIRECTORS - TERMS EXPIRING AT THE 2004 ANNUAL MEETING Lars Westerberg, age 53, has been a director of Autoliv since February, 1999, and President and Chief Executive Officer of Autoliv, Inc. since February 1, 1999. From 1994 until he assumed his positions with Autoliv, he was President and Chief Executive Officer of Granges AB, a Swedish-based aluminum and plastics company listed on the Stockholm Stock Exchange. From 1991 and until 1994 he held the same positions at the publicly-traded welding company Esab AB. He started his employment at Esab in 1984 and held several executive positions, including President of Esab's North American subsidiary. He is the Chairman of Ahlsell AB, a Swedish heating, water and sanitation company and a director of Plastal AB, a Swedish supplier of automotive plastic components. Mr. Westerberg holds a Master of Science degree in Electrical Engineering from the Royal Institute of Technology (KTH) in Stockholm and a Master of Business Administration from the University of Stockholm. Walter Kunerth, age 61, has been a director of Autoliv since August, 1998. Professor Kunerth is a Senior Advisor to the investment banking group Lazard Freres. He is also a member of the Supervisory Board of Gildemeister AG and Chairman of the Supervisory Boards of Basler AG, Paragon AG, Götz AG and Suspa GmbH. For more than 20 years, professor Kunerth held various top executive positions at Siemens AG in Germany, including as a member of Siemens' Corporate Executive Board (1993-97), President of Siemens' Automotive Systems Group (1988-93) and head of Siemens' Automotive Electronics Division. He holds a doctorate degree in Engineering from the University of Stuttgart and has been named Honorary Professor by the university. COMMITTEES OF THE BOARD The Audit Committee recommends to the Board the independent auditors to be selected to audit the Company's annual financial statements and reviews the fees charged for such audits and for any special assignments given to such auditors. The committee also reviews the annual audit and its scope, including the independent auditor's letter of comments and management's responses thereto; possible violations of the Company's business ethics and conflicts of interest policies; any major accounting changes made or contemplated; and the effectiveness and efficiency of the Company's internal audit staff. In addition, the committee confirms that no restrictions have been imposed by Company personnel on the scope of the independent auditors' examinations. Members of this committee 2001. The Compensation Committee advises the Board of the Company with respect to the compensation to be paid to the directors of the Company and approves and advises the Board with respect to the terms of contracts to be entered into with the senior executives of the Company. The Committee also administers the Company's stock incentive plan. Members of this committee The Nominating Committee nominates new members of the Board of the Company and also of the subsidiaries of the Company. This committee which consists of all the members of the Board of the Company does not have any procedures established for the consideration of nominees recommended by stockholders. The committee met once in
The Audit Committee reviews the Company's financial reporting process on behalf of the Board of Directors. In fulfilling its responsibilities, the Audit Committee has reviewed and discussed the audited financial statements contained in the The Audit Committee discussed with the independent accountants matters required to be discussed by Statement on Auditing Standards No. 61, "Communication with Audit Committees," as amended. In addition, the Company's independent accountants provided to the Audit Committee the written disclosures required by the Independence Standards Board Standard No. 1, "Independence Discussions with Audit Committees" and the Audit Committee discussed with the independent accountants their independence. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors (and the Board has approved) that the audited financial statements be included in the Company's Annual Report on Form 10-K for the fiscal year ended December Per Welin, Chairman
As of the date of this proxy statement, one stockholder The following table shows the Company's common stock beneficially owned as of February 26, |
Shares beneficially owned 1) | |
Per-Olof Aronson | 6,193 |
Claes Humbla | 7,977 |
Wilhelm Kull | 4,800 |
Walter Kunerth | 1,660 |
Benoit Marsaud | 0 |
James M. Ringler | 0 |
Tetsuo Sekiya | 1,000 |
S. Jay Stewart | 70,680 |
Roger W. Stone | 3,727 |
Jörgen I. Svensson | 0 |
Per Welin | 2,193 |
Lars Westerberg | 19,000 |
Hans-Göran Persson | 0 |
All directors, nominees and | 117,230 |
executive officers as a group |
1) All amounts shown represent less than 1% of the outstanding shares of the Company. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION COMPENSATION COMMITTEE REPORT To further these objectives, the compensation of senior executive officers includes three components: (1) base salaries, (2) annual bonus programs, and (3) a stock incentive program. BASE SALARIES ANNUAL BONUS PROGRAMS
In December, 2000, the Committee concluded that the stock options under the Stock Incentive Plan had become unattractive, and therefore the programme did not accomplish its intended purpose of attracting and retaining executive personnel, motivating executive personnel and providing incentive compensation that is competitive with those of other major corporations. The Committee further concluded that it was of the utmost importance to expediently ensure that executive personnel was retained and motivated. The Committee received advice from an independent compensation consultant, and thereafter offered optionees the opportunity to cancel the options granted 1997, 1998 and 1999 against (i) a grant by the Company to the optionee of a number of restricted stock units relating to the Company's shares ("RSUs") representing 30 percent of the number of options cancelled, and (ii) a commitment by the Company to grant to the optionee, under the terms and conditions of the Stock Incentive Plan, a number of Stock options, corresponding to 20 percent of the number of options cancelled, which The RSU's will vest after three years and are conditional upon the optionee not having given notice of termination of employment prior to such date. The RSU's are otherwise subject to the same terms and conditions applicable to the cancelled options under the Stock Incentive
For
Consequently, the employee incentive compensation programs in which the Company's most highly compensated officers participate have been structured to comply with the Code's definition of performance-based compensation. To qualify as performance-based under the Code, compensation payments must be made pursuant to a plan that is administered by a committee of outside directors and must be based on achieving objective performance goals. In addition, the material terms of the plan must be disclosed to and approved by stockholders, and the Committee must certify that the performance goals were achieved before payments can be awarded. Notwithstanding its general policy, however, the Committee retains the discretion to authorize incentive payments that may not be deductible if it believes that doing so would be in the best interest of the Company and its stockholders. S. Jay Stewart, Chairman
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Annual Compensation | Long-Term Compensation | |||||||
Name and Principal Function | Fiscal Year | Salary | Bonus | Other Annual Compen- sation | Securities Underlying Options (2) | Restricted Stock Units (4) | ||
Lars Westerberg (3) | 2001 | 484,496 | 130,233 | 0 | 49,000 | 13,500 | ||
Chief Executive | 2000 | 509,868 | 137,001 | 0 | 30,000 | |||
Officer | 1999 | 486,824 | 0 | 0 | 15,000 | |||
Benoit Marsaud | 2001 | 225,564 | 95,694 | 0 | 13,364 | 5,046 | ||
Vice President | 2000 | 204,311 | 120,474 | 0 | 6,900 | |||
Manufacturing | 1999 | 227,221 | 124,035 | 0 | 5,920 | |||
President Autolive France | ||||||||
Hans-Göran Persson | 2001 | 159,884 | 65,116 | 0 | 9,790 | 2,235 | ||
Vice President | 2000 | 172,621 | 43,840 | 0 | 5,450 | |||
Purchasing | 1999 | 181,050 | 0 | 0 | 2,000 | |||
Claes Humbla | 2001 | 155,039 | 38,663 | 0 | 15,318 | 7,977 | ||
Vice President | 2000 | 153,441 | 49,320 | 0 | ||||
Human Resources | 1999 | 156,910 | 46,756 | 0 | ||||
Jörgen I. Svensson | 2001 | 131,298 | 35,000 | 0 | 15,558 | 7,887 | ||
Vice President | 2000 | 134,809 | 49,065 | 0 | ||||
Legal Affairs, | 1999 | 138,805 | 43,651 | 0 | ||||
General Counsel and Secretary |
OPTION GRANTS IN LAST FISCAL YEAR |
Individual Grants | (1) (2) | Expiration | Potential Realizable Value | ||||
Number of | % of Total | Exercise | Date | at assumed Annual Rates | |||
Name and | Securities | Options | or Base | of Stock Price Appreciation | |||
Principal | Underlying | Granted | Price | for Option Term (3) | |||
Function | Options | to Employees | (per share) | 5% | 10% | ||
Granted | in Fiscal year | ||||||
Lars Westerberg | 49,000 | 10.3 | $16.99 | June 18, -11 | 523,320 | 1,326,430 | |
Chief Executive | |||||||
Officer | |||||||
Benoit Marsaud | 13,364 | 2.8 | $16,99 | June 18, -11 | 142,727 | 361,763 | |
Vice President | |||||||
Manufacturing | |||||||
Hans-Göran Persson | 9,790 | 2.0 | $16,99 | June 18, -11 | 104,557 | 265,015 | |
Vice President | |||||||
Purchasing | |||||||
Claes Humbla | 15,318 | 3.2 | $16,99 | June 18, -11 | 163,596 | 414,658 | |
Vice President | |||||||
Human Resources | |||||||
Jörgen I. Svensson | 15,558 | 3.3 | $16,99 | June 18, -11 | 166,159 | 421,155 | |
Vice President | |||||||
Legal Affairs | |||||||
General Counsel and Secretary |
(2) For (3) The amounts shown in these two columns represent potential realizable values using the converted options and exercise prices. The assumed rates of stock price appreciation are set by SEC rules and are not intended to forecast the future appreciation of the Company's common stock.
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Name | Number Of Securities Underlying Unexercised Options At Fiscal Year-End Excercisable/Unexercisable | Value Of Unexercised In-The-Money Options At Fiscal Year-End ($) |
Lars Westerberg | 0/ | 0/ 162,680 |
Chief Executive Officer | ||
Benoit Marsaud | 0/ | 0/ 44,368 |
Vice President Manufacturing | ||
Hans-Göran Persson | 0/ | 0/ 32,503 |
Vice President Purchasing | ||
Claes Humbla | 0/15,318 | 0/50,856 |
Vice President Human Resources | ||
Jörgen I. Svensson | 0/15,558 | 0/51,652 |
Vice President Legal Affairs, General Counsel and Secretary |
*None of the Named Executive Officers exercised any options in CHANGE OF CONTROL SEVERANCE AGREEMENTS PENSION PLANS Senior Executive Officers of the Company have the right to retire at the age of 62 with pension benefits amounting to 60 percent of the base salary at retirement. This benefit will start to accrue at the age of 50.
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Name | Grant Date (1) | Numbers of Securities Underlying Option Repriced or Amended (#) | Market Price of Stock at Time of Repricing or Amendment ($) | Exercise Price at Time of Repricing or Amendment ($) | Number of Options Cancelled (#) | Number of Options Repriced (#) | New Exercise price ($) | Length of Original Option Term Remaining at Date of Repricing or Amendment | Number of Restricted Stock Units Granted (2) (#) |
L .Westerberg | June 18,2001 | 15,000 | 15 | 40.62 | 7,500 | 3,000 | 16,99 | Feb, 09 | 4,500 |
L. Westerberg | June 18,2001 | 30,000 | 15 | 29.37 | 15,000 | 6,000 | 16,99 | Dec, 09 | 9,000 |
B. Marsaud | June 18,2001 | 4,000 | 15 | 31.07 | 2,000 | 800 | 16,99 | Feb 08 | 1,200 |
B. Marsaud | June 18,2001 | 5,920 | 15 | 35.99 | 2,960 | 1,184 | 16,99 | Dec, 08 | 1,776 |
B. Marsaud | June 18,2001 | 6,900 | 15 | 29.37 | 3,450 | 1,380 | 16,99 | Dec, 09 | 2,070 |
H-G. Persson | June 18,2001 | 2,000 | 15 | 30.23 | 1,000 | 400 | 16,99 | July, 09 | 600 |
H-G. Persson | June 18,2001 | 5,450 | 15 | 29.37 | 2,725 | 1,090 | 16,99 | Dec, 09 | 1,635 |
C. Humbla | June 18,2001 | 5,500 | 15 | 35.75 | 2,750 | 1,100 | 16,99 | Aug, 07 | 1,560 |
C. Humbla | June 18,2001 | 7,670 | 15 | 31.07 | 3,835 | 1,534 | 16,99 | Feb, 08 | 2,301 |
C. Humbla | June 18,2001 | 6,150 | 15 | 35.99 | 3,075 | 1,230 | 16,99 | Dec, 08 | 1,845 |
C. Humbla | June 18,2001 | 7,270 | 15 | 29.37 | 3,635 | 1,454 | 16,99 | Dec, 09 | 2,181 |
J. Svensson | June 18,2001 | 5,200 | 15 | 35.75 | 2,600 | 1,040 | 16,99 | Aug, 07 | 1,560 |
J. Svensson | June 18,2001 | 7,670 | 15 | 31.07 | 3,835 | 1,534 | 16,99 | Feb, 08 | 2,301 |
J. Svensson | June 18,2001 | 6,150 | 15 | 35.99 | 3,075 | 1,230 | 16,99 | Dec, 08 | 1,845 |
J. Svensson | June 18,2001 | 7,270 | 15 | 29.37 | 3,635 | 1,454 | 16,99 | Dec, 09 | 2,181 |
1) The options were cancelled on December 15, 2000, pursuant to the actions taken at the meeting of the Compensation Committee of the Board of Directors on December 6, 2000. Replacement options representing 20% of the number of options cancelled will be granted on June 18, 2001. COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
In accordance with a resolution of the Board, this selection is being presented to the stockholders for ratification at the Ernst & Young AB has been the independent auditing firm for the Company since May 1997. Ernst & Young AB has been the independent auditors for Autoliv AB since 1984. Audit services provided to the Company by Ernst & Young AB during AUDIT FEES FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES ALL OTHER FEES The Audit Committee has considered the services discussed in the preceding two paragraphs and provided to the Company by Ernst & Young AB and determined that the provision of these services is compatible with maintaining the independence of Ernst & Young AB. Representatives of Ernst & Young AB will not be present at the Annual Meeting. THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG AB AS THE COMPANY'S INDEPENDENT AUDITORS.
For business to be properly brought before an annual stockholders meeting by a stockholder, timely advance written notice thereof must be received by the Secretary of the Company at its principal executive offices in accordance with the Company's by-laws, a copy of which may be obtained by written request to the Company's Secretary. No such notices were received for the
By Order of the Board March 5,
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