March 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. Therefore, please mark, sign, date and return the accompanying 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, S. Jay Stewart Chairman of the Board Autoliv, Inc. The Annual Meeting of Stockholders of Autoliv, Inc. ("Autoliv"or the "Company") will be held on, Tuesday, April 1. Reelection of 2.
The close of business on March 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
Jörgen I. Svensson AUTOLIV, INC.
March
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 common stock held on the Record Date. Shares will be voted in accordance with stockholders' instructions in the accompanying proxy. If no specific instructions are given, the proxies will vote the shares in accordance with the Board's recommendations, which are noted herein, to the extent permitted by applicable law and the listing requirements of the New York Stock Exchange. Any proxy given may be revoked at any time before it is voted at the meeting. 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 will be counted for purposes of establishing a quorum at the meeting. 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 therefore, by personal interview, mail, telephone or facsimile. In addition, the Company has retained Georgeson Shareholder 1. Listed below as nominees for reelection at the Messrs. Mr. THE BOARD RECOMMENDS A VOTE "FOR" THE NOMINEES FOR DIRECTORS.
Since 1998 the Company has also had a Code of Conduct and Ethics that applies to all employees of the Company and the Company has a Code of Conduct and Ethics for Senior Officers. The Guidelines and the Codes are posted on the Company's The Board has determined that Messrs. Aronson, Carlsson, Kunerth, Lorch, Mr. Stewart has been elected Chairman of the separate sessions of The independent directors met in separate sessions five times in 2004. Any interested party who desires to communicate with the Board or the independent directors regarding the Company can do so under the following address: Board/Independent Directors Contact can be made anonymously and communication with the Board or the independent directors is not screened. The Chairman of the Board and the sessions of independent 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 In addition, non-employee directors who are chairmen of the Compensation Committee and the Nominating and Corporate Governance Committee each receive additional annual retainers of Non-employee directors Nominees for Directors at S. Jay Stewart, age 67, has been a Incumbent Directors - Terms Expiring at the
Tetsuo Sekiya, age 70, has been a director of Autoliv since April 2001. He presently also serves as Advisor to the Board of NSK Ltd, a leading global manufacturer of bearings and automotive parts, of which he was Chairman between July 2002 and June 2004 Per Welin, age 68, 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 to 1998 and has been Chairman of the Board of L-E Lundberg-foretagen AB since 1998. Mr. Welin has a Master of Science degree in Engineering Physics from the Chalmers Institute of Technology in Gothenburg, from which he also holds a licentiate of engineering degree in applied thermo- and fluid dynamics. He also holds an M.B.A. from the Gothenburg School of Economics. Incumbent Directors - Terms Expiring at the 2007 Annual Meeting Walter Kunerth, age Lars Nyberg, age 53, has been a director of Autoliv since October 2004. Mr. Nyberg is Chairman of NCR Corporation, a leading global technology company that provides IT Relationship Technology solutions and which is listed on the New York Stock Exchange. Prior to becoming the non-executive Chairman in 2003, he was the Chief Executive Officer of NCR from 1995. Lars Nyberg also serves as a Director on the Boards of Sandvik AB, a Swedish-based engineering company with world-leading positions in tools for metalworking, listed on the Stockholm Stock Exchange, and of Snap-on Inc., a leading global manufacturer of tools and equipment for the automobile industry and other professional tool users listed on the New York Stock Exchange. He is a board member of DataCard Corporation, the world leader in Secure ID and Card personalization and is also Chairman of Micronics Laser Systems AB, a world-leading manufacturer of high-end laser pattern generators for the production of photomasks, listed on the Stockholm Stock Exchange. Mr. Nyberg, is a graduate in Business Administration from the University of Stockholm. Lars Westerberg, age
The Audit Committee appoints in its sole discretion (subject to 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 cash and stock incentive plan. Members of this committee The Nominating and Corporate Governance Committee identifies and recommends individuals qualified to serve as members of the Board and
The Charter is also posted on the Company's 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. The Audit Committee also concluded that the independent 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 31, The Audit Committee can be contacted regarding accounting issues as follows: Contacts can be made anonymously and communication with the Committee is not screened. The Chairman of the Committee will receive all such communication after it has been determinated that the contents represent a message to the Chairman. Per Welin, Chairman
The Nominating and Corporate Governance Committee acts under a written charter first adopted and approved by the Board of Directors in 2002 and subsequently amended in December 2003. A copy of the Charter is available on the Company's In Mr. The The Committee thereafter recommended to the Board to appoint the The Board determined that The directors nominated for reelection, Messrs. The Nominating and Corporate Governance Committee will consider director candidates nominated by stockholders so long as such Qualifications of director candidates that are considered by the Committee include an attained position of leadership in the candidates area of expertise, business and financial experience relevant to the Company, possession of demonstrated sound business judgment, expertise relevant to the Company's line of businesses, independence and ability to serve on standing Committees and the ability to serve the interests of all stockholders. The Nominating and Corporate Governance Committee identifies potential nominees by asking current directors and executive officers to notify the Committee if they become aware of persons, meeting the criteria described above, who have had a change in circumstances that might make them available to serve on the Board - for example, retirement as a CEO or CFO of a public company or exiting government or military service. The Nominating and Corporate Governance Committee also, from time to time, engages firms that specialize in identifying director candidates. As described above, the Committee will also consider candidates recommended by stockholders. Once a person has been identified by the Committee as a potential candidate, the Committee may collect and review publicly available information regarding the person to assess whether the person should be considered further. If the Nominating and Corporate Governance Committee determines that the candidate warrants further consideration, the Chairman or another member of the Committee contacts the person. Generally, if the person expresses a willingness to be considered and serve on the Board, the Nominating and Corporate Governance Committee requests information from the candidate, reviews the persons' accomplishments and qualifications, including in light of any other candidates that the Committee might be considering, and conducts one or more interviews with the candidate. In certain instances, Committee members may contact one or more references provided by the candidate or may contact other members of the business community or other persons that may have greater first-hand knowledge of the candidate's accomplishments. The Committee's evaluation process does not vary based on whether or not a candidate is recommended by a The Nominating and Corporate Governance Committee can be contacted as follows: Contacts can be made anonymously and communication with the Committee is not screened. The Chairman of the Committee receives all such communication after it has been determined that the content represents a message to the Chairman. S. Jay Stewart, Chairman
|
Shares beneficially owned 1) 2) | |
Per-Olof Aronson | |
Sune Carlsson | |
Halvar Jonzon | |
Walter Kunerth | |
George A. Lorch | |
Magnus Lindquist | |
James M. Ringler | |
Tetsuo Sekiya | |
S. Jay Stewart | |
Roger W. Stone | |
Jörgen I. Svensson | |
Per Welin | |
Lars Westerberg | |
All directors, nominees and | |
executive officers as a group 3) |
1) All amounts shown represent less than 1% of the outstanding shares of the Company.
The Committee has consulted with an independent compensation consulting firm for advice in regard to the total compensation of the Company's senior executive officers.
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 was 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 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
For
It is the Committee's general policy to avoid the loss of tax deductibility whenever compliance with Section 162(m) would be consistent with the Company's incentive compensation objectives. 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. Roger W. Stone, Chairman
1) Dividends at a rate of
|
Annual Compensation | Long-Term Compensation | All Other Compensation | ||||||
Name and Principal | Fiscal year | Salary | Other Ann. Comp. | Securities Underlying Options | Restricted Stock Units | |||
Lars Westerberg Chief Executive Officer | 2004 2003 2002 | 924,529 802,698 564,509 | 870,416 679,200 0 | 0 0 0 | 30,000 37,500 50,000 | 10,000 12,500 0 | 1,376,134 1,157,921 370,843 | |
Vice Pres. Manufacturing Pres. Autoliv France | 2004 2003 2002 | 390,916 343,662 250,447 | 216,432 0 | 0 0 0 | 6,000 7,500 10,000 | 2,000 2,500 0 | ||
Magnus Lindquist Chief Financial Officer | 2004 2003 2002 | 319,506 277,857 210,408 | 174,097 135,836 25,600 | 0 0 0 | 6,000 7,500 10,000 | 2,000 2,500 0 | 121,400 84,807 24,180 | |
Halvar Jonzon Vice President Purchasing | 2004 2003 2002 | 258,324 228,460 177,050 | 167,979 148,185 5,132 | 0 0 0 | 6,000 7,500 10,000 | 2,000 2,500 0 | 240,698 123,939 26,099 | |
Jörgen I. Svensson Vice President Legal Affairs, General Counsel and Secretary | 2004 2003 2002 | 248,807 216,111 144,720 | 123,487 0 | 0 0 0 | 6,000 7,500 10,000 | 2,000 2,500 0 | 297,478 61,061 18,850 |
(1) The amounts contained in the table below were paid either in Swedish Krona or
|
Individual Grants | (1) | 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 (2) | |||
Function | Options | to Employees | (per share) | ||||
Granted | in Fiscal year | 5% | 10% | ||||
Lars Westerberg | 37,500 | 9.7 | $21.36 | 2/1/13 | 503,744 | 1,276,500 | |
Chief Executive | |||||||
Officer | |||||||
Benoit Marsaud | 7,500 | 1.9 | $21.36 | 2/1/13 | 100,725 | 255,300 | |
Vice President | |||||||
Manufacturing | |||||||
President | |||||||
Autoliv France | |||||||
Halvar Jonzon | 7,500 | 1.9 | $21.36 | 2/1/13 | 100,725 | 255,300 | |
Vice President | |||||||
Purchasing | |||||||
Magnus Lindquist | 7,500 | 1.9 | $21.36 | 2/1/13 | 100,725 | 255,300 | |
Chief Financial | |||||||
Officer | |||||||
Jörgen I. Svensson | 7,500 | 1.9 | $21.36 | 2/1/13 | 100,725 | 255,300 | |
Vice President | |||||||
Legal Affairs | |||||||
General Counsel and Secretary |
Individual Grants(1) | |||||||
Name and | Number of | % of Total | Exercise | Expiration | Potential Realizable Value | ||
Principal | Securities | Options | or Base | Date | at assumed Annual Rates | ||
Position | Underlying | Granted | Price | of Stock Price Appreciation | |||
Options | to Employees | (per share) | for Option Term(2) | ||||
Granted | in Fiscal year | 5% | 10% | ||||
Lars Westerberg Chief Executive Officer | 30,000 | 10.3 | $40.26 | 12/1/14 | 759,600 | 1,640,100 | |
Benoît Marsaud Vice President Manufacturing President Autoliv France | 6,000 | 2.1 | $40.26 | 12/1/14 | 151,920 | 328,020 | |
Halvar Jonzon Vice President Purchasing | 6,000 | 2.1 | $40.26 | 12/1/14 | 151,920 | 328,020 | |
Magnus Lindquist Chief Financial Officer | 6,000 | 2.1 | $40.26 | 12/1/14 | 151,920 | 328,020 | |
Jörgen I. Svensson Vice President Legal Affairs, General Counsel and Secretary | 6,000 | 2.1 | $40.26 | 12/1/14 | 151,920 | 328,020 |
(1) For
|
Name | Shares Acquried on Excercise | Value Realized | Number Of Securities Underlying Unexercised Options At Fiscal Year-End Excercisable/Unexercisable | Value Of Unexercised In-The-Money Options At Fiscal Year-End ($) Exercisable/Unexercisable |
Lars Westerberg | 0 | 0 | 99,000 / 37,500 | 1,896,840 / 610,875 |
Chief Executive Officer | ||||
Benoit Marsaud | 0 | 0 | 23,364 / 7,500 | 453,000 / 122,175 |
V.P. Manufacturing | ||||
President ALV France | ||||
Halvar Jonzon | 0 | 0 | 10,710 / 7,500 | 191,568 / 122,175 |
Vice President Purchasing | ||||
Magnus Lindquist | 10,000 | 162,190 | 10,000 / 7,500 | 176,900 / 122,175 |
Chief Financial Officer | ||||
Jörgen I. Svensson | 15,558 | 269,480 | 10,000 / 7,500 | 176,900 / 122,175 |
Vice President Legal Affairs, General Counsel and Secretary |
Name | Shares acquried on Excercise | Value Realized | Number Of Securities Underlying Unexercised Options At Fiscal Year-End Excercisable/Unexercisable | Value Of Unexercised In-The-Money Options At Fiscal Year-End ($) Exercisable/Unexercisable |
Lars Westerberg Chief Executive Officer | 0 | n/a | 136,500 / 30,000 | 4,202,640 / 214,200 |
Benoît Marsaud V.P. Manufacturing Pres. Autoliv France | 0 | n/a | 30,864 / 6,000 | 952,117 / 48,240 |
Halvar Jonzon Vice President Purchasing | 0 | n/a | 18,210 / 6,000 | 555,920 / 48,240 |
Magnus Lindquist Chief Financial Officer | 17,500 | 736,290 | 0 / 6,000 | 0 / 48,240 |
Jörgen I. Svensson Vice President Legal Affairs, General Counsel and Secretary | 17,500 | 725,897 | 0 / 6,000 | 0 / 48,240 |
|
(a) | (b) | (c) | (a) | (b) | (c) | |
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (3) | Weighted-average exercise price of outstanding options, warrants and rights (4) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) | Number of securities to be issued upon exercise of outstanding options, warrants and rights (3) | Weighted-average exercise price of outstanding options, warrants and rights (4) | Number of securities remaining available for future issuance (a) |
Equity compensation plans approved by security holders (2) | 1,304,344 | $20.13 | 862,514(5) | 1,170,602 | $25.91 | 2,499,871 (5) |
Equity compensation plans not approved by security holders | - | - | ||||
Total | 1,304,344 | $20.13 | 1862,514 | 1,170,602 | $25.91 | 2,499,871 |
(1) All information as of December 31,
Senior Executive Officers of the Company have Change of Control Severance Agreements with the Company ("agreements") which were originally effective until December 31, 1998 for Mr. Svensson until December 31, 2000 for Mr. Westerberg and until December 31, 2002, for Messrs. Lindquist and Jonzon which all are automatically extended annually for additional one-year periods unless notice to the contrary is given. The agreements are otherwise terminable during their periods of effectiveness only by termination of the executive's employment. Such termination in connection with a change in control of the Company (as defined in the agreements) will entitle an executive to benefits under the agreements. In the event that during the two-year period following a change of control, the executive terminates the executive's employment for Good Reason (as defined in the agreements) or, during the 30-day period commencing one year after the change of control, for any reason, or the Company terminates the executive's employment without cause (as defined in the agreements), the executive would be entitled to receive an immediate lump sum payment in an amount equal to three times for Mr. Westerberg, and two and a half time for other Senior Executive Officers, the sum of (i) such executive's then current annual salary, (ii) the average of the bonuses received for the two most recent fiscal years or the bonus for the most recent fiscal year, if higher, and (iii) the taxable value of the benefit of a company car, and (iv) the value of any pension benefits to which the executive would have been entitled to if he remained in service for one year following termination.
Senior Executive Officers of the Company other than Mr. Westerberg have the right to retire at the age of 60 with pension benefits amounting to 70 percent of the base salary at retirement until the age of 65 and with complementary pension benefits after the age of 65. Pursuant to such agreements, the Company pays insurance premiums on a linear basis to ensure the pension benefits for the period from the date of retirement until normal retirement age of 65 and thereafter for complementary pension benefits.
2. Ratification of Appointment of Independent Auditors In accordance with directions of the Committee, this appointment 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
Financial Information Systems Design and
All Other Fees The Audit Committee has considered the services discussed in the preceding five 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. The Audit Committee has, however, instructed management to reduce to a minimum services rendered by Ernst & Young AB other than audit services in the future. In addition, the Audit Committee has adopted strict guidelines for the use of Ernst & Young AB to provide audit and 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. 3. Discretionary Voting of Proxies on Other Matters
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
************* Appendix
|
1 NAME. |
This |
2 DEFINITIONS. |
The following definitions shall apply in interpreting the Plan: |
(a) | "Beneficiary" shall mean such individual and/or the trustee or trustees of a trust as may be designated by a Participant (other than a Participant who is subject to | |
(b) | "Board" means the Board of Directors of the Company. | |
(c) | "Code" shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder. | |
(d) | "Committee" shall mean the Compensation Committee of the Board. | |
(e) | "Company" shall mean Autoliv, Inc., a Delaware corporation. | |
(f) | "Compensation" shall mean any retainer fees, meeting fees and any other director fees payable in the | |
(g) | "Fair Market Value" per share of Stock as of a particular date shall mean (i) the closing price per share of Stock on a national securities exchange for the last preceding date on which there was a sale of Stock on such exchange, (ii) if the shares of | |
(h) | "Non-Employee Director" means a person (i) who is serving as a member of the Board and (ii) who is not an officer or employee of the Company. | |
(i) | "Participant" shall mean a Non-Employee Director who elects to set apart Compensation to be | |
(j) | "Phantom Stock Unit" shall mean a bookkeeping unit, having at all times a value equal to one share of Stock, credited to a Participant's Register in accordance with Section 4(a) below. | |
(k) | "Plan Year" shall mean the calendar year; provided, however, that the first Plan Year shall commence on the date on which the Plan is adopted and shall terminate on the next December 31. | |
(l) | "Register" shall mean the register established by the Company for each Participant, which shall set forth the number of Phantom Stock Units allocated to each Participant pursuant to the | |
(m) | "Stock" shall | |
(n) | "Unforeseeable Emergency" shall mean a severe financial hardship to a Participant that results from (i) an illness or accident of the Participant, the Participant's spouse or a dependent (as defined in |
3. PARTICIPATION. |
(a) | All Non-Employee Directors shall be eligible to participate in the Plan. Each Non-Employee Director entitled to Compensation with respect to a Plan Year may elect to have a pre-determined percentage of such Compensation set apart and allocated to this Plan. Such election shall be made in the | |
(b) | A Non-Employee Director may elect to participate in the Plan with respect to Compensation that may be payable with respect to a Plan Year by making an election no later than December 31 of the Plan Year immediately preceding the Plan Year in respect of which such Compensation would be payable [; provided, however, that, with respect to the Plan Year during which the Plan is initially adopted, any Non-Employee Director serving as of the date of adoption of the Plan may, within 30 days of the Plan's Effective Date (as defined in Section 9), elect to set apart Compensation to this Plan that would otherwise be paid following such election] [and provided further, the Committee may allow a Non-Employee Director whose first term as a Non-Employee Director begins during any Plan Year to elect within 30 days after the start of such first term to set apart Compensation to this Plan that would otherwise be paid following such election]. | |
(c) | Elections to set apart Compensation shall be made each year in accordance with Section 3(a) and shall continue in force until the end of the Plan Year for which the Participant made such election. All amounts set apart or otherwise credited to a Participant's Register pur-suant to the Plan shall continue to be subject to the provisions of the Plan notwithstanding such Participant's election not to set apart additional Compensation. |
4. DEFERRAL OF COMPENSATION; DIVIDEND EQUIVALENTS. |
(a) | The Company shall establish a Register on its books in the name of each Participant. | |
(b) | On each date on which Compensation would otherwise have been paid to a Participant but for an election made in accordance with Section 3(a), the Company shall credit to such Participant's Register a number of Phantom Stock Units equal to (i) the amount of Compensation set apart on such date pursuant to such election divided by (ii) the Fair Market Value of a share of Stock on such date. | |
(c) | With respect to Participants who are not subject to United States tax laws, on each date on which a cash dividend is paid on the Stock, the Company shall credit to each Register then maintained under the Plan for such Participants a number of Phantom Stock Units equal to (i) the per share amount of such dividend, multiplied by (ii) the number of Phantom Stock Units credited to the Participant's Register on the record date for such dividend, divided by (iii) the Fair Market Value of a share of Stock on the date on which the dividend is paid. Each Participant who is subject to United States tax laws shall be paid an amount in cash equal to the cash dividend that would have been paid if the Phantom Stock Units credited to the Participant's Register as of the record date for such dividend were actual shares of Stock; provided, however, that, to the extent permitted under Section 409A of the Code, such a Participant may elect to defer receipt of such dividend in the form of additional Phantom Stock Units credited to the Participant's Register, calculated in accordance with the immediately preceding sentence. |
5. DISTRIBUTION OF DEFERRED COMPENSATION. (1) |
(a) | The Company shall pay or commence payment to a Participant of the balance credited to the Participant's Register (i) within [30] days after the Participant's service on the Board ends or (ii) at such other time as the Participant shall have elected (such date, the "Distribution Event"). Such election shall be made in the form set forth on Exhibit A hereto, or such other form as shall be determined by the Committee from time to time. | |
(b) | Once a Participant (other than a Participant subject to Swedish law) makes an election with respect to the timing of distribution of all or a portion of the balance credited to such Participant's Register, such Participant may make subsequent elections to delay distribution of that portion of the balance credited to such Participant's Register, subject to the following limitations: |
(i) | such subsequent election shall not take effect until at least 12 months after the date on which it is made; | ||
(ii) | in the case of a subsequent election with respect to any | ||
(iii) | in the case of a subsequent election with respect to any payment to be made at a specified time pursuant to an election pursuant to clause (ii) of Section 5(a), the subsequent election may not be made less than 12 months prior to the date of the first scheduled payment pursuant to the prior election. |
(c) | Distributions of amounts credited to a Participant's Register shall be made, at the Participant's election (which election may be made on the Participant's initial election form, pursuant to a subsequent election, or at the time such distribution is to be made), in cash, shares of Stock or a combination thereof. Distributions may be made either in a lump sum or in equal annual installments over a period of years (no more than five), as elected in advance on the election form pursuant to which the Participant made his or her initial election (or, in the case of Participants not subject to Swedish law, in accordance with Section 5(b)). In the event that distributions are | |
(d) | Calculations of Distributions. |
(i) | Unless otherwise determined by the | ||
(ii) | Unless otherwise determined by the Committee, (1) if the Participant elects to receive a lump sum payment in the form of shares of |
(e) | In no event may any portion of the balance credited to a Participant's Register be distributed prior to the expiration of the relevant deferral period; provided, however, that a Participant who is not subject to Swedish law may petition the Committee for an early distribution based on the existence of an Unforeseeable Emergency. The existence of an Unforeseeable Emergency with respect to a Participant shall be determined by the Committee in its sole discretion and in accordance with Section 409(A) of the Code and regulations promulgated thereunder. In the event that the Committee determines that an Unforeseeable Emergency exists with respect to a Participant, the Committee shall determine the amount to be paid from the balance credited to the Participant's Register; provided that such amount may not exceed the amount necessary to satisfy the Unforeseeable Emergency, plus amounts necessary for the Participant to satisfy any taxes reasonably anticipated as a result of such distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant's assets (to the extent the liquidation of such assets would not itself cause severance financial hardship). |
(1) Consider whether Registers should be paid out immediately upon a change in control of the Company. |
6. ADMINISTRATION. |
(a) | The Plan shall be administered by the Committee, which shall have all authority that may be deemed appropriate for administering the Plan, including the discretion and authority to interpret the Plan and to adopt rules and regulations for implementing, amending and carrying out the Plan. The Committee may delegate such duties as it determines to such individuals or entities as it may determine. | |
(b) | All determinations made by the Committee with respect to the Plan shall be conclusive and binding on the Company and its successors, the Participants and, if applicable, their Beneficiaries. |
7. GENERAL PROVISIONS. |
(a) | In the event of a reorganization, recapitalization, spinoff, stock dividend or stock split, or combination or other increase or reduction in the number of issued shares of Stock, the Committee shall, in order to prevent the dilution or enlargement of rights under the Plan, make such equitable changes or adjustments as it deems necessary or appropriate to any or all of the | |
(b) | The right of any | |
(c) | A Participant who is not subject to Swedish law may | |
(d) | No Participant or Beneficiary shall have any power to commute, encumber, sell, or otherwise dispose of the rights provided herein, and such rights shall be non-assignable and non-transferable except by will or the laws of descent and distribution. This limitation shall also apply to a Participant's or Beneficiary's estate. | |
(e) | The crediting of Phantom Stock Units to a Participant's Register shall not |
8. TERMINATION OF THE PLAN; AMENDMENT OF THE PLAN. |
(a) | The Plan shall continue in effect until terminated by resolution of the Board; provided, however, that no such termination shall cause the accelerated payment of any portion of the balance credited to any | |
(b) | The Plan may be amended from time to time by resolution of the Committee; provided, however, that no amendment shall provide for accelerated payment of any portion of the balance credited to any Participant's Register and no amendment may adversely alter the rights of Participants to amounts credited to their Registers as of the date of the amendment. |
9. EFFECTIVE DATE OF THE PLAN. |
The Plan was adopted by the Board effective as of December 16, 2004 (the "Effective Date"). The Plan shall be effective with respect to any Compensation payable to a Non-Employee Director for services rendered after such effective date. |
EXHIBIT A [SWEDISH PARTICIPANTS] |
[Address] Attention: Secretary Gentlemen: Pursuant to the provisions of Section 3 of the Autoliv, Inc. Non-Employee Directors Stock-Related Compensation Plan (hereinafter called the "Plan"), I hereby irrevocably elect to have the indicated percentage of my retainer fees, meeting fees and any other director fees which may become payable to me with respect to [2005] allocated to the Plan in the manner provided therein: (Designate percentage to be deferred.) ______% of Compensation This direction shall be effective only for fees payable to me with respect to [2005]. I elect to have amounts I have allocated to the Plan distributed to me: - Within [30] days after my service on the Board ends - ______________________________ (please specify the date which will trigger distribution of payments to you) I elect to receive payments upon distribution in (elect both timing and form of payment): - Lump sum: Cash _____% Stock _____% - Annual installments over ___ years (must be 5 or fewer). Each installment: Cash ______% Stock ______% If electing to be paid in installments, each installment will equal the value, immediately prior to the Payment Date, of the Phantom Stock Units then credited to my Registered, divided by the number of remaining installments, plus any IN WITNESS WHEREOF, I have set my hand as of the date set forth below: __________________________ Name of Participant __________________ Date |
EXHIBIT A [NON-SWEDISH PARTICIPANTS] |
[Address] Attention: Secretary Gentlemen: Pursuant to the provisions of Section 3 of the Autoliv, Inc. Non-Employee Directors Stock-Related Compensation Plan (hereinafter called the "Plan"), I hereby irrevocably elect to have the indicated percentage of my retainer fees, meeting fees and any other director fees which may have become payable to me with respect to [2005] deferred in Phantom Stock Units in the manner provided in the Plan: (Designate percentage or amount to be deferred.) ______% of Compensation This direction shall be effective only for fees payable to me with respect to [2005]. I elect to have amounts I have allocated to the Plan distributed to me: - Within [30] days after my service on the Board ends - ______________________________ (please specify the date which will trigger distribution of payments to you) I elect to receive payments upon distribution in (elect both timing and form of payment): - Lump sum: Cash _____% Stock _____% - Annual installments over ___ years (must be 5 or fewer). Each installment: Cash ______% Stock ______% If electing to be paid in installments, each installment will equal the value, immediately prior to the Payment Date, of the Phantom Stock Units then credited to my Registered, divided by the number of remaining installments, plus any dividend equivalents that may have accrued since the last Payment Date. If I die while a director of the Company - In a lump sum to ______________________________ (Insert Name of Beneficiary) ______________________________ ______________________________ (If more than one Beneficiary is named, indicate percentages to be In continued installments as directed by ______________________________ (Name one Beneficiary only) IN WITNESS WHEREOF, I have set my hand as of
__________________________ Name of Participant __________________ Date |
Autoliv Inc, Box 70381, SE-107 24 Stockholm, Sweden |