UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.)

Filed by the Registrant  þ                     Filed by a Party other than the Registrant  ¨

Check the appropriate box:

¨Preliminary Proxy Statement


March 8, 2007


Dear Stockholder,¨

It is my pleasureConfidential,forUseoftheCommissionOnly(aspermittedbyRule14a-6(e)(2))

þDefinitive Proxy Statement

¨Definitive Additional Materials

¨Soliciting Material Pursuant to invite you§240.14a-12

Autoliv, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

þNo fee required.

¨Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)Title of each class of securities to which the 2007 Annual Meetingtransaction applies:


(2)Aggregate number of Stockholders of Autoliv, Inc.securities to which will be held on Thursday, May 3, 2007, at The Ritz-Carlton Hotel, 160 East Pearson Street, Chicago, Illinois, 60611 USA commencing at 9.00 a.m. local time.

Information regarding the matters to be voted upon at the meeting is contained in the formal noticetransaction applies:


(3)Per unit price or other underlying value of the meetingtransaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and proxystate how it was determined):


(4)Proposed maximum aggregate value of the transaction:


(5)Total fee paid:


¨Fee paid previously with preliminary materials.

¨Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement onnumber, or the following pages.

It is important that your shares be represented at this meeting. Therefore, please mark, sign,Form or Schedule and the date and return the accompanying proxycard promptly in the enclosed postage-paid envelope. This way your shares will be voted as you direct even if you cannot attend the meeting.

A public press release covering voting results will be available after the meeting.

The Autoliv, Inc. Annual Report for the fiscal year ended December 31, 2006 is being distributed to stockholders with this proxy statement.
of its filing.

(1)Amount Previously Paid:


(2)Form, Schedule or Registration Statement No.:


(3)Filing Party:


(4)Date Filed:



LOGO

March 19, 2008

DEAR STOCKHOLDER,

It is my pleasure to invite you to the 2008 Annual Meeting of Stockholders of Autoliv, Inc. to be held on Tuesday, May 6, 2008, at The Ritz-Carlton Hotel, 160 East Pearson Street, Chicago, Illinois 60611 USA commencing at 9:00 a.m. local time.

Information regarding the matters to be voted upon at this year’s Annual Meeting is contained in the Notice of Meeting and Proxy Statement on the following pages.

It is important that your shares be represented at the Annual Meeting. Therefore, please provide your proxy by following the instructions provided on the formal Notice of Meeting and Notice of Internet Availability of Proxy Materials previously sent to you. This way your shares will be voted as you direct even if you cannot attend the Annual 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, 2007 is being made available to stockholders simultaneously with this Proxy Statement.

Sincerely,


S. Jay Stewart

LOGO

Lars Westerberg

Chairman of the Board
Autoliv, Inc.




Notice of Annual Meeting of StockholdersDirectors


The Annual Meeting of Stockholders of Autoliv, Inc. ("Autoliv" or the "Company") will be held on Thursday, May 3, 2007, commencing at 9.00 a.m. local time at The Ritz-Carlton Hotel, 160 East Pearson Street, Chicago, Illinois, 60611 USA, to consider and vote upon:


AUTOLIV, INC.

Box 70381 SE-107 24

Stockholm, Sweden

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 6, 2008

TO THE STOCKHOLDERS OF AUTOLIV, INC.

NOTICE IS HEREBY GIVEN that the 2008 Annual Meeting of Stockholders of Autoliv, Inc. (“Autoliv” or the “Company”) will be held on Tuesday, May 6, 2008, commencing at 9:00 a.m. local time at The Ritz-Carlton Hotel, 160 East Pearson Street, Chicago, Illinois 60611 USA, to consider and vote upon:

1.Reelection of four directors to the Board of Directors of Autoliv for a term of office expiring on the date of the Annual Meeting of Stockholders in 20102011 (see page 5)4 of the accompanying Proxy Statement).

2.Ratification of the appointment of Ernst & Young AB as the Company'sCompany’s independent auditors for the fiscal year ending December 31, 20072008 (see page 22)59 of the accompanying Proxy Statement).

3.Any other business that may properly come before the meeting and/Annual Meeting or any continuation, postponement or adjournment thereof.

The close of business on March 6, 2007 has been fixed as the record date for the annual meeting (the "Record Date"). All stockholders of record at the close of business on that date are entitled to be present and vote at the meeting and/

The Board of Directors has fixed the close of business on March 7, 2008 as the record date for the Annual Meeting. All stockholders of record at the close of business on that date are entitled to notice of, and to be present and vote at, the Annual Meeting and at any continuation or any adjournment thereof.

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.

Attendance at the Annual Meeting will be limited to stockholders of record, beneficial owners of Company common stock entitled to vote at the Annual 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

LOGO

March 8, 2007Lars Sjöbring

Michael S. Anderson
Acting Vice President for Legal Affairs,

General Counsel and Secretary

AUTOLIV, INC.
Box 70381, SE-107 24


AUTOLIV, INC.

Box 70381 SE-107 24

Stockholm, Sweden

PROXY STATEMENT

INFORMATION CONCERNING VOTING AND SOLICITATION

Availability of Proxy Materials on the Internet

Our Board of Directors (the “Board”) has made this Proxy Statement and the Company’s Annual Report for the year ended December 31, 2007 available to you on the Internet or, upon your request, has delivered printed versions of these materials to you by mail, in connection with the Board’s solicitation of proxies for use at our Annual Meeting of Stockholders, to be held on Tuesday, May 6, 2008, commencing at 9:00 a.m. local time at The Ritz-Carlton Hotel, 160 East Pearson Street, Chicago, Illinois 60611 USA, and at any adjournment thereof (the “2008 Annual Meeting” or the “Annual Meeting”).

General

The date of this Proxy Statement is March 19, 2008, the approximate date on which this Proxy Statement, Proxy Card and the Annual Report for the fiscal year ended December 31, 2007, including financial statements, are first being made available on the Internet to stockholders entitled to vote at the Annual Meeting.

Who Can Vote

You are entitled to vote if you were a stockholder of record of our common stock as of the close of business on March 7, 2008 (the “Record Date”). Your shares may be voted at the Annual Meeting only if you are present in person or represented by a valid proxy.

Shares Outstanding and Quorum

At the close of business on the Record Date, 73,417,004 shares of our common stock were outstanding and entitled to vote. A majority of the shares of our common stock outstanding on the Record Date, present in person or represented by proxy, will constitute a quorum at the Annual Meeting.

How to Vote

If you are a stockholder of record, you may vote by proxy on the Internet or by telephone by following the instructions provided in the Notice of Internet Availability of Proxy Materials sent previously to you. If you requested printed copies of the proxy materials by mail, or have printed a proxy card, you may also vote by completing and mailing a printed proxy card. You may also vote in person at the Annual Meeting.

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If you are a beneficial owner of shares held in street name, please refer to the instructions provided by your bank, broker or other nominee for voting your shares. If you wish to vote in person at the Annual Meeting, you must obtain a valid proxy from the organization that holds your shares and have proof of ownership of our common stock as of the Record Date.

Voting of Shares

The shares represented by all properly executed and unrevoked proxies received in proper form in time for the Annual Meeting will be voted. Each stockholder is entitled to one vote for each share of common stock held on the Record Date. If you properly complete your proxy form and send it to the Company in time to vote, your proxy (one of the individuals named in the proxy form) will vote your shares as you have directed. If you sign the proxy form but do not make specific choices, your proxy will vote your shares as recommended by the Board to elect the director nominees listed in “Election of Directors” and for the ratification of the appointment of Ernst & Young AB as the Company’s independent auditors. If any other matter is presented, your proxy will vote in accordance with his best judgment, to the extent permitted by applicable law and the listing rules of the New York Stock Exchange. As of the date of this proxy statement, the Company is not aware of other matters to be acted on at the Annual Meeting other than those matters described in this proxy statement. Any proxy given may be revoked at any time before it is voted at the Annual Meeting.

Shares held by persons attending the Annual Meeting but not voting, shares represented by proxies that reflect abstentions as to a particular proposal and broker “non-votes” will be counted as present for purposes of determining a quorum. A broker “non-vote” occurs when a nominee holding shares for a beneficial owner has not received voting instructions from the beneficial owner and does not have discretionary authority to vote the shares. Brokers generally have discretionary authority to vote on Item 1 and Item 2 to be considered at the Annual Meeting as set forth below.



Proxy Statement


March 8, 2007

Solicitation of Proxies

The principal executive offices of the Company are located at World Trade Center, Klarabergsviadukten 70, SE-111 64 Stockholm, Sweden. The Company's telephone number is +46 (8) 587 20 600. The date of this Proxy Statement is March 8, 2007, the approximate date on which this Proxy Statement, the accompanying Proxy and the Annual Report for the fiscal year ended December 31, 2006, including financial statements, are first being sent or given to stockholders entitled to vote at the meeting. This Proxy Statement is furnished in connection with the solicitation by the Company's Board of Directors (the "Board") of proxies for use at its Annual Meeting of Stockholders, to be held on Thursday, May 3, 2007, commencing at 9.00 a.m. local time at The Ritz-Carlton Hotel, 160 East Pearson Street, Chicago, Illinois, 60611, USA, and at any adjournment thereof (the "2007 Annual Meeting" or the "meeting").

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.
Item 1: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

Item 2:The ratification of the meeting will be decided byselection of Ernst & Young AB requires the affirmative vote of a majority of votesthe shares present or represented by proxy at the meetingAnnual Meeting and entitled to vote thereat. Consequently, abstentions andon the matter. Abstentions will have the same effect as votes against the ratification. Although brokers have discretionary authority to vote on the ratification, if a broker non-votes (i.e., votes withheld by brokers in the absence of instructions from beneficial holders)submits a non-vote, it 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 Inc. to assist in the solicitation for a fee of $12,000 plus expenses, and WM-data AB for a fee of $39,876 plus expenses.



1. Election of Directors

The Company's by-laws provide that the size of the Board shall be fixed from time to time exclusively by the Board. To the extent practicable, one-half of the directors are to be citizens of the United States and one-half of the directors are to be nationals of Sweden or other member states of the European Union. The Board presently consists of twelve members, divided into three classes serving staggered three-year terms. Directors in each class are elected on a rotating basis at the annual stockholder's meeting at which the term for such class expires.

Listed below as nominees for reelection at the 2007 Annual Meeting for three-year terms are Robert W. Alspaugh, Lars Westerberg, Walter Kunerth and Lars Nyberg whose present terms will expire at that time.

Messrs. Alspaugh, Westerberg, Kunerth and Nyberg presently serve as directors, and the Company has not been advised by any of them that they will not serve if reelected.

Mr. Per-Olof Aronson, whose present term also expires at the 2007 Annual Meeting has advised the Company that he will not stand for reelection due to retirement. It is not expected that the vacancy created by Mr. Aronson's retirement will be filled.

THE BOARD RECOMMENDS A VOTE "FOR" THE NOMINEES FOR DIRECTORS.



The Board, Meeting Attendance and Compensation of Directors

The Board currently consists of twelve members, eleven of whom are independent directors under applicable rules of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated by the Securities and Exchange Commission (the "SEC"). The Board met five times during the year ended December 31, 2006. All incumbent directors participated in more than 75 percent of the meetings of the Board and Board committees of which they were members, and all but two of the incumbent directors were present at all meetings of the Board and Board Committees of which they were members. The Board has adopted Corporate Governance Guidelines to assist the Board in the exercise of its responsibilities.

Under the Corporate Governance Guidelines, the Company's policy is for directors to attend the Annual General Meeting of Stockholders. All but one of the directors participated in the 2006 Annual General Meeting of Stockholders. The Board has further adopted a Code of Conduct and Ethics for Directors to assist the individual directors in fulfilling their duties as members of the Board.

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 had a Code of Conduct and Ethics for Senior Officers (the Code of Conduct and Ethics for Directors, Code of Conduct and Ethics for Senior Officers and Code of Conduct and Ethics that applies to all Company employees are collectively referred to as the "Codes").

The Company has adopted a written policy regarding related person transactions ("the Policy") which is incorporated in the Code of Conduct and Ethics for Directors and for Senior Officers. Pursuant to this policy, the Audit Committee of the Company must review and approve any such transactions. During 2006, no transactions took place that the Company deemed to require disclosure under Section 404(a) of Regulation S-K.

The Corporate Governance Guidelines, the Codes and the Policy are posted on the Company's corporate website at www.autoliv.com - Who We Are - Governance and can also be obtained in print by request from the Company using the contact details below.

The Board has determined that Messrs. Alspaugh, Aronson, Carlsson, Johnston, Kunerth, Lorch, Nyberg, Ringler, Sekiya, Stewart and Welin qualify as independent directors.

None of the independent directors have a relationship with the Company other than being a director and/or a shareholder.

Mr. Stewart has been elected Chairman of the separate sessions of independent directors. The independent directors met in separate sessions five times in 2006.

For Director Compensation, see "Director Compensation" on page 22.

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
c/o Vice President Legal Affairs
Autoliv, Inc.
Box 70381
SE-107 24 Stockholm, Sweden
Phone: +46 8 587 20608
Fax: +46 8 587 20633
E-mail: legalaffairs@autoliv.com

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 receive all such communication after it has been determined that the content represents a message to the Chairman.



Nominees for Directors at the May 2007 Annual Meeting

Robert W. Alspaugh, age 59, has been a director of Autoliv since June 2006. Throughout his 36-year career with KPMG, Robert Alspaugh served as the senior partner for a diverse array of companies across a broad range of industries. He has worked with global companies both in Europe and Japan, as well as those headquartered in the United States. Between 2002 and 2005, when he served as CEO of KPMG International, he was responsible for implementing the strategy of this global organization, which includes member firms in nearly 150 countries with more than 100,000 employees. Prior to this position, he served as Deputy Chairman and Chief Operating Officer of KPMG's U.S. practice. He graduated summa cum laude from Baylor University, Texas in 1970.

Walter Kunerth, age 66, has been a director of Autoliv since August 1998. Professor Kunerth is also a member of the Supervisory Board of Gildemeister AG and Chairman of the Supervisory Boards of Götz AG and Paragon AG. For more than 20 years, Professor Kunerth held various senior 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.

Lars Nyberg, age 55, has been a director of Autoliv since October 2004. Mr. Nyberg served as the Chairman and Chief Executive Officer of NCR Corporation from 1995 to 2003, and as non-executive Chairman of NCR Corporation between 2003 and 2005. He is Chairman of Micronics Laser Systems AB, a manufacturer of high-end laser pattern generators for the production of photomasks, and of IBS AB, a provider of supply-chain management solutions, each of which is listed on the Stockholm Stock Exchange. Mr. Nyberg also serves as a Director on the Boards of Snap-on Inc., a manufacturer of tools and equipment for the automobile industry and other professional tool users, and DataCard Corporation, a company dealing in secure ID and card personalization. Mr. Nyberg is a graduate in Business Administration from the University of Stockholm.

Lars Westerberg, age 58, has been a director and President and Chief Executive Officer of Autoliv, Inc. since February 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 to 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 the Board of Husqvarna AB, a listed Swedish outdoor product manufacturer and is a director of Plastal AB, a Swedish supplier of automotive plastic components, Haldex AB, a listed Swedish automatic braking and transmission supplier, and SSAB, a listed Swedish steel company. Mr. Westerberg holds a Master of Science degree in Electrical Engineering from the Royal Institute of Technology (KTH) and is a graduate in Business Administration from the University of Stockholm.



Incumbent Directors - Terms Expiring at the 2008 Annual Meeting

Sune Carlsson, age 65, has been a director of Autoliv since June 2003. Mr. Carlsson previously served as the President, Chief Executive Officer and Director of AB SKF, a listed Swedish-based supplier of products, customer solutions and services in the rolling bearing, seals and related businesses. Prior to that Mr. Carlsson held several executive positions in Asea and ABB in Switzerland. Mr. Carlsson is Chairman of the Board of Atlas Copco AB, a Swedish-based industrial company. Mr. Carlsson also serves on the boards of Investor AB, Sweden's largest industrial holding company, and Scania AB, the heavy truck maker. Atlas Copco AB, Investor AB and Scania AB are listed on the Stockholm Stock Exchange. Mr. Carlsson holds a Master of Engineering Degree from the Chalmers University of Technology in Gothenburg, Sweden.

William E. Johnston Jr., age 66, has been a director of Autoliv since December 2005. Until August 2004, Mr. Johnston served as a director and as Chairman of the Supervisory Board of Salins Europe S.A., a privately-held producer and distributor of salt products in Europe. Mr. Johnston was President, Chief Operating Officer and a director of Morton International, Inc., a manufacturer of specialty chemicals and salt, from October 1995 until June 2000 when he retired. From June 1999 until June 2000, he was also Senior Vice President of Rohm & Haas Co., a Philadelphia-based specialty chemical company which acquired Morton International, Inc. in 1999. Mr. Johnston had previously served at Morton in several executive positions, including Executive Vice President of Administration from 1993 until 1995, and President, Salt Group from 1984 until 1993. Since 1997, Mr. Johnston has served on the Board of Directors of Unitrin, Inc., a NYSE-listed insurance company. Mr. Johnston holds an M.B.A. from the University of Chicago.

S. Jay Stewart, age 69, has been a director of Autoliv since May 1997 and has served as the Chairman of the Board since April 2001. He was Chairman and Chief Executive Officer of Morton International, Inc. from 1994 through 1999, and was a director of Morton between 1989 and 1999. Mr. Stewart was President and Chief Operating Officer of Morton International, Inc. from 1989 through March 1994. He is a director of HSBC North America Holdings, Inc., and KapStone Paper and Packaging Corp. Mr. Stewart holds a Bachelor of Science degree in Chemical Engineering from the University of Cincinnati and an M.B.A. from West Virginia University.



Incumbent Directors - Terms Expiring at the 2009 Annual Meeting

George A. Lorch, age 65, has been a director of Autoliv since June 2003. Mr. Lorch has been Chairman Emeritus of Armstrong Holdings, Inc., a global company that manufactures flooring and ceiling materials, since 2000. From May 2000 to August 2000, he was Chairman and Chief Executive Officer of Armstrong Holdings, Inc. He was Chairman of Armstrong World Industries, Inc. from 1994 to 2000, its President and Chief Executive from 1993 to 2000 and a Director from 1988 to 2000. Mr. Lorch serves on the Boards of Pfizer, Inc., Williams Companies, Inc., HSBC North America Holding Company and HSBC Finance Co. the non-public, wholly owned subsidiaries of HSBC LLP. Mr. Lorch holds a Bachelor of Science degree in business administration from the Virginia Polytechnic Institute.

James M. Ringler, age 61, has been a director of Autoliv since January 2002. He was, prior to his retirement, Vice Chairman of Illinois Tool Works Inc. between 1999 and 2004. Prior to joining Illinois Tool Works, Mr. Ringler was Chairman, President and Chief Executive Officer of Premark International, Inc., which merged with Illinois Tool Works in 1999. Mr. Ringler joined Premark in 1990 and served as Executive Vice President and Chief Operating Officer prior to becoming the CEO in 1996. He serves on the boards of Dow Chemical Company, FMC Technologies, Inc., Corn Products International and he is the Chairman of the Board of NCR Corporation. He also serves on the board of the Manufacturers Alliance for Productivity and Innovation. Mr. Ringler holds a Bachelor of Science degree in business administration and an M.B.A. degree in finance from the State University of New York.

Tetsuo Sekiya, age 72, has been a Director of Autoliv since April 2001. He presently also serves as Advisor to the Board of NSK Ltd, a global manufacturer of bearings and automotive parts, of which he was Chairman between 2002 and 2004 and President & CEO between 1994 and 2002. Mr. Sekiya also serves as Director of Taisei Corporation, one of Japan's major construction firms, Advisor to the Japan Bearing Industrial Association, an Executive Member of the Board of Directors of Nippon Keidanren, the Japan Federation of Economic Organizations, and a Standing Director of the Japan-China Economic Association. Mr. Sekiya, who holds a Bachelor of Science degree in Economics from Keio University, was honored in 1998 with the Medal of Blue Ribbon from His Majesty, the Emperor of Japan, in recognition of his outstanding service to industry in Japan.

Per Welin, age 70, 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 holds 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.



Committees of the Board

There are three standing committees of the Board: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. All Audit, Compensation and Nominating and Corporate Governance committee members are determined by the Board to qualify as independent directors under applicable rules of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated by the SEC.ratification.

Any other proposal brought before the Annual Meeting will be decided by a majority of votes represented at the meeting and entitled to vote on the matter. Consequently, abstentions will have the same effect as votes against the matter, and broker non-votes will not be counted for purposes of determining whether a proposal has been approved.

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Principal Executive Offices

The principal executive offices of the Company are located at World Trade Center, Klarabergsviadukten 70, SE-111 64 Stockholm, Sweden. The Company’s telephone number is +46 (8) 587 20 600.

Solicitation of Proxies

The Company will bear the cost of the solicitation of proxies. In addition to solicitation over the Internet and 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, by personal interview, mail, telephone, facsimile or electronic mail.

In addition, the Company has retained Georgeson Inc. to assist in the solicitation for a fee of $12,000 plus expenses and WM-data AB for a fee of $30,469 plus expenses.

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ITEM 1

ELECTION OF DIRECTORS

The Company’s By-Laws provide that the size of the Board shall be fixed from time to time exclusively by the Board. The Board presently consists of twelve members, divided into three classes of the same or nearly the same number serving staggered three-year terms. Directors in each class are elected on a rotating basis at the annual meeting of stockholders at which the term for such class expires.

Listed below as nominees for election or reelection at the 2008 Annual Meeting are Jan Carlson, Sune Carlsson, William E. Johnston Jr. and S. Jay Stewart whose present terms will expire at that time. If elected or reelected at the Annual Meeting, each would serve until the 2011 annual meeting of stockholders and until his successor is elected and qualified, or until his earlier retirement, resignation, disqualification, removal or death.

If any nominee should become unavailable for election prior to the Annual Meeting, an event that currently is not anticipated by the Board, the proxies will be voted in favor of the election of a substitute nominee or nominees proposed by the Board or the number of directors may be reduced accordingly. Each nominee has agreed to serve if reelected, and the Board has no reason to believe that any nominee will be unable to serve.

Nominees for Directors at the 2008 Annual Meeting

Jan Carlson, age 47, was appointed a director of Autoliv on May 2, 2007 after becoming President and Chief Executive Officer of Autoliv Inc. on April 1, 2007. Mr. Carlson joined Autoliv in 1999 as President of Autoliv Electronics and held that position until April 2005, when he became Vice President for Engineering of Autoliv Inc. and a member of the Company’s management committee. During his six years as President of Autoliv Electronics, the unit tripled its sales and substantially improved its profitability, partly through a major acquisition. Prior to joining Autoliv, Mr. Carlson was President of Saab Combitech, a division within the Saab aircraft group specializing in commercializing military technologies. Mr. Carlson has a Master of Science degree in Physical Engineering from the University of Linköping, Sweden.

Sune Carlsson, age 66, has been a director of Autoliv since June 2003. Mr. Carlsson previously served as the President, Chief Executive Officer and director of AB SKF, a listed Swedish-based supplier of products, customer solutions and services in the rolling bearing, seals and related businesses. Prior to that, Mr. Carlsson held several executive positions in Asea and ABB in Switzerland. Mr. Carlsson is Chairman of the Board of Atlas Copco AB, a Swedish-based industrial company. Mr. Carlsson also serves on the board of Investor AB, Sweden’s largest industrial holding company. Atlas Copco AB and Investor AB are listed on the Stockholm Stock Exchange. Mr. Carlsson holds a Master of Engineering Degree from the Chalmers University of Technology in Gothenburg, Sweden.

William E. Johnston Jr., age 67, has been a director of Autoliv since December 2005. Until August 2004, Mr. Johnston served as a director and Chairman of the Supervisory Board

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of Salins Europe S.A., a privately-held producer and distributor of salt products in Europe. Mr. Johnston was President, Chief Operating Officer and a director of Morton International, Inc., a manufacturer of specialty chemicals and salt, from October 1995 until June 2000 when he retired. From June 1999 until June 2000, he was also Senior Vice President of Rohm & Haas Co., a Philadelphia-based specialty chemical company, which acquired Morton International, Inc. in 1999. Mr. Johnston had previously served at Morton in several executive positions, including Executive Vice President of Administration from 1993 until 1995, and President, Salt Group from 1984 until 1993. Since 1997, Mr. Johnston has served on the Board of Directors of Unitrin, Inc., a NYSE-listed insurance company. Mr. Johnston holds an M.B.A. from the University of Chicago.

S. Jay Stewart, age 69, has been a director of Autoliv since May 1997 and served as the Chairman of the Board from April 2001 until May 2007. Mr. S. Jay Stewart serves as Lead Director at meetings of the independent directors of the Board. He was Chairman and Chief Executive Officer of Morton International, Inc. from 1994 through 1999 and was a director of Morton between 1989 and 1999. Mr. Stewart was President and Chief Operating Officer of Morton International, Inc. from 1989 through March 1994. He is a director of HSBC North America Holdings, Inc. and KapStone Paper and Packaging Corp. Mr. Stewart holds a Bachelor of Science degree in Chemical Engineering from the University of Cincinnati and an M.B.A. from West Virginia University.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE FOUR NAMED NOMINEES FOR DIRECTORS.

Directors Continuing in Office With Terms Expiring at the 2009 Annual Meeting

George A. Lorch, age 66, has been a director of Autoliv since June 2003. Mr. Lorch has been Chairman Emeritus of Armstrong Holdings, Inc., a global company that manufactures flooring and ceiling materials, since 2000. From May 2000 to August 2000, he was Chairman and Chief Executive Officer of Armstrong Holdings, Inc. He was Chairman of Armstrong World Industries, Inc. from 1994 to 2000, its President and Chief Executive from 1993 to 2000 and a director from 1988 to 2000. Mr. Lorch serves on the Boards of Directors of Pfizer, Inc., Williams Companies, Inc., HSBC North America Holding Company and HSBC Finance Co., the non-public, wholly owned subsidiaries of HSBC LLP. Mr. Lorch holds a Bachelor of Science degree in business administration from the Virginia Polytechnic Institute.

James M. Ringler, age 62, has been a director of Autoliv since January 2002. He was, prior to his retirement, Vice Chairman of Illinois Tool Works Inc. between 1999 and 2004. Prior to joining Illinois Tool Works, Mr. Ringler was Chairman, President and Chief Executive Officer of Premark International, Inc., which merged with Illinois Tool Works in 1999. Mr. Ringler joined Premark in 1990 and served as Executive Vice President and Chief Operating Officer prior to becoming the Chief Executive Officer in 1996. He serves on the boards of Dow Chemical Company, FMC Technologies, Inc., Corn Products International and he is the Chairman of the Board of Teradata Corporation. He also serves on the Board of

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Directors of the Manufacturers Alliance for Productivity and Innovation. Mr. Ringler holds a Bachelor of Science degree in business administration and an M.B.A. degree in finance from the State University of New York.

Kazuhiko Sakamoto, age 62, was appointed a director of Autoliv in August 2007. Mr. Kazuhiko Sakamoto is Senior Executive Vice President and Member of the Board of Directors of Marubeni Corporation, one of Japan’s leading general trading houses, operating import, export, offshore trading and investment activities in various business fields. He is also Executive Corporate Officer of Marubeni’s Regional Coordination & Administration Department and Research Institute, as well as Advisor to Marubeni’s President for Iron & Steel Strategies and Coordination Department. During his nearly 40-year career with Marubeni, Mr. Sakamoto has held several other key positions such as President and Chief Executive Officer of Marubeni America Cooperation. He graduated from the Keio University in 1968 and attended the Harvard University Research Institute for International Affairs in 1991-92.

Per Welin, age 71, has been a director of Autoliv since May 1997 and, prior to that, 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 when he became Chairman of the Board of Directors of L-E Lundberg-foretagen AB. Mr. Welin holds 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.

Directors Continuing in Office With Terms Expiring at the 2010 Annual Meeting

Robert W. Alspaugh, age 60, has been a director of Autoliv since June 2006. Prior to becoming a director of Autoliv, Mr. Alspaugh had a 36-year career with KPMG, including serving as the senior partner for a diverse array of companies across a broad range of industries. He has worked with global companies both in Europe and Japan, as well as those headquartered in the United States. Between 2002 and 2005, when he served as Chief Executive Officer of KPMG International, he was responsible for implementing the strategy of this global organization, which includes member firms in nearly 150 countries with more than 100,000 employees. Prior to this position, he served as Deputy Chairman and Chief Operating Officer of KPMG’s U.S. practice. He graduated summa cum laude from Baylor University, Texas in 1970.

Walter Kunerth, age 67, has been a director of Autoliv since August 1998. Professor Kunerth is also a member of the Supervisory Board of Gildemeister AG and Chairman of the Supervisory Boards of Götz AG and Paragon AG. For more than 20 years, Professor Kunerth held various senior 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.

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Lars Nyberg, age 56, has been a director of Autoliv since October 2004. Mr. Nyberg served as the Chairman and Chief Executive Officer of NCR Corporation from 1995 to 2003, and as non-executive Chairman of NCR Corporation between 2003 and 2005. He is Chairman of DataCard Corporation, a company dealing in secure ID and card personalization. Mr. Nyberg was appointed President and Chief Executive Officer of TeliaSonera, the leading Nordic and Baltic telecommunications company, in July 2007. Mr. Nyberg is a graduate in Business Administration from the University of Stockholm.

Lars Westerberg, age 59, was appointed Chairman of Autoliv, Inc. in April 2007 when he retired as President and Chief Executive Officer. Mr. Westerberg has been a director of Autoliv since February 1999 and was President and Chief Executive Officer of Autoliv, Inc. between February 1999 and April 2007. Prior to assuming his positions with Autoliv, he had since 1994 been the President and Chief Executive Officer of Granges AB, a Swedish-based aluminum and plastics company listed on the Stockholm Stock Exchange. From 1991 to 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 the Board of Directors of Husqvarna AB, a listed Swedish outdoor product manufacturer. Mr. Westerberg is a director of SSAB, a listed Swedish steel company; AB Volvo, a listed Swedish transportation manufacturer; and 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) and is a graduate in Business Administration from the University of Stockholm.

7


CORPORATE GOVERNANCE

Board Independence

The Board currently consists of twelve members, ten of whom are independent directors under the applicable rules of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated by the Securities and Exchange Commission (the “SEC”). The Board has determined that Messrs. Alspaugh, S. Carlsson, Johnston, Kunerth, Lorch, Nyberg, Ringler, Sakamoto, Stewart and Welin qualify as independent directors under the above standards. In making its independence determinations, the Board reviewed information regarding transactions and relationships provided by the director, Company records and publicly available information. None of the independent directors have a relationship with the Company other than as a director and/or a stockholder.

Board Meetings

The Board met five times during the year ended December 31, 2007. All incumbent directors participated in more than 75 percent of the total number of meetings of the Board and committees on which they served.

Following each of the meetings of the full Board, the non-management directors met without management directors (i.e., without Mr. J. Carlson) participating, for a total of five times in 2007. Mr. Westerberg chairs the executive sessions of the non-management directors. In addition, and as needed, the independent directors meet in executive sessions without the non-independent directors (i.e., without Mr. Westerberg and Mr. J. Carlson) participating. As the Lead Director, Mr. Stewart chairs the executive sessions of the independent directors.

Corporate Governance Guidelines and Codes of Conduct and Ethics

The Board has adopted Corporate Governance Guidelines to assist the Board in the exercise of its responsibilities.

The Board has further adopted a Code of Conduct and Ethics for Directors to assist the individual directors in fulfilling their duties as members of the Board. 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 had a Code of Conduct and Ethics for Senior Officers (the Code of Conduct and Ethics for Directors, Code of Conduct and Ethics for Senior Officers and Code of Conduct and Ethics that applies to all Company employees are collectively referred to as the “Codes”).

The Company has adopted a written policy regarding related person transactions (the “Related Persons Policy”), which is incorporated in the Codes of Conduct and Ethics for Directors and for Senior Officers.

The Corporate Governance Guidelines, the Codes and the Related Persons Policy are posted on the Company’s website at www.autoliv.com – Who We Are – Governance and can also be obtained in print by request from the Company using the contact details below.

8


Policy on Attending the Annual Meeting

Under the Corporate Governance Guidelines, the Company’s policy is for directors to attend the Annual Meeting of Stockholders. All but one of the incumbent directors then in office participated in the 2007 Annual Meeting of Stockholders.

Related Person Transactions

The Company recognizes that related person transactions (as defined below) can present potential or actual conflicts of interest and create the appearance that Company decisions are based on considerations other than the best interest of the Company and its stockholders. Accordingly, as a general matter, the Company prefers to avoid related person transactions. The Company recognizes, however, that certain situations may arise whereby related person transactions may not be deemed inconsistent with the best interest of the Company or its stockholders.

The Company’s policy is thatall related person transactions must be reviewed and approved or ratified by the Audit Committee. For the purposes of the Related Persons Policy, a Related Person Transaction is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company (including any of its subsidiaries) was, is or will be a participant and in which any Related Person (as defined in the Related Persons Policy) had, has or will have a direct or indirect interest. During 2007, no transactions took place that the Company deemed to require disclosure under Section 404(a) of Regulation S-K.

Communicating with the Board

Any stockholder or other interested party who desires to communicate with the Board, the independent directors, or the non-management directors regarding the Company can do so by writing to such person(s) at the following address:

Board/Independent Directors/Non-Management Directors

c/o Vice President Legal Affairs

Autoliv, Inc.

Box 70381

SE-107 24 Stockholm, Sweden

Phone: +46 8 587 20608

Fax: +46 8 587 20633

E-mail: legalaffairs@autoliv.com

Communications with the Board, the independent directors or the non-management directors may be sent anonymously and are not screened. Such communications will be distributed to the specific director(s) requested by the stockholder or interested party, to the Board or to sessions of independent directors or non-management directors as a group, after it has been determined that the content represents a message to the intended recipient(s).

9


Committees of the Board

There are three standing committees of the Board: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. The Board has determined that all Audit, Compensation and Nominating and Corporate Governance committee members qualify as independent directors under the applicable rules of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated by the SEC.

The Audit Committee appoints, in its sole discretion and subject to stockholder ratification, the Company'sCompany’s independent auditors and is responsible for the compensation, retention and oversight of the work of the independent auditors and for any special assignments given to such auditors. The Audit Committee also reviews the annual audit and its scope, including the independent auditor'sauditors’ letter of comments and management'smanagement’s responses thereto; approves any non-audit services provided to the Company by its independent auditors; reviews possible violations of the Company'sCompany’s business ethics and conflicts of interest policies; reviews any major accounting changes made or contemplated,contemplated; and reviews the effectiveness and efficiency of the Company'sCompany’s internal audit staff. In addition, the Audit Committee confirms that no restrictions have been imposed by Company personnel on the scope of the independent auditors'auditors’ examinations. The Audit Committee is also responsible for the review and approval of related person transactions under the Policy.Related Person Transactions. Members of this committee are Messrs. Welin (Chairman), Alspaugh, S. Carlsson and Nyberg .Nyberg. The Audit Committee met sevensix times in 2006.2007.

The Compensation Committee advises the Board with respect to the compensation to be paid to the directors and executive officers of the Company and is responsible for both advising the Board with respect to the terms of contracts to be entered into with the senior executives of the Company and approving such contracts. The committee also administers the Company'sCompany’s cash and stock incentive plan and reviews and discusses with management the Company's compensation discussionCompany’s Compensation Discussion and analysis ("Analysis (“CD&A"&A”) included herein. Members of this committee are Messrs. Ringler (Chairman), Aronson, Johnston, Lorch and Lorch.Nyberg. The Compensation Committee met fourthree times in 2006.2007.

The Nominating and Corporate Governance Committee identifies and recommends individuals qualified to serve as members of the Board and assists the Board in reviewing the composition of the Board and its committees, monitoring a process to assess Board effectiveness and developing and implementing the Company'sCompany’s Corporate Governance Guidelines. The Nominating and Corporate Governance Committee will consider Stockholderstockholder nominees for election to the Board if timely advance written notice of such nominees is received by the Secretary of the Company at its principal executive offices in accordance with the Company's by-laws,Company’s By-Laws, a copy of which may be obtained by written request to the Company's Secretary. MembersCompany’s Secretary or on the Company’s website at www.autoliv.com — Investors — Governance — Articles of Association. Until December 2007, the members of this committee arewere Messrs. Stewart (Chairman), Johnston Kunerth and Sekiya.Kunerth. The Nominating and Corporate Governance Committee met three times in 2006.2007. In December 2007, after the final meeting for 2007 and as further described on page 13, Mr. Sakamoto became a member of the committee.


10


Audit Committee Report

The Audit Committee of the Board is responsible for providing independent, objective oversight of the Company'sCompany’s accounting functions and internal controls.

The Audit Committee acts underpursuant to a written charter first adopted and approved by the Board in 2000 and subsequently amended latestmost recently in December 2006, See Appendix A.February 2008. The committee’s current charter is posted on the Company's corporateCompany’s website, www.autoliv.com - Who–Who We Are - Governance, and can also be obtained free of charge in print by request from the Company using the contact detailsinformation below. Each member of the Audit Committee is independent“independent” as defined in, and is qualified to serve on the committee pursuant to, the requirementsrules of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and the rules and regulations as promulgated by the SEC. Each member is financially literate and possesses financial literacy and accounting or related financial management expertise, and Messrs. Alspaugh, Nyberg and Welin arehave been determined by the Board to qualify as audit“audit committee financial experts.experts” as defined by the SEC.

The Audit Committee reviews the Company'sCompany’s financial reporting process on behalf of the Board. In fulfilling its responsibilities, the Audit Committee has reviewed and discussed the audited financial statements contained in the 20062007 Annual Report on Form 10-K with the Company'sCompany’s management and independent accountants.auditors. Management is responsible for the financial statements and the reporting process, including the system of internal controls. The independent accountantsauditors are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States.

The Audit Committee discussed with the independent accountantsauditors matters required to be discussed by Statement on Auditing Standards No. 61, "Communication“Communication with Audit Committees",Committees,” as amended. In addition, the Company'sCompany’s independent accountantsauditors provided to the Audit Committee the written disclosures required by the Independence Standards Board Standard No. 1, "Independence“Independence Discussions with Audit Committees" and the Audit Committee discussed with the independent accountants their independence.Committees.” The Audit Committee alsoreviews and oversees the independence of the independent auditors. The Audit Committee concluded that the independent auditors'auditors’ provision of non-audit services to the Company is compatible with the independent auditors'auditors’ independence. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board (and the Board has approved) that the audited financial statements be included in the Company'sCompany’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006,2007, for filing with the SEC.

The Audit Committee can be contacted regarding accounting, issuesinternal accounting controls, or auditing matters as follows:

The Audit Committee

c/o Vice President Legal Affairs

Autoliv, Inc.
Box 70381

SE-107 24 Stockholm, Sweden

Phone: +46 8 587 20608
20 608

Fax: +46 8 587 20633
20 633

E-mail: legalaffairs@autoliv.com

Contacts

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Communications with the committee are not screened and can be made anonymously and communication with the Committee is not screened.anonymously. The Chairman of the Committeecommittee will receive all such communicationcommunications after it has been determinateddetermined that the contents represent a message to the Chairman.committee.

Per Welin, Chairman

Robert W. Alspaugh

Sune Carlsson

Lars Nyberg


Nominating and Corporate Governance Committee Report

The Nominating and Corporate Governance Committee of the Board is responsible for identifying and recommending to the Board individuals qualified to serve as directors of the Company and on committees of the Board. The Nominating and Corporate Governance Committee further advises the Board on composition and procedures of committees, and is responsible for the development of the Company'sCompany’s Corporate Governance Guidelines and the oversight of the evaluation of the Board, and its committees, as well asand members of the Company'sCompany’s management.

The Nominating and Corporate Governance Committee acts underpursuant to a written charter first adopted and approved by the Board in 2002 and subsequently amended in December 2003. A copy of the Charter is available on the Company's corporateCompany’s website at www.autoliv.com - Who–Who We Are - Governance and can also be obtained free of charge in print by request from the Company using the contact detailsinformation below. Each of the members of the committee is independent“independent” as defined in, and is qualified to serve on the Committeecommittee pursuant to, the requirementsapplicable rules of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated by the SEC.

In 2006, one new director was appointed to fill a vacancy on the Board pursuantPrior to the By-lawsappointment of Mr. J. Carlson as President and Chief Executive Officer of the Company. Mr. Alspaugh was proposed toCompany in April 2007, the Nominating and Corporate Governance Committee by George A. Lorch,had evaluated Mr. Carlson also as a directorpotential member of the Board.

The candidate met with the Chairman of the Board and management of the Company. The Nominating and Corporate Governance Committee evaluated the proposed candidate and determined Having found that heMr. Carlson had the necessary skills, experiencesexperience and qualifications to fulfill the duties on the Board. The Nominating and Corporate Governance Committee thereafter recommended to the Board to appoint the candidate to beof a member of the Board.

The Board, determinedthe Committee proposed that he be appointed a member of the candidate qualifiedBoard with an initial term ending at the 2008 Annual Meeting. As the Company’s President and Chief Executive Officer, Mr. J. Carlson does not qualify as independent under“independent” as defined in the applicable rules of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and rules and regulations promulgated by the SEC.

In August 2007, Mr. Tetsuo Sekiya announced his resignation from the Board. Mr. Kazuhiko Sakamoto was proposed to the Nominating and Corporate Governance Committee by a non-management director of the Company as a suitable candidate to replace Mr. Sekiya as a director. Having found that Mr. Sakamoto had the necessary skills, experience and qualifications to fulfill the duties of a member of the Board, the Committee proposed that he be appointed a member of the Board with an initial term ending at the 2009 Annual Meeting. The Board has determined that Mr. Sakamoto is “independent” as defined in, and is qualified to serve on the committee pursuant to, the applicable rules of the New York Stock

12


Exchange, the Sarbanes-Oxley Act of 2002 and rules and regulations promulgated by the SEC. In December 2007, after the last meeting for the fiscal year, Mr. Sakamoto was appointed to the Nominating and Corporate Governance Committee, but he did thus not participate in any of the committee’s meetings in 2007.

The directors nominated for reelection, Messrs. Alspaugh, Westerberg, Kunerth and Nyberg, have beenCommittee has also reviewed and recommended that Messrs. S. Carlsson, Johnston and Stewart be nominated for reelection by the Committee.stockholders at the Annual Meeting. Each director nominated for reelection is “independent” as defined in the applicable rules of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and rules and regulations promulgated by the SEC.

The Nominating and Corporate Governance Committee will consider a director candidatescandidate nominated by stockholders so long asa stockholder provided that such nominations arenomination is submitted to this Committee by stockholdersthe committee within the period set forth in accordance with Article II, Section 6 of the By-lawsBy-Laws of the Company. In considering candidates submitted by stockholders, the Nominating and Corporate Governance Committee will take into consideration the needneeds of the Board and the qualifications of the candidate. Qualifications of director candidates that are considered by the Nominating and Corporate Governance Committee include an attained position of leadership in the candidatescandidates’ area of expertise, business and financial experience relevant to the Company, possession of demonstrated sound business judgment, expertise relevant to the Company's lineCompany’s lines of businesses,business, independence andfrom management, the ability to serve on standing committees and the ability to serve the interests of all stockholders.

The Nominating and Corporate Governance Committee identifies potential director 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 CEOChief Executive Officer or CFOChief Financial Officer 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 Nominating and Corporate Governance Committee will also consider candidates recommended by stockholders. Once a person has been identified by the Nominating and Corporate Governance Committee as a potential candidate, this Committeethe committee collects and reviews publicly availablepublicly-available information regarding the person to assessdetermine whether the personfurther consideration should be considered further.given to the person’s candidacy. If the Nominating and Corporate Governance Committee determines that the candidate warrants further consideration, the Chairman or another member of the committee contacts thewill contact such 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'person’s accomplishments and qualifications, including in light of the qualifications 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 referencesreferees 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'scandidate’s accomplishments. The Nominating and Corpora teCorporate Governance Committee'sCommittee’s evaluation process does not vary based on whether or not a candidate is recommended by a stockholder.

13


The Nominating and Corporate Governance Committee can be contacted as follows:

The Nominating and Corporate Governance Committee

c/o Vice President Legal Affairs

Autoliv, Inc.
Box 70381

SE-107 24 Stockholm, Sweden

Phone: +46 8 587 20608
20 608

Fax: +46 8 587 20633
20 633

E-mail: legalaffairs@autoliv.com

ContactsCommunications with the committee are not screened and can be made anonymously and communication with the Committee is not screened.anonymously. The Chairman of the Committeecommittee receives all such communication after it has been determined that the content represents a message to the Chairman.committee.

S. Jay Stewart, Chairman

William E. Johnston Jr.

Walter Kunerth
Tetsuo Sekiya


Kazuhiko Sakamoto

Compensation Committee InterlocksDuties, Procedures and Insider ParticipationPolicies

The Compensation Committee is comprised exclusively of directors who are not and have never been Company employees and who qualify as independent directors under applicable rules of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated by the SEC. No executive officer of the Company served as a member of the Compensation Committee of another entity, one of whose executive officers served on the Compensation Committee of the Company. No executive officer of the Company served as a director of another entity, one of whose executive officers served on the Compensation Committee of another entity, one of whose executive officers served as a director of the Company.

Compensation Committee Report

The Compensation Committee acts underpursuant to a written charter first adopted and approved by the Board in 2002 and subsequently amended in December 2006. The Charter is attached as Appendix B, is posted on the Company's corporateCompany’s website at www.autoliv.com - Who–Who We Are - Governance, and can also be obtained free of charge in print by request from the Company using the contact detailsinformation below. Each member of the Compensation Committee is intendedhas been determined by the Board to be independent“independent” as defined in, and is qualified to serve on the committee pursuant to, the requirementsrules of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated by the SEC.

The Compensation Committee of the Board is responsible for an annual review of the goals and objectives of the Company'sCompany’s executive compensation plans in light of the Company'sCompany’s goals and objectives withof such plans; to evaluate annually the performance of the Chief Executive Officer in light of the goals and objectives of the Company'sCompany’s executive compensation plans and together with the other independent directors, determine and approve the Chief Executive Officer'sOfficer’s compensation level based on this evaluation; to evaluate annually the performance of the other executive officers of the Company in light of the goals and objectives of the Company'sCompany’s executive compensation plans, and make recommendations to the Board with respect toset the compensation of such other executive officers;officers based on this evaluation; to evaluate annually the appropriate level of compensation for Board and committee service by non-employee directors; to review and approve any severance or termination arrangements to be made with any executive officer of the Company; to review perquisites or other personal benefitbenefits to the Company'sCompany’s executive officers and directors and recommend any changes to the Board; to review and discuss with management the Company'sCompany’s CD&A, and based on that review and discussion, to recommend to the Board that the CD&A be included in the Company'sCompany’s annual proxy statement or annual report on Form 10-K; to prepare the Compensation Committee Report for inclusion in the annual proxy statement or

14


annual report on Form 10-K; and to review the description of the Compensation Committee'sCommittee’s process and procedures for the consideration and determination of executive officer and director compensation to be included in the Company'sCompany’s annual proxy statement.

The Compensation Committee may form subcommittees for any purpose that it deems appropriate and may delegate to such subcommitteesany subcommittee such power and authority as it deems appropriate;appropriate provided that no such subcommittee shall consist of fewer than two members and that the Compensation Committee shall not delegate any power or authority required by any law, regulation or listing standard to be exercised by the Compensation Committee as a whole. Under the Autoliv, Inc. 1997 Stock Incentive Plan, as amended, the Compensation Committee may, to the extent that any such action will not prevent the Autoliv, Inc. 1997 Stock Incentive Plan from complying with rules and regulations, delegate any of its authority thereunder to such persons as it deems appropriate.

The Vice President offor Human Resources of the Company typicallygenerally acts as Secretary of the Compensation Committee and the Compensation Committee assigns to the Secretary the task of preparing proposals for compensation levels for the Chief Executive Officer and other executive officers and, in addition the general principles for compensation applied by the Company.

The Compensation Committee regularly solicits the independent advice of compensation consultants to ensure that the Company's compensation program is competitive with that of those offered by its peer group. In 2006, Mercer Human Resource Consulting AB ("Mercer"), and Human Resource Services AB ("HRS"), a company affiliated with Towers Perrin, were used for this purpose. Both consultants were retained by the Company, and HRS acted under direction of the Compensation Committee. Mercer was assigned to provide general advice regarding compensation and incentive programmes. HRS was assigned to specific issues related to compensation to Senior Executive Officers. Compensation is established using a specific cross section of international industrial companies of similar size primarily in the automotive sector developed by HRS and the Committee. The Committee met three times with representatives of HRS during 2006.

The Chief Executive Officer may make, and the Committee may consider, recommendations to the Committee regarding compensation. During 2006, the Chief Executive Officer was invited by the Committee to participate in three of its meetings.

The Compensation Committee reviewed and discussed with management the Company's CD&A and also reviewed the description of the committee's processes and procedures for the consideration and determination of executive and director compensation. The Compensation Committee recommended to the Board and the Board has approved that the CD&A and above referenced description be included in the Company's proxy statement for the fiscal year ended December 31, 2006, for filing with the SEC.

The Compensation Committee can be contacted as follows:

The Compensation Committee

c/o Vice President Legal Affairs

Autoliv, Inc., Box 70381

SE-107 24 Stockholm, Sweden

Phone: +46 8 587 20 608

Fax: +46 8 587 20 633

E-mail: legalaffairs@autoliv.com

ContactsCommunications with the committee are not screened and can be made anonymously and communication with the Compensation Committee is not screened.anonymously. The Chairman of the Compensation Committeecommittee receives all such communicationcommunications after it has been determined that the content represents a message to the Chairman.
committee.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee is comprised exclusively of directors who have never been employed by the Company and who are “independent” as defined in the applicable rules of the New York Stock Exchange, the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated by the SEC. No executive officer of the Company served as a member of the Compensation Committee of another entity, one of whose executive officers served on the Company’s Compensation Committee. No executive officer of the Company served as a director of another entity, one of whose executive officers either served on the Compensation Committee of such entity or served as a director of the Company.

15


Compensation Committee Report1

The Compensation Committee has reviewed and discussed with management the Company’s Compensation Discussion and Analysis, and based on such review and discussions, has recommended to the Board that the Compensation Discussion and Analysis be included in the Company’s 2008 Annual Meeting Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K.

James M. Ringler, Chairman
Per-Olof Aronson

William E. Johnston Jr.

George A. Lorch




Lars Nyberg

VotingForward-Looking Statements

Some of the information included in this Proxy Statement contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. This includes statements about capital resources, performance and Principal Holders Thereof

On March 6, 2007,results of operations and are based on our reasonable current expectations. In addition, all statements regarding anticipated growth or improvement in operating results, anticipated market conditions, and economic recovery are forward looking. Forward-looking statements may be identified by the Record Dateuse of words, such as “believe”, “expect”, “anticipate”, “intend”, “depend”, “should”, “plan”, “estimated”, “could”, “may”, “subject to”, “continues”, “growing”, “prospective”, “forecast”, “projected”, “purport”, “might”, “if”, “contemplate”, “potential”, “pending”, “target”, “goals”, “scheduled”, “will likely be”, and similar words and phrases. Discussions of strategies, plans or intentions often contain forward-looking statements. Factors, among others, that could cause our actual results and future actions to differ materially from those described in forward-looking statements include, but are not limited to, the factors described in our SEC filings, including the “Business” and “Risk Factors” Section in our Annual Report on Form 10-K for the year ended December 31, 2007.

Any such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those contemplated by such forward-looking statements. The Company disclaims any duty to update any forward-looking statement, all of which are expressly qualified by the foregoing, other than as required by law.

1

The material in this report is not soliciting material, is not deemed filed with the SEC and is not incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, whether made on, before, or after the date of this Proxy Statement and irrespective of any general incorporation language in such filing.

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EXECUTIVE OFFICERS OF THE COMPANY

Set forth below is information regarding the current executive officers of the Company who are not also directors:

Steven Fredin, age 46, Vice President Engineering, appointed September 1, 2006. Mr. Fredin has worked for Autoliv since 1988 and has been a key technical leader in virtually all of Autoliv’s product areas. Prior to assuming his current position, he was Director Global System Development of the Company and Vice President of Seatbelt Development for Autoliv North America. Mr. Fredin holds a Bachelor of Science degree in Mechanical Engineering from the Michigan Technological University.

Halvar Jonzon, age 57, Vice President Purchasing, appointed January 1, 2002. Prior to joining Autoliv, Mr. Jonzon held various positions since 1974 in Electrolux, the Swedish white goods company, including General Manager of Electrolux International (1983-86), Senior Vice President, Purchasing for the White Goods Division (1986-91), Senior Vice President and General Manager for Nordic Markets (1991-96) and for the European Logistics Division (1996-99), as well as Senior Vice President and Chief of Staff of Electrolux Home Products Europe S.A. in Brussels (1999-02). He holds an MBA from Stockholm School of Economics and an Executive Education Diploma from Columbia Business School in New York City.

Magnus Lindquist, age 44, Vice President and Chief Financial Officer, appointed March 8, 2001. Before joining Autoliv on July 1, 2001, Mr. Lindquist was Executive Vice President of Perstorp AB, a Swedish-based chemistry and materials technology corporation, with responsibility from 1996 for Finance, Business Development and Strategy, and from 1999 also for Treasury and IT. He has also held various positions in the finance departments of the public Swedish companies Stora (pulp and paper), Skanska (construction), Swedish Match (consumer goods) and the SEB Bank. On December 19, 2007, Annual Meeting, there were 79,931,378 sharesMr. Lindquist gave notice of resignation as Vice President, Chief Financial Officer of Autoliv, Inc. The Company and Mr. Lindquist are currently in discussion regarding the effective date of Mr. Lindquist’s resignation to ensure an orderly transition to Mr. Lindquist’s successor who is yet to be named.

Benoit Marsaud, age 55, Vice President and Chief Operating Officer appointed September 1, 2006. Mr. Marsaud has served as Vice President Manufacturing since 1998, President of Autoliv France since 1997 and Vice President Manufacturing of Autoliv AB since 1992. He holds a Master of Science degree from Ecole Nationale Superieure Des Arts et Metiers in Paris.

Svante Mogefors, age 53, Vice President Quality, appointed April 1, 2005, after having been Director Corporate Quality of Autoliv AB since 2003. Mr. Mogefors initially joined Autoliv in 1985 and has experience in several functions and positions within Autoliv, including the areas of product development, process implementations and quality control. Between 1990 and 1996, Mr. Mogefors was for a period President of Lesjöfors Herrljunga AB and for another period President of Moelven E-Modul AB. Mr. Mogefors holds a Master of Science degree from the Chalmers Institute of Technology in Gothenburg.

17


Mats Ödman, age 57, Vice President Corporate Communications, appointed May 1, 1997, after having been Director of Investor Relations of Autoliv AB since 1994. Before that Mr. Ödman had the same position in Fermenta AB and Gambro AB. Prior to that Mr. Ödman was Investor Relations Manager in New York for Pharmacia AB.

Jan Olsson, age 53, Vice President Research, appointed April 1, 2005. Mr. Olsson was Vice President Engineering from 1997 to 2005, President of Autoliv Sverige AB from 1994 to 1997 and Manager of Engineering of Autoliv Sverige from 1989 until August 1994. Mr. Olsson holds a Master of Science degree from the Chalmers Institute of Technology in Gothenburg.

Hans-Göran Patring, age 58, Vice President Human Resources, appointed on April 26, 2001. Prior to assuming his current position on January 1, 2002, he was Deputy Vice President, Human Resources from September 3, 2001, and from 1999 Group Vice President of Human Resources of the Global Automation Division at ABB in Zurich, Switzerland. Previously, he was Vice President of Human Resources for ABB’s Global Robotics Business based in the United Kingdom for three years.

Lars Sjöbring, age 40, Vice President Legal Affairs, General Counsel and Secretary, appointed September 3, 2007. Prior to joining Autoliv Mr. Sjöbring held various positions with Telia AB; Skadden Arps, Slate, Meagher and Flom LLP; and Nokia Corp, most recently as Director Legal (M&A). Mr. Sjöbring holds Master of Law degrees from the University of Lund, Sweden; Amsterdam School of International Relations (ASIR), the Netherlands; and Fordham University School of Law, New York, U.S.A. Mr. Sjöbring is admitted to practice in the State of New York.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our common stock outstanding,as of January 31, 2008 by: (i) each entitled to one vote. Only stockholdersdirector and nominee; (ii) our named executive officers (as defined on page 21 below); (iii) all of record on that date will be entitled to vote at the meeting. The Company has no other class of equity securities outstanding.

As of the date of this proxy statement, five stockholders wereour directors and nominees, Named Executive Officers and executive officers as a group; and (iv) each person known to the Companyby us to beneficially own more than 5% of the Company'sour common stock. As of December 31, 2006, Goldman Sachs Asset Management LP., 85 Broad Street, New York, NY 10004, USA was known to hold 5,720,514 shares of common stock, representing 7.1% of all common stock, AXA Financial, Inc, 1290 Avenue of the Americas, New York, NY 10104, USA was known to hold 5,685,718 shares of common stock, representing 7.1% of all common stock, Iridian Asset Management LLC, 276 Post Road West, Westport CT 06880-4704, USA, was known to hold 5,592,240 shares of common stock, representing 7.0%, LSV Asset Management, 1 N. Wacker Drive, Suite 4000, Chicago, IL 60606, USA was known to hold 4,707,367 shares of common stock, representing 5.9% of all common stock, Blavin & Company, Inc., 7025 N. Scottsdale Road, Suite 230, Scottsdale, Arizona 85253, USA, was known to hold 4,401,700 shares of common stock, representing 5.5%

   Common Stock
Beneficially Owned(1)(2)
 

Name of Beneficial Owner

  Number of
Shares
  Percent
of Total
 

5% Stockholders

   

AXA Assurances I.A.R.D. Mutuelle

   

AXA Assurances Vie Mutuelle

   

AXA Courtage Assurance Mutuelle

   

26, rue Drouot

   

75009 Paris, France

   

AXA

   

25, avenue Matignon

   

75008 Paris, France

   

AXA Financial, Inc.

   

1290 Avenue of the Americas

   

New York, NY 10104

  9,005,829(3) 12.2%

LSV Asset Management

   

1 N. Wacker Drive, Suite 4000

   

Chicago, IL 60606

  4,184,753(4) 5.7%

Directors and Named Executive Officers

   

Robert W. Alspaugh

  500  * 

Jan Carlson

  23,250  * 

Sune Carlsson

  303  * 

William E. Johnston Jr.

  1,000  * 

Halvar Jonzon

  45,710  * 

Walter Kunerth

  0  * 

George A. Lorch

  303  * 

Magnus Lindquist

  7,500  * 

Benoît Marsaud

  53,546  * 

Lars Nyberg

  0  * 

Hans-Göran Patring

  23,500  * 

James M. Ringler

  964  * 

Kazuhiko Sakamoto

  0  * 

S. Jay Stewart(5)

  78,459  * 

Per Welin(6)

  8,849  * 

Lars Westerberg

  306,500  * 

All directors and executive officers as a group(16 individuals)(7)

  665,270  * 

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*Less than 1%.

(1)Based on 73,802,784 shares of the Company’s common stock outstanding as of January 31, 2008. The figures in the table and notes thereto represent beneficial ownership and sole voting and investment power except where indicated.

(2)Includes shares which the following individuals have the right to acquire upon exercise of options exercisable within 60 days as follows: Jan Carlson 20,750 shares, Magnus Lindquist 5,500 shares, Benoît Marsaud 42,000 shares, Halvar Jonzon 41,710 shares, Hans-Göran Patring 23,500 shares and Lars Westerberg 226,500 shares.

(3)The amounts shown and the following information was provided by AXA Financial, Inc. and certain of its affiliates (collectively, “AXA”) pursuant to a Schedule 13G (Amendment No. 2) filed with the SEC on February 14, 2008, indicating beneficial ownership as of December 31, 2007. Of these shares, AXA reported sole power to vote 5,470,856 shares, shared power to vote 1,158,273 shares, sole power to dispose 9,005,817 shares and shared power to dispose 12 shares.

(4)The amounts shown and the following information was provided by LSV Asset Management pursuant to a Schedule 13G filed with the SEC on February 12, 2008, indicating beneficial ownership as of December 31, 2007. LSV Asset Management reported sole power to vote and dispose all such shares.

(5)Mr. Stewart indirectly owns these shares, which are held in a trust with Mr. Stewart as the sole trustee.

(6)Includes 5,018 deferred stock units.

(7)Includes 459,045 shares issuable upon exercise of options exercisable within 60 days.

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COMPENSATION DISCUSSION AND ANALYSIS


Shares beneficially owned by Directors and Officers1) 2)
Robert W. Alspaugh0
Per-Olof Aronson8,000
Sune Carlsson303
William E. Johnston Jr.1,000
Halvar Jonzon38,210
Walter Kunerth0
George A. Lorch303
Magnus Lindquist12,000
Benoît Marsaud35,046
Lars Nyberg0
James M. Ringler964
Tetsuo Sekiya2,600
S. Jay Stewart78,459
Jörgen I. Svensson18,000
Per Welin8,715 4)
Lars Westerberg281,500
All directors, nominees and593,736
executive officers as a group3)

1) All amounts shown represent less than 1% of the outstanding shares of the Company.
2) Includes shares issuable upon exercise of options exercisable within 60 days as follows: Halvar Jonzon 36,210 shares, Magnus Lindquist 12,000 shares, Benoit Marsaud 25,500 shares, Jörgen I. Svensson 18,000 shares, and Lars Westerberg 226,500 shares.
3) Includes 414,295 shares issuable upon exercise of options exercisable within 60 days.
4) Includes 4,884 deferred stock units.




Executive Compensation

This Compensation Discussion and Analysis

This compensation discussion describes the material elements of compensation awarded to, earned by, or paid to each of the Company'sCompany’s executive officers who served as a named executive officersofficer (as explained below) during the last completed fiscal year.

It further discusses the principles underlying our executive compensation policies and decisions and the most important factors relevant to an analysis of these decisions and policies. Finally, it provides qualitative information regarding the manner and context in which compensation is awarded to and earned by our named executive officers and places the data presented in perspective through the tables and narratives that follow.

Below, we will discuss our “named executive officers.” In accordance with the relevant rules and regulations promulgated by the SEC, this refers to our Chief Executive Officer (“CEO”), Chief Financial Officer, our three other executive officers who had the highest total compensation during 2007, and our former CEO:

Jan Carlson, our President and CEO

Magnus Lindquist, our Chief Financial Officer

Benoît Marsaud, our Chief Operating Officer, President Autoliv Europe

Halvar Jonzon, our Vice President Purchasing

Hans-Göran Patring, our Vice President Human Resources

Lars Westerberg, our Chairman and former President and CEO

Our former President and CEO, Mr. Lars Westerberg, retired April 1, 2007. Any references in this section of compensation paid to Mr. Westerberg refer to compensation paid for his services as President and CEO prior to retirement and have been annualized where indicated. Mr. Lindquist gave notice of his resignation as our Chief Financial Officer on December 19, 2007. The Company and Mr. Lindquist are currently in discussions regarding the effective date of Mr. Lindquist’s resignation to ensure an orderly transition to Mr. Lindquist’s successor who is yet to be named.

Compensation Practices Background

We believe a brief discussion of our history as a company and the development of our compensation practices within our expanding company and within Sweden where we have our headquarters will help our investors understand our current pay practices and levels relative to the U.S. market in which we are listed.

The Company’s common stock has been listed on the New York Stock Exchange since the merger of Autoliv AB with Morton Automotive Safety Products in 1997. Our headquarters, however, are located in Sweden, and most of our named executive officers and corporate executives reside in Sweden.

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Our tradition in compensation and benefits, similar to most other large multinationals headquartered in Sweden, has been to adopt local remuneration practices in each of our markets. Over time, the Company has developed a compensation philosophy which integrates elements of Swedish and international compensation practices. Swedish executive compensation levels have historically been modest compared to European markets, and even more so compared to the market in the United States. Swedish compensation practices traditionally focus on the base salary levels necessary to recruit and retain executive talent to the company. As a consequence, base salary generally constitutes half of the total compensation of our named executive officers (excluding the executive’s pension), reflecting a compromise between, on the one hand, the Swedish practice of lower total compensation but a relatively higher base salary, and on the other hand, the U.S. practice of higher total compensation but with a relatively higher at-risk component. The Company has also developed a practice of structuring and targeting incentives such that the value of long-term incentives is greater than that of short-term incentives. The Company has, by using variable incentive compensation, sought a balanced distribution of fixed and variable incentive compensation elements over time.

The Compensation Committee recently began to review the Company’s compensation policies and procedures with the goal of implementing a more formal and robust executive compensation process that strikes an appropriate balance between the many factors impacting management compensation in an international corporation. This review is ongoing and will likely result in future changes to our compensation structure and the elements of our compensation. One of the Committee’s initial changes resulting from this review was the development of a peer group against which we benchmark or assess compensation decisions. As discussed in more detail below, we currently use our peer group to benchmark base salary while at-risk compensation generally follows the Company’s longstanding practice discussed in the previous paragraph without being directly benchmarked against the peer group. The Committee also reviews total compensation levels of the peer group against the total compensation levels of the Company and has as yet found no reason to change our longstanding practice with respect to non-equity and equity incentives. The Committee is continuing to review our peer group, both in terms of the member companies and in how the Committee uses the peer group to make compensation decisions, and may make additional refinements in each of these areas in the future.

Compensation Philosophy and Overview

The overall objectivespurpose of the Company'sour executive compensation programs are to:

  • provide competitive compensation programsis to enableattract, motivate and retain the management talent the Company believes is necessary to attract, retainachieve our strategic and motivate management and top management talent;
  • pay for performance, motivating both long and short-term performance on behalf offinancial objectives. We believe that these important investments in talent should effectively balance the Company's stockholders;
  • place greater emphasis on at-risk incentiveassociated compensation than on fixed salaries, particularly for senior executives;
  • base the compensation of business unit or subsidiary executives on the performance of both their operationsexpense against our financial resources and the overallactual and expected performance of the Company to enhancemaximize our return. We also consider the overall performance ofcompetitive market in which we are headquartered and where our significant operations and markets are located in order to provide a compensation package that optimizes value to the Company;participant and
  • align stockholders' and management's interests.
cost to the Company. The Company's Compensation Committee engages third-party independentand management believe that it is their responsibility to utilize discretion and make informed

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judgments as to individual compensation consultants to benchmark comparable executivepackages or pay levels that may occasionally deviate above or below our target pay strategy based on such factors as:

Individual performance and potential relative to peers

Long-term succession planning and talent management

Business conditions in our industry or the market overall

Cases where individuals are asked to step into new roles and responsibilities for specific projects or strategic initiatives

To meet our compensation levels. In 2006,philosophy, the Company engaged Mercercompensation programs we provide have the following objectives:

OBJECTIVES

Objective A

Offer total compensation and benefits sufficient to attract, motivate and retain the management talent necessary to ensure the Company’s continued success

Objective B

Align the interests of the executives and the stockholders

Objective C

Reward performance in a given year and/or over a sustained period using straightforward programs to communicate our performance expectations

Objective D

Encourage global thinking and cooperation among members of the executive, regional and business unit management teams and throughout the Company

Executive Compensation, Pension Benefits and HRS to advise theChange in Control/Severance Programs

With these objectives in mind, our Compensation Committee.

The principal elements of the Company'sCommittee has built an executive compensation program are (1) basewithin a framework that includes three principal compensation components (base salary, (2) annual non-equity bonusincentive, and stock incentive program) as well as pension benefits and additional contractual arrangements to clarify the Company’s and the executive’s obligations under separation events such as a change in control of the Company. The following summarizes each of these programs, including how we target and administer the compensation, benefits and executive programs and (3) a stock incentive program.agreements. We intend to provide these elements annually to our executives, consistent with the competitive market for talent we operate within. The Compensation Committee bases actual payouts that executives receive on the Company’s and the individual’s respective performance during the applicable time periods the compensation covers. The compensation paid in prior years does not affect the compensation targets the Committee establishes for our named executive officers for future years.

The Company generally sets non-equity compensation (including for all of our named executive officers) in the local currency of the country of service. For all of our named executive officers, except for Mr. Marsaud, who is paid in Euros (“EUR”), this means that the Company sets compensation in Swedish kronor (“SEK”). The exchange rate trend of the U.S. dollar impacts the U.S. dollar amounts of compensation reported in this proxy statement. For

23


ease of reference, we use the following exchange rates for 2007 (1 USD = 0.68 EUR = 6.40 SEK) throughout this proxy statement. For historic numbers, we have converted the compensation paid in prior years by the same exchange rate in order to facilitate comparison.

ANNUAL COMPENSATION
Objective(s)
Furthered
Base Salary

Purpose.Provides a minimum level of pay that sustained individual performance warrants. We believe a competitive salary is important to attract and retain an appropriate caliber of talent for the position.

How We Determine Base Salaries.The initial base salary pay levels for our officers are set at the time the officers assume their positions and are most significantly a function of the market assessment of the pay package required to induce the executive to accept a position at the Company and the Company’s needs to fill the position either internally or externally. For 2007, this applied primarily to Mr. Carlson, our President and CEO.

The base salaries of our named executive officers are reviewed every year. The Compensation Committee considers changes in base salary levels after it reviews the median base salary levels of our peer group as well as the level of base salary annual increases in each of the major markets from where the Company may source executive talent. The Committee seeks to meet median target base salary levels of our peer group over time, making annual adjustments above or below the market pay movements resulting from our competitive pay reviews based on the relative gap to our peer group, target positioning and a subjective review of performance developed by our CEO and relayed by our Vice President for Human Resources (please see the section on “Peer Groups and Benchmarking” below). For 2007, this adjustment process applied to all named executive officers except Mr. Carlson.

We believe, consistent with the advice of our compensation consultants, that our base salary levels are competitive with our target median positioning if the salaries are within a range above or below the market median, because a range helps us to avoid extreme swings in pay targets for our executives by recognizing that data from our peer group will vary from year-to-year.

A

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ANNUAL COMPENSATION
Objective(s)
Furthered

The Compensation Committee reviews, provides feedback and approves final recommendations for any individual pay adjustments for the President and CEO, Chief Financial Officer and Chief Operating Officer. For other group Vice Presidents, including our other named executive officers, the Compensation Committee approves any pay adjustments for the group as a whole.

Explanation of Objective % of Total Compensation.For 2007, base salaries for our named executive officers and other senior executive officers should on average represent roughly half of the total of the three elements of total compensation mentioned above. At higher responsibility levels we intend to have a higher percentage of total compensation in incentive, performance-based pay. We believe these objectives are generally consistent with the practices in Sweden where most of our executives are located. We also believe this is appropriate as we seek to provide a more stable pay package given the longer economic cycles of our industry. However, as pay practices develop in our market and the Compensation Committee continues to review the Company’s compensation structure and policies, we may reconsider the above objectives.

Annual

Non-Equity Incentive

Purpose. Compensation program to recognize short-term performance against established annual financial performance goals of the Company (payable in the year following the year in which it was earned).

How We Determine Annual Non-Equity Incentives. For our named executive officers and most other senior executive officers, the Company pays an annual incentive based on the Company’s earnings before interest and taxes (“EBIT”).

   Threshold: If the EBIT is 70% or less of the previous year’s EBIT, the Company does not pay any annual incentive.

   Maximum: If the EBIT is 130% or more of the previous year’s EBIT, the payment equals two times the target amount, the maximum payout under the program.

   Target: Where the relevant EBIT is between 70% and 130% of the previous year’s EBIT, the incentive is

A, B, C & D

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ANNUAL COMPENSATION
Objective(s)
Furthered

calculated through linear interpolation (“along a straight line”) between said levels.

For more information on these profit targets, please see the table in the section “Executive Compensation Implementation – Annual Non-Equity Incentive” below.

The Company believes that using a single, established profit measure provides clear direction to our executives and promotes our team orientation through shared responsibility for overall results. In addition, the Company believes that a single performance metric enhances the transparency of our annual incentive program, providing easy-to-understand information to our investors. We thus believe this simple, transparent approach supports good corporate governance.

The Compensation Committee may exercise its discretion and adjust the EBIT used in the incentive calculation for the impact of extraordinary events. Any such adjustment could be to the benefit or detriment of the recipients, and we generally expect that the adjusted EBIT will serve as the comparison EBIT for the following year’s annual incentive program. The Committee made one such adjustment in 2007 (please see the section “Executive Compensation Implementation – Annual Non-Equity Incentive” below).

Explanation of Objective % of Total Compensation.Each year, the Committee reaffirms appropriate non-equity incentive award opportunities by position in accordance with the Company’s longstanding practice. We base our annual incentive opportunities on a percentage of each executive’s base salary. We developed these percentages from observed Swedish opportunities when the program was instituted. The resulting target-level bonus opportunities for our named executive officers is in 2007 intended to represent about 20% of their total compensation, which is generally consistent with recent years. The Company believes that this approximate 20% objective has resulted in appropriate levels of annual incentive compensation to our named executive officers. In addition, we believe that this general objective focuses our executives on achieving annual goals, while at the same time

26


ANNUAL COMPENSATION
Objective(s)
Furthered

recognizes that the Company places a more significant commitment on longer-term shareholder return (please see immediately below for a discussion of long-term incentives). This approximate 20% objective may change over time as we continue to review our compensation practices.

The Committee reviews the target total cash (sum of the base salary and target annual incentive) of each of our named executive officers as well as equity award opportunities solely to determine if any changes should be considered to the longstanding program opportunities provided.

LONG-TERM INCENTIVES
Objective(s)
Furthered
Stock Incentive Program

Purpose.The Company believes that equity ownership in the Company is important to provide our executive officers with long-term incentives to build value for our stockholders. We award both stock options and restricted stock units (“RSUs”) under our stock incentive program.

       Options have value only if the stock price increases over time and therefore incent stockholder value creation

¡        This characteristic ensures that our named executive officers have a meaningful portion of their compensation tied to future stock price increases

¡        In periods of flat or negative stock performance, however, options provide only limited retention value

       The compensation value of an RSU does not depend solely on future stock price increases, although its value will increase when the stock price increases. Although their value may fluctuate over time, the Company believes that RSUs provide a more powerful tool to retain valuable executives because:

¡        RSUs are easy to understand and have a more stable value relative to options, and

A, B & C

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LONG-TERM INCENTIVES
Objective(s)
Furthered

¡        By vesting after three years, RSUs encourage the executive to stay with the Company or forfeit significant accumulated value, even in periods of flat or negative stock performance.

In 2007, the Committee generally allocated approximately 50% of the economic value of our equity awards to our named executive officers in the form of options and 50% in the form of RSUs. This allocation may change in the future as a result of the Compensation Committee’s ongoing review of our compensation practices.

How We Determine Long-Term Incentives. The Compensation Committee begins its process for determining the grant levels based on a review of competitive market pay levels and trends provided by the independent compensation consultant, a review of historical grant levels, and the recommendations of our CEO for grants to the senior executives (our Vice President for Human Resources provides a separate recommendation for the award to our CEO based on advice from our compensation consultants). The Committee then recommends the number of stock options and RSUs to be granted to the CEO and approves and/or modifies awards to other senior executives (including the other named executive officers) and the total number of shares available for the program as a whole.

Over time, the Committee has intended to grant equity to our named executive officers in levels consistent with the overall long-term incentive targets outlined below. The Committee also considers the resulting targeted total compensation of our named executive officers relative to the benchmark median levels of total compensation of our peer group, subject to any modifications the Committee believes are necessary, based on individual performance, industry conditions and the other criteria discussed in “Compensation Philosophy and Overview” above. Because the long-term incentive awards to our named executive officers are based largely on levels awarded in Sweden, these awards are below the median long-term incentive award levels of our current peer group.

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LONG-TERM INCENTIVES
Objective(s)
Furthered

Where deemed necessary, the Committee may also grant stock options and/or restricted stock units for retention or compensation purposes outside the normal annual grant process.

How We Value Equity Awards. Valuation of equity awards is complex and difficult. For accounting purposes we follow FAS 123R, but when internally assessing and communicating equity compensation we value RSUs and options by applying a “rule of thumb” where we assume the value of an RSU to be equal to the closing price on the NYSE on the date of grant and the value of an option to be one-third that of an RSU. These “assigned values” are different from the accounting cost the Company recognizes in the Summary Compensation Table on page 48. However, the Company believes that this “rule of thumb” is an efficient and appropriate method for making equity compensation decisions with respect to our named executive officers as it has been generally consistent with the relative values of our RSUs and options over time.

Explanation of Target % of Total Compensation. Long-term incentives for our named executive officers are intended to represent a significant part of their total compensation. For 2007, we sought to allocate approximately one-third of our named executive officers’ total compensation to long-term incentives, although long-term incentives generally comprise a slightly greater percentage of the performance-based compensation for our named executive officers with the highest levels of responsibility. This target may change over time as we continue to review our compensation practices.

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RETIREMENT / POST-EMPLOYMENT COMPENSATION
Objective(s)
Furthered
Pension Benefits

Autoliv operates two supplemental retirement benefit programs, in addition to the mandatory programs required by local national statutes, and pays pension benefit premiums for our named executive officers that are competitive with customary local practice. The programs’ normal retirement age is 65, and are as follows:

Defined Benefit Program(traditional pension): With the exception of (i) our new President and CEO, Mr. Carlson, and (ii) Mr. Marsaud, our other named executive officers may retire at the age of 60 with pension benefits amounting to 70% of base salary at retirement until the age of 65 and with complementary pension benefits after the age of 65 that are intended to provide pension benefits amounting to approximately 40% of base salary at retirement. The Company pays insurance premiums to insure the pension benefits for the period from the date of retirement until normal retirement age of 65 and thereafter for complementary pension benefits.

Mr. Marsaud’s arrangement is comparable in nature, but accounts for a different regulatory environment in France.

Defined Contribution Program (individual retirement investment from company contributions): In 2007, as part of an on-going transition plan, the Compensation Committee decided that all newly hired or promoted senior executives would participate in a defined contribution plan rather than a defined benefit plan. Currently, our President and CEO is the only named executive officer, but not the only executive officer, who participates in this plan and the Company contributes an amount equal to 35% of his annual base salary to the plan. For other senior executives covered by the plan, the Company contributes an amount equal to 30% of their annual base salaries to the plan.

Based on advice from our benefits consultants, the Company believes these benefits are consistent with the general benefit levels of large Swedish companies. The Company periodically reviews competitive market practices to take advantage of cost-saving opportunities and to ensure our pension benefits are competitive and tax efficient for our executive officers and for the Company.

A

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RETIREMENT / POST-EMPLOYMENT COMPENSATION
Objective(s)
Furthered
Change in Control / Severance ProgramsThe Company provides severance and change in control benefits to certain of our named executive officers under their employment and severance agreements. Our senior executive officers, which include our named executive officers, have employment agreements with the Company that provide for a notice of termination of employment by the Company of no more than 24 months and generally of 18 months. Our senior executive officers also have Severance Agreements with the Company which, in case of a termination, provide for lump sum payments following a Change of Control (as defined in such agreements). These protections are provided to our most senior executive officers both as a competitive pay package component and to encourage executives to remain focused on the Company’s business in the event of rumored or actual fundamental corporate changes. Our review of such practices indicates that our termination and change of control benefits are consistent with provisions and benefit levels generally provided in such arrangements to senior executives, and therefore the Company believes them to be reasonable.B

Executive Compensation Implementation

Base Salaries

We provide. The following table presents the opportunity forsalaries paid to our named executive officers and other executives to earnin the past three fiscal years.

Base Salaries of

Our Named Executive Officers

Named Executive Officer  2007  2006  2005

Jan Carlson

President and CEO

  701,172  356,771  285,156

Magnus Lindquist

Chief Financial Officer

  500,000  445,312  403,125

Benoît Marsaud

Chief Operating Officer

  661,765  612,745  531,250

Halvar Jonzon

Vice President Purchasing

  353,906  332,031  312,500

Hans-Göran Patring

Vice President Human Resources

  353,906  331,250  304,688

Lars Westerberg

Chairman, former President and CEO

  341,797  1,289,063  1,171,875

31


Annual Non-Equity Incentive. The following table presents the annual incentive opportunities for each named executive officer expressed as a competitive annualpercentage of base salary. We provide this opportunityAwards to attract and retain an appropriate caliber of talent for the position over time, and to provide a base wage that is not subject to our performance risk.

The Company reviews base salaries for itsCompany’s named executive officers annually and adjustments are based on position, individual performance and data on competitive comparable salaries received from independent compensation consultants engaged by the Company.

Base salaries for senior executive officers are intended to represent about 50 % of the total of the three elements of total compensation mentioned above with the annual non-equity bonus calculated at base.

Annual Non-Equity Bonus Program

The annual non-equity bonus program applicable to senior executive officers is based on the attainment by the Company and applicable business units and subsidiaries of certain profit targets. It is measured on the earnings before interest and tax (EBIT) level and starts at 70% of previous year's EBIT with a base at 100% of previous year's EBIT and target at 130% of previous year's EBIT.

The Company's senior executive officers are eligible to receive non-equity incentive program payments based 100% on the profit target of the Company, while region and division managers generally are eligible to receive payments based 70% on the profit target of the Company and 30% on the profit target of the region or division. Presidents, Managing Directors and management team members in subsidiaries, regions and divisions are eligible to receive bonus payments based 60% on the profit target of the Company and 40% to the profit target of the Company, region or division. Business unit officers are eligible to receive bonus payments based 60% on the bonus related to the Company and 40% related to the two-year average of order intake from the business unit customers.

Award levels may range from zero to 100% of thetheir base salaries for senior executive officers. This bonus has traditionally been paid the year following the year in which it was earned.

In 2006, only the Company's Chief Executive Officers' award level could possibly have reached 100% of his base salary. Basedsalaries. We established these targets based on the level of position and responsibility.

Annual Incentive Opportunity for

Our Named Executive Officers in 2007

 
Named Executive Officers  Incentive as a % of Base Salary 
    Threshold  Target  Maximum 

Jan Carlson

President and CEO

  0% 50% 100%

Magnus Lindquist

Chief Financial Officer

  0% 30% 60%

Benoît Marsaud

Chief Operating Officer

  0% 40% 80%

Halvar Jonzon

Vice President Purchasing

  0% 30% 60%

Hans-Göran Patring

Vice President Human Resources

  0% 26% 52%

Lars Westerberg

Chairman, former President and CEO

  0% 50% 100%

As discussed on page 25 above, mentioned factors, bonus paymentsthe annual incentive is based on the Company’s EBIT performance compared to that of the previous year. However, in 2007, the Company’s EBIT was subject to what the Compensation Committee deemed to be an extraordinary event. Due to the seniorloss of a legal dispute, the Company recognized a cost of approximately $30 million in 2007. Because the dispute had its origins in a contract entered into before the 1997 merger of Autoliv AB and Morton Automotive Safety Products and was already subject to dispute at the time of the merger, the Compensation Committee determined that the Company’s EBIT for 2007, for purposes of calculating the 2007 non-equity incentive, should be adjusted such that the impact of the cost of the legal dispute was disregarded.Had no adjustment been made, the annual incentive would have been calculated using a multiplier of 0.89. As a result of the adjustment, the annual incentive was calculated using a multiplier of 1.08.

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This adjustment in 2007 will also impact the 2008 annual incentive payment because each year’s EBIT threshold is based on the prior year’s EBIT. The 2008 threshold amount will be the adjusted (higher) 2007 amount, not the unadjusted (lower) 2007 amount. As a result, annual performance incentive bonuses will be payable with respect to 2008 only if the Company’s EBIT in 2008 exceeds 70% of the adjusted (higher) EBIT amount.

Actual Pay-Out

Annual Non-Equity Incentive Program

YearPay-Out
20071.08 x target
20061.05 x target
20051.00 x target

The table below presents the annual incentive paid to our named executive officers for 2006 will vary from 27% to 53% of their base salaries with a median of 39%. In 2006, about 125 senior executives participated in this program. For 2005, the bonus payments to senior executive officers varied from 24% to 50% of their base salaries with a median of 36%.past three fiscal years.

This annual bonus program is intended to represent about 20% for senior executive officer, and about 20-25% for other senior executives, respectively, of the total of the three elements of total compensation mentioned above with the annual non-equity bonus calculated at base.

Annual Non-Equity Incentives Paid to

Our Named Executive Officers

Named Executive Officer  2007  2006  2005

Jan Carlson

President and CEO

  353,953  113,750  85,937

Magnus Lindquist

Chief Financial Officer

  162,000  139,453  120,312

Benoît Marsaud

Chief Operating Officer

  285,882  213,706  163,765

Halvar Jonzon

Vice President Purchasing

  121,500  116,484  110,937

Hans-Göran Patring

Vice President Human Resources

  101,250  88,593  74,218

Lars Westerberg

Chairman, former President and CEO

  184,570  676,758  585,937

The Company believes that the program's relation to an established profit measure parameter makes it easy to understand and follow, and easy to calculate and therefore provides a good motivational tool for participants.

Stock Incentive Program

The Company believes that equity ownership in. Equity incentives are provided under the Company is important to provide our executive officers with long-term incentives to build value for our stockholders. Stock options and restricted stock units ("RSU") align employees incentives with shareholders since options have value only if the stock price increases over time, and RSU's increase in value when the stock price increases.

The Company also belives that RSUs assist to retain valuable executives since RSUs have a durational element of three years, i.e. they only vest after three years if the executive has not provided notice of resignation at that time.

Half of the value of the equity compensation is granted as stock options and half is granted as RSUs.

The Autoliv 1997 Stock Incentive Plan, as amended, which has been approved by the stockholders of the Company and it is administered by the Compensation Committee.

The Compensation Committee, typically in December of each year, makes recommendationsrecommends to the Board for approval as regards the following year's grant date fornumber of stock options and RSUs to be granted to the named executive officers and some other senior executive officers, the date of grant and the total number of shares available for grants to all participants in that year. The Committee otherwise delegates to the CEO the determination of grants made to other selected participants. The CEO provides the Compensation Committee with his final grant recommendations to the other selected participants for its review.

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In prior years, the Compensation Committee had decided on a grant date as early as practicably possible in the grant year. As a result, vesting in subsequent years occurred shortly before the earnings release for the prior quarter and year, and thus in a blackout period when the executives were not permitted to place any sell orders for vesting equity instruments – even when the vesting triggered taxes immediately payable. In December 2006, the Compensation Committee determined that in order to enhance the Company'sCompany’s corporate governance procedures and to avoid future unintended burdens to participants it would be a better practice going forward to delay the grant date until after the Company has published its fourth quarter financial report in the first quarter of the following year.

The Compensation Committee makes a specific recommendation in regard to number of stock options and RSUs to be granted to the most senior executive officers, and otherwise delegates to the CEO to determine the grants to be made to other selected participants.

Information pertaining to the final grants to other selected participants is delivered to the Compensation Committee for review. This information is used by the Compensation Committee to construct future programs.

All stock options granted to our executive officers for 2006 are for 10-year terms with2007 expire after 10 years, have an exercise price equal to the closing price on the New York Stock Exchange on the date of grant and becomeare exercisable after one year of continued employment following the grant date.

All RSUs granted for 2006to our named executive officers vest after three years and are conditional upon the optioneenamed executive officer not having given notice of termination of employment prior to such date.the vesting date, although the Compensation Committee has the discretion to allow RSUs to vest during the notice period.

Prior to 2006, the exercise price was equal to the average price on the New York Stock Exchange on the date of grant.

For senior executive officers, the yearly grants are intended to represent approximately 30% of total compensation. In 2006,2007, there were 269 participants in the stock incentive program.program, compared to 269 in 2006 and 354 in 2005.


Pension Benefits

The Company has paid pension benefit premiums for Messrs. Westerberg, Lindquist, Jonzonfollowing table presents the stock option and Svensson in accordance with customary Swedish practice and for Mr. Marsaud in accordance with customary French practice. Normal retirement age is 65. Mr. Westerberg has an agreement allowing retirement atRSU awards (representing the agenumber of 60 with pension benefits amounting to 70%shares of base salary at retirement until the age of 65 and amounting to 50% of base salary after the age of 65. Pursuantour common stock subject to such agreement,awards) to our named executive officers in the past three fiscal years.

Equity Awards to Our Named Executive Officers
Named Executive Officer 2007 2006  2005
   Options RSUs Options  RSUs  Options  RSUs

Jan Carlson(1)

President and CEO

 20,000 11,267 5,000  1,667  3,500  1,167

Magnus Lindquist

Chief Financial Officer

 5,500 1,834 6,000  2,000  6,000  2,000

Benoît Marsaud

Chief Operating Officer

 16,500 5,500 6,000  2,000  6,000  2,000

Halvar Jonzon

Vice President Purchasing

 5,500 1,834 6,000  2,000  6,000  2,000

Hans-Göran Patring

Vice President Human Resources

 5,500 1,834 6,000  2,000  6,000  2,000

Lars Westerberg

Chairman, former President and CEO

 15,000 5,000 30,000  10,000  30,000  10,000

(1)The number of RSUs awarded to Mr. Carlson in 2007 includes 4,600 RSUs which were part of the compensation arrangement agreed with Mr. Carlson in connection with his appointment on September 1, 2006 as President, Region Europe, but which RSUs were, pursuant to the terms of said arrangement, formally awarded in February 2007.

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Analysis

The following tables analyze the actual compensation of our named executive officers in 2007 versus our compensation objectives discussed above. This analysis is in addition to the analysis that appears throughout this Compensation Discussion and Analysis. In discussing the total compensation of our named executive officers relative to the total compensation of similar positions in our peer group, we note that the Compensation Committee does not specifically target total compensation levels relative to our peer group, except as an informational point in monitoring the results of our allocation objective approach.

Jan Carlson

Current President & CEO

Base

Salary(1)

  

Approximate

Market

Median

  Analysis
$781,250  $1,150,000  

Upon assuming the duties of President and CEO, Mr. Carlson accepted a base salary of $781,250, which is below the median level for a similar position in our peer group. The Committee believed the salary was an appropriate starting point for a recently appointed CEO in our market and industry.

 

Assuming Mr. Carlson’s performance so warrants, the Committee intends to make annual adjustments to reach market median levels of salary over time. In assessing Mr. Carlson’s performance, the Committee intends to consider the Company’s annual financial performance, market performance of the Company’s common stock, and personal goals associated with senior management development and the performance of Mr. Carlson’s direct reports. The Committee intends to subjectively consider these factors in light of the prevailing market conditions and the Committee’s opinion of each factor’s relative importance during the review period.

Annual
Incentive(1)
  Target  Analysis
$421,875  $390,625  The annual incentive awarded to Mr. Carlson was calculated using the methodology discussed above. As the 2007 EBIT used for calculating the annual incentive was slightly above the 2006 EBIT, the incentive paid was also slightly higher than the Target amount. Mr. Carlson’s annual incentive was based on his base salary earned in 2007, which includes three months as President, Region Europe and nine months as our President and CEO.

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Jan Carlson

Current President & CEO

Annual
Incentive(1)
 Target  Analysis
     Mr. Carlson’s annual incentive award comprised approximately 24% of his total 2007 compensation. Given that we paid incentives above Target levels, this proportion is consistent with the Committee’s current objective that the annual incentive will comprise approximately 20% of the CEO’s total compensation at the target level.
Equity
Awards(2)
 Amount at
One-Third
Objective
  Analysis
$574,000 $592,375  In 2007, the value of the equity awarded to Mr. Carlson, based on the assumed value discussed on page 29 above, comprised approximately 32% of his total compensation. This amount reflects the pay package negotiated as part of his assumption of the CEO duties.

Total

Compensation

(1)

 

Approximate

Market

Median

  Analysis
$1,777,125 $2,770,313  Although Mr. Carlson’s total compensation is below our peer group median, we believe that this amount, and each component, is an appropriate starting point for a recently appointed CEO in our market and industry.
Pension &
Other
Compensation
 Analysis
$367,882 Mr. Carlson received other compensation totaling $367,882, which included the Company’s contribution of $344,022 to Mr. Carlson’s Defined Contribution Plan. Based on advice from our compensation consultants, we believe these benefits are appropriate for an officer in Mr. Carlson’s position.

(1)This amount reflects what Mr. Carlson would have earned in 2007 had he been the Company’s President and CEO for the entire year. Because Mr. Carlson held the CEO position for only nine months in 2007, this amount does not correspond to the amount reported in the Summary Compensation Table below.

(2)This amount reflects the value for the awards in 2007 as CEO excluding grants received for service in his prior position as President, Region Europe (specifically, 4,600 RSUs). This value is also different than the amount presented in the Summary Compensation Table, which presents the associated expense by the Company during this fiscal year for the individual.

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Lars Westerberg

Former President & CEO

Base
Salary(1)
 Approximate
Market 75th
Percentile
  Analysis
$1,367,188 $1,327,000  Mr. Westerberg’s annual salary in 2007 approximated the 75th percentile of the benchmark CEO position in our peer group. The Committee believed this level was appropriate in light of his performance in 2006 and his sustained performance during his tenure as CEO.
Annual
Incentive(1)
 Target  Analysis
$738,282 $683,594  The annual incentive awarded to Mr. Westerberg was calculated using the methodology discussed above. As the 2007 EBIT used for calculating the annual incentive was slightly above the 2006 EBIT, the incentive paid was also slightly higher than the Target amount.
Equity
Awards(1)(2)
 Amount at
One-Third
Objective
  Analysis
$590,100 $898,523  In 2007, the value of the equity awarded to Mr. Westerberg, based on the assumed value discussed on page 29 above, comprised approximately 22% of his total annualized compensation, largely because the value reflects the equity actually awarded to Mr. Westerberg without it being annualized.

Total
Compensation

(1)

 

Approximate
Market

Median

  Analysis
$2,695,570 $2,770,313  The annualized total compensation paid to Mr. Westerberg is within the competitive range of the market median of our peer group.
Pension &
Other
Compensation
 Analysis
$2,684,415 Mr. Westerberg’s employment with the Company terminated prior to his reaching the full retirement age of 60. In recognition of Mr. Westerberg’s contributions to the Company, upon his termination, the Company provided Mr. Westerberg with an additional 15-month service credit such that when he reaches age 60 he will receive retirement benefits as if his employment terminated upon reaching age 60. The present value of such additional service credit is approximately $2,670,170.

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(1)The amounts for Base Salary and Annual Incentive, and those components of Total Compensation, reflect what Mr. Westerberg would have earned in 2007 had he been the Company’s President and CEO for the entire year. Because Mr. Westerberg held the CEO position for only three months in 2007, these amounts do not correspond to the amounts reported in the Summary Compensation Table below. The amount for Equity Awards reflects the equity actually granted to Mr. Westerberg in 2007 and has not been annualized.

(2)This amount reflects the value for the awards in 2007. This value will be different than the amount presented in the Summary Compensation Table, which only presents the associated expense by the Company during this fiscal year for the individual.

Magnus Lindquist

Chief Financial Officer

Base Salary  Approximate
Market
Median
  Analysis
$500,000  $439,063  The base salary paid to Mr. Lindquist in 2007 was 14% higher than the median base salary level of our peer group, primarily to account for observed year-over-year increases in market rates that were significantly higher than that for other functions. The Committee concluded that it was prudent to anticipate future base salary increases of similar scale based on the increasingly important role that this position has in the global market as corroborated by market pay increases and consistent with the importance the Company places on this critical position.
Annual
Incentive
  Target  Analysis
$162,000  $150,000  

The annual incentive awarded to Mr. Lindquist was calculated using the methodology discussed above. As the 2007 EBIT used for calculating the annual incentive was slightly above the 2006 EBIT, the incentive paid was also slightly higher than the Target amount.

 

Mr. Lindquist’s annual incentive award comprised approximately 18% of his total compensation paid in 2007. This level is consistent with the Committee’s current target that the annual incentive will comprise approximately 20% of the CFO’s total compensation at the target level.

Equity
Awards(1)(2)
  Amount at
One-Third
Objective
  Analysis
$216,370  $292,790  In 2007, the value of the equity awarded to Mr. Lindquist, based on the assumed value discussed on page 29 above, comprised approximately 25% of his total compensation, or 8% less than our objective allocation. The relative value of

38


Magnus Lindquist

Chief Financial Officer

     Mr. Lindquist’s long-term incentive was less in 2007 because the Compensation Committee determined to grant the same number of stock options and RSUs to Mr. Lindquist as it granted to the Company’s other Vice Presidents reporting directly to the CEO. Because Mr. Lindquist has a higher base salary than such other Vice Presidents, the value of equity granted to him comprised a lower proportion of his total compensation.
Total
Compensation
 Approximate
Market
Median
  Analysis
$878,370 $832,813  The target total compensation paid to Mr. Lindquist is within the competitive range of the market median for our peer group. We believe that the total compensation amount, and each component, is appropriate for a CFO for our market and industry.
Pension &
Other
Compensation
 Analysis
$218,409 During 2007, the change in pension value with respect to Mr. Lindquist’s Defined Benefit Plan was $179,214. Mr. Lindquist also received $39,195 in other compensation. We believe these benefit levels are appropriate for officers in Mr. Lindquist’s position.

(1)This amount reflects the value for the awards in 2007. This value will be different than the amount presented in the Summary Compensation Table, which only presents the associated expense by the Company during this fiscal year for the individual.

(2)As discussed on page 21, Mr. Lindquist gave notice of his resignation as our Chief Financial Officer on December 19, 2007. As a result of his resignation, Mr. Lindquist will forfeit the RSUs awarded to him in 2007.

Benoît Marsaud

Chief Operating Officer

Base
Salary
  

Approximate

Market

Median

  Analysis
$661,765  $661,500  The base salary of Mr. Marsaud was initially assessed in 2006 against the COO benchmark in our peer group. Because Mr. Marsaud resides in France, the Committee determined that an additional review against French competitive market rates for similar positions was warranted. In light of these reviews and

39


Benoît Marsaud

Chief Operating Officer

     

retention considerations, the Committee determined in 2006 that his salary was appropriate. The Committee did not adjust Mr. Marsaud’s salary for 2007.

 

Mr. Marsaud’s salary comprised approximately 43% of his total compensation. His salary is consistent with the COO approximate market median in our peer group.

Annual

Incentive

 Target  Analysis
$285,882 $264,705  

The annual incentive awarded to Mr. Marsaud was calculated using the methodology discussed above, and no adjustment was made to the formula result.

 

Mr. Marsaud’s annual incentive award comprised approximately 19% of his total compensation in 2007. This level is consistent with the Committee’s current objective that the annual incentive will comprise approximately 20% of the COO’s total compensation at the target level.

Equity

Awards(1)(2)

 Amount at
One-Third
Objective
  Analysis
$590,100 $512,582  In 2007, the value of the equity awarded to Mr. Marsaud, based on the assumed value discussed on page 29 above, comprised approximately 38% of his total compensation, which the Company considers to be generally consistent with our objective for such awards.

Total

Compensation

 Approximate
Market
Median
  Analysis
$1,537,747 $1,558,824  The target total compensation paid to Mr. Marsaud is within the competitive range of the market median for our peer group. We believe that the total compensation amount, and each component, is appropriate for a COO for the local French market and our industry.

Pension &

Other

Compensation

 Analysis
$136,944 During 2007, the change in pension value with respect to Mr. Marsaud’s Defined Benefit Plan was $54,092. This amount is lower than that for the

40


Benoît Marsaud

Chief Operating Officer

other named executive officers due to the different regulatory environment in France for such plans. Mr. Marsaud also received $82,852 in other compensation. We believe these benefit levels are appropriate for officers in Mr. Marsaud’s position.
RetentionAnalysis
In 2007, Mr. Marsaud was awarded a retention bonus of $1,323,529 to be paid in 2010 if he is still a member of the group management team at that time and has not given notice of his resignation.

(1)This amount reflects the value for the awards in 2007. These values will be different than the values presented in the Summary Compensation Table, which only presents the associated expense by the Company during this fiscal year for the individual.

(2)This amount reflects the value for the awards in 2007 as COO excluding grants received for service in his previous position (500 RSUs and 1,500 options).

Halvar Jonzon

Vice President Purchasing

Base

Salary

  Approximate
Market
Median
  Analysis
$353,906  $371,875  

The base salary paid to Mr. Jonzon in 2007 was approximately 5% lower than the median base salary level for peer group positions reporting directly to the CEO (other than Chief Financial Officer positions, which include Vice President Purchasing positions when reported in our peer group or survey sources).

 

Mr. Jonzon’s base salary comprised approximately 51% of his total compensation in 2007.

Annual
Incentive
  Target  Analysis
$121,500  $112,500  

The annual incentive awarded to Mr. Jonzon was calculated using the methodology discussed above. As the 2007 EBIT used for calculating the annual incentive was slightly above the 2006 EBIT, the incentive paid was also slightly higher than the Target amount.

 

Mr. Jonzon’s annual incentive award comprised approximately 18% of his total compensation paid in 2007. This level is consistent with the Committee’s current objective that the annual incentive will comprise approximately 20% of the Vice President Purchasing’s total compensation at the target level.

41


Halvar Jonzon

Vice President Purchasing

Equity
Awards(1)
 Amount at
One-Third
Objective
  Analysis
$216,370 $230,592  In 2007, the value of the equity awarded to Mr. Jonzon, based on the assumed value discussed on page 29 above, comprised approximately 31% of his total compensation, which is generally consistent with our objective.
Total
Compensation
 Approximate
Market
Median
  Analysis
$691,776 $614,063  The target total compensation paid to Mr. Jonzon is approximately 13% above the market median for our peer group, which the Committee considers to be appropriate for a Vice President Purchasing for our market and industry.
Pension &
Other
Compensation
 Analysis
$429,267 During 2007, the change in pension value with respect to Mr. Jonzon’s Defined Benefit Plan was $320,560. Mr. Jonzon also received $108,707 in other compensation. We believe these benefit levels are appropriate for officers in Mr. Jonzon’s position.

(1)This amount reflects the value for the awards in 2007. These values will be different than the values presented in the Summary Compensation Table, which only presents the associated expense by the Company during this fiscal year for the individual.

Hans-Göran Patring

Vice President Human Resources

Base

Salary

  Approximate
Market
Median
  Analysis
$353,906  $371,875  

The base salary paid to Mr. Patring in 2007 was approximately 5% lower than the median base salary level for peer group positions reporting directly to the CEO (other than Chief Financial Officer positions, which include the Vice President Human Resources position when reported in our peer group or survey sources).

 

Mr. Patring’s base salary comprised approximately 53% of his total compensation in 2007, which is consistent with the Committee’s objective of 50%.

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Hans-Göran Patring

Vice President Human Resources

Annual
Incentive
 Target  Analysis
$101,250 $93,750  

The annual incentive awarded to Mr. Patring was calculated using the methodology discussed above. As the 2007 EBIT used for calculating the annual incentive was slightly above the 2006 EBIT, the incentive paid was also slightly higher than the Target amount.

 

Mr. Patring’s annual incentive award comprised approximately 15% of his total compensation paid in 2007. This level is consistent with the Committee’s current objective that the annual incentive will comprise approximately 20% of the Vice President Human Resource’s total compensation at the target level.

Equity
Awards(1)
 Amount at
One-Third
Objective
  Analysis
$216,370 $223,842  In 2007, the value of the equity awarded to Mr. Patring, based on the assumed value discussed on page 29 above, comprised approximately 32% of his total compensation, which the Company believes is generally consistent with our objective for such awards.
Total
Compensation
 Approximate
Market
Median
  Analysis
$671,526 $614,063  The target total compensation paid to Mr. Patring is approximately 9% above the market median for our peer group, which the Committee considers to be appropriate for a Vice President Human Resources for our market and industry.
Pension &
Other
Compensation
 Analysis
$485,951 During 2007, the change in pension value with respect to Mr. Patring’s Defined Benefit Plan was $345,883. Mr. Patring also received $140,068 in other compensation. We believe these benefit levels are appropriate for officers in Mr. Patring’s position.

(1)This amount reflects the value for the awards in 2007. These values will be different than the values presented in the Summary Compensation Table, which only presents the associated expense by the Company during this fiscal year for the individual.

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The Role of the Compensation Consultants

The Compensation Committee regularly solicits the independent advice of compensation consultants to ensure that the Company’s compensation program is competitive with that of those offered by its peer group. Due to the relative scarcity of compensation disclosure in the European market, including Sweden, Swedish companies commonly rely on the experience of local consultants when determining final compensation levels to ensure that they are competitive in the Swedish market. The Committee annually reviews these pay levels and target incentive opportunities versus the competitive market and considers both the consultant’s input regarding trends, the CEO’s recommendations for the other named executive officers as relayed by our Vice President for Human Resources, the recommendations of the Vice President for Human Resources for the CEO’s compensation, and other relevant factors as discussed above in the “Compensation Philosophy and Overview” section.

In 2007, the Company pays insurance premiums to insureretained HRS Human Resource Services AB (“HRS”), a company affiliated with Towers Perrin, and Mercer Human Resource Consulting AB (“Mercer”) for this purpose. Both consultants were retained by the pension benefits of Mr. Westerberg forCompany, and HRS acted under the period from the date of his retirement until the normal retirement age of 65 and thereafter.

Senior Executive Officersdirection of the Company other than Mr. Westerberg and Mr. Marsaud may retire at the age of 60 with pension benefits amounting to 70% of base salary at retirement until the age of 65 and with complementary pension benefits after the age of 65 that are intendedCompensation Committee. Mercer was assigned to provide pension benefits amountingas well as general advice regarding compensation and incentive programs. HRS was assigned to approximately 55%specific issues related to compensation to senior executive officers. The Committee discussed its compensation philosophy with HRS, but otherwise did not impose any specific limitations or constraints on, or otherwise direct, the manner in which HRS performed its advisory services.

The Committee met two times with representatives of HRS during 2007.

Peer Groups and Benchmarking

Given the globalization of the Company’s business and the changes in Swedish compensation practices discussed above, the Company decided in 2005 to review its pay practices and policies, including the construction of its compensation peer group, which had consisted of the ten most international, large-capitalization industrial companies in Sweden. Under the direction of the Compensation Committee, HRS conducted this review during 2005 and 2006 and concluded that an industry-based peer group of corporations headquartered in several key markets, as discussed below, would be a more appropriate comparison for the Company’s compensation practices and levels.

Along with the revised peer group, the Company also determined to change our target for base salaries to the international peer group’s median base salary afterlevels. The Committee believes that this more closely reflects the agecompensation levels of 65. Pursuant to such agreements, the Company pays insurance premiums on a linear basis to insuremarkets in which we operate and the pension benefitscompanies with which we compete for the period from the date of retirement until normal retirement age of 65 and thereafter for complementary pension benefits.

executive talent. The Company has determined that these benefits are consistent with benefitnot recently changed our targeted levels of annual short-term and long-term incentives. We believe that the current mix of fixed and variable compensation is appropriate given our compensation objectives discussed above. The Committee reviews our compensation policies annually to ensure that the Company achieves our primary compensation goal of aligning executive and stockholder interests through our total pay package.

44


The Company’s peer group in 2007 consists of companies from the automotive industry and general industrial companies based in a number of markets in which the Company operates, including Sweden, the United States, France, Germany and the United Kingdom. Within these countries, the Committee chose peer companies based on total revenue, number of employees and market capitalization. The ranges (25th percentile to 75th percentile) of the revenues, number of employees and market capitalization of the companies in our peer group are: $6.5 billion to $15.5 billion, 30,000 to 60,000, and $3.5 billion to $19.0 billion, respectively. As discussed on page 22 above, the Committee is continuing to review the Company’s peer group and may make additional adjustments in the future.

Using the guideline criteria set forth above, our consultant develops a position-specific market survey for our executive officers. The data used for each position depends on the availability of data in the various companies and countries for the position we attempt to assess. Compensation decisions in 2007 were based on information from the following peer group:

Our Peer Group Companies

In 2007

Company  Country  

Revenues

($ in

millions)(1)

  

Number of

Employees

(thousands)(1)

  

Market

Capitalization

($ in millions)(1)

Assa Abloy

  Sweden  4,000  29.6  6,900

Atlas Copco

  Sweden  7,400  26.3  18,700

Continental

  Germany  17,700  81.1  16,400

Cummins

  USA  9,900  33.5  6,400

Electrolux

  Sweden  18,300  69.5  5,400

Faurecia

  France  14,100  60.0  1,500

GKN

  UK  6,900  40.0  4,400

Lear

  USA  17,100  115.0  2,300

MAN

  Germany  18,900  58.2  12,800

Michelin

  France  20,000  129.0  12,400

Navistar International

  USA  10,300  16.0  2,100

Sandvik

  Sweden  9,000  39.6  15,500

Sauer Danfoss

  Germany  1,900  9.0  1,300

Scania

  Sweden  9,000  30.8  14,100

SKF

  Sweden  7,100  38.7  7,400

Tenneco

  USA  4,500  19.0  1,000

Textron

  USA  10,000  37.0  11,500

Tomkins

  UK  6,000  25.4  4,100

45


Our Peer Group Companies

In 2007

Company  Country  

Revenues

($ in

millions)(1)

  

Number of

Employees

(thousands)(1)

  

Market

Capitalization

($ in millions)(1)

Trelleborg

  Sweden  3,500  22.7  1,700

TRW

  USA  12,700  63.1  2,600

Valeo

  France  12,800  70.1  3,000

AB Volvo

  Sweden  32,600  82.0  27,700

(1)Revenues and number of employees are based on fiscal year 2005 data, while market capitalization is as of November 2006.

Survey data of general industrial companies of relevant size, if used, was selected from each country.

Role of the Chief Executive Officer

The Company’s CEO may make, and the Compensation Committee may consider, recommendations to the Committee regarding the Company’s compensation and employee benefit plans and practices, including its executive compensation plans, its incentive compensation and equity-based plans with respect to executive officers other comparable companies. The Company usedthan the independent consultants Max MatthiessenCEO and Mercerthe Company’s director compensation arrangements. Our CEO regularly participates in the meetings of the Compensation Committee. During 2007, the prior CEO (and current Chairman) was invited by the Committee to provide adviceparticipate in regard to these issues.


Termination of Employment and Change of Control Severance Agreements

The Company provides the opportunity for certainthree of its meetings, while the current CEO was invited by the Committee to participate in two meetings. The Committee excuses the CEO from the meeting when matters related to his compensation are discussed.

The Compensation Committee assigns to the Vice President for Human Resources the task of preparing proposals for compensation levels for the CEO and other executive officers and, in addition, the general principles for compensation applied by the Company. Our CEO generally makes recommendations to the Vice President for Human Resources concerning the compensation of the named executive officers, to be protected under the severance and change of control provisions of their employment agreements. Senior Executive Officers have employment agreements with the Company that provide forother than himself. As a notice of termination of employment by the Company of between 24 and 30 months. Senior Executive officers of the Company also have Change of Control Severance Agreements with the Company which in case ofresult, our CEO generally has a termination provide for lump sum payments following a Change of Control. These protections are provided to Senior Executive Officers to attract and retain an appropriate caliber of talent for the positions and to encourage executives to remain focusedsignificant impact on the Company's business in the event of rumored or actual fundamental corporate changes. Analyses indicate that our termination and change of control provisions are consistent with provisions and benefit levels of other peer group companies, and they have been determined to be reasonable.

See "Potential Payments upon Termination or Change of Control" for more information.

Chief Executive Officer

The compensation paid to the Company's Chief Executive Officer, Mr. Lars Westerberg,other named executive officers.

Policy for 2006 was determined based on information on competitive comparable compensation levelsAdjustment or Recovery of Awards Following Restatements

Autoliv does not currently have a formal policy regarding adjustment or recovery of awards if performance measures used to determine awards are restated. However, in cases such as fraud or gross negligence, the Company will review its alternatives for adjustment and/or recovery in the context of the peer group companies received from an independent compensation consultant.

For 2006, the Compensation Committee approved a stock option grant of 30,000 shares and a RSU grant of 10,000 shares of common stockmagnitude of the Companyrestatement, the cost to Mr. Westerberg, cash compensation at an annual rate of SEK 8,250,000 ($1,134,408),recover and an annual non-equity bonus of SEK 4,125,000 ($567,204) with a maximum of SEK 8,250,000 ($1,134,408). The annual non-equity bonus for Mr. Westerbergthe impact to those not involved in or responsible for the year 2006fraud or error leading to the restatement. Our Board will amountdetermine the extent to SEK 4,331,250 ($595,565) calculatedwhich the Company will pursue recovery and/or adjustments and from/for whom. The Company intends to develop a policy statement following a review of our needs as described above under "Annual Non-equity Bonus Programs",a global corporation, operating across numerous national jurisdictions.

46


Tax and will be paid in 2007.Accounting Considerations

Limitation on Deductibility of Certain Compensation

Section 162(m) of the Internal Revenue Code of 1986 as amended (the "Code"“Code”) generally disallows a tax deduction to public companies for annual compensation over $1 million paid to their chief executive officers and the fourthree other most highly compensated executive officers (other than their chief financial officers) that is not "performance-based"“performance-based” (as defined in the Code). It is the committee'sCompensation Committee’s general policy to avoid the loss of tax deductibility whenever compliance with Section 162(m) would be consistent with the Company'sCompany’s incentive compensation objectives.

Consequently, we structure the employee incentive compensation programs in which the Company'sthat our most highly compensated officers participate have been structuredin to comply with the Code'sCode’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.



Additionally, due to differing personal and corporate tax as well as mandatory retirement obligations in France, we have provided an augmented compensation program for Mr. Marsaud. This is an example of where the Committee has deviated from the Company’s general program guidelines to meet the intended competitive positioning for a named executive officer who resides within a region outside of our Swedish headquarters.

47


Stock Performance Graph (1)

The following graph compares the cumulative stockholder returns on the Company's common stock with Standard & Poor's 500 Index and Standard & Poor's Auto Parts & Equipment Index.EXECUTIVE COMPENSATION

1) Dividends at a rate of $4.70 per share of common stock were paid during the period and are included in the cumulative return on the Company's common stock.



Summary Compensation Table (USD) 1)(1)

The following table shows information concerning the annual compensation for services provided by our CEO, CFO, and three other most highly compensated executives and our former President and CEO for each of the fiscal yearyears ended December 31, 2006:


Name and
Principal
Position
YearSalary($)Bonus($)Stock
Awards($)5)
Option
Awards5)
Non-
Equity
Incentive
Plan
Compen-
sation($)
Change in
Pension Value
and Non-
qualified
Deferred
Compensation
Earnings($)4)
All Other
Compen-
sation
($) 2)
Total

Lars Westerberg
Chief Executive
Officer
20061,134,408n/a457,753414,900595,5651,321,8057,5312,610,137
 
Benoît Marsaud
Chief
Operating
Officer3)
2006532,140n/a91,54782,980198,63247,21871,696976,995
 
Magnus Lindquist
Chief Financial Officer
2006391,887n/a91,54782,980122,722122,71550,725739,861
 
Halvar Jonzon
Vice
President
Purchasing
2006292,197n/a91,45782,980102,509253,48896,555665,698
 
Jörgen I. Svensson
Vice President Legal
Affairs, General Counsel
and Secretary
2006303,389n/a91,45782,98092,40390,18850,330620,559

1) The amounts contained in the table below were paid either in Swedish Krona or Euro.
All amounts have been converted to dollars using the following exchange rates:
2006 - 1 USD = 7.2725 SEK = 0.783 EUR
2) All other compensation consists of i) premiums covering pension for early retirement from the age of 60 and/or complementary pension benefits after the age of 65, including supplemental health insurance, (see "Pension Plans"),2007 and ii) for Messrs. Marsaud, Lindquist, Jonzon and Svensson, the amount includes the taxable value of a company car, which is approximately $ 10,000 per person. (The taxable value is higher than the incremental cost to the Company).
3) When Mr. Marsaud assumed the position as Chief Operating Officer as of September 1, 2006, he was promised 500 RSUs and 1,500 stock options for 2006 in addition to RSUs and stock options already granted in 2006. These additional RSUs and stock options will be granted to Mr. Marsaud on the 2007 grant date decided by the Compensation Committee.
4) All amounts contained in the column relate to Change in Pension Value.
5) The numbers reflect the dollar amount recognized in 2006 under FAS123R. The FAS123R values are the accounting values used by the Company to establish the cost of the grants. For more information see the Company's Annual Report Note 1 "Stock Based Compensation".

December 31, 2006:

Name and Principal Position

 Year Salary
($)
 Bonus
($)
 Stock
Awards
($)(2)
 Option
Awards
($)(2)
 Non-Equity
Incentive
Plan

Compen-
sation
($)
 Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(3)
  All Other
Compensation
($)(4)
 Total

Jan Carlson
President and CEO

 2007 $701,172 $0 $205,705 $287,750 $353,953 $0(5) $367,882 $1,916,462
 2006 $356,771 $0 $60,557 $69,150 $113,750 $173,567  $83,115 $856,910

Benoît Marsaud
Chief Operating Officer

 2007 $661,765 $0 $159,369 $250,635 $285,882 $54,092  $82,852 $1,494,595
 2006 $612,745 $0 $91,547 $82,980 $213,706 $54,349  $81,235 $1,136,562

Magnus Lindquist
Chief Financial Officer

 2007 $500,000 $0 $96,272 $83,545 $162,000 $179,214  $39,195 $1,060,226
 2006 $445,312 $0 $91,547 $82,980 $139,453 $139,445  $46,277 $945,014

Halvar Jonzon
Vice President Purchasing

 2007 $353,906 $0 $96,272 $83,545 $121,500 $320,560  $108,707 $1,084,490
 2006 $332,031 $0 $91,547 $82,980 $116,484 $288,045  $115,386 $1,026,473

Hans-Göran Patring
Vice President Human Resources

 2007 $353,906 $0 $96,272 $83,545 $101,250 $345,883  $140,068 $1,120,924
 2006 $331,250 $0 $91,547 $82,980 $88,593 $310,834  $137,800 $1,043,004

Lars Westerberg
Chairman, former President and CEO

 2007 $341,797 $0 $783,917 $227,850 $184,570 $2,670,170  $14,245 $4,222,549
 2006 $1,289,063 $0 $457,753 $414,900 $676,758 $1,502,000  $8,557 $4,349,031

(1)The amounts contained in the table were paid in either Swedish Kronor or Euro. All amounts have been converted to dollars using the following exchange rates in effect on December 31, 2007: 1 USD = 6.40 SEK = 0.68 EUR.

(2)The numbers reflect the dollar amount recognized in 2007 under FAS 123R. The FAS 123R values are the accounting values used by the Company to establish the cost of the grants. For more information see the Company’s Annual Report Note 1 “Stock Based Compensation.”

(3)All amounts contained in the column relate to Change in Pension Value.

(4)All other compensation consists of (i) premiums covering pension for early retirement from the age of 60 and/or complementary pension benefits after the age of 65, including supplemental health insurance (as discussed in the sections called “Pension Plans” of our Compensation Discussion and Analysis), and (ii) for Messrs. Carlson, Marsaud, Jonzon, and Patring the amount includes the aggregate incremental cost to the Company of a company car, which is $23,860, $32,693, $20,927 and $31,783 respectively. For Mr. Carlson, the amount includes $344,022 contributed in 2007 to his Defined Contribution Plan.

(5)The change in pension value for Mr. Carlson in 2007 was -$4,018.

See "Compensationour “Compensation Discussion and Analysis"Analysis” above for more information.




48


Grants of Plan-Based Awards Table 1)

(1)

The following table summarizes grants of plan-based awards made to named executive officers made in the year ended December 31, 2006:2007:


Name and
Principal
Position
Grant DateBoard
Action
Date
All Other
Stock Awards:
No. of Shares
of Stock
or Units (#)
All Other
Option
Awards:
No. of
Securities
Underlying
Options (#)
Exercise of Base
Price of Option
Awards ($)
(S/Sh) ($)
Grant Date
Value of Stock
and Option Awards
($) 2)

Lars Westerberg
Chief Executive
Officer
01/09/06
01/09/06
12/14/05
12/14/05
 
10,000
30,00049.60414,900
496,000
 
Benoît Marsaud
Chief Operating
Officer
01/09/06
01/09/06
12/14/05
12/14/05
 
2,000
6,00049.6082,980
99,200
 
Magnus Lindquist
Chief Financial
Officer
01/09/06
01/09/06
12/14/05
12/14/05
 
2,000
6,00049.6082,980
99,200
 
Halvar Jonzon
Vice President
Purchasing
01/09/06
01/09/06
12/14/05
12/14/05
 
2,000
6,00049.6082,980
99,200
 
Jörgen I. Svensson
Vice President
Legal Affairs,
General Counsel and Secretary
01/09/06
01/09/06
12/14/05
12/14/05
 
2,000
6,00049.6082,980
99,200

1) For 2006, all senior executive officers of the Company as a group received 81,000 options and 27,000 RSUs, and all employees of the Company (other than executive officers) as a group received 210,350 options and 70,117 RSUs.
2) The grant date fair value of the RSUs and the stock options is calculated according to FAS123R. For more information see the Company's Annual Report Note 1 "Stock Based Compensation".

Name and Principal Position

 Grant
Date
 Approval
Date
 Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards
 All Other
Stock
Awards:
Number
of Shares
of Stock
or Units

(#)
 All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
 Exercise
or Base
Price of
Option
Awards
($)
 Grant Date
Fair Value
of Stock
and Option
Awards

($)(2)
   Threshold
($)
 Target
($)
 Maximum
($)
    

Jan Carlson
President and CEO

 06/14/07 03/27/07     15,000 $57.40 $211,800
 06/14/07 03/27/07    5,000   $287,000
 02/14/07 12/19/06     5,000 $59.01 $75,950
 02/14/07 12/19/06 $0 $350,586 $701,172 6,267   $369,816

Benoît Marsaud
Chief Operating Officer

 02/14/07 12/19/06     16,500 $59.01 $250,635
 02/14/07 12/19/06 $0 $264,706 $529,412 5,500   $324,555

Magnus Lindquist
Chief Financial Officer

 02/14/07 12/19/06     5,500 $59.01 $83,545
 02/14/07 12/19/06 $0 $150,000 $300,000 1,834   $108,224

Halvar Jonzon
Vice President Purchasing

 02/14/07 12/19/06     5,500 $59.01 $83,545
 02/14/07 12/19/06 $0 $106,172 $212,344 1,834   $108,224

Hans-Göran Patring
Vice President Human Resources

 02/14/07 12/19/06     5,500 $59.01 $83,545
 02/14/07 12/19/06 $0 $92,016 $184,031 1,834   $108,224

Lars Westerberg
Chairman, former President and CEO

 02/14/07 12/19/06     15,000 $59.01 $227,850
 02/14/07 12/19/06 $0 $170,899 $341,797 5,000   $295,050

(1)

For 2007, all senior executive officers of the Company as a group received 92,000 options and 35,267 RSUs, and all employees of the Company (other than executive officers) as a group received 189,075 options and 63,031 RSUs.

(2)The grant date fair value of the RSUs and the stock options is calculated according to FAS 123R. For more information see the Company’s Annual Report Note 1 “Stock Based Compensation.”

See "Compensationour “Compensation Discussion and Anaylsis"Analysis” above for more information.




49


Outstanding Equity Awards at Fiscal Year-End

The following table summarizes the total number of securities underlying outstanding plan awards for the named executive officers in the year ended December 31, 2006:2007:

<
Option AwardsStock Awards
Name and
Principal
Position
YearNumber of
Securities
Underlying
Unexercised
Options(#)
Excercisable
Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable
Equity
Incentive
Plan Awards:
Number of
Securities
Unexercised
Unearned
Options(#)
Option
Exercise
Price($)
Option
Expriation
Date
No of
Shares or
Units of
Stock that
have not
vested(#)
Market
Value of
Shares or
Units of
Stock that
have not
vested($)
Equity
Incentive
Plan
Awards:
No. of
Unearned
Shares,
Units or
Other
Rights
that have
not vested
(#)
Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
that have
not vested
($)

Lars Westerberg
Chief Executive Officer
2006
2005
2004
2003
2002
2001
 
30,000
30,000
37,500
50,000
49,000
30,000




N/A
49.60
47.46
40.26
21.36
19.96
16.99
01/09/16
01/10/15
01/12/14
01/02/13
01/02/12
06/18/11
10,000
10,000
10,000
603,000
603,000
603,000





N/A





N/A
 
Benoît Marsaud
V.P. Manufacturing
President Autoliv Europe
2006
2005
2004
2003
 
6,000
6,000
7,500
6,000


N/A
49.60
47.46
40.26
21.36
01/09/162,000
2,000
2,000
120,600
120,600
120,600



N/A



N/A
 
Magnus Lindquist
Chief Financial Officer
2006
2005
2004
 
6,000
6,000

N/A
49.60
47.46
01/09/16
01/10/15
2,000
2,000
2,000
120,600
120,600
120,600


N/A


N/A
 
Halvar Jonzon
Vice President Purchasing
2006
2005
2004
2003
2002
2001
 
6,000
6,000
7,500
10,000
710
6,000




N/A
49.60
47.46
40.26
21.36
19.96
18.17
01/09/16
01/10/15
01/12/14
01/02/13
01/02/12
12/03/11
2,000
2,000
2,000
120,600
120,600
120,600





N/A





N/A
 
Jörgen I. Svensson
Vice President
Legal Affairs,
General Counsel and Secretary
2006
2005
2004
 
6,000
6,000
6,000

N/A
49.60
47.46
40.26
01/09/16
01/10/15
01/12/14
2,000
2,000
2,000
120,600
120,600
120,600


N/A


N/A
 

   Year  Option Awards(1)  Stock Awards

Name and Principal Position

    Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options (#)
Un-
exercisable
  Option
Exercise
Price ($)
  Option
Expiration
Date
  Number of
shares or
Units of
Stock that
have not
vested (#)
  Market
Value of
Shares or
Units of
Stock that
have not
vested
($)

Jan Carlson
President and CEO

  2007    15,000  57.40  06/14/17  5,000  263,550
  2007    5,000  59.01  02/14/17  6,267  330,334
  2006  5,000    49.60  01/09/16  1,667  87,868
  2005  3,500    47.46  01/10/15  1,167  61,513
  2004  3,250    40.26  01/12/14    
  2003  4,000    21.36  01/02/13    

Benoît Marsaud
Chief Operating Officer

  2007    16,500  59.01  02/14/17  5,500  289,905
  2006  6,000    49.60  01/09/16  2,000  105,420
  2005  6,000    47.46  01/10/15  2,000  105,420
  2004  6,000    40.26  01/12/14    
  2003  7,500    21.36  01/02/13    

Magnus Lindquist
Chief Financial Officer

  2007    5,500  59.01  02/14/17    
  2006            
  2005          2,000  105,420

Halvar Jonzon
Vice President Purchasing

  2007    5,500  59.01  02/14/17  1,834  96,670
  2006  6,000    49.60  01/09/16  2,000  105,420
  2005  6,000    47.46  01/10/15  2,000  105,420
  2004  6,000    40.26  01/12/14    
  2003  7,500    21.36  01/02/13    
  2002  10,000    19.96  01/02/12    
  2001  710    18.17  12/03/11    

Hans-Göran Patring
Vice President HumanResources

  2007    5,500  59.01  02/14/17  1,834  96,670
  2006  6,000    49.60  01/09/16  2,000  105,420
  2005  6,000    47.46  01/10/15  2,000  105,420
  2004  6,000    40.26  01/12/14    

Lars Westerberg(2)
Chairman, former
President and CEO

  2007    15,000  59.01      
  2006  30,000    49.60  01/09/16    
  2005  30,000    47.46  01/10/15    
  2004  30,000    40.26  01/12/14    
  2003  37,500    21.36  01/02/13    
  2002  50,000    19.96  01/02/12    
  2001  49,000    16.99  06/18/11    

(1)All options vest one year from date of grant. The options were granted on June 18, 2001, December 3, 2001, January 2, 2002, January 2, 2003, January 12, 2004, January 10, 2005, January 9, 2006, February 14, 2007 and June 14, 2007.

(2)All of Mr. Westerberg’s unvested RSUs vested upon his resignation as CEO and President of the Company.

50


All options granted are for 10-year terms with an exercise price equal to the fair market value on the New York Stock Exchange on the date of grant and become exercisable after one year of continued employment following the grant date. As of 2006, the exercise price equals the closing price on the New York Stock Exchange on the date of grant. All RSU'sRSUs granted generally vest after three years and are conditional upon the optionee not having given notice of termination of employment prior to such date.



Option Exercises and Stock Vested

The following table summarizes the stock option exercises and the vesting of restricted stock by theawards for each of our named executive officers infor the year ended December 31, 2006:2007:

   Option Awards  Stock Awards

Name

  Number of Shares
Acquired on
Exercise (#)
  Value Realized on
Exercise ($)(1)
  Number of Shares
Acquired on
Vesting (#)
  Value Realized on
Vesting ($)(2)

Jan Carlson

  0  0  1,083  65,836

Benoît Marsaud

  0  0  2,000  121,580

Magnus Lindquist

  12,000  127,188  2,000  121,580

Halvar Jonzon

  0  0  2,000  121,580

Hans-Göran Patring

  0  0  2,000  121,580

Lars Westerberg(3)

  0  0  35,000  2,035,650

(1)The value realized upon exercise of stock options reflects the price at which shares acquired upon exercise of the stock options were sold or valued for income tax purposes, net of the exercise price for acquiring the shares.

(2)The value realized on vesting of the restricted shares shown in the table above was calculated as the product of the closing price of a share of our common stock on the vesting date multiplied by the number of shares vested.

(3)All of Mr. Westerberg’s unvested RSUs, which totalled 25,000, vested upon his resignation as President and CEO of the Company effective on April 1, 2007.
NameNo. of Shares Acquired on Exercise (#)Value Realized on Exercise ($)No. of Shares Acquired on Vesting (#)Value Realized on Vesting ($)
Lars Westerberg0 12,500567,750
Benoit Marsaud10,000374,4002,500113,550
Magnus Lindquist6,00079,4402,500113,550
Halvar Jonzon0 2,500113,550
Jörgen I. Svensson0 2,500113,550


Pension Benefits

The following table summarizes the present value of the benefit (and other information) under the defined benefit plan[s]plan of the Company for the named executive officers in the year ended December 31, 2006:2007:

NamePlan NameNo. of Years Credited Service (#)Present Value of Accumulated Benefit ($)2)Payments During Last Fiscal Year ($)
Lars WesterbergExecutive Plan74,747,0200
Benoit Marsaud1) 36148,9710
Magnus LindquistExecutive Plan5.50429,8770
Halvar JonzonExecutive Plan5.08884,2970
Jörgen I. SvenssonExecutive Plan7389,0660


1) The Company has paid pension benefit premiums for Mr. Marsaud in accordance with French practice.
2) The accumulated benefit is a measure of pension liabilities used for accounting purposes. The underlying calculation values accrued pensions for plan beneficiaries based on completed service and current salaries allowing for any required future incresases on these benefits. Effectively regarding pension benefits the measure gives an approximate indication of the liability which would have to be met if the plan was frozen. The measure is marketbased in that it values liabilities at market interest rates for investment grade bonds.

Name

 

Plan Name

 Number of Years
Credited Service
(#)
 Present Value
of Accumulated
Benefit ($) (2)
 Payments During
Last Fiscal Year
($)(3)

Jan Carlson

 Executive Plan 2.00 $226,477 $0

Benoît Marsaud (1)

  36 $225,628 $0

Magnus Lindquist

 Executive Plan 6.5   $667,696 $0

Halvar Jonzon

 Executive Plan 6.08 $1,325,412 $0

Hans-Göran Patring

 Executive Plan 6.33 $1,493,085 $0

Lars Westerberg (4)

 Executive Plan 8.00 $8,064,342 $0

51


(1)The Company has paid pension benefit premiums for Mr. Marsaud in accordance with French practice.

(2)

The accumulated benefit is a measure of pension liabilities used for accounting purposes. The underlying calculation values accrued pensions for plan beneficiaries based on completed service and current salaries allowing for any required future increases on these benefits. Effectively regarding pension benefits the measure gives an approximate indication of the liability that would have to be met if the plan was frozen. The measure is market-based in that it values liabilities at market interest rates for investment grade bonds.

(3)None of our named executive officers received a pension payment during 2007.

(4)For period while serving as President and CEO.

See "Compensationour “Compensation Discussion and Analysis"Analysis” above for more information.

The Company does not have any non-qualified defined contribution and deferred compensation plans for the named executive officers.

Potential Payments Upon Termination or Change of Control

The Company has entered into agreements and maintainmaintains plans that may require the Company to make payments and/or provide benefits to theour named executive officers named in the Summary Compensation Table in the event of termination of employment or a change of control. For example, the Company'sCompany’s employment agreements with Messrs. Westerberg,Carlson, Lindquist, Jonzon, MarsaudPatring and Svensson1)Marsaud obligate the Company to provide notice of termination of employment of 24 months in respect of Mr. Westerberg, and a notice of termination of employment of 18 months, as well as a lump-sumseverance payment of one year's severance (calculatedcalculated as described below,) for the other Senior Executive Officers, includingbelow. The employment agreements obligate Messrs. Lindquist, Jonzon, MarsaudPatring and Svensson. The service agreements obligate the senior executive officersMarsaud to provide the Company with notice of resignation of 6 months. Mr. Carlson’s employment agreement obligates him to provide the Company with notice of resignation of 12 months. Following termination of employment, except forwhen (i) the Company terminates the employment and termination is not caused by a breach of the agreement by the Company without causeexecutive or by(ii) the Executive for cause,executive terminates the Senior Executive Officersemployment due to the Company’s breach of the agreement, Messrs. Carlson, Lindquist, Jonzon, Patring and Marsaud are prohibited from competing with the Company for a period of 12 months.

In consideration for such noncompetition, in the case of termination,each of Messrs. Carlson, Lindquist, Jonzon, Patring and Marsaud, the Company is obligated to make monthly severance payments to the executive for 12 months ofmonths. Such monthly payment shall equal the difference between the Executive'sexecutive’s monthly gross salary when his employment was terminated and any lower salary earned by the Executiveexecutive in his or her new employment. This obligationThe monthly payment is however, limited to a maximum of 60 percent of the gross salary earned when employment was terminated. The Company is not obligated to make such payments if the executive’s employment terminates due to his retirement.

All Senior Executive OfficersMost senior executive officers of the Company have Change of Control Severance Agreements with the Company, (the "Agreements") which were originally effective until December 31, 19982005 for Mr. Svensson, until December 31, 2000 for Mr. Westerberg,Carlson, until December 31, 2002 for Messrs. Lindquist, Jonzon and JonzonPatring, and until December 31, 2005 for Mr. Marsaud, and all of which are automatically extended annually for additional one-year periods unless notice of termination is given. The Severance Agreements are otherwise terminable during their periods of effectiveness only by termination of the respective executive'sexecutive’s employment. Such termination in connection with a change in control of the

52


Company (as defined in the agreements)Severance Agreements) entitles an executive to benefits under the Severance Agreements. In the event that during the two-year period following a change of control, the executive terminates the executive'sexecutive’s employment for Good Reason (as defined in the Severance Agreements) or, during the 30-day period commencing one year after the change of control, for any reason, or the Company terminates the executive'sexecutive’s employment Without Cause (as defined in the Severance Agreements), the executiveMessrs. Carlson, Lindquist, Jonzon, Patring and Marsaud would be entitled to receive an immediate lump sum payment in an amount equal to three times in respect of Mr. Westerberg, and two and a half times in respect of other Senior Executive Officers, the sum of (i) such executive's then currentexecutive’s then-current annual salary, (ii) the average of the bonusesannual incentives received by the executive for the two most recent fiscal years, or the bonusannual incentive for the most recent fiscal year, if higher,or the annual incentive for the fiscal year immediately prior to the fiscal year during which occurs the first event or circumstance constituting Good Reason, whichever is highest, (iii) the taxable value of the benefit of a Company car, andplus (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.

The estimated payments and benefits that would be provided assuming that terminationthe executive was terminated without cause or for good reason or following a termination pursuant to a change of control that took place on December 31, 2006,2007, are as follows:

If terminated Mr. Westerberginvoluntarily, Messrs. Carlson, Lindquist, Jonzon, Patring and Marsaud would be entitled to full salary and benefits for a period of 24 months.

If any of Messrs. Marsaud, Lindquist, Jonzon and Svensson were terminated, he would be entitled to full salary and benefits for atheir notice period of 18 months and,plus 12 months of severance benefits equaling (i) the executive’s then current annual salary, (ii) the average of the annual incentives received by the executive for the two most recent fiscal years or the annual incentive for the most recent fiscal year, if higher, (iii) the annual taxable value of the benefit of a Company car, plus (iv) the value of any pension benefits to which the executive would have been entitled to if he remained in addition, he would receive a lump-sum payment ofservice for one year's severanceyear following termination, plus, in each case, any amounts payable to the executive in consideration for his noncompetition with the Company as described above. The total amount for each executive is estimated to be $802,468, $676,876, $657,362, $521,330,$3,469,102, $2,139,774, $2,076,389, $2,095,314 and $2,544,902 respectively.

Following a termination pursuant to a change of control, Mr. WesterbergCarlson would be entitled to a lump-sum cash severance payment of approximately $7,776,347$2,938,558 and Messrs. Lindquist, Marsaud, Lindquist, Jonzon and SvenssonPatring would be entitled to $1,913,626 $1,156,987 $1,264,420$1,879,373, $2,188,342, $1,850,934 and $1,130,017$1,851,530 respectively.

For the purpose of the above calculation, the 20062007 pension premiums for each named executive officer have been used.

In addition, following aan involuntary termination or change of control, any outstanding options and RSUs held by these individuals would become fully exercisablevested and the restrictions applicable to any restricted stock would lapse.

In thisthe case of involuntary termination, Mr. WesterbergCarlson would be entitled to stockequity with a market value of $1,809,000$149,380 and Messrs. Marsaud, Lindquist, Jonzon and SvenssonPatring would each be entitled to stockequity with a market value of $361,800, respectively.

$210,840. In thisthe case of termination following a change in control, Mr. WesterbergCarlson would also be entitled to exercise all outstanding stock optionsequity with a market value of $6,906,840$743,264, Mr. Marsaud would be entitled to equity with a market value of $500,745 and the same value realized for Messrs. Marsaud, Lindquist, Jonzon and Svensson,Patring each would be $553,530, $141,240, $987,680 and $261,480, respectively.

1) Mr. Svensson died in March 2007.entitled to equity with a market value of $307,510.


Director Compensation

53


The following tables set forth the current value of payments and benefits to each of our named executive officers upon a qualifying termination, change in control and death or disability. The table for Mr. Westerberg sets forth the compensationcurrent value of payments and benefits only with respect to a voluntary termination due to his retirement as our President and CEO during 2007. The amounts shown assume that our directors earned during the year endedtriggering events occurred on December 31, 20062007.

Jan Carlson

Estimated Potential Payment or Benefit

 Triggering Event
 Voluntary
Termination ($)
 Involuntary
Termination ($)
 Change of
Control ($)
 Change of
Control and
Termination($)
 Death or
Disability ($)
Lump sum cash severance payment pursuant to severance agreement $0 $1,175,423 $0 $2,938,558 $0
Estimated value of continuing salary/annual incentive payments pursuant to employment agreement $1,135,203 $1,702,805 $0 $0 $0
Salary differential payments in consideration for noncompetition with the Company $468,750 $0 $0 $0 $0
Continuing health, welfare and retirement benefits $273,438 $410,156 $0 $0 $0
Value of accelerated vesting equity $0 $149,380 $743,264 $743,264 $743,264
Value of company car $20,892 $31,338 $0 $0 $0
               

Total

 $1,898,283 $3,469,102 $743,264 $3,681,822 $743,264

54


Magnus Lindquist

Estimated Potential Payment or Benefit

 Triggering Event
 Voluntary
Termination ($)
 Involuntary
Termination ($)
 Change of
Control ($)
 Change of
Control and
Termination ($)
 Death or
Disability ($)
Lump sum cash severance payment pursuant to severance agreement $0 $751,749 $0 $1,879,373 $0
Estimated value of continuing salary/annual incentive payments pursuant to employment agreement $331,000 $993,000 $0 $0 $0
Salary differential payments in consideration for noncompetition with the Company $300,000 $0 $0 $0 $0
Continuing health, welfare and retirement benefits $59,915 $184,185 $0 $0 $0
Value of accelerated vesting equity $0 $210,840 $307,510 $307,510 $307,510
Value of company car $0 $0 $0 $0 $0
               

Total

 $690,915 $2,139,774 $307,510 $2,186,883 $307,510

Benoît Marsaud

Estimated Potential Payment or Benefit

 Triggering Event
 Voluntary
Termination ($)
 Involuntary
Termination ($)
 Change of
Control ($)
 Change of
Control and
Termination ($)
 Death or
Disability ($)
Lump sum cash severance payment pursuant to severance agreement $0 $875,337 $0 $2,188,342 $0
Estimated value of continuing salary/annual incentive payments pursuant to employment agreement $473,824 $1,421,471 $0 $0 $0
Salary differential payments in consideration for noncompetition with the Company $397,059 $0 $0 $0 $0
Continuing health, welfare and retirement benefits $10,405 $31,215 $0 $0 $0
Value of accelerated vesting equity $0 $210,840 $500,745 $500,745 $500,745
Value of company car $2,013 $6,039 $0 $0 $0
               

Total

 $883,301 $2,544,902 $500,745 $2,689,087 $500,745

55


Halvar Jonzon

Estimated Potential Payment or Benefit

 Triggering Event
 Voluntary
Termination ($)
 Involuntary
Termination ($)
 Change of
Control ($)
 Change of
Control and
Termination ($)
 Death or
Disability ($)
Lump sum cash severance payment pursuant to severance agreement $0 $740,374 $0 $1,850,934 $0
Estimated value of continuing salary/annual incentive payments pursuant to employment agreement $237,703 $713,109 $0 $0 $0
Salary differential payments in consideration for noncompetition with the Company $212,344 $0 $0 $0 $0
Continuing health, welfare and retirement benefits $126,019 $387,432 $0 $0 $0
Value of accelerated vesting equity $0 $210,840 $307,510 $307,510 $307,510
Value of company car $8,212 $24,635 $0 $0 $0
               

Total

 $584,277 $2,076,389 $307,510 $2,158,444 $307,510

Hans-Göran Patring

Estimated Potential Payment or Benefit

 Triggering Event
 Voluntary
Termination ($)
 Involuntary
Termination ($)
 Change of
Control ($)
 Change of
Control and
Termination ($)
 Death or
Disability ($)
Lump sum cash severance payment pursuant to severance agreement $0 $740,612 $0 $1,851,530 $0
Estimated value of continuing salary/annual incentive payments pursuant to employment agreement $227,578 $682,734 $0 $0 $0
Salary differential payments in consideration for noncompetition with the Company $212,344 $0 $0 $0 $0
Continuing health, welfare and retirement benefits $137,087 $421,436 $0 $0 $0
Value of accelerated vesting equity $0 $210,840 $307,510 $307,510 $307,510
Value of company car $13,231 $39,692 $0 $0 $0
               

Total

 $590,239 $2,095,314 $307,510 $2,159,041 $307,510

56


Lars Westerberg

Mr. Westerberg retired as our President and CEO effective on April 1, 2007. The Compensation Committee and Mr. Westerberg agreed that Mr. Westerberg’s resignation would be effective immediately with no required additional notice period. As such, the Company had no further obligations under the severance or change in control termination provisions of his employment agreement. As Mr. Westerberg assumed the role of Chairman of the Board and in recognition of his successful tenure as CEO, the Committee agreed to accelerate the vesting for services renderedall outstanding, unvested stock options and restricted stock awards. The value of those options or shares if exercised or sold as members of our boardDecember 31, 2007 was $1,317,750. Also, as Mr. Westerberg’s employment with the Company terminated prior to his reaching the full retirement age of directors:60, the Committee approved an additional 15-month service credit such that when he reaches age 60 he will receive retirement benefits as if his employment terminated upon reaching age 60. The present value of such additional service credit is approximately $2,670,170.

57


DIRECTOR COMPENSATION

NameFees Earned
or Paid in Cash ($)
Total
Alspaugh82,08482,084
Aronson150,000150,000
Carlsson150,000150,000
Johnston150,000150,000
Kunerth150,000150,000
Lorch150,000150,000
Nyberg150,000150,000
Ringler155,000155,000
Sekiya150,000150,000
Stewart305,000305,000
Welin170,000170,000

Directors who are employees of the Company or any subsidiary thereofof its subsidiaries do not receive anyseparate compensation for service on the Board or Board committees. Non-employee directors receive for their servicesare paid a retainer of $150,000 per year. The Chairman of the Board receivesis paid a retainer of $300,000 per year.

year, and the Lead Director is paid an annual retainer of $25,000. In addition, a non-employee director who serves as either the Chairman of the Compensation Committee or the Nominating and Corporate Governance Committee each receivesis paid an additional annual retainersretainer of $5,000, and the Chairman of the Audit Committee receivesis paid an additional annual retainer of $20,000.

Non-employee directors can elect to defer receiptpayment of a pre-determined percentage of their compensation under the Autoliv, Inc. 2004 Non-Employee Director Stock-Related Compensation Plan. In 2006 non2007, none of the directors elected to defer any of their compensation.

Mr. Alspaugh was appointed toDirector Compensation Table

The following table sets forth the Board on June 13, 2006.

Compliance With Section 16(A) ofcompensation that our non-employee directors earned during the Securities Exchange Act of 1934

The members of the Board, the executive officers of the Company and persons who hold more than ten percent of the Company's common stock are subject to the reporting requirements of Section 16(a) of the Exchange Act, which require them to file reports with respect to their ownership of the Company's securities on Form 3 and transactions in the Company's securities on Forms 4 or 5. Based solely on its review of the copies of such forms received by it and written representations from the Company's executive officers and directors, the Company believes that, for the fiscal year ended December 31, 2006, the Section 16(a) filing requirements were complied with by all incumbent executive officers and directors during the year.2007 for services rendered as members of our Board:

Name

  Fees Earned
or Paid in
Cash ($)
  Total ($)

Robert W. Alspaugh

  150,000  150,000

Per-Olof Aronson(1)

  51,250  51,250

Sune Carlsson

  150,000  150,000

William E. Johnston Jr.

  150,000  150,000

Walter Kunerth

  150,000  150,000

George A. Lorch

  150,000  150,000

Lars Nyberg

  150,000  150,000

James M. Ringler

  160,000  160,000

Kazuhiko Sakamoto(2)

  56,250  56,250

Tetsuo Sekiya(3)

  94,125  94,125

S. Jay Stewart

  211,250  211,250

Per Welin

  170,000  170,000

Lars Westerberg

  225,000  225,000

(1)Mr. Aronson resigned from the Board effective May 3, 2007.

(2)Mr. Sakamoto was appointed to the Board on August 16, 2007.

(3)Mr. Sekiya resigned from the Board effective August 16, 2007.

58


ITEM 2



2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Audit Committee of the Board has appointed Ernst & Young AB as the independent auditingaccounting firm for the Company'sCompany’s fiscal year ending December 31, 2007.2008. The committee has been advised that Ernst & Young AB has no relationship with the Company or its subsidiaries other than that arising from the firm'sfirm’s employment as auditors.accountants.

In accordance with directions of the Audit Committee, this appointment is being presented to the stockholders for ratification at the 20072008 Annual Meeting. While ratification by stockholders of this appointment is not required by law or the Company's certificateCompany’s Certificate of incorporationIncorporation or by-laws,By-Laws, the Audit Committee and management believes that such ratification is desirable. In the event this appointment is not ratified by the affirmative vote of a majority of shares present or represented by proxy and entitled to vote of stockholders,on the appointment, the Audit Committee will consider that fact when it selects independent auditors for the nextfollowing year.

Ernst & Young AB has been the independent auditingaccounting 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 20062007 consisted of the examination of the financial statements of the Company and its subsidiaries for that year and the preparation of various reports based thereon.


The Company has been advised that a representative of Ernst & Young AB will attend the Annual Meeting to respond to appropriate questions and will be afforded the opportunity to make a statement if the representative so desires.

THE BOARD RECOMMENDS A VOTE “FOR” THE PROPOSAL

TO RATIFY THE APPOINTMENT OF ERNST & YOUNG AB

AS THE COMPANY’S INDEPENDENT AUDITORS.

Audit Fees

The aggregate fees billed by Ernst & Young AB for professional services rendered for the audit of the Company'sCompany’s annual financial statements for the fiscal yearyears ended December 31, 2007 and 2006, andincluding the reviews of the financial statements included in the Company'sCompany’s Forms 10-Q for thethose fiscal year 2006, was $7.1 million, out of whichyears, were $7,576,000 and $7,035,000 respectively.

Audit-Related Fees

The aggregate fees billed by Ernst & Young AB billed $7.0 million. The aggregate fees billed for the year 2005 was $6.8 million, out of which Ernst & Young AB billed $6.8 million.


Audit - Related Fees

The aggregate fees billed for audit relatedaudit-related services for the fiscal years ended December 31, 2007 and 2006 were $215,000 and 2005 were $155,000 and $110,000, respectively, of which Ernst & Young AB was paid $104,000 and $91,000, respectively. Services for Audit-Related Fees consisted mainly of reviews of benefit plans.


Tax Fees

The aggregate fees billed by Ernst & Young AB for professional services rendered for tax compliance, tax advice and tax planning for the fiscal years ended December 31, 2007 and

59


2006 were $0 and 2005 were $2,561,000 and $4,105,000, respectively, of which Ernst & Young AB was paid $23,000 and $302,000, respectively. Services for tax fees consisted of assistance in tax disputes that originated several years earlier, and assistance related to the Jobs Creation Act.

All Other Fees


Financial Information Systems Design and Implementation Fees

The aggregate fees billed for the non-audit, financial information systems design and implementation services described in Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X, rendered by Ernst & Young AB during the fiscal years ended December 31, 2006 and 2005 were $ 0 for each year.


All Other Fees

The aggregatebilled no fees billed forrelated to any other services rendered by Ernst & Young AB, other than the services discussed in the preceding four paragraphs, for the fiscal years ended December 31, 20062007 and 2005, were $4,341,0002006.

Audit Committee Pre-Approval Policies

The Audit Committee has adopted guidelines for the provision of audit and $3,895,000, respectively, of whichnon-audit services by Ernst & Young AB, including requiring Audit Committee pre-approval of any such audit and non-audit services. In developing these guidelines, the Audit Committee took into consideration the need to ensure the independence of Ernst & Young AB while recognizing that Ernst & Young AB may possess the expertise on certain matters that best positions it to provide the most effective and efficient services on certain matters unrelated to accounting and auditing. On balance, the Audit Committee will only pre-approve the services that it believes enhance the Company’s ability to manage or control risk. The Audit Committee was paid $0also mindful of the relationship between fees for audit and $6,000, respectively. Servicesnon-audit services in deciding whether to pre-approve any such services and may determine, for alleach fiscal year, the appropriate ratio between the total amount of fees for audit, audit-related and tax services, and the total amount of fees for permissible non-audit services (excluding tax services). The guidelines provide for the pre-approval by the Audit Committee of described services to be performed, such as audit, audit-related, tax and other fees consistedpermissible non-audit services. Approval of completionaudit and permitted non-audit services may also be made by the chairperson of expatriates' assignment services.

the Committee and the person granting such approval must report such approval to the Committee at the next scheduled meeting.

The Audit Committee has considered the audit, audit-related, tax and all other services discussed in the preceding five paragraphsabove and additional information 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 non-audit services, including Audit Committee pre-approval of any such audit and non-audit services. The Audit Committee preapproved 100 percent ofpre-approved all such services in 2006.2007.

60


ITEM 3

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

Management does not now intendFor business to bringbe properly brought before an annual stockholders meeting by a stockholder, timely advance written notice thereof must be received by the 2007 Annual Meeting any matters other than those disclosed in the noticeSecretary of the meeting. 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 or on the Company’s website at www.autoliv.com — Investors — Governance — Articles of Association. No such notices were received for the 2008 Annual Meeting.

Should any other matter requiring a vote of the stockholders be properly brought before the meeting by or atAnnual Meeting, the direction of the Board, the proxies in the enclosedproxy form conferconfers upon the person or persons entitled to vote the shares represented by such proxies discretionary authority to vote such shares in respect of any such matter in accordance with their best judgment, to the extent permitted by applicable law and the listing requirementsrules of the New York Stock Exchange.

For business to be properly brought before an annual stockholders meeting by a stockholder, timely advance written notice thereof must be received byOTHER MATTERS

Section 16(a) Beneficial Ownership Reporting Compliance

The members of the SecretaryBoard, the executive officers of the Company at its principal executive offices in accordance withand persons who hold more than ten percent of the Company's by-laws, a copy of which may be obtained by written requestCompany’s common stock (collectively, the “Reporting Persons”) are subject to the Company's Secretary. Noreporting requirements of Section 16(a) of the Exchange Act, which require them to file reports with respect to their ownership of the Company’s securities on Form 3 and transactions in the Company’s securities on Forms 4 or 5. Based solely on its review of the copies of such notices wereforms received by it and written representations from the Company’s executive officers and directors, the Company believes that, for the fiscal year ended December 31, 2007, Annual Meeting. For the Company's 2008 Annual Stockholders' Meeting, any such notices must be receivedSection 16(a) filing requirements were complied with by all Reporting Persons during and with respect to the Company not later than March 3, 2008 and not earlier than February 3, 2008.year.



Stockholder Proposals for 20082009 Annual Meeting

Proposals Pursuant to Rule 14a-8. Stockholder proposals intended for inclusion in the proxy statement for the 20082009 Annual Stockholders Meeting must be received by the Secretary of the Company at its principal executive offices no later than November 8, 2007.19, 2008.

Proposals Pursuant to our By-Laws. Under our By-Laws, in order to bring any business before the stockholders at the 2009 Annual Stockholders Meeting, other than proposals that will be included in our proxy statement, you must comply with the procedures described below. In addition, you must notify us in writing, and such notice must be delivered to or mailed and received by our Secretary no earlier than the close of business on February 5, 2009 and no later than the close of business on March 7, 2009.

A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and record address of the stockholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is submitted, (c) the class and

61


number of shares of the Company which are beneficially owned by the stockholder and the beneficial owner, if any, on whose behalf the proposal is submitted, and (d) any material interest of the stockholder in such business.

Nominations Pursuant to our By-Laws. Under our By-Laws, in order to nominate a director for election to the Board, stockholders must comply with the notice procedures and requirements found in Article II, Section 6 of such By-Laws, a copy of which may be obtained by written request to the Company’s Secretary or on the Company’s website at www.autoliv.com – Investors – Governance – Articles of Association.

By Order of the Board
March 8, 2007

LOGO

Michael S. Anderson
Acting Lars Sjöbring

Vice President for Legal Affairs,

General Counsel and Secretary

March 19, 2008

Stockholm, Sweden





Autoliv, Inc.
Box 70381,
SE-107 24 Stockholm, Sweden

World Trade Center,
Klarabergsviadukten 70, Section E

Tel: +46 (0)8(8) 587 206 00; Fax +46 (0)8(8) 24 44 93;
Corporate93

Company Website: www.autoliv.com

Investor relations:

Sweden Tel: +46 (0)8(8) 587 206 23; Fax +46 (0)8(8) 411 70 25

U.S. Tel: +1 (248) 475 04 27; Fax +1 (801) 625 66 72





Appendix A

AMENDED

62


LOGO


LOGO

Electronic Voting Instructions

You can vote by Internet or telephone! Available 24 hours a day, 7 days a week!

Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.

VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.

Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Eastern Time, on May 5, 2008.

Vote by Internet

• Log on to the Internet and go to www.envisionreports.com/ALV

• Follow the steps outlined on the secured website.

Vote by telephone

• Call toll free 1-800-652-VOTE (8683) within the United States, Canada & Puerto Rico any time on a touch tone telephone. There is NO CHARGE to you for the call. • Follow the instructions provided by the recorded message.

Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. X

Annual Meeting Proxy Card

IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RESTATED CHARTER OFRETURN THE AUDIT COMMITTEE OFBOTTOM PORTION IN THE BOARD OF DIRECTORS OF AUTOLIV, INC. AS ADOPTED ON DECEMBER 19, 2006


I STATEMENT OF POLICY

ENCLOSED ENVELOPE.

A Proposals — The Audit Committee will provide assistance to the Board of Directors in fulfilling its oversight responsibility relating to (i) the integrityrecommends a vote FOR all nominees and FOR Proposal 2.

1. Election of Directors:

01 - Jan Carlson

04 - S. Jay Stewart

For Withhold

For Withhold

For Withhold

02 - Sune Carlsson

03 - William E. Johnston Jr.

For Against Abstain

2. Approval of Ernst & Young AB as independent auditors of the Company's financial statementscompany for the fiscal year ending December 31, 2008.

In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or at any adjournment or postponement thereof to the extent permitted by applicable law and the financial reporting process, (ii) the systems of internal accounting and financial controls, the management's monitoring and controlling of business risk, and the internal audit services function, (iii) the independent auditors' qualifications and independence, (iv) the compliance by the Company with legal and regulatory requirements and (v) the preparation of the report required to be prepared by the Committee pursuant to the rules of the Securities and Exchange Commission for inclusion in the Company's annual proxy statement. In so doing it is the responsibility of the Committee to maintain free and open communication between the Committee, independent auditors, the internal audit service providers and the management of the Company.


II ORGANIZATION

A Charter

At least annually, the charter will be reviewed and reassessed by the Committee and any proposed changes will be submitted to the Board of Directors for approval.

B Members

The members of the Committee shall be appointed by the Board of Directors and shall be comprised of at least three Directors, who shall be qualified to serve on the Committee pursuant to thelisting requirements of the New York Stock Exchange,Exchange.

B Non-Voting Items

Change of Address — Please print new address below.

C Authorized Signatures — This section must be completed for your vote to be counted — Date and Sign Below

Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.

Date (mm/dd/yyyy) — Please print date below.

Signature 1 — Please keep signature within the Sarbanes-Oxley Actbox.

Signature 2 — Please keep signature within the box.


LOGO

Dear Stockholder:

Stockholders of 2002Autoliv, Inc. can take advantage of several services available through our transfer agent, Computershare Trust Company, N.A. These services include:

Vote by Internet

Stockholders may vote their shares via the Internet by following the directions on the reverse side of this card. Votes may be cast by Internet up until 11:59 p.m. Eastern Time on the day before the Annual Meeting.

Internet Account Access

Stockholders may access their accounts on-line at www.computershare.com. Among the services offered through Account Access, dividend payment histories can be viewed, address changes requested, tax identification numbers certified and Direct Deposit requested.

Direct Deposit of Dividends

Autoliv encourages stockholders to authorize the rules and regulations promulgated by the SEC.

Directors' fees (including any additional amounts paid to chairs of committees and to members of committeeselectronic deposit of the Board) are the only compensationquarterly dividends payments directly into their checking or savings account. To enroll, please mail your request along with a membercopy of the Committee may receive from the Company provided, however, that a member of the Committee may also receive pension or other forms of deferred compensation from the Company for prior service so long as such compensation is not contingent in any way on continued service.

No director may serve as a member of the Committee if such director serves on the audit committee of more than two other public companies, unless the Board determines that such simultaneous service would not impair the ability of such directoryour voided check to effectively serve on the Committee. Any such determination must be disclosed in the Company's annual proxy statement.

The chairperson and a non-voting Secretary of the Committee shall be designated by the Board, provided that if the Board does not so designate a chairperson, the members of the Committee, by a majority vote, may designate a chairperson. Each member of the Committee must be "financially literate", as such qualification is interpreted by the Board in its business judgment, or must become financially literate within a reasonable period of time after his or her appointment to the Committee. In addition, at least one member of the Committee must have "accounting or related financial management expertise, as the Board interprets such qualification in its business judgement. Further, either (i) at least one member of the Committee must be a "financial expert", as such term is defined in the rules and regulations promulgated by the SEC pursuant to the Act, or (ii) if no member of the Committee is a "financial expert", the Committee shall so inform the Company.

Any vacancy on the Committee shall be filled by majority vote of the BoardComputershare at the next meeting of the Board following the occurrence of the vacancy. No member of the Committee shall be removed except by majority vote of the Board.

C Meetings

In orderaddress noted below, or logon to discharge its responsibilities, the Committee shallyour account at the beginning of each year establish a schedule of meetings, additional meetings may be scheduled as required.

D Agenda, Minutes and Reports
An agenda, together with materials relating to the subject matter of each meeting, shall be sent to members of the Committee prior to each meeting.

The Secretary (or his/her designee) shall prepare minutes for all meetings of the Committee to document the Committee's discharge of its responsibilities. The minutes shall be circulated in draft form to all Committee members to ensure an accurate final record, shall be approved at a subsequent meeting of the Committee and shall be periodically distributed to the full Board of Directors. The Committee shall make regular reports to the Board.

E Access to Records, Consultants and Others
In discharging its oversight role, the Committeewww.computershare.com.

Transfer Agent Contact Information

Computershare Trust Company, N.A.

Telephone Inside the USA:

(800) 446-2617

P.O. Box 43069

Telephone Outside the USA:

(718) 575-2723

Providence, RI 02940-3069

TD/TTY for Hearing Impaired:

(800) 952-9245

IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.

Proxy — Autoliv, Inc.

This proxy is empowered to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company. The Committee shall have the authority to retain outside legal, accounting or other consultants to advise the Committee. The Committee may request any officer or employee of the Company, the Company's outside counsel, internal audit service providers or independent auditors to attend a meeting of the Committee or to meet with any members of, or consultants to the Committee. The Committee shall also insure that sufficient opportunity exists for its members to meet with the independent auditors without members of management present and with members of management without the independent auditors present.


III DUTIES AND RESPONSIBILITIES OF THE COMMITTEE

In carrying out its duties and responsibilities, the Committee's policies and procedures should remain flexible, so that it may be in a position to best react or respond to changing circumstances or conditions. The following are within the authority of the Committee:

(a) Appoint, in its sole discretion (subject to shareholder ratification), and be responsible for the compensation, retention and oversight of the work of, the firm of independent auditors to audit the books and accounts of the Company and its subsidiaries for each fiscal year;

(b) Review and, in its sole discretion, approve in advance the Company's independent auditors' annual engagement letter, including the proposed fees contained therein, as well as all audit and, all permitted non-audit engagements and relationships between the Company and such auditors (which approval should be made after receiving input from the Company's management). Approval of audit and permitted non-audit services may also be made by the chairperson of the Committee and the person granting such approval shall report such approval to the Committee at the next scheduled meeting;

(c) Review the performance of the Company's independent auditors, including the lead partner of the independent auditors, and, in its sole discretion (subject to shareholder ratification), make decisions regarding the replacement or termination of the independent auditors when circumstances warrant;

(d) Obtain at least annually from the Company's independent auditors and review a report describing:
(i) the independent auditors' internal quality-control procedures;
(ii) any material issues raised by the most recent internal quality-control review, or peer review, of the independent auditors, or by any inquiry or investigation by any governmental or professional authority, within the preceding five years, respecting one or more independent audits carried out by the independent auditors, and any steps taken to deal with any such issues; and
(iii) all relationships between the independent auditors and the Company (including a description of each category of services provided by the independent auditors to the Company and a list of the fees billed for each such category).

The Committee should present its conclusions with respect to the above matters, as well as its review of the lead partner of the independent auditors, and its viewssolicited on whether there should be a regular rotation of the independent auditors, to the Board.

(e) Oversee the independence of the Company's independent auditors by, among other things:
(i) actively engaging in a dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors, and taking appropriate action to satisfy itself of the auditors' independence;
(ii) ensuring that the lead audit partner and reviewing audit partner responsible for the audit of the Company's financial statements have not performed audit services for the Company for more than the previous five consecutive fiscal years of the Company;
(iii) ensuring that the chief executive officer, controller, chief financial officer, chief accounting officer or other person serving in an equivalent position of the Company, was not, within one year prior to the initiation of the audit, an employee of the independent auditor who participated in any capacity in the Company's audit; and
(iv) considering whether there should be a regular rotation of the Company's independent auditors;

(f) Instruct the Company's independent auditors that they are ultimately accountable to the Committee and the Board, and that the Committee is responsible for the selection (subject to shareholder ratification), evaluation and termination of the Company's independent auditors;

(g) Review and accept, if appropriate, the annual audit plan of the Company's independent auditors, including the scope of audit activities and all critical accounting policies and practices to be used, and monitor such plan's progress and results during the year;

(h) Review the results of the year-end audit of the Company, including any comments or recommendations of the Company's independent auditors;

(i) Review with management, the Company's independent auditors and, if appropriate, the director of the Company's internal auditing department, the following:
 (i) the Company's annual audited financial statements and quarterly financial statements, including the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations", and any major issues related thereto;
 (ii) critical accounting policies and such other accounting policies of the Company as are deemed appropriate for review by the Committee prior to any interim or year-end filings with the SEC or other regulatory body, including any financial reporting issues which could have a material impact on the Company's financial statements;
 (iii) major issues regarding accounting principles and financial statements presentations, including (A) any significant changes in the Company's selection or application of accounting principles and (B) any analyses prepared by management and/or the independent auditors setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the ramifications and effects of alternative generally accepted accounting principles methods on the Company's financial statements;
 (iv) all alternative treatments of financial information that have been discussed by the independent auditors and management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the auditors;
 (v) all other material written communications between the independent auditors and management, such as any management letter or schedule of unadjusted differences; and
 (vi) the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company;

(j) Review with the chief executive officer and chief financial officer and independent auditors, periodically, the following:
 (i) all significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize, and report financial data, including any material weaknesses in internal controls identified by the Company's independent auditors;
 (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls; and
 (iii) any significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

(k) Attempt to resolve all disagreements between the Company's independent auditors and management regarding financial reporting;

(l) Review on a regular basis with the Company's independent auditors any problems or difficulties encountered by the independent auditors in the course of any audit work, including management's response with respect thereto, any restrictions on the scope of the independent auditors' activities or on access to requested information, and any significant disagreements with management. In connection therewith, the Committee should review with the independent auditors the following:
 (i) any accounting adjustments that were noted or proposed by the independent auditors but were rejected by management (as immaterial or otherwise);
 (ii) any communications between the audit team and the independent auditors' national office respecting auditing or accounting issues presented by the engagement; and
 (iii) any "management" or "internal control" letter issued, or proposed to be issued, by the independent auditors to the Company;

(m) Confirm that the Company's interim financial statements included in Quarterly Reports on Form 10-Q have been reviewed by the Company's independent auditors;

(n) Review:
 (i) the adequacy and effectiveness of the Company's accounting and internal control policies and procedures on a regular basis, including the responsibilities, budget, compensation and staffing of the Company's internal audit function, through inquiry and discussions with the Company's independent auditors and management of the Company; and
 (ii) the yearly report prepared by management, and attested to by the Company's independent auditors, assessing the effectiveness of the Company's internal control structure and procedures for financial reporting and stating management's responsibility to establish and maintain such structure and procedures, prior to its inclusion in the Company's annual report;

(o) Review with management the Company's administrative, operational and accounting internal controls, including any special audit steps adopted in light of the discovery of material control deficiencies, and evaluate whether the Company is operating in accordance with its prescribed policies, procedures and codes of conduct;

(p) Receive periodic reports from the Company's independent auditors and management of the Company to assess the impact on the Company of significant accounting or financial reporting developments that may have a bearing on the Company;

(q) Establish and maintain free and open means of communication between and among the Board, the Committee, the Company's independent auditors, the Company's internal auditing department, and management, including meeting with such parties separately and privately on a periodic basis;

(r) Review the Company's earnings press releases (especially the use of "pro forma" or "adjusted" information not prepared in compliance with generally accepted accounting principles), as well as financial information and earnings guidance provided by the Company to analysts and rating agencies (which review may be done generally (i.e., discussion of the types of information to be disclosed and type of presentations to be made), and the Committee need not discuss in advance each earnings release or each instance in which the Company may provide earnings guidance);

(s) Establish clear hiring policies by the Company for employees or former employees of the Company's independent auditors;

(t) Discuss guidelines and policies governing the process by which senior management of the Company and the relevant departments of the Company assess and manage the Company's exposure to risk, as well as the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures;

(u) Meet at least annually with the general counsel, and outside counsel when appropriate, to review legal and regulatory matters, including any matters that may have a material impact on the financial statements of the Company;

(v) Prepare the report required by the rules of the SEC to be included in the Company's annual proxy statement;

(w) Review the Company's policies relating to the avoidance of conflicts of interest and review past or proposed transactions between the Company and members of management as well as policies and procedures with respect to officers' expense accounts and perquisites, including the use of corporate assets. Review and approve any Related Person Transactions in accordance with the Company's policy thereon. The Committee shall consider the results of any review of these policies and procedures by the Company's independent auditors;

(x) Review the Company's program to monitor compliance with the Company's Code of Conduct, and meet periodically with the Company's Compliance Officer to discuss compliance with the Code of Conduct;

(y) Obtain from the Company's independent auditors any information pursuant to Section 10A of the Securities Exchange Act of 1934;

(z) Establish procedures for (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters;
 (aa) Secure independent expert advice to the extent the Committee determines it to be appropriate, including retaining, with or without Board approval, independent counsel, accountants, consultants or others, to assist the Committee in fulfilling its duties and responsibilities, the cost of such independent expert advisors to be borne by the Company;
 (bb) Report regularly to the Board on its activities, as appropriate. In connection therewith, the Committee should review with the Board any issues that arise with respect to the quality or integrity of the Company's financial statements, the Company's compliance with legal or regulatory requirements, the performance and independence of the Company's independent auditors, or the performance of the internal audit function;
 (cc) Prepare and review with the Board an annual performance evaluation of the Committee, which evaluation must compare the performance of the Committee with the requirements of this charter, and set forth the goals and objectives of the Committee for the upcoming year. The evaluation should include a review and assessment of the adequacy of the Committee's charter. The performance evaluation by the Committee shall be conducted in such manner as the Committee deems appropriate. The report to the Board may take the form of an oral report by the chairperson of the Committee or any other member of the Committee designated by the Committee to make this report;
 (dd) Perform such additional activities, and consider such other matters, within the scope of its responsibilities, as the Committee or the Board deems necessary or appropriate.


***


While the Committee has the duties and responsibilities set forth in this charter, the Committee is not responsible for planning or conducting the audit or for determining whether the Company's financial statements are complete and accurate and are in accordance with generally accepted accounting principles.

In fulfilling their responsibilities hereunder, it is recognized that members of the Committee are not full-time employees of the Company, it is not the duty or responsibility of the Committee or its members to conduct "field work" or other types of auditing or accounting reviews or procedures or to set auditor independence standards, and each member of the Committee shall be entitled to rely on (i) the integrity of those persons and organizations within and outside the Company from which it receives information, (ii) the accuracy of the financial and other information provided to the Committee absent actual knowledge to the contrary (which shall be promptly reported to the Board) and (iii) statements made by management or third parties as to any information technology, internal audit and other non-audit services provided by the auditors to the Company.



Appendix B

CHARTER OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF AUTOLIV INC. AMENDED AS OF DECEMBER 19, 2006


I PURPOSE OF THE COMMITTEE

The purposes of the Compensation Committee (the "Committee")behalf of the Board of Directors (the "Board") of Autoliv, Inc. (the "Company") shall be to overseefor use at the Company's compensation and employee benefit plans and practices, including its executive compensation plans and its incentive-compensation and equity-based plans; to review and discuss with management the Company's compensation discussion and analysis ("CD&A")Annual Meeting of Stockholders to be includedheld May 6, 2008 and at any adjournment or postponement thereof.

The undersigned hereby revokes all proxies and appoints Jan Carlson and Lars Sjobring, with full power of substitution, to attend the Annual Meeting of Autoliv, Inc. to be held on Tuesday, May 6, 2008 at 9:00 a.m. local time at the Ritz-Carlton Hotel, 160 East Pearson Street, Chicago, Illinois 60611, USA and at any adjournment or postponement thereof and to vote as specified in this proxy all the Company's annual proxy statementshares of Autoliv, Inc. common stock which the undersigned would be entitled to vote if personally present upon all subjects that may properly come before the meeting.

In their discretion, Mr. Carlson and Mr. Sjobring are also authorized to vote upon such other matters as may properly come before the meeting. Management is not presently aware of any such matters to be presented for action. If any nominee should become unavailable for election prior to the meeting, the proxies will vote for the election of a substitute nominee or annual report on Form 10-K filednominees proposed by the Board of Directors. If specific voting instructions are not given with respect to matters to be acted upon and the signed card is returned, the proxies will vote in accordance with the Securitiesdirectors’ recommendations and Exchange Commission ("SEC");at their discretion on any other matters that may properly come before the meeting to the extent permitted by applicable law and to prepare the Compensation Committee Report as required by the rules of the SEC.


II COMPOSITION OF THE COMMITTEE

The Committee shall be comprised of three or more directors who qualify as independent directors ("Independent Directors") under the listing standardsrequirements of the New York Stock Exchange (the "NYSE"). Members ofExchange. If you do not sign and return a proxy, submit a proxy by telephone or Internet or attend the Committee shall also qualify as "non-employee directors" within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended,meeting and "outside directors" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.

vote by ballot, shares that you own directly cannot be voted.

The members of the Committee shall be nominatedsigner hereby revokes all proxies heretofore given by the Nominating and Corporate Governance Committee and elected annuallysigner to one-year terms by majority vote at said meeting or any adjournment or postponement thereof.

This proxy, when properly executed, will be voted in the manner directed herein. If no direction is made, this proxy will be voted in accordance with the recommendation of the Board of Directors, FOR the election of the nominees to the Board and FOR proposal 2.

Your vote is important! Please sign and date this card on the reverse side and return promptly in the enclosed postage-paid envelope or utilize the Vote by Phone or Vote by Net service to cast your vote.

This card also provides voting instructions for the Autoliv ASP, Inc. Employee Savings and Investment Plan for all shares votable by the signor and held of record by the Trustee.

(Continued and to be dated and signed on reverse side.)


LOGO

Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. X

Annual Meeting Proxy Card

PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.

A Proposals — The Board of Directors recommends a vote FOR all nominees and FOR Proposal 2.

1. Election of Directors:

01 - Jan Carlson

04 - S. Jay Stewart

For Withhold

For Withhold

For Withhold

02 - Sune Carlsson

03 - William E. Johnston Jr.

For Against Abstain

2. Approval of Ernst & Young AB as independent auditors of the company for the fiscal year ending December 31, 2008.

In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or at any adjournment or postponement thereof to the first meetingextent permitted by applicable law and the listing requirements of the New York Stock Exchange.

B Authorized Signatures — This section must be completed for your vote to be counted — Date and Sign Below

Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.

Date (mm/dd/yyyy) — Please print date below.

Signature 1 — Please keep signature within the box.

Signature 2 — Please keep signature within the box.


LOGO

PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.

Proxy — Autoliv, Inc.

This proxy is solicited on behalf of the Board of Directors of Autoliv, Inc. for use at the Annual Meeting of Stockholders to be held followingMay 6, 2008 and at any adjournment or postponement thereof.

The undersigned hereby revokes all proxies and appoints Jan Carlson and Lars Sjobring, with full power of substitution, to attend the annualAnnual Meeting of Autoliv, Inc. to be held on Tuesday, May 6, 2008 at 9:00 a.m. local time at the Ritz-Carlton Hotel, 160 East Pearson Street, Chicago, Illinois 60611, USA and at any adjournment or postponement thereof and to vote as specified in this proxy all the shares of Autoliv, Inc. common stock which the undersigned would be entitled to vote if personally present upon all subjects that may properly come before the meeting.

In their discretion, Mr. Carlson and Mr. Sjobring are also authorized to vote upon such other matters as may properly come before the meeting. Management is not presently aware of any such matters to be presented for action. If any nominee should become unavailable for election prior to the meeting, the proxies will vote for the election of stockholders. Vacancies on the Committee shall be filleda substitute nominee or nominees proposed by majority vote of the Board atof Directors. If specific voting instructions are not given with respect to matters to be acted upon and the next meeting ofsigned card is returned, the Board following the occurrence of the vacancy. No member of the Committee shall be removed except by majorityproxies will vote of the Independent Directors then in office.


III MEETINGS AND PROCEDURES OF THE COMMITTEE

The Committee shall fix its own rules of procedure, which shall be consistentaccordance with the Bylaws of the Companydirectors’ recommendations and this Charter. The Committee shall meet as provided by its rules, which shall be at least two times annually, or more frequently as circumstances require. The Board shall designate one member of the Committee as its Chairperson. The Chairperson of the Committee or a majority of the members of the Committeetheir discretion on any other matters that may also call a special meeting of the Committee. A majority of the members of the Committee present in person or by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other shall constitute a quorum.

The Committee may form subcommittees for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee deems appropriate; provided, however, that no subcommittee shall consist of fewer than two members; and provided further that the Committee shall not delegate to a subcommittee any power or authority required by any law, regulation or listing standard to be exercised by the Committee as a whole.

The Committee may request that any directors, officers or employees of the Company, or other persons whose advice and counsel are sought by the Committee, attend any meeting of the Committee to provide such pertinent information as the Committee requests.

Following each of its meetings, the Committee shall deliver a report onproperly come before the meeting to the Board, includingextent permitted by applicable law and the listing requirements of the New York Stock Exchange. If you do not sign and return a description ofproxy, submit a proxy by telephone or Internet or attend the meeting and vote by ballot, shares that you own directly cannot be voted.

The signer hereby revokes all actions takenproxies heretofore given by the Committeesigner to vote at the meeting. The Committee shall keep written minutes of its meetings, which minutes shallsaid meeting or any adjournment or postponement thereof.

This proxy, when properly executed, will be maintained with the books and records of the Company.


IV COMMITTEE RESPONSIBILITIES

A Executive Compensation

The Committee shall have the following goals and responsibilities with respect to the Company's executive compensation plans:
(a) To review at least annually the goals and objectives of the Company's executive compensation plans, and amend, or recommend that the Board amend, these goals and objectives if the Committee deems it appropriate.
(b) To review at least annually the Company's executive compensation plans in light of the Company's goals and objectives with respect to such plans, and, if the Committee deems it appropriate, adopt, or recommend to the Board the adoption of, new, or the amendment of existing, executive compensation plans.
(c) To evaluate annually the performance of the Chief Executive Officer in light of the goals and objectives of the Company's executive compensation plans, and set his or her compensation level based on this evaluation together with the other independent directors. In determining the long-term incentive component of the Chief Executive Officer's compensation, the Committee shall consider all relevant factors, including the Company's performance and relative stockholder return, the value of similar awards to chief executive officers of comparable companies, and the awards given to the Chief Executive Officer of the Company in past years.
(d) To evaluate annually the performance of the other executive officers of the Company in light of the goals and objectives of the Company's executive compensation plans, and set the compensation level of each based on this evaluation. To the extent that long-term incentive compensation is a component of such executive officer's compensation, the Committee shall consider all relevant factors in determining the appropriate level of such compensation, including at least the factors applicable with respect to the Chief Executive Officer.
(e) To evaluate annually the appropriate level of compensation for Board and Committee service by nonemployee members of the Board.
(f) To review and approve any severance or termination arrangements to be made with any executive officer of the Company.
(g) To perform such duties and responsibilities as may be assigned to the Board or the Committee under the terms of any executive compensation plan.
(h) To review perquisites or other personal benefits to the Company's executive officers and directors and recommend any changes to the Board.
(i) To review and discuss with management the Company's CD&A, and based on that review and discussion, to recommend to the Board that the CD&A be includedvoted in the Company's annualmanner directed herein. If no direction is made, this proxy statement or annual report on Form 10-K.
(j) To prepare the Compensation Committee Reportwill be voted in accordance with the rules and regulationsrecommendation of the SEC for inclusion inBoard of Directors, FOR the Company's annual proxy statement or annual report on Form 10-K.
(k) To review the descriptionelection of the Committee's processes and procedures for the consideration and determination of executive and director compensation to be included in the Company's annual proxy statement.




B Incentive-Compensation and Equity-Based Plans
The Committee shall have the following responsibilities with respect to the Company's incentive-compensation and equity-based plans:
(a) To review at least annually the goals and objectives of the Company's incentive-compensation and equity-based plans, and amend, or recommend that the Board amend, these goals and objectives if the Committee deems it appropriate.
(b) To review at least annually the Company's incentive-compensation plans and equity-based plans in light of the goals and objectives of these plans, and recommend that the Board amend these plans if the Committee deems it appropriate.
(c) To review all equity-compensation plans to be submitted for stockholder approval under the listing standards of the NYSE, and to review all equity-compensation plans that are exempt from such stockholder approval requirements and approve such plans in its sole discretion.
(d) To perform such duties and responsibilities as may be assignednominees to the Board and FOR proposal 2.

Your vote is important! Please sign and date this card on the reverse side and return promptly in the enclosed postage-paid envelope or utilize the Committee underVote by Phone or Vote by Net service to cast your vote.

This card also provides voting instructions for the terms of any incentive-compensation or equity-based plan.




C Other CompensationAutoliv ASP, Inc. Employee Savings and Employee Benefit Plans
(a) To review at least annually the goals and objectives of the Company's general compensation plans and other employee benefit plans, and recommend that the Board amend these goals and objectives if the Committee deems it appropriate.
(b) To review at least annually the Company's general compensation plans and other employee benefit plans in light of the goals and objectives of these plans, and recommend that the Board amend these plans if the Committee deems it appropriate.
(c) To perform such duties and responsibilities as may be assigned to the Board or the Committee under the terms of its general compensation plans and other employee benefit plans.


V ROLE OF CHIEF EXECUTIVE OFFICER

The Chief Executive Officer may make, and the Committee may consider, recommendations to the Committee regarding the Company's compensation and employee benefit plans and practices, including its executive compensation plans, its incentive-compensation and equity-based plans with respect to executive officers other than the Chief Executive Officer and the Company's director compensation arrangements.


VI EVALUATION OF THE COMMITTEE

The Committee shall, on an annual basis, evaluate its performance under this Charter. In conducting this review, the Committee shall evaluate whether this Charter appropriately addresses the matters that are or should be within its scope. The Committee shall addressInvestment Plan for all matters that the Committee considers relevant to its performance, including at least the following: the adequacy, appropriateness and quality of the information and recommendations presentedshares votable by the Committee tosignor and held of record by the Board, the manner in which they were discussed or debated,Trustee.

(Continued and whether the number and length of meetings of the Committee were adequate for the Committee to complete its work in a thorough and thoughtful manner.

The Committee shall deliver to the Board a report setting forth the results of its evaluation, including any recommended amendments to this Charter and any recommended changes to the Company's or the Board's policies or procedures.


VII INVESTIGATIONS AND STUDIES; OUTSIDE ADVISERS

The Committee may conduct or authorize investigations into or studies of matters within the Committee's scope of responsibilities, and may retain, at the Company's expense, such independent counsel or other advisers as it deems necessary or appropriate, including compensation consultants to advise the Committee with respect to amounts or forms of executive and director compensation. The Committee shall have the sole authority to retain or terminate a compensation consultant to assist the Committee in carrying out its responsibilities, including sole authority to approve the consultant's fees and other retention terms, such fees to be borne by the Company.

dated and signed on reverse side.)