SCHEDULE 14A
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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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AUTOLIV INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Our date March 12, 1999
Our ref Gunnar Bark
Department Chairman
Telephone +46 (8) 587 20 600
Dear Stockholder,7, 2000
DEAR STOCKHOLDER,
It is my pleasure to invite you to the 19992000 Annual Meeting of Stockholders of
Autoliv, Inc. which will be held on Thursday, May 6, 19994, 2000, at Ingenjorshuset, Polhemssalen, Malmskillnadsgatan 46, Stockholm, Sweden,Bank One, One
Bank One Plaza, 57th floor, Chicago, Illinois 60602, USA, commencing at 4:00 p.m.9.a.m
local time. Information regarding the matters to be voted upon at the meeting
is contained in the formal notice of the meeting and proxy statement on the
following pages. It is important that your shares be represented at this
meeting. Therefore, please mark, sign, date and return your proxy promptly in
the enclosed envelope. 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, 1998,1999 is being distributed to stockholders with this
proxy statement.
Sincerely,
Gunnar Bark
Chairman of the Board
Autoliv, Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Autoliv, Inc. (the "Company") will be
held on Thursday, May 6, 1999,4, 2000, at Ingenjorshuset, Polhemssalen,
Malmskillnadsgatan 46, Stockholm, Sweden,Bank One, One Bank One Plaza, 57th floor,
Chicago, Illinois 60602, USA, at 4:00 p.m.9.a.m local time to consider and vote upon:
1. ElectionReelection of threetwo directors for a term of office expiring on the
Annual Meeting of Stockholders in 20022003 (see page 2).
2. Approval of an Amendment to the Company's 1997 Stock Incentive
Plan (see page 9)
3. Ratification of the appointment of Ernst & Young AB as the Company's
independent auditing firm for the fiscal year ending December 31, 19992000
(see page 13)
4.10).
3. Any other business that may properly come before the meeting and/or
any adjournment thereof.
The close of business of March 8, 19996, 2000 has been fixed as the record date for
the meeting. All stockholders of record at the close of business on that date
are entitled to be present and vote at the meeting and/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, thea maximum of one authorized
representative (one only) 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 meeting.
By order of the Board of Directors
March 12, 19997, 2000
Jorgen I. Svensson
Vice President for Legal Affairs,
General Counsel and Secretary
AUTOLIV, INC.
Box 70381, SE-107 24 Stockholm, Sweden
PROXY STATEMENT
March 12, 19997, 2000
SOLICITATION OF PROXIES
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 6, 1999,4, 2000, and at any
adjournment thereof (the "1999"2000 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. Shares will be voted in
accordance with stockholders' instructions in the accompanying proxy. If no
instructions are given, the shares will be voted in accordance with the
Board's recommendations, which are noted herein. Any proxy given may be
revoked at any time before it is voted at the meeting.
Directors will be elected by a plurality of the votes of the shares present
at the meeting in person or by proxy and entitled to vote thereon. Votes
withheld as to one or more nominees will not be counted as votes cast for
such individuals. Any other proposal brought before the meeting will be
decided by a majority of votes represented at the meeting and entitled to vote
thereat. Consequently, abstentions and broker non-votes (votes(i.e., votes withheld
by brokers in the absence of instructions from beneficial holders) arewill not be
counted for purposes of determining whether a proposal has been approved, but
they arewill 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 material 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; and certain directors, officers
and other employees of the Company, not specially employed for the purpose,
may solicit proxies, without additional remuneration therefor, by personal
interview, mail, telephone or facsimile.
In addition, the Company has retained Georgeson Shareholder Communications
CorporationCommunication, Inc.
to assist in the solicitation for a fee of $10,000$12,500 plus expenses, and WM-data
AB for a fee of $47$50 per hour 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-
halfone-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 eight members, divided into three
classes. Directors in each class are elected on a rotating basis at the annual
stockholders meeting at which the term for such class expires, for terms
expiring at the third subsequent annual meeting of stockholders.
Listed below as nominees for electionreelection at the 19992000 Annual Meeting for
three-
yearthree-year terms are Wilhelm Kull, S. Jay StewartGunnar Bark and Roger W. Stone,Per Welin, whose present terms will expire
at that time. Messrs. Kull, StewartBark and StoneWelin are presently serving as directors, and
the Company has not been advised by either of them that they will not serve if
elected.
THE BOARD RECOMMENDS A VOTE "FOR" THE NOMINEES FOR DIRECTORS.
BOARD MEETING ATTENDANCE AND COMPENSATION OF DIRECTORS
The Board met sixfive times during the year ended December 31, 1998.1999. All but
one of the
incumbent directors were present at all meetings of the Board and Board
committees of which they were members.
Directors who are employees of the Company or any subsidiary thereof do not
receive any compensation for service on the Board or Board committees. Non-employeeNon-
employee directors receive for their services a retainer of $35,000 per year,
plus a fee of $1,200 for each Board meeting attended.
In addition, non-employee directors who are chairmen of the Audit and
Compensation Committees each receive additional annual retainers of $3,000;
and all committee chairmen and members receive $800 for attendance at each
meeting of their particular committees.
Non-employee directors who are elected or continuing as such at annual
stockholders meetings also receive annual grants of shares of Company common
stock with a market value of $15,000 at the time of grant.
NOMINEES FOR DIRECTORS AT THE MAY 1999 ANNUAL
MEETING
Wilhelm Kull, age 62, has been a director since May 1997 and until March
31, 1999, Chief Financial Officer of Autoliv, Inc. He has been Vice
President and Chief Financial Officer of Autoliv AB since 1975, when the
company under the name Granges Weda was a subsidiary of Granges AB, a
publicly listed company. Mr. Kull served as the Deputy Chief Financial
Officer of Granges AB from 1969 to 1974. Prior to that Mr. Kull worked
for five years at a certified public accounting firm in Sweden. He holds a
B.S. degree in business and an M.B.A. from the University of Colorado in
the United States.
S. Jay Stewart, age 60, has been a director of Autoliv, Inc. since May 1997.
He has served as Chairman and Chief Executive Officer of Morton since
April 1994 and has been a director of Morton since 1989. Mr. Stewart was
President and Chief Operating Officer of Morton from 1989 through March
1994. In addition, he is a director of Household International, Inc. Mr.
Stewart holds a B.S. degree in Chemical Engineering from the University of
Cincinnati and an M.B.A. degree from West Virginia University.
Roger W. Stone, age 64, has been a director of Autoliv, Inc. since May
1997. He served until 1998 as Chairman of the Board (since 1983),
President (since 1975), and Chief Executive Officer (since 1979) of Stone
Container Corporation, a multinational producer and marketer of pulp, paper
and packaging products. Mr. Stone is now President and Chief Executive
Officer of Smurfit Stone Container Corporation. He has been a director of
Morton since 1989 and has also been a director of McDonald's Corporation
and Option Care, Inc. He is a graduate of the University of Pennsylvania
Wharton School of Finance.
INCUMBENT DIRECTORS - TERMS EXPIRING AT THE 2000 ANNUAL MEETING
Gunnar Bark, age 59,60, Chairman and until January 31, 1999, CEO of the Company,
was elected a director of Autoliv AB and appointed Chairman of the Autoliv AB
Board in March 1997. Mr. Bark had previously served as President and Chief
Executive Officer of Autoliv AB and as a member of the Autoliv AB Board from
1982 until he retired from his position as President of Autoliv AB and member
of the Autoliv AB Board in April 1996 and as Chief Executive Officer of
Autoliv AB in August 1996. Mr. Bark serves as Chairman of Allgon AB,
Springboard Venture Capital AB, and of Spectra-Physics AB.Calix AB, a privately held automotive
supplier. Mr. Bark has a Master of Science in Engineering Physics from the
Royal Institute of Technology (KTH) in Stockholm. The Chalmers Institute of
Technology in Gothenburg has awarded him the title of Honorary Doctor of
Engineering.
Per Welin, age 62,63, has been a director of Autoliv, Inc. since May 1997 and of
Autoliv AB since 1995. Mr. Welin has served as Executive Vice President and
director of the investment company L-E Lundberg-foretagen AB since 1991 and
until 1998 and as Chairman of the Board of L-E Lundberg-
foretagenLundberg-foretagen AB since
1998. He also holds the position of director of Allgon AB, MoDoHolmen AB, Ostgota Enskilda Bank and NCC
AB. Mr. Welin has a Master of Science in Engineering Physics from the Chalmers
Institute of Technology in Gothenburg, from which he also holds a licentiate
of engineering degree in applied thermo- and fluid dynamics. He also holds an
M.B.A. from the Gothenburg School of Economics.
INCUMBENT DIRECTORS - TERMS EXPIRING AT THE 2001 ANNUAL MEETING
Per-Olof Aronson, age 68,69, has been a director of Autoliv, Inc. since May 1997.
He was a director of Autoliv AB from Autoliv's initial public offering in 1994.
Mr. Aronson has worked in the aluminum company Granges AB since 1956, where he
has held various senior executive positions, including three years as Technical
Director and 11 years as President and Chief Executive Officer. Mr. Aronson is
now Vice Chairman of Granges.SAPA AB (former Granges). Mr. Aronson holds a graduate
degree in Chemical Engineering from the Royal Institute of Technology (KTH) in
Stockholm.
Lars Westerberg, age 50,51, has been a director of Autoliv, Inc. since February
10, 1999, and President and Chief Executive Officer of Autoliv, Inc. since
February 1, 1999. From 1994 until he assumed his positions with Autoliv, he
was President and Chief Executive Officer of Granges AB, a Swedish-
basedSwedish-based
aluminum and plastics company listed on the Stockholm Stock Exchange. From
1991 and until 1994 he held the same positions at the publicly-
tradedpublicly-traded welding
machine 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 a director of SAPA AB (former Granges) and Angpanneforeningen
AB, an engineering consultancy company. Mr. Westerberg holds a Masters Degree
in Electrical Engineering from the Royal Institute of Technology (KTH) in
Stockholm and a M.B.A from the University of Stockholm.
Walter Kunerth, age 57,58, has been a director of Autoliv, Inc. since August 25,
1998. Professor Kunerth is a Senior Advisor to the investment banking group
Lazard Freres, Vice President of DIN (the German Institute for Standardization)
and a member of the senate of the Fraunhofer Society for Applied Research. He
is also a member of the Supervisory Board of Gildemeister AG and Chairman of
the Supervisory Boards of Basler AG, Gotz AG and Basler AG.Suspa Compact GmbH. For more
than 20 years, professor Kunerth held various top executive positions at
Siemens AG in Germany, including member of Siemen'sSiemens' Corporate Executive Board
(1993-97), President of Siemen'sSiemens' Automotive Systems Group (1988-93) and head
of Siemen'sSiemens' Automotive Electronics Division. He holds a graduatedoctorate degree in
Engineering from the University of Stuttgart and has been named Honorary
Professor by the university.
INCUMBENT DIRECTORS - TERMS EXPIRING AT THE 2002 ANNUAL MEETING
Wilhelm Kull, age 63, has been a director since May 1997 and until March 31,
1999, Chief Financial Officer of Autoliv, Inc. He has been Vice President and
Chief Financial Officer of Autoliv AB from 1975, when the company under the
name Granges Weda was a subsidiary of Granges AB, a publicly listed company.
Mr. Kull served as the Deputy Chief Financial Officer of Granges AB from 1969
to 1974. Prior to such time Mr. Kull worked for five years at a certified
public accounting firm in Sweden. He holds a B.S. degree in business and an
M.B.A. from the University of Colorado in the United States.
S. Jay Stewart, age 61, has been a director of Autoliv, Inc. since May 1997.
He was Chairman and Chief Executive Officer of Morton from April 1994 through
October 1999, and was a director of Morton since 1989. Mr. Stewart was
President and Chief Operating Officer of Morton from 1989 through March 1994.
In addition, he is a director of Household International, Inc. Mr Stewart
holds a B.S. degree in Chemical Engineering from the University of Cincinnati
and an M.B.A. from West Virginia University.
Roger W. Stone, age 65, has been a director of Autoliv, Inc. since May 1997.
He served until 1998 as Chairman of the Board (since 1983), President
(since 1975), and Chief Executive Officer (since 1979) of Stone Container
Corporation, a multinational producer and marketer of pulp, paper and packaging
products. Mr. Stone was President and Chief Executive Officer of Smurfit Stone
Container Corporation from 1998 to 1999. He was a director of Morton from 1989
through 1999 and has also been a director of McDonald's Corporation and Option
Care, Inc. He is a graduate of the University of Pennsylvania's Wharton School
of Finance.
COMMITTEES OF THE BOARD
There are three standing committees of the Board: the Audit Committee,
Compensation Committee and Nominating Committee.
The Audit Committee recommends to the Board the independent auditors to be
selected to audit the Company's annual financial statements and reviews the
fees charged for such audits and for any special assignments given such
auditors. The committee also reviews the annual audit and its scope, including
the independent auditors'auditor's letter of comments and management's responses
thereto; possible violations of the Company's business ethics and conflicts of
interest policies; any major accounting changes made or contemplated; and the
effectiveness and efficiency of the Company's internal audit staff. In
addition, the committee confirms that no restrictions have been imposed by
Company personnel on the scope of the independent auditors' examinations.
Members of this committee are Messrs. Welin (Chairman), Aronson, Kunerth and
Stewart. The committee met three times in 1998.1999.
The Compensation Committee advises the Board of the Company with respect to
the compensation to be paid to the directors of the Company and approves and
advises the Board with respect to the terms of contractsthe contract to be entered into
with the senior executives of the Company. The Committee also administers the
Company's stock incentive plan. Members of this committee are Messrs. Stewart
(Chairman), Aronson, Stone and Welin. The committee met three times in 1998.1999.
The Nominating Committee nominates new members of the Boardboard of the Company and
also of the subsidiaries of the Company. This committee consists of all the
members of the Board of the Company. The committee met oncetwice in 1998.1999.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
On March 8, 1999,6, 2000, the record date for the 19992000 Annual Meeting, there were
102,313,365102,333,288 shares of common stock outstanding, each entitled to one vote.
Only stockholders 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, noone stockholder (Robur
Kapitalforvaltning AB) was known to the Company to beneficially own more than
5% of the Company's common stock.
The following table shows the Company's common stock beneficially owned as of
March 8, 19996, 2000 by each present director and each executive officer named in the
Summary Compensation Table on page 7; and by all present directors and
executive officers of the Company as a group. Each named person has sole
voting and investment power with respect to the shares shown.
Shares beneficially owned 1
Per-Olof Aronson 4,3984,831
Gunnar Bark 25,000
Claes HumblaHans Biorck 0
Wilhelm Kull 0
Walter Kunerth 0298
Benoit Marsaud 0
S. Jay Stewart 68,88569,318
Roger W. Stone 1,932
Jorgen I. Svensson 02,365
Per Welin 398831
Lars Westerberg 19,000
All directors, nominees and 122,243
executive officers as a group 120,213
1 All amounts shown represent less than 1% of the outstanding shares of the
Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised exclusively of directors who are not
and have never been Company employees. No Company executive officer serves on
the compensation committee of another company for which any member of the
Company's Compensation Committee serves as an executive officer.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board (the "Committee") advises the Board
regarding senior officers'officers compensation and administers the Company's cash and
stock incentive compensation strategy. The purpose of this plan and the
objectives of the Committee are to:
- - provide*provide competitive compensation programs so as to be able to attract,
retain and motivate top management talent,
- - pay*pay for performance, motivating both long- and short-term performance on
behalf of Company stockholders,
- - place*place greater emphasis on at-risk incentive compensation than on fixed
salaries, particularly for senior executives,
- - base*base the incentive compensation of business unit or subsidiary executives on
the performance of their operations, while including a component which
recognizes overall Company performance, and
- - join*join shareholder and management interests.
To further these objectives, the compensation of senior executive officers
includes three components: (1) base salaries, (2) annual bonus programs, and
(3) a stock incentive program.
The Committee has consulted with an independent compensation consulting firm
for advice in regard to the total compensation of the Company's senior
executive officers.
BASE SALARIES
The Committee recommends salaries for senior executive officers based on data
on competitive salaries received from independent compensation consultants,
position and individual performance.
ANNUAL BONUS PROGRAMS
The Committee determined annual bonus payments for 19981999 based on performance
during 1998.1999. Under the annual bonus program applicable to senior executive
officers, award levels may range from zero to 56%60 % of their base salaries as
of the beginning of the performance periods depending on salary grade and
attainment of Company and applicable business unit and subsidiary profit
targets as approved by the Committee. Based on these factors and the terms
of such annual bonus programs, the Committee approved bonus payments to senior
executive officers varying from 0 %0% to 56%54% of their base salaries.
STOCK INCENTIVE PLAN
In 1998,1999, the Committee authorized stock option grants to selected officers of
the Company and its subsidiaries and stock appreciation rights ("SARs")
payable in cash to the senior executive officers of the Company located in
Sweden with the exception of the Chairman and Chief Executive Officer.
All SARs ever granted under the Autoliv, Inc. 1997 Stock Incentive Plan
(the "Plan") have been converted into stock options with identical exercise
price and terms and conditions as a result of certain changes which occurred
in the Swedish tax legislation in 1998.subsidiaries. All options and rights granted in 19981999 are for 10 year
terms with an exercise price equal to the market price on the date of grant,
and become exercisable after one year of continued employment following the
grant date. Executive officers received option or right grants in February, April and July 19981999 ranging
from 4,0001,025 shares to 100,00022,550 shares (see "Option/SAR"Option Grants in Last Fiscal Year").
CHIEF EXECUTIVE OFFICER
The compensation for the period May 1, 1998 to May 1, 1999 of the Company's Chairman and Chief Executive
Officer, Mr. Gunnar Bark, who resigned as Chief Executive Office of the
Company effective January 31, 1999, and of the new Chief Executive Officer,
Mr. Lars Westerberg, who joined the Company in February 1999, was determined
based on information on competitive compensation levels received from an
independent compensation consultant. Mr. Bark's cash compensation as Chairman
and Chief Executive Officer was at an annual rate of SEK 6,500,000
(USD 784,550). In July 1998,1999, the Committee approved a stock option grant of 100,00015,000
shares of common stock of the Company to Mr. Bark, andWesterberg, a cash compensation
at an annual rate of SEK 6,500,0004,400,000 (USD 817,713). The cash
compensation ceased being payable upon Mr. Bark's resignation as Chief
Executive Officer531,080), and an annual performance
bonus of the Company in February 1999.SEK 1,500,000 (USD 181,050).
LIMITATION ON DEDUCTIBILITY OF CERTAIN COMPENSATION
Section 162 (m) of the Internal Revenue Code of 1986 as amended (the "Code")
generally disallows a tax deduction to public companies for annual compensation
over $1 million paid to their chief executive officers and the four other most
highly compensated executive officers that is not "performance-based"
(as defined in the Code). It is the Committee's general policy to avoid the
loss of tax deductibility whenever compliance with Section 162 (m) would be
consistent with the Company's incentive compensation objectives.
Consequently, the employee incentive compensation programs in which the
Company's most highly compensated officers participate have been structured to
comply with the Code's definition of performance-based compensation. To qualify
as performance-based under the Code, compensation payments must be made
pursuant to a plan that is administered by a committee of outside directors and
must be based on achieving objective performance goals. In addition, the
material terms of the plan must be disclosed to and approved by stockholders,
and the Committee must certify that the performance goals were achieved before
payments can be awarded.
Notwithstanding its general policy, however, the Committee retains the
discretion to authorize incentive payments that may not be deductible if it
believes that doing so would be in the best interest of the Company and its
stockholders.
S. Jay Stewart, Chairman
Per-Olof Aronson
Roger W. Stone
Per Welin
STOCK PERFORMANCE GRAPH (1) (2)
The following graph compares the cumulative stockholder returns on the
Company's common stock with Standard & Poors 500 Index and Standard
& Poors Automobiles Index.
GRAPH
EDGAR representation of data used in printed graphic.
1997: May 1Apr 30 July 1 Oct 131 Sep 30 Dec 31
Autoliv, Inc. $35.5 $39.5 $43.2$34.8 $42.5 $32.8
S&P 500 Index $35.5 $39.6 $42.5 $43.1$39.8 $39.8 $40.5
S&P Automobiles Index $35.5 $37.4 $44.2 $44.2$39.1 $41.9 $42.2
1998: March 2731 June 2630 Sep 2530 Dec 31
Autoliv, Inc. $32.1 $32.1 $30.1$31.1 $31.6 $27.5 $37.2
S&P 500 Index $46.3 $47.9 $44.2 $52.1$46.2 $47.6 $42.6 $51.5
S&P Automobiles Index $53.1 $64.5 $55.2 $64.4$51.8 $63.9 $52.2 $63.5
1999: March 31 June 30 Sep 30 Dec 31
Autoliv, Inc. $37.6 $30.3 $37.6 $29.3
S&P 500 Index $53.9 $57.5 $53.6 $61.4
S&P Automobiles Index $67.8 $65.3 $59.6 $65.7
1) Public trading of the Company stock began on May 1, 1997 on the New
York Stock Exchange and on May 2, 1997 on the Stockholm Stock
Exchange in the form of Swedish Depositary Receipts. Consequently, the
period covered on the graph is limited to the Company's returns from May
1, 1997 through December 31, 1998.
2) Dividends at a rate of $0.66$0.11 per share of common stock were paid
during the period (1998-1999) and are included in the cumulative return on the
Company's common stock
SUMMARY COMPENSATION TABLE
(USD) (1)
Annual Compensation Long-Term All Other
Compensation Compensation
Name and Principal Fiscal year Salary Bonus (2) Other Annual Securities Underlying (3)
Function Compensation Options
Gunnar Bark (4) 1999 501,307 0 0 22,550 374,260
Chairman 1998 733,845 0 0 100,000 374,260
Chairman and 1997 388,149 0 0 0 3,031,052
Lars Westerberg (4) 1999 486,824 0 0 15,000
Chief Executive
1996 450,110 146,520Officer
Hans Biorck (5) 1999 289,680 24,140 0 0 182,3447,000
Chief Financial
Officer
Wilhelm Kull (5) 1999 217,260 182,927 0 1,025
Chief Financial 1998 339,665 190,659 0 15,170
Chief FinancialOfficer 1997 284,642 315,940 0 20,000
Officer 1996 163,516 21,832Benoit Marsaud 1999 227,221 124,035 0 0
Benoit Marsaud5,920
Vice President 1998 229,241 136,839 0 4,000
Vice PresidentManufacturing, 1997 217,501 111,305 0 0
Manufacturing, 1996 235,125 107,895 0 0
President Autoliv
France
Claes Humbla(1) The amounts contained in the table below were paid either in Swedish
Krona or French Francs. All amounts have been converted to dollars using the
following exchange rates:
1999 - 1 USD = 8.2850 SEK, 1 USD = 6.1614 FRF;
1998 154,107 48,748 0 7,670
Vice President- 1 USD = 7.949 SEK, 1 USD = 5.889 FRF;
1997 153,099 181,408 0 5,500
Human Resources 1996 144,762 21,832 0 0
Jorgen Svensson- 1 USD = 7.729 SEK, 1 USD = 5.931 FRF.
(2) The 1997 bonuses for Mr. Kull included a one-time stay and performance
bonus.
(3) The amounts for 1998 138,382 45,496 0 7,670
Vice Presidentand 1999 consist of pension contribution from
Autoliv AB. The amount for 1997 130,250 151,650 0 5,200
Legal Affairs, 1996 82,637 21,832 0 0
General Counselconsists of the value of 25,000 shares of
common stock of the Company when granted in August 1997, a lump sum cash amount
to partially offset the tax payable in connection with the stock grant and Secretarya
pension payment from Autoliv AB and a consultancy fee of $1,293,828 paid by
Autoliv AB to Kanoe AB, a company controlled by Mr. Bark, for services when
Mr. Bark was not employed by Autoliv AB or the Company.
(4) Mr Westerberg succeeded Mr Bark as CEO on February 1, 1999.
(5) Mr Biorck succeeded Mr Kull as Chief Financial Officer of the Company
on April 1, 1999.
(1) The amounts contained in the table below were paid either in Swedish
Krona or French Francs.
All amounts have been converted to dollars using the following exchange rates:
1998 - 1 USD = 7.949 SEK, 1 USD = 5.889 FRF; 1997 - 1 USD = 7.729 SEK,
1 USD = 5.931 FRF; 1996 - 1 USD = 6.705 SEK, and 1 FRF = 1.31 SEK
(2) The bonuses for 1997 included a one-time stay and performance bonus.
(3) The amount for 1998 consists of pension from Autoliv AB. The amount for
1997 consists of the value of 25,000 shares of common stock of the Company
when granted in August 1997, a lump sum cash amount to partially offset the tax
payable in connection with the stock grant and a pension payment from Autoliv
AB and a consultancy fee of $1,293,828 paid by Autoliv AB to Kanoe AB, a
company controlled by Mr. Bark, for services when Mr. Bark was not employed
by Autoliv AB or the Company. The amount for 1996 consists of board fees
received from Autoliv AB subsidiaries in the US and France.
OPTION/SAR
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants (1) (2) Expiration Potential Realizable Value
Number of % of Total Exercise Date at assumed Annual Rates
Name and Securities Options /SAR or Base of Stock Price Appreciation
Principal Underlying Granted Price for Option Term (3)
Function Options/SAROptions to Employees (per share) 5% 10%
Granted in Fiscal year
Gunnar Bark 100,000 29.02 $32.05 July 1, 08 $2,015,000 $4,723,00022,550 8.17 $39.92 Feb 10, -09 566,128 1,434,681
Chairman
andLars Westerberg 15,000 5.43 $40.62 Feb 01, -09 383,185 971,067
Chief Executive
Officer
Hans Biorck 7,000 2.54 $38.25 Jan 4, -09 168,387 426,725
Chief Financial
Officer
Wilhelm Kull 15,170 4.41 $33.59 April 21, 08 $320,390 $840,9561,025 0.37 $35.99 Dec 7, -08 23,200 58,793
Chief Financial
Officer
Benoit Marsaud 4,000 1.17 $31.07 Feb 4, 08 $78,160 $198,0805,920 2.14 $35.99 Dec 7, -08 133,993 339,564
Vice President
Manufacturing
Claes Humbla 7,670 2.23 $31.07 Feb 4, 08 $149,872 $379,818
Vice President
Human Resources
Jorgen Svensson 7,670 2.23 $31.07 Feb 4, 08 $149,872 $379,818
Vice President
Legal Affairs,
General Counsel(1) The options granted will become exercisable in December 1999, and Secretary
(1) The options and SAR's granted will become exercisable in February,
April and July 1999.
(2) In 1998 all executive officers of the Company as a group received
156,180 options, and all employees of the Company (other than executive
officers) as a group received 188,470January and February 2000.
(2) In 1999, all executive officers of the Company as a group received 77,255 options, and all
employees of the Company (other than executive officers) as a group received 198,360 options.
(3) The amounts shown in these two columns represent potential realizable values using the
converted options and exercise prices. The assumed rates of stock price appreciation are set by
SEC rules and are not intended to forecast the future appreciation of the Company's common stock.
AGGREGATED OPTION/SAROPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAROPTION VALUES*
Name Number Of Securities Underlying Value Of Unexercised In-The-Money
Unexercised Options/SARs Options/SARsOptions At Fiscal Year-End Options At Fiscal Year-End ($)
At fiscal Year-EndExcercisable/Unexercisable Exercisable/Unexercisable
Excercisable/Unexercisable
Gunnar Bark 100,000/22,550 0/100,000 0/514,0000
Chairman
andLars Westerberg 0/15,000 0/0
Chief Executive Officer
Wilhelm Kull 20,000/15,170 28,800/54,612Hans Biorck 0/7,000 0/0
Chief Financial Officer
Benoit Marsaud 9,920/0 0/4,000 0/24,4800
Vice President Manufacturing
Claes Humbla 5,500/7,670 7,920/46,940
Vice President Human Resources
Jorgen Svensson 5,200/7,670 7,488/46,940
Vice President Legal Affairs,
General Counsel and SecretaryWilhelm Kull 36,195/0 0/0
Chief Financial Officer
* None of the Named Executive Officers exercised any options in 1999.
CHANGE OF CONTROL SEVERANCE AGREEMENTS
Messrs. HumblaWesterberg and SvenssonBiorck named in the Summary Compensation Table have
change of control severance agreements with the Company ("agreements") which
were originally effective until December 31, 19981999 and are automatically
extended annually for additional 1-yearone-year periods unless notice to the contrary
is given. The agreements are otherwise terminable during their periods of
effectiveness only by termination of the executives'executive's employment. Such
termination in connection with a change in control of the Company (as defined
in the agreements)agreement) will entitle an executive to benefits under the agreements.
In the event that during the two-year period following a change of control,
the executive terminates the executive's employment for Good Reason (as
defined in the agreements) or, during the 30-day period commencing one year
after the change of control, for any reason, or the Company terminates the
executive's employment without cause (as defined in the agreements), the
executive would be entitled to receive an immediate lump sum payment in an
amount equal to between two and a half and three times the sum of (i) such
executive's then current annual salary, (ii) the average of the bonuses
received for the two most recent fiscal years and (iii) the taxable value of
the benefit of a company car.
PENSION PLANS
The Company has paid pension benefit premiums for Messrs. Westerberg, Kull Humbla
and
SvenssonBiorck in accordance with customary Swedish practice. Normal retirement age is
the age of 65. Mr. Westerberg has an agreement allowing retirement at the age
of 60 with complementary pension benefits after the age of 65, and Mr. Kull has
an agreement allowing retirement at the age of 63 and Mr Humbla at the age of 62.63. Pursuant to such agreements,
the Company pays insurance premiums to ensure the pension benefits of
Mr. Westerberg for the period from the date of his retirement until the normal
retirement age of 65 and thereafter for complementary pension benefits, and in
1995 Autoliv AB paid pension insurance premiums to ensure pension benefits
would be paid to Messrs.Mr. Kull and Humbla for the period from the date of the executive'shis retirement until
the normal retirement age of 65.
Senior Executive Officers of the Company have the right to retire at the age of
62 with pension benefits amounting to 60 percent of the base salary at
retirement. This benefit will start to accrue at the age of 50.
2. APPROVAL OF THE AMENDMENT TO THE COMPANY'S 1997
STOCK INCENTIVE PLAN (THE "AMENDMENT")
The Company's 1997 Stock Incentive Plan, which was approved by
stockholders at the 1998 Annual Meeting of Stockholders, provides that an
aggregate of 800,000 shares of the Company's common stock, plus the
number of shares issuable in connection with the exchange of "old" Morton
International, Inc. options for options in the stock of the Company, be
reserved for issuance under the Plan. The Board has determined it necessary
to amend the Plan to reserve an additional two million shares of the
Company's common stock for issuance under the Plan.
The Board has approved and recommends stockholder approval of such
Amendment to the Plan in the belief that grants and awards of cash and
stock thereunder (collectively, "awards") will assist Company Management
to attract, retain and provide appropriate incentives to key personnel. In
addition, approval by stockholders will enable certain awards to qualify as
"performance-based compensation" not subject to the limitations on
deductibility of executive compensation in excess of $1 million contained in
Section 162 (m) of the Internal Revenue Code.
The Plan was approved by the Board on April 30, 1997 subject to approval
by the stockholders of the Company which was received at the 1998 Annual
Meeting of Stockholders. The following summary of the Plan, as amended,
is qualified in its entirety by reference to the complete text of the Plan and
the Amendment, copies of which can be obtained from the Company by any
stockholder upon written request. References herein to the "Plan" shall
mean the Plan as it is proposed to be amended unless the context requires
otherwise.
The Plan is intended to promote the long term financial interests and growth
of the Company by (a) attracting and retaining executive personnel, (b)
motivating executive personnel by means of growth-related incentives, (c)
providing incentive compensation opportunities that are competitive with
those of other major corporations, and (d) furthering the identity of interests
of participants with those of the stockholders of the Company.
The Plan is intended to comply with the requirements of Rule 16b-3 ("Rule
16b-3") promulgated under the Securities Exchange Act of 1934, as
amended. In addition, the Plan is intended to provide performance-based
compensation so as to be eligible for compliance with Section 162(m)
("Section 162(m)") of the Code which, generally, limits the deduction by an
employer for compensation of certain covered officers ("Covered
Employees"). Under Section 162(m), certain compensation, including
compensation based on the attainment of performance goals, may be
disregarded for purposes of this deduction limit if certain requirements are
met. Among the requirements for compensation to qualify for this exception
is that the material terms pursuant to which the compensation is to be paid
disclosed to and approved by the stockholders in separate vote prior to the
payment. Accordingly, if the Plan is approved by stockholders and the other
conditions of Section 162(m) relating to performance-based compensation
are satisfied, compensation paid to Covered Employees pursuant to the Plan
will not fail to be deductible under Section 162(m).
General
The Plan is administered by The Compensation Committee of the Board.
The Plan provides for the granting of awards to such key employees of the
Company and its affiliates as the Compensation Committee may select from
time to time. At present approximately 180 employees are eligible to
participate in the Plan.
Currently, an aggregate of 800,000 shares of the Company's common stock
("Company Stock"), plus the number of shares issuable in connection with
the exchange of "old" Morton International, Inc. options for options in the
stock of the Company, is reserved for issuance under the Plan, subject to
adjustment as described below. If stockholder approval is received for the
Amendment, the Plan, as amended, will provide for the reservation of
2,800,000 shares of Company Stock, plus the number of shares issuable in
connection with the exchange of "old" Morton International, Inc. options for
options in the stock of the Company, subject to adjustment as described
below. Such shares may be authorized but unissued Company Stock or
authorized and issued Company Stock held in the Company's treasury or a
combination thereof. Generally, shares subject to an award that remain
unissued upon expiration or cancellation of the award will be available for
other awards under the Plan. The total number of shares of Company Stock
subject to awards (including awards paid in cash but denominated as shares
of Company Stock) granted to any Participant in the Plan during any
calendar year may not exceed 600,000. In the event that the Compensation
Committee determines that any recapitalization, reorganization, spin off,
stock split, combination or other increase or reduction in the number of
issued shares of Company Stock affects such Company Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of participants in the Plan, then the Compensation Committee may
make such equitable changes or adjustments as it deems necessary to the
number and kind of shares of Company Stock which may thereafter be
issued in connection with awards, the limit on individual awards, the
number and kind of shares of Company Stock subject to each outstanding
award, and the exercise price of each award.
Awards under the Plan may be made in the form of (a) Incentive Stock
Options, (b) Non-Qualified Stock Options (Incentive and Non-Qualified
Stock Options are collectively referred to as "options"), (c) stock
appreciation rights, (d) Restricted Stock, and (e) Other Awards.
Administration
The Plan is administered by the Compensation Committee. The
Compensation Committee will, at all times, consist of two or more persons,
each of whom is an "outside director" within the meaning of Section 162(m)
and a "disinterested person" within the meaning of Rule 16b-3. The
Compensation Committee is authorized, among other things, to interpret and
implement the provisions of the Plan, to select the persons to whom awards
will be granted, to determine the terms and conditions of such awards and to
make all other determinations deemed necessary or advisable for the
administration of the Plan.
Awards under the Plan
Stock Options
Options granted pursuant to the Plan will be exercisable at such time or
times as the Compensation Committee determines. The purchase price per
share payable upon the exercise of an option (the "option exercise price")
will be established by the Compensation Committee; provided, however,
that in the case of an Incentive Stock Option, the option exercise price may
be no less than the fair market value of a share of Company Stock on the
date of grant and in the case of a Non-Qualified Stock Option the option
exercise price may be no less than the par value of a share of Company
Stock. The option exercise price is payable by any one of the following
methods or a combination thereof, to the extent permitted by the
Compensation Committee: (a) cash; (b) check, bank draft or money order;
(c) by surrender of shares of Company Stock having a fair market value on
the date of the exercise equal to the option exercise price; or (e) by any
other consideration.
Stock Appreciation Rights
Stock appreciation rights may be granted in connection with all or any part
of, or independently of, any option granted under the Plan. A stock
appreciation right granted independently of any option will be subject to the
same vesting rules as described above for options. A stock appreciation
right granted in tandem with any stock option will be exercisable only when
and to the extent the option to which it relates is exercisable. The grantee
of a stock appreciation right has the right to surrender the stock appreciation
right and receive from the Company, in cash, an amount equal to the excess
of the fair market value of a share of Company Stock in respect of which
such stock appreciation right is being exercised.
Restricted Stock
The Compensation Committee may grant restricted shares of Company
Stock to such persons, in such amounts, and subject to such terms and
conditions (including the attainment of performance goals) as the
Compensation Committee may determine in its discretion except for
restrictions on transfer and such other restrictions as the Compensation
Committee may impose, participants will have all the rights of a stockholder
with respect to the restricted stock. Unless the Compensation Committee
determines otherwise, termination of employment during the restricted
period will result in the forfeiture by the participant of all shares still
subject to restrictions.
Other Awards
Other cash awards and awards valued in whole or in part by reference to, or
otherwise based on, Company Stock may be granted either alone or in
addition to other awards under the Plan. Subject to the provisions of the
Plan, the Compensation Committee has the sole and complete authority to
determine the persons to whom and the time or times at which such Other
Awards will be granted, the number of shares of Company Stock to be
granted pursuant to such Other Awards and all other conditions of such
Other Awards. Participants may elect to defer all or a portion of such Other
Awards in accordance with procedures established by the Compensation
Committee. The Compensation Committee may, in its discretion, make
awards with terms and conditions different from those specified in the Plan
to participants who are employed outside of the United States or who are
foreign nationals.
Other Features of the Plan
In the event of a Change in Control (as defined in the Plan), all outstanding
awards will become fully vested and/or immediately exercisable.
The Board or the Compensation Committee may suspend, revise, terminate
or amend the Plan at any time; provided, however, that no such action may,
without the consent of a participant, reduce the participants' rights under
any outstanding award.
New Plan Benefits
Inasmuch as awards under the Plan will be granted at the sole discretion of
the Compensation Committee, it is not possible to determine the awards that
will be made thereunder for 1999. See "OPTION/SAR GRANTS IN LAST
FISCAL YEAR" for the name, position and grant information for Plan
participants who were granted awards under the Plan for 1998.
Certain Federal Income Tax Consequences
The following discussion is a brief summary of the principal United States
Federal income tax consequences under current Federal income tax laws
relating to awards under the Plan. This summary is not intended to be
exhaustive and, among other things, does not describe state, local or foreign
income and other tax consequences.
Non-Qualified Stock Options
An optionee will not recognize any taxable income upon the grant of a Non-
Qualified Stock Option. The Company will not be entitled to a tax deduction
with respect to the grant of a Non-Qualified Stock Option. Upon exercise of
a Non-Qualified Stock Option, the excess of the fair market value of the
Company Stock on the exercise date over the option exercise price will be
taxable as compensation income to the optionee and will be subject to
applicable withholding taxes. The Company will generally be entitled to a
tax deduction at such time in the amount of such compensation income. The
optionee's tax basis for the Company Stock received pursuant to the
exercise of a Non-Qualified Stock Option will equal the sum of the
compensation income recognized and the exercise price.
In the event of a sale of Company Stock received upon the exercise of a
Non-Qualified Stock Option, any appreciation or depreciation after the
exercise date generally will be taxed as capital gain or loss.
Incentive Stock Options
An optionee will not recognize any taxable income at the time of grant or
timely exercise of an Incentive Stock Option and the Company will not be
entitled to a tax deduction with respect to such grant or exercise. Exercise
of an Incentive Stock Option may, however, give rise to taxable
compensation income subject to applicable withholding taxes, and a tax
deduction to the Company, if the Incentive Stock Option is not exercised on
a timely basis (generally, while the optionee is employed by the Company
or within 90 days after termination of employment) or if the optionee
subsequently engages in a "disqualifying disposition," as described below.
A sale or exchange by an optionee of shares acquired upon the exercise of
an Incentive Stock Option more than one year after the transfer of the
shares to such optionee and more than two years after the date of grant of
the Incentive Stock Option will result in any difference between the net
sale proceeds and the exercise price being treated as long-term capital gain
(or loss) to the optionee. If such sale or exchange takes place within two
years after the date of grant of the Incentive Stock Option or within one
year from the date of transfer of the Incentive Stock Option shares to the
optionee, such sale or exchange will generally constitute a "disqualifying
disposition" of such shares that will have the following results: any excess
of (a) the lesser of (i) the fair market value of the shares at the time of
exercise of the Incentive Stock Option and (ii) the amount realized on such
disqualifying disposition of the shares over (b) the option exercise price of
such shares, will be ordinary income to the optionee, subject to applicable
withholding taxes, and the Company will be entitled to a tax deduction in
the amount of such income. Any further gain or loss after the date of
exercise generally will qualify as capital gain or loss and will not result in
any deduction by the Company.
Restricted Stock
A grantee will not recognize any income upon the receipt of Restricted
Stock unless the holder elects under Section 83(b) of the Code, within thirty
days of such receipt, to recognize ordinary income in an amount equal to the
fair market value of the Restricted Stock at the time of receipt, less any
amount paid for the shares. If the election is made, the holder will not be
allowed a deduction for amounts subsequently required to be returned to the
Company. If the election is not made, the holder will generally recognize
ordinary income, on the date that the restrictions to which the Restricted
Stock are subject are removed, in an amount equal to the fair market value
of such shares on such date, less any amount paid for the shares. At the time
the holder recognizes ordinary income, the Company generally will be
entitled to a deduction in the same amount.
Generally, upon a sale or other disposition of Restricted Stock with respect
to which the holder has recognized ordinary income (i.e. a Section 83(b)
election was previously made or the restrictions were previously removed),
the holder will recognize capital gain or loss in an amount equal to the
difference between the amount realized on such sale or other disposition and
the holder's basis in such shares.
Other Types of Awards
The grant of stock appreciation right will not result in income for the
grantee or in a tax deduction for the Company. Upon the settlement of such
a right or award, the grantee will recognize ordinary income equal to the
aggregate value of the payment received, and the Company generally will be
entitled to a tax deduction in the same amount.
THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
APPROVE THE AMENDMENT TO THE PLAN.
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation by the Audit Committee, the Board has appointed Ernst &
Young AB as the independent auditing firm for the Company's fiscal year ending
December 31, 1999.2000. The Company has been advised that Ernst & Young AB has no
relationship with the Company or its subsidiaries other than that arising from
the firm's employment as auditors.
In accordance with a resolution of the Board, this selection is being presented
to the stockholders for ratification at the 19992000 Annual Meeting. While
ratification by stockholders of this appointment is not required by law or the
Company's certificate of incorporation or by-laws, management believes that
such ratification is desirable. In the event this appointment is not ratified
by a majority vote of stockholders, the Board will consider that fact when it
appoints independent auditors for the next year.
Ernst & Young AB has been the independent auditing firm for the Company since
May 1997. Ernst & Young AB has been the independent auditors for Autoliv AB
since 1984. Audit services provided to the Company by Ernst & Young AB during
19981999 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.
Representatives of Ernst & Young AB are expected towill not be present at the 1999 Annual Meeting with the opportunity to make a statement if they so
desire and to be available to respond to appropriate questions relating to
that firm's examination of the Company's financial statements for 1998.Meeting.
THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY THE APPOINTMENT OF
ERNST & YOUNG AB AS THE COMPANY'S INDEPENDENT AUDITORS.
4.3. DISCRETIONARY VOTING OF PROXIES ON OTHER MATTERS
Management does not now intend to bring before the 19992000 Annual Meeting any
matters other than those disclosed in the notice of the meeting. Should any
matter requiring a vote of the stockholders be properly brought before the
meeting by or at the direction of the Board, the proxies in the enclosed form
confer 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.
For business to be properly brought before an annual stockholders meeting by
a stockholder, timely advance written notice thereof must be received by the
Secretary of the Company at its principal executive offices in accordance
with the Company's by-laws, a copy of which may be obtained by written request
to the Company's Secretary. No such notices were received for the 19992000 Annual
Meeting. For the Company's 20002001 Annual Stockholders Meeting any such notices
must be received by the Company not later than March 7, 20005, 2001 and not earlier
than February 4, 2000.3, 2001.
STOCKHOLDER PROPOSALS FOR 20002001 ANNUAL MEETING
Stockholder proposals intended for inclusion in the proxy statement for the
20002001 Annual Stockholders Meeting must be received by the Secretary of the
Company at its principal executive offices no later than November 12, 1999.7, 2000.
By Order of the Board
March 12, 19997, 2000
Jorgen I. Svensson
Vice President for Legal Affairs,
General Counsel and Secretary
Stockholm, Sweden
Autoliv Inc, Box 70381, SE-107 24 Stockholm, Sweden
World Trade Center, Klarabergsviadukten 70, Section E
Tel: +46 (8) 587 206 00; Fax +46 (8) 24 44 79; Web Site: www.autoliv.com
Investor relations:
Sweden Tel: +46 (8) 587 206 00; Fax +46 (8) 24 44 79
U.S. Tel: +1 (248) 475 04 09; Fax +1 (248) 475 98 31