Exhibit 10.4

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GRANT AGREEMENT

 

Applicable to Restricted Stock Units promised under the

Autoliv, Inc., 1997 Stock Incentive Plan

(as amended and restated)

 

Your above-described grant of restricted stock units (“RSUs”) is subject to the
following provisions in addition to those set forth in the attached Notice of
Grant (the “Grant Notice”) and the Autoliv, Inc. 1997 Stock Incentive Plan, as
amended and restated (“the Plan”):

 

1.

Defined Terms:

 

Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Plan.  In addition, for purposes of this Grant
Agreement:

 

 

a.

“Cause” will have the meaning assigned such term in the employment, severance or
similar agreement, if any, between you and Autoliv, Inc. (“the Company”) or one
of its subsidiaries; provided, however, that if there is no such employment,
severance or similar agreement in which such term is defined, “Cause” shall mean
any of the following acts by you, as determined by the Company or one of its
subsidiaries, as applicable, in its sole discretion: gross neglect of duty;
prolonged absence from duty, as reasonably determined by the Company, without
the consent of the Company or one of its subsidiaries, as applicable; your
material breach of any published Company code of conduct or code of ethics; or
your willful misconduct, misfeasance or malfeasance of duty which is reasonably
determined to be detrimental to the Company or one of its subsidiaries.

 

 

b.

“Disability” means your inability, as reasonably determined by the Company, to
perform the essential functions of your regular duties and responsibilities,
with or without reasonable accommodation, due to a medically determinable
physical or mental illness which has lasted (or can reasonably be expected to
last) for a period of six (6) consecutive months.

 

 

c.

“EMT” means Executive Management.

 

 

d.

“Qualifying Retirement” means your termination of employment with the Company or
one of its subsidiaries at or after satisfying the eligibility requirements for
retirement under the retirement provisions of local law in your home country,
provided such termination of employment has been approved by the Company, if you
are not a member of EMT, or by the Compensation Committee, if you are a member
of EMT. Notwithstanding the foregoing, your termination of employment will not
be considered a Qualifying Retirement if (i) the termination occurs within six
(6) months following the Date of Promise, or (ii) you are terminated for Cause
by the Company or one of its subsidiaries.   

 

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2.

Vesting: The RSUs have been credited to a bookkeeping account (“Account”) on
your behalf as of the grant date specified in the Grant Notice (the “Grant
Date”). Your Account will reflect the number of RSUs awarded to you as set forth
in the Grant Notice, as well as any additional RSUs credited as a result of
dividend equivalents, as described in Section 9 below.  Each RSU represents an
unfunded, unsecured right to receive Common Stock, subject to the terms and
conditions stated in the Plan and this Grant Agreement. Your RSUs will vest and
become non-forfeitable on the earliest to occur of the following (each, a “Date
of Vesting’”):

 

 

(a)

as to all of the RSUs, on the Date of Vesting specified in the Grant Notice,
provided that you are then still employed by the Company or one of its
subsidiaries;

 

 

(b)

as to all of the RSUs, upon the termination of your employment by reason of
death, Disability or a Qualifying Retirement; or

 

 

(c)

as to all of the RSUs, upon the occurrence of a Change in Control (as defined
below), provided that you are then still employed by the Company or one of its
subsidiaries.

 

If your employment terminates for any reason other than as described in (b)
above, you will forfeit all right, title and interest in and to the unvested
RSUs as of the date of such termination, and the unvested RSUs will be
reconveyed to the Company without further consideration or any act or action by
you.

 

3.

Conversion to Shares of Common Stock; Procedure at Date of Vesting:

 

 

a.

Unless the RSUs are forfeited prior to the Date of Vesting as provided in
Section 2 above, the RSUs will be converted on the Date of Vesting to actual
shares of Common Stock.  The shares of Common Stock to be issued pursuant to
this Grant Agreement shall be issued in the form of book-entry shares of Common
Stock in your name as the beneficial owner as of the Date of Vesting.

 

 

b.

Notwithstanding the foregoing paragraph, if you are a U.S. taxpayer for the
taxable year in which your termination of employment occurs: (i) your vested
RSUs that constitute “deferred compensation” under Section 409A of the Internal
Revenue Code and the regulations promulgated thereunder (“Section 409A”) shall
be paid only if the circumstances giving rise to your termination of employment
meet any definition of “separation from service” in Section 409A (without giving
effect to any elective provisions that may be available under such definition)
and (ii) if you are a “specified employee” of the Company (as defined in
Section 409A) as of the date of your termination of employment, the vested
shares of Common Stock that constitute “deferred compensation” under Section
409A will be delivered to you on the first day of the seventh month following
the date of your termination of employment (or if earlier, upon death);
provided, however, that such delay shall be implemented only to the extent
necessary in order to avoid the imposition of taxes under Section 409A; and
further provided that you have otherwise complied with the requirements for such
delivery of vested shares as provided herein.  

 

 

c.

You will, if requested, within the specified time set forth in any such request
(not to exceed 30 days), deliver to the Company such written representations and
undertakings as may, in the opinion of the Company’s legal counsel, be necessary
or desirable to comply with tax and securities laws.

 

4.

Securities Law Restrictions; Insider Trading Policy:

 

You may not offer, sell or otherwise dispose of any shares of Common Stock in a
manner which would violate any applicable laws, including, without limitation,
the laws of Sweden, U.S. federal and state securities laws, U.S. federal law,
the requirements of any stock exchange or quotation system upon which the Common
Stock may then be listed or quoted and any laws of any other country or
jurisdiction that may be applicable to you.

 

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In connection with receipt of this Grant Agreement, you acknowledge that you are
subject to the Company’s AS 314 Insider Trading Policy which may be found on the
Company’s intranet at “Functions, Legal” or is available upon request to the
Legal department of the Company.

 

5.

Change in Control of the Company:

 

Notwithstanding any provision herein to the contrary, your RSUs shall be
immediately vested in full upon the occurrence of a Change in Control; provided,
however, that if you are a U.S. taxpayer for the taxable year in which the
Change in Control occurs, this provision shall apply only if the circumstances
giving rise to such Change in Control meet any definition of “change in control
event” in Section 409A of the Internal Revenue Code and applicable regulations
(without giving effect to any elective provisions that may be available under
such definition).

 

6.

Non-Transferability:

 

Your RSUs are personal to you and shall not be transferable by you otherwise
than by will or the laws of descent and distribution.

 

7.

Conformity with Plan:

 

Your RSUs are intended to conform in all respects with the Plan, including any
future amendments thereto. Inconsistencies between this Grant Agreement and the
Plan shall be resolved in accordance with the terms of the Plan. All definitions
stated in the Plan shall be fully applicable to this Grant Agreement.

 

8.

Employment and Successors:

 

Nothing herein or in the Grant Notice or in the Plan confers any right or
obligation on you to continue in the employ of the Company or any subsidiary or
shall affect in any way your right or the right of the Company or any
subsidiary, as the case may be, to terminate your employment at any time. This
Grant Agreement, the Grant Notice, and the Plan, including any future amendments
thereto, shall be binding upon you, your estate, any person succeeding to your
rights hereunder and any successor or successors of the Company.  The RSUs do
not confer to you or any person succeeding to your rights hereunder any rights
of a shareholder of the Company unless and until shares of Common Stock are in
fact issued to you or such person in connection with the settlement of the RSUs.

 

9.

Dividend Equivalent Rights:  

 

Subject to share availability under the Plan, any cash dividend paid with
respect to the Common Stock for which the record date occurs on or after the
Grant Date and the payment date occurs on or before the Date of Vesting will
result in a credit to your Account of additional RSUs equal to (a) the dollar
amount of the dividend per share of Common Stock multiplied by the number of
RSUs credited to your Account as of the applicable record date, divided by (b)
the closing price per share of the Common Stock on the New York Stock Exchange
on the applicable dividend payment date. The additional RSUs credited pursuant
to this Section 9 will be subject to the same vesting schedule, forfeiture and
other terms that apply to the original RSUs.  RSUs that, at the relevant
dividend payment date, previously have been settled or forfeited will not be
eligible to receive dividend equivalents pursuant to this Section 9.

 

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10.

Tax:

 

You are totally responsible for paying all taxes that you incur in respect of
this Grant. The Company has the authority and the right to deduct or withhold,
or require you to remit, an amount sufficient to satisfy all applicable taxes
required by law to be withheld with respect to any taxable event arising as a
result of vesting or settlement of the RSUs.  The withholding requirement may be
satisfied, in whole or in part, by withholding from the settlement of the RSUs,
shares of Common Stock having a fair market value on the date of withholding
equal to the minimum amount (and not any greater amount unless such other
withholding rate will not cause an adverse accounting consequence or cost)
required to be withheld for tax purposes, all in accordance with such procedures
as the Company establishes.  The obligations of the Company hereunder will be
conditional on such payment, and the Company will, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to you.

 

11.

Governing Law:

 

This Grant Agreement, the Grant Notice, and the Plan shall be construed in
accordance with and governed by the laws of the State of Delaware, USA, and, to
the extent relevant, the local laws of your home country.

 

12.

Severability:

 

If any one or more of the provisions contained in this Grant Agreement are
invalid, illegal or unenforceable, the other provisions of this Grant Agreement
will be construed and enforced as if the invalid, illegal or unenforceable
provision had never been included.

 

13.

Recoupment Policy; Agreement to Repayments of Incentive Compensation When
Payments Are Required Under Federal Law:

 

The Company’s policy regarding “Return of Compensation in Restatement
Situations” is enclosed herewith.  Such policy also may be found on the
Company’s intranet at “Functions, HR.”  In connection with receipt of this Grant
Agreement, you acknowledge that you are subject to such policy.  In addition,
the RSUs shall be subject to any future compensation recoupment policy that the
Company may adopt from time to time, as required by law or otherwise, to the
extent applicable.

 

This provision applies to any policy adopted by the New York Stock Exchange (or
any other exchange on which the securities of the Company are listed) pursuant
to Section 10D of the Securities Exchange Act of 1934.  Section 10D provides for
the recovery of incentive-based compensation that has been erroneously paid
because of material errors in financial statements of the Company.  To the
extent such policy requires the repayment of incentive-based compensation
received by you, whether paid pursuant to this Grant Agreement or any other plan
of incentive-based compensation maintained in the past or adopted in the future
by the Company, you agree to the repayment of such amounts to the extent
required by such policy.

 

14.

Executive Stock Ownership Requirements:

 

In connection with receipt of this Grant Agreement, you acknowledge that you are
subject to the Company’s policy regarding “Stock Ownership Policy for
Executives”, if you are a member of the EMT.  

 

15.

Fractional Shares

 

No fractional shares of Common Stock, nor the cash value of any fractional
shares of Common Stock will be issuable or payable to you pursuant to this
Agreement. On the Date of Vesting, the aggregate number of RSUs shall be rounded
down to the nearest whole share.