Exhibit 10.3

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(1) Autoliv Inc.

 

(2) Frank Melzer

Mutual Separation Agreement

 

 

 

 

 

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This agreement regarding termination of employment “the Agreement” is entered
into BETWEEN:

(1)

Autoliv, Inc. referred to as “the Company”;

(2)

Frank Melzer, referred to as “the Executive”; together referred to as “the
Parties”.

1.

Background

 

1.1

The Executive is employed by the Company pursuant to the terms and conditions
outlined in the Executive’s employment agreement dated September 15, 2014 (“the
Employment Agreement”) and in the indemnification agreement dated September 15,
2014 (“the Indemnification Agreement”).

 

1.2

The Company and the Executive have agreed on October 1, 2016 (“the Agreement
Effective Date”) that the employment of the Executive shall cease on the terms
set out in this agreement.

 

1.3

The Executive shall be irrevocably released from all duties linked to the
Company on the Agreement Effective Date, except for being reasonably available
over the phone and email to answer any questions that the Company may have.

 

1.4

Apart from what is explicitly stated below, this agreement supersedes all
earlier oral or written agreements between the Company or any associated
company, and the Executive, relating to the employment of the Executive. For the
purpose of this agreement, “associated company” means a legal entity directly or
indirectly controlling or controlled by or under common control with the
Company, irrespective of the country of registration of such legal entity.

 

1.5

The provisions of this Agreement, including for the avoidance of doubt section
5.5 below, shall not waive or terminate any rights to indemnification Executive
may have under the Company’s Restated Certificate of Incorporation, Restated
Bylaws or the Indemnification Agreement between the Executive and the Company.

2.

Termination of the Employment

 

2.1

The Executive’s employment with the Company shall cease nine (9) calendar months
after the Agreement Effective Date (“the Termination Date”). The Parties can
mutually agree on an earlier date for the termination of the Executive’s
employment “the Early Termination Date” due to the Executive’s new employment.

 

2.2

The Parties mutually agree that there are no service or employment relationships
with associated companies. Any such service or employment agreements are hereby
cancelled with immediate effect for reasons of precaution. The Company acts on
behalf of its associated companies.

3.

Compensation

 

3.1

The Executive shall be entitled to his monthly base salary, pension
contribution, company car and mobile phone until the Termination Date or, if
applicable, the Early Termination Date.

 

3.2

Not later than 6 weeks following the Termination Date, or if applicable, the
Early Termination Date, the Company shall pay a lump-sum severance payment to
the Executive equal to two (2) times the Executive’s annual gross (not including
employer’s contribution to social security) base salary (“the Severance Pay”).
The payment does not constitute any form of pension entitlement or right to
vacation pay.

 

3.3

The Executive shall be eligible for Short Term Incentive (“STI”) for the entire
fiscal year 2016 in line with the rules and principles of the STI program. The
STI will be paid in the first quarter of 2017, but no later than March 31, 2017.

 

3.4

The Company shall withhold income tax and employee’s contribution to social
security for all the compensation components and in addition thereto pay any
statutory employer’s social security charges, as applicable.

 

3.5

Not later than 6 weeks following the Termination Date or, if applicable, Early
Termination Date, the Company shall pay any vacation pay accrued until the
Termination Date or, if applicable, the Early Termination Date.

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4.

Undertakings

 

4.1

The Executive has an obligation of loyalty that follows by an employment
relationship. Accordingly, the Executive has a duty to be loyal to the Company
until the Termination date and thus carry out, inter alia, the remaining tasks
and assignments the Executive is instructed to carry out as well as not being
engaged in any business competing with the Company or its associated companies.

 

4.2

The Executive will continue to be bound by the confidentiality undertaking under
section 8 under the employment agreement. The Executive is thereby not allowed
to in any way disclose sensitive or other confidential information regarding the
Company or any of its associated companies to any other company or individual
not employed by the Company or any of its associated companies. This
confidentiality undertaking is not limited in time. The Executive also
recognises that he will adhere to section 14 of the employment agreement
regarding intellectual property rights.

 

4.3

To avoid any misunderstandings, the Company hereby releases the Executive from
the non-competition obligation under section 13 of the Employment Agreement. The
Company will thereby have no obligation to pay the compensation outlined under
section 13 of the Employment Agreement.

5.

Other Issues and Final Settlement

 

5.1

The executive participates in Autoliv, Inc. 1997 Stock Incentive Plan
(“Incentive Plan”). The parties agree that the Executive’s entitlement under the
Incentive Plan will be handled in accordance with the rules and regulations
prescribed by the Incentive Plan. With reference to the rules of the plan, the
parties note that all of the Executive’s Restricted Stock Units and Performance
Shares promised but not vested will not vest and shall be forfeited as of the
Termination Date or, if applicable, the Early Termination Date.

 

The Parties further note that the Executive’s already vested Options, if any,
will remain exercisable for three (3) months after the Termination Date or, if
applicable, the Early Termination Date.

 

5.2

The separation between the Executive and the Company is based on mutual trust
and the parties agree that they shall use their best endeavours to act in a fair
and considerate way regarding all issues relating to this separation, including
internal and external communication and other practical matters that have to be
resolved as consequence of this separation. The parties have further agreed to
keep the contents of this agreement confidential other than such disclosures
that are required to comply with applicable securities laws in the U.S. or
Germany. The Company shall provide the Executive with reference signed by Jan
Carlson. The reference shall bear the date of the termination of the employment
relationship. The Executive shall have the right to provide a draft to the
Company. The Company reserve the right to make modifications to that draft.

 

5.3

On the date the Executive is irrevocably released from all duties, the Executive
shall return to the Company at its place of operation all keys, credit cards,
documents, laptop computer and all other property, data and documents which the
Executive may have in his possession and which belong to the Company or its
associated companies except the mobile phone and company car.

 

5.4

The Executive shall resign from all board of directors or similar directorship
in the Company or in any other associated companies latest on the date the
Executive is released.

 

The Executive acknowledges that he has no claim whatsoever outstanding against
either the Company, its associated companies or any of their respective
officers, directors and employees in connection with the position as director.
To the extent that any such claim exists or may exist, the Executive irrevocably
waives such claim and releases the Company, its associated companies and each of
their respective officers, directors and employees from any liability whatsoever
in respect of such claim.

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5.5

Unless otherwise expressly provided in this Agreement, the conclusion of this
Agreement shall settle and compensate for all financial claims of the Parties
out of the employment relationship and its termination. Excluded from this are
possible claims arising from criminal or tortious acts.

 

5.6

The Company has pointed out to the Executive that the conclusion of this
agreement may have adverse consequences under social security law.

6.

Governing Law and Miscellaneous

 

6.1

This agreement shall be governed by and construed in accordance with the laws of
Germany.

 

6.2

If any provision of this agreement is or should become invalid or unenforceable
in whole or in part, the validity of the remaining provisions shall not be
affected. The invalid or unenforceable provision shall be replaced by such
legally permissible provision which comes closest to the original sense and
purpose of the parties behind the invalid or unenforceable provision.

This agreement has been duly executed in two original copies, of which each of
the parties has taken one original signed copy.

Place; Stockholm, Sweden

Date – September 30, 2016

 

On behalf of Autoliv, Inc.

 

The Executive

 

 

 

 

 

/s/ Jan Carlson

 

/s/ Frank Melzer

 

Jan Carlson

 

Frank Melzer

 

Chairman & CEO

 

 

 

 

 

 

 

/s/ Karin Eliasson

 

 

 

Karin Eliasson

 

 

 

Group Vice President, Human Resources

 

 

 

 

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