Exhibit 10.1

EMPLOYEE MATTERS AGREEMENT

BY AND BETWEEN

AUTOLIV, INC.

AND

VEONEER, INC.

DATED AS OF JUNE 28, 2018

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TABLE OF CONTENTS

 

AGREEMENT:

     5  

ARTICLE I

     5  

DEFINITIONS

     5  

Section 1.01

 

Definitions

     5  

Section 1.02

 

Interpretation

     11  

ARTICLE II GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES

     12  

Section 2.01

 

General Principles

     12  

Section 2.02

 

Service Credit

     12  

Section 2.03

 

Benefit Plans

     13  

Section 2.04

 

Individual Agreements

     14  

Section 2.05

 

Collective Bargaining

     15  

Section 2.06

 

Non-U.S. Regulatory Compliance

     15  

ARTICLE III ASSIGNMENT OF EMPLOYEES

     15  

Section 3.01

 

Active Employees

     15  

ARTICLE IV EQUITY, CASH, AND EXECUTIVE COMPENSATION

     16  

Section 4.01

 

Generally

     16  

Section 4.02

 

Equity Awards

     17  

Section 4.03

 

Short-Term Incentive Plans

     20  

Section 4.04

 

Director Compensation

     21  

ARTICLE V U.S. RETIREMENT PLANS

     21  

Section 5.01

 

Autoliv U.S. Pension Plans

     21  

Section 5.02

 

Veoneer U.S. Savings Plan

     21  

Section 5.03

 

Autoliv U.S. Savings Plan

     22  

Section 5.04

 

Veoneer Non-Qualified Retirement Plan

     22  

Section 5.05

 

Nonqualified Plan Participation; Distributions

     23  

ARTICLE VI U.S. WELFARE BENEFIT PLANS

     23  

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Section 6.01

 

Welfare Plans

     23  

Section 6.02

 

Veoneer U.S. Retiree Medical Plan

     24  

Section 6.03

 

COBRA

     25  

Section 6.04

 

Vacation, Holidays and Leaves of Absence

     25  

Section 6.05

 

Severance and Unemployment Compensation

     25  

Section 6.06

 

Workers’ Compensation

     25  

Section 6.07

 

Insurance Contracts

     25  

Section 6.08

 

Third-Party Vendors

     25  

ARTICLE VII NON-U.S. EMPLOYEES AND BENEFIT PLANS

     26  

Section 7.01

 

Non-U.S. Employees

     26  

Section 7.02

 

Veoneer Non-U.S. Pension Plans

     26  

Section 7.03

 

Veoneer Non-U.S. Welfare Plans

     26  

Section 7.04

 

Autoliv Non-U.S. Pension Plans

     26  

Section 7.05

 

Autoliv Non-U.S. Welfare Plans

     26  

ARTICLE VIII MISCELLANEOUS

     27  

Section 8.01

 

Employee Records

     27  

Section 8.02

 

Preservation of Rights to Amend

     28  

Section 8.03

 

Fiduciary Matters

     28  

Section 8.04

 

Further Assurances

     28  

Section 8.05

 

Counterparts; Entire Agreement; Corporate Power

     28  

Section 8.06

 

Governing Law

     28  

Section 8.07

 

Assignability

     29  

Section 8.08

 

Third-Party Beneficiaries

     29  

Section 8.09

 

Notices

     29  

Section 8.10

 

Severability

     30  

Section 8.11

 

Force Majeure

     30  

Section 8.12

 

Headings

     30  

Section 8.13

 

Survival of Covenants

     30  

Section 8.14

 

Waivers of Default

     30  

Section 8.15

 

Dispute Resolution

     30  

Section 8.16

 

Data Privacy

     30  

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Section 8.17

 

Specific Performance

     30  

Section 8.18

 

Amendment

     31  

Section 8.19

 

Construction

     31  

Section 8.20

 

Exclusivity of Tax Matters Agreement

     31  

Section 8.21

 

Limitations of Liability

     31  

Schedules

 

Schedule 1.01(b)

  

Veoneer Non-U.S. Pension Plans

Schedule 1.01(c)

  

Veoneer Non-U.S. Welfare Plans

Schedule 1.01(d)

  

Veoneer U.S. Welfare Plans

Schedule 1.01(e)

  

Veoneer U.S. Retirement Plans

Schedule 1.01(f)

  

Autoliv Non-U.S. Pension Plans

Schedule 1.01(g)

  

Autoliv Non-U.S. Welfare Plans

Schedule 1.01(h)

  

Autoliv U.S. Welfare Plans

Schedule 1.01(i)

  

Autoliv U.S. Retirement Plans

Schedule 1.01(j)

  

Autoliv Short-Term Incentive Plans

Schedule 1.01(k)

  

Veoneer Short-Term Incentive Plans

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EMPLOYEE MATTERS AGREEMENT

This EMPLOYEE MATTERS AGREEMENT, dated as of June 28, 2018 (this “Agreement”),
is by and between Autoliv, Inc., a Delaware corporation (“Autoliv”), and
Veoneer, Inc., a Delaware corporation (“Veoneer”). Capitalized terms used in
this Agreement but not otherwise defined herein shall have the meanings set
forth in Article I or ascribed to them in the Distribution Agreement.

RECITALS:

WHEREAS, Autoliv owns 100% of the shares of common stock, par value $1.00 per
share, of Veoneer (the “Veoneer Common Stock”);

WHEREAS, Autoliv and Veoneer entered into a Master Transfer Agreement, effective
as of April 1, 2018 (the “Master Transfer Agreement”), pursuant to which on or
prior to April 1, 2018 (the “Restructuring Date”), Autoliv and its Subsidiaries
entered into a series of transactions to separate the Veoneer Business from the
Autoliv Business so that, as of the Restructuring Date, the Veoneer Business was
held and operated by members of the Veoneer Group and the Autoliv Business was
held and operated by members of the Autoliv Group (the “Restructuring”);

WHEREAS, the Board of Directors of Autoliv (the “Autoliv Board”) has determined
on careful review and consideration that it is appropriate, desirable and in the
best interests of Autoliv and its stockholders to separate Veoneer into a
separate, publicly traded company;

WHEREAS, in order to effect the separation, the Autoliv Board has determined
that it is appropriate, desirable and in the best interests of Autoliv and its
stockholders for Autoliv to distribute to the holders of the Autoliv Common
Stock (as defined herein), on a pro rata basis (in each case without
consideration being paid by such stockholders), all of the outstanding shares of
Veoneer Common Stock (with the holders of Swedish Depository Receipts
representing shares of Autoliv Common Stock receiving Swedish Depository
Receipts representing shares of Veoneer Common Stock) (the “Distribution”);

WHEREAS, in order to effectuate the Distribution, Autoliv and Veoneer have
entered into that certain Distribution Agreement, dated as of the date hereof
(the “Distribution Agreement”); and

WHEREAS, in addition to the matters addressed by the Distribution Agreement, the
Parties desire to enter into this Agreement to set forth the terms and
conditions of certain employment, compensation, and benefit matters.

AGREEMENT:

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements,
provisions and covenants contained in this Agreement, the Parties hereby agree
as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. For purposes of this Agreement, the following terms
shall have the meanings set forth below.

 

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“Adjusted Autoliv Awards” mean collectively, Adjusted Autoliv Options and
Adjusted Autoliv Restricted Stock Unit Awards.

“Adjusted Autoliv Option” means an Autoliv Option, adjusted as of the Effective
Time in accordance with Section 4.02(a).

“Adjusted Autoliv Restricted Stock Unit Award” means an Autoliv Restricted Stock
Unit Award, adjusted as of the Effective Time in accordance with
Section 4.02(b).

“Affiliate” has the meaning set forth in the Distribution Agreement.

“Agreement” has the meaning set forth in the preamble to this Agreement and
shall include all Schedules hereto and all amendments, modifications, and
changes hereto entered into pursuant to Section 8.18.

“Amended and Restated Master Transition Services Agreement” has the meaning set
forth in the Distribution Agreement.

“Ancillary Agreement” has the meaning set forth in the Distribution Agreement.

“Assets” has the meaning set forth in the Master Transfer Agreement.

“Autoliv” has the meaning set forth in the preamble to this Agreement.

“Autoliv Awards” means, collectively, Autoliv Options, Autoliv Restricted Stock
Unit Awards and Autoliv Performance Shares.

“Autoliv Benefit Plan” means any Benefit Plan established, sponsored, maintained
or contributed to by Autoliv or any of its Subsidiaries immediately prior to the
Effective Time, excluding any Veoneer Benefit Plan.

“Autoliv Board” has the meaning set forth in the recitals to this Agreement.

“Autoliv Business” has the meaning set forth in the Master Transfer Agreement.

“Autoliv Common Stock” has the meaning set forth in the Distribution Agreement.

“Autoliv Compensation Committee” means the Leadership Development and
Compensation Committee of the Autoliv Board.

“Autoliv Conversion Ratio” means the average of the closing per share price of
Autoliv Shares trading “regular way with due bills” on the NYSE during the five
(5) trading days immediately preceding and including the Distribution Date
divided by the average of the closing per share price of Autoliv Shares during
the first five (5) trading days immediately following the Distribution Date,
rounded to the nearest full cent.

“Autoliv Equity Plan” means any equity compensation plan sponsored or maintained
by Autoliv immediately prior to the Effective Time, including the Autoliv, Inc.
1997 Stock Incentive Plan, as amended.

“Autoliv Group” has the meaning set forth in the Distribution Agreement.

 

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“Autoliv Group Employee” means any individual employed by the Autoliv Group as
of the Effective Time (including any such individual who is not actively working
as of the Effective Time as a result of an illness, injury, or leave of absence)
who is not a Veoneer Group Employee.

“Autoliv Liabilities” has the meaning set forth in the Distribution Agreement.

“Autoliv Nonqualified Plans” means the Autoliv ASP, Inc. Excess Pension Plan and
the Autoliv North America Non-Qualified Retirement Plan.

“Autoliv Non-Qualified Retirement Plan” means the Autoliv North
America Non-Qualified Retirement Plan.

“Autoliv Non-U.S. Pension Plan” means collectively, the plans listed on Schedule
1.01(f) hereto.

“Autoliv Non-U.S. Welfare Plan” means any Welfare Plan established, sponsored,
maintained, or contributed to by Autoliv or any of its Subsidiaries for the
benefit of Non-U.S. Employees or Former Non-U.S. Employees, excluding any
Veoneer Non-U.S. Welfare Plan, and listed on Schedule 1.01(g) hereto.

“Autoliv Option” means an option to purchase Autoliv Shares granted pursuant to
an Autoliv Equity Plan that is outstanding as of immediately prior to the
Effective Time.

“Autoliv Performance Share” means a performance share award in respect of
Autoliv Shares granted pursuant to an Autoliv Equity Plan that is outstanding as
of immediately prior to the Effective Time.

“Autoliv Performance Share Conversion Factor” means the level of achievement of
the applicable performance goals for each outstanding Autoliv Performance Share,
expressed as a percentage.

“Autoliv Restricted Stock Unit Award” means a restricted stock unit award in
respect of Autoliv Shares granted pursuant to an Autoliv Equity Plan that is
outstanding as of immediately prior to the Effective Time.

“Autoliv Savings Plan” means the Autoliv (401k) Plan.

“Autoliv Shares” means shares of Autoliv Common Stock.

“Autoliv Short-Term Incentive Plans” means any annual or short-term incentive
cash compensation plan sponsored or maintained by Autoliv immediately prior to
the Effective Time, including the plans listed in Schedule 1.01(j) hereto, other
than any Veoneer Short-Term Incentive Plans.

“Autoliv U.S. Pension Plans” means, collectively, the Autoliv ASP, Inc. Pension
Plan and the Autoliv ASP, Inc., Excess Pension Plan.

“Autoliv U.S. Savings Plan” means the Autoliv ASP, Inc. Employee Savings and
Investment Plan.

“Autoliv U.S. Savings Plan Trust” means the master trust for Autoliv U.S.
Savings Plans.

“Autoliv U.S. Welfare Plan” means any Welfare Plan established, sponsored,
maintained, or contributed to by Autoliv or any of its Subsidiaries for the
benefit of U.S. Employees or Former U.S. Employees including the plans listed in
Schedule 1.01(h) hereto.

 

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“Autoliv Welfare Plans” means the Autoliv U.S. Welfare Plans and the Autoliv
Non-U.S. Welfare Plans.

“Benefit Plan” means any contract, agreement, policy, practice, program, plan,
trust, commitment or arrangement providing for benefits, perquisites or
compensation of any nature from an employer to any Employee, or to any family
member, dependent, or beneficiary of any such Employee, including pension plans,
superannuation plans, thrift plans, supplemental pension plans, and welfare
plans, and contracts, agreements, policies, practices, programs, plans, trusts,
commitments, and arrangements providing for terms of employment, fringe
benefits, severance benefits, termination indemnities, change in control
protections or benefits, travel and accident, life, accidental death and
dismemberment, disability and accident insurance, tuition reimbursement, travel
reimbursement, vacation, sick, personal or bereavement days, leaves of absences,
and holidays; provided, however, that the term “Benefit Plan” shall not include
any government-sponsored benefits, such as workers’ compensation, unemployment,
or any similar plans, programs, or policies.

“COBRA” means the U.S. Consolidated Omnibus Budget Reconciliation Act of 1985,
as codified in Section 601 et seq. of ERISA and in Section 4980B of the Code.

“Code” has the meaning set forth in the Distribution Agreement.

“Dispute” has the meaning set forth in the Distribution Agreement.

“Distribution” has the meaning set forth in the recitals to this Agreement.

“Distribution Agreement” has the meaning set forth in the recitals to this
Agreement.

“Distribution Date” has the meaning set forth in the Distribution Agreement.

“Effective Time” has the meaning of “Distribution Effective Time” set forth in
the Distribution Agreement.

“Employee” means any Autoliv Group Employee or Veoneer Group Employee.

“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.

“Exchange Act” has the meaning set forth in the Distribution Agreement.

“FICA” has the meaning set forth in Section 3.01(e).

“Force Majeure” has the meaning set forth in the Distribution Agreement.

“Former Autoliv Group Employee” means any individual who is a former employee of
a legal entity that remained with the Autoliv Group following the Restructuring
Date who terminated employment prior to the Effective Date.

“Former Employees” means Former Autoliv Group Employees and Former Veoneer Group
Employees.

“Former Non-U.S. Employee” means any Former Employee other than a Former U.S.
Employee.

 

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“Former U.S. Employee” means any Former Employee who was assigned primarily to
operations in the United States during his or her employment with the Autoliv
Group.

“Former Veoneer Group Employee” means any individual employed by a legal entity
that remained with the Veoneer Group following the Restructuring Date who
terminated employment prior to the Effective Date.

“FUTA” has the meaning set forth in Section 3.01(e).

“Governmental Authority” has the meaning set forth in the Distribution
Agreement.

“Incurred Claims” means a Liability related to services or benefits provided
under a Benefit Plan, and shall be deemed to be incurred: (a) with respect to
medical, dental, vision, and prescription drug benefits, upon the rendering of
services giving rise to such Liability; (b) with respect to death benefits, life
insurance, accidental death and dismemberment insurance, and business travel
accident insurance, upon the occurrence of the event giving rise to such
Liability; (c) with respect to disability benefits, upon the date of disability,
as determined by the disability benefit insurance carrier or claim
administrator, giving rise to such Liability; (d) with respect to a period of
continuous hospitalization, upon the date of admission to the hospital; and
(e) with respect to tuition reimbursement or adoption assistance, upon
completion of the requirements for such reimbursement or assistance, whichever
is applicable.

“Indemnitee” has the meaning set forth in the Distribution Agreement.

“Individual Agreement” means any individual (a) employment contract,
(b) retention, severance, or change of control agreement, (c) expatriate
(including any international assignee) contract or agreement (including
agreements and obligations regarding repatriation, relocation, equalization of
taxes, and living standards in the host country), (d) intellectual property
assignment agreements, or (e) other agreement containing restrictive covenants
(including confidentiality, noncompetition, and nonsolicitation provisions)
between a member of the Autoliv Group or the Veoneer Group, on the one hand, and
an Veoneer Group Employee or Former Veoneer Group Employee, on the other hand,
as in effect immediately prior to the Effective Time.

“IRS” means the United States Internal Revenue Service.

“Law” has the meaning set forth in the Distribution Agreement.

“Liability” or “Liabilities” has the meaning set forth in the Distribution
Agreement.

“Non-U.S. Employee” means any Employee other than a U.S. Employee.

“NYSE” has the meaning set forth in the Distribution Agreement.

“Parties” means the parties to this Agreement.

“Person” has the meaning set forth in the Distribution Agreement.

“Privileged Information” has the meaning set forth in the Distribution
Agreement.

“Record Date” has the meaning set forth in the Distribution Agreement.

“Securities Act” means the U.S. Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.

 

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“Separation” has the meaning set forth in the recitals to this Agreement.

“Subsidiary” has the meaning set forth in the Distribution Agreement.

“Transferred Director” means any Veoneer non-employee director as of the
Effective Time who served on the Autoliv Board immediately prior to the
Effective Time.

“Transferred FSA Balances” has the meaning set forth in Section 6.01(d).

“U.S.” means the United States of America.

“U.S. Employees” shall mean Employees who are assigned primarily to operations
in the United States.

“Welfare Plan” means any “welfare plan” (as defined in Section 3(1) of ERISA) or
a “cafeteria plan” under Section 125 of the Code, and any benefits offered
thereunder, and any other plan offering health benefits (including medical,
prescription drug, dental, vision, mental health, substance abuse, and retiree
health), disability benefits, or life, accidental death and dismemberment, and
business travel insurance, pre-tax premium conversion benefits, dependent care
assistance programs, employee assistance programs, paid time-off programs,
contribution funding toward a health savings account, flexible spending
accounts, or cashable credits.

“Veoneer” has the meaning set forth in the preamble to this Agreement.

“Veoneer Awards” means, collectively, Veoneer Options and Veoneer Restricted
Stock Unit Awards.

“Veoneer Benefit Plan” means any Benefit Plan established, sponsored,
maintained, or contributed to by a member of the Veoneer Group as of or after
the Effective Time.

“Veoneer Board” means the Board of Directors of Veoneer.

“Veoneer Business” has the meaning set forth in the Master Transfer Agreement.

“Veoneer Common Stock” has the meaning set forth in the Distribution Agreement.

“Veoneer Conversion Ratio” means the average of the closing per share price of
Autoliv Shares trading “regular way with due bills” on the NYSE during the five
(5) trading days immediately preceding and including the Distribution Date
divided by the average of the closing per share price of Veoneer Shares during
the first five (5) trading days immediately following the Distribution Date,
rounded to the nearest full cent.

“Veoneer Equity Plan” means the Veoneer 2018 Stock Incentive Plan.

“Veoneer Group” has the meaning set forth in the Distribution Agreement.

“Veoneer Group Employee” means any individual employed by the Veoneer Group as
of the Effective Time (including any such individual who is not actively working
as of the Effective Time as a result of an illness, injury, or leave of absence)
who is not an Autoliv Group Employee.

“Veoneer Liabilities” has the meaning set forth in the Distribution Agreement.

 

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“Veoneer Non-Qualified Retirement Plan” means the Veoneer North
America Non-Qualified Retirement Plan.

“Veoneer Non-U.S. Pension Plans” means, collectively, the plans listed on
Schedule 1.01(b) hereto.

“Veoneer Non-U.S. Welfare Plans” means the Welfare Plans established, sponsored,
maintained, or contributed to by any member of the Veoneer Group for the benefit
of Veoneer Group Employees and Former Veoneer Group Employees who are Non-U.S.
Employees and Former Non-U.S. Employees, respectively, including the Welfare
Plans listed in Schedule 1.01(c) hereto.

“Veoneer Option” means an option to purchase Veoneer Shares granted by Veoneer
pursuant to the Veoneer Equity Plan in accordance with Section 4.02(a).

“Veoneer Restricted Stock Unit Award” means a restricted stock unit award in
respect of Veoneer Shares granted pursuant to the Veoneer Equity Plan in
accordance with Section 4.02(b).

“Veoneer Shares” means shares of Veoneer Common Stock.

“Veoneer Short-Term Incentive Plans” means any annual or short-term incentive
cash compensation plan sponsored or maintained by Veoneer immediately following
the Effective Time, including the plans listed in Schedule 1.01(k) hereto.

“Veoneer U.S. Retiree Medical Plan” means the Veoneer US Retiree Medical Plan.

“Veoneer U.S. Savings Plan” means the Veoneer US (401k) Plan.

“Veoneer U.S. Savings Plan Trust” means the master trust for Veoneer U.S.
Savings Plans.

“Veoneer U.S. Welfare Plans” means the Welfare Plans established, sponsored,
maintained, or contributed to by any member of the Veoneer Group for the benefit
of Veoneer Group Employees and Former Veoneer Group Employees who are U.S.
Employees and Former U.S. Employees, respectively, including the Welfare Plans
listed in Schedule 1.01(d) hereto, excluding any Autoliv U.S.

“Veoneer Welfare Plans” means the Veoneer U.S. Welfare Plans and the Veoneer
Non-U.S. Welfare Plans.

Section 1.02 Interpretation. In this Agreement, (a) words in the singular shall
be deemed to include the plural and vice versa and words of one gender shall be
deemed to include the other genders as the context requires; (b) the terms
“hereof,” “herein,” “herewith” and words of similar import, and the terms
“Agreement” shall, unless otherwise stated, be construed to refer to this
Agreement as a whole (including all of the Schedules, Exhibits, Annexes and
Appendices hereto and thereto) and not to any particular provision of this
Agreement; (c) Article, Section, Exhibit, Schedule and Appendix references are
to the Articles, Sections, Exhibits, Schedules and Appendices to this Agreement
unless otherwise specified; (d) the word “including” and words of similar import
when used in this Agreement shall mean “including, without limitation”; (e) the
word “or” shall not be exclusive; (f) unless expressly stated to the contrary in
this Agreement, all references to “the date hereof,” “the date of this
Agreement,” and words of similar import shall all be references to the date
first stated in the preamble to this Agreement, regardless of any amendment or
restatement hereof; (g) unless otherwise provided, all references to “$” or
“dollars” are to United States dollars; and (h) references to the performance,
discharge or fulfillment of any Liability in accordance with its terms shall
have meaning only to the extent such Liability has terms, and if the Liability
does not have terms, the reference shall mean performance, discharge or
fulfillment of such Liability.

 

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ARTICLE II

GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES

Section 2.01 General Principles.

(a) Acceptance and Assumption of Veoneer Liabilities. Except as otherwise
specifically provided herein, as of the Effective Time, Veoneer accepts,
assumes, and agrees to faithfully perform, discharge, and fulfill all of the
following Liabilities in accordance with their respective terms (each of which
shall be considered a Veoneer Liability), regardless of when or where such
Liabilities arose or arise, or whether the facts on which they are based
occurred prior to or subsequent to the Effective Time, regardless of where or
against whom such Liabilities are asserted or determined (including any
Liabilities arising out of claims made by Autoliv’s or Veoneer’s respective
directors, officers, Employees, Former Employees, agents, Subsidiaries, or
Affiliates against any member of the Autoliv Group or the Veoneer Group) or
whether asserted or determined prior to the date hereof, and regardless of
whether arising from or alleged to arise from negligence, recklessness,
violation of Law, fraud, or misrepresentation by any member of the Autoliv Group
or the Veoneer Group, or any of their respective directors, officers, Employees,
Former Employees, agents, Subsidiaries, or Affiliates:

(i) any and all wages, salaries, incentive compensation (as the same may be
modified by this Agreement), equity compensation (as the same may be modified by
this Agreement), commissions, bonuses, and any other employee compensation or
benefits payable to or on behalf of any Veoneer Group Employees and Former
Veoneer Group Employees after the Effective Time, without regard to when such
wages, salaries, incentive compensation, equity compensation, commissions,
bonuses, or other employee compensation or benefits are or may have been awarded
or earned;

(ii) any and all Liabilities whatsoever with respect to claims made by or with
respect to any Veoneer Group Employees or Former Veoneer Group Employees in
connection with any Benefit Plan not retained or assumed by any member of the
Autoliv Group pursuant to this Agreement;

(iii) any and all other Liabilities with respect to any Veoneer Group Employees
or Former Veoneer Group Employees; and

(iv) any and all Liabilities expressly assumed or retained by any member of the
Veoneer Group pursuant to this Agreement.

(b) Acceptance and Assumption of Autoliv Liabilities. Except as otherwise
specifically provided herein, as of the Effective Time, Autoliv accepts,
assumes, and agrees to faithfully perform, discharge, and fulfill all of the
following Liabilities in accordance with their respective terms (each of which
shall be considered an Autoliv Liability), regardless of when or where such
Liabilities arose or arise, or whether the facts on which they are based
occurred prior to or subsequent to the Effective Time, regardless of where or
against whom such Liabilities are asserted or determined (including any
Liabilities arising out of claims made by Autoliv’s or Veoneer’s respective
directors, officers, Employees, Former Employees, agents, Subsidiaries, or
Affiliates against any member of the Autoliv Group or the Veoneer Group) or
whether asserted or determined prior to the date hereof, and regardless of
whether arising from or alleged to arise from negligence, recklessness,
violation of Law, fraud, or misrepresentation by any member of the Autoliv Group
or the Veoneer Group, or any of their respective directors, officers, Employees,
Former Employees, agents, Subsidiaries, or Affiliates:

 

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(i) any and all wages, salaries, incentive compensation (as the same may be
modified by this Agreement), equity compensation (as the same may be modified by
this Agreement), commissions, bonuses, and any other employee compensation or
benefits payable to or on behalf of any Autoliv Group Employees and Former
Autoliv Group Employees after the Effective Time, without regard to when such
wages, salaries, incentive compensation, equity compensation, commissions,
bonuses, or other employee compensation or benefits are or may have been awarded
or earned;

(ii) any and all Liabilities whatsoever with respect to claims made by or with
respect to any Autoliv Group Employees or Former Autoliv Group Employees in
connection with any Benefit Plan not retained or assumed by any member of the
Veoneer Group pursuant to this Agreement;

(iii) any and all other Liabilities with respect to any Autoliv Group Employees
or Former Autoliv Group Employees; and

(iv) any and all Liabilities expressly assumed or retained by any member of the
Autoliv Group pursuant to this Agreement.

(c) Unaddressed Liabilities. To the extent that this Agreement does not address
particular Liabilities under any Benefit Plan and the Parties later determine
that they should be allocated in connection with the Distribution, the Parties
shall agree in good faith on the allocation, taking into account the handling of
comparable Liabilities under this Agreement.

Section 2.02 Service Credit. The Veoneer Benefit Plans shall, and Veoneer shall
cause each member of the Veoneer Group to, recognize each Veoneer Group
Employee’s and each Former Veoneer Group Employee’s full service with Autoliv or
any of its Subsidiaries or predecessor entities at or before the Effective Time,
to the same extent that such service was credited by Autoliv for similar
purposes prior to the Effective Time as if such full service had been performed
for a member of the Veoneer Group, for purposes of eligibility, vesting, and
determination of level of benefits under any such Veoneer Benefit Plan;
provided, however, that the foregoing service recognition shall not apply to the
extent it would result in duplication of benefits for the same period of
services.

Section 2.03 Benefit Plans.

(a) Establishment of Plans. Except as otherwise explicitly provided in this
Agreement, before the Effective Time, Veoneer shall, or shall cause an
applicable member of the Veoneer Group to, adopt Benefit Plans (and related
trusts, if applicable), with terms that are in the aggregate comparable (or such
other standard as is specified in this Agreement with respect to any particular
Benefit Plan) to those of the corresponding Autoliv Benefit Plans; provided,
however, that Veoneer may limit participation in any such Veoneer Benefit Plan
to Veoneer Group Employees and Former Veoneer Group Employees who participated
in the corresponding Autoliv Benefit Plan immediately prior to the date of
establishment of such plan.

 

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(b) No Creation/Acceleration of Benefits; No Duplication of Benefits.

(i) Notwithstanding anything to the contrary in this Agreement, the Distribution
Agreement, or any other Ancillary Agreement, no participant in any Veoneer
Benefit Plan shall receive service credit or benefits to the extent that receipt
of such service credit or benefits would result in duplication of benefits
provided to such participant by the corresponding Autoliv Benefit Plan or any
other plan, program, or arrangement sponsored or maintained by a member of the
Autoliv Group.

(ii) Unless expressly provided for in this Agreement, in the Distribution
Agreement, or in any other Ancillary Agreement, or required by applicable Law,
no provision in this Agreement shall be construed to create any right to, or
accelerate vesting or entitlements to, any compensation or benefit whatsoever
under any program or arrangement sponsored or maintained by a member of the
Autoliv Group or member of the Veoneer Group on the part of any Employee or
Former Employee.

(c) Transition Services. The Parties acknowledge that the Autoliv Group or the
Veoneer Group may provide administrative services for certain of the other
Party’s compensation and benefit programs for a transitional period under the
terms of the Amended and Restated Master Transition Services Agreement.

(d) Beneficiaries. References to Autoliv Group Employees, Former Autoliv Group
Employees, Veoneer Group Employees, Former Veoneer Group Employees, and
non-employee directors of either Autoliv or Veoneer (including Transferred
Directors), shall, where the context clearly contemplates, be deemed to refer to
their beneficiaries, dependents, survivors, and alternate payees, as applicable.

(e) Amendment and Termination. Nothing in this Agreement shall be construed or
interpreted to restrict the right or authority of any member of the Autoliv
Group or the Veoneer Group, as applicable, to amend or terminate any Autoliv
Benefit Plan or Veoneer Benefit Plan, or any plan that is newly adopted or
implemented in accordance with the terms hereof after the Distribution Date, as
applicable, effective as of a date on and after the Distribution Date, to the
extent permitted by applicable Law.

(f) Consent of Third Parties. If any provision of this Agreement is dependent on
the consent of any third party and such consent is withheld, the Parties shall
use commercially reasonable efforts to implement the applicable provision of
this Agreement to the full extent practicable. If any provision of this
Agreement cannot be implemented due to the failure of such third party to
consent, the Parties shall negotiate in good faith to implement the provision in
a mutually satisfactory manner.

Section 2.04 Individual Agreements.

(a) Assignment by Autoliv. To the extent necessary, Autoliv shall assign, or
cause an applicable member of the Autoliv Group to assign, to Veoneer or another
member of the Veoneer Group, as designated by Veoneer, all Individual
Agreements, with such assignment to be effective as of or prior to the Effective
Time; provided, however, that to the extent that assignment of any such
Individual Agreement is not permitted by the terms of such agreement or by
applicable Law, effective as of or prior to the Effective Time, each member of
the Veoneer Group shall be considered to be a successor to each member of the
Autoliv Group for purposes of, and a third-party beneficiary with respect to,
such Individual Agreement, such that each member of the Veoneer Group shall
enjoy all of the rights and benefits under such agreement (including rights and
benefits as a third-party beneficiary), with respect to the business operations
of the Veoneer Group; and provided, further, that, on and after the Effective
Time, Autoliv shall not be permitted to enforce any Individual Agreement
(including any agreement containing noncompetition or nonsolicitation covenants)
against a Veoneer Group Employee or Former Veoneer Group Employee for action
taken in such individual’s capacity as a Veoneer Group Employee or Former
Veoneer Group Employee.

 

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(b) Assumption by Veoneer. Effective as of or prior to the Effective Time,
Veoneer shall assume and honor, or shall cause a member of the Veoneer Group to
assume and honor, all Individual Agreements.

Section 2.05 Collective Bargaining. Effective no later than immediately prior to
the Effective Time, to the extent necessary, Veoneer shall cause the appropriate
member of the Veoneer Group to (a) assume collective bargaining, works council,
or similar agreements (including any national, sector, or local collective
bargaining agreement) that cover Veoneer Group Employees or Former Veoneer Group
Employees and the Liabilities arising under any such agreements, and (b) join
any industrial, employer, or similar association or federation if membership is
required for the relevant collective bargaining agreement to continue to apply.
Notwithstanding anything to the contrary in this Section 2.05, in countries in
which the European Union Acquired Rights Directive applies, collective
bargaining agreements and any other agreements with employee representatives
shall continue to apply after the Distribution Date to the extent and in the
manner provided for by local Law.

Section 2.06 Non-U.S. Regulatory Compliance. Autoliv shall have the authority to
adjust the treatment described in this Agreement with respect to Veoneer Group
Employees or Former Veoneer Group Employees who are located outside of the
United States in order to ensure compliance with the applicable laws or
regulations of countries outside of the United States or to preserve the tax
benefits provided under local tax law or regulation before the Distribution.

ARTICLE III

ASSIGNMENT OF EMPLOYEES

Section 3.01 Active Employees.

(a) Assignment and Transfer of Employees. Effective no later than immediately
prior to the Effective Time and except as otherwise agreed by the Parties or as
required by applicable Law, (i) the applicable member of the Autoliv Group or
the Veoneer Group shall have taken such actions as are necessary to ensure that
each Veoneer Group Employee is employed by a member of the Veoneer Group as of
the Effective Time, and (ii) the applicable member of the Autoliv Group or the
Veoneer Group shall have taken such actions as are necessary to ensure that each
individual who is an Autoliv Group Employee is employed by a member of the
Autoliv Group as of the Effective Time. Each of the Parties agreed to execute,
and to seek to have the applicable Employees execute, such documentation, if
any, as may be necessary to reflect such assignment and/or transfer.

(b) At-Will Status. Nothing in this Agreement shall create any obligation on the
part of any member of the Autoliv Group or any member of the Veoneer Group to
(i) continue the employment of any Employee or permit the return of any Employee
from a leave of absence for any period after the date of this Agreement (except
as required by applicable Law) or (ii) change the employment status of any
Employee from “at-will,” to the extent that such Employee is an “at-will”
employee under applicable Law.

 

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(c) Non-Termination of Employment; Severance.

(i) The Parties acknowledge and agree that any Autoliv Group Employee or Veoneer
Group Employee shall not be deemed either to have terminated employment,
incurred a separation from service or severance from employment, or to be in
retirement status under any Benefit Plan solely as a result of the Distribution
and the assignment, transfer, or continuation of the employment of Employees as
contemplated by this Section 3.01, except as required by applicable Law or as
otherwise agreed between the Parties. Except to the extent required by
applicable Law, any Autoliv Group Employee or Veoneer Group Employee shall not,
solely as a result of the Distribution or related transactions, be eligible to
receive payment of, or exercise any portability rights in respect of, such
Employee’s vested benefit or retirement allowance under any Benefit Plan.

(ii) Notwithstanding Section 2.01 or anything to the contrary contained in any
business transfer agreement entered into between a member of the Autoliv Group
and a member of the Veoneer Group, Autoliv (or a member of the Autoliv Group
designated by Autoliv) shall retain (or assume or reimburse to the extent
necessary), and agrees to faithfully perform, discharge, and fulfill any
Liabilities in respect of any severance payments or benefits that become payable
pursuant to applicable Law to any Veoneer Group Employee as a result of the
transfer of such Veoneer Group Employee to a member of the Veoneer Group as
contemplated by Section 3.01(a).

(d) No Change of Control or Change in Control. The Parties acknowledge and agree
that neither the consummation of the Distribution nor any transaction
contemplated by this Agreement, the Distribution Agreement, or any other
Ancillary Agreement shall be deemed a “change of control,” “change in control,”
or term of similar import for purposes of any Benefit Plan sponsored or
maintained by any member of the Autoliv Group or member of the Veoneer Group,
except as required by applicable Law.

(e) U.S. Payroll and Related Taxes. With respect to any Veoneer Group Employee
or group of Veoneer Group Employees located in the United States, the Parties
shall, or shall cause their respective Subsidiaries to, (i) treat Veoneer (or
the applicable member of the Veoneer Group) as a “successor employer” and
Autoliv (or the applicable member of the Autoliv Group) as a “predecessor,”
within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code, for
purposes of taxes imposed under the United States Federal Insurance
Contributions Act, as amended (“FICA”), or the United States Federal
Unemployment Tax Act, as amended (“FUTA”), (ii) cooperate with each other to
avoid, to the extent possible, the restart of FICA and FUTA upon or following
the Effective Time with respect to each such Veoneer Group Employee for the tax
year during which the Effective Time occurs, and (iii) use commercially
reasonable efforts to implement the alternate procedure described in Section 5
of Revenue Procedure 2004-53; provided, however, that, to the extent that
Veoneer (or the applicable member of the Veoneer Group) cannot be treated as a
“successor employer” to Autoliv (or the applicable member of the Autoliv Group)
within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code with
respect to any Veoneer Group Employee or group of Veoneer Group Employees,
(A) with respect to the portion of the tax year commencing on January 1, 2018
and ending on the Distribution Date, Autoliv shall (x) be responsible for all
payroll obligations, tax withholding, and reporting obligations for such Veoneer
Group Employees and (y) furnish a Form W-2 or similar earnings statement to all
such Veoneer Group Employees for such period, and (B) with respect to the
remaining portion of such tax year, Veoneer shall (x) be responsible for all
payroll obligations, tax withholding, and reporting obligations regarding such
Veoneer Group Employees and (y) furnish a Form W-2 or similar earnings statement
to all such Veoneer Group Employees.

ARTICLE IV

EQUITY, CASH, AND EXECUTIVE COMPENSATION

Section 4.01 Generally(f) . Each Autoliv Award granted that is outstanding as of
immediately prior to the Effective Time shall be adjusted as described below.
Before the Effective Time, the Veoneer Equity Plan shall be established, with
such terms as are necessary to permit the implementation of the provisions of
Section 4.02.

 

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Section 4.02 Equity Awards.

(a) Stock Options. Each Autoliv Option that is outstanding immediately prior to
the Effective Time, shall be converted as of the Effective Time into an Adjusted
Autoliv Option and a Veoneer Option, and each such Adjusted Autoliv Option and
Veoneer Option shall be subject to the same terms and conditions (including with
respect to vesting and expiration) after the Effective Time as were applicable
to such Autoliv Option immediately prior to the Effective Time, except as
otherwise provided herein;

(i) the number of Autoliv Shares subject to such Adjusted Autoliv Options shall
be equal to the product of fifty percent (50%) of the number of Autoliv Shares
subject to the corresponding Autoliv Options immediately prior to the Effective
Time multiplied by the Autoliv Conversion Ratio, rounded down to the nearest
whole share;

(ii) the number of Veoneer Shares subject to such Veoneer Options shall be equal
to the product of fifty percent (50%) of the number of Autoliv Shares subject to
the corresponding Autoliv Options immediately prior to the Effective Time
multiplied by the Veoneer Conversion Ratio, rounded down to the nearest whole
share;

(iii) the per share exercise price of such Adjusted Autoliv Options shall be
equal to the quotient of (1) the per share exercise price of the corresponding
Autoliv Option immediately prior to the Effective Time divided by (2) the
Autoliv Conversion Ratio, rounded up to the nearest full cent; and

(iv) the per share exercise price of such Veoneer Options shall be equal to the
quotient of (1) the per share exercise price of the corresponding Autoliv Option
immediately prior to the Effective Time divided by (2) the Veoneer Conversion
Ratio, rounded up to the nearest full cent.

Notwithstanding anything to the contrary in this Section 4.02(a), the exercise
price, the number of Autoliv Shares and Veoneer Shares subject to each Adjusted
Autoliv Option and Veoneer Option, respectively, and the terms and conditions of
exercise of such options shall be determined in a manner consistent with the
requirements of Section 409A and Section 424 of the Code, as applicable.

(b) Restricted Stock Units. Each Autoliv Restricted Stock Unit that is
outstanding immediately prior to the Effective Time shall be converted as of the
Effective Time into an Adjusted Autoliv Restricted Stock Unit and a Veoneer
Restricted Stock Unit, and each such Adjusted Autoliv Restricted Stock Unit and
Veoneer Restricted Stock Unit shall be subject to the same terms and conditions
(including with respect to vesting) after the Effective Time as were applicable
to such Autoliv Restricted Stock Unit immediately prior to the Effective Time,
except as otherwise provided herein;

(i) the number of Autoliv Shares subject to such Adjusted Autoliv Restricted
Stock Units shall be equal to the product of fifty percent (50%) of the number
of Autoliv Shares subject to the corresponding Autoliv Restricted Stock Units
immediately prior to the Effective Time multiplied by the Autoliv Conversion
Ratio;

(ii) the number of Veoneer Shares subject to such Veoneer Restricted Stock Units
shall be equal to the product of fifty percent (50%) of the number of Autoliv
Shares subject to the corresponding Autoliv Restricted Stock Units immediately
prior to the Effective Time multiplied by the Veoneer Conversion Ratio; and

 

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(iii) in each case, on the date of vesting, the aggregate number of Adjusted
Autoliv Restricted Stock Units and Veoneer Restricted Stock Units, respectively,
shall be rounded down to the nearest whole share.

(c) Performance Shares. Each Autoliv Performance Share that is outstanding
immediately prior to the Effective Time shall be converted as of the Effective
Time into an Adjusted Autoliv Restricted Stock Unit and a Veoneer Restricted
Stock Unit, and each such Adjusted Autoliv Restricted Stock Unit and Veoneer
Restricted Stock Unit shall be subject to the same terms and conditions
(including with respect to vesting) after the Effective Time as were applicable
to such Autoliv Performance Shares immediately prior to the Effective Time,
except as otherwise provided herein;

(i) the number of Autoliv Shares subject to such Adjusted Autoliv Restricted
Stock Units shall be equal to the product of (A) the product of fifty percent
(50%) of the number of Autoliv Shares subject to the corresponding Autoliv
Performance Shares immediately prior to the Effective Time, multiplied by the
Autoliv Performance Share Conversion Factor for the respective Autoliv
Performance Share program prior to the Effective Time, multiplied by (B) the
Autoliv Conversion Ratio; and

(ii) the number of Veoneer Shares subject to such Veoneer Restricted Stock Units
shall be equal to the product of (A) the product of fifty percent (50%) of the
number of Autoliv Shares subject to the corresponding Autoliv Performance Shares
immediately prior to the Effective Time, multiplied by (B) the Autoliv
Performance Share Conversion Factor for the respective Performance Share program
prior to the Effective Time, multiplied by (B) the Veoneer Conversion Ratio; and

(iii) in each case, on the date of vesting, the aggregate number of Adjusted
Autoliv Restricted Stock Units and Veoneer Restricted Stock Units, respectively,
shall be rounded down to the nearest whole share.

(d) Miscellaneous Award Terms.

(i) Continued Service. With respect to Adjusted Autoliv Awards held by Veoneer
Group Employees and Adjusted Veoneer Awards held by Autoliv Group Employees,
employment or continued service as a director with the Veoneer Group and the
Autoliv Group, respectively, shall be treated as employment or continued service
as a director with Autoliv and Veoneer, respectively. In addition, neither the
Distribution nor any employment transfer described in Section 3.01 shall
constitute a termination of employment for any Employee for purposes of any
Adjusted Autoliv Award or any Veoneer Award.

(ii) Change in Control.

(A) After the Effective Time, for any award adjusted under this Section 4.02,
any reference to a “change in control,” “change of control,” or similar
definition in an award agreement, employment agreement applicable to such award
(1) with respect to Autoliv, shall be deemed to refer to a “change in control,”
“change of control,” or similar definition as set forth in the applicable
Autoliv Equity Plan , and (2) with respect to Veoneer, shall be deemed to refer
to a “Change in Control” as defined in the Veoneer Equity Plan;

 

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(B) After the Effective Time, with respect to any Adjusted Autoliv Restricted
Stock Units and Veoneer Restricted Stock Units, upon the occurrence of a “change
in control,” “change of control,” or similar definition of Autoliv, (1) Adjusted
Autoliv Restricted Stock Units shall vest in accordance with the
change-in-control provisions of the Autoliv Equity Plan, regardless of whether
such awards are held by an Autoliv Group Employee or Veoneer Group Employee, and
(2) Veoneer Restricted Stock Units held by an Autoliv Group Employee shall vest
in accordance with the change-in-control provisions of the Autoliv Equity Plan;
and

(C) Upon the occurrence of a “change in control,” “change of control,” or
similar definition of Veoneer, (1) Veoneer Restricted Stock Units shall vest in
accordance with the change-in-control provisions of the Veoneer Equity Plan,
regardless of whether such awards are held by an Autoliv Group Employee or
Veoneer Group Employee, and (2) Adjusted Autoliv Restricted Stock Units held by
a Veoneer Group Employee shall vest in accordance with the change-in-control
provisions of the Autoliv Equity Plan.

(e) Settlement; Tax Reporting; and Withholding.

(i) Except as otherwise provided in this Section 4.02(e), after the Effective
Time, stock-settled Adjusted Autoliv Awards, regardless of by whom held, shall
be settled by Autoliv, and stock-settled Veoneer Awards, regardless of by whom
held, shall be settled by Veoneer.

(ii) Upon the vesting or settlement of any Adjusted Autoliv Awards and any
Veoneer Awards, Veoneer shall be solely responsible for ensuring the
satisfaction of all applicable tax withholding requirements on behalf of each
Veoneer Group Employee and Former Veoneer Group Employees. Upon the vesting or
settlement of any Adjusted Autoliv Awards and any Veoneer Awards, Autoliv shall
be solely responsible for ensuring the satisfaction of all applicable tax
withholding requirements on behalf of each Autoliv Group Employee and Former
Autoliv Group Employees. Following the Effective Time, Autoliv shall be
responsible for all income tax reporting in respect of Adjusted Autoliv Awards
held by Autoliv Group Employees and Former Autoliv Group Employees, and Veoneer
shall be responsible for all income tax reporting in respect of Adjusted Autoliv
Awards and Veoneer Awards held by Veoneer Group Employees and Former Veoneer
Group Employees, except as may be modified pursuant to Section 3.01(e).

(iii) Following the Effective Time, if any stock-settled Adjusted Autoliv Award
or Veoneer Award shall fail to become vested, such Adjusted Autoliv Award or
Veoneer Award shall be forfeited to Autoliv or Veoneer, respectively.

(f) Cooperation. Each of the Parties shall establish an appropriate
administration system to administer, in an orderly manner, (i) exercises of
vested Adjusted Autoliv Options and Veoneer Options, (ii) the vesting and
forfeiture of unvested Adjusted Autoliv Awards and Veoneer Awards, and (iii) the
withholding and reporting requirements with respect to all awards. Each of the
Parties shall work together to unify and consolidate all indicative data and
payroll and employment information on regular timetables and make certain that
each applicable Person’s data and records in respect of such awards are correct
and updated on a timely basis. The foregoing shall include employment status and
information required for vesting and forfeiture of awards and tax
withholding/remittance, compliance with trading windows, and compliance with the
requirements of the Exchange Act and other applicable Laws. Without limiting the
foregoing provisions of this Section 4.02(f), each Party agrees that each such
Party shall, during the three-year period commencing on the Distribution Date
engage the same stock plan administrator as its third-party administrator for
Autoliv Awards, in the case of Autoliv, and Veoneer Awards, in the case of
Veoneer.

 

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(g) Registration and Other Regulatory Requirements. Veoneer agrees to file a
Form S-8 registration statement with respect to, and to cause to be registered
pursuant to the Securities Act, the Veoneer Shares authorized for issuance under
the Veoneer Equity Plan, as required pursuant to the Securities Act, before the
date of issuance of any Veoneer Shares pursuant to the Veoneer Equity Plan.

(h) Equity Awards in Certain Jurisdictions. Notwithstanding the foregoing
provisions of this Section 4.02, the Parties may mutually agree, in their sole
discretion, not to adjust certain outstanding Autoliv Awards pursuant to the
foregoing provisions of this Section 4.02 where those actions would create or
trigger adverse legal, accounting, or tax consequences for Autoliv, Veoneer,
and/or the affected award holder, including, without limitation, outstanding
Autoliv Options that are intended to qualify as incentive stock options under
Section 422 of the Code. In such circumstances, Autoliv and/or Veoneer may take
any action necessary or advisable to prevent any such adverse legal, accounting,
or tax consequences, including agreeing that the outstanding Autoliv Awards of
the affected award holders shall terminate in accordance with the terms of the
Autoliv Equity Plan and the underlying award agreements, in which case Veoneer
or Autoliv, as applicable, shall equitably compensate the affected award holders
in an alternate manner determined by Veoneer or Autoliv, as applicable, in its
sole discretion, or agreeing that an alternate adjustment method should be
applied, in each case provided such alternate manner of equitable compensation
or alternate adjustment method, as applicable, does not itself result in adverse
legal, accounting, or tax consequences for Autoliv, Veoneer, and/or the affected
award holder. Where and to the extent required by applicable Law or tax
considerations, the adjustments described in this Section 4.02(h) shall be
(i) deemed to have been effectuated immediately prior to the Distribution Date,
(ii) deemed approved by the Autoliv Compensation Committee, and
(iii) incorporated by reference herein as if fully set forth herein and shall be
binding on the Parties and their respective Affiliates.

Section 4.03 Short-Term Incentive Plans.

(a) Establishment of Veoneer Short-Term Incentive Plans. Veoneer shall, or shall
cause other members of the Veoneer Group to, establish the Veoneer Short-Term
Incentive Plans. The Veoneer Short-Term Incentive Plans shall govern incentives
earned for performance periods commencing after the Distribution Date. In no
event shall any Veoneer Group Employee or Former Veoneer Group Employee be
entitled to any payments under the Autoliv Short-Term Incentive Plan for any
period after the Distribution Date.

(b) Fiscal Year 2018 Annual Bonus. Effective as of the Effective Time, the
Liability in respect of bonus awards allocable to Veoneer Group Employees and
Former Veoneer Group Employees under any Autoliv Short-Term Incentive Plan in
respect of the 2018 fiscal year shall be assumed by the Veoneer Group based on
the accrual for such Employees as of immediately prior to the Effective Time.
Upon the determination of the actual amount of the bonuses for the Veoneer Group
Employees and Former Veoneer Group Employees by Autoliv following the Effective
Time, Veoneer shall pay the amounts awarded to the Veoneer Group Employees and
Former Veoneer Group Employees.

(c) Allocation of Liabilities. Except as otherwise provided in this Agreement,
(i) the Autoliv Group shall be solely responsible for funding, paying, and
discharging all obligations relating to any annual incentive bonus awards under
any Autoliv Short-Term Incentive Plan with respect to payments earned before, as
of, or after the Effective Time to Autoliv Group Employees or Former Autoliv
Group Employees, and no member of the Veoneer Group shall have any obligations
with respect thereto; and (ii) the Veoneer Group shall be solely responsible for
funding, paying, and discharging all obligations relating to any annual
incentive bonus awards under any Veoneer Short-Term Incentive Plan with respect
to payments made after the Effective Time to Veoneer Group Employees or Former
Veoneer Group Employees, and no member of the Autoliv Group shall have any
obligations with respect thereto.

 

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Section 4.04 Director Compensation.

(a) Establishment of Veoneer Non-Employee Director Compensation Policy. Prior to
the Effective Time, Veoneer shall establish the Veoneer non-employee director
compensation policy.

(b) Allocation of Directors’ Compensation. Autoliv shall be responsible for the
payment of any fees for service on the Autoliv Board that are earned at, before,
or after the Effective Time, and Veoneer shall not have any responsibility for
any such payments. With respect to any Veoneer non-employee director, Veoneer
shall be responsible for the payment of any fees for service on the Veoneer
Board that are earned at any time after the Effective Time and Autoliv shall not
have any responsibility for any such payments. Notwithstanding the foregoing,
Veoneer shall commence paying quarterly cash retainers to Veoneer non-employee
directors in respect of the quarter in which the Effective Time occurs; provided
that (i) if Autoliv has already paid such quarter’s cash retainers to Autoliv
non-employee directors prior to the Effective Time, then within thirty
(30) business days after the end of the fiscal quarter in which the Distribution
Date occurs, Veoneer shall pay Autoliv an amount equal to the portion of such
payment that is attributable to Transferred Directors’ service to Veoneer after
the Distribution Date, and (ii) if Autoliv has not yet paid such quarter’s cash
retainers to Autoliv non-employee directors prior to the Effective Time, then
within thirty (30) business days after the end of the fiscal quarter in which
the Distribution Date occurs, Autoliv shall pay Veoneer an amount equal to the
portion of such payment that is attributable to Transferred Directors’ service
to Autoliv on and prior to the Distribution Date. The Parties recognize and
agree that any Autoliv Awards held by a Veoneer non-employee director or a
Transferred Director shall be adjusted under Section 4.02.

ARTICLE V

U.S. RETIREMENT PLANS

Section 5.01 Autoliv U.S. Pension Plans.

(a) Retention of Plan. As of the Effective Time, the Autoliv Group shall retain
(or assume to the extent necessary) sponsorship of each Autoliv U.S. Pension
Plan, and, from and after the Effective Time, all Assets and Liabilities
thereunder shall be Assets and Liabilities of the Autoliv Group.

(b) Treatment of Veoneer Group Employees. As of the Effective Time, Veoneer
Group Employees shall be ineligible to accrue benefits under the Autoliv U.S.
Pension Plans. Veoneer Group Employees shall be treated as vested terminated
employees from the Defined Benefit Plan. Veoneer Group Employees shall be
treated as vested employees under the Excess Pension Plan; the date of
separation shall be determined by the date of separation from Veoneer.

Section 5.02 Veoneer U.S. Savings Plan.

(a) Establishment of Veoneer U.S. Savings Plan. Before the Effective Time,
Veoneer shall establish the Veoneer U.S. Savings Plan, and the Veoneer U.S.
Savings Plan Trust, effective as of the Effective Time. Before the Effective
Time, Veoneer shall provide Autoliv with (i) a copy of the Veoneer U.S. Savings
Plan and Veoneer U.S. Savings Plan Trust and (ii) a copy of certified
resolutions of the Veoneer Board (or its authorized committee or other delegate)
evidencing adoption of the Veoneer U.S. Savings Plan and the Veoneer U.S.
Savings Plan Trust and the assumption by the Veoneer U.S. Savings Plan of the
Liabilities described in Section 5.02(b) effective as of the Effective Time.

 

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(b) Transfer of Account Balances. As soon as administratively feasible, Autoliv
shall cause the trustee of the Autoliv U.S. Savings Plan to transfer from the
Autoliv U.S. Savings Plan Trust to the Veoneer U.S. Savings Plan Trust the
account balances of the Veoneer Group Employees under the Autoliv U.S. Savings
Plan, determined as of the date of the transfer. Such transfers shall be made in
kind, including promissory notes evidencing the transfer of outstanding loans.
Any Asset and Liability transfers pursuant to this Section 5.02(b) shall comply
in all respects with Sections 414(1) and 411(d)(6) of the Code.

(c) Employer Contributions. Veoneer shall be responsible for making any such
matching contributions and retirement income contributions to the Veoneer U.S.
Savings Plan.

(d) Veoneer U.S. Savings Plan Provisions. The Veoneer U.S. Savings Plan shall
provide that:

(i) Veoneer Group Employees shall (A) be eligible to participate in the Veoneer
U.S. Savings Plan as of the Effective Time to the extent that they were eligible
to participate in the Autoliv U.S. Savings Plan as of immediately prior to the
Effective Time, and (B) receive credit for all service credited for that purpose
under the Autoliv U.S. Savings Plan as of immediately prior to the Distribution
as if that service had been rendered to Veoneer; and

(ii) the account balance of each Veoneer Group Employee under the Autoliv U.S.
Savings Plan as of the date of the transfer of Assets from the Autoliv U.S.
Savings Plan (including any outstanding promissory notes) shall be credited to
such individual’s account balance under the Veoneer U.S. Savings Plan.

(e) Autoliv U.S. Savings Plan After Effective Time. From and after the Effective
Time, (i) the Autoliv U.S. Savings Plan shall continue to be responsible for
Liabilities in respect of Autoliv Group Employees and Former Employees with
accounts under such plans, and (ii) no Veoneer Group Employees shall accrue any
benefits under the Autoliv U.S. Savings Plan. Without limiting the generality of
the foregoing, Veoneer Group Employees shall cease to be participants in the
Autoliv U.S. Savings Plan effective as of the Effective Time.

(f) No Loss of Unvested Benefits; No Distributions. No Veoneer Group Employee
shall be entitled to a distribution of his or her benefit under the Autoliv U.S.
Savings Plan or Veoneer U.S. Savings Plan as a result of such transfer of
employment to the Veoneer Group.

Section 5.03 Autoliv U.S. Savings Plan.

(a) Retention of Plan. As of the Effective Time, the Autoliv Group shall retain
sponsorship of the Autoliv U.S. Savings Plan, and, from and after the Effective
Time, all Assets and Liabilities thereunder shall be the Assets and Liabilities
of the Autoliv Group.

Section 5.04 Veoneer Non-Qualified Retirement Plan.

(a) Establishment of the Veoneer Non-Qualified Retirement Plan. Before the
Effective Time, Veoneer shall establish the Veoneer Non-Qualified Retirement
Plan.

(b) Assumption of Liabilities from Autoliv. As of the Effective Time, Veoneer
shall, and shall cause the Veoneer Non-Qualified Retirement Plan to, assume all
Liabilities under the Autoliv Non-Qualified Retirement Plan of Veoneer Group
Employees that relate to deferrals following the Effective Time, determined as
of the Effective Time, and the Autoliv Group and the Autoliv Non-Qualified
Retirement Plan shall be relieved of all such Liabilities. Autoliv shall retain
all Liabilities under the Autoliv Non-Qualified Retirement Plan for Autoliv
Group Employees and Former Employees and all Liabilities under the Autoliv
Non-Qualified Retirement Plan for Autoliv Group Employees that relate to
deferrals prior to or as of the Distribution Date. As soon as administratively
feasible following the

 

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Effective Time, Autoliv shall cause the trustee holding Autoliv Non-Qualified
Retirement Plan assets to transfer the assets funding the account balances of
the Veoneer Group Employees under the Autoliv Non-Qualified Retirement Plan
determined as the date of transfer, to the trustee of the Veoneer Non-Qualified
Retirement Plan Trust. Veoneer Group Employees shall cease to participate in the
Autoliv Non-Qualified Retirement Plan. The deferral elections in effect for the
Veoneer Group Employees under the Autoliv Non-Qualified Retirement Plan as of
the Effective Time shall continue to apply under the Veoneer Non-Qualified
Retirement Plan immediately after the Effective Time without interruption
through December 31, 2018.

Section 5.05 Nonqualified Plan Participation; Distributions. The Parties
acknowledge that none of the transactions contemplated by this Agreement, the
Distribution Agreement, or any other Ancillary Agreement shall trigger a payment
or distribution of compensation under any of the Autoliv Nonqualified Plans or
Veoneer Non-Qualified Retirement Plan for any participant and, consequently,
that the payment or distribution of any compensation to which such participant
is entitled under any of the Autoliv Nonqualified Plans or Veoneer Non-Qualified
Retirement Plan shall occur upon such participant’s separation from service from
the Veoneer Group or at such other time as provided in the applicable Veoneer
Non-Qualified Retirement Plan or participant’s deferral election.

ARTICLE VI

U.S. WELFARE BENEFIT PLANS

Section 6.01 Welfare Plans.

(a) Multi-Employer Health Plan. Autoliv, ASP. Inc. Welfare Benefit Plan shall
act as a multi-employer health plan from July 1, 2018 through December 31, 2018.
Actual claims and administrative costs from providers shall be captured and
assigned to Veoneer. Costs are that are not billed per employee, but are instead
fee-based per service, shall be prorated based on a percentage of head-count for
Veoneer US, Inc. vs. Autoliv ASP, Inc. each month.

(b) Establishment of Veoneer U.S. Welfare Plans. As of January 1, 2019, Veoneer
shall, or shall cause the applicable member of the Veoneer Group to, establish
the Veoneer U.S. Welfare Plans.

(c) Waiver of Conditions; Benefit Maximums. Veoneer shall use commercially
reasonable efforts to cause the Veoneer U.S. Welfare Plans and any Welfare Plans
that provide leave benefits, as applicable, to:

(i) with respect to initial enrollment as of January 1, 2019, waive (A) all
limitations as to preexisting conditions, exclusions, and service conditions
with respect to participation and coverage requirements applicable to any
Veoneer Group Employee or Former Veoneer Group Employee who are U.S. Employees,
or any covered dependents thereof, other than limitations that were in effect
with respect to such Veoneer Group Employee, Former Veoneer Group Employee, or
covered dependent under the applicable Autoliv U.S. Welfare Plan as of
immediately prior to January 1, 2019 (or, if earlier, the date on which the
applicable Welfare Plan is established), and (B) any waiting period limitation
or evidence of insurability requirement applicable to such Veoneer Group
Employee, Former Veoneer Group Employee, or any covered dependents thereof,
other than limitations or requirements that were in effect with respect to such
Veoneer Group Employee, Former Veoneer Group Employee, or covered dependent
under the applicable Autoliv U.S. Welfare Plans as of immediately prior to
January 1, 2019 (or, if earlier, the date on which the applicable Welfare Plan
is established); and

 

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(ii) take into account with respect to aggregate annual, lifetime, or similar
maximum benefits available under the Veoneer U.S. Welfare Plans, such Veoneer
Group Employee’s, Former Veoneer Group Employee’s, or any covered dependents’
prior claim experience under the Autoliv U.S. Welfare Plans and any Benefit Plan
that provides leave benefits.

(d) Flexible Spending Accounts. The Parties shall use commercially reasonable
efforts to ensure that any health or dependent care flexible spending accounts
of Veoneer Group Employees who are U.S. Employees (whether positive or negative)
(the “Transferred FSA Balances”) under Autoliv U.S. Welfare Plans that are
health or dependent care flexible spending account plans are transferred, as
soon as practicable after January 1, 2019 (or, if earlier, the date on which the
corresponding Veoneer U.S. Welfare Plans are established), from the Autoliv U.S.
Welfare Plans to the corresponding Veoneer U.S. Welfare Plans. As soon as
practicable after January 1, 2019 (calculated as of January 1, 2019), and in any
event within thirty (30) days after the amount of the Transferred FSA Balances
is determined or such later date as mutually agreed upon by the Parties, Veoneer
shall pay Autoliv the net aggregate amount of the Transferred FSA Balances
(calculated as of January 1, 2019), if such amount is positive, and Autoliv
shall pay Veoneer the net aggregate amount of the Transferred FSA Balances
(calculated as of January 1, 2019), if such amount is negative.

(e) Allocation of Welfare Assets and Liabilities. Except as otherwise
specifically provided herein, the Autoliv Group shall retain all Liabilities
relating to Incurred Claims under the Autoliv U.S. Welfare Plans, and shall also
retain Assets (including, without limitation, Medicare reimbursements,
pharmaceutical rebates, and similar items) associated with such Incurred Claims.
The Veoneer Group shall be responsible for all Liabilities relating to Incurred
Claims under any Veoneer U.S. Welfare Plan and shall also retain Assets
(including, without limitation, Medicare reimbursements, pharmaceutical rebates,
and similar items) associated with such Incurred Claims.

(f) Determination of Veoneer Group Employees. For purposes of this Section 6.01,
it is contemplated that some or all of the Veoneer U.S. Welfare Plans or Benefit
Plans providing leave benefits may be established prior to the Effective Time.
In such event, all references to “Veoneer Group Employees” in this Section 6.01
shall mean and refer to individuals employed by a member of the Veoneer Group as
of immediately prior to the date of establishment of such plan.

Section 6.02 Veoneer U.S. Retiree Medical Plan.

(a) Establishment of the Veoneer U.S. Retiree Medical Plan. Before the Effective
Time, Veoneer shall establish the Veoneer U.S. Retiree Medical Plan.

(b) Assumption of Liabilities from Autoliv. As of the Effective Time (or, if
earlier, the date on which the Veoneer U.S. Retiree Medical Plan is
established), Veoneer shall, and shall cause the Veoneer U.S. Retiree Medical
Plan to, assume all retiree medical Liabilities under the Autoliv Retiree
Welfare Plan of the (no unions in US) Veoneer Group Employees and Former Veoneer
Group Employees, determined as of immediately prior to the Effective Time (or,
if earlier, the date on which the Veoneer U.S. Retiree Medical Plan is
established), and the Autoliv Group and the Autoliv Retiree Welfare Plan shall
be relieved of all such Liabilities. Autoliv shall retain all Liabilities under
the Autoliv Retiree Welfare Plan for Autoliv Group Employees and Former Autoliv
Group Employees. From and after the Effective Time (or, if earlier, the date on
which the Veoneer U.S. Retiree Medical Plan is established), Veoneer Group
Employees and Former Veoneer Group Employees shall cease to participate in the
Autoliv Retiree Welfare Plan.

 

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Section 6.03 COBRA.

The Autoliv Group shall continue to be responsible for complying with, and
providing coverage pursuant to, the health care continuation requirements of
COBRA and the corresponding provisions of the Autoliv U.S. Welfare Plans with
respect to any Autoliv Group Employee and any Former Autoliv Group Employee who
is a U.S. Employee (and his or her covered dependents) who incur a qualifying
event under COBRA before, as of, or after the January 1, 2019. Effective as of
January 1, 2019, the Veoneer Group shall assume responsibility for complying
with, and providing coverage pursuant to, the health care continuation
requirements of COBRA, the certificate of creditable coverage requirements of
HIPAA, and the corresponding provisions of the Veoneer U.S. Welfare Plans with
respect to any Veoneer Group Employee or Former Veoneer Group Employee who is a
U.S. Employee (and his or her covered dependents) who incurs a qualifying event
or loss of coverage under the Veoneer U.S. Welfare Plans before, as of, or after
the January 1, 2019. The Parties agree that the consummation of the transactions
contemplated by the Distribution Agreement shall not constitute a COBRA
qualifying event for any purpose of COBRA.

Section 6.04 Vacation, Holidays and Leaves of Absence. Effective as of no later
than the Effective Time, the Veoneer Group shall assume all Liabilities of the
Autoliv Group with respect to vacation, holiday, annual leave, or other leave of
absence, and required payments related thereto, for each Veoneer Group Employee
who is a U.S. Employee. The Autoliv Group shall retain all Liabilities with
respect to vacation, holiday, annual leave or other leave of absence, and
required payments related thereto, for each Autoliv Group Employee who is a U.S.
Employee.

Section 6.05 Severance and Unemployment Compensation. Except as otherwise
provided in Section 3.01(c), effective as of the Effective Time, the Veoneer
Group shall assume any and all Liabilities to, or relating to, Veoneer Group
Employees and Former Veoneer Group Employees in respect of severance and
unemployment compensation, regardless of whether the event giving rise to the
Liability occurred before, at, or after the Effective Time. The Autoliv Group
shall be responsible for any and all Liabilities to, or relating to, Autoliv
Group Employees and Former Autoliv Group Employees in respect of severance and
unemployment compensation, regardless of whether the event giving rise to the
Liability occurred before, at or after the Effective Time.

Section 6.06 Workers’ Compensation. With respect to claims for workers’
compensation in the U.S., (a) the Veoneer Group shall be responsible for claims
in respect of Veoneer Group Employees and Former Veoneer Group Employees,
whether occurring before, at, or after the Effective Time, and (b) the Autoliv
Group shall be responsible for all claims in respect of Autoliv Group Employees
and Former Autoliv Group Employees, whether occurring before, at, or after the
Effective Time.

Section 6.07 Insurance Contracts. To the extent that any Autoliv Welfare Plan is
funded through the purchase of an insurance contract or is subject to any
stop-loss contract, the Parties shall cooperate and use their commercially
reasonable efforts to replicate such insurance contracts for Veoneer (except to
the extent that changes are required under applicable state insurance Laws or
filings by the respective insurers) and to maintain any pricing discounts or
other preferential terms for both Autoliv and Veoneer for a reasonable term.
Neither Party shall be liable for failure to obtain such insurance contracts,
pricing discounts, or other preferential terms for the other Party. Each Party
shall be responsible for any additional premiums, charges, or administrative
fees that such Party may incur pursuant to this Section 6.07.

Section 6.08 Third-Party Vendors. Except as provided below, to the extent that
any Autoliv Welfare Plan is administered by a third-party vendor, the Parties
shall cooperate and use their commercially reasonable efforts to replicate any
contract with such third-party vendor for Veoneer and to maintain any pricing
discounts or other preferential terms for both Autoliv and Veoneer for a
reasonable term. Neither Party shall be liable for failure to obtain such
pricing discounts or other preferential terms for the other Party. Each Party
shall be responsible for any additional premiums, charges, or administrative
fees that such Party may incur pursuant to this Section 6.08.

 

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ARTICLE VII

NON-U.S. EMPLOYEES AND BENEFIT PLANS

Section 7.01 Non-U.S. Employees. Unless otherwise agreed by the Parties, Veoneer
Group Employees and Former Veoneer Group Employees who are Non-U.S. Employees or
who otherwise are subject to non-U.S. Law and their related benefits and
Liabilities shall be treated in the same manner as the Veoneer Group Employees
and Former Veoneer Group Employees, respectively, who are U.S. Employees and who
are not subject to non-U.S. Law. Notwithstanding anything to the contrary in
this Agreement, all actions taken with respect to Non-U.S. Employees or U.S.
Employees working in non-U.S. jurisdictions shall be subject to and accomplished
in accordance with applicable Law and the custom of the applicable
jurisdictions.

Section 7.02 Veoneer Non-U.S. Pension Plans.

(a) As of the Effective Time, the Veoneer Group shall retain (or establish or
assume to the extent necessary) sponsorship of the Veoneer Non-U.S. Pension
Plans, and, from and after the Effective Time, all Assets and Liabilities
thereunder shall be the Assets and Liabilities of the Veoneer Group.

(i) Previously separated entities of Veoneer Canada and Veoneer France each have
separate formerly established pension plans and the Liabilities associated with
each of such plans has been assumed by the respective entities as of the
Restructuring Date.

(ii) Each of Veoneer Japan, Veoneer South Korea and Veoneer India established a
new pension plan for participation by employees of the respective entity,
effective on or about the Restructuring Date, and the Liabilities associated
with each of these plans for Veoneer Group Employees has been assumed by the
Veoneer Group as of the Restructuring Date.

(iii) Veoneer Germany maintains a Pension Promise Plan for the benefit one
(1) active Veoneer Group Employee and the Liabilities associated with this plan
has been assumed by the Veoneer Group as of the Restructuring Date.

Section 7.03 Veoneer Non-U.S. Welfare Plans. As of the Effective Time, the
Veoneer Group shall retain (or establish or assume to the extent necessary)
sponsorship of the Veoneer Non-U.S. Welfare Plans, and, from and after the
Effective Time, all Assets and Liabilities thereunder shall be the Assets and
Liabilities of the Veoneer Group.

Section 7.04 Autoliv Non-U.S. Pension Plans. As of the Effective Time, the
Autoliv Group shall retain (or establish or assume to the extent necessary)
sponsorship of the Autoliv Non-U.S. Pension Plans, and, from and after the
Effective Time, all Assets and Liabilities thereunder shall be the Assets and
Liabilities of the Autoliv Group.

Section 7.05 Autoliv Non-U.S. Welfare Plans. As of the Effective Time, the
Autoliv Group shall retain (or establish or assume to the extent necessary)
sponsorship of the Autoliv Non-U.S. Welfare Plans, and, from and after the
Effective Time, all Assets and Liabilities thereunder shall be the Assets and
Liabilities of the Autoliv Group.

 

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ARTICLE VIII

MISCELLANEOUS

Section 8.01 Employee Records.

(a) Sharing of Information. Subject to any limitations imposed by applicable
Law, Autoliv and Veoneer (acting directly or through members of the Autoliv
Group or the Veoneer Group, respectively) shall provide to the other Party and
their respective authorized agents and vendors all information necessary for the
Parties to perform their respective duties under this Agreement.

(b) Transfer of Personnel Records and Authorization. Subject to any limitation
imposed by applicable Law and to the extent that it has not done so before the
Effective Time, each Party shall transfer to the other Party any and all
employment records as necessary for each Party to carry out its obligations
under this Agreement.

(c) Access to Records. To the extent not inconsistent with this Agreement, the
Distribution Agreement, or any applicable privacy protection Laws or
regulations, reasonable access to Employee-related records after the Effective
Time shall be provided to members of the Autoliv Group and members of the
Veoneer Group pursuant to the terms and conditions of Article VI of the
Distribution Agreement.

(d) Maintenance of Records. With respect to retaining, destroying, transferring,
sharing, copying, and permitting access to all Employee-related information,
Autoliv and Veoneer shall comply with all applicable Laws, regulations, and
internal policies, and shall indemnify and hold harmless each other from and
against any and all Liability, claims, actions, and damages that arise from a
failure (by the indemnifying Party or its Subsidiaries or their respective
agents) to so comply with all applicable Laws, regulations, and internal
policies applicable to such information.

(e) Cooperation. Each Party shall use commercially reasonable efforts to
cooperate and work together to unify, consolidate, and share (to the extent
permissible under applicable privacy/data protection laws) all relevant
documents, resolutions, government filings, data, payroll, employment, and
benefit plan information on regular timetables and cooperate as needed with
respect to (i) any litigation with respect to any employee benefit plan, policy,
or arrangement contemplated by this Agreement, (ii) efforts to seek a
determination letter, private letter ruling, or advisory opinion from the IRS,
U.S. Department of Labor, or ruling from any other Governmental Authority on
behalf of any employee benefit plan, policy, or arrangement contemplated by this
Agreement, and (iii) any filings that are required to be made or supplemented to
the IRS, U.S. Pension Benefit Guaranty Corporation, U.S. Department of Labor, or
any other Governmental Authority; provided, however, that requests for
cooperation must be reasonable and not interfere with daily business operations.

(f) Confidentiality. Notwithstanding anything to the contrary in this Agreement,
all confidential records and data relating to Employees to be shared or
transferred pursuant to this Agreement shall be subject to Section 6.9 of the
Distribution Agreement and the requirements of applicable Law.

(g) Compensation for Providing Information. The Party requesting information
under this Section 8.01 agrees to reimburse the other Party for the reasonable
costs, if any, of gathering, copying, transporting, and otherwise complying with
the request with respect to such information (including any reasonable costs and
expenses incurred in any review of information for purposes of protecting the
Privileged Information of the providing Party or in connection with the
restoration of backup media for purposes of providing the requested
information).

 

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Section 8.02 Preservation of Rights to Amend. The rights of each member of the
Autoliv Group and each member of the Veoneer Group to amend, waive, or terminate
any plan, arrangement, agreement, program, or policy referred to herein shall
not be limited in any way by this Agreement.

Section 8.03 Fiduciary Matters. Autoliv and Veoneer each acknowledge that
actions required to be taken pursuant to this Agreement may be subject to
fiduciary duties or standards of conduct under ERISA or other applicable Law,
and no Party shall be deemed to be in violation of this Agreement if it fails to
comply with any provisions hereof based upon its good faith determination (as
supported by advice from counsel experienced in such matters) that to do so
would violate such a fiduciary duty or standard. Each Party shall be responsible
for taking such actions as are deemed necessary and appropriate to comply with
its own fiduciary responsibilities and shall fully release and indemnify the
other Party for any Liabilities caused by the failure to satisfy any such
responsibility.

Section 8.04 Further Assurances. Each Party hereto shall take, or cause to be
taken, any and all reasonable actions, including the execution, acknowledgment,
filing, and delivery of any and all documents and instruments that any other
Party hereto may reasonably request in order to effect the intent and purpose of
this Agreement and the transactions contemplated hereby.

Section 8.05 Counterparts; Entire Agreement; Corporate Power.

(a) This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more counterparts have been signed by each of the Parties and delivered
to the other Party.

(b) This Agreement and the exhibits, annexes and schedules hereto and thereto,
contain the entire agreement between the Parties with respect to the subject
matter hereof, supersede all previous agreements, negotiations, discussions,
writings, understandings, commitments and conversations with respect to such
subject matter and there are no agreements or understandings between the Parties
with respect to such subject matter other than those set forth or referred to
herein or therein.

(c) Autoliv represents on behalf of itself and each other member of the Autoliv
Group, and Veoneer represents on behalf of itself and each other member of the
Veoneer Group, as follows:

(i) each such Person has the requisite corporate or other power and authority
and has taken all corporate or other action necessary in order to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby; and

(ii) this Agreement has been duly executed and delivered by it and constitutes a
valid and binding agreement of it enforceable in accordance with the terms
hereof.

(d) Each Party acknowledges that it and each other Party may execute this
Agreement by facsimile, stamp or mechanical signature. Each Party expressly
adopts and confirms each such facsimile, stamp or mechanical signature made in
its respective name as if it were a manual signature, agrees that it shall not
assert that any such signature is not adequate to bind such Party to the same
extent as if it were signed manually and agrees that at the reasonable request
of any other Party at any time it shall as promptly as reasonably practicable
cause this Agreement to be manually executed (any such execution to be as of the
date of the initial date thereof).

Section 8.06 Governing Law. This Agreement (and any claims or Disputes arising
out of or related hereto or to the transactions contemplated in this Agreement
or to the inducement of any Party to enter herein, whether for breach of
contract, tortious conduct or otherwise and whether predicated on common law,
statute or otherwise) shall be governed by and construed and interpreted in
accordance with the Laws of the State of Delaware, irrespective of the choice of
laws principles of the State of Delaware, including all matters of validity,
construction, effect, enforceability, performance and remedies.

 

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Section 8.07 Assignability. This Agreement shall be binding upon and inure to
the benefit of the other Party or the other parties hereto and thereto,
respectively, and their respective successors and permitted assigns; provided,
however, that no Party or other party thereto may assign its respective rights
or delegate its respective obligations under this Agreement without the express
prior written consent of the other Party or other parties thereto, as
applicable. Notwithstanding the foregoing, no such consent shall be required for
the assignment of a party’s rights and obligations under this Agreement in whole
in connection with a change of control of a Party so long as the resulting,
surviving or transferee Person assumes all the obligations of the relevant party
thereto by operation of Law or pursuant to an agreement in form and substance
reasonably satisfactory to the other Party. Nothing herein is intended to, or
shall be construed to, prohibit either Party or any member of its Group from
being party to or undertaking a change of control.

Section 8.08 Third-Party Beneficiaries. Except for the indemnification rights
under this Agreement of any Autoliv Indemnitee or Veoneer Indemnitee in their
respective capacities as such, (a) the provisions of this Agreement are solely
for the benefit of the Parties and are not intended to confer upon any Person
(including, without limitation, any shareholders of Autoliv or shareholders of
Veoneer) except the Parties hereto any rights or remedies hereunder, and
(b) there are no third-party beneficiaries of this Agreement and this Agreement
shall not provide any third Person (including, without limitation, any
shareholders of Autoliv or shareholders of Veoneer) with any remedy, claim,
Liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.

Section 8.09 Notices. All notices, requests, claims, demands, or other
communications under this Agreement shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon acknowledgment of
receipt) by delivery in person, by overnight courier service, or registered or
certified mail (postage prepaid, return receipt requested) to the respective
Parties at the following addresses (or at such other address for a Party as
shall be specified in a notice given in accordance with this Section 8.09):

(i) if to Autoliv, to:

Autoliv, Inc.

1320 Pacific Drive

Auburn Hills, Michigan 48326

Attention: General Counsel

(ii) if to Veoneer, to:

Veoneer, Inc.

26545 American Drive

Southfield, Michigan 48034

Attention: General Counsel

A Party may, by notice to the other Party, change the address to which such
notices are to be given.

 

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Section 8.10 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
hereof, or the application of such provision to Persons or circumstances or in
jurisdictions other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby. Upon such determination, the Parties
shall negotiate in good faith in an effort to agree upon such a suitable and
equitable provision to effect the original intent of the Parties.

Section 8.11 Force Majeure. No Party shall be deemed in default of this
Agreement for any delay or failure to fulfill any obligation, other than a delay
or failure to make a payment, so long as and to the extent to which any delay or
failure in the fulfillment of such obligation is prevented, frustrated,
hindered, or delayed as a consequence of circumstances of Force Majeure. In the
event of any such excused delay, the time for performance shall be extended for
a period equal to the time lost by reason of the delay. A Party claiming the
benefit of this provision shall, as soon as reasonably practicable after the
occurrence of any such event, (a) provide written notice to the other Party of
the nature and extent of any such Force Majeure condition, and (b) use
commercially reasonable efforts to remove any such causes and resume performance
under this Agreement as soon as reasonably practicable.

Section 8.12 Headings. The article, section, and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

Section 8.13 Survival of Covenants. Except as expressly set forth in this
Agreement, the covenants, representations, and warranties contained in this
Agreement, and Liability for the breach of any obligations contained herein,
shall survive the Distribution and shall remain in full force and effect in
accordance with their terms.

Section 8.14 Waivers of Default. Waiver by a Party of any default by the other
Party of any provision of this Agreement shall not be deemed a waiver by the
waiving Party of any subsequent or other default, nor shall it prejudice the
rights of the other Party. No failure or delay by any Party in exercising any
right, power, or privilege under this Agreement shall operate as a waiver
thereof, nor shall a single or partial exercise thereof prejudice any other or
further exercise thereof or the exercise of any other right, power, or
privilege.

Section 8.15 Dispute Resolution. The dispute resolution procedures set forth in
Article IV of the Distribution Agreement shall apply to any dispute, controversy
or claim arising out of or relating to this Agreement.

Section 8.16 Data Privacy.. The Parties agree that any applicable data privacy
Laws and any other obligations of the Autoliv Group or Veoneer Group to maintain
the confidentiality of any employee information or information held by any
Benefit Plan in accordance with applicable Law shall govern the disclosure of
employee information among the Parties under this Agreement. The Parties agree
to use commercially reasonable efforts to have in place appropriate technical
and organizational security measures to protect the personal data of Employees.

Section 8.17 Specific Performance. Subject to Article IV of the Distribution
Agreement, in the event of any actual or threatened default in, or breach of,
any of the terms, conditions, and provisions of this Agreement, the Party who
is, or is to be, thereby aggrieved shall have the right to specific performance
and injunctive or other equitable relief (on an interim or permanent basis) in
respect of its rights under this Agreement, in addition to any and all other
rights and remedies at law or in equity, and all such rights and remedies shall
be cumulative. The Parties agree that the remedies at law for any breach or
threatened breach, including monetary damages, are inadequate compensation for
any loss and that any defense in any action for specific performance that a
remedy at law would be adequate is waived. Any requirements for the securing or
posting of any bond with such remedy are waived by each of the Parties.

 

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Section 8.18 Amendment. No provisions of this Agreement shall be deemed waived,
amended, supplemented or modified by a Party, unless such waiver, amendment,
supplement or modification is in writing and signed by the authorized
representative of the Party against whom it sought to enforce such waiver,
amendment, supplement or modification is sought to be enforced; provided, at any
time prior to the Effective Time, the terms and conditions of this Agreement,
including terms relating to the Distribution, may be amended, modified or
abandoned by and in the sole and absolute discretion of the Autoliv Board
without the approval of any Person, including Veoneer or Autoliv.

Section 8.19 Construction. This Agreement shall be construed as if jointly
drafted by the Parties and no rule of construction or strict interpretation
shall be applied against either Party. The Parties represent that this Agreement
is entered into with full consideration of any and all rights which the Parties
may have. The Parties have conducted such investigations they thought
appropriate, and have consulted with such advisors as they deemed appropriate
regarding this Agreement and their rights and asserted rights in connection
therewith. The Parties are not relying upon any representations or statements
made by the other Party, or such other Party’s employees, agents,
representatives or attorneys, regarding this Agreement, except to the extent
such representations are expressly set forth or incorporated in this Agreement.
The Parties are not relying upon a legal duty, if one exists, on the part of the
other Party (or such other Party’s employees, agents, representatives or
attorneys) to disclose any information in connection with the execution of this
Agreement or their preparation, it being expressly understood that neither Party
shall ever assert any failure to disclose information on the part of the other
Party as a ground for challenging this Agreement.

Section 8.20 Exclusivity of Tax Matters Agreement. Notwithstanding any other
provision of this Agreement (other than Sections 3.01(e) and 4.02(e)), the Tax
Matters Agreement shall exclusively govern all matters related to Taxes
(including allocations thereof) addressed therein.

Section 8.21 Limitations of Liability. NOTWITHSTANDING ANYTHING IN THIS
AGREEMENT TO THE CONTRARY, NEITHER VEONEER NOR ITS AFFILIATES, ON THE ONE HAND,
NOR AUTOLIV NOR ITS AFFILIATES, ON THE OTHER HAND, SHALL BE LIABLE UNDER THIS
AGREEMENT TO THE OTHER FOR ANY INCIDENTAL CONSEQUENTIAL, SPECIAL, INDIRECT,
PUNITIVE, EXEMPLARY, REMOTE, SPECULATIVE OR SIMILAR DAMAGES IN EXCESS OF
COMPENSATORY DAMAGES OF THE OTHER ARISING IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (OTHER THAN ANY SUCH LIABILITY WITH RESPECT TO
INDEMNIFICATION OF SUCH DAMAGES PAID BY AN INDEMNITEE IN RESPECT OF A THIRD
PARTY CLAIM).

[Signature page to follow.]

 

31

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.

 

AUTOLIV, INC. By:  

/s/ Lars Sjöbring

Name:   Lars Sjöbring Its:   Group Vice President, Legal Affairs, General
Counsel and Secretary VEONEER, INC. By:  

/s/ Mathias Hermansson

Name:   Mathias Hermansson Its:   Chief Financial Officer and Executive Vice
President, Financial Affairs