Document:

alv-ex105_151.htm

 

Exhibit 10.5

 

 

GRANT AGREEMENT

 

Applicable to Performance Shares promised 

under the Autoliv, Inc., 1997 Stock Incentive Plan (as amended and restated)

 

Your above-described grant of performance shares (the “Performance Shares”) is subject to the following provisions, in addition to those set forth in the attached Notice of Grant (the “Grant Notice”): and the Autoliv, Inc. 1997 Stock Incentive Plan (“the Plan”):

 

	
1.
	
Defined Terms:

 

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

 

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

 

	
 
	
b.
	
“Date of Vesting” means the earlier of (i) the date of the Compensation Committee’s certification of the Company’s attainment of the Performance Objectives for the Performance Period or (ii) the date on which a Change of Control of the Company occurs as described in Section 5 below, provided that, except as otherwise stated herein, you are then still employed by the Company or one of its subsidiaries.

 

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

 

	
 
	
d.
	
“EMT” means Executive Management.

 

	
 
	
e.
	
“Performance Objectives” shall have the meaning set forth in Exhibit A hereto.

 

	
 
	
f.
	
“Performance Period” shall have the meaning set forth in Exhibit A hereto.

 

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

 

 

	
 
		
following the Date of Promise, or (ii) you are terminated for Cause by the Company or one of its subsidiaries.   

 

	
 
	
h.
	
“Target Award” is the target number of shares of Common Stock subject to this award, as set forth in your Grant Notice, as well as any additional Performance Shares credited as a result of dividend equivalents, as described in Section 9 below.

 

	
2.
	
Vesting; Termination of Employment: 

 

	
 
	
a.
	
The Performance Shares have been credited to a bookkeeping account (“Account”) on your behalf as of the grant date specified in the Grant Notice (the “Grant Date”). Your Account will reflect the number of Performance Shares awarded to you as set forth in the Grant Notice, as well as any additional Performance Shares credited as a result of dividend equivalents, as described in Section 9 below.  Each Performance Share represents an unfunded, unsecured right to receive Common Stock, subject to the terms and conditions stated in the Plan and this Grant Agreement. The Confirmed Performance Shares in your account will be earned in whole, in part, or not at all, on the Date of Vesting to the extent that the Performance Objectives are attained, as provided on Exhibit A attached hereto, provided that, except as otherwise stated herein, you are then still employed by the Company or one of its subsidiaries. Any Performance Shares that fail to vest in accordance with the terms of this Grant Agreement will be forfeited and reconveyed to the Company without further consideration or any act or action by you.

 

	
 
	
b.
	
If your employment with the Company or one of its subsidiaries terminates by reason of your death, Disability or Qualifying Retirement prior to the Date of Vesting, you or, as the case may be, your estate, will retain the Performance Shares and the Performance Shares may be earned, in whole, in part, or not at all, on the Date of Vesting to the extent that the Performance Objectives are attained, as provided on Exhibit A attached hereto.

 

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

 

	
3.
	
Conversion to Shares of Common Stock; Procedure at Date of Vesting:

 

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

 

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

 

 

	
 
		
and further provided that you have otherwise complied with the requirements for such delivery of vested shares as provided herein.  

 

	
4.
	
Securities Law Restrictions; Insider Trading Policy:

 

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

 

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

 

	
5.
	
Change in Control of the Company:

 

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

 

	
6.
	
Non-Transferability:

 

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

 

	
7.
	
Conformity with Plan:

 

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

 

	
8.
	
Employment and Successors:

 

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

 

 

 

	
9.
	
Dividend Equivalent Rights:  

 

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

 

	
10.
	
Tax: 

 

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

 

	
11.
	
Governing Law:

 

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

 

	
12.
	
Severability: 

 

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

 

	
13.
	
Recoupment Policy; Agreement to Repayments of Incentive Compensation When Payments Are Required Under Federal Law:

 

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

 

 

 

This provision applies to any policy adopted by the New York Stock Exchange (or any other exchange on which the securities of the Company are listed) pursuant to Section 10D of the Securities Exchange Act of 1934.  Section 10D provides for the recovery of incentive-based compensation that has been erroneously paid because of material errors in financial statements of the Company.  

 

To the extent such policy requires the repayment of incentive-based compensation received by you, whether paid pursuant to this Grant Agreement or any other plan of incentive-based compensation maintained in the past or adopted in the future by the Company, you agree to the repayment of such amounts to the extent required by such policy.

 

	
14.
	
Executive Stock Ownership Requirements:

 

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

 

	
15.
	
Confidentiality:

 

By accepting this Grant, you agree (a) to keep this Grant Agreement and all of its provisions, as well as any ancillary materials related to this Grant provided to you, confidential; (b) not to disclose the contents thereof to anyone except your attorney, your immediate family or your financial consultant (“Permitted Persons”), provided such Permitted Persons agree in advance to keep such information confidential and not disclose it to others; and (c) not to use the contents thereof for any purpose other than the interpretation of this Grant.  If you or any Permitted Person violate the terms and conditions of this Section 15, the Performance Shares will be forfeited as of the date of such violation, and the Performance Shares will be reconveyed to the Company without further consideration or any act or action by you.  In addition, violations of this Section 15 may result in potential civil or criminal penalties under the US federal securities laws. Anything herein to the contrary notwithstanding, you shall not be restricted from: (i) disclosing information that is required to be disclosed by law, court order or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, you shall provide the Company with prompt notice of such requirement so that the Company may seek an appropriate protective order prior to any such required disclosure by you; and (ii) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation, and you shall not need the prior authorization of the Company to make any such reports or disclosures and shall not be required to notify the Company that you have made such reports or disclosures.

 

	
16.
	
Fractional Shares

 

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

 

 

 

EXHIBIT A

 

[Performance Matrix and Terms]EX-4.6

 Exhibit 4.6 

GUARANTEE 

For value received, Telefónica, S.A., a sociedad anónima organized under the laws of the Kingdom of Spain, having
its registered office at Gran Vía, 28, 28013 Madrid, Spain (herein called the “Guarantor” which term includes any successor Person under the Indenture referred to in each Security Certificate representing the Securities of
any series upon which this Guarantee is endorsed), hereby unconditionally and irrevocably guarantees to the Holders of the Securities of any series represented by each Security Certificate upon which this Guarantee is endorsed and to the Trustee, in
its individual and trust capacities, and on behalf of each such Holder, the due and punctual payment of the principal of, premium, if any, and interest and all other amounts due under the Indenture and the Securities of any such series when and as
the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, on an unsubordinated and unconditional basis according to the terms thereof and of the Indenture referred to
therein. In case of the failure of Telefónica Emisiones, S.A.U. (the “Issuer”, which term includes any successor Person under the Indenture), punctually to make any such payment of principal, premium, if any, and interest and
all other amounts due under the Indenture and on such Securities of any such series, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer. 
 The Guarantor hereby
further agrees that any amounts to be payable by the Guarantor under this Guarantee (whether in respect of principal, redemption amount, interest or otherwise) will be made free and clear of and without withholding or deduction for or on account of
any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the Kingdom of Spain or any political subdivision thereof or any authority or agency therein or thereof having power to
tax, unless the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. Subject to the exceptions set forth in Section 10.4 of the Original Indenture (as such term is defined in each Security
Certificate representing the Securities of any series upon which this Guarantee is endorsed) and any Supplemental Indenture supplementing the Original Indenture pursuant to which the Securities of any series upon which this Guarantee is endorsed
have been issued, in the event that such withholding or deduction is required by law, the Guarantor shall pay such Additional Amounts as will result in receipt by the Holders of the Securities of any such series of such amounts as would have been
received by them had no such withholding or deduction been required. 
 The Guarantor hereby agrees that its obligations hereunder shall be
as if it were principal debtor and not merely surety, and shall be absolute, full and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Securities of any such series or the
Indenture, any failure to enforce the provisions of such Securities of any such series or the Indenture, or any waivers, modification or indulgence granted to the Issuer in respect thereof by the Holders of such Securities of any such series or the
Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without
the consent of the Guarantor, increase the principal amount of such Securities of any such series, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or change the currency of payment thereon, or change
the provisions relating to payments of Additional Amounts thereon, or alter the Stated Maturity thereof or increase the principal amount of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the
maturity thereof pursuant to Section 5.2 of the Original Indenture. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, the benefits of
orden, división and excusión under Spanish law, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, premium, if any, and interest (including Additional Amounts, if any) on such Securities of any such series and the Guarantor shall
have fully performed all its obligations in accordance with the provisions of the Securities of any such series, this Guarantee and the Indenture; after such time, this Guarantee shall not be valid or obligatory for any purpose. 

The Guarantor shall be subrogated to all rights of the Holders of such Securities of any such series and the Trustee against the Issuer in
respect of any amounts paid to such Holders by the Guarantor pursuant to the 

  
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provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such right of
subrogation until the principal of, premium, if any, and interest (including Additional Amounts, if any) on all Securities of any such series issued under the Indenture shall have been paid in full. 

No reference herein to the Indenture and no provision of this Guarantee or of the Indenture shall alter or impair the guarantee of the
Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, interest on, Additional Amounts, if any, and all other amounts due under the Securities of any series represented by each Security
Certificate upon which this Guarantee is endorsed. 
 The obligations of the Guarantor under this Guarantee shall, without any further act
or thing being required to be done or to occur, extend to the obligations of any successor Person who is not the Guarantor arising in respect of the Securities of any such series by virtue of a substitution pursuant to the Indenture. 

The obligations of the Guarantor under this Guarantee in respect of the Securities of any such series will constitute direct, unconditional,
unsubordinated and unsecured obligations of the Guarantor under this Guarantee and will rank pari passu without any preference among such obligations of the Guarantor under this Guarantee in respect of the Securities of any such series
and at least pari passu with all other unsubordinated and unsecured indebtedness and monetary obligations involving or otherwise related to borrowed money of the Guarantor, present and future; provided that the obligations of
the Guarantor under this Guarantee in respect of the Securities of each series will be effectively subordinated to those obligations that are preferred under Law 22/2003 (Ley Concursal) dated July 9, 2003 regulating insolvency
proceedings in the Kingdom of Spain. 
 This Guarantee shall not be valid or obligatory for any purpose until the certificate of
authentication with respect to each Security Certificate representing the Securities of any such series upon which this Guarantee has been endorsed shall have been manually executed by or on behalf of the Trustee under the Indenture. 

All capitalized terms used in this Guarantee, which are not otherwise defined herein, shall have the meanings assigned to them in the
Indenture. 
 The Guarantee shall be governed by and construed in accordance with the laws of the State of New York. 

  
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 IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed manually or in
facsimile. 
  

									
	Dated: April 28, 2017	 	TELEFÓNICA, S.A.
				
		 		 	By:	 	 /s/ Jesús Romero Albarracín

		 		 		 	Name:	 	Jesús Romero Albarracín
		 		 		 	Title:	 	Authorized Officer

  
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