1.

Defined Terms:

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 the Executive Management Team.

e.

“Good Reason” shall have the meaning (i) assigned such term in the employment, severance or similar agreement, if any, between you and the Company or one of its subsidiaries, or (ii) if there is no such employment, severance or similar agreement in which such term is defined, then “Good Reason” as used herein shall mean a resignation following a Change in Control event for the purpose of Section 5(b) below due to (a) material reduction in salary, or (b) relocation of principal place of business to a location more than thirty kilometers from employment location at the time of the Change in Control,.

f.

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

g.

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

h.

“Qualifying Retirement” means your termination of employment with the Company or one of its subsidiaries at or after the earliest date you satisfy the eligibility requirements for retirement under the relevant provisions of national, state, or provincial law in your home country, provided such termination of employment (i) is approved by the Company to be a Qualifying Retirement, or (ii) if you are a member of EMT, is approved as a Qualifying Retirement in advance by the Leadership Development and Compensation Committee. 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.   

i.

“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 PSUs credited as a result of dividend equivalents, as described in Section 9 below.

2.

Vesting; Termination of Employment:

a.

The PSUs 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 PSUs awarded to you as set forth in the Grant Notice, as well as any additional PSUs 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 PSUs 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 PSUs 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 PSUs and the PSUs 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 PSUs as of the date of such termination and the unvested PSUs 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 PSUs are forfeited prior to the Date of Vesting as provided in Section 2 above, the Confirmed PSUs 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.

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 PSUs shall be immediately vested at the Target Award level under the following situations.

a.

If (i) a Change in Control occurs during the Performance Period and while you are employed by the Company or one of its subsidiaries, and (ii) the surviving entity is not a public company with shares listed on a public stock exchange then as of the effective date of the Change in Control, your PSUs shall be immediately vested at the Target Award level.  

b.

If (i) a Change in Control occurs during the Performance Period and while you are employed by the Company or one of its subsidiaries, (ii) the PSUs are assumed and equitably converted by the surviving entity which is a publicly traded company with shares listed on a public stock exchange, and (iii) within two (2) years after the effective date of the Change in Control your employment is terminated by the Company or one of its subsidiaries without Cause or, if applicable, you resign for Good Reason, then as of your date of termination, your equitably converted PSUs shall immediately vest at the Target Award level.

6.

Non-Transferability:

Your PSUs 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 PSUs 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 PSUs 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 PSUs.

9.

Dividend Equivalent Rights:  

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 PSUs.  The withholding requirement may be satisfied, in whole or in part, by withholding from the settlement of the PSUs, 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:

14.

Executive Stock Ownership Requirements:

15.

Confidentiality:

a.

If Section 5(a) becomes operative and you are a U.S. taxpayer for the taxable year in which the Change in Control occurs, then the Change in Control must meet any definition of “change in control event” in Section 409A (without giving effect to any elective provisions that may be available under such definition).

b.

If your PSUs become payable upon your termination of employment pursuant to Section 5(b) hereof (or otherwise) and you are a U.S. taxpayer for the taxable year in which your termination of employment occurs, then (i) the circumstances giving rise to your termination of employment must 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, vested PSUs 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.  

I.

Definitions

a.

Performance Objectives shall mean Relative EPS Growth and New Order Intake Level

b.

Performance Period shall mean the three-year period beginning on January 1, 2020 and ending on December 31, 2022.

c.

Company EPS shall mean the Company’s “Earnings per common share – assuming dilution” as reported in the Company’s audited financial statements for the relevant year adjusted, if applicable, to exclude the Impact of Foreign Currency Translations, unusual Tax items, costs for Capacity Alignment and Antitrust related matters.

d.

Company EPS Growth shall mean the three-year average of Company EPS’ annual growth rate as of December 31^st in 2020, 2021 and 2022, expressed as a percentage, calculated with a beginning value of $5.78 (the Company EPS for the year prior to the first year of the Performance Period).

e.

Industry Growth shall mean the three-year average of annual growth rate for global light vehicle production as of December 31^st in 2020, 2021 and 2022, expressed as a percentage, using the information reported in IHS “Automotive Global Light Vehicle Production Forecast” to be released in January of the year following the measurement year.

f.

Relative EPS Growth shall mean the Company EPS Average for the Performance Period relative to the Industry Average for the Performance Period.

g.

New Order Intake shall mean the projected sales for the lifetime of each program awarded to Autoliv in relation to projected sales for the lifetime of each program available for award in the market, expressed in %.

h.

New Order Intake Level shall mean the three-year average of annual New Order Intake, as of December 31^st in 2020, 2021 and 2022, expressed as a percentage.

i.

Impact of Foreign Currency Translations shall mean the differences arising from the translation into U.S. dollars of the income statements of the Company's non-U.S. subsidiaries using foreign exchange rates different from those used in preparing the Company's audited financial statements in the year prior to the first year of the Performance Period.

j.

Capacity Alignment shall mean the amounts recognized in the Company’s audited financial statements for restructuring plus any specifically identifiable costs associated with restructurings or cessations of operations or closures of facilities. Such identifiable costs would include, for example, impairment charges for fixed assets.

II.

Vesting Matrices and Terms.

Degree of Performance Attainment

Company EPS Growth Relative to Industry Growth ⁽¹⁾

% of Relative EPS Growth Award Earned ⁽¹⁾

Maximum

Company EPS Growth exceeds Industry Growth by ten (10) whole percentage points

200%

Target

Company EPS Growth exceeds Industry Growth by five (5) whole percentage points

100%

Threshold

Company EPS Growth is equal to Industry Growth

0%

⁽¹⁾

Payouts between performance levels will be determined based on straight line interpolation.

Degree of Performance Attainment

New Order Intake Level ⁽¹⁾

% of New Order Intake Level Award Earned ⁽¹⁾

Maximum

48%

200%

Target

44%

100%

Threshold

40%

0%

⁽¹⁾

Payouts between performance levels will be determined based on straight line interpolation.