Ericsson Tightens Employee Stock Option Program

The Board of Ericsson has, after discussions with major shareholders, decided to increase the upper threshold of the performance target in the Performance Matching Program for senior managers. The change means that maximum matching shares will be allocated if the average annual growth of Earnings Per Share (EPS) between July 1, 2005 and June 30, 2008 is at or above 15 percent, instead of 12 percent as previously proposed.

Ericsson's Long Term Incentive Plan 2005 has 3 parts:


1. The Stock Purchase Plan for all employees, under which participants invest in Ericsson shares during a 12 months period and after three years of holding are matched with one share for each one purchased (1+1).


2. The Key Contributor Program for up to 5,000 key contributors (approximately 10 percent of the total number of Ericsson employees), under which selected participants in the Stock Purchase Plan receive one extra matching share for each one purchased, totally two matching shares (1 + 1 + 1).


3. The Performance Matching Program for up to 220 senior managers, under which up to 170 selected senior managers can receive up to four extra matching shares for each one purchased (1 + 1 + 0-4), and up to 50 top senior managers up to six extra matching shares (1 + 1 + 0-6), totally up to five or seven matching shares, depending on the outcome of the performance target.
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