Telefonaktiebolaget LM Ericsson (publ) - MRRS Decision

MRRS Decision

Headnote

MRRS - Registration and Prospectus relief for first trades by former employees of foreign issuer - Registration relief forfirst trades by current employees of foreign issuer required in Alberta.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c.S.5, as am., s. 74.

Applicable Ontario Policies

OSC Rule 45-503 - Trades to Employees, Executives and Consultants.

OSC Rule 72-501 - Prospectus Exemption for First Trade Over a Market Outside Ontario.

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO, AND ALBERTA

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

TELEFONAKTIEBOLAGET LM ERICSSON (PUBL)

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Ontario, andAlberta (the "Jurisdictions") has received an application from Telefonaktiebolaget LM Ericsson (publ) ("Ericsson" or the"Company") for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that certain tradesin series B shares of Ericsson and american depositary receipts ("ADRs") evidencing series B shares of Ericsson to, byor on behalf of employees of Ericsson and affiliates of Ericsson (the "Ericsson Group") in connection with the exerciseof options ("Options") issued to such employees under the Ericsson Millennium Stock Option Plan (the "Plan") shall notbe subject to the requirements contained in the Legislation to be registered to trade in a security (the "RegistrationRequirements") or to file and obtain a receipt for a preliminary prospectus and a prospectus (the "ProspectusRequirements");

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System"), the Ontario Securities Commission is the principal regulator for this application;

AND WHEREAS Ericsson has represented to the Decision Makers as follows:

1. Ericsson is a public company incorporated under the laws of the Kingdom of Sweden, is not a reporting issuerunder the Legislation and has no present intention of becoming a reporting issuer under the Legislation.

2. Ericsson Canada Inc. ("Ericsson Canada") is an indirect subsidiary of Ericsson and was incorporated pursuantto the laws of Canada. Ericsson Canada is not a reporting issuer in any of the Jurisdictions and has no presentintention of becoming a reporting issuer under the legislation.

3. As of January 9, 2001, the authorized share capital of Ericsson consisted of 656,218,640 Series A shares ("AShares"), par value SEK 1 and 7,254,116,972 Series B shares ("B Shares" or "Shares"), par value SEK 1 andall authorized shares were issued and outstanding.

4. Ericsson is subject to the requirements of the OM Stockholm Exchange, in Sweden, including its reportingrequirements. The A Shares and B Shares are listed on the OM Stockholm Exchange. The B Shares are alsotraded on the stock exchanges in Germany, London, Paris and on the Swiss Exchange. Ericsson's ADRs, eachof which represents one B Share, are traded on the NASDAQ National Market ("NASDAQ").

5. The purpose of the Plan is to promote the interests of Ericsson and its shareholders by affording personnel withspecial expertise an opportunity to participate in the ownership of Ericsson.

6. The Ericsson Group has identified and will identify employees of the Ericsson Group (the "Participants") to begranted Options under the Plan. Former Participants will be employees who participated in the Plan whenemployed by a member of the Ericsson Group but who are not employed by a member of the Ericsson Groupat the time they exercise their Options and/or sell Shares or ADRs acquired upon exercise of Options pursuantto the Plan.

7. Under the Plan, Ericsson has granted and may grant Options to Participants. Shares offered under the Planwill be tradeable on the OM Stockholm Exchange, the Swiss Exchange and the stock exchanges in Germany,London and Paris and will be registered with the Securities and Exchange Commission (the "SEC") under theU.S. Securities Act of 1933.

8. There are approximately 2 Participants resident in British Columbia, 1 in Alberta and 25 in Ontario eligible toparticipate in the Plan.

9. Participation in the Plan by Participants is voluntary and such Participants have not been and will not beinduced to participate in the Plan or to exercise their Options by expectation of employment or continuedemployment with the Ericsson Group.

10. Ericsson has appointed Salomon Smith Barney Inc. ("SSB"), Citibank International PLC ("Citibank") andSkandinaviska Enskilda Banken (publ) ("SEB") as agents (each, an "Agent") to perform various administrativeand brokerage functions under the Plan. With Ericsson's knowledge, SSB will also use the services of SalomonBrothers International Limited ("SBIL" or a "Foreign Broker") to execute certain securities transactions underthe Plan. The current Agents are, and, if replaced, will be, corporations registered under applicable legislationin the U.S., Sweden or elsewhere as necessary under the Plan. The Agents and SBIL are not registered toeffect trades contemplated under the Plan in any of the Jurisdictions and, if replaced, the Agents and anyForeign Brokers are not expected to be registered to effect trades contemplated under the Plan in any of theJurisdictions.

11. The role of the Agents, SBIL, or any replacements appointed for any of them, may include: (a) holding Sharesor ADRs on behalf of Participants and Former Employees; (b) facilitating Option exercises (including cashlessexercises) under the Plan, including through persons or companies licensed to trade in securities on the OMStockholm Exchange; (c) establishing and maintaining accounts on behalf of Participants and FormerParticipants under the Plan into which Shares and ADRs and other process may be deposited; (d) facilitatingand executing the exchange of Shares acquired under the plan for ADRs; and (e) facilitating and executing theresale of ADRs through NASDAQ and the resale of Shares acquired under the Plan over an exchange ormarket outside of Canada.

12. Senior management of the Ericsson Group has established procedures governing the exercise of Options. Theconsideration to be paid for Shares or ADRs issued upon the exercise of Options granted under the Plan mayconsist of cash or its equivalent, including compensation received by Ericsson under a cashless exerciseprogram implemented by Ericsson in connection with the Plan.

13. Any Shares acquired upon exercise of Options through the Agents to be held by a Participant or FormerParticipant, who is resident in Canada, will be automatically converted by the Agents into ADRs unless suchParticipant or Former Participant specifically instructs the Agents to deposit Shares into the Participant's orFormer Participant's account with SSB.

14. Options are not transferable otherwise than by will or the laws of intestacy.

15. Participants, including Former Participants, or their legal representatives, who wish to sell Shares or ADRsacquired under the Plan may do so through the Agents.

16. A copy of the U.S. Prospectus relating to the Plan as well as a Plan brochure, employee letter, exercisebrochure and Option Agreement has been delivered to each Participant and Former Participant who is residentin Canada and who has been granted Options under the Plan and will be delivered to each Participant who isresident in Canada and who is granted Options under the Plan. The annual reports, proxy materials and othermaterials Ericsson is required to file with the SEC and under Swedish law will be provided to Participants andFormer Participants resident in Canada at the same time and in the same manner as the documents areprovided to other shareholders of Ericsson.

17. At the time of the grant of Options under the Plan, holders of Shares or Shares evidenced by ADRs whose lastaddress as shown on the books of Ericsson was in Canada will not hold more than 10% of the outstandingShares, including Shares evidenced by ADRs, and will not represent in number more than 10% of the totalnumber of holders of Shares and Shares evidenced by ADRs.

18. Because there is no market for the Shares or ADRs in Canada and none is expected to develop, any resaleof the Shares or ADRs acquired under the Plan will be effected through the facilities of, and in accordance withthe rules and laws applicable to, a stock exchange or organized market outside of Canada on which the Sharesor ADRs may be listed or quoted for trading.

19. The Legislation of the Jurisdictions does not contain exemptions from the Prospectus Requirements and theRegistration Requirements for trades of Shares or ADRs by the Agents or SBIL to or on behalf of FormerParticipants upon the exercise of Options.

20. The Legislation of the Jurisdictions does not contain exemptions from the Registration Requirements for firsttrades by Former Participants, by the Agents or SBIL on behalf of Former Participants or by the Agents or SBILon behalf of the legal representatives of Former Participants. As well, the Legislation of certain of theJurisdictions does not contain exemptions from the Registration Requirements for first trades by Participants,by the Agents or SBIL on behalf of Participants or by the Agents or SBIL on behalf of the legal representativesof the Participants.

AND WHEREAS pursuant to the System, this Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Maker with the jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that:

(1) the Prospectus Requirements and Registration Requirements shall not apply to the trades by the Agents orSBIL in Shares and ADRs (or Shares that were represented by ADRs) to or on behalf of Former Participantsupon exercise of the Options acquired under the Plan; and

(2) the Registration Requirements shall not apply to the first trade by a Participant or a Former Participant, by theAgents or SBIL on behalf of the Participant or Former Participant, as the case may be, or the legalrepresentatives of the Participant or Former Participant, as the case may be, in any Shares or ADRs (or Sharesthat were represented by ADRs) that are acquired upon exercise of Options acquired under the Plan provided:

(i) at the time of the trade, Ericsson is not a reporting issuer under the Legislation of the Jurisdiction inwhich the trade is being made; and

(ii) such first trade is executed on an exchange or market outside Canada.

March 12, 2001.

"J. A. Geller"       "Stephen N. Adams"