• No more than one member of the board elected by the shareholders may work as a senior executive in the company or its subsidiaries.
• The majority of the directors elected by the shareholders’ meetings must be independent of the company and its management.
• At least two of the directors who are independent of the company and its management must also be independent of the company’s major shareholders. One of these directors must be experienced in requirements placed on a listed company.

Independence requirements on the board of directors (excluding employee representatives):

• No more than one member of the board elected by the shareholders may work as a senior executive in the company or its subsidiaries.
• A majority of the directors elected by the shareholders’ meetings must be independent of the company and its management.
• At least two of the directors who are independent of the company and its management must also be independent of the company’s major shareholders.

Independence requirements on the Audit Committee:

• The majority of Audit Committee members must be independent of the company and senior management.
• At least one member of the committee must be independent of the company’s major shareholders.
• A board member who is part of senior management may not be a member of the audit committee.

Independence requirements on the remuneration committee:

• Committee members must be independent of the company and the senior management.

Independence requirements on the board of directors:

• A majority of the members of the board of directors must be independent within the meaning of the NASDAQ rules.

Ericsson has obtained an exemption from NASDAQ allowing employee representative directors to be exempt from NASDAQ’s independence requirements.

Independence requirements on the audit committee:

• All members of the audit committee must be independent within the meaning of the Sarbanes-Oxley Act of 2002.

The Sarbanes-Oxley Act of 2002 includes a specific exemption for non-executive employee representatives.

Pursuant to a 2005 amendment to NASDAQ’s Marketplace Rules, foreign private issuers such as Ericsson may follow home- country practice in lieu of certain NASDAQ corporate governance requirements.

Before the amendment was adopted, NASDAQ’s Marketplace Rules provided that foreign private issuers could, upon application, be exempt from certain of its corporate governance requirements when these requirements were contrary to the laws, rules or regulations, or generally accepted business practices of the issuer’s home jurisdiction.

Ericsson has received (and is entitled to continue to rely thereon under the 2005 amendment) exemptions from NASDAQ’s corporate governance requirements under the Marketplace Rules in order to allow:

• Employee representatives to be elected to the Board of Directors and serve on its Committees (including the Audit Committee), in accordance with Swedish law.
• Shareholders to participate in the election of Directors and the Nomination Committee, in accordance with Swedish law and common market practice respectively.
• Employee representatives on the Board to attend all Board and all Committee meetings (including the Audit Committee), in accordance with Swedish laws concerning attendance and decision making processes.

In addition, Ericsson relies on the exemption provided by the 2005 amendment to overcome contradictions between NASDAQ and Swedish law requirements regarding quorums for its meetings of holders of common stock.