Chrysler 2004 Annual Report Download - page 220

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Stockholders,
Pursuant to the Sarbanes Oxley Act and subsequent United
States regulations, your Company, as an issuer of financial
instruments listed on the New York Stock Exchange, must name
the corporate body that performs the duties of the audit
committee envisaged in those regulations and confirm that its
members satisfy the envisaged requirements of independence
and professional expertise.
Your Company, in consequence of recognition by the Securities
and Exchange Commission that the board of statutory auditors
envisaged under Italian law is analogous to the audit committee
envisaged under American law, has designated the Board of
Statutory Auditors as the corporate body authorized to perform
the duties of the audit committee as envisaged in American law
and to the extent allowed by Italian law. The Company has also
confirmed that all of the Statutory Auditors satisfy the envisaged
requirements for qualification as a financial expert.
Thus, the Board of Statutory Auditors has been assigned duties
and prerogatives in compliance with U.S. law that go beyond
those envisaged in Italian law. These duties and prerogatives
principally involve relations with the external auditors and the
handling of complaints regarding accounting issues, internal
audits, or external audits, as well as the right to retain external
consultants at the Company’s expense for the provision of
services directly connected with the new functions of the Board
of Statutory Auditors.
Given the complexity of these new functions and the fact that
they are not envisaged in the Italian legal system, we consider it
opportune to submit the stockholders meeting a motion to
provide forms of coverage and surety for the risks and costs that
might result from civil actions filed for inadvertent failure to
comply with the requirements deriving from the functions
connected with the role of the audit committee pursuant to U.S.
law. However, those acts that are criminal and fraudulent will be
excluded from the coverage.
Similarly to what has already been provided to directors, this
coverage could be offered in various complementary forms, by
effecting multiple insurance policies with a maximum total
coverage of 50 million euros, which can be combined with
Company risk-sharing and self-insurance strategies that are used
to minimize insurance premium costs.
Insurance policies should be supplemented with complementary
self-insurance by the Company that is designed to hold the
Statutory Auditors harmless and to offer supplemental
coverage, in addition to the protection provided by the
insurance policies, up to a maximum limit (including the
insurance policies) that, based on the size of the Fiat Group,
should be set at 100 million euros.
If you approve this motion, the Company’s legal representatives
will provide for the execution of the relevant contracts.
Turin, May 10, 2005
The Chairman of the Board of Directors
Luca Cordero di Montezemolo
COVERAGE OF CIVIL LIABILITY FOR STATUTORY AUDITORS IN CONNECTION WITH
THEIR FULFILLMENT OF THE ADDITIONAL FUNCTIONS ENTRUSTED TO THEM
Other Items on the Agenda and Related Reports and Motions