Mercedes 2003 Annual Report Download - page 173
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The Group purchases products and services from T-Systems ITS an
information technology company. As discussed in Note 4, the
Group beneficially owned a 49.9% equity interest in T-Systems ITS,
through a joint venture until March 2002. The Group continues to
purchase products from T-Systems ITS.
As discussed in Note 4, in April, 2002, DaimlerChrysler exercised
its option to sell its 40% interest in Conti Temic microelectronic
GmbH to Continental. The Group continues to purchase products
from Conti Temic microelectronic GmbH.
As described in more detail in Note 31, DaimlerChrysler provides
a number of guarantees with respect to Toll Collect GmbH, a joint
venture in which DaimlerChrysler holds an equity interest of 45%.
In November 2003, DaimlerChrysler sold 60% of its equity inter-
est in Mercedes-Benz Lenkungen GmbH to ThyssenKrupp Automo-
tive AG. DaimlerChrysler accounts for its remaining 40% equity
interest in the company using the equity method of accounting.
Mr. Bernhard Walter, a member of DaimlerChrysler’s Supervisory
Board, abstained from the Supervisory Board voting for the
approval of the sale since he is also a member of the Supervisory
Board of ThyssenKrupp AG, the parent company of ThyssenKrupp
Automotive AG.
In 2003, Dr. Mark Wössner, a member of DaimlerChrysler’s
Supervisory Board, received payments for the rental of premises to
Westfalia Van Conversion GmbH, a wholly owned subsidiary of
DaimlerChrysler AG, in the amount of €1 million.
The following represent transactions with shareholders:
DaimlerChrysler incurred expenses of approximately $957,000 in
2003 for advertising and related marketing activities with a U.S.
magazine. Earl G. Graves, member of DaimlerChrysler’s Superviso-
ry Board and shareholder of DaimlerChrysler AG, is the Chairman,
Chief Executive Officer and sole stockholder of the magazine’s ulti-
mate parent company.
DB Value GmbH, a wholly owned subsidiary of Deutsche Bank AG,
owns approximately 11.8% of DaimlerChrysler’s outstanding
shares. Deutsche Bank AG and its subsidiaries provided the Group
with various financial and other services for which they were paid
reasonable and customary fees. Additionally, DaimlerChrysler
provides a €672 million guarantee to Deutsche Bank AG for the
company’s operation of DaimlerChrysler’s corporate credit card
program for corporate travel expenses. The guarantee covers
the obligations of the company’s employees towards Deutsche
Bank AG arising from that program in case of employee’s default.
DaimlerChrysler so far has not incurred any major payments to
Deutsche Bank AG from that guarantee.
37. Compensation and share ownership of the members of the
Board of Management and the Supervisory Board and further
additional information concerning German Corporate Gover-
nance Code
Remuneration. The total remuneration paid by Group related com-
panies to the members of the Board of Management of Daimler-
Chrysler AG are calculated from the amount of compensation paid
in cash and from the non-cash benefits in kind. The total remunera-
tion in 2003 for the members of the Board of Management of
DaimlerChrysler AG amounted to €40.8 million, of which €13.4 mil-
lion is fixed and €27.4 million is short-term and mid-term incentive
remuneration components. In 2003, no compensation resulted
from long-term incentive remuneration components.
In 2003, 3.14 million stock options from the Stock Option Plan
2000 were granted to the members of the Board of Management
as a long-term remuneration component. Also in 2003, 503,000 per-
formance-based awards were granted to the members of the Board
of Management based on a 3 year performance plan. For detailed
information on stock based compensation programs, see Note 24.
The remuneration paid in 2003 to the members of the Superviso-
ry Board of DaimlerChrysler AG for services in all capacities to the
Group amounted to €2.8 million.
Directors’ Dealings. Pursuant to §15a of the German Securities
Trading Act, members of the Board of Management and the Super-
visory Board as well as their spouses and first-grade relatives are
legally required to disclose significant purchases or sales of Ordi-
nary Shares, options or derivatives of DaimlerChrysler AG and
Group related companies (in 2003: EADS and Maschinenfabrik
Esslingen AG). In the fiscal year just ended, no such transactions
were reported, which are to be published.
Share Ownership. As of December 31, 2003, the current mem-
bers of the Board of Management as a group owned 10.1 million
Ordinary Shares, options or derivatives (SAR) of DaimlerChrysler
AG (0.998% of all outstanding shares) and the current members of
the Supervisory Board as a group owned 0.1 million Ordinary
Shares, options or derivatives (SAR) of DaimlerChrysler AG (0.011%
of all outstanding shares).
Transactions with Related Parties. For transactions with related
parties, which are shareholders of DaimlerChrysler AG, please see
last paragraph of Note 36.
38. Subsequent Events
On January 15, 2004, DaimlerChrysler entered into a purchase
agreement with MMC to acquire an additional 22% equity interest
in MFTBC for approximately €0.4 billion in cash (see Note 4).
On January 27, 2004, the Toll Collect consortium, in which Daimler-
Chrysler holds a 45% equity interest, presented to the Federal
Minister of Transport, Building and Housing a revised proposal for
the completion and operation of an electronic toll collection sys-
tem for commercial vehicles over 12 t GVW in Germany. In inten-
sive negotiations with representatives from the Federal Ministry of
Transport, Building and Housing, the parties could not reach a final
agreement with respect to the offer submitted. Negotiations
between the parties were primarily focused on contract terms per-
taining to contractual commitments and possible future contract
termination options as well as matters regarding the technical risks
associated with the toll collection system. On February 17, 2004,
the Federal Minister of Transport, Building and Housing announced
that the consortium should formally receive notification of termina-
tion of the operating agreement. To avoid contract termination, the
consortium has the possibility to reach agreement with the Federal
Ministry of Transport, Building and Housing within a time period of
two months following the receipt of the notification of termination
of the operating agreement. A contract termination could have a
substantial negative impact on the Group’s operating results and
financial condition.
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