Mercedes 2002 Annual Report Download - page 159

Any securities transactions conducted by members of the
Board of Management or the Supervisory Board (or by persons
regarded by the German Securities Trading Law as being
similarly situated) are disclosed by DaimlerChrysler without
delay after the company is informed of such transactions
(directors’ dealings), in accordance with the requirements of
the German Securities Trading Law. The relevant details are
given in the Notes to the Consolidated Financial Statements
on page 142 of this Annual Report, and, in accordance with
the requirements of the law, are also available on the Internet
at www.daimlerchrysler.com/corpgov_e.
Integrity code
The Integrity Code is a guideline that has been in effect since
1999. It defines binding limits to the activities of all employees
worldwide, and is regularly referred to. Among other things,
it contains rules of conduct concerning international trans-
actions, conflicts of interest, the issue of equality, the role of
internal monitoring systems, the right to the fulfillment
of statutory standards, as well as other internal and external
regulations.
Declaration of compliance with the German Corporate
Governance Code (convenience translation)
Section 161 of the German Stock Corporation Act (AktG)
requires the Board of Management and the Supervisory Board
of a listed stock corporation to give a declaration each year
that the recommendations of the “German Corporate
Governance Code Government Commission” published by the
Federal Ministry of Justice in the official section of the elec-
tronic Federal Gazette are being or have been met, or, if not,
which recommendations are not being or have not been
applied. As 2002 is the first year in which such declarations
are mandatory, they can consist merely of a statement to the
effect that the recommendations are being met, or, if not,
which recommendations are not being applied. This declaration
must be made available to shareholders at all times.
The German Corporate Governance Code (the “Code”)
contains rules with varying binding effect. Apart from outlining
aspects of the current German Stock Corporation Act, it
contains recommendations from which companies are per-
mitted to deviate. However, if they do so, they must disclose
this fact each year. The Code also contains suggestions, which
can be ignored without giving rise to any disclosure require-
ment.
The Board of Management and the Supervisory Board of
DaimlerChrysler AG have decided to disclose not only devia-
tions from the Code’s recommendations (see I.), but also –
without being legally obliged to do so – deviations from its
suggestions (see II). For reasons of language simplicity,
only the masculine gender is used in this text, which form
should be understood to include both male and female
persons. (This declaration is also available on the Internet
at www.daimlerchrysler.com/corpgov_e.) 1
I. Recommendations
The Board of Management and the Supervisory Board of
DaimlerChrysler AG declare that the recommendations
of the “German Corporate Governance Code Government
Commission“, published on November 26, 2002 by the
Federal Ministry of Justice in the official section of the elec-
tronic Federal Gazette, are being met. The following
recommendations are the only ones not being applied:
1.Clause 3.8, Paragraph 2
(Directors’ and officers’ liability insurance for the Board
of Management and the Supervisory Board) 1
If the company takes out a D&O (directors’ and officers’ liability
insurance) policy for the Board of Management and the
Supervisory Board, a suitable deductible shall be agreed in
accordance with clause 3.8, para. 2 of the Code.
The D & O insurance obtained by DaimlerChrysler AG for
the Board of Management and Supervisory Board does not
provide any insurance cover for intentional acts and omissions
or for breaches of duty knowingly committed.
Insurance cover is provided only for negligent breaches of
duty by members of the Board of Management and the
Supervisory Board, so that this is the only context in which
the question of the agreement of a deductible arises.
It is not advisable to agree a deductible for negligence on
the part of the members of the Supervisory Board.
DaimlerChrysler AG endeavors to staff its Supervisory Board
with prominent members of the community from Germany
and abroad who have extensive business experience, and the
company may be impeded in this aim if members of its
Supervisory Board have to accept far-reaching liability risks for
potential negligence. The fact that a deductible is still fairly
unusual in other countries makes this even more of a problem.
Nor does the D & O insurance of DaimlerChrysler AG
envisage any deductible for ordinary or gross negligence on
the part of members of the Board of Management. In cases of
a grossly negligent breach of duty by a member of the Board
of Management, the Presidential Committee of the Supervisory
Board, with responsibility for human resources, may agree to
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