The
information in this prospectus supplement is not complete and
may be changed. A registration statement relating to these
securities has been filed with the Securities and Exchange
Commission. This prospectus supplement and the accompanying
prospectus are not an offer to sell these securities and we are
not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
|
SUBJECT TO COMPLETION DATED
MARCH 11, 2010
PROSPECTUS
SUPPLEMENT
(To Prospectus dated September 29, 2009)
Filed pursuant to
Rule 424(b)(2)
Registration Statement
No. 333-162195
Deutsche Bank Contingent
Capital Trust V
(a wholly owned subsidiary of
Deutsche Bank Aktiengesellschaft)
[ ],000 8.05%
additional Trust Preferred Securities
(Liquidation Preference Amount
$25 per Trust Preferred Security)
guaranteed on a subordinated
basis by Deutsche Bank Aktiengesellschaft
Deutsche Bank Contingent Capital Trust V, a Delaware
statutory trust, which we refer to as the Trust, will offer for
sale [ ],000 8.05% trust preferred securities
(each with a $25 liquidation preference amount), which we refer
to as the Trust Preferred Securities. The Trust has
previously issued 50,600,000 8.05% trust preferred securities,
which we refer to as the Outstanding Trust Preferred
Securities (and together with the Trust Preferred
Securities and any other trust preferred securities issued by
the Trust from time to time, as the Trust Preferred Series
and any trust preferred security thereof, as a
Trust Preferred Series Security), on May 9, 2008,
which we refer to as the Initial Issue Date. The
Trust Preferred Securities shall have the same terms and
conditions as the Outstanding Trust Preferred Securities in
all respects except for the issue date, the date from which
Capital Payments in respect thereof begin to accrue, the issue
price and any other deviations required for compliance with
applicable law, so as to form a single series with the
Outstanding Trust Preferred Securities. Distributions,
which we also refer to as Capital Payments, are noncumulative on
the Outstanding Trust Preferred Securities and will be
noncumulative on the Trust Preferred Securities. The Trust will
use the proceeds from the sale of the Trust Preferred
Securities to buy additional securities in a class of preferred
securities, which we refer to as the Class B Preferred
Securities, issued by Deutsche Bank Contingent Capital
LLC V, a Delaware limited liability company, which we refer
to as the Company. The Company has previously issued preferred
securities designated as Class B using the proceeds from
its sale of the Outstanding Trust Preferred Securities,
which we refer to as the Outstanding Class B Preferred
Securities (and together with the Class B Preferred
Securities and any other preferred securities in Class B
issued by the Company from time to time, as the Class B
Preferred Series and any preferred security thereof, as a
Class B Preferred Series Security). The Class B
Preferred Securities shall have the same terms and conditions as
the Outstanding Class B Preferred Securities in all
respects except for the issue date, the date from which Capital
Payments in respect thereof begin to accrue, the issue price and
any other deviations required for compliance with applicable
law, so as to form a single series with the Outstanding
Class B Preferred Securities. The Class B Preferred
Series will be the only assets of the Trust. The Class B
Preferred Securities are not offered hereby.
Capital Payments on the Trust Preferred Securities and on
the Class B Preferred Securities will accrue on the
respective liquidation preference amounts of $25 per
Trust Preferred Security and $25 per Class B Preferred
Security, from March 30, 2010, which we refer to as the
Issue Date, at a fixed coupon rate of 8.05% per annum and will
be payable quarterly in arrears, on March 30, June 30,
September 30 and December 30 of each year, which we refer to as
Payment Dates, commencing on June 30, 2010. The initial
Payment Period will commence on the Issue Date. Capital Payments
on the Trust Preferred Securities are expected to be paid
out of the Capital Payments received by the Trust from the
Company with respect to the Class B Preferred Securities.
Capital Payments on the Class B Preferred Securities will
be made only when, as and if declared or deemed declared by the
Companys Board of Directors. Capital Payments on the
Class B Preferred Securities will only be authorized to be
made on any Payment Date if the Company has sufficient operating
profits and Deutsche Bank Aktiengesellschaft, which we refer to
as Deutsche Bank AG or the Bank, has sufficient distributable
profits. Capital Payments will be cumulative, unless and until
the Bank elects, prior to June 30, 2013, to qualify all or
a percentage amounting to at least 10% or an integral multiple
thereof of each and every Class B Preferred Security as
consolidated Tier 1 regulatory capital. Once the Bank makes
such an election, Capital Payments on the percentage of the
Class B Preferred Securities so qualified will be
noncumulative beginning with the first day of the Payment Period
during which the Tier 1 qualification election occurs. The
respective percentages of each Class B Preferred Security
for which the election has been made and has not been made will
not be separable at any time, and each Class B Preferred
Security will at all times consist of a single security with a
liquidation preference amount of $25. Prior to the Issue Date,
the Bank has made a Tier 1 Qualification Election in
respect of 100% of the Outstanding Class B Preferred
Securities. On the Issue Date, the Bank will make a Tier 1
Qualification Election in respect of 100% of the Class B
Preferred Securities. Capital Payments will therefore be
noncumulative.
The Trust Preferred Securities offered hereby do not have a
maturity date. We may redeem the Trust Preferred Series in
whole but not in part, in connection with the redemption of the
Class B Preferred Series, on any Payment Date on or after
June 30, 2018 at the applicable redemption price.
Deutsche Bank AG fully and unconditionally guarantees, on a
subordinated basis, payments in respect of the
Trust Preferred Securities.
Investing in the Trust Preferred Securities involves
risks. See Risk Factors beginning on
page S-18
for a discussion of certain factors that should be considered by
prospective investors.
Neither the U.S. Securities and Exchange Commission nor
any state securities regulator has approved or disapproved of
these securities or determined whether this prospectus
supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting Discounts
|
|
|
Proceeds, before
|
|
|
|
Price to
Public
(1)
|
|
|
and Commissions
|
|
|
Expenses, to the
Trust
(2)
|
|
|
Per Trust Preferred Security
|
|
$
|
[ ]
|
|
|
$
|
[ ]
|
|
|
$
|
[ ]
|
|
Total
|
|
$
|
[ ],000,000
|
|
|
$
|
[ ],000
|
|
|
$
|
[ ],000,000
|
|
|
|
|
(1)
|
|
Plus accrued Capital Payments, if
any, from March 30, 2010
|
|
(2)
|
|
The Bank will pay the underwriter
compensation of $[ ] per Trust Preferred Security.
Total underwriting discounts and commissions payable by the Bank
will be $[ ].
|
The Trust Preferred Securities are not deposits or
savings accounts or other obligations of a bank. The
Trust Preferred Securities are not insured by the Federal
Deposit Insurance Corporation or any other U.S. or foreign
governmental agency or instrumentality.
The initial sale of the Trust Preferred Securities in this
offering entails a longer settlement period than is customary
for similar securities. It is expected that delivery of the
Trust Preferred Securities will be made against payment on or
about March 30, 2010.
The Bank has granted the underwriter an option, exercisable on
up to [ ] occasions within
[ ] days from the date of this prospectus
supplement, to purchase up to an aggregate total of
[ ] additional Trust Preferred Securities
to cover over-allotments, if any, at the offering price plus
accrued Capital Payments, if any, from March 30, 2010 (with
a corresponding aggregate amount of Class B Preferred
Securities to be issued by the Company and purchased by the
Trust).
The Outstanding Trust Preferred Securities are listed on
the New York Stock Exchange under the ticker symbol
DKT. We will make a supplemental application to list
the Trust Preferred Securities on the New York Stock
Exchange under the same symbol and as a fully fungible class of
securities together with the Outstanding Trust Preferred
Securities, but no assurance can be given that the supplemental
listing application will be approved.
The underwriter will deliver the Trust Preferred Securities
in book-entry form only through the facilities of The Depository
Trust Company, which we refer to as DTC, on or about
March 30, 2010. Beneficial interests in the
Trust Preferred Securities will be shown on, and transfers
thereof will be effected only through, records maintained by DTC
and its participants, including Clearstream Banking,
société anonyme, and Euroclear Bank SA/NV.
Deutsche Bank Securities
The date of this Prospectus
Supplement is March [ ], 2010.
TABLE OF
CONTENTS
|
|
|
|
|
|
|
|
S-1
|
|
|
|
|
S-3
|
|
|
|
|
S-4
|
|
|
|
|
S-18
|
|
|
|
|
S-24
|
|
|
|
|
S-25
|
|
|
|
|
S-27
|
|
|
|
|
S-29
|
|
|
|
|
S-30
|
|
|
|
|
S-46
|
|
|
|
|
S-61
|
|
|
|
|
S-67
|
|
|
|
|
S-68
|
|
|
|
|
S-72
|
|
|
|
|
S-77
|
|
|
|
|
S-79
|
|
|
|
|
S-83
|
|
|
|
|
S-84
|
|
|
|
|
S-85
|
|
|
|
|
S-92
|
|
|
|
|
|
|
|
|
|
|
|
Prospectus
|
|
|
|
|
|
|
|
1
|
|
|
|
|
4
|
|
|
|
|
5
|
|
|
|
|
6
|
|
|
|
|
7
|
|
|
|
|
8
|
|
|
|
|
9
|
|
|
|
|
10
|
|
|
|
|
11
|
|
|
|
|
12
|
|
|
|
|
13
|
|
|
|
|
14
|
|
|
|
|
15
|
|
|
|
|
21
|
|
|
|
|
22
|
|
|
|
|
29
|
|
|
|
|
31
|
|
|
|
|
32
|
|
|
|
|
33
|
|
|
|
|
42
|
|
|
|
|
46
|
|
|
|
|
48
|
|
|
|
|
49
|
|
|
|
|
49
|
|
|
|
|
49
|
|
ABOUT THIS
PROSPECTUS SUPPLEMENT
References in this prospectus supplement to
Trust
refer to Deutsche Bank Contingent
Capital Trust V. References in this prospectus supplement
to
Company
or
Delaware Company
refer to Deutsche Bank Contingent Capital LLC V. References
in this prospectus supplement to the
Bank,
we, our, us
or
Deutsche Bank AG
refer to Deutsche Bank
Aktiengesellschaft (including, as the context may require,
acting through one of its branches) and, unless the context
requires otherwise, will include the Trust, the Company and our
other consolidated subsidiaries.
References to
you
mean those who invest in
the Trust Preferred Securities, whether they are the direct
holders or owners of beneficial interests in those securities.
References to
holders
mean those who
own securities registered in their own names on the books that
we or the trustee maintain for this purpose, and not those who
own beneficial interests in securities issued in book-entry form
through The Depository Trust Company or another depositary
or in securities registered in street name. Owners of beneficial
interests in the Trust Preferred Securities should read the
section entitled Description of
Trust Securities Form, Book-Entry Procedures
and Transfer.
You should rely only on the information contained in this
prospectus supplement and the accompanying prospectus or to
which we refer you. We have not authorized anyone to provide you
with information that is different. This prospectus supplement
and the accompanying prospectus may only be used where it is
legal to sell these securities. You should assume that the
information in this prospectus supplement and the accompanying
prospectus is accurate as of the date of this prospectus
supplement only.
The Trust is offering the Trust Preferred Securities for
sale in those jurisdictions in the United States and elsewhere
where it is lawful to make such offers. The distribution of this
prospectus supplement and the accompanying prospectus and the
offering of the Trust Preferred Securities in some
jurisdictions may be restricted by law. If you possess this
prospectus supplement and the accompanying prospectus, you
should find out about and observe these restrictions. This
prospectus supplement and the accompanying prospectus are not an
offer to sell the Trust Preferred Securities and we are not
soliciting an offer to buy the Trust Preferred Securities
in any jurisdiction where the offer or sale is not permitted or
where the person making the offer or sale is not qualified to do
so or from any person to whom it is not permitted to make such
offer or sale. We refer you to the information under
Underwriting in this prospectus supplement. The
delivery of this prospectus supplement, at any time, does not
create any implication that there has been no change in our
affairs since the date of this prospectus supplement or that the
information contained in this prospectus supplement is correct
as of any time subsequent to that date.
In connection with the issue of the Trust Preferred
Securities, the underwriter (or persons acting on behalf of the
underwriter) may over-allot Trust Preferred Securities or
effect transactions with a view to supporting the market price
of the Trust Preferred Securities at a level higher than
that which might otherwise prevail. However, there is no
assurance that the underwriter (or persons acting on behalf of
the underwriter) will undertake stabilization action. Such
stabilizing, if commenced, may be discontinued at any time and,
if begun, must be brought to an end after a limited period. Any
stabilization action or over-allotment must be conducted by the
underwriter (or person(s) acting on behalf of the underwriter)
in accordance with all applicable laws and rules.
This communication is only being distributed to and is only
directed at (i) persons who are outside the United Kingdom
or (ii) investment professionals falling within
Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005 (the Order) or
(iii) high net worth companies, and other persons to whom
it may lawfully be communicated, falling within
Article 49(2)(a) to (d) of the Order (all such persons
together being referred to as relevant persons). The
Trust Preferred Securities are only available to, and any
invitation, offer or agreement to subscribe, purchase or
otherwise acquire such Trust Preferred Securities will be
engaged in only with, relevant persons. Any person who is not a
relevant person should not act or rely on this document or any
of its contents.
S-1
Certain capitalized terms used in this prospectus supplement are
defined under Glossary starting on
page S-85.
References to EUR and are to the
euro, the currency introduced at the start of the third stage of
the European Economic and Monetary Union pursuant to the treaty
establishing the European Community, as amended by the treaty on
European Union. References to $ are to United States
currency, and the terms United States and
U.S. mean the United States of America, its states,
its territories, its possessions and all areas subject to its
jurisdiction.
The Banks consolidated financial statements as of and for
the years ended December 31, 2007 and 2008, which are
incorporated by reference into this prospectus supplement and
the accompanying prospectus, were prepared in accordance with
International Financial Reporting Standards, which we refer to
as IFRS. The Banks consolidated and unconsolidated
financial statements are stated in Euro.
S-2
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement contains forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933, as amended, which we refer to as the Securities Act, and
Section 21E of the Securities Exchange Act of 1934, as
amended, which we refer to as the Exchange Act, with respect to
Deutsche Bank AGs financial condition and results of
operations.
In this document, forward-looking statements include, among
others, statements relating to:
|
|
|
the potential development, severity, duration and impact on us
of the current economic and business conditions;
|
|
|
the implementation of our strategic initiatives and other
responses to the economic and business conditions;
|
|
|
the development of aspects of our results of operations;
|
|
|
our expectations of the impact of risks that affect our
business, including the risks of continuing losses on our
trading processes and credit exposures; and
|
|
|
other statements relating to our future business development and
economic performance.
|
In addition, we may from time to time make forward-looking
statements in our periodic reports to the U.S. Securities
and Exchange Commission, which we refer to as the SEC, on
Forms 20-F
and
6-K,
annual and interim reports, invitations to annual
shareholders meetings and other information sent to
shareholders, offering circulars and prospectuses, press
releases and other written materials. Our Management Board,
Supervisory Board, officers and employees may also make oral
forward-looking statements to third parties, including financial
analysts.
Forward-looking statements are statements that are not
historical facts, including statements about our beliefs and
expectations. We use words such as believe,
anticipate, expect, intend,
seek, estimate, project,
should, potential, reasonably
possible, plan, aim and similar
expressions to identify forward-looking statements.
By their very nature, forward-looking statements involve risks
and uncertainties, both general and specific. We base these
statements on our current plans, estimates, projections and
expectations. You should therefore not place too much reliance
on them. Our forward-looking statements speak only as of the
date we make them, and we undertake no obligation to update any
of them in light of new information or future events.
We caution you that a number of important factors could cause
our actual results to differ materially from those we describe
in any forward-looking statement. These factors include, among
others, the following:
|
|
|
the potential development, severity and duration of the current
economic and business conditions;
|
|
|
other changes in general economic and business conditions;
|
|
|
changes and volatility in currency exchange rates, interest
rates and asset prices;
|
|
|
changes in governmental policy and regulation, including
measures taken in response to current economic, business,
political and social conditions;
|
|
|
changes in our competitive environment;
|
|
|
the success of our acquisitions, divestitures, mergers and
strategic alliances;
|
|
|
our success in implementing our strategic initiatives and other
responses to the current economic and business conditions and
realizing the benefits anticipated therefrom; and
|
|
|
other factors, including those we refer to in Item 3:
Key Information Risk Factors of our most
recent Annual Report on
Form 20-F
and elsewhere in that Annual Report on
Form 20-F,
this prospectus supplement or the accompanying prospectus, and
others to which we do not refer.
|
S-3
PROSPECTUS
SUPPLEMENT SUMMARY
The following summary of certain general features of the
Offering does not purport to be complete and is taken from and
qualified in its entirety by the detailed information appearing
elsewhere, or incorporated by reference in this prospectus
supplement and the accompanying prospectus.
The
Trust
The Trust is a statutory trust formed under the Delaware
Statutory Trust Act, as amended (which we refer to as the
Delaware Statutory Trust Act), and is governed by:
|
|
|
an amended and restated trust agreement dated May 9, 2008
(which we refer to as the Trust Agreement) executed by the
Company, as sponsor, the trustees of the Trust and the
Bank; and
|
|
|
a certificate of trust filed with the Secretary of State of the
State of Delaware on April 25, 2008.
|
The Trust exists exclusively to:
|
|
|
issue, offer and sell the Trust Preferred
Series Securities to the public; and
|
|
|
issue and sell one common security (which we refer to as the
Trust Common Security) with a liquidation amount of $25 to
Deutsche Bank AG for a purchase price of $25.
|
The trustees of the Trust consist of The Bank of New York Mellon
(formerly known as The Bank of New York), a New York banking
corporation (which we refer to as the Property Trustee), three
individuals who are our officers or employees or are officers or
employees of our subsidiaries (who we refer to as the Regular
Trustees) and Deutsche Bank Trust Company Delaware (which
we refer to as the Delaware Trustee).
The principal executive office of the Trust is located at 60
Wall Street, New York, New York 10005, telephone number
212-250-2077.
The
Company
The Company is a limited liability company formed under the
Delaware Limited Liability Company Act, as amended (which we
refer to as the LLC Act), and is governed by:
|
|
|
an amended and restated limited liability company agreement of
the Company dated May 9, 2008 (which we refer to as the LLC
Agreement); and
|
|
|
a certificate of formation of the Company filed with the
Secretary of State of the State of Delaware on April 24,
2008.
|
The Company exists exclusively to:
|
|
|
issue and sell the Class B Preferred Series Securities
to the Trust;
|
|
|
issue and sell one security of a separate class of preferred
securities (which we refer to as the Class A Preferred
Security) to Deutsche Bank AG; and
|
|
|
issue one common security (which we refer to as the Company
Common Security) representing a limited liability company
interest in the Company to Deutsche Bank AG.
|
None of the securities issued by the Company are offered hereby.
The principal executive office of the Company is located at 60
Wall Street, New York, New York 10005, telephone number
212-250-2077.
S-4
The
Bank
Deutsche Bank AG is a stock corporation organized under the laws
of Germany registered in the commercial register of the District
Court in Frankfurt am Main under registration number
HRB 30 000. Our registered office is in Frankfurt am
Main. We maintain our head office at Theodor-Heuss-Allee 70,
60486 Frankfurt am Main, Germany.
Deutsche Bank AG originated from the reunification of
Norddeutsche Bank Aktiengesellschaft, Hamburg,
Rheinisch-Westfälische Bank Aktiengesellschaft,
Düsseldorf and Süddeutsche Bank Aktiengesellschaft,
Munich; pursuant to the Law on the Regional Scope of Credit
Institutions, these had been disincorporated in 1952 from
Deutsche Bank, which was founded in 1870. The merger and the
name were entered in the Commercial Register of the District
Court Frankfurt am Main on May 2, 1957.
We are the parent company of a group consisting of banks,
capital market companies, fund management companies, a property
finance company, installment financing companies, research and
consultancy companies and other domestic and foreign companies.
We offer a wide variety of investment, financial and related
products and services to private individuals, corporate entities
and institutional clients around the world.
We are the largest bank in Germany and one of the largest
financial institutions in Europe and the world measured by total
assets. As of September 30, 2009, on an unaudited basis, we
had total assets of 1,660 billion, total liabilities
of 1,624 billion and total equity (including minority
interest) of 35.7 billion, in each case on the basis
of IFRS.
As of September 30, 2009, our outstanding share capital
amounted to 1,589 million consisting of
620.9 million ordinary shares of no par value, of which
619.5 million were outstanding. The shares are fully paid
up and in registered form. The shares are listed for trading and
official quotation on all the German Stock Exchanges and are
listed on the New York Stock Exchange.
Please refer to our Annual Report on
Form 20-F
and the other documents incorporated by reference herein for
additional information and financial statements relating to us.
Exchange
Rates
Germanys currency is the euro. For convenience, we
translate some amounts denominated in euro appearing in certain
documents incorporated by reference herein into
U.S. dollars. Fluctuations in the exchange rate between the
euro and the U.S. dollar will affect the U.S. dollar
equivalent of the euro price of our shares quoted on the German
stock exchanges and, as a result, are likely to affect the
market price of our shares on the New York Stock Exchange. These
fluctuations will also affect the U.S. dollar value of cash
dividends we may pay on our shares in euros. Past fluctuations
in foreign exchange rates may not necessarily be predictive of
future fluctuations.
S-5
The following table shows the period-end, average, high and low
noon buying rates for the euro. In each case, the period-end
rate is the noon buying rate announced on the last business day
of the period.
|
|
|
|
|
|
|
|
|
|
|
|
|
in U.S.$ per
|
|
Period-end
|
|
|
High
|
|
|
Low
|
|
|
2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
March (through and including March 8)
|
|
|
1.3674
|
|
|
|
1.3731
|
|
|
|
1.3516
|
|
February
|
|
|
1.3570
|
|
|
|
1.3984
|
|
|
|
1.3489
|
|
January
|
|
|
1.3966
|
|
|
|
1.4563
|
|
|
|
1.3966
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
December
|
|
|
1.4406
|
|
|
|
1.5120
|
|
|
|
1.4276
|
|
November
|
|
|
1.5023
|
|
|
|
1.5083
|
|
|
|
1.4658
|
|
October
|
|
|
1.4800
|
|
|
|
1.5020
|
|
|
|
1.4537
|
|
September
|
|
|
1.4643
|
|
|
|
1.4783
|
|
|
|
1.4220
|
|
S-6
The
Offering
|
|
|
Issuer
|
|
Deutsche Bank Contingent Capital Trust V, a Delaware
statutory trust formed for the purpose of issuing
Trust Preferred Series Securities.
|
|
Securities Offered
|
|
[ ],000 8.05% additional Trust Preferred
Securities with a liquidation preference amount of $25 per
Trust Preferred Security (assuming no exercise of the
underwriters over-allotment option), representing
undivided preferred beneficial ownership interests in the assets
of the Trust, which we refer to as the Trust Estate. The
Trust Preferred Securities shall have the same terms and
conditions as the Outstanding Trust Preferred Securities
(defined below) in all respects except for the issue date, the
date from which Capital Payments in respect thereof begin to
accrue, the issue price and any other deviations required for
compliance with applicable law, so as to form a single series
with the Outstanding Trust Preferred Securities.
|
|
Offering Price
|
|
$[ ] per Trust Preferred plus accrued
Capital Payments, if any, from March 30, 2010.
|
|
Issue Date
|
|
March 30, 2010.
|
|
No Maturity
|
|
The Trust Preferred Securities will not have a maturity
date or be subject to any mandatory redemption provisions.
|
|
Form and Denominations;
Clearing and
Settlement
|
|
The Trust Preferred Securities will be sold in minimum
denominations of $25 liquidation preference amount (and integral
multiples of $25). The Trust Preferred Securities will be
denominated in U.S. dollars and all payments on or in respect of
the Trust Preferred Securities will be made in U.S.
dollars. The Trust Preferred Securities will be issued in
book-entry form only and will be represented by registered
Global Certificates deposited with a custodian for and
registered in the name of a nominee of DTC. The
Trust Preferred Securities will be accepted for clearance
by DTC, Euroclear and Clearstream. Beneficial interests in the
Trust Preferred Securities will be shown on, and transfers
thereof will be effected only through, the book-entry records
maintained by DTC and its direct and indirect participants,
including Euroclear and Clearstream.
|
|
Over-allotment Option
|
|
Deutsche Bank has granted the underwriter an option, exercisable
on up to [ ] occasions within
[ ] days from the date of this prospectus
supplement, to purchase up to an aggregate total of
[ ] additional Trust Preferred Securities
at the offering price to the public plus accrued Capital
Payments from March 30, 2010, solely to cover
over-allotments, if any. If this option is exercised, a
corresponding aggregate amount of Class B Preferred
Securities will be issued by the Company and purchased by the
Trust, and an additional Obligation will be issued by Deutsche
Bank AG in an aggregate principal amount equal to the aggregate
liquidation preference amount of the additional
Trust Preferred Securities. Deutsche Bank AG will pay the
underwriter compensation for the additional Trust Preferred
Securities at the same rate as is set forth on the cover page of
this prospectus supplement.
|
|
Securities Issued but Not Offered to the
Public in
Connection
with the Offering
|
|
|
|
Company
Class B Preferred
Securities
|
|
The Company will issue and sell the Class B Preferred
Securities to the Trust for a purchase price of $25 per
Class B Preferred Security. The Class B Preferred
Securities will not have a maturity date or be subject to any
mandatory redemption provisions.
|
S-7
|
|
|
Initial Obligation
|
|
Deutsche Bank AG will issue and sell a perpetual fixed rate
subordinated note governed by New York law (which we refer to as
the Initial Obligation) to the Company for a purchase price of
$[ ],000,000.
|
|
Securities Previously Issued but Not Offered
to the
Public in
Connection with the
Offering
|
|
|
|
Outstanding Trust Preferred Securities
|
|
The Trust has previously issued 50,600,000 8.05% trust preferred
securities, which we refer to as the Outstanding
Trust Preferred Securities (and, together with the
Trust Preferred Securities and any other trust preferred
securities issued by the Trust from time to time, as the
Trust Preferred Series and any trust preferred security
thereof, as a Trust Preferred Series Security), on
May 9, 2008, which we refer to as the Initial Issue Date.
|
|
Company Outstanding Class B
Preferred
Securities
|
|
The Company has previously issued preferred securities
designated as Class B using the proceeds from its sale of
Outstanding Trust Preferred Securities, which we refer to
as the Outstanding Class B Preferred Securities (and,
together with the Class B Preferred Securities and any
other preferred securities in Class B issued by the Company
from time to time, as the Class B Preferred Series and any
preferred security thereof, as a Class B Preferred
Series Security). The Class B Preferred Securities
shall have the same terms and conditions as the Outstanding
Class B Preferred Securities in all respects except for the
issue date, the date from which Capital Payments in respect
thereof begin to accrue, the issue price and any other
deviations required for compliance with applicable law, so as to
form a single series with the Outstanding Class B Preferred
Securities.
|
|
Company Class A Preferred
Security
|
|
In connection with the issuance of the Outstanding
Trust Preferred Securities, the Company has issued and sold
the Class A Preferred Security to Deutsche Bank AG for a
purchase price of $25.
|
|
Company Common Security
|
|
In connection with the issuance of the Outstanding
Trust Preferred Securities, the Company has issued the
Company Common Security representing a limited liability company
interest in the Company to Deutsche Bank AG.
|
|
Trust Common Security
|
|
In connection with the issuance of the Outstanding
Trust Preferred Securities, the Trust has issued and sold
the Trust Common Security with a liquidation amount of $25
to Deutsche Bank AG for a purchase price of $25.
|
|
Outstanding Initial Obligation
|
|
In connection with the issuance of the Outstanding
Trust Preferred Securities, Deutsche Bank AG has issued and
sold a perpetual fixed rate subordinated note governed by New
York law (which we refer to as the Outstanding Initial
Obligation, and together with the Initial Obligation and any
additional obligation issued by the Bank from time to time and
having the same terms and conditions as the Initial Obligation
in all respects except for the issue date, the date from which
interest begins to accrue, the issue price and any other
deviations required for compliance with applicable law, as the
Initial Obligations) to the Company for a purchase price of
$1,265,000,025.
|
|
Use of Proceeds by the Trust
|
|
The Trust will use the proceeds from the sale of the
Trust Preferred Securities to purchase the Class B
Preferred Securities issued by the Company. The Class B
Preferred Series will be the Trusts only assets.
|
S-8
|
|
|
Use of Proceeds by the Company
|
|
The Company will use the proceeds from the sale of the
Class B Preferred Securities to purchase the Initial
Obligation. In connection with the issuance of the Outstanding
Trust Preferred Securities, the Company has deposited the
proceeds from the Class A Preferred Security and from the
Company Common Security in a non-interest bearing account. The
Companys only assets will include the Initial Obligations,
any arrears of payments, if any, that have been deferred to the
extent that Capital Payments are cumulative, deposited with the
Bank under the Subordinated Deposit Agreement described below,
and such non-interest bearing deposit.
|
|
Use of Proceeds by the Bank
|
|
The Bank intends to use the proceeds from the sale of the
Initial Obligation for general corporate purposes. The Bank will
pay commissions to the underwriter (which is an affiliate of the
Bank) and reimburse the underwriter for certain expenses in
connection with the Offering. On the Issue Date, the Bank will
make a Tier 1 Qualification Election (as described below)
in respect of 100% of the Class B Preferred Securities. The
Bank expects to treat 100% of the Class B Preferred
Securities as consolidated Tier 1 regulatory capital at all
times from and after the Issue Date. Correspondingly, 100% of
the Trust Preferred Securities will qualify as Tier 1
regulatory capital.
|
|
Liquidation Preference Amount
|
|
$25 per Trust Preferred Security and $25 per Class B
Preferred Security.
|
|
Capital Payments on the Trust Preferred
Securities
|
|
If you purchase Trust Preferred Securities, you will be
entitled to receive cumulative or noncumulative cash
distributions (which we refer to as Capital Payments) at a rate
of 8.05% per annum (on the $25 liquidation preference amount for
each Trust Preferred Security), as and when funds are
available to the Trust to make such Capital Payments. Capital
Payments will be cumulative on any portion of the
Trust Preferred Securities as to which no Tier 1
Qualification Election has occurred and noncumulative on any
portion as to which a Tier 1 Qualification Election has
occurred, beginning with the first day of the Payment Period
during which such Tier 1 Qualification Election occurred.
As a Tier 1 Qualification Election will be made in respect
of 100% of the Trust Preferred Securities on the Issue Date,
Capital Payments will be noncumulative. Capital Payments will be
payable quarterly in arrears on March 30, June 30,
September 30 and December 30 of each year (which we refer to as
Payment Dates) commencing on June 30, 2010. We refer to
each period from and including one Payment Date to but excluding
the next Payment Date as a Payment Period. The initial Payment
Period will commence on the Issue Date.
|
|
Depend on Receipt by Trust of Capital
Payments
on the Class
B Preferred Securities
|
|
The Trust expects to make the Capital Payments on the
Trust Preferred Securities out of the Capital Payments
received by the Trust from the Company with respect to the
Class B Preferred Securities.
|
|
Tier 1 Qualification Election
|
|
The Bank may, at any time and on one or more occasions before
June 30, 2013, give notice under the LLC Agreement to the
Company that the Bank is making an election to treat all or a
percentage of each Class B Preferred Security as
consolidated Tier 1 regulatory capital and as a consequence
to change (beginning with the first day of the Payment Period in
which such election occurs) the determination of Capital
Payments and related matters with respect to such percentage of
each Class B Preferred Security to the terms described in
Description of the Company
|
S-9
|
|
|
|
|
Securities Class B Preferred Securities
applicable pursuant to such election (we refer to each such
election as a Tier 1 Qualification Election). If a
Tier 1 Qualification Election is made, the
Trust Preferred Securities will be reclassified to the same
extent and as of the same date as the Class B Preferred
Securities. The aggregate percentage of the Class B
Preferred Securities and of the Trust Preferred Securities
as to which a Tier 1 Qualification Election has occurred as
of any time is referred to as the Tier 1 Percentage.
The aggregate percentage of the Class B Preferred
Securities and of the Trust Preferred Securities as to
which no Tier 1 Qualification Election has occurred as of
any time is referred to as the Upper Tier 2 Percentage.
|
|
Tier 1 Qualification Elections Made and
To
be Made
|
|
Prior to the Issue Date, the Bank has made a Tier 1
Qualification Election in respect of 100% of the Outstanding
Class B Preferred Securities. On the Issue Date, the Bank
will make a Tier 1 Qualification Election in respect of
100% of the Class B Preferred Securities.
|
|
Capital Payments Cumulative on the
Upper
Tier 2
Percentage of the
Trust Preferred
Securities
|
|
To the extent the Trust does not have sufficient funds available
to make a Capital Payment on the Upper
Tier 2 Percentage, if any, of the Trust Preferred
Securities in respect of any Payment Period, you will not be
entitled to receive a Capital Payment in respect of such Upper
Tier 2 Percentage for such Payment Period, whether or
not Capital Payments are made on the Upper
Tier 2 Percentage, if any, of the Trust Preferred
Securities in respect of future Payment Periods. Any such
Capital Payment or portion thereof accrued but not declared (or
deemed to have been declared) by the Trust will be deferred. We
refer to such deferred Capital Payments as Arrears of Payment
with respect to the Upper Tier 2 Percentage, if any,
of the Trust Preferred Securities. The Trust will pay
Arrears of Payments on the Upper Tier 2 Percentage, if
any, of Trust Preferred Securities if and to the extent the
Company pays to the Trust the corresponding Arrears of Payment
on the Upper Tier 2 Percentage, if any, of the
Class B Preferred Securities. Because the Bank will make a
Tier 1 Qualification Election in respect of 100% of the
Class B Preferred Securities on the Issue Date, Capital
Payments on the Trust Preferred Securities will be
noncumulative.
|
|
Capital Payments Noncumulative on the
Tier 1 Percentage of
the
Trust Preferred
Securities
|
|
To the extent the Trust does not have sufficient funds available
to make a Capital Payment on the Tier 1 Percentage of
the Trust Preferred Securities for any Payment Period, you
will not be entitled to receive a Capital Payment in respect of
such Tier 1 Percentage for such Payment Period,
whether or not Capital Payments are made on the
Tier 1 Percentage of the Trust Preferred
Securities in respect of any future Payment Periods and whether
or not Capital Payments in respect of the Upper
Tier 2 Percentage, if any, of the Trust Preferred
Securities are deferred.
|
|
Capital Payments on the Class B Preferred
Securities
|
|
As holder of the Class B Preferred Securities, the Trust is
entitled to receive cumulative (with respect to the Upper
Tier 2 Percentage, if any) or noncumulative (with
respect to the Tier 1 Percentage) cash distributions
(which we refer to as Capital Payments) at a rate of 8.05% per
annum (on the $25 liquidation preference amount for each
Class B Preferred Security), payable quarterly in arrears
on the Payment Dates, but Capital Payments on the Class B
Preferred Securities will be made only when, as, and if declared
or deemed declared by the Companys Board of Directors. As
a Tier 1 Qualification Election will be made in respect of
100% of the Class B Preferred Securities on the Issue Date,
Capital Payments will be noncumulative.
|
|
Conditions to Declaration
|
|
Capital Payments on the Class B Preferred Securities will
only be authorized to be made on any Payment Date to the extent
that:
|
|
|
|
the Company has Operating Profits for the related
Payment Period at least equal to the amount of such Capital
Payments; and
|
S-10
|
|
|
|
|
the Bank has an amount of Distributable Profits for
the preceding fiscal year for which audited unconsolidated
financial statements are available at least equal to the
aggregate amount of such Capital Payments on the Class B
Preferred Series, Capital Payments on the Class B Preferred
Series theretofore paid and (i) in respect of the Upper
Tier 2 Percentage, if any, of the Class B
Preferred Securities, capital payments or dividends or other
distributions payable on Parity Capital Securities and Preferred
Tier 1 Capital Securities, if any,
pro rata
on the
basis of such Distributable Profits, and (ii) in respect of
the Tier 1 Percentage, if any, of the Class B
Preferred Securities, capital payments or dividends or other
distributions payable on Preferred Tier 1 Securities, if
any,
pro rata
on the basis of such Distributable Profits.
|
|
Possible Prohibition of Declaration
|
|
Even if the Company has sufficient Operating Profits and there
are sufficient Distributable Profits of the Bank, the Company
will be prohibited from making Capital Payments on the
Class B Preferred Securities at any time an order from the
German Federal Financial Supervisory Authority
(Bundesanstalt
für Finanzdienstleistungsaufsicht,
which we refer to as
the BaFin) (or any other relevant regulatory authority)
prohibits the Bank from making any distributions of profits.
|
|
Capital Payments Cumulative on the
Upper
Tier 2
Percentage of the
Class B
Preferred
Securities
|
|
If the Company does not declare a Capital Payment on the Upper
Tier 2 Percentage, if any, of the Class B
Preferred Securities for any Payment Period or only declares a
pro rata
portion of the Capital Payment, whether as a
result of insufficient Operating Profits of the Company,
insufficient Distributable Profits of the Bank, an order of the
BaFin or otherwise, the Trust as holder of the Class B
Preferred Securities will not be entitled to receive that unpaid
Capital Payment (or unpaid portion thereof), whether or not
Capital Payments are made on the Upper
Tier 2 Percentage, if any, of the Class B
Preferred Securities in respect of any other Payment Periods.
However, the unpaid Capital Payment (or unpaid portions thereof)
will be deferred and will constitute Arrears of Payments with
respect to the Upper Tier 2 Percentage, if any, of the
Class B Preferred Securities. If, as a result of the
deferral of Capital Payments on the Upper
Tier 2 Percentage, if any, of the Class B
Preferred Securities, the Company receives payments of interest
on the Initial Obligation described below which exceed the
Capital Payments the Company pays on the Upper
Tier 2 Percentage, if any, of the Class B
Preferred Securities, the excess will be deposited into a
subordinated deposit account at the Bank bearing interest at a
rate of 0.75% per annum pursuant to the Subordinated Deposit
Agreement described in this prospectus supplement. Any interest
accumulating in such deposit account will be payable to the
holder of the Company Common Security under the circumstances
described herein. The Subordinated Deposit Agreement will
provide that, subject to the subordination provisions of the
Subordinated Deposit Agreement, the subordinated deposit
outstanding under the Subordinated Deposit Agreement will be
terminated and such deposit repaid to the Company at such time
and to the extent as the Company is required to pay Arrears of
Payments to the Trust. The subordinated deposit outstanding at
any time pursuant to the Subordinated Deposit Agreement will at
all times and to its full extent be subordinated to the same
extent as the Class B Preferred Guarantee will or would be
after the initial Tier 1 Qualification Election. The
Company will pay Arrears of Payment on the Upper
Tier 2 Percentage, if any, of the Class B
Preferred Securities under the conditions described under
Description of the Trust Securities
Capital Payments on the Upper Tier 2 Percentage.
|
S-11
|
|
|
Capital Payments Noncumulative on the
Tier 1 Percentage of
the Class B
Preferred
Securities
|
|
If the Company does not declare a Capital Payment on the
Tier 1 Percentage of the Class B Preferred
Securities for any Payment Period or only declares a
pro rata
portion of such Capital Payment, whether as a result of
insufficient Operating Profits of the Company, insufficient
Distributable Profits of the Bank, an order of the BaFin or
otherwise, the Trust as holder of the Class B Preferred
Securities will not be entitled to receive that unpaid Capital
Payment (or unpaid portion thereof), whether or not Capital
Payments are made on the Tier 1 Percentage of the
Class B Preferred Securities in respect of any other
Payment Periods.
|
|
Distribution Upon Liquidation
|
|
If the Trust is dissolved (other than following a redemption of
the Class B Preferred Securities) and its assets are
distributed, because of the occurrence of a Trust Special
Redemption Event or otherwise, after satisfaction of the
claims of creditors of the Trust, if any, Class B Preferred
Series Securities will be distributed on a
pro rata
basis to you , the holders of the other Trust Preferred
Series Securities and the holder of the Trust Common
Security as a liquidation distribution of your interest in the
Trust.
|
|
Payments of Additional Amounts
|
|
Except as further described herein, Capital Payments on the
Class B Preferred Series and the Trust Preferred
Series, as the case may be, and any amount payable in
liquidation or upon redemption thereof, will be made without
deduction or withholding for or on account of any Withholding
Taxes (as defined herein), unless such deduction or withholding
is required by law. In such event, the Company or the Trust, as
the case may be, will pay, as additional Capital Payments, such
additional amounts (which we refer to as the Additional Amounts)
as may be necessary in order that the net amounts received by
the holders of the Class B Preferred Series Securities
and the holders of Trust Preferred Series Securities,
after such deduction or withholding, will equal the amounts that
would have been received in respect of the Class B
Preferred Series Securities and the Trust Preferred
Series Securities had no such deduction or withholding been
required. Additional Amounts will also be payable on Arrears of
Payments, if any.
|
|
Redemption
|
|
The Class B Preferred Securities and the
Trust Preferred Securities are not redeemable at any time
at the option of the holders thereof. The Trust must redeem the
Trust Preferred Series if the Company redeems the
Class B Preferred Series. In that event, the proceeds of
the redemption of the Class B Preferred Series received by
the Trust will be applied to redeem the Trust Securities at
their Redemption Price. The Company, at its option, may
redeem the Class B Preferred Series, in whole but not in
part, on any Payment Date on and after June 30, 2018 (which
we refer to as the Initial Redemption Date), at their
Redemption Price.
|
|
|
|
The Company, at its option, may also redeem the Class B
Preferred Series, in whole but not in part, at any time, upon
the occurrence of a Company Special Redemption Event, at
their Redemption Price.
|
|
|
|
The Redemption Price of the Trust Preferred
Series Securities or the Class B Preferred
Series Securities means an amount equal to their
liquidation preference amount, or $25 per security, plus any
accrued and unpaid Capital Payments for the current Payment
Period to but excluding the Redemption Date plus, with
respect to the Upper Tier 2 Percentage, if any, of the
Trust Preferred Securities and of the Class B
Preferred Securities as of the Redemption Date, all
outstanding and unpaid Arrears of Payments, if any, plus
Additional Amounts, if any.
|
S-12
|
|
|
|
|
No redemption of the Class B Preferred Series for any
reason may take place unless:
|
|
|
|
the Company has an amount of cash funds (by reason
of payments on the Obligations or the Class B Preferred
Guarantee) at least equal to the Redemption Price;
|
|
|
|
the Company has an amount of Operating Profits for
the current Payment Period at least equal to the Capital
Payments on the Class B Preferred Series and Arrears of
Payments, if applicable, accrued and unpaid as of the
Redemption Date, plus Additional Amounts, if any;
|
|
|
|
the Bank has an amount of Distributable Profits for
the preceding fiscal year of the Bank (for which audited
unconsolidated financial statements are available) at least
equal to the Capital Payments on the Class B Preferred
Series accrued and unpaid as of the Redemption Date, plus
the aggregate amount of Capital Payments (including any Arrears
of Payments) on the Class B Preferred Series theretofore
paid, plus any Additional Amounts plus (i) if the Upper
Tier 2 Percentage of the Class B Preferred
Securities exceeds zero, capital payments payable or dividends
or other distributions on Parity Capital Securities and
Preferred Tier 1 Capital Securities, or (ii) if the
Upper Tier 2 Percentage of the Class B Preferred
Securities is zero, capital payments, dividends or other
distributions payable on any Preferred Tier 1 Securities;
and
|
|
|
|
no order of the BaFin (or any other relevant
regulatory authority) is in effect prohibiting the Bank from
making any distribution of profits.
|
|
Guarantor
|
|
Deutsche Bank AG, which in this capacity we refer to as the
Guarantor.
|
|
Guarantees
|
|
|
|
Trust Preferred Guarantee
|
|
In connection with the issuance of the Outstanding
Trust Preferred Securities, the Guarantor has agreed to
guarantee payment, on a subordinated basis, of certain payments
on all current and future securities forming part of the
Trust Preferred Series, which includes the
Trust Preferred Securities, under a guarantee we refer to
as the Trust Preferred Guarantee. Accordingly, the
Guarantor has irrevocably and unconditionally guaranteed, on a
subordinated basis as described in this prospectus supplement,
without duplication, the following payments (which we refer to
as the Guarantee Payments) with respect to the
Trust Preferred Series:
|
|
|
|
Capital Payments due and payable on the
Trust Preferred Series on each Payment Date for the then
current Payment Period;
|
|
|
|
any Arrears of Payments due and payable under the
terms of the Trust Preferred Series on any Payment Date;
|
|
|
|
on any Redemption Date, the
Redemption Price for each Trust Preferred
Series Security called for redemption by the Trust; and
|
|
|
|
upon any voluntary or involuntary dissolution,
liquidation or winding up of the Trust (other than a dissolution
of the Trust in which the Class B Preferred
Series Securities are distributed to the holders of the
Trust Preferred Securities Securities), the liquidation
preference amount of the Trust Preferred Series, plus any
accrued and unpaid Capital Payments for the then current Payment
Period to but excluding the date of liquidation, plus Arrears of
Payments, if any, that are due and payable, plus any Additional
Amounts.
|
|
Class B Preferred Guarantee
|
|
In connection with the issuance of the Outstanding Class B
Preferred Securities, the Guarantor has agreed to guarantee
payment, on a subordinated basis, of certain payments on all
current and future securities forming part of the Class B
Preferred
|
S-13
|
|
|
|
|
Series, which includes the Class B Preferred Securities,
under a guarantee we refer to as the Class B Preferred
Guarantee. Accordingly, the Guarantor has irrevocably and
unconditionally guaranteed, on a subordinated basis as described
in this prospectus supplement, without duplication, the
following payments (which we refer to as the Guarantee Payments)
with respect to the Class B Preferred Securities:
|
|
|
|
Capital Payments declared (or deemed declared) on
the Class B Preferred Series and due and payable on each
Payment Date for the then current Payment Period;
|
|
|
|
any Arrears of Payments due and payable under the
terms of the Class B Preferred Series on any Payment Date;
|
|
|
|
on any Redemption Date, the
Redemption Price for each Class B Preferred
Series Security called for redemption by the Company; and
|
|
|
|
upon any voluntary or involuntary dissolution,
liquidation or winding up of the Company, the liquidation
preference amount of the Class B Preferred Series, plus any
accrued and unpaid Capital Payments for the then current Payment
Period to but excluding the date of liquidation, plus Arrears of
Payments, if any, that are due and payable, plus any Additional
Amounts.
|
|
|
|
Neither of the Guarantees is a guarantee of any kind that the
Company or the Trust will at any time have sufficient assets to
declare a Capital Payment or other distribution or that any
other condition for declaring a Capital Payment or other
distribution will be met or that the Company will declare a
Capital Payment if all conditions for the declaration of a
Capital Payment are met.
|
|
Governing Law
|
|
The LLC Agreement, including the terms of the Class A
Preferred Security, the Class B Preferred Securities and
the Company Common Security, and the Trust Agreement,
including the terms of the Trust Preferred Securities and
the Trust Common Security, are governed by Delaware law.
The Guarantees are governed by New York law.
|
|
Listing
|
|
The Outstanding Trust Preferred Securities are listed on
the New York Stock Exchange under the ticker symbol
DKT. We will make a supplemental application to list
the Trust Preferred Securities on the New York Stock
Exchange under the same symbol and as a fully fungible class of
securities together with the Outstanding Trust Preferred
Securities, but no assurance can be given that the supplemental
listing application will be approved.
|
|
Ratings
|
|
It is a condition to the issuance of the Trust Preferred
Securities that Moodys Investor Service, Inc. rates the
Trust Preferred Securities at least Baa2,
Standard & Poors Rating Services rates the
Trust Preferred Securities at least BBB+, and Fitch Ratings
rates the Trust Preferred Securities at least A. Each of
these ratings will reflect only the view of the applicable
rating agency at the time the rating was issued, and any
explanation of the significance of a rating may be obtained only
from the relevant rating agency. A credit rating is not a
recommendation to buy, sell or hold securities, and there is no
assurance that a credit rating will remain in effect for any
given period of time or that a rating will not be lowered,
suspended or withdrawn entirely by the applicable rating agency
if, in that rating agencys judgment, circumstances so
warrant.
|
S-14
Summary of the
Terms of the Initial Obligation
|
|
|
Obligor
|
|
Deutsche Bank AG will issue and sell the 8.05% perpetual
subordinated note, which we refer to as the Initial Obligation,
to the Company.
|
|
No Maturity
|
|
The Initial Obligation will be perpetual which means that it
will not have a maturity date.
|
|
Principal Amount
|
|
The aggregate principal amount of the Initial Obligation will be
$[ ],000,000 (which we refer to as the
Principal Amount) and is equal to the Companys proceeds
from the sale of the Class B Preferred Securities.
|
|
Interest Payments
|
|
The Initial Obligation will bear interest at the rate of 8.05%
per annum from December 30, 2009. Interest on the Initial
Obligation will be payable to the Company as holder thereof
quarterly in arrears on each Payment Date, commencing on
June 30, 2010. The initial Payment Period will commence on
the Issue Date.
|
|
Ranking
|
|
The Initial Obligation is the Banks direct, unsecured
subordinated obligation. Except for the amount corresponding to
the Tier 1 Percentage of the Trust Preferred
Securities, if any, claims for repayment of the Initial
Obligation will, in the case of an insolvency or liquidation of
the Bank, rank
|
|
|
|
subordinate and junior to all senior and
subordinated debt obligations of the Bank (including profit
participation rights (
Genussscheine
));
|
|
|
|
senior to all preference shares, Preferred
Tier 1 Capital Securities and the common shares of the Bank;
|
|
|
|
pari passu
with all other obligations
constituting the Initial Obligations; and
|
|
|
|
unless otherwise expressly provided in the terms
thereof,
pari passu
with any instrument or contractual
obligation of the Bank ranking junior to any of the instruments
included in the first clause above and senior to any of the
instruments or contractual obligations of the Bank included in
the second clause above.
|
|
|
|
Claims for repayment of the Initial Obligation in an amount
corresponding to the Tier 1 Percentage of the
Trust Preferred Securities, if any, will, in the case of an
insolvency or liquidation of the Bank, rank
|
|
|
|
subordinate and junior to all senior and
subordinated debt obligations of the Guarantor that do not
expressly rank on parity with the obligations of the Guarantor
under the Guarantees;
|
|
|
|
pari passu
with all other obligations
constituting the Initial Obligations;
|
|
|
|
on parity with the most senior ranking preference
shares of the Guarantor, if any, and with its obligations under
any guarantee or support agreement or undertaking relating to
any preference shares or other instrument of any subsidiary of
the Bank qualifying as consolidated Tier 1 capital of the
Bank that does not expressly rank junior to the obligation of
the Guarantor under the Guarantees; and
|
|
|
|
senior to the Junior Securities.
|
|
Redemption
|
|
The Bank, at its option, may redeem the Initial Obligation, in
whole but not in part, together with all other obligations
constituting the Initial Obligations on any Payment Date on or
after June 30, 2018 (which we refer to as the Obligation
Initial
|
S-15
|
|
|
|
|
Redemption Date), provided the Bank has obtained any
required regulatory approvals.
|
|
|
|
The Bank, at its option, may redeem the Initial Obligation, in
whole but not in part, together with all other obligations
constituting the Initial Obligations at any time if (i) an
Obligation Special Redemption Event has occurred and the
Company has decided to redeem the Class B Preferred
Securities in whole and (ii) the Bank has either replaced
the Principal Amount by paying in other, at least equivalent,
own funds (
haftendes Eigenkapital
) within the meaning of
the German Banking Act, or obtained approval of the BaFin for
such early redemption.
|
|
|
|
The Bank, at its option, may redeem the Initial Obligation at
any time in whole or in part, if it replaces the Initial
Obligation in whole or in such part, as applicable, with
Substitute Obligations.
|
|
Governing Law
|
|
The Initial Obligation will be governed by New York law.
|
S-16
Summary of
Offering Transactions
Prior to or simultaneously with the issuance and sale of the
Trust Preferred Securities to you, the Company, the Trust
and the Bank will engage in the following transactions:
(i) the Company will issue to the Trust the Class B
Preferred Securities; and (ii) the Company will invest the
proceeds from the issuance of the Class B Preferred
Securities in the Initial Obligation issued by the Bank.
The following diagram summarizes the relationships among the
Trust, the Company, the Bank and the investors in the
Trust Preferred Series.
S-17
RISK
FACTORS
An investment in the Trust Preferred Securities involves
certain risks. Because the Trust will rely on the payments it
receives from the Company on the Class B Preferred
Securities, and because upon a liquidation of the Trust (other
than following the redemption of the Class B Preferred
Securities), the Trust may distribute the Class B Preferred
Securities to you, you are also making an investment decision
with regard to the Class B Preferred Securities and the
Guarantees. You should carefully consider the following
discussion of the risks and the other information about the
Trust Preferred Series, which includes the
Trust Preferred Securities, the Class B Preferred
Series, which includes the Class B Preferred Securities,
and the Guarantees contained in this prospectus supplement and
the accompanying prospectus, before deciding whether an
investment in the Trust Preferred Securities is suitable.
For more information regarding risks that may materially affect
our business and results please refer to the information under
the caption Item 3: Key Information Risk
Factors in our Annual Report on
Form 20-F
for the year ended December 31, 2008, which is incorporated
by reference in this prospectus supplement and the accompanying
prospectus.
Dependency of
Trust on Receipt of Capital Payments on Class B Preferred
Securities
The only assets of the Trust are the Class B Preferred
Series (and including the related rights under the Class B
Preferred Guarantee). The Trust expects to make Capital Payments
on the Trust Preferred Securities from Capital Payments
received by it on the Class B Preferred Securities. Any
reduction or non-payment of Capital Payments on the Class B
Preferred Securities on any Payment Date will reduce partially
or entirely the amounts available to the Trust to make Capital
Payments on the Trust Preferred Securities. See
Description of the Company Securities
Class B Preferred Securities Stated Rate and
Capital Payment Dates and Description of the
Trust Securities. You should consider the following
risks relating to Capital Payments on the Class B Preferred
Securities.
Capital
Payments Require Distributable Profits of the Bank and Operating
Profits of the Company
The Company will be authorized to declare and pay Capital
Payments (and Capital Payments deemed declared will only be
payable) on the Class B Preferred Series (and, accordingly,
the Trust will only have funds available for the payment of
Capital Payments on the Trust Preferred Series) only if the
Bank has sufficient Distributable Profits determined as
described under Distributable Profits of the Bank
and the Company has sufficient Operating Profits. There can be
no assurance that the Bank will have sufficient Distributable
Profits in every year for the Company to be authorized to
declare the full amount of Capital Payments in the succeeding
year. The Company will have sufficient Operating Profits only if
the Bank makes payments in the amounts and at the dates as
required under the Initial Obligations. For more information
regarding risks that may materially affect the amount of our
Distributable Profits and the Banks ability to make
payments under the Initial Obligations please refer to the
information under the caption Item 3: Key
Information Risk Factors in our Annual Report
on
Form 20-F
for the year ended December 31, 2008, which is incorporated
by reference in this prospectus supplement.
Capital
Payments Are Discretionary
The declaration and payment of Capital Payments by the Company
on the Class B Preferred Series (and, accordingly, the
availability of funds for the payment of Capital Payments on the
Trust Preferred Series by the Trust) are limited by the
terms of the LLC Agreement. Although it is the policy of the
Company to distribute the full amount of Operating Profits for
each Payment Period as capital payments or dividends to its
securityholders, the Companys Board of Directors has
discretion in declaring and making Capital Payments (except with
respect to deemed declarations which are mandatory) on the
Class B Preferred Series.
S-18
Capital
Payments May Be Prohibited
Even if the Bank has sufficient Distributable Profits, the
Company will be prohibited from making Capital Payments on the
Class B Preferred Series at any time an order from the
German Federal Financial Supervisory Authority (
Bundesanstalt
für Finanzdienstleistungsaufsicht,
which we refer to as
the BaFin) or any other relevant regulatory authority prohibits
the Bank from making any distributions of profits.
Capital
Payments Could Be Adversely Affected by Regulatory Restrictions
on the Companys Operations
Because the Company is a subsidiary of the Bank, German bank
regulatory authorities could make determinations in the future
with respect to the Bank that could adversely affect the
Companys ability to make Capital Payments in respect of
the Class B Preferred Series. In addition, United States
federal or state regulatory authorities, as well as German and
European Union regulatory authorities and regulatory authorities
in other countries, have regulatory authority over the Bank
and/or
the
Banks subsidiaries. Under certain circumstances, any of
such regulatory authorities could make determinations or take
decisions in the future with respect to the Bank
and/or
any
of the Banks subsidiaries or a portion of their respective
operations or assets that could adversely affect the ability of
any of them to, among other things, make distributions to their
respective securityholders, engage in transactions with
affiliates, purchase or transfer assets, pay their respective
obligations or make any redemption or liquidation payments to
their securityholders. See Item 4: Information on the
Company Regulation and Supervision in the
Banks Annual Report on
Form 20-F
incorporated by reference herein for a description of
regulations applicable to the Bank.
Capital Payments
on the Upper Tier 2 Percentage Are Cumulative But May
Be Deferred
As described above, the Capital Payments are discretionary
(except with respect to circumstances where Capital Payments are
deemed to have been declared). The LLC Agreement provides that
it is the policy of the Company to distribute all of its
Operating Profits; however, even if the Distributable Profits
test has been met by the Bank, holders of the
Trust Preferred Series will have no right to receive any
Capital Payments in respect of such Payment Period unless the
Board of Directors of the Company declares (or is deemed to have
declared) Capital Payments on the Class B Preferred Series
for such Payment Period. Moreover, even if a Capital Payment on
the Class B Preferred Series has been declared (or is
deemed to have been declared), all or a portion of such Capital
Payment on the Upper Tier 2 Percentage, if any, of the
Class B Preferred Securities may be deferred if the
Distributable Profits are insufficient to pay such Capital
Payment together with Capital Payments in respect of the other
Class B Preferred Series Securities in full. See
Description of the Company Securities
Class B Preferred Securities Capital Payments
on the Upper Tier 2 Percentage and
Description of the Trust Securities.
S-19
Capital Payments
on the Tier 1 Percentage Are Noncumulative
Prior to the Issue Date, the Bank has made a Tier 1
Qualification Election in respect of 100% of the Outstanding
Class B Preferred Securities. On the Issue Date, the Bank
will make a Tier 1 Qualification Election in respect of
100% of the Class B Preferred Securities. Once the Bank has
elected to qualify all or a portion of each of the Class B
Preferred Securities as consolidated Tier 1 regulatory
capital, the Capital Payments on that portion and the Capital
Payments on the corresponding portion of the
Trust Preferred Securities, plus any earlier
Tier 1 Percentage of the Class B Preferred
Securities and the Tier 1 Percentage of the
Trust Preferred Securities, will be noncumulative. If the
Company does not make or only makes a portion of any Capital
Payment on the Tier 1 Percentage of the Class B
Preferred Securities for any Payment Period (due to lack of
Operating Profits of the Company or Distributable Profits of the
Bank or because it is prohibited from making the Capital Payment
by a BaFin order or for any other reason) and consequently the
Trust will not have sufficient funds to make a Capital Payment
on the Tier 1 Percentage of the Trust Preferred
Securities for that period, you will not be entitled to recover
that Capital Payment (or portion thereof not made), whether or
not Capital Payments are made on the Tier 1 Percentage
of the Trust Preferred Securities in respect of any other
periods. In addition, the Bank may make a Tier 1
Qualification Election during a Payment Period with respect to
which Capital Payments on the Upper Tier 2 Percentage,
if any, of the Class B Preferred Securities would otherwise
have been deferred. In that case, there will be no deferral of
Capital Payments for that Payment Period in respect of the
portion of each of the Class B Preferred Securities and the
Trust Preferred Securities to which such Tier 1
Qualification Election relates and such Capital Payments will be
noncumulative. You will not be entitled to recover such Capital
Payments for that Payment Period. See Description of the
Company Securities Class B Preferred
Securities Capital Payments on the
Tier 1 Percentage.
No Voting Rights; Relationships with the Bank and Its
Affiliates; Certain Conflicts of Interest
The Bank controls the Company through its power to elect a
majority of the Board of Directors as holder of the Company
Common Security. Generally, the Trust as holder of the
Class B Preferred Series has no voting rights and no right
to elect members of the Board of Directors, except for the
limited right to elect two additional independent directors to
the Companys Board of Directors if the Company has not
paid full Capital Payments for any four consecutive quarterly
Payment Periods. See Description of the Company
Securities Class B Preferred
Securities Voting and Enforcement Rights.
The initial directors and officers of the Company and the
Regular Trustees of the Trust are, and the Company expects that
all future directors and officers of the Company and the Regular
Trustees of the Trust will be, officers or employees of the Bank
or its affiliates. In addition, the Bank (which may act through
its New York branch) has entered into a Services Agreement with
the Company and the Trust pursuant to which the Bank (which may
act through its New York branch) provides certain accounting,
legal, tax and other support services to the Company and the
Trust. Furthermore, an affiliate of the Bank acts as Delaware
Trustee. Consequently, conflicts of interest may arise for those
officers or employees of the Bank and its affiliates in the
discharge of their duties as directors, officers or employees of
the Company or Regular Trustees or Delaware Trustee of the Trust.
The
Trust Preferred Securities May Never Be Redeemed or May Be
Redeemed
The Trust Preferred Securities have no fixed redemption
date and are not redeemable at the option of the holders. The
Trust is under no obligation to redeem the Trust Preferred
Securities at any time, other than in the case of a redemption
of the Class B Preferred Securities. The Company is under
no obligation to redeem the Class B Preferred Securities at
any time. The Company may, at its option, redeem the
Class B Preferred Series, in whole but not in part, at any
time upon the occurrence of a Company Special
Redemption Event. A Company Special Redemption Event
will arise if, as a result of certain changes in law, there are
changes in the tax status of the Company; Additional Amounts
relating to withholding taxes become applicable to payments on
the Class B Preferred Series; the Bank is not permitted,
(i) following a Tier 1 Qualification Election, to
treat the respective Tier 1 Percentage of the
Class B Preferred Series Securities as Tier 1
regulatory capital for capital adequacy purposes or (ii) at
any time to treat the Upper
S-20
Tier 2 Percentage, if any, of the Class B
Preferred Securities as Upper Tier 2 regulatory capital for
capital adequacy purposes; or the Company will be considered an
investment company within the meaning of the
U.S. Investment Company Act of 1940, as amended (which we
refer to as the 1940 Act). A Company Special
Redemption Event will also arise if there is a final
determination that the Bank may not deduct in full interest
payments on the Initial Obligation for German tax purposes. See
Description of the Trust Securities
Redemption. The Company may, at its option, redeem the
Class B Preferred Series on any Payment Date on and after
June 30, 2018. As a result, the holders of
Trust Preferred Series Securities will receive a
return of the liquidation preference amount of their investment
only if the Bank elects to require the Company to redeem the
Class B Preferred Series.
The
Trust May Be Liquidated and Class B Preferred
Securities Distributed to You
The Trust may also be liquidated upon the occurrence of a
Trust Special Redemption Event. A Trust Special
Redemption Event will arise if, as a result of certain
changes in law, there are changes in the tax status of the
Trust; Additional Amounts relating to withholding taxes become
applicable to payments on the Trust Preferred Series; or
the Trust will be considered an investment company
within the meaning of the 1940 Act.
Upon any liquidation of the Trust you may receive as its
liquidation distribution a
pro rata
amount of
Class B Preferred Series Securities, and the
Trust Preferred Series will be deemed no longer
outstanding. Holders receiving Class B Preferred
Series Securities in such a distribution, and their
nominees, will become subject to
Form K-1
and nominee reporting requirements under the U.S. Internal
Revenue Code of 1986, as amended (which we refer to as the
Code). There can be no assurance as to the market price of the
Class B Preferred Series Securities distributed upon a
liquidation of the Trust or that a market for the Class B
Preferred Series Securities would ever develop. The
Class B Preferred Series Securities which you may
receive on dissolution and liquidation of the Trust may trade at
a discount to the price of the Trust Preferred
Series Securities for which they were exchanged.
See Description of the Trust Securities
Redemption.
The Guarantees
Only Guarantee Capital Payments by the Company and the Trust if
the Company Has Cash Available
The guarantees entered into between the Bank and the
Trust Preferred Guarantee Trustee for the benefit of the
holders of the Trust Preferred Series Securities and
the Bank and the Class B Preferred Guarantee Trustee for
the benefit of the holders of the Class B Preferred
Series Securities apply to Capital Payments only to the
extent the Company has funds available for payment. In addition,
the guarantees will not require us to make Capital Payments on
behalf of the Company or the Trust, if the Company has not
declared (or is not deemed to have declared) Capital Payments on
the Class B Preferred Series.
In particular, the guarantees are
|
|
|
not a guarantee that the Company or the Trust will at any time
have sufficient assets to declare a Capital Payment or other
distribution;
|
|
|
not a guarantee that the Bank will have sufficient Distributable
Profits (or have sufficient funds to make payments on the
Initial Obligations) or any other condition for declaring a
Capital Payment or other distribution will be met;
|
|
|
not a guarantee that the Company or the Trust will be authorized
to declare and make, or not be prohibited from declaring or
making, a Capital Payment;
|
|
|
not a guarantee that the Company or the Trust will pay any
Arrears of Payments; and
|
|
|
not a guarantee that the Company will exercise its discretion to
declare a Capital Payment if all conditions for the declaration
of a Capital Payment are met.
|
S-21
The Guarantees
Are Subordinated Obligations of the Bank
Our obligations under the Guarantees will be unsecured and are
very deeply subordinated, as described under Description
of the Subordinated Guarantees Subordination;
the degree of subordination becomes deeper with respect to any
Tier 1 Percentage. Consequently, in the event of the
dissolution or liquidation of, or insolvency proceedings
against, Deutsche Bank AG, any claims the holders of
Trust Preferred Series Securities or holders of
Class B Preferred Series Securities may have under the
applicable Guarantee will be subordinated to the claims of all
creditors of Deutsche Bank AG so that no amounts will be payable
under the Guarantees until the claims of all creditors of
Deutsche Bank AG have been satisfied in full. See
Description of the Subordinated Guarantees.
If the Bank fails to make a payment on any liability senior to
its obligations under the provisions of either of the Guarantees
relating to the Upper Tier 2 Percentage, if any, or
the Tier 1 Percentage, as the case may be, of the
Trust Preferred Securities or the Class B Preferred
Securities, the Bank may not make any payments on either of the
Guarantees to that extent. If the Bank has insufficient funds to
make payments on the Guarantees and obligations ranking on
parity with its obligations under the provisions of either of
the Guarantees relating to the Upper
Tier 2 Percentage, if any, or the
Tier 1 Percentage, as the case may be, of the
Trust Preferred Securities or the Class B Preferred
Securities, any obligations on parity with such obligations
under the Guarantees will share equally (on a
pro rata
basis) in payment with the Guarantees.
There is no restriction on our ability, or that of any of our
subsidiaries, to incur additional indebtedness, liabilities, and
obligations, including indebtedness, liabilities and obligations
that rank senior to or on parity with the Guarantees and the
Initial Obligations.
Limited
Liquidity
The Outstanding Trust Preferred Securities are currently
listed on the New York Stock Exchange under the ticker symbol
DKT. We will make a supplemental application to list
the Trust Preferred Securities on the New York Stock
Exchange under the same symbol and as a fully fungible class of
securities together with the Outstanding Trust Preferred
Securities, but no assurance can be given that the supplemental
listing application will be approved. The underwriter may or may
not decide to make a market in the Trust Preferred
Securities but, in any case, are not obligated to do so and may
discontinue market making at any time. We cannot assure you that
an active secondary market for the Trust Preferred Series
has developed, will develop or, if it has developed or does
develop, will continue, or as to the liquidity of any market
that has developed, may develop or, if it has developed or does
develop, will continue.
Because the availability of funds to make Capital Payments on
the Trust Preferred Securities depends on the Capital
Payments being made on the Class B Preferred Securities and
those in turn may be limited by the lack of sufficient available
Distributable Profits of the Bank and in other circumstances,
the market prices of the Trust Preferred Securities may be
more volatile than other securities that do not have such
provisions. The liquidity and the market prices for the
Trust Preferred Securities can be expected to vary with
changes in the financial condition and prospects, including
operating results, of the Bank and market and economic
conditions, such as prevailing interest rates, and other factors
that generally influence the secondary market prices of
securities. As a result, if you sell your Trust Preferred
Securities in the secondary market, you may not be able to
obtain a price equal to the $25 liquidation preference amount or
the price that you paid for the Trust Preferred Securities.
Risks Associated
with the Financial Condition of the Bank and Its
Affiliates
The ability of the Trust to make Capital Payments on the
Trust Preferred Securities and to pay the liquidation
preference amount of $25 per Trust Preferred Security will
depend on the Companys ability to make the corresponding
Capital Payments and liquidation payments with respect to the
Class B Preferred Securities, which in turn depends solely
upon our making related payments under the Initial Obligation
when due. If we default on our obligation to pay interest on, or
principal of, the Initial Obligation, the Company (and
consequently the Trust) will not have sufficient funds to make
Capital Payments or pay the liquidation preference amount.
S-22
If the financial condition of the Bank or its affiliates were to
deteriorate, then it could result in (i) the Bank having
insufficient Distributable Profits and (ii) the Company
receiving reduced payments from the Bank under the Initial
Obligation and therefore having insufficient Operating Profits,
either of which events would cause the Company to not be
authorized to declare and pay Capital Payments on the
Class B Preferred Securities. This would reduce the amounts
received by the Trust in respect of the Class B Preferred
Securities, with the effect that the Trust would have
insufficient funds available for Capital Payments to holders of
the Trust Preferred Securities.
The amount of Distributable Profits of Deutsche Bank AG for any
fiscal year, which determines the extent to which the Company is
authorized to make Capital Payments on the Class B
Preferred Securities (and correspondingly determines the
availability of funds for the Trust to make Capital Payments on
the Trust Preferred Securities), is calculated on the basis
of Deutsche Bank AGs audited unconsolidated financial
statements prepared in accordance with accounting provisions
generally accepted in the Federal Republic of Germany as
described in the German Commercial Code
(
Handelsgesetzbuch
) which differ in many respects from
U.S. GAAP and IFRS. As a result, the Bank could show a
profit in its consolidated financial statements prepared under
IFRS but a loss (or insufficient Distributable Profits to make
the applicable Capital Payments in full) in its unconsolidated
financial statements prepared in accordance with accounting
provisions generally accepted in the Federal Republic of Germany
as described in the German Commercial Code
(
Handelsgesetzbuch
).
Trust Preferred
Securities Are Not Deposit Liabilities of Bank
The Trust Preferred Securities are not deposit liabilities
of the Bank and will not be insured by the United States Federal
Deposit Insurance Corporation or any other governmental agency
of the United States, Germany or any other jurisdiction. The
value of your investment will likely fluctuate and you may lose
your entire investment in the event of a voluntary or
involuntary liquidation, dissolution or winding up of the Bank.
S-23
USE OF
PROCEEDS
All the proceeds from the sale of the Trust Securities will
be invested by the Trust in the Class B Preferred
Securities. The Company will use the proceeds from the sale of
the Class B Preferred Securities to purchase the Initial
Obligation. The Bank intends to use the proceeds from the sale
of the Initial Obligation for general corporate purposes, and on
the Issue Date will make a Tier 1 Qualification Election in
respect of 100% of the liquidation preference amount of the
Class B Preferred Securities, after the effectiveness of
which it expects to treat the Tier 1 Percentage of the
Class B Preferred Securities as Tier 1 regulatory
capital, or core capital (
Kernkapital
), of the Bank on a
consolidated basis. The Bank will pay commissions to the
underwriter (which is an affiliate of the Bank) totaling
$[ ] (assuming no exercise of the
underwriters over-allotment option and assuming all sales
are made to retail investors, as described in
Underwriting) and reimburse the underwriter for
certain expenses in connection with the Offering. See
Underwriting.
S-24
DEUTSCHE BANK
CONTINGENT CAPITAL TRUST V
The Trust is a statutory trust (Delaware Secretary of State file
number 4539259) formed under the Delaware Statutory
Trust Act and is governed by (i) an amended and
restated trust agreement dated May 9, 2008 (which we refer
to as the Trust Agreement) executed by the Company, as
sponsor, the five initial trustees of the Trust and the Bank,
and (ii) a certificate of trust filed with the Secretary of
State of the State of Delaware on April 25, 2008. The
Trust Agreement is qualified as an indenture under the
Trust Indenture Act.
The Trusts business and affairs are conducted by the
Regular Trustees and, with respect to the Trust Estate, the
Property Trustee.
The Trust exists exclusively to:
|
|
|
issue, offer and sell Trust Preferred
Series Securities, including the Trust Preferred
Securities offered hereby, representing undivided preferred
beneficial ownership interests in the Trust Estate;
|
|
|
issue the Trust Common Security, representing an undivided
beneficial ownership interest in the Trust Estate;
|
|
|
invest the proceeds of the issuance and sale from time to time
of the Trust Preferred Series Securities and the
Trust Common Security (which we collectively refer to as
the Trust Securities) in Class B Preferred
Series Securities issued by the Company from time to
time; and
|
|
|
engage in those other activities necessary or incidental thereto.
|
Consequently, the assets of the Trust will consist solely of the
Class B Preferred Series (including related rights under
the Class B Preferred Guarantee) and payments on the
Class B Preferred Series will be the sole source of revenue
of the Trust.
The rights of the holders of the Trust Preferred
Securities, including economic rights, rights to information and
voting rights, are as set forth in the Trust Agreement, the
Delaware Statutory Trust Act and the Trust Indenture
Act. See Description of the Trust Securities.
The Bank owns the Trust Common Security. The
Trust Common Security ranks equally, and payments will be
made on it
pro rata,
with the Trust Preferred
Securities (or, if the Tier 1 Percentage of the
Trust Preferred Securities exceeds zero, with the
Tier 1 Percentage of the Trust Preferred
Securities) and the other Trust Preferred
Series Securities, based on the liquidation amounts of the
Trust Common Security and the Trust Preferred
Securities, except that in liquidation and certain other
circumstances the rights of the holders of the Trust Common
Security to payments will be subordinated to the rights of the
holders of the Trust Preferred Securities, as described
under Description of the Trust Securities
Subordination of the Trust Common Security and that
the Trust Preferred Guarantee is solely for the benefit of
the holders of the Trust Preferred Series Securities.
Pursuant to the Trust Agreement, there are five trustees
(which we collectively refer to as Trustees) of the Trust. Three
of the Trustees are John Cipriani, Richard W. Ferguson and
Joseph J. Rice, individuals who are employees or officers of the
Bank or one of its subsidiaries (we refer to those as the
Regular Trustees). The fourth Trustee, which we refer to as the
Property Trustee, is a financial institution that is
unaffiliated with the Bank. The fifth Trustee we refer to as the
Delaware Trustee. The Bank of New York Mellon (formerly known as
The Bank of New York) acts as Property Trustee, and Deutsche
Bank Trust Company Delaware, a Delaware corporation, acts
as Delaware Trustee. The Bank as the holder of the
Trust Common Security has the right to appoint, remove or
replace any of the Trustees and to increase and decrease (but
not below three) the number of Trustees, provided that there
must always be at least one trustee that is qualified to act as
Property Trustee and to act as Delaware Trustee pursuant to the
Trust Agreement and at least one trustee who is an employee
or officer of, or is affiliated with, the Bank.
S-25
The Trust is
subject to the corporate governance requirements of the State of
Delaware applicable to Delaware statutory trusts.
The Property Trustee is the registered holder of the
Class B Preferred Series and holds title to the
Class B Preferred Series for the benefit of the holders and
beneficial owners of the Trust Securities.
The Property Trustee has the power to exercise all rights,
powers and privileges with respect to the Class B Preferred
Series under the LLC Agreement. In addition, the Property
Trustee establishes and maintains exclusive control of a
segregated non-interest bearing trust account (which we refer to
as the Property Account) in which all payments made in respect
of the Class B Preferred Series are held for the benefit of
the holders or beneficial owners of the Trust Securities.
Funds in the Property Account remain uninvested until disbursed
pursuant to the terms of the Trust Agreement.
The Bank (in such capacity referred to as the Guarantor) has
agreed with The Bank of New York Mellon (formerly known as The
Bank of New York) (in such capacity referred to as the
Trust Preferred Guarantee Trustee) for the benefit of the
holders of the Trust Preferred Securities, to guarantee
payment, on a subordinated basis, of certain payments on the
Trust Preferred Securities, to the extent described under
Description of the Subordinated Guarantees
Guarantee Payments. We refer to this agreement as the
Trust Preferred Guarantee.
The Trust has entered into a services agreement dated
May 9, 2008, and amended as of March [ ],
2010 (which we refer to as the Services Agreement) with the
Company and the Bank (which may act through its New York
branch), under which the Bank (which may act through its New
York branch) is obligated, among other things, to provide legal,
accounting, tax and other general support services to the Trust
and the Company, to maintain compliance with all applicable
U.S. and German local, state and federal laws, and to
provide administrative, recordkeeping and secretarial services
for the Company and the Trust. The Bank (which may act through
its New York branch) is responsible for, and will pay all
expenses related to, the organization and operations of the
Company and the Trust. See Description of the Services
Agreement.
The address of all Regular Trustees is the principal executive
office of the Trust at 60 Wall Street, New York, New York 10005,
telephone number
(212) 250-2077.
The location of the offices of the Property Trustee is 101
Barclay Street, Floor 21 West, New York, New York 10286.
The location of the offices of the Delaware Trustee is 1011
Centre Road, Suite 200, Wilmington, Delaware 19805.
S-26
DEUTSCHE BANK
CONTINGENT CAPITAL LLC V
The Company is a limited liability company (Delaware Secretary
of State file number 4538709) formed under the LLC Act and
is governed by (i) an amended and restated limited
liability company agreement (which we refer to as the LLC
Agreement) dated May 9, 2008 and (ii) a certificate of
formation of the Company filed with the Secretary of State of
the State of Delaware on April 24, 2008. The LLC Agreement
is qualified as an indenture under the Trust Indenture Act.
Except as otherwise provided in the LLC Agreement or the by-laws
of the Company, the Companys business and affairs are
managed solely and exclusively by its Board of Directors. The
Bank of New York Mellon (formerly known as The Bank of New York)
acts as manager trustee solely for the benefit of the holder of
the Class B Preferred Securities for purposes of the
Trust Indenture Act.
The Company exists exclusively to:
|
|
|
issue two classes of preferred securities representing preferred
limited liability company interests in the Company (which we
refer to as the Class A Preferred Security and the
Class B Preferred Series and collectively as the Company
Preferred Securities) and a common security representing a
limited liability company interest in the Company (which we
refer to as the Company Common Security);
|
|
|
invest the proceeds of the issuance and sale from time to time
of the Class B Preferred Series Securities in
perpetual subordinated notes issued from time to time by
Deutsche Bank AG (which we refer to as the Initial Obligations)
and deposit the proceeds of the issuance and sale of the Company
Common Security and the Class A Preferred Security in a
non-interest bearing account;
|
|
|
upon any redemption or substitution of the Initial Obligations
or parts thereof which does not involve a redemption of the
Class B Preferred Series accept from the Bank Substitute
Obligations in substitution of the Initial Obligations (or parts
thereof) redeemed;
|
|
|
in the event of a failure of payment of interest and Additional
Interest Amounts, if any, on the Obligations by the obligor
thereunder, bring an action or proceeding to enforce such
payment; and
|
|
|
engage in those other activities necessary or incidental thereto.
|
Consequently, the assets of the Company will consist exclusively
of the Initial Obligations (or any substitutes thereof, as
described under Description of the Terms of the Initial
Obligation Substitution), the deposit of the
proceeds from the Company Common Security and the Class A
Preferred Security in the non-interest bearing account and the
deposit of Arrears of Payments, if any, under the Subordinated
Deposit Agreement with the Bank. Payments on the Initial
Obligations or any substitutes thereof will be the sole source
of revenue of the Company. The Company will, however, receive
additional Obligations in the event it issues additional
preferred securities of Class B as described under
Description of the Company Securities
Class B Preferred Securities Voting and
Enforcement Rights.
The rights of the holders of the Class B Preferred
Securities, including economic rights, rights to information and
voting rights, are set forth in the LLC Agreement, the LLC Act
and the Trust Indenture Act. See Description of the
Company Securities Class B Preferred
Securities.
The Property Trustee is initially the registered holder of, and
holds title to, all issued and outstanding Class B
Preferred Series Securities. The Company Common Security
and the Class A Preferred Security are owned by the Bank.
For a complete description of the share capital of the Company
and relative rights of the Company Securities, see
Description of the Company Securities.
The Bank (in such capacity referred to as the Guarantor) has
agreed with The Bank of New York Mellon (formerly known as The
Bank of New York) (in such capacity referred to as the
Class B Preferred Guarantee Trustee) for the benefit of the
holders of the Class B Preferred Securities, to guarantee
payment, on a subordinated basis, of certain payments on the
Class B Preferred Securities, to the extent described under
Description of the Subordinated Guarantees
Guarantee Payments). We refer to this agreement as the
Class B Preferred Guarantee.
S-27
Pursuant to the LLC Agreement, the Board of Directors of the
Company initially consisted of four directors, John Cipriani,
Richard W. Ferguson, Helmut Mannhardt and Joseph J. Rice, each
as elected by the Bank as initial holder of the Company Common
Security. However, the Trust as the holder of the Class B
Preferred Series may appoint two additional, independent
directors to the Board of Directors if for four consecutive
Payment Periods Capital Payments on the Class B Preferred
Securities and any Additional Amounts in respect of such Capital
Payments have not been paid at the Stated Rate in full by the
Company or by the Guarantor under the Class B Preferred
Guarantee. See Description of the Company
Securities Class B Preferred
Securities Voting and Enforcement Rights.
The officers of the Company are Richard W. Ferguson, as
President, John Cipriani, as Vice President and Treasurer,
Anjali Thadani, Joseph J. Rice and Helmut Mannhardt as Vice
Presidents, Sonja K. Olsen as Secretary and Sandra L. West as
Assistant Secretary. No director, including any independent
director, will be a resident of the Federal Republic of Germany.
The Company is subject to the corporate governance requirements
of the State of Delaware applicable to limited liability
companies.
The Company has entered into a Services Agreement dated
May 9, 2008 with the Trust and the Bank (which may act
through its New York branch) under which the Bank (which may act
through its New York branch) is obligated, among other things,
to provide legal, accounting, tax and other general support
services to the Company and the Trust, to maintain compliance
with all applicable U.S. and German local, state and
federal laws, and to provide administrative, recordkeeping and
secretarial services for the Company and the Trust. The Bank
(which may act through its New York branch) is responsible for
and will pay all expenses related to the organization and
operations of Company and the Trust. See Description of
the Services Agreement.
The address of all directors and officers of the Company is the
principal executive office of the Company, Deutsche Bank
Contingent Capital LLC V, 60 Wall Street, New York, New
York 10005, telephone number
(212) 250-2077.
S-28
DISTRIBUTABLE
PROFITS OF THE BANK
The Companys authority to declare Capital Payments and pay
any declared (or deemed declared) Capital Payments, including,
if applicable, Arrears of Payment, if any, on the Class B
Preferred Securities for any Payment Period depends, among other
things, on the Distributable Profits of the Bank for the
preceding fiscal year for which audited unconsolidated financial
statements are available. Distributable Profits of the Bank for
any fiscal year are the balance sheet profits
(
Bilanzgewinn
) as of the end of such fiscal year, as
shown in the audited unconsolidated balance sheet of the Bank as
of the end of such fiscal year. Such balance sheet profits
include the annual surplus or loss
(
Jahresüberschussfehlbetrag
),
plus
any
profits carried forward from previous years,
minus
any
loss carried forward from previous years,
plus
transfers
from capital reserves and earnings reserves,
minus
allocations to earnings reserves. Distributable Profits are
determined on the basis of the Banks audited
unconsolidated financial statements prepared in accordance with
accounting principles generally accepted in the Federal Republic
of Germany as described in the German Commercial Code
(
Handelsgesetzbuch
) and other applicable German law then
in effect. The German Commercial Code differs in certain
respects from IFRS, in accordance with which the Bank prepares
its consolidated financial statements and from U.S. GAAP,
in accordance with which the Bank prepared its consolidated
financial statements for the year ended December 31, 2006
and prior years.
Distributable Profits in respect of any fiscal year include, in
addition to annual profits, transfers made by the Bank, in its
discretion, of amounts carried on its balance sheet as
Other revenue reserves. In addition, in determining
the Distributable Profits for any fiscal year, the amounts shown
below as Capital reserves and statutory revenue reserves
available to offset an annual loss may be transferred in
the Banks discretion to offset any losses which may be
incurred by the Bank.
The following table sets forth, for the years indicated, certain
items derived from the Banks audited unconsolidated
balance sheet that relate to the foregoing discussion:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Year Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
( in millions)
|
|
|
Annual profits after allocations to other revenue reserves
|
|
|
310
|
|
|
|
2,387
|
|
|
|
2,099
|
|
Other revenue reserves
|
|
|
3,840
|
|
|
|
3,840
|
|
|
|
3,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,150
|
|
|
|
6,227
|
|
|
|
5,719
|
|
Capital reserves and statutory revenue reserves available to
offset an annual loss
|
|
|
15,104
|
|
|
|
12,986
|
|
|
|
12,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,254
|
|
|
|
19,213
|
|
|
|
18,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deutsche Bank Aktiengesellschaft paid total dividends on its
ordinary shares of 309 million,
2,274 million and 2,005 million in respect
of 2008, 2007 and 2006, respectively. On February 4, 2010,
the Bank announced its intention to recommend to its
shareholders the payment of a dividend in respect of 2009 of
0.75 per share.
S-29
DESCRIPTION OF
THE TRUST SECURITIES
The following, together with the Description of Capital
Securities Description of Trust Preferred
Securities in the attached prospectus, describes the
material terms of the Trust Preferred Securities. If the
description of the Trust Preferred Securities in this
prospectus supplement differs in any way from the description in
the attached prospectus, you should rely on the description in
this prospectus supplement. You also should read the
Trust Agreement, the Delaware Statutory Trust Act and
the Trust Indenture Act. We have filed with the SEC a form
of the Trust Agreement as an exhibit to the registration
statement pertaining to this prospectus supplement and the
attached prospectus.
The Trust will issue the Trust Preferred Securities under
the Trust Agreement. The Trust Agreement is qualified
as an indenture under the Trust Indenture Act. The Bank of
New York Mellon (formerly known as The Bank of New York) acts as
the Property Trustee for purposes of complying with the
Trust Indenture Act. The terms of the Trust Preferred
Securities will include those stated in the Trust Agreement
and the Delaware Statutory Trust Act and those made part of
the Trust Agreement by the Trust Indenture Act.
Because the purchase of Trust Preferred Securities will
also involve an investment decision regarding the Class B
Preferred Securities and the Guarantees, you should read
Description of Company Securities Class B
Preferred Securities, Description of the
Subordinated Guarantees, and Description of the
Terms of the Initial Obligation in this prospectus
supplement. The following description of the material terms of
the Trust Preferred Securities in this prospectus
supplement contains only a summary of their material terms and
is not complete and is qualified in its entirety by reference to
the terms and provisions of the Trust Agreement, the
Delaware Statutory Trust Act and the Trust Indenture
Act. We have filed or will file forms of the
Trust Agreement, the LLC Agreement, the Guarantees and the
Initial Obligation, as exhibits to the registration statement.
In addition, you may request copies of these documents from us
at our address set forth under Where You Can Find
Additional Information. We urge you to read these
documents in their entirety because they, and not this
description or the descriptions referred to above, will define
your rights under the Trust Preferred Securities.
Registered holders of Trust Preferred Securities will be
treated as the owners thereof for all purposes. Except as set
forth below, only registered holders will have rights under the
Trust Agreement.
Outstanding
Trust Preferred Securities
The Company has previously issued Outstanding
Trust Preferred Securities having the same terms and
conditions as the Trust Preferred Securities in all
respects except for the issue date, the date from which Capital
Payments began to accrue, the issue price and any other
deviations required for compliance with applicable law. The
Trust Preferred Securities will form a single series with
the Outstanding Trust Preferred Securities.
Trust Preferred
Securities
General
The Trust Preferred Securities constitute direct, unsecured
and unsubordinated securities of the Trust and rank on parity
with all other Trust Preferred Series Securities
without any preference among themselves.
Each Trust Preferred Series Security represents an
undivided preferred beneficial ownership interest, and the
Trust Common Security represents an undivided beneficial
ownership interest, in the Trust Estate. The Trusts
only assets will be the Class B Preferred Series and the
related rights under the Class B Preferred Guarantee. Title
to the Class B Preferred Series will be held by the
Property Trustee for the benefit of the holders and beneficial
owners of the Trust Securities.
The Trust Agreement does not permit the Trust to acquire
any assets other than Class B Preferred
Series Securities, issue any securities other than
Trust Preferred Series Securities or incur any
indebtedness. Nevertheless, the Company will, if so required by
the Bank, either (a) in connection with the
S-30
exercise of the underwriters over-allotment option on or
prior to March 30, 2010 or (b) from time to time on or
prior to June 30, 2013 and without the consent of the
holders of any of the Class B Preferred
Series Securities, issue additional preferred securities of
Class B having the same terms as the Class B Preferred
Series Securities in all respects except for the issue
date, the date from which Capital Payments in respect thereof
begin to accrue , the issue price and any other deviations
required for compliance with applicable law, so as to form a
single series with all other Class B Preferred
Series Securities. Accordingly, the Trust Agreement
provides that in such circumstances and without consent of the
holders of any of the Trust Preferred
Series Securities, the Trust will issue additional trust
preferred securities having the same terms and conditions as the
Trust Preferred Series Securities in all respects
except for the issue date, the date from which Capital Payments
in respect thereof begin to accrue, the issue price and any
other deviations required for compliance with applicable law, so
as to form a single series with all other Trust Preferred
Series Securities, in consideration for the receipt of such
additional preferred securities of Class B equal to the
aggregate liquidation preference amount of such additional trust
preferred securities. See Description of the Company
Securities Class B Preferred
Securities Voting and Enforcement Rights.
Stated Rate and
Payment Dates
Capital Payments on the Trust Preferred Securities and
Capital Payments on the Class B Preferred Securities accrue
at the same fixed annual rate of 8.05% (on the liquidation
preference amount of $25 per security).
Capital Payments on the Trust Preferred Securities and
Capital Payments on the Class B Preferred Securities when
declared (or deemed declared) will be paid quarterly in arrears
on March 30, June 30, September 30 and December 30 of
each year (which dates we refer to as Payment Dates) commencing
on June 30, 2010, to the relevant holder of such
Trust Preferred Securities or Class B Preferred
Securities, as applicable, as of the related record date. The
initial Payment Period will commence on the Issue Date. If any
Payment Date or redemption date is not a Business Day, payment
of all amounts otherwise payable on such Payment Date or
redemption date will be made on the next succeeding Business
Day, without adjustment, interest or further payment as a result
of such delay in payment.
Capital Payments payable on any Payment Date will accrue from
and including the immediately preceding Payment Date up to but
excluding the relevant Payment Date (we refer to each such
period as a Payment Period). For each Payment Period, Capital
Payments will be calculated on the basis of a
360-day
year
of twelve
30-day
months.
Tier 1
Qualification Election
The LLC Agreement provides that the Bank may, at any time and on
one or more occasions before June 30, 2013, give notice
under the LLC Agreement to the Company that the Bank is making
an election to qualify a percentage of each and every
Class B Preferred Security as consolidated Tier 1
regulatory capital of the Bank (we refer to each such election
as a Tier 1 Qualification Election). The Bank may elect
this qualification only in increments of 10% of the liquidation
preference amount of the Class B Preferred Securities. This
means that the first such election may relate to 10%, 20%, 30%,
40%, 50%, 60%, 70%, 80%, 90% or 100% of the liquidation
preference amount of each and every Class B Preferred
Security and, to the extent that the first such election relates
to 90% or less of such liquidation preference amount, each
following election, if any, may relate to one or more of the
increments of 10% of the liquidation preference amount of the
Class B Preferred Securities with respect to which no
election was previously made. The Bank is under no obligation to
make any such election and, if it does choose to make any such
election and that election relates to less than 100% of the
aggregate liquidation preference amount of the Class B
Preferred Securities, it is under no obligation to make any
subsequent election to so qualify any additional percentage of
such liquidation preference amount. However, once the Bank has
elected to qualify any percentage of the liquidation preference
amount of the Class B Preferred Securities as
S-31
consolidated Tier 1 regulatory capital of the Bank, that
election cannot be reversed. Prior to the Issue Date, the Bank
has made a Tier 1 Qualification Election in respect of 100%
of the Outstanding Class B Preferred Securities. Therefore,
as of the Issue Date, any further Tier 1 Qualification
Election can only be made in respect of the Class B
Preferred Securities. On the Issue Date, the Bank will make a
Tier 1 Qualification Election in respect of 100% of the
Class B Preferred Securities.
Once a Tier 1 Qualification Election has been made, the
Trust Preferred Securities are reclassified to the same
extent and as of the same date as the Class B Preferred
Securities. The respective percentages of each Class B
Preferred Security for which the election has been made and has
not been made will not be separable at any time. The
corresponding respective percentages of each
Trust Preferred Security that is reclassified and not
reclassified will not be separable at any time. Each
Class B Preferred Security will at all times consist of a
single security with a liquidation preference amount of U.S.$25
and each Trust Preferred Security will at all times consist
of a single security with a liquidation preference amount of
U.S.$25. Accordingly, investors will not be able to choose the
extent to which Trust Preferred Securities they hold have
been subject to the election. The following paragraphs describe
in more detail the Banks right to make this election, the
applicable conditions and limitations and the effects of the
election on the Trust Preferred Securities.
Any and each notice by the Bank to the Company of its
Tier 1 Qualification Election with respect to a percentage
of the liquidation preference amount of the Class B
Preferred Securities must specify:
|
|
|
the percentage of the aggregate liquidation preference amount of
the Class B Preferred Securities to which such election
relates (such increment, expressed as a percentage, is referred
to as the Specified Increment) which percentage may only be 10%
or an integral multiple thereof (as described above), and
|
|
|
that the Bank is making the election permitted pursuant to the
LLC Agreement to subject the Specified Increment of each
Class B Preferred Security to those terms of the
Class B Preferred Securities described in Description
of the Company Securities Class B Preferred
Securities relating to Capital Payments and the other
matters described therein applicable to the aggregate of the
Specified Increments of each Class B Preferred Security
with respect to which Tier 1 Qualification Elections have
been made after giving effect to such election (expressed as a
percentage, referred to as the Tier 1 Percentage).
|
The Tier 1 Qualification Election will be effective as of
the first day of the Payment Period during which the Tier 1
Qualification Election occurred. Once the Tier 1
Qualification Election in respect of 100% of the Class B
Preferred Securities is made on the Issue Date, such Tier 1
Qualification Election will be effective as of the Issue Date.
The remaining percentage, if any, of the liquidation preference
amount of each Class B Preferred Security as to which no
Tier 1 Qualification Election has been made as of any time
is referred to as the Upper Tier 2 Percentage as of
such time.
The Company will give notice to the Trust pursuant to the
Trust Agreement immediately upon receipt from the Bank of
each Tier 1 Qualification Election. The Trust will give
notice to the registered holders of the Trust Preferred
Securities immediately upon receipt from the Company of each
such notice that the Bank has made a Tier 1 Qualification
Election, the Specified Increment to which that Tier 1
Qualification Election relates, that the Tier 1
Qualification Election is effective as of the first day of the
Payment Period during which that Tier 1 Qualification
Election occurred and the total Tier 1 Percentage
following that Tier 1 Qualification Election. The Bank may
not elect to revert to the terms in effect before the
Tier 1 Qualification Election or Elections relating to any
of the Tier 1 Percentage.
The effectiveness of each Tier 1 Qualification Election is
subject to the conditions that on the date of such Tier 1
Qualification Election (i) the BaFin has not applied for
the initiation of insolvency proceedings against Deutsche Bank
Aktiengesellschaft, (ii) Deutsche Bank Aktiengesellschaft
has not given notice to the BaFin that it is insolvent
(
zahlungsunfähig
) or overindebted
(
überschuldet
) within the meaning of
§ 46 b of
S-32
the German Banking Act (
Gesetz über das
Kreditwesen
), (iii) the BaFin (or any other relevant
regulatory authority) has not prohibited the Bank from making
such Tier 1 Qualification Election, and (iv) all
Arrears of Payments (as described below), if any, have been paid
or will be paid by or on the date of such Tier 1
Qualification Election.
If any of these conditions are not met with respect to any
Tier 1 Qualification Election, such Tier 1
Qualification Election will not occur and the Bank will be
deemed to have rescinded the related notice. In such case, the
Bank may make a Tier 1 Qualification Election at a later
date in compliance with the provisions summarized in the
preceding paragraphs. The Trust will notify the registered
holders of the Trust Preferred Securities of such deemed
recission and announce such recission by means of a publication
as described above.
Capital Payments
on the Upper Tier 2 Percentage
The following discussion applies to all Capital Payments in
respect of the Upper Tier 2 Percentage, if any, of the
Trust Preferred Securities for all relevant Payment
Periods. Upon their issuance, the Upper
Tier 2 Percentage in respect of the
Trust Preferred Securities will be 100%. On the Issue Date,
the Bank will make a Tier 1 Qualification Election in
respect of 100% of the Class B Preferred Securities,
whereupon the Trust Preferred Securities will be
reclassified to the same extent and as of the same date.
Accordingly, Capital Payments on 100% of the Trust Preferred
Securities will be noncumulative. Nonetheless, as the Bank has
no obligation to effect any Tier 1 Qualification Election,
these provisions may apply to some or all of the
Trust Preferred Securities for the life of the
Trust Preferred Securities.
The Trust will make Capital Payments on the Upper
Tier 2 Percentage of the Trust Preferred
Securities only when the Trust has available funds for that
purpose. Funds available to the Trust to make Capital Payments
on the Upper Tier 2 Percentage of the
Trust Preferred Securities are limited to Capital Payments
declared (or deemed declared) and made by the Company on the
Upper Tier 2 Percentage of the Class B Preferred
Securities and received by the Property Trustee as holder of the
Class B Preferred Securities. Capital Payments on the Upper
Tier 2 Percentage of the Class B Preferred
Securities will be made only when, as, and if declared, or
deemed declared, by the Companys Board of Directors.
Capital Payments on the Upper Tier 2 Percentage of the
Class B Preferred Securities can be paid only out of the
Companys Operating Profits. The Company will derive
Operating Profits only from payments made to the Company by the
Bank as obligor under the Initial Obligation.
If the Company does not declare (and is not deemed to have
declared) a Capital Payment on the Upper
Tier 2 Percentage of the Class B Preferred
Securities in respect of any Payment Period, the holder of the
Class B Preferred Securities will have no right to receive
a Capital Payment in respect of such Upper
Tier 2 Percentage for such Payment Period, and the
Company will have no obligation to pay a Capital Payment in
respect of such Upper Tier 2 Percentage for such
Payment Period, whether or not Capital Payments are declared (or
deemed to have been declared) and paid in respect of such Upper
Tier 2 Percentage for any future Payment Period. In
such a case, no Capital Payments will be made on the Upper
Tier 2 Percentage of the Trust Preferred
Securities in respect of such Payment Period; however, any such
Capital Payment or portion thereof accrued but not declared (or
deemed to have been declared) by the Company in respect of any
such Payment Period will be deferred as of the related Payment
Date.
If the Company declares (or is deemed to have declared) a
Capital Payment in respect of the Upper
Tier 2 Percentage for any Payment Period under
circumstances where the Distributable Profits of the Bank for
the most recent preceding fiscal year are insufficient to pay
such Capital Payment in full as well as capital payments,
dividends or other distributions or payments then due on Parity
Capital Securities, the respective Tier 1 Percentage
of the Class B Preferred Series Securities and
Preferred Tier 1 Capital Securities, payment of all or a
portion of such Capital Payment on the Upper
Tier 2 Percentage of the Class B Preferred
Securities (and, as a result thereof, a corresponding portion of
the Capital Payment then due on the Upper
Tier 2 Percentage of the Trust Preferred
Securities) will also be deferred as of the related Payment
Date. The portions of such Capital Payments that cannot be paid
and have been deferred in such
S-33
case, together with the portions of Capital Payments that were
not declared or deemed to have been declared in respect of such
Upper Tier 2 Percentage for any Payment Period and
therefore deferred, will be cumulative and will collectively
constitute Arrears of Payments with respect to the Upper
Tier 2 Percentage of the Class B Preferred
Securities and the Upper Tier 2 Percentage of the
Trust Preferred Securities, as applicable. Arrears of
Payments will not themselves bear interest.
The Company will pay outstanding Arrears of Payments on the
Upper Tier 2 Percentage of the Class B Preferred
Securities on the earliest of:
|
|
|
the first Payment Date after such deferral to the extent that
for the most recent preceding fiscal year for which audited
unconsolidated financial statements are available, the
Distributable Profits of the Bank are in an amount exceeding the
aggregate of:
|
|
|
|
|
|
Capital Payments on the Upper Tier 2 Percentage of the
Class B Preferred Securities due on such Payment Date;
|
|
|
|
capital payments, dividends or other distributions or payments
on Parity Capital Securities, if any, due in respect of such
fiscal year; and
|
|
|
|
Capital Payments on the respective Tier 1 Percentage
of the Class B Preferred Series Securities and capital
payments, dividends or other distributions or payments on the
Preferred Tier 1 Capital Securities, if any, due in respect
of such fiscal year,
|
in which case, such Arrears of Payments on the Upper
Tier 2 Percentage of the Class B Preferred
Securities and any Deferred Payments on Parity Capital
Securities will be paid
pro rata
on the basis of
Distributable Profits for such preceding fiscal year, with any
Arrears of Payments that cannot be repaid pursuant to the
foregoing on such Payment Date continuing to be deferred and to
constitute Arrears of Payments;
|
|
|
the date of any redemption of the Class B Preferred
Securities, in the full amount of outstanding Arrears of
Payments; and
|
|
|
the date on which an order is made for the winding up,
liquidation or dissolution of the Company or the Bank (other
than for the purposes of or pursuant to an amalgamation,
reorganization or restructuring while solvent, where the
continuing entity assumes substantially all of the assets and
obligations of the Company or the Bank, as the case may be), in
the full amount of outstanding Arrears of Payments.
|
No Tier 1 Qualification Election may be made or become
effective so long as Arrears of Payments remain outstanding and
unpaid.
If, as a result of the deferral of Capital Payments on the Upper
Tier 2 Percentage of the Class B Preferred
Securities, the Company receives payments of interest on the
Initial Obligation which exceed Capital Payments declared and
paid on the Upper Tier 2 Percentage of the
Class B Preferred Securities on the corresponding Payment
Date, such excess will be deposited into a deposit account with
the Bank bearing interest at a rate of 0.75% per annum pursuant
to the Subordinated Deposit Agreement. Any interest accumulating
in such deposit account will be payable to the holder of the
Company Common Security under the circumstances described
herein. The Subordinated Deposit Agreement provides that,
subject to the subordination provisions of the Subordinated
Deposit Agreement, the subordinated deposit outstanding under
the Subordinated Deposit Agreement will be terminated and such
deposit repaid to the Company at such time and to the extent as
the Company is required to pay Arrears of Payments. The
subordinated deposit outstanding at any time pursuant to the
Subordinated Deposit Agreement will be subordinated such that
the obligations of the Bank under the Subordinated Deposit
Agreement upon the bankruptcy, insolvency or liquidation of the
Bank will be (i) subordinated in right of payment to the
prior payment in full of all indebtedness and other liabilities
of the Bank to its creditors (including subordinated
liabilities), except those which by their terms rank on parity
with or are subordinated to the Banks obligations under
the Subordinated Deposit Agreement, (ii) on parity with the
most senior ranking preference shares of the Bank, if any and
any obligations or instruments of the Bank which by their terms
rank on parity with such preference shares, and
(iii) senior to the Junior Securities.
S-34
Capital Payments
on the Tier 1 Percentage
The following discussion applies to all Capital Payments in
respect of the Tier 1 Percentage for all Payment
Periods beginning, with respect to each Specified Increment
arising from a Tier 1 Qualification Election, with the
Payment Period during which the related Tier 1
Qualification Election occurred. As of the Issue Date, 100% of
the Outstanding Class B Preferred Securities, and
correspondingly 100% of the Outstanding Trust Preferred
Securities, has been elected to qualify as Tier 1
regulatory capital. Upon their initial issuance, the
Tier 1 Percentage in respect of the Class B
Preferred Securities and the Trust Preferred Securities
will be 0%. As the Bank is under no obligation to effect any
Tier 1 Qualification Election, these provisions may never
become effective with respect to any portion of the Class B
Preferred Securities and the Trust Preferred Securities.
Nonetheless, as of the Issue Date, the Bank will make a
Tier 1 Qualification Election in respect of 100% of the
Class B Preferred Securities. Upon such Tier 1
Qualification Election, 100% of the Class B Preferred
Securities, and correspondingly 100% of the Trust Preferred
Securities, will qualify as Tier 1 regulatory capital.
The Trust will make Capital Payments on the
Tier 1 Percentage of the Trust Preferred
Securities only when the Trust has available funds for that
purpose. Funds available to the Trust to make Capital Payments
on the Tier 1 Percentage of the Trust Preferred
Securities are limited to Capital Payments declared (or deemed
declared) and made by the Company on the
Tier 1 Percentage of the Class B Preferred
Securities and received by the Property Trustee as holder of the
Class B Preferred Securities. Capital Payments on the
Tier 1 Percentage of the Class B Preferred
Securities will be made only when, as, and if declared, or
deemed declared, by the Companys Board of Directors.
Capital Payments on the Tier 1 Percentage of the
Class B Preferred Securities can be paid only out of the
Companys Operating Profits. The Company will derive
Operating Profits only from payments made to the Company by the
Bank as obligor under the Initial Obligations.
The Company is authorized to declare Capital Payments on the
Tier 1 Percentage of the Class B Preferred
Securities and pay declared Capital Payments on the
Tier 1 Percentage of the Class B Preferred
Securities on any Payment Date on and after the Payment Date
relating to the Payment Period during which the respective
Tier 1 Qualification Election, if any, occurred, only to
the extent that:
|
|
|
the Company has an amount of Operating Profits for the related
Payment Period ending on the day immediately preceding such
Payment Date at least equal to the amount of all Capital
Payments on the Class B Preferred Series for the related
Payment Period; and
|
|
|
the Bank has an amount of Distributable Profits for the
preceding fiscal year for which audited unconsolidated financial
statements are available at least equal to the aggregate amount
of such Capital Payments on the Class B Preferred Series
and capital payments or dividends or other distributions payable
on Preferred Tier 1 Securities, if any,
pro rata
on
the basis of such Distributable Profits.
|
In determining the availability of sufficient Distributable
Profits of the Bank related to any fiscal year to permit Capital
Payments to be declared with respect to the
Tier 1 Percentage of the Class B Preferred
Securities, any Capital Payments already paid on the respective
Tier 1 Percentage of the Class B Preferred
Series Securities and any capital payments, dividend or
other distributions already paid during the succeeding fiscal
year of the Bank on Preferred Tier 1 Securities, if any, on
the basis of such Distributable Profits for such fiscal year,
will be deducted from such Distributable Profits.
Under certain circumstances described herein, the Company may be
deemed to have declared full or partial Capital Payments on the
Tier 1 Percentage of the Class B Preferred
Securities. See Description of the Company
Securities Class B Preferred
Securities Stated Rate and Capital Payment
Dates.
Even if the Company has sufficient Operating Profits and the
Bank has sufficient Distributable Profits, the Company will be
prohibited from making Capital Payments on the Class B
Preferred Securities any time an order from the BaFin (or any
other relevant regulatory authority) prohibits the Bank from
making any distributions of profits.
S-35
Capital Payments on the Tier 1 Percentage of the
Class B Preferred Securities in respect of any Payment
Period from and after the Payment Period during which the
respective Tier 1 Qualification Elections occurred, as a
result of which each portion of the Tier 1 Percentage
first qualified as such, are noncumulative. That means that the
Company will have no obligation to make up, and the Property
Trustee as holder of the Class B Preferred Securities will
have no right to receive, at any time, any Capital Payments on
the Tier 1 Percentage of the Class B Preferred
Securities or portions thereof which have not been paid in full
by the Company on any Payment Date, be it as a result of
insufficient Operating Profits of the Company, insufficient
Distributable Profits of the Bank, an order of the BaFin or
otherwise. In such a case, consequently no Capital Payments will
be made on the Tier 1 Percentage of the
Trust Preferred Securities in respect of such Payment
Period.
The Capital Payments on the Tier 1 Percentage of the
Trust Preferred Securities in respect of any Payment
Periods from and after the Payment Period during which the
respective Tier 1 Qualification Elections occurred, as a
result of which each portion of the Tier 1 Percentage
first qualified as such, are also noncumulative. As a result, if
a Capital Payment on the Tier 1 Percentage of the
Trust Preferred Securities is not made or only made
partially on any Payment Date because the Trust has insufficient
funds with respect to that Payment Date, investors will not be
entitled to receive that Capital Payment or unpaid portion
thereof, whether or not Capital Payments are made on the
Tier 1 Percentage of the Trust Preferred
Securities on any other Payment Date.
Record Dates for
Capital Payments
Each Capital Payment on the Trust Preferred Securities will
be payable to the holders of record of the Trust Preferred
Securities as they appear on the books and records of the Trust
on the corresponding record date. The record dates for the
Trust Preferred Securities will be
|
|
|
so long as the Trust Preferred Securities remain in
book-entry form, the end of business on the Business Day
immediately preceding the relevant Payment Date, and
|
|
|
in all other cases, the end of business of the
15th Business Day prior to the relevant Payment Date.
|
Capital Payments on the Trust Preferred Securities will be
paid through or by the order of the Property Trustee, who will
hold amounts received in respect of the Class B Preferred
Securities in the Property Account for the benefit of the
holders of the Trust Preferred Securities. Each payment
will be made as described in Form, Book-Entry
Procedures and Transfer.
Except as described under Subordination of the
Trust Common Security below, all Capital Payments and
other payments to holders of the Trust Securities will be
distributed among holders of record
pro rata,
based on
the liquidation preference amount and the liquidation thereof.
Payments of
Additional Amounts
All Capital Payments (and Arrears of Payments, if any) on the
Trust Preferred Series made by the Trust, and any amount
payable in liquidation or upon redemption thereof, will be made
without any withholding or deduction for or on account of
Withholding Taxes unless such deduction or withholding is
required by law. In such event, the Trust will pay, as
additional Capital Payments (or additional Arrears of Payments,
as the case may be), such Additional Amounts as may be necessary
in order that the net amounts received by the holders of the
Trust Preferred Series Securities, after such
deduction or withholding for or on account of Withholding Taxes,
will equal the amounts that otherwise would have been received
in respect of the Trust Preferred Series Securities
had no such deduction or withholding been required. However, no
such Additional Amounts will be payable in respect of the
Trust Preferred Series Securities:
|
|
|
in respect of each portion of the Upper
Tier 2 Percentage of the Trust Preferred
Securities for Payment Periods ending prior to the Payment
Period during which the respective Tier 1 Qualification
Election, if any, occurred, with respect to such portions, if
and to the extent that the Company is unable to pay
corresponding amounts in respect of the Upper
Tier 2 Percentage of the Class B Preferred
Securities
|
S-36
|
|
|
because such payment would exceed the Distributable Profits of
the Bank for the fiscal year in respect of which the relevant
Capital Payments are payable (after subtracting from such
Distributable Profits the amount of the Capital Payments on the
Upper Tier 2 Percentage of the Class B Preferred
Securities and dividends or other distributions or payments on
Parity Capital Securities, the respective Tier 1 Percentage
of Trust Preferred Series Securities and Preferred
Tier 1 Capital Securities, if any, already paid on the
basis of such Distributable Profits on or prior to the date on
which such Additional Amounts will be payable), in which case
such Additional Amounts will be deferred and will thereupon
constitute Arrears of Payments;
|
|
|
|
in respect of each portion of the respective
Tier 1 Percentage of the Trust Preferred
Series Securities for Payment Periods from and after the
Payment Period during which the respective Tier 1
Qualification Election, if any, occurred, with respect to such
portions, if and to the extent that the Company is unauthorized
to pay corresponding amounts in respect of the respective
Tier 1 Percentage of the Class B Preferred
Series Securities because of insufficient Distributable
Profits of the Bank for the preceding fiscal year (after
subtracting from such Distributable Profits the amounts of
Capital Payments on the respective Tier 1 Percentage
of the Class B Preferred Series Securities and
dividends or other distributions or payments on Preferred
Tier 1 Securities, if any, already paid on the basis of
such Distributable Profits on or prior to the date on which such
Additional Amounts will be payable);
|
|
|
with respect to any Withholding Taxes that are payable by reason
of a holder or beneficial owner of the Trust Preferred
Series Securities having some connection with any Relevant
Jurisdiction other than by reason only of the mere holding or
beneficial ownership of the Trust Preferred
Series Securities;
|
|
|
with respect to any Withholding Taxes which are deducted or
withheld pursuant to (i) European Council Directive
2003/48/EC or any other European Union Directive or Regulation
implementing the conclusions of the ECOFIN Council meeting of
26-27 November
2000 on the taxation of savings income, or (ii) any
international treaty or understanding entered into for the
purpose of facilitating cooperation in the reporting and
collection of savings income and to which (x) the United
States, and (y) the European Union or Germany are parties,
or (iii) any provision of law implementing, or complying
with, or introduced to conform with, such Directive, Regulation,
treaty or understanding; or
|
|
|
to the extent such deduction or withholding can be avoided or
reduced if the holder or beneficial owner of the
Trust Preferred Series Securities makes a declaration
of non-residence or other similar claim for exemption to the
relevant tax authority or complies with any reasonable
certification, documentation, information or other reporting
requirement imposed by the relevant tax authority; provided,
however, that the exclusion in this clause will not apply if the
certification, information, documentation or other reporting
requirement would be materially more onerous (in form, procedure
or substance of information required to be disclosed) to the
holder or beneficial owner of Trust Preferred
Series Securities than comparable information or other
reporting requirements imposed under U.S. tax law,
regulation and administrative practice (such as IRS
Forms W-8
and
W-9).
|
Unless expressly excluded or the context requiring otherwise,
references to the payment of Capital Payments include any
Additional Amounts payable thereon.
Enforcement
Events
If, at any time, any of the following occurs (which we refer to
as a Trust Enforcement Event):
|
|
|
non-payment of Capital Payments (plus any Additional Amounts
thereon, if any) on the Trust Preferred Series or non-payment of
Capital Payments (plus any Additional Amounts thereon, if any)
on the Class B Preferred Series, in each case at the Stated
Rate in full, for four consecutive Payment Periods;
|
|
|
a default by the Guarantor in respect of any of its payment
obligations under the Trust Preferred Guarantee or in respect of
any of its payment obligations under the Class B Preferred
Guarantee; or
|
|
|
a default by the Guarantor in the performance of any other
obligation under the Trust Preferred Guarantee or the
Class B Preferred Guarantee, which default continues for
60 days after the
|
S-37
|
|
|
Trust Preferred Guarantee Trustee or Class B Preferred
Guarantee Trustee, as applicable, has given notice thereof to
the Guarantor;
|
then the Property Trustee will have the right to enforce its
rights as holder of the Class B Preferred Series, for the
benefit of holders of the Trust Securities, including the
rights of the holders of Class B Preferred
Series Securities to receive Capital Payments (only if and
to the extent declared or deemed declared) on the Class B
Preferred Series.
Holders of more than 50% in liquidation preference amount of the
Trust Preferred Series (excluding Trust Preferred
Series Securities held by the Bank or its Affiliates) have
the right to direct the time, method and place of any
enforcement action by the Property Trustee.
See also Description of the Company Securities
Class B Preferred Securities Voting and
Enforcement Rights.
Redemption
The Class B Preferred Securities and the
Trust Preferred Securities do not have a scheduled maturity
date and will not be redeemable at any time at the option of the
holders thereof.
However, the Company, at its option, may under certain
circumstances redeem the Class B Preferred Series in whole
but not in part and if the Class B Preferred Series is
redeemed for any reason, the Trust must redeem the
Trust Preferred Series in whole but not in part. The Trust
will do so, simultaneously with the redemption of the
Class B Preferred Series, by applying the redemption price
received in connection therewith to redeem the
Trust Preferred Series. Any Class B Preferred
Series Securities or Trust Preferred
Series Securities that are redeemed will be cancelled, and
not reissued, following their redemption.
See Description of the Company Securities
Class B Preferred Securities Redemption of the
Class B Preferred Securities for a description of
when and under what circumstances the Class B Preferred
Series may be and consequently the
Trust Preferred Series will be redeemed.
The Trust Agreement requires the Property Trustee to give
prompt notice to the holders of the Trust Preferred
Series Securities of the Companys intention to redeem
the Class B Preferred Series. The Trust will be required to
give an irrevocable notice of redemption of the
Trust Preferred Securities, specifying the date of
redemption, at least 30 days prior to such date to the
holders of the Trust Preferred Securities.
In addition the Trust Preferred Series will no longer be
deemed outstanding if, at any time, the Trust is dissolved or
liquidated for any reason (including the occurrence of a
Trust Special Redemption Event) and its assets are set
to be distributed. After the satisfaction of any creditors of
the Trust, if any, Class B Preferred Series Securities
will be distributed on a
pro rata
basis to you, the
holders of the other Trust Preferred Series Securities
and the holder of the Trust Common Security as the
liquidation distribution of your interest in the Trust. In such
event the certificates representing Trust Securities will
be deemed to represent Class B Preferred
Series Securities having an equal liquidation preference
amount and bearing equivalent accumulated and unpaid Capital
Payments as the Trust Securities so redeemed.
See Liquidation Distribution upon
Dissolution below for further information.
If the Class B Preferred Series Securities are
distributed to the holders of the Trust Preferred
Series Securities, the Bank will use commercially
reasonable efforts to make the Class B Preferred
Series Securities eligible for clearing and settlement
through DTC or a successor clearing agent and to be listed on
the New York Stock Exchange or such other securities exchange or
similar organization as the Trust Preferred
Series Securities are then listed or quoted.
No vote or consent of the holders of the Trust Securities
will be required for the Trust to redeem and cancel
Trust Securities or distribute Class B Preferred
Series Securities in accordance with the
Trust Agreement.
S-38
Subordination of
the Trust Common Security
Capital Payments and other distributions, including upon
redemption of the Trust Securities or liquidation of the
Trust, made out of funds received by the Trust from the Company
with respect to the Class B Preferred
Series Securities or from the Bank under the
Trust Preferred Guarantee will generally be made
pro
rata
among the Trust Preferred Series Securities
and the Trust Common Security based on the liquidation
preference amount and the liquidation amount thereof. However,
during the continuance of a failure to pay interest or
additional interest amounts, if any, under the Initial
Obligations or the Substitute Obligations or a failure by the
Bank to perform any obligation under the Guarantees, no payment
of Capital Payments or any other distributions of amounts,
including upon redemption or liquidation of the Trust, will be
made to the holder of the Trust Common Security, unless
payment in full in cash of all accumulated and unpaid Capital
Payments on and amounts on redemption of the
Trust Preferred Series Securities have been made or
provided for.
If a Trust Enforcement Event has occurred and is
continuing, only the holders of Trust Preferred
Series Securities will have the right to direct the
Property Trustees actions.
Liquidation
Distribution upon Dissolution
Pursuant to the Trust Agreement, the Trust will dissolve:
|
|
|
upon the bankruptcy, insolvency or dissolution of the Bank;
|
|
|
upon the dissolution of the Company;
|
|
|
upon the entry of a decree of a judicial dissolution of the
Company or the Trust;
|
|
|
upon the redemption of all of the Trust Securities; or
|
|
|
with the consent of the holders of a majority of the
Trust Securities, voting as a single class
|
In the event of any voluntary or involuntary liquidation,
dissolution, winding up or termination of the Trust (other than
following a redemption of the Class B Preferred
Securities), the holders of the Trust Securities will be
entitled to receive the Class B Preferred
Series Securities. See also
Redemption above. The rights of
the holder of the Trust Common Security under the
Class B Preferred Series Securities received by such
holder upon liquidation of the Trust to any amounts payable on
the Class B Preferred Series Securities (including
pursuant to the Class B Preferred Guarantee) will be
subordinated to rights of the Holders of the
Trust Preferred Series Securities under Class B
Preferred Series Securities received by such holders upon
liquidation of the Trust.
The Regular Trustees, after consultation with DTC and the
Property Trustee will, within 90 days after a
Trust Special Redemption Event has occurred and is
continuing, dissolve the Trust upon no less than 30 and no more
than 60 days notice to the holders of the
Trust Securities, unless the Trust Special
Redemption Event can be eliminated within that
90-day
period by the Trust taking some ministerial action which in the
sole judgment of the Bank will cause no adverse effect on the
Company, the Trust, the Bank or the holders or beneficial owners
of the Trust Securities and will involve no material costs,
in which case the Trust will pursue any such measure in lieu of
dissolution.
Voting
Rights
Except as expressly required by applicable law or provided for
in the Trust Agreement or the LLC Agreement, the holders of
the Trust Preferred Series Securities will not be
entitled to vote on the affairs of the Trust.
So long as the Trust holds any Class B Preferred
Series Securities, the holders of a majority in liquidation
preference amount of the Trust Preferred
Series Securities will have the right to direct the
Property Trustee to enforce the voting rights attributable to
such Class B Preferred Series Securities. These voting
S-39
rights may be waived by the holders of the Trust Preferred
Series Securities by written notice to the Property Trustee.
The holders of a majority in aggregate liquidation preference
amount of the outstanding Trust Preferred
Series Securities have the right to direct the Property
Trustee with respect to available remedies and the exercise of
any trust or power conferred upon the Property Trustee under the
Trust Agreement, including with respect to the Property
Trustees right, as holder of the Class B Preferred
Series, to (i) exercise the remedies available to it under
the LLC Agreement, and (ii) consent to any amendment,
modification or termination of the LLC Agreement or the
Class B Preferred Series Securities where such consent
will be required. Where the LLC Agreement requires the consent
or act of the holders of more than 50% of the liquidation
preference amount of the Class B Preferred
Series Securities affected thereby, only holders of at
least the same percentage of the aggregate liquidation
preference amount of the Trust Preferred
Series Securities may direct the Property Trustee to give
such consent or take such action on behalf of the Trust. See
Description of the Company Securities
Class B Preferred Securities Voting and
Enforcement Rights. The Property Trustee will be under no
obligation to take any of the actions described in
clause (i) or (ii) above unless the Property Trustee
has obtained an opinion of independent tax counsel to the effect
that following such action, the Trust will be classified as a
grantor trust for U.S. federal income tax purposes and each
holder of the Trust Securities will continue to be treated
as owning an undivided beneficial ownership interest in the
Trust Estate.
The holders of Trust Preferred Series Securities may
give any required vote at a separate meeting of holders of the
Trust Preferred Series Securities convened for such
purpose, at a meeting of all of the holders of the
Trust Securities or pursuant to a written consent. The
Regular Trustees will cause a notice of any meeting at which
holders of the Trust Preferred Series Securities are
entitled to vote, or of any matter upon which action may be
taken by written consent of such holders, to be given to the
holders of the Trust Preferred Series Securities.
For purposes of any vote of Trust Preferred
Series Securities, any Trust Preferred
Series Securities that are beneficially owned at such time
by the Bank or any affiliate of the Bank, either directly or
indirectly, will not be entitled to vote or consent and will,
for purposes of such vote or consent, be treated as not
outstanding, except for the Trust Preferred
Series Securities purchased or acquired by the Bank or its
affiliates in connection with transactions effected by or for
the account of customers of the Bank or any of its affiliates or
in connection with trading or market-making activities in the
ordinary course of business. Persons (other than affiliates of
the Bank) to whom the Bank or any of its affiliates have pledged
Trust Preferred Series Securities may vote or consent
with respect to such pledged Trust Preferred
Series Securities pursuant to the terms of such pledge.
The procedures by which holders of the Trust Preferred
Series Securities represented by the Global Certificates
may exercise their voting rights are described below. See
Form, Book-Entry Procedures and Transfer.
Holders of the Trust Preferred Series Securities will
have no rights to appoint or remove the Regular Trustees, who
may be appointed, removed or replaced solely by the Bank, as the
holder of the Trust Common Security.
Merger,
Consolidation or Amalgamation of the Trust
The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to, any corporation or
other entity, except with the consent of a majority of the
Regular Trustees (but without the consent of the holders of the
Trust Securities, the Property Trustee or the Delaware
Trustee), with a trust organized as such under the laws of any
State of the United States, provided that:
|
|
|
if the Trust is not the survivor, the successor entity either
(i) expressly assumes all of the obligations of the Trust
to the holders of the Trust Securities or
(ii) substitutes for the Trust Securities other
securities having substantially the same terms as the Trust
Securities (referred to as the Successor Trust Securities),
so long
|
S-40
|
|
|
as the Successor Trust Securities rank the same as the
Trust Securities rank with respect to Capital Payments,
distributions and rights upon liquidation, redemption or
otherwise;
|
|
|
|
the Company expressly acknowledges a trustee of such successor
entity possessing the same powers and duties as the Property
Trustee as the holder of the Class B Preferred Series;
|
|
|
such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences, privileges or tax
treatment of the holders of the Trust Preferred Series
Securities (including any Successor Trust Securities) in
any material respect;
|
|
|
such successor entity has purposes substantially identical to
that of the Trust;
|
|
|
such successor entity will be classified as a grantor trust for
United States federal income tax purposes;
|
|
|
the Guarantor guarantees the obligations of such successor
entity under the Successor Trust Securities to the same extent
as provided under the Trust Preferred Guarantee;
|
|
|
prior to such merger, consolidation, amalgamation or
replacement, the Bank has received an opinion of a nationally
recognized law firm experienced in such matters as described in
the Trust Agreement; and
|
|
|
such merger, consolidation, amalgamation or replacement does not
otherwise result in a Trust Special Redemption Event
and/or
Company Special Redemption Event.
|
Modification of
the Trust Agreement
The Trust Agreement may be modified and amended only with
the approval of a majority of the Regular Trustees (and in
certain circumstances the Property Trustee and the Delaware
Trustee).
In addition, any amendment that would
|
|
|
materially adversely affect the powers, preferences or special
rights of the Trust Securities; or
|
|
|
provide for the dissolution, winding up or termination of the
Trust other than pursuant to the terms of the
Trust Agreement,
|
requires the approval of the holders of not less than a majority
in liquidation preference amount of the Trust Securities
affected thereby, voting together as a single class. If any
amendment would materially adversely affect only the
Trust Preferred Series Securities or the
Trust Common Security, then such amendment only requires
the approval of the holders of a majority in the liquidation
amount of the respective affected class.
The Trust Agreement may be amended without the consent of
the holders of the Trust Securities to
|
|
|
cure any ambiguity,
|
|
|
correct or supplement any provision in the Trust Agreement
that may be defective or inconsistent with any other provision
of the Trust Agreement,
|
|
|
add to the covenants, restrictions or obligations of the Bank,
|
|
|
conform to any change in the 1940 Act or the
Trust Indenture Act, or written change in interpretation or
application of the rules or regulations promulgated thereunder
by any legislative body, court, government agency or regulatory
authority, or
|
|
|
modify, eliminate and add to any provision of the
Trust Agreement to such extent as may be necessary or
desirable;
|
provided, that no such amendment will have a material adverse
effect on the rights, preferences or privileges of the holders
of the Trust Securities.
S-41
Modifications to certain provisions of the Trust Agreement
require the consent of all holders of the Trust Securities.
Notwithstanding the foregoing, no amendment or modification may
be made to the Trust Agreement if such amendment or
modification would
|
|
|
cause the Trust to fail to be classified as a grantor trust for
United States federal income tax purposes,
|
|
|
cause the Company to be classified as an association or publicly
traded partnership taxable as a corporation for United States
federal income tax purposes,
|
|
|
reduce or otherwise adversely affect the powers of the Property
Trustee, or
|
|
|
cause the Trust or the Company to be required to register under
the 1940 Act.
|
Form, Book-Entry
Procedures and Transfer
The Trust Preferred Securities will be issued in fully
registered form, without coupons, in denominations of $25
liquidation preference amount (or integral multiples of $25).
Trust Preferred Securities will be represented by one or
more certificates in registered, global form (collectively
referred to as the Global Certificates). The Global Certificates
will be deposited upon issuance with the custodian for DTC, in
New York, New York and registered in the name of DTC or its
nominee, in each case for credit to an account of a direct or
indirect participant in DTC as described below.
The Trust Preferred Securities will be accepted for
clearance by DTC, Euroclear and Clearstream as a fully fungible
class of securities together with the Outstanding
Trust Preferred Securities. Beneficial interest in the
Trust Preferred Securities will be shown on, and transfers
will be effected only through, the book-entry records maintained
by DTC and its direct and indirect participants, including
Euroclear and Clearstream. Clearstream is incorporated under the
laws of Luxembourg as a professional depositary, subject to
regulation by the Luxembourg Monetary Institute. The Euroclear
System is owned by Euroclear Clearance System Public Limited
Company and operated through a license agreement with Euroclear
Bank S.A./N.V., a bank incorporated under the laws of the
Kingdom of Belgium.
Except as set forth below, the Global Certificates may not be
transferred except by DTC in whole and not in part and only to
another nominee of DTC or to a successor of DTC or its nominee.
Beneficial interests in the Global Certificates may not be
exchanged for Trust Preferred Securities in certificated
form except in the limited circumstances described below. See
Exchange of Book-Entry Securities for
Certificated Securities.
In addition, transfer of beneficial interests in the Global
Certificates will be subject to the applicable rules and
procedures of DTC and its direct or indirect participants,
including Euroclear and Clearstream, which may change from time
to time.
Depositary
Procedures
DTC has advised the Company and the Trust that DTC is a
limited-purpose trust company created to hold securities for its
participating organizations (collectively referred to as the
Participants) and to facilitate the clearance and settlement of
transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants.
The Participants include securities brokers and dealers
(including the underwriter), banks, trust companies, clearing
corporations and certain other organizations. Access to
DTCs system is also available to other entities such as
banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Participant, either
directly or indirectly (collectively referred to as the Indirect
Participants). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the
Participants or the Indirect Participants. The ownership
interest and transfer of ownership interest of each actual
purchaser of each security held by or on behalf of DTC are
recorded on the records of the Participants and Indirect
Participants.
S-42
DTC has also advised the Trust and the Company that, pursuant to
procedures established by it, (i) upon deposit of the
Global Certificates, DTC will credit the accounts of
Participants designated by the underwriter with portions of the
principal amount of the Global Certificates and
(ii) ownership of such interests in the Global Certificates
will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect
to the Participants) or by the Participants and the Indirect
Participants (with respect to other owners of beneficial
interests in the Global Certificates).
Investors in the Global Certificates must hold their interest
therein directly through DTC if they are Participants in such
system, or indirectly through organizations which are
Participants in such system. The laws of some states require
that certain persons take physical delivery in certificated form
of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Certificate to such
persons will be limited to that extent. Because DTC can act only
on behalf of Participants, which in turn act on behalf of
Indirect Participants and certain banks, the ability of a person
having beneficial interests in a Global Certificate to pledge
such interests to persons or entities that do not participate in
the DTC system, or otherwise take actions in respect of such
interests, may be affected by the lack of a physical certificate
evidencing such interests. For certain other restrictions on the
transferability of the Trust Preferred Securities, see
Exchange of Book-Entry Securities for
Certificated Securities.
Except as described below, owners of interests in the Global
Certificates will not have Trust Preferred Securities
registered in their name, will not receive physical delivery of
the Trust Preferred Securities in certificated form and
will not be considered the registered owners or holders thereof
for any purpose.
The Trust will make payments in respect of the Global
Certificates registered in the name of DTC or its nominee to DTC
or its nominee in its capacity as the registered holder. The
Trust will treat the persons in whose names Trust Preferred
Securities, including the Global Certificates, are registered as
the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently,
neither the Bank, the Trust, the Company, nor any agent thereof
has or will have any responsibility or liability for
(i) any aspect of DTCs records or any
Participants or Indirect Participants records
relating to or payments made on account of beneficial ownership
interests in the Global Certificates, or for maintaining,
supervising or reviewing any of DTCs records or any
Participants or Indirect Participants records
relating to the beneficial ownership interests in the Global
Certificates or (ii) any other matter relating to the
actions and practices of DTC or any of its Participants or
Indirect Participants. DTC has advised the Trust and the Company
that its current practice, upon receipt of any payment in
respect of securities such as the Trust Preferred
Securities, is to credit the accounts of the relevant
Participants with the payment on the payment date unless DTC has
reason to believe it will not receive payment on such payment
date. Payments by the Participants and the Indirect Participants
to the beneficial owners of the Trust Preferred Securities
will be governed by standing instructions and customary
practices and will be the responsibility of the Participants or
the Indirect Participants and will not be the responsibility of
DTC, the Bank, the Trust or the Company. The Bank, the Trust and
the Company and any paying agent, if any, may conclusively rely
on and will be protected in relying on instructions from DTC or
its nominee for all purposes.
DTC, Clearstream and Euroclear have no knowledge of the actual
beneficial owners of interests in a Global Certificate
representing Trust Preferred Securities. DTCs records
reflect only the identity of the DTC Participants, including
Clearstream and Euroclear, to whose accounts those
Trust Preferred Securities are credited, which may or may
not be the beneficial owners of interests in such Global
Certificate. Similarly, records of Clearstream and Euroclear
reflect only the identity of the Clearstream or Euroclear
participants to whose accounts those Trust Preferred
Securities are credited, which may or may not be the beneficial
owners of interest in such Global Certificate. DTC, Clearstream
and Euroclear Participants and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of
their customers.
Interests in the Global Certificates will trade in DTCs
settlement system and secondary market trading activity in such
interests will therefore settle in immediately available funds,
subject in all cases to the rules and procedures of DTC and its
Participants. Transfers between Participants in DTC will be
effected in accordance with DTCs procedures and will be
settled in
same-day
funds. Cross market transfers
S-43
between persons holding directly or indirectly through DTC, on
the one hand, and directly or indirectly through Clearstream or
Euroclear participants, on the other, will be effected in DTC in
accordance with the rules of DTC on behalf of the relevant
European international clearing system by the relevant European
depositary. However, those cross-market transactions will
require delivery of instructions to the relevant European
international clearing system by the counterparty in that system
in accordance with its rules and procedures and within its
established deadlines, European time. The relevant European
international clearing system will, if the transaction meets its
settlement requirements deliver instructions to the relevant
European depositary to take action to effect final settlement on
its behalf by delivering or receiving securities in DTC, and
making or receiving payment in accordance with normal procedures
for
same-day
funds settlement applicable to DTC. Clearstream and Euroclear
participants may not deliver instructions directly to the
European depositaries. Because of time zone differences, credits
of Trust Preferred Securities received in Clearstream or
Euroclear as a result of a transaction with a person that does
not hold Trust Preferred Securities through Clearstream or
Euroclear will be made during subsequent securities settlement
processing and dated the business day following the DTC
settlement date. Those credits or any transactions in those
securities settled during that processing will be reported to
the relevant Euroclear or Clearstream participants on that
business day. Cash received in Clearstream or Euroclear as a
result of sales of Trust Preferred Securities by or through
a Clearstream or Euroclear participant to a DTC participant will
be received with value on the DTC settlement date, but will be
available in the relevant Clearstream or Euroclear cash account
only as of the business day following settlement in DTC.
DTC has advised the Company and the Trust that it will take any
action permitted to be taken by a holder of the
Trust Preferred Securities only at the direction of one or
more Participants to whose account with DTC interests in the
Global Certificates are credited.
The information contained herein concerning DTC and its
book-entry system has been obtained from sources that the
Company and the Trust believe to be reliable but neither the
Company nor the Trust takes any responsibility for the accuracy
thereof.
Although DTC has agreed to the foregoing procedures to
facilitate transfers of interest in the Global Certificates
among participants in DTC, it is under no obligation to perform
or to continue to perform such procedures, and such procedures
may be discontinued at any time. Neither the Company, the Trust
nor the Bank will have any responsibility for the performance by
DTC or its respective Participants or Indirect Participants of
their respective obligations under the rules and procedures
governing their operations.
Exchange of
Book-Entry Securities for Certificated Securities
A Global Certificate is exchangeable for Trust Preferred
Securities in registered certificated form if DTC notifies the
Company that it is unwilling or unable to continue as depositary
for the Global Certificates (and the Trust and the Company
thereupon fail to appoint a successor depositary within
90 days) or it has ceased to be a clearing agency
registered under the Exchange Act. In all cases, certificated
Trust Preferred Securities delivered in exchange for any
Global Certificates or beneficial interests therein will be
registered in the names and issued in any approved
denominations, requested by or on behalf of the depositary (in
accordance with its customary procedures).
Registrar,
Transfer Agent and Paying Agent
Deutsche Bank Trust Company Americas will act as registrar,
transfer agent, authenticating agent and paying agent for the
Trust Preferred Securities. Registration of transfers of
the Trust Preferred Securities will be effected without
charge by or on behalf of the Trust, but the Trust or transfer
agent may require payment (and an indemnity) from any
transferring holder in respect of any tax or other government
charges which may be imposed in relation to it.
The Trust will not be required to register or cause to be
registered the transfer of the Trust Preferred Securities
after such Trust Preferred Securities have been called for
redemption.
S-44
Information
Concerning the Property Trustee
Unless a Trust Enforcement Event has occurred and is
continuing, the Property Trustee undertakes to perform only such
duties as are specifically set forth in the Trust Agreement
(and will be under no obligation to exercise any of the rights
or powers vested in it by the Trust Agreement at the
request or direction of any holder of the Trust Securities,
unless such holder has provided to the Property Trustee
reasonable security and indemnity), and no implied covenants
will be read into the Trust Agreement against the Property
Trustee. Upon the occurrence and continuance of a
Trust Enforcement Event known to the Property Trustee, the
Property Trustee will exercise the rights and powers vested in
it by the Trust Agreement, and use the same degree of care
and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or
her own affairs.
Governing
Law
The Trust Agreement and the Trust Securities is
governed by, and construed in accordance with, the laws of the
State of Delaware.
S-45
DESCRIPTION OF
THE COMPANY SECURITIES
The following, together with the Description of Capital
Securities Description of Company Preferred
Securities in the attached prospectus, describes the
material terms of the Class B Preferred Securities. If the
description of the Class B Preferred Securities in this
prospectus supplement differs in any way from the description in
the attached prospectus, you should rely on the description in
this prospectus supplement. The LLC Agreement is qualified as an
indenture under the Trust Indenture Act. The Bank of New
York Mellon (formerly known as The Bank of New York) acts as
manager trustee for purposes of the Trust Indenture Act.
You also should read the LLC Agreement, the LLC Act and the
Trust Indenture Act. We have filed with the SEC a form of
the LLC Agreement as an exhibit to the registration statement
pertaining to this prospectus supplement and the attached
prospectus.
The following description of the material terms of the
Class B Preferred Securities in this prospectus supplement
contains only a summary of their material terms and is not
complete and is qualified in its entirety by reference to the
terms and provisions of the LLC Agreement, the LLC Act and the
Trust Indenture Act. Upon the execution of the LLC
Agreement, the Company has issued limited liability company
interests consisting of the Company Common Security, the
Class A Preferred Security and the Outstanding Class B
Preferred Securities. The Company Common Security and the
Class A Preferred Security are owned initially directly by
the Bank. All of the Class B Preferred
Series Securities will be owned by the Trust. The Bank
undertakes to maintain direct or indirect ownership of the
Class A Preferred Security and the Company Common Security
so long as any Class B Preferred Series Securities
remain outstanding.
Company Common
Security
Subject to the limited rights of the holders of the Class B
Preferred Series Securities to appoint two independent
directors if for four consecutive Payment Periods Capital
Payments on the Class B Preferred Series at the Stated Rate
and any Additional Amounts in respect of such Capital Payments
have not been paid in full by the Company or by the Guarantor
under the Class B Preferred Guarantee, all voting rights
are vested in the Company Common Security. The Company Common
Security is currently, and upon consummation of the Initial
Offering has been, held by the Bank.
The ability of the Company to make any capital payments on the
Company Common Security will change to the extent the Bank has
made one or more Tier 1 Qualification Elections, as
described under Class B Preferred
Securities Tier 1 Qualification Election.
In any case, the Company may pay capital payments on the Company
Common Security only when, as and if declared by the Board of
Directors.
The Board of Directors will declare capital payments on the
Company Common Security:
|
|
|
with respect to the Upper Tier 2 Percentage of the
Class B Preferred Securities only to the extent the Board
of Directors does not declare Capital Payments on the Upper
Tier 2 Percentage of the Class B Preferred
Securities at the Stated Rate in full on any Payment Date. It is
expected that the holder of the Company Common Security will
receive Capital Payments relating to such Upper
Tier 2 Percentage of the Class B Preferred
Securities only to the extent that (i) Capital Payments are
not permitted to be declared on such Upper
Tier 2 Percentage on any Payment Date at the Stated
Rate in full due to an order of the BaFin (or any other relevant
regulatory authority) prohibiting the Bank from making any
distribution of profits, (ii) a declared or deemed declared
Capital Payment on the Class B Preferred Series does not
become an Arrears of Payments pursuant to the provisions
governing Capital Payments on the Upper
Tier 2 Percentage of the Class B Preferred
Securities, and (iii) the Company has sufficient Operating
Profits. Notwithstanding the foregoing, on each Payment Date,
the holder of the Company Common Security will also be entitled
to receive a distribution corresponding to the amount of any
interest accrued on amounts deposited with the Bank under the
Subordinated Deposit Agreement (described below), to the extent
the Company has sufficient Operating Profits for such
distribution.
|
S-46
|
|
|
with respect to the respective Tier 1 Percentage of
the Class B Preferred Series Securities, only if all
Capital Payments on the respective Tier 1 Percentage
of the Class B Preferred Series Securities, if any, in
respect of the relevant Payment Period have been declared and
paid at the Stated Rate in full.
|
Subject to the above, the Company does not expect to pay any
capital payments on the Company Common Security.
The payment of capital payments on the Company Common Security
is not a condition to the payment of Capital Payments on the
Class B Preferred Series.
In the event of the voluntary or involuntary liquidation,
dissolution or winding up of the Company, after satisfaction of
any creditors of the Company, if any, and after the applicable
liquidation preference amount has been paid or a sufficient
amount has been set aside for payment to the holders of all
Company Preferred Securities, the holder of the Company Common
Security will be entitled to any remaining assets.
Class A
Preferred Security
The Company has previously issued a class of noncumulative,
non-redeemable preferred security designated as the Class A
Preferred Security with a liquidation preference amount of $25
and sold that Class A Preferred Security to Deutsche Bank
AG. The Class A securityholder is entitled to receive
capital payments when, as and if declared by the Board of
Directors. The Board has discretion whether or not to declare
capital payments on the Class A Preferred Security. The
Board is only authorized to declare capital payments on the
Class A Preferred Security, and it is the Companys
intent that the holder of the Class A Preferred Security
will only receive capital payments in respect of periods
beginning on and after the date on which the
Tier 1 Percentage of the Class B Preferred
Securities exceeds zero, and then only to the extent that
(i) Capital Payments are not declared on the respective
Tier 1 Percentage of the Class B Preferred
Series Securities and paid at the Stated Rate in full on
any Payment Date, and (ii) the Company has sufficient
Operating Profits.
Subject to the above, the Company currently does not intend to
pay capital payments on the Class A Preferred Security.
The payment of capital payments on the Class A Preferred
Security is not a condition to the payment of Capital Payments
on the Class B Preferred Securities.
Upon the voluntary or involuntary liquidation, dissolution or
winding-up
of the Company, the Class A Preferred Security will rank
senior to the Class B Preferred Series in respect of the
right to receive payments out of the Obligations (including
accrued and unpaid interest thereon) as their liquidation
distribution but the Class A Preferred Securityholders will
not be entitled to share in any payments made by the Bank
pursuant to the Class B Preferred Guarantee or any other
assets. Any enforcement of, and payments made pursuant to, the
Class B Preferred Guarantee will be only for the benefit of
the holders of the Class B Preferred Series Securities.
Outstanding
Class B Preferred Securities
The Company has previously issued Outstanding Class B
Preferred Securities having the same terms and conditions as the
Class B Preferred Securities in all respects except for the
issue date, the date from which Capital Payments began to
accrue, the issue price and any other deviations required for
compliance with applicable law. The Class B Preferred
Securities will form a single series with the Outstanding
Class B Preferred Securities.
S-47
Class B
Preferred Securities
General
The Company will issue fully paid and nonassessable preferred
limited liability company interests in the Company designated as
the Class B Preferred Securities pursuant to the LLC
Agreement and sell them to the Trust.
The Class B Preferred Securities will not have any
scheduled maturity date, will not be redeemable at any time at
the option of the holders thereof, will not be convertible into
any other securities of the Company and will not be subject to
any sinking fund or other obligation of the Company for their
repurchase or redemption.
Stated Rate
and Capital Payment Dates
Capital Payments on the Class B Preferred Securities will
accrue at the fixed annual rate of 8.05% (which we also refer to
as the Stated Rate) on the liquidation preference amount of $25
per Class B Preferred Security.
Capital Payments on the Class B Preferred Securities when
declared (or deemed declared) will be paid quarterly in arrears
on March 30, June 30, September 30 and December 30 of
each year (which dates we refer to as Payment Dates), commencing
on June 30, 2010 to the Trust as holder of the Class B
Preferred Securities. The initial Payment Period will commence
on the Issue date.
Capital Payments payable on any Payment Date will accrue from
and including the immediately preceding Payment Date up to but
excluding the relevant Payment Date (we refer to each such
period as a Payment Period). For each Payment Period, Capital
Payments will be calculated on the basis of a
360-day
year
of twelve
30-day
months.
If any Payment Date is not a Business Day, payment of all
amounts otherwise payable on such Payment Date will be made on
the next succeeding Business Day, without adjustment, interest
or further payment as a result of such delay in payment.
Tier 1
Qualification Election
The LLC Agreement provides that the Bank may, at any time and on
one or more occasions before June 30, 2013, give notice
under the LLC Agreement to the Company that the Bank is making
an election to qualify a percentage of each and every
Class B Preferred Security as consolidated Tier 1
regulatory capital of the Bank (we refer to each such election
as a Tier 1 Qualification Election). The Bank may elect
this qualification only in increments of 10% of the liquidation
preference amount of the Class B Preferred Securities. This
means that the first such election may relate to 10%, 20%, 30%,
40%, 50%, 60%, 70%, 80%, 90% or 100% of the liquidation
preference amount of each and every Class B Preferred
Security and, to the extent that the first such election relates
to 90% or less of such liquidation preference amount, each
following election, if any, may relate to one or more of the
increments of 10% of the liquidation preference amount of the
Class B Preferred Securities with respect to which no
election was previously made. The Bank is under no obligation to
make any such election and, if it does choose to make any such
election and that election relates to less than 100% of the
aggregate liquidation preference amount of the Class B
Preferred Securities, it is under no obligation to make any
subsequent election to so qualify any additional percentage of
such liquidation preference amount. However, once the Bank has
elected to qualify any percentage of the liquidation preference
amount of the Class B Preferred Securities as consolidated
Tier 1 regulatory capital of the Bank, that election cannot
be reversed. Prior to the Issue Date, the Bank has made a
Tier 1 Qualification Election in respect of 100% of the
Outstanding Class B Preferred Securities. Therefore, as of
the Issue Date, any further Tier 1 Qualification Election
can only be made in respect of the Class B Preferred
Securities. On the Issue Date, the Bank will make a Tier 1
Qualification Election in respect of 100% of the Class B
Preferred Securities.
S-48
Once a Tier 1 Qualification Election has been made, the
Trust Preferred Securities are reclassified to the same
extent and as of the same date as the Class B Preferred
Securities. The respective percentages of each Class B
Preferred Security for which the election has been made and has
not been made will not be separable at any time. The
corresponding respective percentages of each
Trust Preferred Security that is reclassified and not
reclassified will not be separable at any time. Each
Class B Preferred Security will at all times consist of a
single security with a liquidation preference amount of U.S.$25
and each Trust Preferred Security will at all times consist
of single security with a liquidation preference amount of
U.S.$25. Accordingly, investors will not be able to choose the
extent to which Trust Preferred Securities they hold have
been subject to the election. The following paragraphs describe
in more detail the Banks right to make this election, the
applicable conditions and limitations and the effects of the
election on the Trust Preferred Securities.
Any and each notice by the Bank to the Company of its
Tier 1 Qualification Election with respect to a percentage
of the liquidation preference amount of the Class B
Preferred Securities must specify:
|
|
|
the percentage of the aggregate liquidation preference amount of
the Class B Preferred Securities to which such election
relates (such increment, expressed as a percentage, is referred
to as the Specified Increment) which percentage may only be 10%
or an integral multiple thereof (as described above), and
|
|
|
that the Bank is making the election permitted pursuant to the
LLC Agreement to subject the Specified Increment of each
Class B Preferred Security to those terms of the
Class B Preferred Securities described below relating to
Capital Payments and the other matters described therein
applicable to the aggregate of the Specified Increments of each
Class B Preferred Security with respect to which
Tier 1 Qualification Elections have been made after giving
effect to such election (expressed as a percentage, referred to
as the Tier 1 Percentage).
|
The Tier 1 Qualification Election will be effective as of
the first day of the Payment Period during which the Tier 1
Qualification Election occurred. Once the Tier 1
Qualification Election in respect of 100% of the Class B
Preferred Securities is made on the Issue Date, such Tier 1
Qualification Election will be effective as of the Issue Date.
The remaining percentage, if any, of the liquidation preference
amount of each Class B Preferred Security as to which no
Tier 1 Qualification Election has been made as of any time
is referred to as the Upper Tier 2 Percentage as of
such time.
The Bank may not elect to revert to the terms in effect before
the Tier 1 Qualification Election or Elections relating to
any of the Tier 1 Percentage of the Class B
Preferred Securities.
The effectiveness of each Tier 1 Qualification Election is
subject to the conditions that, on the date of such Tier 1
Qualification Election (i) the BaFin has not applied for
the initiation of insolvency proceedings against Deutsche Bank
Aktiengesellschaft, (ii) Deutsche Bank Aktiengesellschaft
has not given notice to the BaFin that it is insolvent
(
zahlungsunfähig
) or overindebted
(
überschuldet
) within the meaning of § 46b
of the German Banking Act (
Gesetz über das
Kreditwesen
), (iii) the BaFin (or any other relevant
regulatory authority) has not prohibited the Bank from making
such Tier 1 Qualification Election, and (iv) all
Arrears of Payments (as described below), if any, have been paid
or will be paid by or on the date of such Tier 1
Qualification Election.
If any of these conditions are not met with respect to any
Tier 1 Qualification Election, such Tier 1
Qualification Election will not occur and the Bank will be
deemed to have rescinded the related notice. In such case, the
Bank may make a Tier 1 Qualification Election at a later
date in compliance with the provisions summarized in the
preceding paragraphs.
Capital
Payments on the Upper Tier 2 Percentage
The following discussion applies to all Capital Payments in
respect of the Upper Tier 2 Percentage, if any, for
all relevant Payment Periods. Upon their issuance, the Upper
Tier 2 Percentage in respect of the Class B
Preferred Securities will be 100%. On the Issue Date, the Bank
will make a Tier 1
S-49
Qualification Election in respect of 100% of the Class B
Preferred Securities. Accordingly, Capital Payments on 100% of
the Class B Preferred Securities will be noncumulative.
Nonetheless, as the Bank has no obligation to effect any
Tier 1 Qualification Election, these provisions may apply
to some or all of the Class B Preferred Securities for the
life of the Class B Preferred Securities.
Capital Payments on the Upper Tier 2 Percentage of the
Class B Preferred Securities will be made only when, as and
if declared, or deemed declared, by the Companys Board of
Directors. Capital Payments on the Upper
Tier 2 Percentage of the Class B Preferred
Securities can be paid only out of the Companys Operating
Profits. The Company will derive Operating Profits only from
payments made to the Company by the Bank as obligor under the
Initial Obligations.
The Company is authorized to declare Capital Payments on the
Upper Tier 2 Percentage of the Class B Preferred
Securities and pay a declared (or deemed declared) Capital
Payment on the Upper Tier 2 Percentage of the
Class B Preferred Securities on any Payment Date only to
the extent that:
|
|
|
the Company has an amount of Operating Profits for the related
Payment Period ending on the day immediately preceding such
Payment Date at least equal to the amount of all Capital
Payments on the Class B Preferred Series for the related
Payment Period, and
|
|
|
the Bank has an amount of Distributable Profits for the
preceding fiscal year for which audited unconsolidated financial
statements are available at least equal to the aggregate amount
of such Capital Payments on the Class B Preferred Series,
and capital payments or dividend or other distributions payable
on Parity Capital Securities and Preferred Tier 1 Capital
Securities, if any,
pro rata
based on such Distributable
Profits.
|
If the amount of such Distributable Profits is insufficient to
pay all such amounts on the Upper Tier 2 Percentage of
the Class B Preferred Securities, the Parity Capital
Securities, the respective Tier 1 Percentage of the
Class B Preferred Series Securities and the Preferred
Tier 1 Capital Securities, the Company is nevertheless
authorized to declare Capital Payment on the Upper
Tier 2 Percentage of the Class B Preferred
Securities. In such case, however, the portion of such Capital
Payments on the Upper Tier 2 Percentage of the
Class B Preferred Securities that cannot be paid will be
deferred and will thereupon constitute Arrears of Payments (as
described below).
In determining the availability of sufficient Distributable
Profits of the Bank related to any fiscal year to permit Capital
Payments to be declared with respect to the Upper
Tier 2 Percentage of the Class B Preferred
Securities, any Capital Payments already paid on the Upper
Tier 2 Percentage of the Class B Preferred
Securities and on the respective Tier 1 Percentage of
the Class B Preferred Series Securities, and any
capital payments, dividend or other distributions already paid
during the succeeding fiscal year of the Bank on Parity Capital
Securities, and Preferred Tier 1 Capital Securities, if
any, on the basis of such Distributable Profits for such fiscal
year will be deducted from such Distributable Profits.
The Company may also be deemed to have declared a Capital
Payment on the Upper Tier 2 Percentage of the
Class B Preferred Securities in certain other
circumstances. If the Bank or any of its subsidiaries declares
or pays any dividends, distributions or other payments on
|
|
|
any Tier 2 Junior Securities (other than payments on
Tier 2 Junior Securities issued by wholly-owned
subsidiaries of the Bank, when such Tier 2 Junior
Securities are held exclusively by the Bank or by any of its
other wholly-owned subsidiaries), then the Company will be
deemed to have declared Capital Payments on the Upper
Tier 2 Percentage of the Class B Preferred
Securities at the Stated Rate in full
|
|
|
|
|
|
payable on each of the next four Payment Dates, if the dividend,
distribution or other payment on the Tier 2 Junior
Securities is paid in respect of an annual period;
|
|
|
|
payable on each of the next two Payment Dates, if the dividend,
distribution or other payment on the Tier 2 Junior
Securities is paid in respect of a semi-annual period; and
|
|
|
|
payable on the next Payment Date, if the dividend, distribution
or other payment on the Tier 2 Junior Securities is paid in
respect of a quarterly period.
|
S-50
|
|
|
any Parity Capital Securities, the respective
Tier 1 Percentage of the Class B Preferred
Series Securities or Preferred Tier 1 Capital
Securities (other than a payment in kind of ordinary shares of
common stock or Junior Securities or payments on Preferred
Tier 1 Securities issued by wholly-owned subsidiaries of
the Bank, when such Preferred Tier 1 Securities are held
exclusively by the Bank or by any of its other wholly-owned
subsidiaries), then the Company will be deemed to have declared
Capital Payments on the Upper Tier 2 Percentage of
Class B Preferred Securities at the Stated Rate
|
|
|
|
|
|
payable on each of the next four Payment Dates, if the dividend,
distribution or other payment on the Parity Capital Securities,
the respective Tier 1 Percentage of the Class B
Preferred Series Securities or Preferred Tier 1
Capital Securities is paid in respect of an annual period;
|
|
|
|
payable on each of the next two Payment Dates, if the dividend,
distribution or other payment on the Parity Capital Securities,
the respective Tier 1 Percentage of the Class B
Preferred Series Securities or Preferred Tier 1
Capital Securities is paid in respect of a semi-annual
period; and
|
|
|
|
payable on the next Payment Date, if the dividend, distribution
or other payment on the Parity Capital Securities, the
respective Tier 1 Percentage of the Class B
Preferred Series Securities or Preferred Tier 1 Capital
Securities is paid in respect of a quarterly period.
|
If the dividend or other payment or distribution on Parity
Capital Securities, the respective Tier 1 Percentage
of the Class B Preferred Series Securities or
Preferred Tier 1 Capital Securities was in the full stated
amount payable on such securities in respect of such periods,
Capital Payments will be deemed declared at the Stated Rate in
full for payment on such Payment Date or Payment Dates. If the
dividend or other payment or distribution on Parity Capital
Securities, the respective Tier 1 Percentage of the
Class B Preferred Series Securities or Preferred
Tier 1 Capital Securities was only a partial payment of the
amount so owing, the amount of the Capital Payment deemed
declared for payment on such Payment Date or Payment Dates will
be adjusted proportionally, in which case the portion of such
Capital Payment that is not so paid will be deferred and will
thereupon constitute Arrears of Payments.
If the Bank or any of its subsidiaries redeems, repurchases or
otherwise acquires any Parity Capital Securities, Tier 2
Junior Securities or Preferred Tier 1 Capital Securities
(other than Parity Capital Securities, Tier 2 Junior
Securities or Preferred Tier 1 Capital Securities issued by
wholly-owned subsidiaries of the Bank, when such Parity Capital
Securities, Tier 2 Junior Securities or Preferred
Tier 1 Capital Securities are held exclusively by the Bank
or by any of its other wholly-owned subsidiaries) for any
consideration (except by conversion into or exchange for
ordinary shares of common stock of the Bank), other than in
connection with:
|
|
|
transactions effected by or for the account of customers of the
Bank or any of its subsidiaries or in connection with the
distribution, trading or market-making in respect of such
securities,
|
|
|
the satisfaction by the Bank or any of its subsidiaries of its
obligations under any employee benefit plans or similar
arrangements with or for the benefit of employees, officers,
directors or consultants, including hedging transactions
effected to cover exposure to unvested grants under employee
benefit plans,
|
|
|
a reclassification of the capital stock of the Bank or any of
its subsidiaries or the exchange or conversion of one class or
series of such capital stock for another class or series of such
capital stock, or
|
|
|
the purchase of fractional interests in shares of the capital
stock of the Bank or any of its majority-owned subsidiaries
pursuant to the provisions of any security being converted into
or exchanged for such capital stock,
|
the Company will be deemed to have declared Capital Payments on
the Upper Tier 2 Percentage of the Class B
Preferred Securities at the Stated Rate in full payable on each
of the next four Payment Dates contemporaneously with
and/or
immediately following the date on which such redemption,
repurchase or other acquisition occurred.
S-51
Even if the Company has sufficient Operating Profits and there
are sufficient Distributable Profits of the Bank, the Company
will be prohibited from making Capital Payments on the Upper
Tier 2 Percentage of the Class B Preferred
Securities at any time an order from the BaFin (or any other
relevant regulatory authority) prohibits the Bank from making
any distributions of profits. The Company will have no
obligation to make up, at any time, any Capital Payments not
paid in full by the Company as a result of (1) insufficient
Operating Profits of the Company or (2) an order of the
BaFin.
Capital Payments on the Upper Tier 2 Percentage of the
Class B Preferred Securities will be paid out of the
Companys Operating Profits or from payments received by
the Company under the Class B Preferred Guarantee.
If the Company does not declare (and is not deemed to have
declared) a Capital Payment on the Upper
Tier 2 Percentage of the Class B Preferred
Securities in respect of any Payment Period, the holders of the
Class B Preferred Securities will have no right to receive
a Capital Payment in respect of such Upper
Tier 2 Percentage for such Payment Period, and the
Company will have no obligation to pay a Capital Payment in
respect of such Upper Tier 2 Percentage for such
Payment Period, whether or not Capital Payments are declared (or
deemed to have been declared) and paid in respect of such Upper
Tier 2 Percentage for any future Payment Period. In
such a case, no Capital Payments will be made on the Upper
Tier 2 Percentage of the Trust Preferred
Securities in respect of such Payment Period. See
Description of the Trust Securities.
However, the unpaid Capital Payment (or unpaid portion thereof)
will be deferred and constitute Arrears of Payments. The Company
will pay Arrears of Payments to the Trust under the conditions
described under Description of the
Trust Securities Capital Payments on the Upper
Tier 2 Percentage.
If the Company declares (or is deemed to have declared) a
Capital Payment in respect of the Upper
Tier 2 Percentage for any Payment Period under
circumstances where the Distributable Profits of the Bank for
the most recent preceding fiscal year are insufficient to pay
such Capital Payment in full as well as Capital Payments then
due on the respective Tier 1 Percentage of the
Class B Preferred Series Securities and capital
payments, dividends or other distributions or payments then due
on Parity Capital Securities, and Preferred Tier 1 Capital
Securities, payment of all or a portion of such Capital Payment
on the Upper Tier 2 Percentage of the Class B
Preferred Securities (and, as a result thereof, a corresponding
portion of the Capital Payment then due on the Upper
Tier 2 Percentage of the Trust Preferred
Securities) will also be deferred as of the related Payment
Date. The portions of such Capital Payments that cannot be paid
and have been deferred in such case, together with the portions
of Capital Payments that were not declared or deemed to have
been declared in respect of such Upper
Tier 2 Percentage for any Payment Period and therefore
deferred, will be cumulative and will collectively constitute
Arrears of Payments with respect to the Upper
Tier 2 Percentage of the Class B Preferred
Securities and the Upper Tier 2 Percentage of the
Trust Preferred Securities, as applicable. Arrears of
Payments will not themselves bear interest.
The Company will pay outstanding Arrears of Payments on the
Upper Tier 2 Percentage of the Class B Preferred
Securities on the earliest of:
|
|
|
the first Payment Date after such deferral to the extent that
for the most recent preceding fiscal year for which audited
unconsolidated financial statements are available, the
Distributable Profits of the Bank are in an amount exceeding the
aggregate of:
|
|
|
|
|
|
Capital Payments on the Upper Tier 2 Percentage of the
Class B Preferred Securities due on such Payment Date,
|
|
|
|
capital payments, dividends or other distributions or payments
on Parity Capital Securities, if any, due in respect of such
fiscal year, and
|
|
|
|
Capital Payments on the respective Tier 1 Percentage
of the Class B Preferred Series Securities and capital
payments, dividends or other distributions or payments on the
Preferred Tier 1 Capital Securities, if any, due in respect
of such fiscal year,
|
S-52
in which case, such Arrears of Payments on the Upper
Tier 2 Percentage of the Class B Preferred
Securities and any Deferred Payments on Parity Capital
Securities will be paid
pro rata
on the basis of
Distributable Profits for such preceding fiscal year, with any
Arrears of Payments that cannot be repaid pursuant to the
foregoing on such Payment Date continuing to be deferred and to
constitute Arrears of Payments;
|
|
|
the date of any redemption of the Class B Preferred
Securities, in the full amount of outstanding Arrears of
Payments; and
|
|
|
the date on which an order is made for the winding up,
liquidation or dissolution of the Company or the Bank (other
than for the purposes of or pursuant to an amalgamation,
reorganization or restructuring while solvent, where the
continuing entity assumes substantially all of the assets and
obligations of the Company or the Bank, as the case may be), in
the full amount of outstanding Arrears of Payments.
|
No Tier 1 Qualification Election may be made or become
effective so long as Arrears of Payments remain outstanding and
unpaid.
If, as a result of the deferral of Capital Payments on the Upper
Tier 2 Percentage of the Class B Preferred
Securities, the Company would receive payments of interest on
the Initial Obligation that would exceed Capital Payments
declared and paid on the Upper Tier 2 Percentage of
the Class B Preferred Securities on the corresponding
Payment Date (in each such case, Excess Interest
Amounts), the Bank will not pay such Excess Interest
Amounts to the Company in cash but will instead, without any
instruction or other action being taken by the Company, credit
to the account of the Company at the Bank a subordinated deposit
in the Bank, subject to the Subordinated Deposit Agreement,
having an aggregate principal amount equal to such Excess
Interest Amount. The Subordinated Deposit Agreement provides
that the deposit account at the Bank will bear interest at a
rate of 0.75% per annum. Any interest accumulating in such
deposit account will be payable to the holder of the Company
Common Security under the circumstances described herein. The
Subordinated Deposit Agreement provides that, subject to the
subordination provisions of the Subordinated Deposit Agreement,
the subordinated deposit outstanding under the Subordinated
Deposit Agreement will be terminated, and such deposit repaid to
the Company at such time and to the extent as the Company, is
required to pay Arrears of Payments. The subordinated deposit
outstanding at any time pursuant to the Subordinated Deposit
Agreement will be subordinated such that the obligations of the
Bank under the Subordinated Deposit Agreement upon the
bankruptcy, insolvency or liquidation of the Bank will be
(i) subordinated in right of payment to the prior payment
in full of all indebtedness and other liabilities of the Bank to
its creditors (including subordinated liabilities), except those
which by their terms rank on parity with or are subordinated to
the Banks obligations under the Subordinated Deposit
Agreement, (ii) on parity with the most senior ranking
preference shares of the Bank, if any, and any obligations or
instruments of the Bank which by their terms rank on parity with
such preference shares and (iii) senior to the Junior
Securities.
Capital
Payments on the Tier 1 Percentage
The following discussion applies to all Capital Payments in
respect of the Tier 1 Percentage for all Payment
Periods beginning, with respect to the Specified Increment
arising from a Tier 1 Qualification Election, with the
Payment Period during which such Tier 1 Qualification
Election occurred. As of the Issue Date, As of the Issue Date,
100% of the Outstanding Class B Preferred Securities, and
correspondingly 100% of the Outstanding Trust Preferred
Securities, has been elected to qualify as Tier 1
regulatory capital. Upon their initial issuance, the
Tier 1 Percentage in respect of the Class B
Preferred Securities and the Trust Preferred Securities
will be 0%. As the Bank is under no obligation to effect any
Tier 1 Qualification Election, these provisions may never
become effective with respect to any portion of the Class B
Preferred Securities. Nonetheless, as of the Issue Date, the
Bank will make a Tier 1 Qualification Election in respect
of 100% of the Class B Preferred Securities. Upon such
Tier 1 Qualification Election, 100% of the Class B
Preferred Securities, and correspondingly 100% of the
Trust Preferred Securities, will qualify as Tier 1
regulatory capital.
S-53
Capital Payments on the Tier 1 Percentage of the
Class B Preferred Securities in respect of any Payment
Period from and after the Payment Period during which the
related Tier 1 Qualification Election occurred, as a result
of which each portion of the Tier 1 Percentage first
qualified as such, are noncumulative. That means that the
Company will have no obligation to make up, and the Property
Trustee as holder of the Class B Preferred Securities will
have no right to receive, at any time, any Capital Payments on
the Tier 1 Percentage of the Class B Preferred
Securities or portions thereof which have not been paid in full
by the Company on any Payment Date, be it as a result of
insufficient Operating Profits of the Company, insufficient
Distributable Profits of the Bank, an order of the BaFin or
otherwise.
Capital Payments on the Tier 1 Percentage of the
Class B Preferred Securities will be made only when, as and
if declared, or deemed declared, by the Companys Board of
Directors. Capital Payments on the Tier 1 Percentage
of the Class B Preferred Securities will be paid out of the
Companys Operating Profits. The Company can derive
Operating Profits only from payments made to the Company by the
Bank as obligor under the Initial Obligations.
The Company is authorized to declare Capital Payments on the
Tier 1 Percentage of the Class B Preferred
Securities and pay declared Capital Payments on the
Tier 1 Percentage of the Class B Preferred
Securities on any Payment Date that falls after the respective
Tier 1 Qualification Election due to which each portion of
the Tier 1 Percentage first qualified as such, only to
the extent that:
|
|
|
the Company has an amount of Operating Profits for the related
Payment Period ending on the day immediately preceding such
Payment Date at least equal to the amount of all Capital
Payments on the Class B Preferred Series for the related
Payment Period; and
|
|
|
the Bank has an amount of Distributable Profits for the
preceding fiscal year for which audited unconsolidated financial
statements are available at least equal to the aggregate amount
of such Capital Payments on the Class B Preferred Series,
and capital payments or dividends or other distributions payable
on Preferred Tier 1 Securities, if any,
pro rata
on
the basis of such Distributable Profits.
|
In determining the availability of sufficient Distributable
Profits of the Bank related to any fiscal year to permit Capital
Payments to be declared with respect to the respective
Tier 1 Percentage of the Class B Preferred
Series Securities, any Capital Payments already paid on the
respective Tier 1 Percentage of the Class B
Preferred Series Securities and any capital payments,
dividend or other distributions already paid during the
succeeding fiscal year of the Bank on Preferred Tier 1
Securities, if any, on the basis of such Distributable Profits
for such fiscal year, will be deducted from such Distributable
Profits.
However, in certain circumstances the Company may be also deemed
to have declared a Capital Payment on the
Tier 1 Percentage of the Class B Preferred
Securities. If the Bank or any of its subsidiaries declares or
pays any dividends, distributions or other payments on
|
|
|
any Junior Securities (other than a payment in kind of ordinary
shares of common stock or other Junior Securities or payments on
Junior Securities issued by wholly-owned subsidiaries of the
Bank, when such Junior Securities are held exclusively by the
Bank or by any of its other wholly-owned subsidiaries), then the
Company will be deemed to have declared Capital Payments on the
Tier 1 Percentage of the Class B Preferred
Securities at the Stated Rate in full
|
|
|
|
|
|
payable on each of the next four Payment Dates, if the dividend,
distribution or other payment on the Junior Security is paid in
respect of an annual period;
|
|
|
|
payable on each of the next two Payment Dates, if the dividend,
distribution or other payment on the Junior Security is paid in
respect of a semi-annual period; and
|
|
|
|
payable on the next Payment Date, if the dividend, distribution
or other payment on the Junior Security is paid in respect of a
quarterly period.
|
|
|
|
any Preferred Tier 1 Securities (other than a payment in
kind of ordinary shares of common stock or Junior Securities or
payments on Preferred Tier 1 Securities issued by
wholly-owned subsidiaries of
|
S-54
|
|
|
the Bank, when such Preferred Tier 1 Securities are held
exclusively by the Bank or by any of its other wholly-owned
subsidiaries), then the Company will be deemed to have declared
Capital Payments on the Tier 1 Percentage of the
Class B Preferred Securities at the Stated Rate
pro rata
(in the same proportion that the payment that was made on
the Preferred Tier 1 Security had to the amount that was
payable on such Preferred Tier 1 Security at the time of
such payment)
|
|
|
|
|
|
payable on each of the next four Payment Dates, if the dividend,
distribution or other payment on the Preferred Tier 1
Security is paid in respect of an annual period,
|
|
|
|
payable on each of the next two Payment Dates, if the dividend,
distribution or other payment on the Preferred Tier 1
Security is paid in respect of a semi-annual period; and
|
|
|
|
payable on the next Payment Date, if the dividend, distribution
or other payment on the Preferred Tier 1 Security is paid
in respect of a quarterly period.
|
If the Bank or any of its subsidiaries redeems, repurchases or
otherwise acquires any Junior Securities or Preferred
Tier 1 Securities (other than Junior Securities or
Preferred Tier 1 Securities issued by wholly-owned
subsidiaries of the Bank, when such Junior Securities or
Preferred Tier 1 Securities are held exclusively by the
Bank or by any of its other wholly-owned subsidiaries) for any
consideration (except by conversion into or exchange for
ordinary shares of common stock of the Bank or other Junior
Securities) or any moneys are paid to or made available for a
sinking fund for, or for redemption of, any such securities,
other than in connection with:
|
|
|
transactions effected by or for the account of customers of the
Bank or any of its subsidiaries or in connection with the
distribution, trading or market-making in respect of such
securities,
|
|
|
the satisfaction by the Bank or any of its subsidiaries of its
obligations under any employee benefit plans or similar
arrangements with or for the benefit of employees, officers,
directors or consultants, including hedging transactions
effected to cover exposure to unvested grants under employee
benefit plans,
|
|
|
a reclassification of the capital stock of the Bank or any of
its subsidiaries or the exchange or conversion of one class or
series of such capital stock for another class or series of such
capital stock, or
|
|
|
the purchase of fractional interests in shares of the capital
stock of the Bank or any of its majority-owned subsidiaries
pursuant to the provisions of any security being converted into
or exchanged for such capital stock,
|
the Company will be deemed to have declared Capital Payments on
the Tier 1 Percentage of the Class B Preferred
Securities at the Stated Rate in full payable on each of the
next four Payment Dates contemporaneously with
and/or
immediately following the date on which such redemption,
repurchase or other acquisition occurred.
Any Capital Payments so deemed to be declared as described above
will (i) only be authorized to be paid on any Payment Date
to the extent the Company has an amount of Operating Profits for
the related Payment Period at least equal to the aggregate
amount of Capital Payments so deemed declared in respect of the
Class B Preferred Securities as well as any other
Class B Preferred Series Securities and (ii) to
the extent not authorized to be paid pursuant to clause (i),
will not be considered due and payable for any purposes under
the LLC Agreement or under the Class B Preferred Guarantee,
except with respect to such Capital Payments deemed declared
after the Trust is dissolved and the Class B Preferred
Series Securities have been distributed to the Holders of
the Trust Preferred Series Securities, which will be
considered due and payable for purposes of the Class B
Preferred Guarantee.
Even if the Company has sufficient Operating Profits and there
are sufficient Distributable Profits of the Bank, the Company
will be prohibited from making Capital Payments on the
Class B Preferred Securities at any time an order from the
BaFin (or any other relevant regulatory authority) prohibits the
Bank from making any distributions of profits.
S-55
Record Dates
for Capital Payments
Each Capital Payment declared (or deemed to be declared) on the
Class B Preferred Securities will be payable to the holders
of record of the Class B Preferred Securities as they
appear on the books and records of the Company on the
corresponding record date. The record dates for the Class B
Preferred Securities will be:
|
|
|
for those Class B Preferred Securities held by the Property
Trustee (regardless of their own form) so long as the
Trust Preferred Securities remain in book-entry form, and
for Class B Preferred Securities held in book-entry form,
the end of business on the Business Day immediately preceding
the relevant Payment Date, and
|
|
|
in all other cases, the end of business of the
15th Business Day prior to the relevant Payment Date.
|
Payments of
Additional Amounts
All Capital Payments (and Arrears of Payments, if any) on the
Class B Preferred Series, and any amount payable or upon
redemption thereof or in liquidation, will be made without any
deduction or withholding for or on account of Withholding Taxes,
unless such deduction or withholding is required by law. In such
event, the Company will pay, as additional Capital Payments (or
additional Arrears of Payments, as the case may be), such
Additional Amounts as may be necessary in order that the net
amounts received by the holders of the Class B Preferred
Series Securities and the Trust Preferred
Series Securities, after such deduction or withholding for
or on account of Withholding Taxes, will equal the amounts that
otherwise would have been received in respect of the
Class B Preferred Series Securities and the
Trust Preferred Series Securities, respectively, had
no such deduction or withholding been required.
However, no such Additional Amounts will be payable in respect
of the Class B Preferred Series Securities:
|
|
|
in respect of each portion of the Upper
Tier 2 Percentage of the Class B Preferred
Securities for Payment Periods prior to the Payment Period
during which the respective Tier 1 Qualification Election,
if any, occurred, with respect to such portions, if and to the
extent that the Company is unable to pay because such payment
would exceed the Distributable Profits of the Bank for the
fiscal year in respect of which the relevant Capital Payments
are payable (after subtracting from such Distributable Profits
the amount of the Capital Payments on the Upper
Tier 2 Percentage of the Class B Preferred
Securities and any payments on Parity Capital Securities, the
respective Tier 1 Percentage of the Class B
Preferred Series Securities and Preferred Tier 1
Capital Securities, if any, already paid on the basis of such
Distributable Profits on or prior to the date on which such
Additional Amounts will be payable), in which case such
Additional Amounts will be deferred and will thereupon
constitute Arrears of Payments;
|
|
|
in respect of each portion of the respective
Tier 1 Percentage of the Class B Preferred
Series Securities for Payment Periods from and after the
Payment Period during which the respective Tier 1
Qualification Election, if any, occurred, with respect to such
portion, if and to the extent that the Company is unauthorized
to pay amounts in respect of the respective
Tier 1 Percentage of the Class B Preferred
Series Securities because of insufficient Distributable
Profits of the Bank for the preceding fiscal year (after
subtracting from such Distributable Profits the amounts of
Capital Payments on the respective Tier 1 Percentage
of the Class B Preferred Series Securities and
dividends or other distributions or payments on Preferred
Tier 1 Securities, if any, already paid on the basis of
such Distributable Profits on or prior to the date on which such
Additional Amounts will be payable);
|
|
|
with respect to any Withholding Taxes that are payable by reason
of a holder or beneficial owner of the Class B Preferred
Series Securities (other than the Trust) having some
connection with the Relevant Jurisdiction other than by reason
only of the mere holding or beneficial ownership of the
Class B Preferred Series Securities;
|
S-56
|
|
|
with respect to any Withholding Taxes which are deducted or
withheld pursuant to (i) European Council Directive
2003/48/EC or any other European Union Directive or Regulation
implementing the conclusions of the ECOFIN Council meeting of
26-27 November
2000 on the taxation of savings income, or (ii) any
international treaty or understanding entered into for the
purpose of facilitating cooperation in the reporting and
collection of savings income and to which (x) the United
States, and (y) the European Union or Germany are parties,
or (iii) any provision of law implementing, or complying
with, or introduced to conform with, such Directive, Regulation,
treaty or understanding; or
|
|
|
to the extent such deduction or withholding can be avoided or
reduced if the holder or beneficial owner of the Class B
Preferred Series Securities makes a declaration of
non-residence or other similar claim for exemption to the
relevant tax authority or complies with any reasonable
certification, documentation, information or other reporting
requirement imposed by the relevant tax authority; provided,
however, that this exclusion will not apply if the
certification, information, documentation or other reporting
requirement would be materially more onerous (in form, procedure
or substance of information required to be disclosed) to the
holder or beneficial owner of the Class B Preferred
Series Securities than comparable information or other
reporting requirements imposed under U.S. tax law,
regulation and administrative practice (such as IRS
Forms W-8
and
W-9).
|
Voting and
Enforcement Rights
Except as described below, the Class B Preferred
Series Securities will have no voting rights.
If for four consecutive Payment Periods, Capital Payments on the
Class B Preferred Series and any Additional Amounts in
respect of such Capital Payments have not been paid at the
Stated Rate in full by the Company or by the Guarantor under the
Class B Preferred Guarantee, the holders of a majority in
liquidation preference amount of the Class B Preferred
Series Securities will be entitled to appoint, by ordinary
resolution passed at a separate general meeting convened for
that purpose, two additional, independent directors to the Board
of Directors. Any independent director so appointed will vacate
office if, Capital Payments (including, with respect to the
Upper Tier 2 Percentage, if any, all Arrears of
Payments) have been paid regularly at the Stated Rate in full by
the Company or the Guarantor under the Class B Preferred
Guarantee or the Trust Preferred Guarantee for one calendar
year. Any independent director may be removed only by the vote
of holders of a majority in liquidation preference amount of the
Class B Preferred Series Securities.
So long as any Class B Preferred Series is outstanding, the
Company will not, without the affirmative vote of at least
66
2
/
3
%
in aggregate liquidation preference amount of the Class B
Preferred Series Securities:
|
|
|
amend, alter, repeal or change any provision of the LLC
Agreement (including the terms of any of the Class B
Preferred Series Securities) if such amendment, alteration,
repeal or change would materially adversely affect the rights,
preferences, powers or privileges of any of the Class B
Preferred Series Securities,
|
|
|
agree to modify or amend any provision of, or waive any default
in the payment of any amount under, Obligations in any manner
that would materially adversely affect the interests of the
holders of Class B Preferred Series Securities, or
|
|
|
effect any merger, consolidation, or business combination
involving the Company, or any sale of all or substantially all
of the assets of the Company, provided, that any such merger,
consolidation, or business combination involving the Company, or
any sale of all or substantially all of the assets of the
Company, also must comply with the requirements set forth under
Mergers, Consolidations and Sales.
|
The Company will not, without the unanimous consent of all the
holders of the Class B Preferred Series Securities,
issue any additional equity securities of the Company ranking
prior to or on parity with the Class B Preferred Series as
to periodic distribution rights or rights on liquidation or
dissolution of the Company, or incur any indebtedness for
borrowed money. Nevertheless, the Company will, if so required
by the Bank, either (a) in connection with the exercise of
the underwriters over-allotment option on or
S-57
prior to March 30, 2010 or (b) from time to time on or
prior to June 30, 2013 and without the consent of the
holders of any of the Class B Preferred
Series Securities, issue additional preferred securities of
Class B having the same terms and conditions as the
Class B Preferred Series Securities in all respects
except for the issue date, the date from which Capital Payments
in respect thereof begin to accrue, the issue price and any
other deviations required for compliance with applicable law, so
as to form a single series with all other Class B Preferred
Series Securities, in consideration for Obligations of a
principal amount equal to the aggregate liquidation preference
amount of such additional preferred securities of Class B
and having the same terms and conditions as the Initial
Obligations in all respects except for the issue date, the date
from which interest in respect thereof begins to accrue, the
issue price and any other deviations required for compliance
with applicable law, and confirmation from the Bank that such
additional preferred securities of Class B have the benefit
of the Class B Preferred Guarantee.
The Class A Preferred Security (and the Class B
Preferred Series Securities, if any) beneficially owned by
the Bank, the Company or any of their respective affiliates
(other than the Trust) will not be entitled to vote or consent
under the LLC Agreement or the bylaws of the Company and will,
for the purposes of such vote or consent, be treated as not
outstanding, except Company Preferred Securities acquired by the
Bank or its affiliates in connection with transactions effected
by or for the account of customers of the Bank or any of its
affiliates or in connection with trading or market-making
activities relating to such Company Preferred Securities in the
ordinary course of business. Persons (other than affiliates of
the Bank) to whom the Bank or any of its affiliates have pledged
a Class A Preferred Security or Class B Preferred
Series Securities may vote or consent with respect to such
pledged Class A Preferred Security or Class B
Preferred Series Securities pursuant to the terms of such
pledge.
Redemption of
the Class B Preferred Securities
Subject to any required regulatory approvals, the Company may,
at its option, on at least 30 days prior notice (or
such longer period as required by the relevant regulatory
authorities) to the holders of the Class B Preferred
Series Securities, redeem the Class B Preferred
Series, in whole but not in part, at a redemption price per
Class B Preferred Series Security equal to the
liquidation preference amount thereof, plus accrued and unpaid
Capital Payments for the then current Payment Period to but
excluding the date of redemption, plus, with respect to the
Upper Tier 2 Percentage of the Class B Preferred
Securities, all outstanding Arrears of Payments, if any, plus
Additional Amounts, if any, with respect thereto (the sum of
these is referred to as the Redemption Price):
|
|
|
on any Payment Date on or after June 30, 2018 (which we
refer to as the Initial Redemption Date); and
|
|
|
at any time upon the occurrence of a Company Special
Redemption Event.
|
No redemption of the Class B Preferred Series for any
reason may take place unless on the Redemption Date:
|
|
|
the Company has an amount of cash funds (by reason of payments
on the Obligations or the Class B Preferred Guarantee) at
least equal to the Redemption Price;
|
|
|
the Company has an amount of Operating Profits for the current
Payment Period at least equal to the Capital Payments on the
Class B Preferred Series and Arrears of Payments, if
applicable, accrued and unpaid as of the Redemption Date,
plus Additional Amounts, if any;
|
|
|
the Bank has an amount of Distributable Profits for the
preceding fiscal year of the Bank (for which audited
unconsolidated financial statements are available) at least
equal to the Capital Payments on the Class B Preferred
Series accrued and unpaid as of the Redemption Date, plus
the aggregate amount of Capital Payments (including any Arrears
of Payments) on the Class B Preferred Series theretofore paid,
plus any Additional Amounts plus (i) if the Upper
Tier 2 Percentage of the Class B Preferred
Securities exceeds zero, capital payments or dividends or other
distributions payable on Parity Capital Securities and Preferred
Tier 1 Capital Securities, or (ii) if the Upper
Tier 2 Percentage of the Class B Preferred
Securities is zero, capital payments, dividends or other
distributions payable on any Preferred Tier 1
Securities; and
|
S-58
|
|
|
no order of the BaFin (or any other relevant regulatory
authority) is in effect prohibiting the Bank from making any
distribution of profits (including to the holders of Preferred
Tier 1 Securities, if any).
|
In the event that payment of any Redemption Price, in
respect of any Class B Preferred Series Securities, is
improperly withheld or refused and not paid, Capital Payments on
such Class B Preferred Series Securities will continue
to accrue at the Stated Rate from the designated
Redemption Date to the date of actual payment of the
Redemption Price.
No redemption, whether before or after the Initial
Redemption Date, requires the vote or consent of any of the
holders of the Class B Preferred Series Securities.
An irrevocable notice of any redemption of the Class B
Preferred Series will be given by the Board of Directors on
behalf of the Company by mail to the record holder of each
Class B Preferred Series Security to be redeemed not
fewer than 30 calendar days before the date fixed for
redemption, or such other time period as may be required by the
relevant regulatory authorities.
Liquidation
Distribution
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company, holders of the
Class B Preferred Series Securities will, subject to
the limitations described below, be entitled to receive the
Redemption Price of their Class B Preferred
Series Securities. The holders of the Class B
Preferred Series Securities will be entitled to receive
their liquidation distribution following the liquidation
distribution of Obligations (including accrued and unpaid
interest thereon) to the holder of the Class A Preferred
Security but before any distribution of assets is made to the
holder of the Company Common Security. Any payments made by the
Bank pursuant to the Class B Preferred Guarantee will be
made solely on behalf of the holders of the Class B
Preferred Series Securities and under the terms of the LLC
Agreement and to the fullest extent permitted by law, the
Company will not be dissolved until all obligations under the
Class B Preferred Guarantee have been paid in full pursuant
to its terms.
Mergers,
Consolidations and Sales
The Company may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to, any corporation or
other body, except with the consent of the holders of
66
2
/
3
%
in aggregate liquidation preference amount of the Class B
Preferred Series Securities, into a limited partnership,
limited liability company or trust organized as such under the
laws of any State of the United States of America, provided,
that:
|
|
|
such successor entity either expressly assumes all of the
obligations of the Company under the Class B Preferred
Series or substitutes for the Class B Preferred Series
other securities having substantially the same terms as the
Class B Preferred Series (referred to as the Successor
Company Securities) so long as the Successor Company Securities
are not junior to any equity securities of the successor entity,
with respect to participation in the profits, distributions and
assets of the successor entity, except that they may rank junior
to the Class A Preferred Security or any successor
Class A Preferred Security to the same extent that the
Class B Preferred Series ranks junior to the Class A
Preferred Security;
|
|
|
the Bank expressly acknowledges such successor entity as the
holder of the Obligations and holds, directly or indirectly, all
of the voting securities (within the meaning of
Rule 3a-5
under the 1940 Act) of such successor entity;
|
|
|
such consolidation, amalgamation, merger or replacement does not
cause the Trust Preferred Series (or, in the event that the
Trust is liquidated, the Class B Preferred Series
(including any Successor Company Securities)) to be downgraded
by any nationally recognized rating organization;
|
|
|
such consolidation, amalgamation, merger or replacement does not
adversely affect the powers, preferences and other special
rights or tax treatment of the holders of the Trust Preferred
|
S-59
|
|
|
Series Securities or Class B Preferred
Series Securities (including any Successor Company
Securities) in any material respect;
|
|
|
|
such successor entity has a purpose substantially identical to
that of the Company;
|
|
|
prior to such consolidation, amalgamation, merger or
replacement, the Company has received an opinion of a nationally
recognized law firm experienced in such matters as described in
the LLC Agreement to the effect that such successor entity will
be treated as a partnership, and will not be classified as an
association or publicly traded partnership taxable as a
corporation, for United States federal income tax purposes;
|
|
|
such consolidation, merger, amalgamation or replacement does not
otherwise result in a Company Special
Redemption Event; and
|
|
|
the Bank guarantees the obligations of such successor entity
under the Successor Company Securities at least to the extent
provided by the Class B Preferred Guarantee.
|
Book-Entry and
Settlement
If the Class B Preferred Series Securities are
distributed to holders of the Trust Preferred
Series Securities in connection with the involuntary or
voluntary liquidation, dissolution, winding up or termination of
the Trust, the Company will use reasonable efforts to arrange
for the Class B Preferred Series Securities to be
issued in the form of one or more global certificates registered
in the name of DTC or its nominee. As of the date of this
prospectus supplement, the description herein of DTCs
book-entry system and practices as they relate to purchases,
transfers, notices and payments with respect to the
Trust Preferred Series Securities will apply in all
material respects to any Class B Preferred
Series Securities represented by one or more global
certificates.
Registrar and
Transfer Agent
Deutsche Bank Trust Company Americas will act as registrar,
transfer agent and paying agent for the Class B Preferred
Securities. Registration of transfers of the Class B
Preferred Securities will be effected without charge by or on
behalf of the Company, but upon payment (with the giving of such
indemnity as the transfer agent may require) in respect of any
tax or other governmental charges that may be imposed in
relation to it. The transfer agent will not be required to
register or cause to be registered the transfer of the
Class B Preferred Securities after such Class B
Preferred Securities have been called for redemption.
S-60
DESCRIPTION OF
THE SUBORDINATED GUARANTEES
The following, together with Description of Capital
SecuritiesDescription of Subordinated Guarantees in
Connection with Capital Securities in the attached
prospectus, describes the material terms of the Guarantees. If
the description of the Guarantees in this prospectus supplement
differs in any way from the description in the attached
prospectus, you should rely on the description in this
prospectus supplement. You also should read the Guarantees and
the Trust Indenture Act. We have filed with the SEC forms
of the Guarantees as an exhibit to the registration statement
pertaining to this prospectus supplement and the attached
prospectus.
In connection with the issuance of the Outstanding
Trust Preferred Securities, the Bank has agreed to
guarantee payment, on a subordinated basis, of certain payments
on all current and future securities forming part of the
Trust Preferred Series, which includes the
Trust Preferred Securities, under a guarantee we refer to
as the Trust Preferred Guarantee, to the extent described
below. In connection with the issuance of the Outstanding
Class B Preferred Securities, the Bank has agreed to
guarantee payment, on a subordinated basis, of certain payments
on all current and future securities forming part of the
Class B Preferred Series, which includes the Class B
Preferred Securities, under a guarantee we refer to as the
Class B Preferred Guarantee, to the extent described below.
We refer to both guarantees collectively as Guarantees, and we
refer to the Trust Preferred Series Securities in
relation to the Trust Preferred Guarantee as related
securities and to the Class B Preferred
Series Securities in relation to the Class B Preferred
Guarantee as related securities. The Guarantees are qualified
under the Trust Indenture Act. The Bank of New York Mellon
(formerly known as The Bank of New York) acts as trustee under
the Trust Preferred Guarantee and is in such capacity
referred to as Trust Preferred Guarantee Trustee and under
the Class B Preferred Guarantee and is in such capacity
referred to as the Class B Preferred Guarantee Trustee, in
each case for purposes of complying with the
Trust Indenture Act. The terms of each Guarantee includes
those stated in that Guarantee and those made part of that
Guarantee by the Trust Indenture Act.
The following description of the material terms of the
Guarantees in this prospectus supplement contains only a summary
of their material terms and is not complete and is qualified in
its entirety by reference to the terms and provisions of the
respective Guarantee and the Trust Indenture Act.
General
Each of the Guarantees is a direct, unsecured and subordinated
obligation of Deutsche Bank AG.
The Class B Preferred Guarantee is held by the Class B
Preferred Guarantee Trustee for the benefit of the Property
Trustee as holder of the Class B Preferred Series, and the
Property Trustee in turn holds it for the benefit of the holders
of the Trust Preferred Series Securities.
The Trust Preferred Guarantee is held by the
Trust Preferred Guarantee Trustee for the benefit of the
holders of the Trust Preferred Series Securities.
The holders of a majority in liquidation preference amount of
the related securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available
to the related Guarantee Trustee.
The rights under the Guarantees are not separately transferable
from the Class B Preferred Series or the
Trust Preferred Series, as applicable, to which the
Guarantee relates. Upon transfer of any Class B Preferred
Series Securities or Trust Preferred
Series Security to another holder, the prior holder will no
longer have rights under the related Guarantee with respect to
the transferred securities.
Under the Guarantees the Guarantor may provide to the related
Guarantee Trustee evidence of compliance with any conditions
precedent under such Guarantee in the form of an officers
certificate meeting the requirements set forth in such Guarantee.
S-61
The Guarantor may not assign its obligations under the
applicable Guarantee, except in the case of a merger or
consolidation in which the Guarantor is not the surviving party
or in the case of a sale, lease or other transfer of
substantially all of its assets, to a purchaser and only if such
surviving entity or purchaser expressly assumes the obligations
of the Guarantor thereunder or such assumption of obligations
result from applicable law.
The Guarantees are governed by New York law.
Guarantee
Payments
The Guarantor irrevocably and unconditionally guarantees, on a
subordinated basis, without duplication, the following payments
(which we refer to as the Guarantee Payments):
|
|
|
with respect to the Trust Preferred Series:
|
|
|
|
|
|
Capital Payments due and payable on the Trust Preferred
Series on each Payment Date for the then current Payment Period
including any Arrears of Payments that are due and payable, and
including any Additional Amounts payable with respect to such
Capital Payments and, if applicable, such Arrears of Payments;
|
|
|
|
on any redemption date, the Redemption Price for each Trust
Preferred Series Security called for redemption by the
Trust; and
|
|
|
|
upon any voluntary or involuntary dissolution, liquidation or
winding up of the Trust (other than a dissolution of the Trust
in which the Class B Preferred Series Securities are
distributed to the holders of the Trust Preferred
Series Securities), the liquidation preference amount of
the Trust Preferred Series, plus any accrued and unpaid
Capital Payments for the then current Payment Period to but
excluding the date of liquidation, plus Arrears of Payments that
are due and payable and including any Additional Amounts payable
with respect to such Capital Payments and, if applicable, such
Arrears of Payments.
|
|
|
|
with respect to the Class B Preferred Securities:
|
|
|
|
|
|
the Capital Payments due and payable on the Class B
Preferred Series on each Payment Date for the then current
Payment Period, if declared or deemed declared pursuant to the
LLC Agreement, including any Arrears of Payments that are due
and payable, and including any Additional Amounts payable with
respect to such Capital Payments and, if applicable, such
Arrears of Payments;
|
|
|
|
on any Redemption Date, the Redemption Price for each
Class B Preferred Series Security called for
redemption by the Company; and
|
|
|
|
upon any voluntary or involuntary dissolution, liquidation or
winding up of the Company, the liquidation preference amount of
the Class B Preferred Series, plus any accrued and unpaid
Capital Payments for the then current Payment Period to but
excluding the date of liquidation, plus, any Arrears of Payments
that are due and payable and including any Additional Amounts
payable with respect to such Capital Payments and, if
applicable, such Arrears of Payments.
|
The Guarantees require the Guarantor to pay all amounts payable
thereunder in respect of Capital Payments payable in respect of
any Payment Period on the Trust Preferred Series or the
Class B Preferred Series, to which the Guarantee relates,
prior to any dividend or other payment (except dividends in the
form of shares) upon its shares of common stock.
Payments of
Guarantee Additional Amounts
All Guarantee Payments made or caused to be made by the
Guarantor will be made without withholding or deduction for or
on account of any Withholding Tax, unless the withholding or
deduction of such Withholding Tax is required by law. In such
event, the Guarantor will pay, as additional Guarantee Payments
(which we refer to as Trust Preferred Additional Guarantee
Payments or Class B Preferred
S-62
Additional Guarantee Payments, as applicable, and collectively
as Guarantee Additional Amounts), such additional amounts as may
be necessary in order that the net amounts received by a holder
after such withholding or deduction for or on account of
Withholding Tax will equal the amount which would have been
received in respect of the Guarantee Payments (including
interest accrued thereon, if any) had no such deduction or
withholding been required, except that no such Guarantee
Additional Amounts will be payable to a holder with respect to
any Guarantee Payments,
|
|
|
in respect of each portion of the Upper
Tier 2 Percentage of the Trust Preferred Securities
for Payment Periods ending prior to the Payment Period during
which the respective Tier 1 Qualification Election, if any,
occurred, with respect to such portions, if and to the extent
that the Company is unable to pay corresponding amounts in
respect of the Upper Tier 2 Percentage of the
Class B Preferred Securities because such payment would
exceed the Distributable Profits of the Bank for the fiscal year
in respect of which the relevant Capital Payments are payable
(after subtracting from such Distributable Profits the amount of
the Capital Payments on the Upper Tier 2 Percentage of
the Class B Preferred Securities and dividends or other
distributions or payments on Parity Capital Securities, the
respective Tier 1 Percentage of the
Trust Preferred Series Securities and Preferred
Tier 1 Capital Securities, if any, already paid on the
basis of such Distributable Profits on or prior to the date on
which such Additional Amounts will be payable), in which case
such Additional Amounts will be deferred and will thereupon
constitute Arrears of Payments under the applicable Guarantee;
|
|
|
in respect of each portion of the respective
Tier 1 Percentage of the Trust Preferred
Series Securities for Payment Periods from and after the
Payment Period during which the respective Tier 1
Qualification Election, occurred, with respect to such portions,
if and to the extent that the Company is unable to pay
corresponding amounts in respect of the respective
Tier 1 Percentage of the Class B Preferred Series
Securities because of insufficient Distributable Profits of the
Bank for the preceding fiscal year (after subtracting from such
Distributable Profits the amounts of Capital Payments on the
respective Tier 1 Percentage of the Class B
Preferred Series Securities and dividends or other distributions
or payments on Preferred Tier 1 Securities, if any, already
paid on the basis of such Distributable Profits on or prior to
the date on which such Additional Amounts will be payable);
|
|
|
with respect to any Withholding Taxes that are payable by reason
of a holder or beneficial owner of the securities to which such
Guarantee Payments relate having some connection with any
Relevant Jurisdiction other than by reason only of the mere
holding or beneficial ownership of such securities;
|
|
|
with respect to any Withholding Taxes which are deducted or
withheld pursuant to (i) European Council Directive
2003/48/EC or any other European Union Directive or Regulation
implementing the conclusions of the ECOFIN Council meeting of
26-27 November
2000 on the taxation of savings income, or (ii) any
international treaty or understanding entered into for the
purpose of facilitating cooperation in the reporting and
collection of savings income and to which (x) the United
States, and (y) the European Union or Germany are parties,
or (iii) any provision of law implementing, or complying
with, or introduced to conform with, such Directive, Regulation,
treaty or understanding; or
|
|
|
where such deduction or withholding can be avoided or reduced if
the holder or beneficial owner of the securities to which such
Guarantee Payments relate makes a declaration of non-residence
or other similar claim for exemption to the relevant tax
authority or complies with any reasonable certification,
documentation, information or other reporting requirement
imposed by the relevant tax authority, provided, however, that
this exclusion will not apply if the certification, information
documentation or other reporting requirement would be materially
more onerous to such holder or beneficial owner (in form,
procedure or substance of information required to be disclosed)
than comparable information or other reporting requirements
imposed under U.S. tax law, regulation and administrative
practice (such as IRS
Forms W-8
and
W-9).
|
S-63
No Guarantee of
Sufficient Funds of the Company
Neither of the Guarantees is a guarantee of any kind that the
Company or the Trust will at any time have sufficient assets to
declare a Capital Payment or other distribution or that any
other condition for declaring a Capital Payment or other
distribution will be met or that the Company will declare a
Capital Payment on the Class B Preferred Securities if all
conditions for the declaration of such a Capital Payment are met.
Subordination
In respect of each portion of the Upper
Tier 2 Percentage of the Trust Preferred
Securities for Payment Periods ending prior to the date of the
respective Tier 1 Qualification Election, if any, with
respect to such portions, in the case of a liquidation of the
Guarantor, the Guarantees will rank
|
|
|
subordinate and junior to all senior and subordinated debt
obligations of the Bank (including profit participation rights
(
Genussscheine
));
|
|
|
senior to all preference shares, Preferred Tier 1 Capital
Securities and the common shares of the Bank; and
|
unless otherwise expressly provided in the terms thereof,
pari passu
with any instrument or contractual obligation
of the Bank ranking junior to any of the instruments included in
the first clause above and senior to any of the instruments or
contractual obligations of the Bank included in the second
clause.
In respect of each portion of the respective
Tier 1 Percentage of the Trust Preferred
Series Securities for Payment Periods from and including
the Payment Period during which the respective Tier 1
Qualification Election, occurred, with respect to such portion,
in the case of a liquidation of the Guarantor, the Guarantees
will rank
|
|
|
subordinate and junior to all senior and subordinated debt
obligations of the Guarantor that do not expressly rank on
parity with the obligations of the Guarantor under the
Guarantees;
|
|
|
on parity with the most senior ranking preference shares of the
Guarantor, if any, and with its obligations under any guarantee
or support agreement or undertaking relating to any preference
shares or other instrument of any subsidiary of the Bank
qualifying as consolidated Tier 1 capital of the Bank that
does not expressly rank junior to the obligation of the
Guarantor under the Guarantees; and
|
|
|
senior to the Junior Securities.
|
Limitations on
Transactions
For so long as any Class B Preferred Series Securities
or Trust Preferred Series Securities remain
outstanding and until the Tier 1 Qualification Election has
become effective for the full amount of the Class B
Preferred Series and the Trust Preferred Series, the
Guarantor undertakes not to give any guarantee or similar
undertaking with respect to, or enter into any other agreement
relating to the support of, or payment of any amounts in respect
of any Group Capital Securities of any of its affiliates which
guarantee or similar undertaking or other support agreement
would rank senior in any regard to the related Guarantee unless
the related Guarantee is amended to give the holders such rights
and entitlements in respect of the Upper
Tier 2 Percentage of the Class B Preferred
Securities or the Upper Tier 2 Percentage of the
Trust Preferred Securities to which such Guarantee relates
as are contained in or attached to such other guarantee, similar
undertaking or agreement so that the Guarantors
obligations under such Guarantee rank at least on parity with,
and contain substantially equivalent rights of priority as to
payment, as such guarantee, similar undertaking or other support
agreement.
We define Group Capital Securities to include any
interests in the capital of any person that rank (A) senior
to the preference shares, Preferred Tier 1 Capital
Securities and common shares of such person and (B) junior
to all other obligations of such person that (i) rank
senior to the preference shares and
S-64
Preferred Tier 1 Capital Securities, if any, of such person
and (ii) do not by their terms rank
pari passu
with
such interests.
From and including the date of the first Tier 1
Qualification Election, if any, and for so long as any
Class B Preferred Series Securities or
Trust Preferred Series Securities remain outstanding,
the Guarantor undertakes not to issue any preference shares
ranking senior on liquidation to its obligations under the
related Guarantee or give any guarantee or similar undertaking
with respect to, or enter into any other agreement relating to
the support or payment of any amounts in respect of, any other
preference shares (or instruments ranking on parity with or
junior to preference shares) issued by any other affiliated
entity that would rank senior in right of payment to the
Guarantors obligations under the related Guarantee in
respect of the respective Tier 1 Percentage of the
Class B Preferred Series Securities or the respective
Tier 1 Percentage of the Trust Preferred
Series Securities, unless that Guarantee is amended to give
the holders of the respective Tier 1 Percentage of the
Class B Preferred Series Securities or of the
respective Tier 1 Percentage of the
Trust Preferred Series Securities to which such
Guarantee relates such rights and entitlements as are contained
in or attached to such other guarantee, similar undertaking or
agreement so that the Guarantors obligations under such
Guarantee rank at least on parity with, and contain
substantially equivalent rights of priority as to payment as,
such guarantee, similar undertaking or other support agreement.
Events of
Default
An event of default:
|
|
|
under the Trust Preferred Guarantee occurs, if (i) the
Guarantor defaults in respect of any of its payment obligations
under the Trust Preferred Guarantee or (ii) the Guarantor
defaults in the performance of any other obligation under the
Trust Preferred Guarantee, and, in the case of (ii), such
default continues for 60 days after the Trust Preferred
Guarantee Trustee has given notice of such default to the
Guarantor; and
|
|
|
under the Class B Preferred Guarantee occurs, if
(i) the Guarantor defaults in respect of any of its payment
obligations under the Class B Preferred Guarantee or
(ii) the Guarantor defaults in the performance of any other
obligation under the Class B Preferred Guarantee, and, in
the case of (ii), such default continues for 60 days after
the Class B Preferred Guarantee Trustee has given notice of
such default to the Guarantor.
|
The applicable Guarantee Trustee is required to notify the
holders of the Trust Preferred Series Securities or
the holders of the Class B Preferred
Series Securities, as applicable, of all events of default
known to such Guarantee Trustee under the related Guarantee,
within 90 days after the occurrence of such event of
default, unless such event of default has been cured before such
notification. The applicable Guarantee Trustee may withhold such
notice if and so long such Guarantee Trustee in good faith
determines that the withholding of such notice is in the
interests of the Holders of the Trust Preferred
Series Securities or Class B Preferred
Series Securities, as applicable.
Amendments
The Guarantor and the applicable Guarantee Trustee may, at any
time and from time to time, without the consent of the holders
of any of the Class B Preferred Series Securities or
the Trust Preferred Series Securities, as applicable,
to which the Guarantee relates, modify either of the Guarantees
|
|
|
to make any changes required to make the Guarantee rank on
parity with instruments of the Guarantor that would otherwise be
prohibited by the terms of that Guarantee,
|
|
|
to cure any ambiguity or correct any mistake,
|
|
|
to correct or supplement any provision in the Guarantee that may
be defective or inconsistent with any other provision of the
Guarantee,
|
S-65
|
|
|
to add to the covenants, restrictions or obligations of the
Guarantor for the benefit of the holders of the related
securities or to surrender any right or power conferred upon the
Guarantor under that Guarantee,
|
|
|
to evidence the succession of another entity to the Guarantor
and the assumption by any such successor of the covenants of the
Guarantor stated in the Guarantee,
|
|
|
to modify or supplement any provision in that Guarantee to give
effect to any provision made invalid by any changes in the 1940
Act, the Trust Indenture Act or the rules or regulations of
either such Act or any other applicable law, provided that no
such amendment will have a material adverse effect on the
rights, preferences or privileges of the holders of the related
securities (and, in the case of the Class B Preferred
Guarantee, so long as the Trust holds the Class B Preferred
Securities, the Trust Preferred Securities),
|
|
|
to modify, eliminate and add to any provision of that Guarantee
to such extent as may be necessary or desirable, provided that
no such amendment will have a material adverse effect on the
rights, preferences or privileges of the holders of the related
securities (and, in the case of the Class B Preferred
Guarantee, so long as the Trust holds the Class B Preferred
Securities, the Trust Preferred Securities), or
|
|
|
in connection with the creation of any series of related
securities and the establishment of the particular terms
(including, without limitation, to confirm or provide that the
benefits of the Trust Preferred Guarantee and the Class B
Preferred Guarantee apply to additional trust preferred
securities issued by the Trust or preferred securities of
Class B issued by the Company, as applicable, issued on or
before June 30, 2013 in accordance with the
Trust Agreement and the LLC Agreement).
|
Each of the Guarantees may be modified with the prior approval
of the holders of not less than a majority in liquidation
preference amount of the securities to which the Guarantee
relates, provided that, (i) changes to the certain
provisions relating to guarantee payment obligations and related
Guarantor certification requirements, unless those changes are
of the kind that would be permitted pursuant to the paragraph
above, may not be amended without the prior approval of each
holder of the related securities, and (ii) any amendment to
reduce the aggregate liquidation preference amount of related
securities whose holders must consent to an amendment must be
approved by each holder of such related securities.
Termination
The Guarantees will terminate upon the earlier of (i) full
payment of the Redemption Price of the Trust Preferred
Series or Class B Preferred Series, as applicable, or
repurchase and cancellation of the Trust Preferred Series
or Class B Preferred Series, as applicable, to which such
Guarantee relates or (ii) upon full payment of the
liquidation preference amount, plus any accumulated and unpaid
Capital Payments, plus Arrears of Payments, if applicable, plus
Additional Amounts, if any, payable on the Trust Preferred
Series upon liquidation of the Trust pursuant to the
Trust Agreement or on the Class B Preferred Series
upon liquidation of the Company pursuant to the LLC Agreement,
as applicable, to which such Guarantee relates.
S-66
DESCRIPTION OF
THE SERVICES AGREEMENT
The following summary sets forth the material terms and
provisions of the Services Agreement. This summary is not
complete and is qualified in its entirety by reference to the
Services Agreement.
Under the Services Agreement, the Bank (which may act through
its New York branch) is obligated, among other things, to
provide legal, accounting, tax and other support services to the
Trust and the Company, to maintain compliance with all
applicable U.S. and German local, state and federal laws,
and to provide administrative, recordkeeping and secretarial
services for the Company and the Trust. The Bank (which may act
through its New York branch) is responsible for and will pay all
expenses related to the organization and operations of the
Company and the Trust, including, in each case, any taxes,
duties, assessments or governmental charges of whatsoever nature
(other than Withholding Taxes) imposed by Germany, the United
States or any other taxing authority upon the Company or the
Trust, and all other obligations of the Company and the Trust
(other than with respect to the Trust Securities or the
Company Securities) will be paid by the Bank (which may act
through its New York branch) pursuant to the Services Agreement.
The Services Agreement does not prevent the Bank or any of its
affiliates or employees from engaging in any other activities.
The Services Agreement had an initial term of ten years as of
May 9, 2008, the date as of which it was entered into, and
is renewable automatically for additional five-year periods
unless terminated by Company and the Trust on 90 days
notice.
The Services Agreement is governed by, and construed in
accordance with, the laws of the State of Delaware.
S-67
DESCRIPTION OF
THE TERMS OF THE INITIAL OBLIGATION
The following, together with Description of Capital
Securities Description of Subordinated Debt Obligations in
Connection with Certain Capital Securities in the attached
prospectus, describes the material terms of the Initial
Obligation. If the description of the Initial Obligation in this
prospectus supplement differs in any way from the description in
the attached prospectus, you should rely on the description in
this prospectus supplement.
The following summary sets forth the material terms and
provisions of the Initial Obligation. This summary is not
complete and is qualified in its entirety by reference to the
Initial Obligation.
General
The Initial Obligation will be a perpetual, unsecured,
subordinated note with an aggregate Principal Amount of
$[ ],000,000 issued by the Bank on the Issue
Date.
The Initial Obligation will bear interest at the fixed annual
rate of 8.05%, payable quarterly in arrears on each Payment
Date. The initial Payment Period will commence on the Issue
Date. The amount of interest payable for any period will be
computed based on a
360-day
year
comprised of twelve
30-day
months. If any Payment Date or a date fixed for redemption of
the Initial Obligation (which we refer to as Obligation
Redemption Date) is not a Business Day, payment of all
amounts otherwise payable on such date will be made on the next
succeeding Business Day, without adjustment, interest or further
payment as a result of such delay in payment.
The Initial Obligation is perpetual which means that it does not
have a maturity date.
The Initial Obligation will not be listed on any stock exchange.
The Initial Obligation will be purchased by the Company with
proceeds from the Companys issuance and sale of the
Class B Preferred Securities to the Trust. The aggregate
Principal Amount of the Initial Obligation will be such that the
aggregate interest income paid to the Company on the Initial
Obligation on any Payment Date will create sufficient Operating
Profits for the Company to make the aggregate Capital Payments
on the Class B Preferred Securities on the corresponding
Payment Date. The purchase of the Initial Obligation by the
Company will occur contemporaneously with its issuance of the
Class B Preferred Securities.
In connection with the issuance of the Outstanding
Trust Preferred Securities, Deutsche Bank AG has issued and
sold a perpetual fixed rate subordinated note governed by New
York law (which we refer to as the Outstanding Initial
Obligation, and together with the Initial Obligation and any
additional obligation issued by the Bank from time to time and
having the same terms and conditions as the Initial Obligation
in all respects except for the issue date, the date from which
interest begins to accrue, the issue price and any other
deviations required for compliance with applicable law, as the
Initial Obligations) to the Company for a purchase price of
$1,265,000,025. The Initial Obligation shall have the same terms
and conditions as the Outstanding Initial Obligation in all
respects except for the issue date, the date from which interest
began to accrue on the Outstanding Initial Obligation, the issue
price and any other deviations required for compliance with
applicable law.
Additional
Interest Amounts
Payment of interest on the Initial Obligation (or any Substitute
Obligation) and any repayment upon redemption thereof, will be
made without withholding or deduction for or on account of any
Withholding Tax unless such deduction or withholding is required
by law. In such event, the Bank or other obligor will pay as
additional interest such additional amounts (which we refer to
as Additional Interest Amounts) as may be necessary in order
that the net amounts received by the Company, after such
deduction or withholding for or on account of Withholding Taxes,
will equal the amounts that otherwise would have
S-68
been received in respect of the Initial Obligation (or
Substitute Obligation) had no such withholding or deduction been
required. However, no such Additional Interest Amounts will be
payable on the Initial Obligation (or Substitute Obligation)
with respect to:
|
|
|
any tax which is payable otherwise than by deduction or
withholding;
|
|
|
any tax imposed on the net income of the holder or beneficial
owner of the Initial Obligation (or Substitute Obligation) or
that is payable by reason of the holder or beneficial owner of
the Initial Obligation (or Substitute Obligation) having some
connection with any Relevant Jurisdiction other than by reason
only of the mere holding or beneficial ownership of the Initial
Obligation (or Substitute Obligation);
|
|
|
with respect to any Withholding Taxes which are deducted or
withheld pursuant to (i) European Council Directive
2003/48/EC or any other European Union Directive or Regulation
implementing the conclusions of the ECOFIN Council meeting of
26-27 November
2000 on the taxation of savings income, or (ii) any
international treaty or understanding entered into for the
purpose of facilitating cooperation in the reporting and
collection of savings income and to which (x) the United
States, and (y) the European Union or Germany are parties,
or (iii) any provision of law implementing, or complying
with, or introduced to conform with, such Directive, Regulation,
treaty or understanding;
|
|
|
any Withholding Tax to the extent the same would not have been
so imposed but for the presentation of the Initial Obligation
(or Substitute Obligation) for payment on a date more than
15 days after the date on which payment became due and
payable or the date on which payment thereof is duly provided
for, whichever occurs later; or
|
|
|
to the extent such deduction or withholding can be avoided or
reduced if the holder or beneficial owner of the
Trust Preferred Securities makes a declaration of
non-residence or other similar claim for exemption to the
relevant tax authority or complies with any reasonable
certification, documentation, information or other reporting
requirement imposed by the relevant tax authority; provided,
however, that this exclusion will not apply if the
certification, documentation, information or other reporting
requirement would be materially more onerous (in form, procedure
or substance of information required to be disclosed) to the
holder or beneficial owner of the Trust Preferred
Securities than comparable information or other reporting
requirements imposed under U.S. tax law, regulation and
administrative practice (such as IRS
Forms W-8
and
W-9).
|
Redemption
The Bank may redeem the Initial Obligation, in whole but not in
part, together with all other obligations constituting the
Initial Obligations upon at least 30 days prior
notice, on any Payment Date falling on or after June 30,
2018 (which we refer to as the Obligation Initial
Redemption Date), if the Bank has obtained any required
regulatory approvals.
The Bank may redeem the Initial Obligation, in whole but not in
part, together with all other obligations constituting the
Initial Obligations upon at least 30 days prior
notice, at any time if both an Obligation Special
Redemption Event has occurred and the Company has decided
to redeem its Class B Preferred Securities in whole;
provided
the Bank has either (i) replaced the
Principal Amount together with the principal amount of all other
obligations constituting the Initial Obligations by paying in
other, at least equivalent, own funds (
haftendes
Eigenkapital
) within the meaning of the German Banking Act,
or (ii) obtained prior approval of the BaFin or any
successor authority for such early redemption.
The Bank may, at its option, redeem the Initial Obligation at
any time in whole or in part, if it replaces the Initial
Obligation in whole or in such part, as applicable, with
Substitute Obligations.
The redemption price payable for any redemption of the Initial
Obligation is equal to the aggregate Principal Amount thereof
plus accrued and unpaid interest thereon to the redemption date
and Additional Interest Amounts, if any.
S-69
Pursuant to § 10, subparagraph (5a) of the German
Banking Act, if the Bank redeems or repays the Initial
Obligation prior to the Obligation Initial Redemption Date,
notwithstanding any agreements to the contrary, any amounts so
paid to the Company as holder of the Initial Obligation must be
repaid to the Bank unless the Principal Amount will be replaced
with at least equivalent own funds (
haftendes
Eigenkapital
) within the meaning of the German Banking Act
or prior approval of the BaFin has been obtained.
Enforcement
In the event the Bank (or any obligor thereunder) fails to make
any payment of interest and Additional Interest Amounts, if any,
on the Initial Obligation or Substitute Obligation, the Company
as holder of such Obligations may bring an action or proceeding
to such payment, provided that the Bank is not in default in the
payment of interest under any indebtedness to which the Initial
Obligation is subordinated. The Company as holder of the Initial
Obligation will not have any right to accelerate payment of the
Initial Obligation in the case of a failure of the Bank (or
other obligor thereunder) to make any payment of principal of,
interest on, or other amounts owing under, the Initial
Obligation or a failure to perform any other covenant of the
Bank (or other obligor) contained in the Initial Obligation.
Subordination
The Initial Obligation is the Banks direct, unsecured
subordinated obligation. Except for the amount corresponding to
the Tier 1 Percentage of the Trust Preferred
Securities, if any, claims for repayment of the Initial
Obligation will, in the case of an insolvency or liquidation of
the Bank, rank
|
|
|
subordinate and junior to all senior and subordinated debt
obligations of the Bank (including profit participation rights
(
Genussscheine
));
|
|
|
senior to all preference shares, Preferred Tier 1 Capital
Securities and the common shares of the Bank;
|
|
|
pari passu
with all other obligations constituting the
Initial Obligations; and
|
|
|
unless otherwise expressly provided in the terms thereof,
pari passu
with any instrument or contractual obligation
of the Bank ranking junior to any of the instruments included in
the first clause above and senior to any of the instruments or
contractual obligations of the Bank included in the second
clause above.
|
Claims for repayment of the Initial Obligation in an amount
corresponding to the Tier 1 Percentage of the
Trust Preferred Securities, if any, will, in the case of an
insolvency or liquidation of the Bank, rank
|
|
|
subordinate and junior to all senior and subordinated debt
obligations of the Guarantor that do not expressly rank on
parity with the obligations of the Guarantor under the
Guarantees;
|
|
|
pari passu
with all other obligations constituting the
Initial Obligations; and
|
|
|
on parity with the most senior ranking preference shares of the
Guarantor, if any, and with its obligations under any guarantee
or support agreement or undertaking relating to any preference
shares or other instrument of any subsidiary of the Bank
qualifying as consolidated Tier 1 capital of the Bank that
does not expressly rank junior to the obligation of the
Guarantor under the Guarantees; and
|
|
|
senior to the Junior Securities.
|
The obligations of the Bank under the Initial Obligation may not
be secured by any lien, security interest or other encumbrance
on any property of the Bank or any other person and, except as
permitted by applicable law, the Bank will not, directly or
indirectly, acquire for its own account, finance for the account
of any other person the acquisition of, or accept as security
for any obligation owed to it, any of the Initial Obligation.
The Bank is also prohibited from amending the terms of the
Initial Obligation to limit the subordination provisions.
S-70
The Company, as the holder of the Initial Obligation, will waive
any rights it may have to set off claims it may have against the
Bank for payments under the Initial Obligation against any
claims the Bank may have against it.
Substitution
At any time, the Bank will have the right to (i) substitute
another obligor on the Obligations, in whole or in part, which
obligor may be either a branch of the Bank or a Subsidiary, or
(ii) replace the Obligations, in whole or in part, with
Substitute Obligations;
provided,
in each case, that
(a) the Bank has received the written opinion of a
nationally recognized law firm in the United States that
reinvestment in such Substitute Obligation will not adversely
affect the qualified dividend income eligibility for
purposes of Section 1(h)(11) of the Internal Revenue Code
of 1986, as amended (or any successor legislation), if any, of
Capital Payments on the Trust Preferred Securities or cause
the holders thereof to recognize gain or loss for
U.S. federal income tax purposes and (b) such
substitution or replacement does not result in a Company Special
Redemption Event or a Trust Special
Redemption Event, and
provided, further
in each case
that the Bank has obtained any required regulatory approvals.
Governing
Law
The Initial Obligation will be governed by New York law.
S-71
CERTAIN U.S.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain material U.S. federal
income tax considerations relating to an investment in the
Trust Preferred Securities. Unless otherwise specifically
indicated herein, this summary addresses the material
U.S. federal income tax consequences to a beneficial owner
of the Trust Preferred Securities (a
Trust Preferred Securityholder) that acquires
those securities on their original issue at their original
offering price and that is an individual citizen or resident of
the United States, a corporation organized in or under the laws
of the United States or any state thereof or the District of
Columbia, or otherwise is subject to U.S. federal income
taxation on a net income basis in respect of the
Trust Preferred Securities (a U.S. Holder).
This summary does not address all tax consequences that may be
applicable to a Trust Preferred Securityholder. In
particular, the following discussion does not address
(i) persons that may be subject to special treatment or
special circumstances under U.S. federal income tax law,
such as banks, insurance companies, thrift institutions,
regulated investment companies, real estate investment trusts,
dealers in securities or currencies, and traders in securities
that elect mark-to-market treatment, (ii) persons that will
hold Trust Preferred Securities as part of a position in a
straddle or as part of a hedging,
conversion or other integrated investment
transaction for U.S. federal income tax purposes,
(iii) persons whose functional currency is not the United
States dollar or (iv) persons that do not hold
Trust Preferred Securities as capital assets. This summary
is based upon the Internal Revenue Code of 1986, as amended (the
Code), Treasury Regulations, Internal Revenue
Service (IRS) rulings and pronouncements and
judicial decisions as of the date hereof, all of which are
subject to change (possibly with retroactive effect).
The discussion below is not binding on the IRS or the courts.
Prospective investors should note that no rulings have been or
are expected to be sought from the IRS with respect to the
Trust Preferred Securities or income allocated to the
Trust Preferred Securityholders in respect thereof, and no
complete assurance can be given that the IRS will not take
positions contrary to those described in this summary. Moreover,
no complete assurance can be given that the treatment described
below will not be challenged by the IRS or, if challenged, that
such treatment will be sustained.
YOU ARE URGED TO CONSULT WITH YOUR TAX ADVISORS AS TO THE
PARTICULAR UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO YOU
OF HOLDING THE TRUST PREFERRED SECURITIES, AS WELL AS THE
EFFECT OF ANY STATE, LOCAL, OR FOREIGN TAX LAWS AND OF CHANGES
IN APPLICABLE TAX LAWS.
Classification of
the Trust
Under current law, and assuming compliance with the terms of the
Trust Agreement, for U.S. federal income tax purposes
the Trust will be treated as a grantor trust and will not be
treated as an association taxable as a corporation. As a result,
each Trust Preferred Securityholder will be considered the
beneficial owner of a
pro rata
portion of the related
Class B Preferred Series Securities held by the Trust.
Tax Treatment of
the Company
In purchasing the Trust Preferred Securities, each
Trust Preferred Securityholder agrees with the Bank, the
Company and the Trustees that the Bank, the Company, the
Trustees and the Trust Preferred Securityholders will treat
Trust Preferred Securityholders for all purposes as holders
of an undivided interest in Trust assets, including the
Class B Preferred Series, and not as holders of an
underlying interest in the Bank or in any other person, and the
following discussion is based on the assumption that such
treatment will apply for U.S. federal income tax purposes.
Assuming compliance with the LLC Agreement, the Company will not
be taxable as a corporation and will not itself be subject to
U.S. federal income tax, but will be treated as a
partnership for U.S. federal income tax purposes.
S-72
Income from the
Class B Preferred Securities
Under the LLC Agreement, upon the payment of dividends on the
Class B Preferred Series, a like amount of the
Companys ordinary income generally will be allocated to
the holders of Class B Preferred Series Securities.
Regardless of when dividends on the related Trust Preferred
Securities and other Trust Preferred Series Securities are
actually paid, income allocated to the holders of Class B
Preferred Series Securities will be includable as ordinary
income by a U.S. Holder for its taxable year that includes
December 31st of the calendar year in which the income
is allocated, except that if the U.S. Holder disposes of
its entire holding of the Trust Preferred Series Securities
and Class B Preferred Series Securities (if any), the
amount allocated for the calendar year of that disposition will
be includable for the U.S. Holders taxable year that
includes the date of that disposition. Income in respect of the
securities generally will constitute foreign source income,
subject to various foreign tax credit limitations, and will not
be eligible for the dividends-received deduction available for
dividends paid by U.S. corporations.
In the event a Capital Payment in respect of the Upper
Tier 2 Percentage of the Class B Preferred
Securities is deferred, it is possible, depending on the then
current facts and circumstances, that a U.S. holder of the
Class B Preferred Securities would be allocated taxable
income in respect of the fair market value of the holders
allocable share of the subordinated deposits issued to the
Company in lieu of cash payments on the Initial Obligation,
which allocation could be significantly less than, and in no
event would exceed, the amount of the deferred Capital Payment.
Subject to certain exceptions for short-term and hedged
positions, the U.S. dollar amount of dividends received by
an individual before January 1, 2011 will be subject to
taxation at a maximum rate of 15% if the dividends are
qualified dividends. Although there is no authority
directly on point and therefore the matter is not completely
free from doubt, in the opinion of Cleary Gottlieb
Steen & Hamilton LLP, as counsel to the Bank, the
Initial Obligation will be treated as an equity interest in the
Bank and the income received by the Company in respect thereof
and allocated to U.S. Holders will be treated as dividends
for U.S. federal income tax purposes, and will be eligible
to be treated as qualified dividends if the Bank is a qualified
foreign corporation. This opinion is based on current law, and
assumes the accuracy of, and full compliance with, the terms of
the Initial Obligation (and certain other documents) and that
such documents conform to the form thereof that such counsel has
reviewed. The remainder of this disclosure assumes the accuracy
of this opinion. In addition, a condition to the issuance of a
Substitute Obligation is the receipt of a written opinion of a
nationally recognized law firm in the United States that
reinvestment in such Substitute Obligation will not adversely
affect the qualified dividend income eligibility of
income allocated to U.S. Holders. See Description of
the Terms of the Initial Obligation
Substitution. Accordingly, assuming the accuracy of such
an opinion, income received by the Company in respect of the
Substitute Obligation and allocated to U.S. Holders will be
eligible to be treated as qualified dividends for
U.S. federal income tax purposes, provided the obligor of
the Substitute Obligation is a qualified foreign corporation.
The Bank (or any other obligor on a Substitute Obligation) will
be a qualified foreign corporation (or so treated) if:
(i) the obligor is eligible for the benefits of a
comprehensive income tax treaty with the United States which the
U.S. Treasury Department determines is satisfactory and
which includes an exchange of information program and
(ii) the obligor was not, in the year prior to the year in
which the dividend was paid, and is not, in the year in which
the dividend is paid, a passive foreign investment company
(PFIC). The Bank is eligible for the benefits of the
Germany-U.S. income tax treaty, which satisfies the treaty
requirement described above. Based on the Banks audited
financial statements and relevant market data, the Company
believes that the Bank was not a PFIC for U.S. federal
income tax purposes with respect to its 2009 taxable year. In
addition, based on the Banks audited financial statements
and the Companys current expectations regarding the value
and nature of the Banks assets, the sources and nature of
its income, and relevant market data, the Company does not
anticipate that the Bank will be a PFIC in 2010 or in the
foreseeable future and therefore the Company anticipates that
the Bank will be a qualified foreign corporation or so treated.
Accordingly, the Company anticipates that under current law
dividends allocated to U.S. Holders generally will be
eligible for taxation as qualified dividends.
S-73
The U.S. Treasury has also announced its intention to
promulgate final rules pursuant to which holders of shares and
intermediaries through whom such securities are held will be
permitted to rely on statements or certifications from issuers
to establish that dividends are eligible to be treated as
qualified dividends under current law. Because final procedures
have not yet been issued, it is not certain that the Bank will
be able to comply with the final requirements. The Bank will use
reasonable efforts to facilitate appropriate tax reporting by
providing certifications pursuant to any subsequent rules the
U.S. Internal Revenue Service or U.S. Treasury may
promulgate to the extent the Bank is reasonably able to do so
without material cost.
Disposition of
the Trust Preferred Securities
A U.S. Holder will recognize gain or loss on a sale,
exchange or other disposition of the Trust Preferred
Securities (including the receipt of a distribution solely of
cash in redemption of a U.S. Holders
Trust Preferred Securities) in an amount equal to the
difference between its adjusted tax basis in the
Trust Preferred Securities and the amount realized on the
disposition of such Trust Preferred Securities. Any gain or
loss so recognized generally will be capital gain or loss.
Long-term capital gains recognized by an individual
U.S. Holder in respect of the Trust Preferred
Securities held for more than one year generally are subject to
taxation at reduced rates.
A U.S. Holders adjusted tax basis in
Trust Preferred Securities generally will equal the amount
paid for the Trust Preferred Securities, increased by the
amount of income allocated to such U.S. Holder and reduced
by the amount of any cash distributed to such U.S. Holder
with respect to the Trust Preferred Securities. A
U.S. Holder who acquires Trust Preferred Securities at
different prices may be required to maintain a single aggregate
adjusted tax basis in all of his Trust Preferred Securities
and, upon sale or other disposition of some of such
Trust Preferred Securities, may be required to allocate a
pro rata
portion of such aggregate tax basis to the
Trust Preferred Securities sold (rather than maintaining a
separate tax basis in each Trust Preferred Security for
purposes of computing gain or loss on a sale of that
Trust Preferred Security).
Effect of
Tier 1 Qualification Elections
Upon a Tier 1 Qualification Election, the terms of the
Tier 1 Percentage of the Class B Preferred
Securities resulting from such Tier 1 Qualification
Election, described in Description of the Company
Securities Class B Preferred Securities
relating to Capital Payments and other matters will change as
described in that section of this prospectus supplement. A
U.S. Holder will not realize gain or loss in the event the
Bank makes a Tier 1 Qualification Election.
Receipt of the
Class B Preferred Series Securities Upon Liquidation of the
Trust
Under certain circumstances, as described under the caption
Description of the Trust Securities
Redemption, Class B Preferred Series Securities may
be distributed to Trust Preferred Securityholders in
exchange for their Trust Preferred Securities and in
liquidation of the Trust. Unless the liquidation of the Trust
occurs as a result of the Trust being subject to
U.S. federal income tax with respect to income accrued or
received on the Class B Preferred Series, such a
distribution to a U.S. Holder would, for U.S. federal
income tax purposes, be treated as a nontaxable event to each
U.S. Holder, each U.S. Holder would receive an
aggregate tax basis in the Class B Preferred Series
Securities it receives equal to such U.S. Holders
aggregate tax basis in its Trust Preferred Securities, and
a U.S. Holders holding period in the Class B
Preferred Series Securities so received in liquidation of the
Trust would include the period during which the
Trust Preferred Securities were held by such
U.S. Holder. The U.S. Holder of the Class B
Preferred Series Securities would be subject to the same
U.S. federal income tax treatment as when it held
Trust Preferred Securities, but would hold an interest in
the Company rather than an interest in a trust. If, however, the
liquidation of the Trust were to occur because the Trust is
subject to U.S. federal income tax with respect to income
accrued or received on the Class B Preferred Series, the
distribution of the
S-74
Class B Preferred Series Securities to U.S. Holders by
the Trust likely would be a taxable event to each
U.S. Holder, and the U.S. Holders would recognize gain
or loss as if each U.S. Holder had exchanged its
Trust Preferred Securities for Class B Preferred
Series Securities it received upon the liquidation of the Trust.
Such gain or loss would be equal to the difference between the
U.S. Holders aggregate tax basis in its
Trust Preferred Securities surrendered in the exchange and
the aggregate fair market value of the Class B Preferred
Series Securities received in the exchange.
Receipt of Cash
Upon Liquidation of the Trust
In certain circumstances, as described under the captions
Description of the Trust Securities
Redemption and Liquidation Distribution
upon Dissolution, (i) the Class B Preferred
Series may be redeemed for cash and the proceeds of such
redemption distributed to Trust Preferred Securityholders
together with the holders of the other Trust Preferred Series
Securities in redemption of their respective
Trust Preferred Series Securities or (ii) the Company
may liquidate, in which case liquidation proceeds paid with
respect to the Class B Preferred Series will be distributed
pro rata
to Trust Preferred Securityholders together
with the holders of the other Trust Preferred Series Securities
upon the liquidation of the Trust. Under current law, such a
redemption or liquidation would, for U.S. federal income
tax purposes, constitute a taxable disposition of the
Trust Preferred Securities, and a U.S. Holder would
recognize gain or loss as if it sold such Trust Preferred
Securities for cash. See Disposition of the
Trust Preferred Securities.
Certain
Non-U.S.
Holders
The Company intends to operate so that it will not be treated as
engaged in the conduct of a U.S. trade or business.
Moreover, the Company intends to invest in securities that will
be exempt from withholding of U.S. federal income tax when
income attributable to such securities is distributed or
allocated to beneficial holders of the Class B Preferred
Series Securities provided that certification is furnished as
described below.
Accordingly, payments in respect of Trust Preferred
Securities that are beneficially owned by a non-resident alien
individual or a foreign corporation (a
Non-U.S. Holder)
generally will not be subject to U.S. withholding tax. A
Non-U.S. Holder
also generally will not be subject to U.S. federal income
tax in respect of its allocable share of the Companys
income unless such income is effectively connected with the
conduct by the
Non-U.S. Holder
of a trade or business in the United States.
Non-U.S. Holders
generally will not be subject to U.S. federal income or
withholding tax on gain realized on the sale or exchange of the
Trust Preferred Securities unless (i) such gain is
effectively connected with the conduct by the
Non-U.S. Holder
of a trade or business in the United States or (ii) in the
case of gain realized by an individual
Non-U.S. Holder,
the
Non-U.S. Holder
is present in the United States for 183 days or more in the
taxable year of the sale and certain other conditions are met.
Information
Reporting and Backup Withholding
It is expected that income on the Trust Preferred
Securities will be reported to U.S. Holders, and may be
reported to the IRS, by financial institutions that hold the
Trust Preferred Securities on behalf of such
U.S. Holders on an IRS Form 1099, which form should be
mailed to U.S. Holders by January 31 following each
calendar year. Payments made on, and proceeds from the sale of,
the Trust Preferred Securities also may be subject to
U.S. backup withholding unless the Trust Preferred
Securityholder complies with certain identification
requirements. Any amounts withheld under the backup withholding
rules generally will be allowed as a credit against a
Trust Preferred Securityholders U.S. federal
income tax, provided the required information is timely filed
with the IRS.
In general, a
Non-U.S. Holder
who holds Trust Preferred Securities through a
non-United
States Bank or other
non-United
States financial institution that is a participant in Euroclear
or Clearstream will not be
S-75
required to provide certification of
non-U.S. status
for U.S. withholding purposes and will not be subject to
any information reporting rules. In other contexts, however,
including where a
Non-U.S. Holder
withdraws from the Trust and directly holds the Class B
Preferred Securities, a
Non-U.S. Holder
in order to eliminate U.S. information reporting
requirements and backup withholding tax will be required to
comply with applicable certification procedures to establish the
holders
non-U.S. status
(by providing an IRS
Form W-8BEN
or other applicable form) or otherwise establish its exempt
status as a corporation or other exempt recipient.
S-76
CERTAIN ERISA
CONSIDERATIONS
General
Each fiduciary of a pension, profit-sharing or other employee
benefit plan subject to the fiduciary responsibility provisions
of ERISA (an ERISA Plan) should consider the
fiduciary standards of ERISA in the context of the ERISA
Plans particular circumstances before authorizing an
investment in the Trust Preferred Securities. Accordingly,
among other factors, the fiduciary should consider whether the
investment would satisfy the prudence and diversification
requirements of ERISA and would be consistent with the documents
and instruments governing the ERISA Plan.
Section 406 of ERISA and Section 4975 of the Code
prohibit ERISA Plans, as well as individual retirement accounts,
Keogh plans and other plans and arrangements subject to
Section 4975 of the Code and any entities whose underlying
assets include plan assets by reason of any such
ERISA Plans or other accounts, plans or
arrangements investment in the entity (together with ERISA
Plans, Plans), from engaging in certain transactions
involving plan assets with persons who are
parties in interest under ERISA or
disqualified persons under the Code (together,
Parties in Interest) with respect to such Plans.
A violation of these prohibited transaction rules
may result in an excise tax or other liabilities under ERISA
and/or
Section 4975 of the Code for such Parties in Interest,
unless exemptive relief is available under an applicable
statutory or administrative exemption. In addition, the
fiduciary of the Plan that engaged in such a non-exempt
prohibited transaction may be subject to penalties and
liabilities under ERISA
and/or
the
Code. In the case of an individual retirement account, the
occurrence of a prohibited transaction involving the individual
who established the individual retirement account, or his or her
beneficiaries, would cause the individual retirement account to
lose its tax-exempt status, unless exemptive relief is available.
Employee benefit plans that are
non-U.S. plans
(as described in Section 4(b)(4) of ERISA), governmental
plans (as defined in Section 3(32) of ERISA) and certain
church plans (as defined in Section 3(33) of ERISA) are not
subject to the requirements of ERISA or Section 4975 of the
Code, but may be subject to non-US, federal, state or local law
that is substantially similar to such provisions of ERISA or the
Code (Similar Law).
Plan Assets
Regulation
Under a regulation issued by the United States Department of
Labor (the DOL) as modified by Section 3(42) of
ERISA (the Plan Assets Regulation), the assets of
the Trust and the Company could be deemed to be plan
assets of a Plan for purposes of ERISA and
Section 4975 of the Code if plan assets of the
Plan were used to acquire an equity interest in the Trust or in
the Company and no exception were applicable under the Plan
Assets Regulation. The Plan Assets Regulation defines an
equity interest as any interest in an entity, other
than an instrument that is treated as indebtedness under
applicable local law and has no substantial equity features, and
specifically includes a beneficial interest in a trust.
Under exceptions contained in the Plan Assets Regulation, the
assets of the Trust
and/or
Company would not be deemed to be plan assets of
investing Plans if (i) immediately after the most recent
acquisition of an equity interest in the Trust or Company, as
applicable, less than 25% of the value of each class of equity
interests in the Trust or Company, as applicable, were held by
Plans as determined in accordance with the Plan Assets
Regulation or (ii) the Trust Preferred Securities or
Class B Preferred Securities, as applicable, were
publicly-offered securities for purposes of the Plan
Assets Regulation. Publicly-offered securities are
securities which are widely-held, freely transferable, and
either (x) part of a class of securities registered under
Section 12(b) or 12(g) of the Exchange Act or (y) sold
as part of an offering pursuant to an effective registration
statement under the Securities Act and then timely registered
under the Exchange Act.
No assurance can be given that Plans will hold less than 25% of
the total value of the Trust Preferred Securities at the
completion of the initial offering or of the
Trust Preferred Securities or Class B Preferred
S-77
Securities thereafter, and we do not intend to monitor or take
any other measures to assure satisfaction of the conditions to
this exception.
It is currently anticipated that the Trust Preferred
Securities will be offered in a manner consistent with the
requirements of the publicly-offered securities exception
described above and therefore the Trust should qualify for such
exception so that the assets of the Trust should not be
plan assets of any Plan investing in the
Trust Preferred Securities. However, no assurance can be
given that the Trust Preferred Securities (or the
Class B Preferred Securities if distributed to investors)
would be considered to be publicly-offered securities under the
Plan Assets Regulation.
Prohibited
Transactions
Certain transactions involving the Trust or the Company could be
deemed to constitute direct or indirect prohibited transactions
under ERISA and Section 4975 of the Code with respect to a
Plan if the Trust Preferred Securities (or Class B
Preferred Securities) were acquired with plan assets
of such Plan and assets of the Trust (and/or the Company) were
deemed to be plan assets of Plans investing in the
Trust and in the Company (either indirectly through holding
Trust Preferred Securities or directly through holding
Class B Preferred Securities). For example, if the Bank is
a Party in Interest with respect to an investing Plan (either
directly or by reason of its ownership of its banking or other
subsidiaries), the purchase of the Initial Obligation by the
Company may be prohibited by Section 406(a)(1) of ERISA and
Section 4975(c)(1) of the Code, unless exemptive relief
were available under an applicable statutory or administrative
exemption.
Section 408(b)(17) of ERISA and Section 4975(d)(20) of
the Code (the Service Provider Exemption) and five
prohibited transaction class exemptions issued by the DOL
(PTCEs) may provide exemptive relief for direct or
indirect prohibited transactions resulting from the purchase,
holding or redemption of the Trust Preferred Securities
and/or
the
Class B Preferred Securities under ERISA and the Code,
assuming that assets of the Trust and the Company were deemed to
be plan assets of Plans investing in the Trust and
in the Company. Those class exemptions are
PTCE 96-23
(for certain transactions determined by in-house asset
managers),
PTCE 95-60
(for certain transactions involving insurance company general
accounts),
PTCE 91-38
(for certain transactions involving bank collective investment
funds),
PTCE 90-1
(for certain transactions involving insurance company separate
accounts), and
PTCE 84-14
(for certain transactions determined by independent qualified
professional asset managers). There may be similar exemptions
for a plan subject to Similar Law.
Any purchaser or holder of the Trust Preferred Securities
or Class B Preferred Securities or any interest therein
(and any fiduciary causing such purchase or holder to purchase
or hold) will be deemed to have represented by its purchase and
holding thereof that on each day that it holds
Trust Preferred Securities or Class B Preferred
Securities either (a) it is not a Plan or a plan subject to
Similar Law and is not purchasing such securities on behalf of
or with plan assets of any Plan or plan subject to
Similar Law or (b) the purchase, holding and redemption of
such securities is exempt by reason of the Service Provider
Exemption,
PTCE 96-23,
95-60,
91-38,
90-1
or
84-14
or
similar exemptions from Similar Law.
Due to the complexity of these rules and the penalties that may
be imposed upon persons involved in non-exempt prohibited
transactions, it is particularly important that fiduciaries or
other persons considering purchasing the Trust Preferred
Securities on behalf of or with plan assets of any
Plan or plan subject to Similar Law consult with their counsel
regarding the potential consequences if the assets of both the
Trust and the Company were deemed to be plan assets
and the availability of exemptive relief under the Service
Provider Exemption,
PTCE 96-23,
95-60,
91-38,
90-1
or
84-14
or
similar exemptions from Similar Law.
The sale of any Trust Preferred Securities to a Plan or
plan subject to Similar Law is in no respect a representation by
the Trust, the Company, the Bank or the underwriter that such an
investment meets all relevant legal requirements with respect to
investments by such plans generally or any particular plan, or
that such an investment is appropriate for plans generally or
any particular plan.
S-78
UNDERWRITING
We intend to offer the Trust Preferred Securities through
Deutsche Bank Securities Inc. Subject to the terms and
conditions set forth in the purchase agreement dated March
[ ], 2010, among the Bank, the Company, the
Trust and the underwriter named therein (the Purchase
Agreement), the Trust will agree to sell to the
underwriter and the underwriter will agree to purchase from the
Trust, [ ],000 Trust Preferred Securities.
Under the terms and conditions of the Purchase Agreement, the
underwriter will be committed to purchase and pay for all
Trust Preferred Securities offered hereby, if any are
taken. The Purchase Agreement entitles the underwriter to
terminate the Purchase Agreement in certain circumstances before
payment is made to the Trust.
We have granted to the underwriter an option, exercisable on up
to [ ] occasions within
[ ] days from the date of this prospectus
supplement, to purchase up to an aggregate total of
[ ] additional Trust Preferred Securities
at the public offering price plus accrued Capital Payments, if
any, from March 30, 2010. The underwriter may exercise such
option solely for the purpose of covering over-allotments, if
any, in connection with the offering of the Trust Preferred
Securities offered by this prospectus supplement. Deutsche Bank
AG will pay the underwriter compensation for the additional
Trust Preferred Securities at the same rate as is set forth
in the table below.
The initial sale of the Trust Preferred Securities in this
offering entails a longer settlement period than is customary
for similar securities. It is expected that delivery of the
Trust Preferred Securities will be made against payment on
or about March 30, 2010, which will be the [ ]
New York business day following the date of pricing of the
Trust Preferred Securities (such settlement cycle being
referred to as T+[ ]). Under
Rule 15c6-1
of the Exchange Act, as amended, trades in the secondary market
generally are required to settle in three New York business
days, unless the parties to any such trade expressly agree
otherwise. Accordingly, purchasers who wish to trade the
Trust Preferred Securities prior to the third New York
business day before the delivery of the Trust Preferred
Securities will be required, by virtue of the fact that the
Trust Preferred Securities initially will settle in
T+[ ], to specify an alternate settlement cycle
at the time of any such trade to prevent a failed settlement.
Purchasers of the Trust Preferred Securities who wish to
make such trades should consult their own advisors.
The purchase price for the Trust Preferred Securities will
be the initial offering price set forth on the cover page of
this prospectus supplement (which we refer to as the Offering
Price). The underwriter proposes to offer the
Trust Preferred Securities at the Offering Price. The
underwriter may also offer the Trust Preferred Securities
to securities dealers at a price that represents a concession
not in excess of $[ ] per Trust Preferred
Security. If not all of the Trust Preferred Securities are
sold at the Offering Price, the underwriter may change the
public offering price and other selling terms.
The Purchase Agreement provides that the Bank will reimburse the
underwriter for certain expenses of the Offering. We estimate
that the out-of-pocket expenses of the Bank for this Offering
will be $[ ].
The following table shows the Offering Price, underwriting
discounts and commissions and proceeds before expenses to the
Trust (assuming no exercise of the underwriters
over-allotment option).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
|
|
Proceeds, before
|
|
|
|
|
Discounts and
|
|
Expenses, to the
|
|
|
Price to
Public
(1)
|
|
Commissions
|
|
Trust
(2)
|
|
Per Trust Preferred Security
|
|
$
|
[ ]
|
|
|
$
|
[ ]
|
|
|
$
|
[ ]
|
|
Total
|
|
$
|
[ ],000,000
|
|
|
$
|
[ ],000
|
|
|
$
|
[ ],000,000
|
|
|
|
|
(1)
|
|
Plus accrued Capital Payments, if
any, from March 30, 2010.
|
|
(2)
|
|
The Bank will pay the underwriter
compensation of $[ ] per Trust Preferred Security. Total
underwriting discounts and commissions payable by the Bank will
be $[ ].
|
The Outstanding Trust Preferred Securities are listed on
the New York Stock Exchange under the ticker symbol
DKT. We will make a supplemental application to list
the Trust Preferred Securities on the New York Stock
Exchange under the same symbol and as a fully fungible class of
securities together with the
S-79
Outstanding Trust Preferred Securities, but no assurance
can be given that the supplemental listing application will be
approved. There is no assurance that there is, will be or, as
the case may be, will continue to be a secondary market for the
Trust Preferred Series.
During a period of 30 days from the date of this prospectus
supplement, neither the Trust nor the Company nor any other
subsidiary of the Bank that is similar to the Trust or the
Company will, without the prior written consent of Deutsche Bank
Securities Inc., directly or indirectly, issue, sell, offer or
contract to sell, grant any option for sale of, or otherwise
transfer or dispose of, any Trust Preferred Securities or
any Class B Preferred Securities or any security
convertible into or exchangeable for the Trust Preferred
Securities or Class B Preferred Securities.
Because the Financial Industry Regulatory Authority, which we
refer to as FINRA, views trust preferred securities as a
direct participation program, any offering of the
Trust Preferred Securities will be subject to
Rule 2810 of the Conduct Rules of FINRA.
The offer and sale of any Trust Preferred Securities by
Deutsche Bank Securities Inc., a wholly-owned subsidiary of the
Bank, will comply with the applicable provisions of
Rule 2720 of the Conduct Rules of FINRA regarding a member
firms underwriting securities of an affiliate. As required
by Rule 2720, any such offer and sale will not be made to
any accounts over which Deutsche Bank Securities Inc. exercises
discretionary authority without the prior approval of the
customer.
Any of the Banks broker-dealer subsidiaries or affiliates,
including Deutsche Bank Securities Inc., may buy and sell the
Trust Preferred Securities in secondary market transactions
as part of their business as broker-dealers. Any sale will be at
negotiated prices relating to prevailing prices at the time of
sale. This prospectus supplement, together with the accompanying
prospectus, may be used in connection with offers and sales
related to secondary market transactions in the
Trust Preferred Securities by and through our broker-dealer
subsidiaries or affiliates, including Deutsche Bank Securities
Inc. Any of the Banks broker-dealer subsidiaries or
affiliates, including Deutsche Bank Securities Inc., may act as
principal or agent in such transactions.
The Trust, the Company and the Bank have been advised by the
underwriter that they currently intend to make a market in the
Trust Preferred Securities. However, neither the
underwriter nor the Banks broker-dealer subsidiaries or
affiliates, including Deutsche Bank Securities Inc., has any
obligation to make a market in the Trust Preferred
Securities and may discontinue any market-making activities at
any time without notice, at its sole discretion.
In the ordinary course of business, the underwriter and its
affiliates have provided financial advisory, investment banking
and general financing and banking services for the Bank and its
affiliates for customary fees, and may do so again in the future.
The Bank, the Trust and the Company have agreed to indemnify the
underwriter and certain other persons against certain
liabilities, including liabilities under the Securities Act, and
to contribute to payments which the underwriter and such persons
may be required to make as a result of such liabilities.
In connection with the Offering, the underwriter
and/or
its
affiliates may engage in stabilizing transactions,
over-allotment transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the
Exchange Act.
|
|
|
Stabilizing transactions consist of certain bids for or
purchases of Trust Preferred Securities in the open market
made for the purpose of preventing or retarding a decline in the
market price of the Trust Preferred Securities while the
Offering is in progress.
|
|
|
Over-allotment involves sales by the underwriter of
Trust Preferred Securities in excess of the number of
Trust Preferred Securities the underwriter is obligated to
purchase, which creates a syndicate short position. The
underwriter may close out any short position by purchasing
Trust Preferred Securities in the open market.
|
S-80
|
|
|
Syndicate covering transactions involve purchases of the Trust
Preferred Securities in the open market after the distribution
has been completed in order to cover syndicate short positions.
A naked short position can only be closed out by buying
Trust Preferred Securities in the open market. A naked
short position is more likely to be created if the underwriter
is concerned that there could be downward pressure on the price
of the Trust Preferred Securities in the open market after
pricing that could adversely affect investors who purchase in
the Offering.
|
|
|
Penalty bids permit the underwriter to reclaim a selling
concession from a syndicate member when the underwriter
repurchases Trust Preferred Securities originally sold by that
syndicate member in order to cover syndicate short positions or
make stabilizing purchases.
|
These stabilizing transactions, over-allotment and syndicate
covering transactions and penalty bids may have the effect of
raising or maintaining the market price of the
Trust Preferred Securities or preventing or retarding a
decline in the market price of the Trust Preferred
Securities. As a result the price of the Trust Preferred
Securities may be higher than the price that might otherwise
exist in the open market. If the underwriter commences any of
these transactions, it may discontinue them at any time. These
transactions may be effected in their over-the-counter market or
otherwise.
Selling
Restrictions
European Economic
Area
In relation to each member state of the European Economic Area
which has implemented the Prospectus Directive (each, a
Relevant Member State), the underwriter has
represented and agreed that with effect from and including the
date on which the Prospectus Directive is implemented in that
Relevant Member State (the Relevant Implementation
Date) it has not made and will not make an offer of the
Trust Preferred Securities to the public in that Relevant
Member State prior to the publication of a prospectus in
relation to the Trust Preferred Securities, except that it
may, with effect from and including the Relevant Implementation
Date, make an offer of the Trust Preferred Securities to
the public in that Relevant Member State at any time:
|
|
|
to legal entities which are authorized or regulated to operate
in the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
|
|
|
to any legal entity which has two or more of (1) an average
of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000 and
(3) an annual net turnover of more than 50,000,000,
as shown in its last annual or consolidated accounts;
|
|
|
by the underwriter to fewer than 100 natural or legal persons
(other than qualified investors as defined in the Prospectus
Directive); or
|
|
|
in any other circumstances falling within Article 3(2) of
the Prospectus Directive;
|
provided that no such offer will require the Trust or the
underwriter to publish a prospectus pursuant to Article 3
of the Prospectus Directive.
For the purposes of this provision, the expression an
offer of the Trust Preferred Securities to the
public in relation to any Trust Preferred Securities
in any Relevant Member State means the communication in any form
and by any means of sufficient information on the terms of the
offer and the Trust Preferred Securities to be offered so
as to enable an investor to decide to purchase or subscribe the
Trust Preferred Securities, as the same may be varied in
that member state by any measure implementing the Prospectus
Directive in that member state and the expression
Prospectus Directive means Directive 2003/71/EC and
includes any relevant implementing measure in each Relevant
Member State.
This European Economic Area selling restriction is in addition
to any other selling restrictions set out in this prospectus
supplement.
S-81
United
Kingdom
The underwriter has represented, warranted and agreed that:
|
|
|
it has only communicated or caused to be communicated and will
only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning
of section 21 of the Financial Services and Markets Act
2000, as amended from time to time, or any successor
legislation, (FSMA)) received by it in connection
with the issue or sale of any Trust Preferred Securities
which are the subject of the offering contemplated by this
prospectus supplement in circumstances in which
section 21(1) of the FSMA does not apply to the
Trust; and
|
|
|
it has complied and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to
the Trust Preferred Securities in, from or otherwise involving
the United Kingdom.
|
General
The underwriter has represented and agreed that it will not take
any action (including without limitation, the possession or
distribution of the accompanying prospectus, this prospectus
supplement or any other offering document or any publicity or
other material relating to the Trust Preferred Securities)
in any country or jurisdiction outside of the United States
where such action would (i) result in any violation of
applicable law or (ii) cause the issuance of the
Trust Preferred Securities to be considered an offering to
the public under applicable law.
S-82
WHERE YOU CAN
FIND ADDITIONAL INFORMATION
This prospectus supplement is part of a registration statement
on
Form F-3
(File
No. 333-162195)
we have filed with the SEC under the Securities Act of 1933, as
amended. This prospectus supplement omits some information
contained in the registration statement in accordance with SEC
rules and regulations. You should review the information in and
exhibits to the registration statement for further information
on us and the securities we are offering. Statements in this
prospectus supplement concerning any document we filed or will
file as an exhibit to the registration statement or that we
otherwise filed with the SEC are not intended to be
comprehensive and are qualified in their entirety by reference
to these filings. You should review the complete document to
evaluate these statements.
The SEC allows us to incorporate by reference much
of the information we file with the SEC, which means that we can
disclose important information to you by referring you to those
publicly available documents. The information that we
incorporate by reference in this prospectus supplement is an
important part of this prospectus supplement. For information on
the documents we incorporate by reference in this prospectus
supplement and the accompanying prospectus, we refer you to
Where You Can Find Additional Information on
page 5 of the accompanying prospectus.
In addition to the specific documents incorporated by reference
listed on page 5 of the accompanying prospectus, we
incorporate by reference in this prospectus supplement and the
accompanying prospectus the Reports on
Form 6-K
of Deutsche Bank AG filed on October 29, 2009 (two
reports), October 30, 2009, February 5, 2010 and
March 5, 2010.
In addition to the documents listed in the accompanying
prospectus and described above, we incorporate by reference in
this prospectus supplement and the accompanying prospectus any
future documents we file with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Exchange Act from the date of this
prospectus supplement until this Offering is completed. Reports
on
Form 6-K
we furnish to the SEC after the date of this prospectus
supplement (or portions thereof) are incorporated by reference
in this prospectus supplement only to the extent that the report
expressly states that it (or such portions) is incorporated by
reference in this prospectus supplement.
You may request, at no cost to you, a copy of these documents
(other than exhibits not specifically incorporated by reference)
by writing or telephoning us at: Deutsche Bank AG,
Theodor-Heuss-Allee 70, 60486 Frankfurt am Main, Germany,
Attention: Investor Relations (Telephone: +49-69-910-00).
S-83
LEGAL
MATTERS
Certain legal matters with respect to Delaware law relating to
the validity of the Trust Preferred Securities and the
Class B Preferred Securities will be passed upon for the
Trust, the Company, the Delaware Trustee and the Bank by
Richards, Layton & Finger, P. A., Wilmington,
Delaware. Certain legal matters with respect to German law will
be passed upon for Deutsche Bank AG by Group Legal Services of
Deutsche Bank AG. Certain legal matters with respect to United
States and New York law will be passed upon for the underwriter
by Cleary Gottlieb Steen & Hamilton LLP, Frankfurt am
Main, Germany.
S-84
GLOSSARY
Additional Amounts means such additional amounts
payable by the Company or the Trust pursuant to the terms of the
Class B Preferred Securities and the Trust Preferred
Securities as additional Capital Payments (or Arrears of
Payments, as the case may be) as may be necessary in order that
the net amounts received by the holders of the Class B
Preferred Securities and the Trust Preferred Securities,
after deduction or withholding for or on account of any
Withholding Taxes, on payments on and any amount payable in
liquidation or on repayment upon redemption thereof, will equal
the amounts that otherwise would have been received had no such
deduction or withholding been required.
Additional Interest Amounts means any additional
interest amounts payable by the Bank or other obligor pursuant
to the terms of the Initial Obligations or Substitute
Obligations as a result of deduction or withholding for or on
account of any Withholding Taxes upon payment of interest on the
Initial Obligations or Substitute Obligations or repayment upon
redemption thereof.
Arrears of Payments means Capital Payments and
Additional Amounts, if any, the payment of which has, in
accordance with the applicable deferral provisions of the
relevant Upper Tier 2 Percentage, if any, of
Trust Preferred Securities and the relevant Upper
Tier 2 Percentage, if any, of Class B Preferred
Securities, as the case may be, been deferred and which
thereupon constitute cumulative arrears of Capital Payments.
BaFin means the German Federal Financial Supervisory
Authority
(Bundesanstalt für
Finanzdienstleistungsaufsicht)
.
Board of Directors means the board of directors of
the Company.
Business Day means a day other than a Saturday, a
Sunday or a day on which banks in the City of New York are
authorized or required by law or executive order to close.
Capital Payments means the periodic distributions on
the Trust Securities and the Class B Preferred
Securities.
Class A Preferred Security means the
noncumulative Class A Preferred Security evidencing a
preferred ownership interest in the Company.
Class B Preferred Guarantee means the agreement
by Deutsche Bank AG with The Bank of New York Mellon (formerly
known as The Bank of New York) as Class B Preferred
Guarantee Trustee for the benefit of the holders of the
Class B Preferred Securities to guarantee payment, on a
subordinated basis, of certain payments on the Class B
Preferred Securities.
Class B Preferred Securities means the
cumulative and, upon a Tier 1 Qualification Election to
such extent, noncumulative preferred securities of Class B
evidencing preferred ownership interests in the Company, issued
in connection with the issuance of the Trust Preferred
Securities.
Class B Preferred Series means (i) the
Class B Preferred Securities, (ii) the Outstanding
Class B Preferred Securities and (iii) any additional
preferred securities of Class B issued by the Company from
time to time and having the same terms as the Class B
Preferred Securities in all respects except for the issue date,
the date from which Capital Payments in respect thereof begin to
accrue, the issue price and any other deviations required for
compliance with applicable law.
Class B Preferred Series Security means
any on of the preferred securities of the Company designated as
Class B, of which the Class B Preferred Series is
comprised.
Code means the Internal Revenue Code of 1986, as
amended.
Company means Deutsche Bank Contingent Capital
LLC V, a Delaware limited liability company.
Company Common Security means the voting common
security representing a limited liability company interest in
the Company.
S-85
Company Preferred Securities means the Class B
Preferred Series together with the Class A Preferred
Security.
Company Special Redemption Event means
(i) a Regulatory Event, (ii) a Tax Event other than a
Tax Event solely with respect to the Trust, or (iii) an
Investment Company Act Event with respect to the Company.
Deferred Payments means any capital payments,
dividends or other distributions or payments deferred on a
cumulative basis pursuant to the terms of any Parity Capital
Security.
Delaware Statutory Trust Act means the Delaware
Statutory Trust Act, as amended. Delaware
Trustee means Deutsche Bank Trust Company Delaware,
in its capacity as Delaware trustee of the Trust.
Distributable Profits of the Bank for any fiscal
year is the balance sheet profit (
Bilanzgewinn
) as of the
end of such fiscal year, as shown in the audited unconsolidated
balance sheet of the Bank as of the end of such fiscal year.
Such balance sheet profit includes the annual surplus or loss
(
Jahresüberschuss/-fehlbetrag
),
plus
any
profit carried forward from previous years,
minus
any
loss carried forward from previous years,
plus
transfers
from capital reserves and earnings reserves,
minus
allocations to earnings reserves, all as determined in
accordance with the provisions of the German Stock Corporation
Act (
Aktiengesetz
) and accounting principles generally
accepted in the Federal Republic of Germany as described in the
German Commercial Code (
Handelsgesetzbuch
) and other
applicable German law then in effect.
Global Certificates means one or more global
certificates representing the Trust Preferred Securities.
Group Capital Securities of any person means any
interests in the capital of such person that rank
(A) senior to the preference shares, Preferred Tier 1
Capital Securities and common shares of such person and
(B) junior to all other obligations of such person that
(i) rank senior to the preference shares and Preferred
Tier 1 Capital Securities, if any, of such person and
(ii) do not by their terms rank
pari passu
with such
interests.
Guarantees means the Trust Preferred Guarantee
and the Class B Preferred Guarantee, collectively.
Initial Issue Date means May 9, 2009, the issue
date of the Outstanding Trust Preferred Securities.
Initial Obligation means the U.S.$
[ ],000,000 8.05% perpetual subordinated note
of the Bank, acquired by the Company using proceeds from the
issuance of the Class B Preferred Securities.
Initial Obligations means (i) the Initial
Obligation, (ii) the Outstanding Initial Obligation and
(iii) any additional obligation issued by the Bank from
time to time in connection with a notice to the Company to issue
additional preferred securities of Class B (in connection
with the exercise of the underwriters over-allotment
option or otherwise) and having the same terms and conditions as
the Initial Obligations in all respects except for the issue
date, the date from which interest begins to accrue, the issue
price and any other deviations required for compliance with
applicable law.
Initial Offering means the offering by Deutsche Bank
Contingent Capital Trust V of the Outstanding
Trust Preferred Securities on or about the Initial Issue
Date.
Initial Redemption Date means June 30,
2018, the first day on which the Class B Preferred
Securities will be redeemable other than on the occurrence of a
Company Special Redemption Event.
Investment Company means an investment company
within the meaning of the 1940 Act.
Investment Company Act Event means the request and
receipt by the Bank of an opinion of a nationally recognized
U.S. law firm experienced in such matters to the effect
that there is more than an insubstantial risk that the Company
or the Trust is or will be considered an Investment Company as a
result of any judicial decision, pronouncement or interpretation
(irrespective of the manner made known), the adoption or
amendment of any law, rule or regulation, or any notice or
announcement (including any notice or announcement of intent to
adopt such law, rule or regulation) by any U.S. legislative
body, court, governmental agency, or regulatory authority, in
each case after the Issue Date.
S-86
IRS means the Internal Revenue Service.
Issue Date means March 30, 2010, the issue date
of the Trust Preferred Securities.
Junior Securities means (i) ordinary shares of
common stock of the Bank, (ii) each class of preference
shares of the Bank ranking junior to Preferred Tier 1
Securities of the Bank, if any, and any other instrument of the
Bank ranking on parity with such preference shares or junior
thereto and (iii) preference shares or any other instrument
of any subsidiary of the Bank subject to any guarantee or
support agreement of the Bank which guarantee or support
undertaking ranks junior to the obligations of the Bank under
the Guarantees.
LLC Act means the Delaware Limited Liability Company
Act, as amended.
LLC Agreement means the limited liability company
agreement of the Company, as amended and restated in its
entirety prior to the issuance of Company Preferred Securities.
Obligations means the Initial Obligations together
with the Substitute Obligations, if any.
Obligation Special Redemption Event means
(i) a Regulatory Event, (ii) a Tax Event, or
(iii) an Investment Company Act Event.
Offering means the offering by Deutsche Bank
Contingent Capital Trust V of the Trust Preferred
Securities.
Offering Price means the initial offering price of
$25 per Trust Preferred Security.
Operating Profits of the Company for any Payment
Period means the excess of the amounts paid on the Obligations
that the Company may then hold in accordance with the LLC
Agreement during such Payment Period over any operating expenses
of the Company not paid or reimbursed by the Bank or one of its
branches or affiliates during such Payment Period.
Outstanding Class B Preferred Securities means
the preferred securities of Class B evidencing preferred
ownership interests in the Company, issued in connection with
the issuance of the Outstanding Trust Preferred Securities.
Outstanding Initial Obligation means the
U.S.$1,265,000,025 8.05% perpetual subordinated note of the
Bank, acquired by the Company using proceeds from the issuance
of the Outstanding Class B Preferred Securities.
Outstanding Trust Preferred Securities means
the 50,600,000 8.05% trust preferred securities, liquidation
preference amount $25 per security offered in the Initial
Offering.
Parity Capital Securities means Parity Subsidiary
Capital Securities and each class of ownership interests in the
capital of the Bank that rank senior to the preference shares of
the Bank and junior to all other securities of the Bank that
(i) rank senior to preference shares and (ii) do not
by their terms rank
pari passu
with such ownership
interests of the Bank, if any.
Parity Subsidiary Capital Securities means any
instrument of any subsidiary of the Bank subject to any
guarantee or support agreement of the Bank ranking
pari passu
with the obligations of the Bank under the terms of the
Guarantees in effect with respect to the Upper
Tier 2 Percentage, if any, of the Trust Preferred
Securities and the Upper Tier 2 Percentage, if any, of
the Class B Preferred Securities.
Payment Date means March 30, June 30,
September 30 and December 30 of each year, commencing in respect
of the Trust Preferred Securities and the Class B
Preferred Securities on June 30, 2010.
Payment Period means the period from and including
the immediately preceding Payment Date to but excluding the
relevant Payment Date. The initial Payment Period in respect of
the Trust Preferred Securities and the Class B
Preferred Securities will commence on the Issue Date.
S-87
Preferred Tier 1 Capital Securities of any
person means each class of the most senior ranking preference
shares of such person and any other instruments of such person
(other than common shares) qualifying as Tier 1 Regulatory
Capital and, if such person is the Bank, Preferred Tier 1
Subsidiary Securities.
Preferred Tier 1 Securities means (i) each
class of the most senior ranking preference shares of the Bank,
if any, and (ii) preference shares or any other instrument
of any subsidiary of the Bank subject to any guarantee or
support agreement of the Bank which guarantee or support
undertaking ranks on parity with the obligations of the Bank
under the Guarantees.
Preferred Tier 1 Subsidiary Securities means
the most senior ranking preference shares and any other
instruments of any person other than the Bank, which, in each
case, qualify as Tier 1 Regulatory Capital and are subject
to any agreement of the Bank that guarantees or otherwise
provides support of such preference shares or other instruments.
Principal Amount means, in connection with the
Initial Obligation, the aggregate principal amount of
$[ ],000,000 and in connection with the
Outstanding Initial Obligation, the aggregate principal amount
of $1,265,000,025.
Property Trustee means The Bank of New York Mellon
(formerly known as The Bank of New York), in its capacity as
trustee of the Trust.
Redemption Date means the date of redemption of
the Class B Preferred Securities.
Redemption Price means with respect to a
Class B Preferred Security or a Trust Preferred
Security, as applicable, a redemption price per such security
equal to the liquidation preference amount thereof, plus any
accrued and unpaid Capital Payments for the then current Payment
Period to but excluding the Redemption Date, plus
Additional Amounts, if any, plus Arrears of Payments, if any.
Regular Trustees means the three Trustees of the
Trust who are employees or officers of, or who are affiliated
with, the Bank.
Regulatory Event means that the Bank is notified by
a relevant regulatory authority that, as a result of the
occurrence of any amendment to, or change (including any change
that has been adopted but has not yet become effective) in, the
applicable banking laws of Germany (or any rules, regulations or
interpretations thereunder, including rulings of the relevant
banking authorities) or the guidelines of the Committee on
Banking Supervision at the Bank for International Settlements,
in each case effective after the date of the issuance of the
Company Securities and the Trust Securities, the Bank is
not, or will not be, allowed to treat (i) the Upper
Tier 2 Percentage, if any, of the Class B
Preferred Securities, if any, as supplementary capital
(
Ergänzungskapital
) or upper Tier 2 regulatory
capital or (ii) the Tier 1 Percentage of the
Class B Preferred Securities, if any, as core capital
(
Kernkapital
) or Tier 1 regulatory capital, in each
case for capital adequacy purposes on a consolidated basis.
Relevant Jurisdiction means the United States or
Germany (or any jurisdiction from which payments are made) or,
during any period during which Substitute Obligations are
outstanding, the jurisdiction of residence of any obligor on
such Substitute Obligations (or any jurisdiction from which
payments are made).
Services Agreement means the services agreement
among the Trust, the Company and the Bank (which may act through
its New York branch).
Specified Increment means the percentage of the
aggregate liquidation preference amount of the
Trust Preferred Securities or the Class B Preferred
Securities, as applicable, to which a Tier 1 Qualification
Election relates, which percentage may only be (a) zero or
(b) 10% or an integral multiple thereof.
Sponsor means the Company, in relation to the
Trust Agreement.
S-88
Stated Rate means the fixed coupon rate of 8.05% per
annum for the accrual of Capital Payments (or, in the case of
the Initial Obligations, for the accrual of interest) during
Payment Periods, in each case calculated on the basis of a
360-day
year
of twelve
30-day
months.
Subordinated Deposit Agreement means the
subordinated deposit agreement dated May 9, 2008 between
the Bank and the Company.
Subsidiary means a subsidiary (i) that is
consolidated with the Bank for German bank regulatory purposes
and (ii) of which the Bank owns or controls, directly or
indirectly, more than (x) fifty percent (50%) of the
outstanding voting stock or other equity interest entitled
ordinarily to vote in the election of the directors or other
governing body (however designated) and (y) fifty percent
(50%) of the outstanding capital stock or other equity interest.
Substitute Obligations means a subordinated
obligation issued (in substitution for the Initial Obligation,
the Outstanding Initial Obligation or of Substitute Obligations
or any additional obligation as described in the definition of
Obligations) by the Bank or a Subsidiary with the
same aggregate principal amount and interest rate and payment
dates as those of the relevant Original Obligation and a
maturity that is perpetual or is not earlier than May 9,
2038 and terms otherwise substantially identical to those of the
relevant Original Obligation,
provided,
that unless the
Bank itself is the issuer of the Substitute Obligations, the
Bank (which may act through a branch) guarantees on a
subordinated basis, at least equal to the ranking of the Initial
Obligations, the obligations of the new substitute obligor;
provided,
in each case, that (i) the Bank has
received the written opinion of a nationally recognized law firm
in the United States that reinvestment in such Substitute
Obligation will not adversely affect the qualified
dividend income eligibility for purposes of
Section 1(h)(11) of the Internal Revenue Code of 1986, as
amended (or any successor legislation), of Capital Payments on
the Trust Preferred Securities or cause the holders thereof
to recognize gain or loss for U.S. federal income tax
purposes and (ii) such substitution or replacement does not
result in a Company Special Redemption Event or a
Trust Special Redemption Event, and
provided,
further
in each case that the Bank has obtained any required
regulatory approvals.
Successor Trust Securities means other
securities having substantially the same terms as the
Trust Securities.
Tax Event means (A) the receipt by the Bank of
an opinion of a nationally recognized law firm or other tax
adviser in a Relevant Jurisdiction, as appropriate, experienced
in such matters, to the effect that as a result of (i) any
amendment to, or clarification of, or change (including any
announced prospective change) in, the laws (or any regulations
promulgated thereunder) of a Relevant Jurisdiction or any
political subdivision or taxing authority thereof or therein
affecting taxation, (ii) any judicial decision, official
administrative pronouncement, published or private ruling,
regulatory procedure, notice or announcement (including any
notice or announcement of intent to adopt such procedures or
regulations) by any legislative body, court, governmental
authority or regulatory body (Administrative Action)
or (iii) any amendment to, clarification of, or change in
the official position or the interpretation of such
Administrative Action or any interpretation or pronouncement
that provides for a position with respect to such Administrative
Action that differs from the theretofore generally accepted
position, in each case, by any legislative body, court,
governmental authority or regulatory body, irrespective of the
manner in which such amendment, clarification or change is made
known, which amendment, clarification or change is effective, or
which pronouncement or decision is announced, after the date of
issuance of the Company Preferred Securities and the
Trust Securities, there is more than an insubstantial risk
that (a) the Trust or the Company is or will be subject to
more than a
de minimis
amount of taxes, duties or other
governmental charges, (b) the Trust, the Company, an
obligor on the Obligations or the Guarantor would be obligated
to pay Additional Amounts, Additional Interest Amounts or
Trust Preferred Additional Guarantee Payments or
Class B Preferred Additional Guarantee Payments, as
applicable, or (c) the Bank would be subject to tax on
income of the Company under the rules of the German Foreign Tax
Act (
Aussensteuergesetz
) except in cases where the
Capital Payments may not be declared by the Company, or
(B) a final determination has been made by the German tax
authorities to the effect that the Bank, as obligor on the
Obligations, may not, in the determination of its taxable income
for the purposes of determining German corporate income tax in
S-89
any year, deduct in full interest payments on the Obligations
(except to the extent such interest payments are determined to
be connected with income of a branch that is not subject to
taxation in Germany). However, none of the foregoing will
constitute a Tax Event if it may be avoided by the Bank, the
Trust or the Company taking reasonable measures under the
circumstances.
Tier 1 Percentage means the Specified
Increment of each Trust Preferred Security or Class B
Preferred Security, as applicable, with respect to which
Tier 1 Qualification Elections have been made after giving
effect to such elections.
Tier 1 Qualification Election means the
election of the Bank by notice to the Company to replace
specified terms of all or a portion of each and every
Trust Preferred Security or Class B Preferred
Security, as applicable, with terms specified to be applicable
from and after such election. We refer to the date written on
such Tier 1 Qualification Election notice to the Company as
the date of the Tier 1 Qualification Election.
Tier 2 Junior Securities means (i) common
stock of the Bank, (ii) each class of preference shares of
the Bank ranking junior to Parity Capital Securities and
Preferred Tier 1 Capital Securities of the Bank, if any,
and any other instrument of the Bank ranking
pari passu
therewith or junior thereto and (iii) preference shares or
any other instrument of any subsidiary of the Bank (other than
Preferred Tier 1 Subsidiary Securities) subject to any
guarantee or support agreement of the Bank ranking junior to the
obligations of the Bank under the terms of the Guarantees in
effect with respect to the Tier 1 Percentage, if any,
of each of the Trust Preferred Securities and the
Class B Preferred Securities.
Trust means Deutsche Bank Contingent Capital
Trust V, a Delaware statutory trust.
Trust Agreement means the trust agreement among
the Trustees, the Company as Sponsor and the Bank, as amended
and restated in its entirety prior to the issuance of the
Trust Preferred Securities.
Trust Common Security means the common security
of the Trust.
Trust Enforcement Event under the
Trust Agreement means the occurrence, at any time, of any
of (i) non-payment of Capital Payments (plus any Additional
Amounts thereon, if any) on the Trust Preferred Securities
at the Stated Rate in full, for four consecutive Payment
Periods, (ii) non-payment of Capital Payments (plus any
Additional Amounts thereon, if any) on the Class B
Preferred Securities at the Stated Rate in full, for four
consecutive Payment Periods, (iii) a default by the
Guarantor (x) in respect of any of its payment obligations
under the Trust Preferred Guarantee and (y) in the
performance of any other obligation under the
Trust Preferred Guarantee, and, in the case of (y),
continuance of such default for 60 days after the
Trust Preferred Guarantee Trustee has given notice thereof
to the Guarantor, and (iv) a default by the Guarantor
(x) in respect of any of its payment obligations under the
Class B Preferred Guarantee and (y) in the performance
of any other obligation under the Class B Preferred
Guarantee, and, in the case of (y), continuance of such default
for 60 days after the Class B Preferred Guarantee
Trustee has given notice thereof to the Guarantor.
Trust Preferred Guarantee means the agreement
by Deutsche Bank AG with The Bank of New York Mellon (formerly
known as The Bank of New York) as Trust Preferred Guarantee
Trustee for the benefit of the holders of the
Trust Preferred Securities to guarantee the payment, on a
subordinated basis, of certain payments on the
Trust Preferred Securities.
Trust Preferred Securities means the
[ ],000 8.05% trust preferred securities,
liquidation preference amount $25 per security offered in the
Offering.
Trust Preferred Series means (i) the
Trust Preferred Securities, (ii) the Outstanding
Trust Preferred Securities and (iii) any additional
trust preferred securities issued by the Trust from time to time
and having the same terms as the Trust Preferred Securities
in all respects except for the issue date, the date from which
Capital Payments in respect thereof begin to accrue, the issue
price and any other deviations required for compliance with
applicable law.
S-90
Trust Preferred Series Security means any
one of the trust preferred securities issued by the Trust, of
which the Trust Preferred Series is comprised.
Trust Securities means the Trust Common
Security together with the Trust Preferred Series.
Trust Special Redemption Event means
(i) a Tax Event with respect to the Trust, or (ii) an
Investment Company Act Event with respect to the Trust.
Trustees means the five trustees of the Trust
pursuant to the Trust Agreement.
Upper Tier 2 Percentage means the portion,
if any, of each Trust Preferred Security or Class B
Preferred Security, as applicable, with respect to which no
Tier 1 Qualification Election has been made.
U.S. GAAP means accounting principles generally
accepted in the United States.
Withholding Taxes means any present or future taxes,
duties or governmental charges of any nature whatsoever imposed,
levied or collected by or on behalf of any Relevant
Jurisdiction, or by or on behalf of any political subdivision or
authority therein or thereof having the power to tax.
S-91
EXPERTS
The consolidated financial statements of Deutsche Bank AG and
its subsidiaries as of December 31, 2008 and 2007 (which
were prepared in accordance with IFRS), and for each of the
years in the two-year period ended December 31, 2008, are
incorporated by reference herein in reliance upon the audit
report of KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft (which we refer to as
KPMG), Marie-Curie-Strasse 30, D-60439 Frankfurt am Main,
Germany, independent registered public accounting firm, given
upon the authority of that firm as experts in auditing and
accounting.
S-92
Deutsche Bank
Aktiengesellschaft
Ordinary Shares
Tradable Subscription Rights to Subscribe for Ordinary Shares
Debt Securities
Warrants
Purchase Contracts
Units
Subordinated Guarantees
Deutsche Bank Capital Funding
Trust XII
Trust Preferred
Securities
Deutsche Bank Capital Funding
LLC XII
Company Preferred
Securities
We, Deutsche Bank Aktiengesellschaft, may, from time to time,
offer any of the following securities:
|
|
|
ordinary shares of Deutsche Bank Aktiengesellschaft;
|
|
|
tradable subscription rights to subscribe for ordinary shares of
Deutsche Bank Aktiengesellschaft;
|
|
|
debt securities which may consist of senior debt securities,
including debt securities convertible into, exchangeable for, or
linked to, other securities of Deutsche Bank Aktiengesellschaft,
securities of any entity affiliated or unaffiliated with
Deutsche Bank Aktiengesellschaft, commodities, a basket of such
securities or commodities, an index or indices of such
securities or commodities or any combination of the foregoing,
currencies and any other financial, economic or other measure or
instrument, including the occurrence or non-occurrence of any
event or circumstance;
|
|
|
warrants or warrants in the form of subscription rights to
purchase or sell, or whose redemption value is determined by
reference to the performance, level or value of, other
securities of Deutsche Bank Aktiengesellschaft, securities of
any entity affiliated or unaffiliated with Deutsche Bank
Aktiengesellschaft, commodities, a basket of such securities or
commodities, an index or indices of such securities or
commodities or any combination of the foregoing, currencies and
any other financial, economic or other measure or instrument,
including the occurrence or non-occurrence of any event or
circumstance;
|
|
|
purchase contracts to purchase or sell, or whose redemption
value is determined by reference to the performance, level or
value of, other securities of Deutsche Bank Aktiengesellschaft,
securities of any entity affiliated or unaffiliated with
Deutsche Bank Aktiengesellschaft, commodities, a basket of such
securities or commodities, an index or indices of such
securities or commodities or any combination of the foregoing,
currencies and any other financial, economic or other measure or
instrument, including the occurrence or non-occurrence of any
event or circumstance;
|
|
|
units; and
|
|
|
subordinated guarantees of capital securities.
|
Deutsche Bank Capital Funding Trust XII, and any other
trust we may organize in the event of certain offerings of
capital securities, each of which we refer to as the trust, may
offer and sell trust preferred securities representing
beneficial interests in the assets of the relevant trust, in one
or more offerings.
Deutsche Bank Capital Funding LLC
XII, and any other limited liability company we may organize in
the event of certain offerings of capital securities, each of
which we refer to as the company, may offer and sell company
preferred securities, representing preferred ownership interests
in the relevant company, in one or more offerings.
Each of the trust preferred
securities and company preferred securities, which we sometimes
collectively refer to as the capital securities, will be fully
and unconditionally guaranteed on a subordinated basis by
Deutsche Bank Aktiengesellschaft.
This prospectus describes the
general terms of these securities and the general manner in
which the securities will be offered. The specific terms of any
securities offered will be included in a supplement to this
prospectus. The prospectus supplement will also describe the
specific manner in which the securities will be offered. We will
not use this prospectus to issue any securities unless it is
attached to a prospectus supplement.
The ordinary shares of Deutsche
Bank Aktiengesellschaft are listed on all the German stock
exchanges (Frankfurt, Berlin, Düsseldorf, Hamburg,
Hannover, Munich and Stuttgart) as well as the New York Stock
Exchange, where the ordinary shares trade under the symbol
DB. Unless stated otherwise in a prospectus
supplement, we will not list the other securities offered
hereunder on any securities exchange.
These securities may be offered
directly or to or through underwriters, agents or dealers,
including Deutsche Bank Securities Inc. The names of any
underwriters, agents or dealers will be included in the
applicable prospectus supplement.
Investing in the securities
involves risks. We may include specific risk factors in an
applicable prospectus supplement under the heading Risk
Factors.
Neither the Securities and
Exchange Commission nor any state securities commission has
approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
These securities are not
deposits or savings accounts and are not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other
U.S. or foreign governmental agency or
instrumentality.
The date of this prospectus is
September 29, 2009.
TABLE OF
CONTENTS
|
|
|
|
|
|
|
Page
|
|
|
|
|
1
|
|
|
|
|
4
|
|
|
|
|
5
|
|
|
|
|
6
|
|
|
|
|
7
|
|
|
|
|
8
|
|
|
|
|
9
|
|
|
|
|
10
|
|
|
|
|
11
|
|
|
|
|
12
|
|
|
|
|
13
|
|
|
|
|
14
|
|
|
|
|
15
|
|
|
|
|
21
|
|
|
|
|
22
|
|
|
|
|
29
|
|
|
|
|
31
|
|
|
|
|
32
|
|
|
|
|
33
|
|
|
|
|
42
|
|
|
|
|
46
|
|
|
|
|
48
|
|
|
|
|
49
|
|
|
|
|
49
|
|
|
|
|
49
|
|
SUMMARY OF
REGISTERED SECURITIES
Deutsche Bank Aktiengesellschaft, which we also refer to as the
Bank or we, may offer any of the
following securities: ordinary shares, tradable subscription
rights to subscribe for ordinary shares, debt securities,
warrants, purchase contracts, units and subordinated guarantees.
In the event of certain offerings of capital securities, a trust
may offer trust preferred securities and a Delaware company may
issue company preferred securities. The following summary
describes these securities in general terms only. You should
read the summary together with the more detailed information
contained in the rest of this prospectus and the applicable
prospectus supplement.
|
|
|
Ordinary Shares
|
|
We may offer ordinary shares.
|
|
Tradable Subscription Rights
|
|
We may issue tradable subscription rights that would entitle the
holders to subscribe for ordinary shares. We will provide one or
more prospectus supplements that describe the specific terms of
any subscription rights offering, including, as applicable, the
title of the subscription rights; the exercise price for the
subscription rights; the number of subscription rights issued;
the record date, if any, to determine who is entitled to the
subscription rights and the ex-rights date; the date on which
the exercise of the subscription rights will commence, and the
date on which the rights will expire; and any other terms of the
subscription rights, including terms, procedures and limitations
relating to the exchange and exercise of the subscription rights.
|
|
Debt Securities
|
|
We may issue senior debt securities. We will provide one or more
prospectus supplements that describe the specific designation;
the aggregate principal amount; the purchase price; the
maturity; the redemption terms; whether the securities are
linked, convertible or exchangeable securities and, if so, the
securities (which may be issued by us or an entity affiliated or
not affiliated with us), indices, currencies, commodities,
interest rates or other measures or instruments to which they
are linked or into or for which they are convertible or
exchangeable; the amount or manner of calculating the amount
payable at maturity and whether that amount may be paid by
delivering cash, securities or other property; the interest
rate, manner of calculating the interest rate and the time of
payment of interest, if any; the terms for any conversion or
exchange, including the terms relating to the adjustment of any
conversion or exchange mechanism; the listing, if any, on a
securities exchange; and any other specific terms of the debt
securities.
|
|
|
|
The debt securities will be issued under a senior indenture
among us, Law Debenture Trust Company of New York, as
trustee, and Deutsche Bank Trust Company Americas, as
paying agent, issuing agent and registrar. The indenture that
governs our senior debt securities does not limit the amount of
additional indebtedness that we or any of our subsidiaries may
incur. We have summarized the general features of the senior
indenture under the heading Description of Debt Securities
of Deutsche Bank Aktiengesellschaft. We encourage you to
read the senior indenture, which is an exhibit to our
registration statement.
|
|
Warrants
|
|
We may offer warrants to purchase or sell, or whose redemption
value is determined by reference to the performance, level or
value of, one or more of the following:
|
|
|
|
securities issued by us or an entity affiliated or
not affiliated with us, commodities, a basket or baskets of
those securities or commodities, an index or indices of those
securities or commodities, or any combination of the foregoing;
|
|
|
|
currencies; and
|
|
|
|
any other financial, economic or other measure or
instrument, including the occurrence or non-occurrence of any
event or circumstance.
|
1
|
|
|
|
|
In a prospectus supplement, we will inform you of the exercise
price and describe other specific terms of the warrants,
including whether we will satisfy our obligations, if any, or
you will satisfy your obligations, if any, under the warrants by
delivering or purchasing the underlying securities, commodities,
currencies or instruments, or their cash value. Warrants will
not be contractually subordinated in priority of payment to our
senior obligations.
|
|
Purchase Contracts
|
|
We may offer purchase contracts to purchase or sell, or whose
redemption value is determined by reference to the performance,
level or value of, one or more of the following:
|
|
|
|
securities issued by us or an entity affiliated or
not affiliated with us, commodities, a basket or baskets of
those securities or commodities, an index or indices of those
securities or commodities, or any combination of the foregoing;
|
|
|
|
currencies; and
|
|
|
|
any other financial, economic or other measure or
instrument, including the occurrence or non-occurrence of any
event or circumstance.
|
|
|
|
In a prospectus supplement, we will describe the specific terms
of the purchase contracts, including whether we will satisfy our
obligations, if any, or you will satisfy your obligations, if
any, under the purchase contracts by delivering or purchasing
the underlying securities, commodities, currencies or
instruments, or their cash value. Purchase contracts will not be
contractually subordinated in priority of payment to our senior
obligations.
|
|
Units
|
|
We may offer as units any combination of ordinary shares,
tradable subscription rights to subscribe for ordinary shares,
warrants, purchase contracts, debt securities issued by us, and
debt obligations or other securities of an entity affiliated or
not affiliated with us. In a prospectus supplement, we will
describe the particular combination of ordinary shares, tradable
subscription rights to subscribe for ordinary shares, warrants,
purchase contracts and debt securities issued by us, or debt
obligations or other securities of an entity affiliated or not
affiliated with us, constituting any units and any other
specific terms of the units. Units will not be contractually
subordinated in priority of payment to our senior obligations.
|
|
Trust Preferred Securities
|
|
The trusts may issue trust preferred securities. The trust
preferred securities will not have a maturity date or be subject
to mandatory redemption provisions. In a prospectus supplement,
we will describe the specific terms of any trust preferred
securities.
|
|
Company Preferred Securities
|
|
In connection with certain offerings of trust preferred
securities, the Delaware companies may issue company preferred
securities. The company preferred securities will not have a
maturity date or be subject to mandatory redemption provisions.
In a prospectus supplement, we will describe the specific terms
of any company preferred securities.
|
|
Subordinated Guarantees
|
|
In connection with certain offerings of capital securities, we
may issue subordinated guarantees. The guarantees are for the
benefit of the holders of the capital securities of any series
issued by the relevant trust or the relevant company, as
applicable.
|
|
|
|
In a prospectus supplement, we will describe the specific terms
of any subordinated guarantee.
|
|
Form
|
|
We may issue ordinary shares, tradable subscription rights to
subscribe for ordinary shares, debt securities, warrants,
purchase contracts and units, and the trusts may issue trust
preferred securities and the Delaware companies may issue
company
|
2
|
|
|
|
|
preferred securities, in each case in fully registered form or
in bearer form and, in either case, in definitive form or global
form.
|
|
Terms Specified in Prospectus Supplements
|
|
When we decide to sell particular securities, we will provide a
prospectus supplement describing the securities offering and the
specific terms of the securities. You should carefully read this
prospectus and the applicable prospectus supplement.
|
|
|
|
We will offer our ordinary shares, tradable subscription rights
to subscribe for ordinary shares, debt securities, warrants,
purchase contracts and units, and the trusts will offer their
trust preferred securities to investors on terms determined by
market and other conditions. Our securities may be sold for U.S.
dollars or foreign currency. Principal of, and any premium or
interest on, debt securities, cash amounts payable under
warrants or purchase contracts and capital payments payable on
capital securities may be payable in U.S. dollars or foreign
currency, as we specifically designate in the related prospectus
supplement.
|
|
|
|
Any prospectus supplement we provide will include the name of
and compensation to each dealer, underwriter or agent, if any,
involved in the sale of the securities being offered and the
managing underwriters for any securities sold to or through
underwriters. Any underwriters, including managing underwriters,
dealers or agents in the United States may include Deutsche Bank
Securities Inc. or other affiliates of ours.
|
|
Branches
|
|
We may act directly through our principal office in Frankfurt or
through one of our branch offices, such as our London branch,
our New York branch, or such other branch as specified in the
applicable prospectus supplement.
|
|
|
|
Conflicts of Interest
|
|
To the extent an initial offering of the securities will be
distributed by an affiliate of the Bank, each such offering of
securities will be conducted in compliance with the requirements
of NASD Rule 2720 of the Financial Industry Regulatory
Authority, or FINRA, regarding a FINRA member
firms distribution of securities of an affiliate. See
Plan of Distribution (Conflicts of Interest).
|
3
ABOUT THIS
PROSPECTUS
References in this prospectus to the
Bank,
we,
our,
us
or
Deutsche Bank AG
refer to Deutsche Bank Aktiengesellschaft (including, as the
context may require, acting through one of its branches) and,
unless the context requires otherwise, will include the trusts,
the companies and our other consolidated subsidiaries. In the
sections of this prospectus entitled Description of
Ordinary Shares, Description of Tradable
Subscription Rights to Subscribe for Ordinary Shares,
Description of Debt Securities of Deutsche Bank
Aktiengesellschaft, Description of Warrants,
Description of Purchase Contracts, Description
of Units, Description of Capital
Securities Description of Subordinated Guarantees in
Connection with Capital Securities and Description
of Capital Securities Description of Subordinated
Debt Obligations in Connection with Certain Capital
Securities, references to
Bank,
we,
our,
us
or
Deutsche Bank AG
refer to Deutsche Bank Aktiengesellschaft (including, as the
context may require, acting through one of its branches), as
issuer of the securities described in such sections.
References in this prospectus to
trust
refer to Deutsche Bank Capital Funding Trust XII and any
other trust organized in the event of certain offerings of
capital securities to issue trust preferred securities
representing beneficial interests in the assets of the relevant
trust. References in this prospectus to
company
or
Delaware
company
refer to Deutsche Bank Capital Funding LLC XII
and any other limited liability company organized in the event
of certain offerings of capital securities to issue company
preferred securities.
References to
you
mean those who invest in
the securities being offered, whether they are the direct
holders or owners of beneficial interests in those securities.
References to
holders
mean those who own
securities registered in their own names on the books that we or
the trustee maintain for this purpose, and not those who own
beneficial interests in securities issued in book-entry form
through The Depository Trust Company or another depositary
or in securities registered in street name. Owners of beneficial
interests in the securities should read the section entitled
Forms of Securities.
This prospectus is part of a registration statement on
Form F-3
that we filed with the Securities and Exchange Commission (the
Commission
or
SEC
)
utilizing a shelf registration process. Under this
shelf process, we may, from time to time, sell any combination
of the securities described in the prospectus in one or more
offerings.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will
provide one or more prospectus supplements that will contain
specific information about the terms of the offering. A
prospectus supplement may add, modify or replace information
contained in this prospectus.
If a prospectus supplement is
inconsistent with this prospectus, the terms of the prospectus
supplement will control. Therefore the statements made in this
prospectus may not be the terms that apply to the securities you
purchase
. You should read both this prospectus and any
prospectus supplement together with additional information
described under the heading Where You Can Find Additional
Information beginning on page 5 of this prospectus
before purchasing any securities.
Following the initial distribution of an offering of securities,
certain affiliates of ours may offer and sell those securities
in the course of their businesses. Such affiliates may act as
principal or agent in these transactions. This prospectus and
the applicable prospectus supplement will also be used in
connection with those transactions. Sales in any of those
transactions will be made at varying prices related to
prevailing market prices and other circumstances at the time of
sale.
References to EUR and are to the
euro, the currency introduced at the start of the third stage of
the European Economic and Monetary Union pursuant to the treaty
establishing the European Community, as amended by the treaty on
European Union. References to $ are to United States
currency, and the terms United States and
U.S. mean the United States of America, its states,
its territories, its possessions and all areas subject to its
jurisdiction.
4
WHERE YOU CAN
FIND ADDITIONAL INFORMATION
We are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the
Exchange Act
), and in accordance therewith,
we file reports and other information with the SEC. You may read
and copy these documents at the SECs public reference room
at 100 F Street, NE, Washington, D.C. 20549.
Copies of these materials can also be obtained from the Public
Reference Room of the SEC at 100 F Street, NE,
Washington, D.C. 20549 at prescribed rates. Please call the
SEC at
1-800-732-0330
for further information about the Public Reference Room. The SEC
also maintains an internet website that contains reports and
other information regarding us that are filed through the
SECs Electronic Data Gathering, Analysis and Retrieval
(EDGAR) System. This website can be accessed at
http://www.sec.gov.
You can find information that we have filed with the SEC by
reference to file number
0001-159508.
Reports and other information concerning the business of
Deutsche Bank Aktiengesellschaft may also be inspected at the
offices of the New York Stock Exchange at 20 Broad Street,
New York, New York 10005.
This prospectus is part of a registration statement on
Form F-3
we filed with the SEC. This prospectus omits some information
contained in the registration statement in accordance with SEC
rules and regulations. You should review the information in and
exhibits to the registration statement for further information
on us and the securities we are offering. Statements in this
prospectus concerning any document we filed as an exhibit to the
registration statement or that we otherwise filed with the SEC
are not intended to be comprehensive and are qualified in their
entirety by reference to these filings. You should review the
complete document to evaluate these statements.
The SEC allows us to incorporate by reference much
of the information we file with the SEC, which means that we can
disclose important information to you by referring you to those
publicly available documents. The information that we
incorporate by reference in this prospectus is an important part
of this prospectus. Because we are incorporating by reference
future filings with the SEC, this prospectus is continually
updated and those future filings may modify or supersede some of
the information included or incorporated in this prospectus.
This means that you must look at all of the SEC filings that we
incorporate by reference to determine if any of the statements
in this prospectus or in any document previously incorporated by
reference have been modified or superseded. This prospectus
incorporates by reference the documents listed below and any
future filings we make with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Exchange Act. Reports on
Form 6-K
we furnish to the SEC after the date of this prospectus (or
portions thereof) are incorporated by reference in this
prospectus only to the extent that the report expressly states
that it (or such portions) is incorporated by reference in this
prospectus. We incorporate by reference in this prospectus:
|
|
(1)
|
Annual Report on
Form 20-F
of Deutsche Bank Aktiengesellschaft for the year ended
December 31, 2008, filed on March 24, 2009, which we
also refer to as our
2008
Form 20-F.
|
|
(2)
|
Reports on
Form 6-K
of Deutsche Bank Aktiengesellschaft dated April 28, 2009
and July 28, 2009 (each relating to our interim results), and
dated August 24, 2009 and September 24, 2009.
|
Upon request, we will provide to each person, including any
beneficial owner to whom a prospectus is delivered, a copy of
any or all of the information that has been incorporated by
reference in the prospectus but not delivered with the
prospectus.
You may request, at no cost to you, a copy of these documents
(other than exhibits thereto not specifically incorporated by
reference) by writing or telephoning us at: Deutsche Bank AG,
Theodor-Heuss-Allee 70, 60486 Frankfurt am Main, Germany,
Attention: Investor Relations (Telephone: +49-
69-910-0).
Certain of these documents can also be obtained on Deutsche Bank
AGs website
http://www.deutsche-bank.com/ir
under Reporting and Events Reports, SEC
Filing. Reference to this uniform resource
locator or URL is made as an inactive textual
reference for informational purposes only. Other information
found at this website is not incorporated by reference in this
document.
5
USE OF
NON-GAAP FINANCIAL MEASURES
This document contains or incorporates by reference non-GAAP
financial measures. Non-GAAP financial measures are measures of
our historical or future performance, financial position or cash
flows that contain adjustments that exclude or include amounts
that are included or excluded, as the case may be, from the most
directly comparable measure calculated and presented in
accordance with International Financial Reporting Standards
(
IFRS
) as issued by the International
Accounting Standards Board (
IASB
) and as
endorsed by the European Union (
EU
) in our
financial statements.
For descriptions of these non-GAAP financial measures, please
refer to Other Information Target
Definitions starting on page 70 of our Interim Report
as of June 30, 2009 filed with the SEC on
Form 6-K
on July 28, 2009 and pages (v), (vi),
S-17,
S-18
and
S-19
of our
2008
Form 20-F.
6
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and any prospectus supplements, including the
information incorporated by reference, contain forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the
Securities
Act
), and Section 21 E of the Exchange Act.
Forward-looking statements are statements that are not
historical facts; they include statements about our beliefs and
expectations. We use words such as believe,
anticipate, expect, intend,
seek, estimate, project,
should, potential, reasonably
possible, plan, aim and similar
expressions to identify forward-looking statements. In addition,
we may from time to time make forward-looking statements in our
periodic reports to the SEC on
Forms 20-F
and
6-K,
annual and interim reports, invitation to annual
shareholders meetings and other information sent to
shareholders, offering circulars and prospectuses, press
releases and other written materials. Our Management Board,
Supervisory Board, officers and employees may also make oral
forward-looking statements to third parties, including financial
analysts.
Such forward-looking statements may include, without limitation,
statements relating to the following:
|
|
|
the potential development, severity, duration and impact on us
of the current financial crisis;
|
|
|
the implementation of our strategic initiatives and other
responses to the financial crisis;
|
|
|
the development of aspects of our results of operations;
|
|
|
our expectations of the impact of risks that affect our
business, including the risks of continuing losses on our
trading processes and credit exposures; and
|
|
|
other statements relating to our future business development and
economic performance.
|
By their very nature, forward-looking statements involve risks
and uncertainties, both general and specific. We base these
statements on our current plans, estimates, projections and
expectations. You should therefore not place undue reliance on
them. Our forward-looking statements speak only as of the date
we make them, and we undertake no obligation to update any of
them in light of new information or future events.
We caution you that a number of important factors could cause
our actual results to differ materially from those we describe
in any forward-looking statement. These factors include, among
others, the following:
|
|
|
the potential development, severity and duration of the current
financial crisis;
|
|
|
other changes in general economic and business conditions;
|
|
|
changes and volatility in currency exchange rates, interest
rates and asset prices;
|
|
|
changes in governmental policy and regulation, and political and
social conditions;
|
|
|
changes in our competitive environment;
|
|
|
the success of our acquisitions, divestitures, mergers and
strategic alliances;
|
|
|
our success in implementing our strategic initiatives and other
responses to the current financial crisis and realizing the
benefits anticipated therefrom; and
|
|
|
other factors, including those we refer to in Item 3:
Key Information Risk Factors of our 2008
Form 20-F
and elsewhere in the 2008
Form 20-F,
this document, and others to which we do not refer.
|
7
DEUTSCHE BANK
AKTIENGESELLSCHAFT
Deutsche Bank Aktiengesellschaft is a stock corporation
organized under the laws of Germany registered in the commercial
register of the District Court in Frankfurt am Main under
registration number HRB 30 000. Our registered office is in
Frankfurt am Main. We maintain our head office at
Theodor-Heuss-Allee 70, 60486 Frankfurt am Main, Germany.
Originally founded in Berlin in 1870 as a joint stock company
principally dedicated to financing foreign trade, Deutsche Bank
in 1952 disincorporated and split into three separate
institutions, Norddeutsche Bank Aktiengesellschaft, Hamburg,
Rheinisch-Westfälische Bank Aktiengesellschaft,
Düsseldorf and Süddeutsche Bank Aktiengesellschaft,
Munich (pursuant to a 1952 law limiting the scope of credit
institutions). In 1957 these institutions reunified under the
name Deutsche Bank Aktiengesellschaft.
We are the parent company of a group consisting of banks,
capital market companies, fund management companies, a property
finance company, installment financing companies, research and
consultancy companies and other German and non-German companies.
We offer a wide variety of investment, financial and related
products and services to private individuals, corporate entities
and institutional clients around the world.
We are one of the largest banks in Germany and one of the
largest financial institutions in Europe and the world measured
by total assets. As of June 30, 2009, on an unaudited
basis, we had total assets of 1,733 billion, total
liabilities of 1,697 billion and total
shareholders equity of 34.3 billion, in each
case on the basis of IFRS.
As of June 30, 2009, our share capital amounted to
1,589 million consisting of 620,859,015 ordinary
shares of no par value, of which 618,131,689 were outstanding.
The shares are fully paid up and in registered form. The shares
are listed for trading and official quotation on all the German
Stock Exchanges and are listed on the New York Stock Exchange.
Please refer to our 2008
Form 20-F
and the other documents incorporated by reference herein for
additional information and financial statements relating to us.
8
THE
TRUSTS
Deutsche Bank Capital Funding Trust XII is and, unless
provided otherwise in the applicable prospectus supplement, any
other trust organized in the event of certain offerings of
capital securities will be, a Delaware statutory trust. The
relevant Delaware companies are sponsors of the trusts. The
trusts exist, in the event of certain offerings of capital
securities, to issue trust preferred securities representing a
beneficial interest in the assets of the relevant trust and
entitled to the benefits of a subordinated guarantee of Deutsche
Bank AG, which we refer to as the
trust preferred
guarantee.
Company preferred securities, including
rights under a subordinated guarantee of the company preferred
securities issued by Deutsche Bank AG (which we refer to as the
company preferred guarantee
) will be the only
assets of the trusts. The trusts may pass the dividends or other
payments they receive on company preferred securities through to
holders as distributions on the trust preferred securities. The
trusts cannot engage in other activities (other than those
incidental to the foregoing activities). Deutsche Bank AG will
pay all expenses and liabilities of the trusts.
Each trust will be treated as a grantor trust for
U.S. federal income tax purposes. As a result, holders will
be treated as beneficial owners of interests in company
preferred securities and rights under a subordinated guarantee
for U.S. federal income tax purposes.
The principal executive office of each trust is located at 60
Wall Street, New York, New York 10005. Their telephone number is
212-250-2077.
9
THE
COMPANIES
Deutsche Bank Capital Funding LLC XII is, and unless the
applicable prospectus supplement provides otherwise, any other
company organized in the event of certain offerings of capital
securities will be, a Delaware limited liability company. Unless
provided otherwise in the applicable prospectus supplement, in
the event of certain offerings of capital securities, the
companies will issue a class of company preferred securities to
the related trust and company common securities to Deutsche Bank
AG or one of its branches or subsidiaries and may issue another
class of company preferred securities (which we refer to as
intra-group company preferred securities
) to
Deutsche Bank AG or one of its branches or subsidiaries and may
acquire and hold subordinated debt obligations issued by
Deutsche Bank AG or one of its branches or subsidiaries or other
eligible investments. The company preferred securities will
afford holders of such securities rights under the company
preferred guarantee. Each company will apply the cash generated
by the subordinated debt obligations or other eligible
investments, if any, to pay dividends to the applicable trust,
as the initial holder of the company preferred securities or (if
intra-group company preferred securities have been issued and to
the extent dividends are not declared on the company preferred
securities) to Deutsche Bank AG (or one of its branches or
subsidiaries), as the holder of the intra-group company
preferred securities.
The principal executive office of each company is located at 60
Wall Street, New York, New York 10005. Their telephone number is
212-250-2077.
10
LIMITATIONS ON
ENFORCEMENT OF U.S. LAWS
Deutsche Bank AG is incorporated as a German stock corporation
with limited liability (
Aktiengesellschaft
).
Substantially all members of the Management Board (
Vorstand
) and of the Supervisory Board (
Aufsichtsrat
) of the
Bank (as well as certain of the directors, managers and
executive officers of the trusts and the companies) are resident
outside the United States, and much of the assets of the Bank
and of such persons are located outside the United States. As a
result, it may not be possible for holders or beneficial owners
of the securities offered in this prospectus to effect service
of process upon the Bank or such persons, have any of them
appear in a U.S. court or to enforce against any of them in
U.S. courts judgments obtained in such courts predicated
upon the civil liability provisions of the federal securities or
other laws of the United States or any state thereof. We have
been advised by Cleary Gottlieb Steen & Hamilton LLP
that there is doubt as to enforceability in Germany, in original
actions or in actions for enforcement of judgments of
U.S. courts, of liability based solely on the federal
securities laws of the United States.
11
RATIO OF EARNINGS
TO FIXED CHARGES
The Statement re: Computation of Ratio of Earnings to Fixed
Charges of Deutsche Bank AG for the periods ended June 30,
2009 and December 31, 2008, 2007 and 2006 included in
Exhibit 99.3 on Deutsche Bank AGs Current Report on
Form 6-K
filed with the SEC on July 28, 2009 and the Statement re:
Computation of Ratio of Earnings to Fixed Charges of Deutsche
Bank AG for the periods ended December 31, 2006, 2005 and
2004 included in Exhibit 7.1 on Deutsche Bank AGs
Annual Report on
Form 20-F
for the year ended December 31, 2006 filed with the SEC on
March 27, 2007 are hereby incorporated by reference.
12
CAPITALIZATION &
INDEBTEDNESS
THE
FOLLOWING TABLE SETS FORTH OUR UNAUDITED CONSOLIDATED
CAPITALIZATION
IN
ACCORDANCE WITH IFRS
|
|
|
|
|
|
|
June 30, 2009
|
|
|
|
(in millions)
|
|
|
Debt
(1)
:
|
|
|
|
|
Long-term
debt
(2)(3)
|
|
|
134,811
|
|
Trust preferred
securities
(4)
|
|
|
9,841
|
|
Long-term debt at fair value through profit or loss
|
|
|
15,392
|
|
|
|
|
|
|
Total debt
|
|
|
160,044
|
|
|
|
|
|
|
Shareholders equity:
|
|
|
|
|
Ordinary shares (no par value)
|
|
|
1,589
|
|
Additional
paid-in-capital
|
|
|
15,269
|
|
Retained earnings
|
|
|
21,751
|
|
Common shares in treasury, at cost
|
|
|
(261
|
)
|
Equity classified as obligation to purchase common shares
|
|
|
(8
|
)
|
Net gains (losses) not recognized in the income statement, net
of tax:
|
|
|
|
|
Unrealized net gains (losses) on securities available for sale,
net of applicable tax and other
|
|
|
(593
|
)
|
Unrealized net gains (losses) on derivatives hedging variability
of cash flows, net of tax
|
|
|
(125
|
)
|
Foreign currency translation, net of tax
|
|
|
(3,295
|
)
|
|
|
|
|
|
Total shareholders equity
|
|
|
34,327
|
|
|
|
|
|
|
Minority interest
|
|
|
1,113
|
|
|
|
|
|
|
Total equity
|
|
|
35,440
|
|
|
|
|
|
|
Total
capitalization
(5)
|
|
|
195,484
|
|
|
|
|
|
|
|
|
1
|
No third party has guaranteed any of our debt.
|
2
|
3,728 million (3%) of our long-term debt was secured
as of June 30, 2009. There has been no material change in
the amount of our secured long-term debt since June 30,
2009.
|
3
|
As of August 31, 2009, our long-term debt increased to
136,880 million.
|
4
|
On September 5, 2009 we issued trust preferred securities
in an amount of 1,300 million.
|
5
|
Other than the issuance of trust preferred securities on
September 5, 2009 and the updated amount for long-term
debt, as set out above, there have been no material changes in
our capitalization since June 30, 2009.
|
13
USE OF
PROCEEDS
We will use the net proceeds from the sale of the securities we
offer by this prospectus for general corporate purposes, in
connection with hedging our obligations under the securities, or
for any other purposes described in the applicable prospectus
supplement. General corporate purposes may include additions to
working capital, investments in or extensions of credit to our
subsidiaries and the repayment of indebtedness.
The relevant trust will use the net proceeds from the sale of
any trust preferred securities to purchase corresponding company
preferred securities. The relevant company will use the net
proceeds from the sale of the company preferred securities to
the relevant trust or directly to investors to purchase
subordinated debt obligations of Deutsche Bank AG or one of its
branches or subsidiaries. The Bank intends to include the
proceeds of any issuance of capital securities in its regulatory
capital calculated on a consolidated basis, in accordance with
and to the extent permitted by German banking law and
regulations.
14
DESCRIPTION OF
ORDINARY SHARES
For a summary of the material terms of our Articles of
Association and applicable German corporate law in effect as of
the date of this prospectus regarding our ordinary shares and
the holders thereof, please refer to Item 10:
Additional Information Memorandum and Articles of
Association in our 2008
Form 20-F.
The summary describes our Articles of Association. Our Articles
of Association were most recently approved at the annual
shareholders meeting held on May 26, 2009 and have
been registered at the Commercial Register in Frankfurt am Main.
This summary may not contain all of the information that is
important to you. You should read the Articles of Association,
which are incorporated herein by reference, to understand them
fully.
Share Capital and
Shares
As of August 31, 2009, our share capital amounted to
1,589,399,078.40 million consisting of 620,859,015 no
par value ordinary registered shares, each representing a
notional par value of 2.56 in our share capital and
carrying full dividend rights as from January 1, 2009.
Thereof 1,321,508 ordinary shares, representing
3,383,060.48 of our share capital, were held by or on
behalf of the Bank or one of its subsidiaries. All issued
ordinary shares are fully paid up. Below is a reconciliation of
the number of ordinary shares outstanding at the beginning of
the year and as of August 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury
|
|
|
|
|
|
|
|
|
|
shares
|
|
|
|
|
|
|
|
|
|
(Shares held
|
|
|
|
|
|
|
|
|
|
by or on
|
|
|
|
|
|
|
|
|
|
behalf of the
|
|
|
|
|
|
|
Total share
|
|
|
Bank or one
|
|
|
|
|
|
|
capital issued
|
|
|
of its
|
|
|
|
|
Number of ordinary shares
|
|
and fully paid
|
|
|
subsidiaries)
|
|
|
Outstanding
|
|
|
Ordinary shares outstanding as of January 1, 2009
|
|
|
570,859,015
|
|
|
|
(8,192,060
|
)
|
|
|
562,666,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital increase
|
|
|
50,000,000
|
|
|
|
|
|
|
|
50,000,000
|
|
Ordinary shares issued under share-based compensation plans
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares purchased for treasury
|
|
|
|
|
|
|
(490,115,705
|
)
|
|
|
(490,115,705
|
)
|
Ordinary shares sold or distributed from treasury
|
|
|
|
|
|
|
496,986,257
|
|
|
|
496,986,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares outstanding as of August 31, 2009
|
|
|
620,859,015
|
|
|
|
(1,321,508
|
)
|
|
|
619,537,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
According to our Articles of Association, all ordinary shares
are issued in the form of registered shares. Shareholders are
required to notify the Bank for registration in the share
register and provide, in particular, where natural persons are
concerned, their name, their address as well as their date of
birth or, where legal persons are concerned, their registered
name, their business address and their registered domicile, and
in all cases the number of shares they hold. The entry in the
Banks share register constitutes a prerequisite for
attending and exercising voting rights at the shareholders
meeting.
Stock Exchange
Listing
Our shares have been admitted to the regulated market
(
Regulierter Markt
) and the
sub-segment
of the regulated market with additional obligations arising from
admission (Prime Standard) of the Frankfurt Stock Exchange
(
Frankfurter Wertpapierbörse
) as well as to the
regulated market of the six other German stock exchanges
(Berlin, Düsseldorf, Hamburg, Hanover, Munich and
Stuttgart). In addition, our shares are listed on the New York
Stock Exchange.
Transferability
of Shares
The transferability of our ordinary shares is not restricted by
law or our Articles of Association.
15
Development of
the Share Capital since 2006
As of December 31, 2005, our share capital amounted to
1,419,610,291.20 and was divided into 554,535,270 ordinary
registered shares with no par value. Since December 31,
2005, our share capital has developed as follows:
|
|
|
On February 15, 2006, we reduced our registered share
capital by 102,400,000.00 to 1,317,210,291.20
through the cancellation of 40,000,000 shares.
|
|
|
As of December 31, 2006, our share capital amounted to
1,343,406,103.04 and was divided into 524,768,009 ordinary
registered shares with no par value. These amounts reflect the
issuance of 10,232,739 shares out of our conditional
capital in the year 2006 to our and our affiliates
employees or members of management, which was registered in the
Commercial Register on April 27, 2007.
|
|
|
As of December 31, 2007, our share capital amounted to
1,357,824,256.00 and was divided into 530,400,100 ordinary
registered shares with no par value. These amounts reflect the
issuance of 5,632,091 shares out of our conditional capital
in the year 2007 to our and our affiliates employees or
members of management, which was registered in the Commercial
Register on February 14, 2008.
|
|
|
On September 22, 2008, we issued 40,000,000 shares
against cash payments using authorized capital created in 2004
and partially using authorized capital created in 2007 and our
share capital was accordingly increased by 102,400,000.00.
The capital increase was registered with the Commercial Register
on September 23, 2008. Following this capital increase, our
registered share capital amounted to 1,460,224,256.00.
|
|
|
As of December 31, 2008, our share capital amounted to
1,461,399,078.40 and was divided into 570,859,015 ordinary
registered shares with no par value. These amounts reflect the
issuance of 458,915 shares out of our conditional capital
in the year 2008 to our and our affiliates employees or
members of management, which was registered in the Commercial
Register on February 11, 2009.
|
|
|
On February 23, 2009, we issued 50,000,000 shares
(with full dividend rights for the year 2008 and without
subscription rights) from our authorized capital created in 2006
against a contribution in kind of 50,000,000 ordinary shares of
Deutsche Postbank AG and our share capital was accordingly
increased by 128,000,000. The new shares were issued to
Deutsche Post AG as consideration for the transfer of shares in
Deutsche Postbank AG. The capital increase was registered in the
Commercial Register on March 6, 2009. Following this
capital increase, our registered share capital amounts to
1,589,399,078.40.
|
For further information about our share capital (including a
reconciliation of the number of ordinary shares outstanding at
the beginning and end of each of 2007 and 2008), see
note 29 to the consolidated financial statements in our
2008
Form 20-F.
Authorized
Capital.
Our share capital may be increased by issuing new shares out of
authorized capital against cash payments, and in some
circumstances against contributions in kind. Our authorized but
unissued capital as of the date of this prospectus amounts to
485,480,000.00.
|
|
|
By resolution of our annual shareholders meeting dated
May 24, 2007, the Management Board is authorized to
increase our share capital on or before April 30, 2012,
with the consent of the Supervisory Board, on one or more
occasions, by up to a total of 30,600,000.00 through the
issuance of new shares against cash payment. Shareholders are to
be granted pre-emptive rights, but the Management Board is
authorized to exclude fractional amounts from shareholders
pre-emptive rights and to exclude pre-emptive rights in so far
as is necessary to grant to the holders of option rights,
convertible bonds and convertible participatory rights issued by
us and our subsidiaries preemptive rights to new shares to the
extent that they would be entitled to such rights after
exercising their option or conversion rights. The Management
Board is also authorized to exclude the pre-emptive rights in
full with the consent of the Supervisory Board if the issue
price of the new shares is not
|
16
|
|
|
significantly lower than the quoted price of the shares already
listed at the time of the final determination of the issue price.
|
|
|
|
By resolution of our annual shareholders meeting dated
May 29, 2008, the Management Board is authorized to
increase our share capital on or before April 30, 2013,
with the consent of the Supervisory Board, on one or more
occasions, by up to a total of 140,000,000.00 through the
issuance of new shares against cash payment or contribution in
kind. Shareholders are to be granted pre-emptive rights, but the
Management Board is authorized to exclude fractional amounts
from shareholders pre-emptive rights and to exclude
pre-emptive rights in so far as is necessary to grant to the
holders of option rights, convertible bonds and convertible
participatory rights issued by us and our subsidiaries
pre-emptive rights to new shares to the extent that they would
be entitled to such rights after exercising their option or
conversion rights. The Management Board is also authorized to
exclude the pre-emptive rights with the consent of the
Supervisory Board if the capital increase against contribution
in kind is carried out in order to acquire companies or
shareholdings in companies.
|
|
|
By resolution of our annual shareholders meeting dated
May 26, 2009, the Management Board is authorized to
increase our share capital on or before April 30, 2014,
with the consent of the Supervisory Board, on one or more
occasions, by up to a total of 314,880,000.00 through the
issuance of new shares against cash payment. Shareholders are to
be granted pre-emptive rights, but the Management Board is
authorized to exclude fractional amounts from shareholders
pre-emptive rights and to exclude pre-emptive rights in so far
as is necessary to grant to the holders of option rights,
convertible bonds and convertible participatory rights issued by
us and our subsidiaries pre-emptive rights to new shares to the
extent that they would be entitled to such rights after
exercising their option or conversion rights.
|
The following resolutions were adopted by our annual
shareholders meeting on May 26, 2009. However, these
resolutions have been contested by certain shareholders and as
of the date of this prospectus have not been registered with the
Commercial Register and, as a result, are not in effect. We do
not know whether or when these resolutions will come into effect.
|
|
|
The Management Board may increase our share capital on or before
April 30, 2014, with the consent of the Supervisory Board,
on one or more occasions, by up to a total of
128,000,000.00 through the issuance of new shares against
cash payment. Shareholders are to be granted pre-emptive rights,
but the Management Board is authorized to exclude fractional
amounts from shareholders pre-emptive rights and to
exclude pre-emptive rights in so far as is necessary to grant to
the holders of option rights, convertible bonds and convertible
participatory rights that we and our subsidiaries issue
preemptive rights to new shares to the extent that they would be
entitled to such rights after exercising their option or
conversion rights. The Management Board is also authorized to
exclude the pre-emptive rights with the consent of the
Supervisory Board if the issue price of the new shares is not
significantly lower than the quoted price of the shares already
listed at the time of the final determination of the issue price.
|
|
|
The Management Board may increase our share capital on or before
April 30, 2014, with the consent of the Supervisory Board,
on one or more occasions, by up to a total of
176,640,000.00 through the issuance of new shares against
cash payment or contribution in kind. Shareholders are to be
granted pre-emptive rights, but the Management Board is
authorized to exclude fractional amounts from shareholders
pre-emptive rights and to exclude pre-emptive rights in so far
as is necessary to grant to the holders of option rights,
convertible bonds and convertible participatory rights issued by
us and our subsidiaries pre-emptive rights to new shares to the
extent that they would be entitled to such rights after
exercising their option or conversion rights. The Management
Board is also authorized to exclude the pre-emptive rights with
the consent of the Supervisory Board if the capital increase
against contribution in kind is carried out in order to acquire
companies or shareholdings in companies.
|
Moreover, pursuant to the so-called statutory authorized capital
set forth in Article 2 Section 3 of the Financial
Market Stabilization Act, the Management Board, subject to the
consent of the Supervisory Board, is authorized by law through
December 31, 2009 to increase our share capital by up to
50% of the
17
Banks share capital existing as of October 18, 2008
through the issuance of new shares to the German Financial
Market Stabilization Fund against consideration. The pre-emptive
rights of shareholders are excluded. The German Financial Market
Stabilization Fund is a federal special fund
(
Sondervermögen des Bundes
) which may, upon
application, support financial institutions until
December 31, 2009 by implementing stabilization measures.
Conditional
Capital.
Our conditional but unissued capital as of the date of this
prospectus amounts to 407,305,932.80, divided as follows:
|
|
|
By resolution of our annual shareholders meeting dated
May 17, 1999, our share capital is conditionally increased
by up to 1,305,932.80, through the issuance of up to
510,130 no par value shares. The conditional capital increase
will only be carried out in so far as the holders of the option
rights issued on the basis of the share option plan pursuant to
the resolution of the annual shareholders meeting on
May 17, 1999 or in accordance with the resolution of the
annual shareholders meeting on May 17, 2001 make use
of their option rights and we do not fulfill the option rights
in either case by transferring own shares or by making a cash
payment.
|
|
|
By resolution of our annual shareholders meeting dated
May 29, 2008, our share capital is conditionally increased
by up to 150,000,000.00 through the issuance of up to
58,593,750 no par value shares. The conditional capital increase
will only be carried out in so far as (a) the holders of
conversion rights or warrants linked with participatory notes or
convertible bonds or bonds with warrants to be issued on or
before April 30, 2013 by us or a company in which we have a
direct or indirect majority holding, make use of their
conversion or option rights or in so far as (b) the holders
with conversion obligations of convertible participatory notes
or convertible bonds to be issued on or before April 30,
2013 by us or a company in which we have a direct or indirect
majority holding, fulfill their obligation to convert.
|
|
|
By resolution of our annual shareholders meeting dated
May 26, 2009, our share capital is conditionally increased
by up to 256,000,000.00 through the issuance of up to
100,000,000 shares. Pursuant to this resolution, the
conditional capital increase will only be carried out in so far
as (a) the holders of conversion rights or warrants linked
with participatory notes or convertible bonds or bonds with
warrants to be issued on or before April 30, 2014 by us or
a company in which we have a direct or indirect majority
holding, make use of their conversion or option rights, or
(b) the holders with conversion obligations of convertible
participatory notes or convertible bonds to be issued on or
before April 30, 2014 by us or a company in which we have a
direct or indirect majority holding, fulfill their obligation to
convert.
|
Authorization
to Acquire Own Shares.
As of August 31, 2009, we held 1,321,508 of our own shares.
On May 26, 2009, our annual shareholders meeting
resolved to authorize the Management Board, pursuant to
Section 71(1) no. 7 and Section 71(1) no. 8
of the German Stock Corporation Act, to acquire own shares of
the Bank.
Authorization
pursuant to Section 71(1) no. 7 of the German Stock
Corporation Act.
We are authorized pursuant to Section 71(1) no. 7 of
the German Stock Corporation Act to buy and sell, for the
purpose of securities trading, own shares on or before
October 31, 2010, at prices which do not exceed or fall
short of the average of the share prices (closing auction prices
of our share in Xetra trading
and/or
in a
comparable successor system on the Frankfurt Stock Exchange) on
the respective three preceding stock exchange trading days by
more than 10%. In this context, the shares acquired for this
purpose may not, at the end of any day, exceed 5% of our share
capital.
18
Authorization
pursuant to Section 71(1) no. 8 of the German Stock
Corporation Act.
We are authorized pursuant to Section 71(1) no. 8 of
the German Stock Corporation Act to buy, on or before
October 31, 2010, own shares of the Bank in a total volume
of up to 10% of our share capital. Together with own shares we
acquired for trading purposes
and/or
for
other reasons and which are from time to time in our possession
or attributable to us pursuant to Sections 71a et seq. of
the German Stock Corporation Act, own shares purchased on the
basis of this authorization may not at any time exceed 10% of
our share capital. Own shares may be bought through a stock
exchange or by means of a public tender offer to all
shareholders. The price for the purchase of shares (excluding
ancillary purchase costs) on a stock exchange may not exceed or
fall short by more than 10% of the average of the share prices
(closing auction prices of our share in Xetra trading
and/or
in a
comparable successor system on the Frankfurt Stock Exchange) on
the last three stock exchange trading days before the obligation
to purchase. In the case of a public tender offer, the purchase
price may not exceed or fall short by more than 10% of the
average of the share prices (closing auction prices of our share
in Xetra trading
and/or
in a
comparable successor system on the Frankfurt Stock Exchange) on
the last three stock exchange trading days before the day of
publication of the offer. If the volume of shares offered in a
public tender offer exceeds the planned buy-back volume,
acceptance must be in proportion to the shares offered in each
case. We may provide for a preferred acceptance of small
quantities of up to 50 of our shares offered for purchase per
shareholder.
The Management Board is also authorized to dispose of the
purchased shares and of any shares purchased on the basis of
previous authorizations pursuant to Section 71(1)
no. 8 of the German Stock Corporation Act on the stock
exchange, through an offer to all shareholders or against
contribution in kind with the exclusion of the
shareholders pre-emptive rights for the purpose of
acquiring companies or shareholdings in companies. In addition,
the Management Board is authorized, in case it disposes of
acquired own shares through an offer to all shareholders, to
grant to the holders of the option rights, convertible bonds and
convertible participatory rights issued by us pre-emptive rights
to the extent that they would be entitled to such rights if they
exercised their option
and/or
conversion rights. Shareholders pre-emptive rights are
excluded for these cases and to this extent. The Management
Board is also authorized to issue such own shares to our and our
affiliates employees and retired employees or to use them,
to service option rights on
and/or
rights or obligations to purchase our shares granted to our and
our affiliates employees, in each case with the exclusion
of shareholders pre-emptive rights.
Furthermore, the Management Board is authorized to sell the
shares to third parties against cash payment under exclusion of
the shareholders pre-emptive rights if the purchase price
is not substantially lower than the stock exchange price of the
shares at the time of sale. This authorization may only be used
to the extent that the number of shares sold on the basis of
this authorization together with shares issued from authorized
capital with the exclusion of shareholders pre-emptive
rights pursuant to Section 186(3) sentence 4 of the German
Stock Corporation Act does not exceed 10% of our share capital
at the time of the issuance
and/or
sale
of shares.
The Management Board may cancel shares acquired on the basis of
this authorization without any further resolution of the annual
shareholders meeting.
Dividends and
Paying Agents
For more information on our dividend policy and legal basis for
dividends under German law, see our 2008
Form 20-F
Item 8: Financial Information Dividend
Policy.
Shareholders registered with our New York transfer agent will be
entitled to elect whether to receive dividend payments in euros
or U.S. dollars. For those shareholders, unless instructed
otherwise, we will convert all cash dividends and other cash
distributions with respect to ordinary shares into
U.S. dollars prior to payment to the shareholder. The
amount distributed will be reduced by any amounts we or our New
York transfer agent are required to withhold for taxes or other
governmental charges. If our New York transfer agent determines,
following consultation with us, that in its judgment any foreign
currency it
19
receives is not convertible or distributable, our New York
transfer agent may distribute the foreign currency (or a
document evidencing the right to receive such currency) or, in
its discretion, hold the foreign currency for the account of the
shareholder to receive the same.
If any of our distributions consists of a dividend of our
shares, Registrar Services GmbH and our New York transfer agent
(with respect to shares individually certificated) or the
custodian bank with which shareholders have deposited their
shares (with respect to shares in global form) will distribute
the shares to the shareholders in proportion to their existing
shareholdings. Rather than distribute fractional shares,
Registrar Services GmbH, our New York transfer agent or the
custodian bank will sell all such fractional shares and
distribute the net proceeds to shareholders.
Registrar Services GmbH and our New York transfer agent (with
respect to shares individually certificated) or the custodian
bank with which shareholders have deposited their shares (with
respect to shares in global form) will also distribute all
distributions (other than cash, our shares or rights) to
shareholders in proportion to their shareholdings. In the event
that Registrar Services GmbH, our New York transfer agent or the
custodian bank determine that the distribution cannot be made
proportionately among shareholders or that it is impossible to
make the distribution, they may adopt any method that they
consider fair and practicable to effect the distribution. Such
methods may include the public or private sale of all or a
portion of the securities or property and the distribution of
the proceeds. Registrar Services GmbH, our New York transfer
agent or the custodian bank must consult with us before adopting
any alternative method of distribution.
Depending on whether shares are individually certificated or in
global form, we, Registrar Services GmbH, our New York transfer
agent or the custodian bank with which shareholders have
deposited their shares will determine whether or not any
distribution (including cash, shares, rights or property) is
subject to tax or governmental charges. In the case of a cash
distribution, we may use all or part of the cash to pay any such
tax or governmental charge. In the case of other distributions,
we, Registrar Services GmbH, our New York transfer agent or the
custodian bank may dispose of all or part of the property to be
distributed by public or private sale, in order to pay the tax
or governmental charge. In all cases, shareholders will receive
any net proceeds of any sale or the balance of the cash or
property after the deduction for taxes or governmental charges
in proportion to their shareholdings.
Employee Stock
Options
For a description of options granted to employees under
employees share plans, please see notes 29 and 31 to
the consolidated financial statements in our 2008
Form 20-F.
20
DESCRIPTION OF
TRADABLE SUBSCRIPTION RIGHTS TO SUBSCRIBE
FOR ORDINARY SHARES
We may offer tradable statutory subscription rights to subscribe
for ordinary shares of Deutsche Bank Aktiengesellschaft. The
applicable prospectus supplement will describe the specific
terms of any such subscription rights offering, including, as
applicable:
|
|
|
the title of the subscription rights;
|
|
|
the exercise price for the subscription rights;
|
|
|
the aggregate number of subscription rights issued;
|
|
|
a discussion of the material U.S. federal, German or other
income tax considerations, as well as considerations under the
U.S. Employee Retirement Income Security Act of 1974, or
ERISA,
applicable to the issuance of ordinary
shares together with statutory subscription rights or exercise
of the subscription rights;
|
|
|
any other terms of the subscription rights, including terms,
procedures and limitations relating to the exercise of the
subscription rights;
|
|
|
the terms of the ordinary shares corresponding to the
subscription rights;
|
|
|
information regarding the trading of subscription rights;
|
|
|
the record date, if any, to determine who is entitled to the
subscription rights and the ex-rights date;
|
|
|
the date on which the rights to exercise the subscription rights
will commence, and the date on which the rights will expire;
|
|
|
the extent to which the offering includes a contractual
over-subscription privilege with respect to unsubscribed
securities; and
|
|
|
the material terms of any standby underwriting arrangement we
enter into in connection with the offering.
|
Each subscription right will entitle its holder to subscribe for
a number of our ordinary shares at an exercise price described
in the prospectus supplement. Subscription rights may be
exercised at any time up to the close of business on the
expiration date set forth in the prospectus supplement. After
the close of business on the expiration date, all unexercised
subscription rights will become void. Upon receipt of payment
and, if applicable, the subscription form properly completed and
executed at the subscription rights agents office or
another office indicated in the prospectus supplement, we will,
as soon as practicable, forward our ordinary shares that can be
subscribed for with this exercise. The prospectus supplement may
offer more details on how to exercise the subscription rights.
If we determine to make appropriate arrangements for rights
trading, persons other than our shareholders can acquire rights
as described in the prospectus supplement. In the event
subscription rights are offered only to our shareholders and
their rights remain unexercised, we may determine to offer the
unsubscribed offered securities to persons other than our
shareholders. In addition, we may enter into a standby
underwriting arrangement with one or more underwriters under
which the underwriter or underwriters, as the case may be, will
purchase any offered securities remaining unsubscribed for after
the offering, as described in the prospectus supplement.
21
DESCRIPTION OF
DEBT SECURITIES OF DEUTSCHE BANK AKTIENGESELLSCHAFT
This section describes the general terms that will apply to any
debt securities that may be offered pursuant to this prospectus
by Deutsche Bank AG, directly or through one of its branches.
The specific terms of the offered debt securities, and the
extent to which the general terms described in this section
apply to debt securities, will be described in one or more
related prospectus supplements at the time of the offer.
General
As used in this prospectus,
debt securities
means the senior debentures, notes, bonds and other evidences of
indebtedness that Deutsche Bank AG issues, directly or through
one of its branches, and in each case, the trustee authenticates
and delivers under the senior indenture.
The senior debt securities (and, in the case of debt securities
in bearer form, any coupons to these securities) will be our
direct, unconditional, unsecured and unsubordinated obligations
and will rank on parity with the claims of all our other
unsecured creditors other than those claims which are expressly
preferred by law of the jurisdiction of our incorporation or, in
the case of senior debt securities issued by Deutsche Bank AG
through a branch, the law of the jurisdiction where the branch
is established.
The Senior
Indenture
Deutsche Bank AG may issue senior debt securities, directly or
through one of its branches. The senior debt securities offered
pursuant to this prospectus will be issued, in one or more
series under, and will be governed by, the senior indenture
among Deutsche Bank AG, as issuer, Law Debenture
Trust Company of New York, as trustee, and Deutsche Bank
Trust Company Americas, as paying agent, issuing agent and
registrar. The senior indenture will be qualified under the
Trust Indenture Act of 1939, as amended, or the
Trust Indenture Act.
We refer to Law Debenture Trust Company of New York,
including any successor trustee, as the
trustee.
We refer to the senior indenture, as it may be supplemented
from time to time, as the
senior indenture.
We have summarized below the material provisions of the senior
indenture and the senior debt securities, or indicated which
material provisions will be described in the related prospectus
supplement. These descriptions are only summaries and are
qualified in their entirety by the senior indenture. The terms
of the senior indenture will include both those stated in that
indenture and those made part of that indenture by the
Trust Indenture Act. The senior indenture will be included
as an exhibit to the registration statement of which this
prospectus forms a part, and you should read the indenture for
provisions that may be important to you.
We May Issue
Different Series of Debt Securities
The senior indenture does not limit the amount of debt that may
be issued. We may issue debt securities from time to time in one
or more distinct series, at a price of 100% of their principal
amount or at a premium or a discount. This section summarizes
terms of the debt securities that apply generally to all series.
The provisions of the senior indenture allow us not only to
issue debt securities with terms different from those of debt
securities previously issued under that indenture, but also to
reopen a previously issued series of debt securities
and issue additional debt securities of that series. The debt
securities will not be secured by any property or assets of
Deutsche Bank AG. We will describe many of the specific terms of
the applicable series in the applicable prospectus supplement.
Payments on the
Debt Securities
Denomination and currency.
The debt
securities may be denominated and payable in U.S. dollars
or other currencies.
22
Fixed rate and floating rate debt
securities.
Debt securities may bear interest at a
fixed rate or a floating rate, which, in either case, may be
zero, or at a rate that varies during the lifetime of the debt
security. Debt securities bearing no interest or interest at a
rate that at the time of issuance is below the prevailing market
rate may be sold at a discount below their stated principal
amount.
Linked or exchangeable debt securities.
We
may issue debt securities from time to time with the principal
amount
and/or
interest payable on any relevant payment date to be determined
by reference to one or more currencies, commodities or
securities of ours or entities that are or are not affiliated
with us, a basket or baskets of those currencies, commodities or
securities, or an index or indices of those currencies,
commodities or securities, or interest rates, or intangibles,
articles, or goods, or any other financial or economic or other
measure or instrument, including the occurrence or
non-occurrence of any event or circumstance. Holders of these
types of debt securities will receive payments of principal
and/or
interest (if any) that are determined by reference to the
applicable underlying instrument or measurement. Such debt
securities may provide either for cash settlement or for
physical settlement by delivery of the applicable underlying
property or other property of the type listed above. Such debt
securities may also provide that the form of settlement may be
determined at our option or at your option.
We may issue debt securities that are exchangeable, either
mandatorily or at our or the holders option, into
securities of ours or entities that are or are not affiliated
with us, a basket or baskets of those securities, other
property, or any combination of, or the cash value of, such
securities or other property.
Terms Specified
in Prospectus Supplement
The prospectus supplement will contain, where applicable, the
following terms of and other information relating to any offered
debt securities:
|
|
|
whether the debt securities will be issued by Deutsche Bank AG,
directly or through one of its branches;
|
|
|
the specific designation;
|
|
|
the aggregate principal amount, purchase price and denomination;
|
|
|
the currency in which the debt securities are denominated
and/or
in
which principal, and premium, if any,
and/or
interest, if any, is payable;
|
|
|
the date of maturity (and any provisions relating to extending
or shortening the maturity date);
|
|
|
the interest rate or rates or the method by which the
calculation agent (identified in the prospectus supplement) will
determine the interest rate or rates, if any;
|
|
|
the date from which interest accrues and the interest payment
dates, if any;
|
|
|
the place or places for payment of the principal of and any
premium, if any,
and/or
interest, if any, on the debt securities;
|
|
|
any repayment, redemption, prepayment or sinking fund
provisions, including any redemption notice provisions;
|
|
|
if other than the principal amount thereof, the portion of the
principal amount of the debt securities payable upon declaration
of acceleration of maturity thereof;
|
|
|
whether we will issue the debt securities in registered form or
bearer form or both and, if we are offering debt securities in
bearer form, any restrictions applicable to the exchange of one
form for another and to the offer, sale and delivery of those
debt securities in bearer form;
|
|
|
whether we will issue the debt securities in global (i.e.,
book-entry) or definitive (i.e., certificated) form and under
what terms and conditions;
|
23
|
|
|
the terms on which holders of the debt securities may exchange
them into or for one or more securities of ours or entities that
are or are not affiliated with us, a basket or baskets of those
securities, other property, or any combination of, or the cash
value of, any of the foregoing; the terms on which exchange may
occur, including whether exchange is mandatory, at the option of
the holder or at our option; the period during which exchange
may occur; the initial exchange price or rate; and the
circumstances or manner in which the amount of securities or
other property, or any combination thereof, deliverable upon
exchange, or the cash value thereof, may be adjusted;
|
|
|
information as to the methods for determining the amount of
principal, premium, if any,
and/or
interest payable on any date
and/or
currencies, commodities or securities of ours or entities that
are or are not affiliated with us, the basket or baskets of
those currencies, commodities or securities, or the index
or indices of those currencies, commodities or securities,
or interest rates, or intangibles, articles, or goods, or any
other financial or economic or other measure or instrument,
including the occurrence or non-occurrence of any event or
circumstance, to which the amount payable on that date is linked;
|
|
|
the identity of any agents for the debt securities, including
the trustee, depositaries, authenticating or paying agents,
transfer agents, registrars, determination or other agents;
|
|
|
the proposed listing, if any, of the debt securities on any
securities exchange;
|
|
|
whether the debt securities are to be sold separately or with
other securities as part of units; and
|
|
|
any other specific terms of the debt securities and any terms
required by or advisable under applicable laws or regulations.
|
The prospectus supplement relating to any series of debt
securities may also include, if applicable, a discussion of
certain U.S. federal income tax considerations, German
income tax consequences and income tax consequences of the
jurisdiction of any relevant issuing branch and considerations
under ERISA.
Registration and
Transfer of Debt Securities
Holders may present debt securities for exchange and transfer
(except bearer securities) in the manner, at the places and
subject to the restrictions stated in the debt securities and
described in the applicable prospectus supplement. We will
provide these services without charge except for any tax or
other governmental charge payable in connection with these
services and subject to any limitations or requirements provided
in the senior indenture or the supplemental indenture thereto or
issuer order under which that series of debt securities is
issued.
Holders may transfer debt securities in bearer form
and/or
the
related coupons, if any, by delivery to the transferee.
If any of the securities are held in global form, the procedures
for transfer of interests in those securities will depend upon
the procedures of the depositary for those global securities.
See Forms of Securities.
Impact of
Significant Corporate Actions and Other Developments
Under German law, a surviving corporation in a merger or
consolidation generally assumes the obligations of its
predecessors. There are, however, no covenants in the indenture
or other provisions designed to protect holders of the debt
securities against a reduction in the creditworthiness of
Deutsche Bank AG that would afford holders of debt securities
additional protection in the event of a recapitalization
transaction, a change of control of the Bank, a merger or
consolidation, a sale, lease or conveyance of all or
substantially all of the Banks assets or a highly
leveraged transaction or any other transaction that might
adversely affect holders of the debt securities.
It may be that Deutsche Bank AG will depend increasingly upon
the earnings and cash flow of its subsidiaries to meet its
obligations under the debt securities. Since the creditors of
any of its subsidiaries
24
would generally have a right to receive payment that is superior
to Deutsche Bank AGs right to receive payment from the
assets of that subsidiary, holders of debt securities will be
effectively subordinated to creditors of Deutsche Bank AGs
subsidiaries. In addition, there are various regulatory
requirements applicable to some of Deutsche Bank AGs
subsidiaries that limit their ability to pay dividends and make
loans and advances to Deutsche Bank AG.
Events of
Default
The senior indenture provides holders of debt securities with
remedies if we fail to perform specific obligations, such as
making payments on the debt securities, or if we become
bankrupt. Holders should review these provisions and understand
which of our actions trigger an event of default and which
actions do not. The senior indenture permits the issuance of
debt securities in one or more series, and, in many cases,
whether an event of default has occurred is determined on a
series by series basis.
An event of default is defined under the senior indenture, with
respect to any series of debt securities issued under that
indenture, as any one or more of the following events (each an
event of default
) having occurred and be
continuing:
|
|
|
default is made in the payment of principal, interest or premium
in respect of such series of debt securities for 30 days;
|
|
|
we fail to perform or observe any of our other obligations under
the securities and such failure has continued for the period of
60 days following the service on us of notice by the
trustee or holders of
33
1
/
3
%
of such series requiring the same to be remedied, except that
the failure to file with the trustee certain information
required to be filed with the trustee pursuant to the
Trust Indenture Act, will not constitute an event of
default (although the trustee may bring suit to enforce such
filing obligation); or
|
|
|
a court in Germany opens insolvency proceedings against us or we
apply for or institute such proceedings or offer or make an
arrangement for the benefit or our creditors generally.
|
Any additional or different events of default applicable to a
particular series of debt securities will be described in the
prospectus supplement relating to such series.
No Negative Pledge.
The senior indenture does
not contain any restrictions preventing us from incurring
additional debt.
Acceleration
of Debt Securities Upon an Event of Default.
The senior indenture provides that:
|
|
|
if an event of default due to the default in payment of
principal, interest or premium in respect of any series of
senior debt securities issued under the senior indenture, or due
to the default in the performance or breach of any other
covenant or warranty of the Bank applicable to less than all
outstanding series of senior debt securities issued under the
senior indenture occurs and is continuing, other than a covenant
for which the senior indenture specifies that the violation
thereof does not give a right to accelerate or declare due and
payable any securities issued under the senior indenture, either
the trustee or the holders of not less than
33
1
/
3
%
in aggregate principal amount of the outstanding senior debt
securities of all affected series, voting as one class, by
notice in writing to the Bank, may declare the principal of all
senior debt securities of each affected series and interest
accrued thereon to be due and payable immediately; and
|
|
|
if an event of default due to a default in the performance of
any other of the covenants or agreements in the senior indenture
applicable to all outstanding debt securities issued under the
senior indenture or due to the specified events of bankruptcy,
insolvency or reorganization of the Bank, occurs and is
continuing, other than a covenant for which the senior indenture
specifies that the violation thereof does not give a right to
accelerate or declare due and payable any securities issued
under the senior indenture, either the trustee or the holders of
not less than
33
1
/
3
%
in aggregate principal amount of all
|
25
|
|
|
outstanding senior debt securities issued under the senior
indenture, voting as one class, by notice in writing to the
Bank, may declare the principal of all senior debt securities
and interest accrued thereon to be due and payable.
|
Annulment of Acceleration and Waiver of
Defaults.
In some circumstances, if any and all
events of default under the indenture, other than the
non-payment of the principal of the securities that has become
due as a result of an acceleration, have been cured, waived or
otherwise remedied, then the holders of a majority in aggregate
principal amount of all series of outstanding debt securities
affected, voting as one class, may annul past declarations of
acceleration of or waive past defaults of the debt securities.
Indemnification of Trustee for Actions Taken on Your
Behalf.
The senior indenture provides that the
trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the
direction of the holders of debt securities issued under that
indenture relating to the time, method and place of conducting
any proceeding for any remedy available to the trustee, or
exercising any trust or power conferred upon the trustee. In
addition, the senior indenture contains a provision entitling
the trustee, subject to the duty of the trustee to act with the
required standard of care during a default, to be indemnified by
the holders of debt securities issued under that indenture
before proceeding to exercise any right or power at the request
of holders. Subject to these provisions and some other
limitations, the holders of a majority in aggregate principal
amount of each affected series of outstanding debt securities,
voting as one class, may direct the time, method and place of
conducting any proceeding for any remedy available to the
trustee, or exercising any trust or power conferred on the
trustee.
Limitation on Actions by You as an Individual
Holder.
The senior indenture provides that no
individual holder of debt securities may institute any action
against us under that indenture, except actions for payment of
overdue principal and interest at maturity or upon acceleration,
unless the following actions have occurred:
|
|
|
the holder must have previously given written notice to the
trustee of the continuing default;
|
|
|
the holders of not less than a majority in aggregate principal
amount of the outstanding debt securities of each affected
series, treated as one class, must have (1) requested the
trustee to institute that action and (2) offered the
trustee reasonable indemnity;
|
|
|
the trustee must have failed to institute that action within
60 days after receipt of the request referred to
above; and
|
|
|
the holders of a majority in aggregate principal amount of the
outstanding debt securities of each affected series, treated as
one class, must not have given directions to the trustee
inconsistent with those of the holders referred to above.
|
The senior indenture contains a covenant that we will file
annually with the trustee a certificate of no default or a
certificate specifying any default that exists.
Discharge and
Defeasance
We have the ability to eliminate most or all of our obligations
on any series of debt securities prior to maturity if we comply
with the following provisions.
Discharge of Indenture.
We may discharge all
of our obligations, other than as to transfers and exchanges,
under the senior indenture after we have:
|
|
|
paid or caused to be paid the principal of and any interest or
premium, if any, on all of the outstanding debt securities
issued thereunder in accordance with their terms;
|
|
|
delivered to the trustee for cancellation all of the outstanding
debt securities issued thereunder; or
|
|
|
if in the case of any series of debt securities on which the
exact amount (including the currency of payment) of principal
and any interest or premium, if any, due can be determined at
the time of making
|
26
|
|
|
the deposit referred to below, and which shall have become due
or payable, or are by their terms to become due and payable or
are scheduled for redemption, within one year, we have
irrevocably deposited with the trustee, cash or, in the case of
a series of debt securities payable only in U.S. dollars,
U.S. government obligations, in trust for the benefit of
the holders of securities of such series, in an amount certified
to be sufficient to pay on each date that they become due and
payable, the principal of and any interest or premium, if any,
on, and any mandatory sinking fund payments for, those
securities.
|
Defeasance of a Series of Securities at Any
Time.
We may also discharge all of our obligations,
other than as to transfers and exchanges, under any series of
debt securities at any time, which we refer to as
defeasance.
Defeasance may be effected only if, among other things:
|
|
|
we irrevocably deposit with the trustee cash or, in the case of
debt securities payable only in U.S. dollars,
U.S. government obligations, in trust for the benefit of
the holders of securities of such series, in an amount certified
to be sufficient to pay on each date that they become due and
payable, the principal of and any interest or premium, if any,
on, and any mandatory sinking fund payments for, all outstanding
debt securities of the series being defeased; and
|
|
|
we deliver to the trustee an opinion of counsel to the effect
that:
|
|
|
|
|
|
the holders of the series of debt securities being defeased will
not recognize income, gain or loss for U.S. federal income
tax purposes as a result of the defeasance; and
|
|
|
|
the defeasance will not otherwise alter those holders
U.S. federal income tax treatment of principal and interest
payments on the series of debt securities being defeased.
|
This opinion must be based on a ruling of the Internal Revenue
Service or a change in U.S. federal income tax law
occurring after the date of this prospectus, since the above
results would not occur under current tax law.
Modification of
the Indenture
Modification without Consent of Holders.
We
and the trustee may enter into supplemental indentures without
the consent of the holders of debt securities issued under the
senior indenture to:
|
|
|
secure any senior debt securities;
|
|
|
evidence the assumption by a successor corporation of our
obligations;
|
|
|
add covenants for the protection of the holders of debt
securities;
|
|
|
cure any ambiguity or correct any inconsistency or manifest
error;
|
|
|
establish the forms or terms of debt securities of any
series; or
|
|
|
evidence the acceptance of appointment by a successor trustee.
|
Modification Requiring Consent of Each
Holder.
We and the trustee may not make any of the
following changes to any outstanding debt security without the
consent of each holder that would be affected by such change:
|
|
|
change the final maturity of such security;
|
|
|
reduce the principal amount;
|
|
|
reduce the rate or change the time of payment of interest;
|
|
|
reduce any amount payable on redemption;
|
|
|
change the currency in which the principal, including any amount
of original issue discount, premium, or interest thereon is
payable;
|
|
|
modify or amend the provisions for conversion of any currency
into another currency;
|
27
|
|
|
reduce the amount of any original issue discount security
payable upon acceleration or provable in bankruptcy;
|
|
|
alter the terms on which holders of the debt securities may
convert or exchange debt securities for other securities of the
Bank or of other entities or for other property or the cash
value of thereof, other than in accordance with the antidilution
provisions or other similar adjustment provisions included in
the terms of the debt securities;
|
|
|
alter certain provisions of the indenture relating to debt
securities not denominated in U.S. dollars;
|
|
|
impair the right of any holder to institute suit for the
enforcement of any payment on any debt security when due; or
|
|
|
reduce the percentage of debt securities the consent of whose
holders is required for modification of the indenture.
|
Modification with Consent of Holders of a
Majority.
We and the trustee may make any other
change to the senior indenture and to the rights of the holders
of the debt securities issued thereunder, if we obtain the
consent of the holders of not less than a majority in aggregate
principal amount of all affected series of outstanding debt
securities issued thereunder, voting as one class.
Concerning Our
Relationship with the Trustee
We and our subsidiaries maintain ordinary banking relationships
and custodial facilities with the trustee and affiliates of the
trustee.
Governing
Law
The debt securities and the senior indenture will be governed
by, and construed in accordance with, the laws of the State of
New York.
28
DESCRIPTION OF
WARRANTS
We may offer warrants separately or together with one or more
additional warrants, ordinary shares, tradable subscription
rights to subscribe for our ordinary shares, purchase contracts
and debt securities issued by us or debt obligations or other
securities of an entity affiliated or not affiliated with us or
any combination of those securities in the form of units, as
described in the applicable prospectus supplement. If we issue
warrants as part of a unit, the accompanying prospectus
supplement will specify whether those warrants may be separated
from the other securities in the unit prior to the
warrants expiration date. Warrants to purchase or sell
securities of entities not affiliated with us issued in the
United States may not be so separated prior to the
91st day after the issuance of the unit, unless otherwise
specified in the applicable prospectus supplement.
We may issue warrants, on terms to be determined at the time of
sale, for the purchase or sale of, or whose redemption value is
determined by reference to the performance, level or value of,
one or more of the following:
|
|
|
securities issued by us or an entity affiliated or not
affiliated with us, commodities, a basket or baskets of those
securities or commodities, an index or indices of those
securities or commodities, or any combination of the foregoing;
|
|
|
currencies; and
|
|
|
any other financial, economic or other measure or instrument,
including the occurrence or non-occurrence of any event or
circumstance.
|
We refer to the items in the above clauses as
warrant
property.
We may satisfy our obligations, if any, with
respect to any warrants by delivering the warrant property, the
cash value of the warrant property or the cash value of the
warrants determined by reference to the performance, level or
value of the warrant property, all as described in the
applicable prospectus supplement.
Terms Specified
in Prospectus Supplement
The prospectus supplement will contain, where applicable, the
following terms of and other information relating to any offered
warrants:
|
|
|
the specific designation;
|
|
|
the aggregate number of, and the price at which we will issue,
the warrants;
|
|
|
the currency with which the warrants may be purchased;
|
|
|
whether we will issue the warrants in registered form or bearer
form or both;
|
|
|
the date on which the right to exercise the warrants will begin
and the date on which that right will expire or, if you may not
continuously exercise the warrants throughout that period, the
specific date or dates on which you may exercise the warrants;
|
|
|
if applicable, the minimum or maximum amount of warrants that
may be exercised at any one time;
|
|
|
if applicable, the date on and after which the warrants and the
related securities will be separately transferable;
|
|
|
whether the warrants are put warrants, call warrants or spread
warrants (entitling the holder to receive a cash value to be
determined by reference to the amount, if any, by which a
specified reference value of the warrant property at the time of
exercise exceeds a specified base value of the warrant
property), whether you or we will have the right to exercise the
warrants and any conditions or restrictions on the exercise of
the warrants;
|
|
|
the specific warrant property or cash value, and the amount or
the method for determining the amount of the warrant property or
cash value, deliverable upon exercise of each warrant;
|
29
|
|
|
the price at which and the currency with which the underlying
securities, currencies or commodities may be purchased or sold
upon the exercise of each warrant, or the method of determining
that price;
|
|
|
whether the warrant must be exercised by the payment of the
exercise price in cash, on a cashless basis or by the delivery
of any other security;
|
|
|
whether the exercise of the warrants is to be settled in cash or
by delivery of the underlying securities, commodities, or both;
|
|
|
the identity of the warrant agent for the warrants and of any
other depositaries, execution or paying agents, transfer agents,
registrars, determination or other agents;
|
|
|
any applicable U.S. federal income tax consequences, German
income tax consequences and income tax consequences of the
jurisdiction of any relevant issuing branch;
|
|
|
the proposed listing, if any, of the warrants or any securities
that may be acquired upon exercise of the warrants on any
securities exchange;
|
|
|
whether the warrants are to be sold separately or with other
securities as part of units; and
|
|
|
any additional terms of the agreement governing the warrants and
any terms required by or advisable under applicable laws or
regulations.
|
Governing
Law
The warrants will be governed by, and construed in accordance
with, the laws of the State of New York.
30
DESCRIPTION OF
PURCHASE CONTRACTS
We may issue purchase contracts (including purchase contracts
issued as part of a unit with one or more warrants and debt
securities issued by us or debt obligations or other securities
of an entity affiliated or not affiliated with us) to purchase
or sell, or whose redemption value is determined by reference to
the performance, level or value of one or more of the following:
|
|
|
securities issued by us or an entity affiliated or not
affiliated with us, commodities, a basket or baskets of those
securities or commodities, an index or indices of us or those
securities or commodities, or any combination of the foregoing;
|
|
|
currencies; and
|
|
|
any other financial, economic or other measure or instrument,
including the occurrence or non-occurrence of any event or
circumstance.
|
We refer to the property in the above clauses as
purchase contract property.
Each purchase contract will obligate the holder to purchase or
sell, and obligate us to sell or purchase, on specified dates,
the purchase contract property at a specified price or prices
(which may be based on a formula), all as described in the
applicable prospectus supplement. We may satisfy our
obligations, if any, with respect to any purchase contract by
delivering the purchase contract property, the cash value of
such purchase contract property or the cash value of the
purchase contract (which may be based on a formula or determined
by reference to the performance, level or value of the purchase
contract property), or, in the case of purchase contracts on
underlying currencies, by delivering the underlying currencies,
all as set forth in the applicable prospectus supplement. The
applicable prospectus supplement will specify the methods by
which the holders may purchase or sell the purchase contract
property, any acceleration, cancellation or termination
provisions, the identity of any purchase contract agent, other
provisions relating to the settlement of a purchase contract or
any other terms of the purchase contracts. The applicable
prospectus supplement will also specify any applicable
U.S. federal income tax consequences, German income tax
consequences and income tax consequences of the jurisdiction of
any relevant issuing branch in respect of the relevant purchase
contracts.
Prepaid Purchase
Contracts
Purchase contracts may require holders to satisfy their
obligations under the purchase contracts at the time they are
issued. We refer to these purchase contracts as
prepaid
purchase contracts.
In certain circumstances, our
obligation to settle prepaid purchase contracts on the relevant
settlement date may be governed by the senior indenture and
accordingly will rank on parity with all of our other unsecured
and unsubordinated debt.
Purchase
Contracts Issued as Part of Units
Purchase contracts issued as part of a unit will be governed by
the terms and provisions of a unit agreement, as described in
the applicable prospectus supplement.
31
DESCRIPTION OF
UNITS
Units will consist of any combination of ordinary shares,
tradable subscription rights to subscribe for ordinary shares,
warrants, purchase contracts, debt securities issued by us and
debt obligations or other securities of an entity affiliated or
not affiliated with us. The applicable prospectus supplement
will also describe:
|
|
|
the designation and the terms of the units and of any
combination of ordinary shares, tradable subscription rights to
subscribe for ordinary shares, warrants, purchase contracts,
debt securities issued by us and debt obligations or other
securities of an entity affiliated or not affiliated with us
constituting the units, including whether and under what
circumstances the ordinary shares, tradable subscription rights
to subscribe for ordinary shares, warrants, purchase contracts,
debt securities issued by us and debt obligations or other
securities of an entity affiliated or not affiliated with us may
be traded separately;
|
|
|
any additional terms of the governing unit agreement;
|
|
|
any additional provisions for the issuance, payment, settlement,
transfer or exchange of the units or of the ordinary shares,
tradable subscription rights to subscribe for ordinary shares,
warrants, purchase contracts, debt securities issued by us and
debt obligations or other securities of an entity affiliated or
not affiliated with us constituting the units; and
|
|
|
any applicable U.S. federal income tax consequences, German
income tax consequences and income tax consequences of the
jurisdiction of any relevant issuing branch.
|
The terms and conditions described under Description of
Ordinary Shares, Description of Tradable
Subscription Rights to Subscribe for Ordinary Shares,
Description of Debt Securities of Deutsche Bank
Aktiengesellschaft, Description of Warrants
and Description of Purchase Contracts will apply to
each unit and to any ordinary shares, tradable subscription
rights to subscribe for ordinary shares, debt securities,
warrants and purchase contracts issued by us included in each
unit, unless otherwise specified in the applicable prospectus
supplement.
32
DESCRIPTION OF
CAPITAL SECURITIES
As more fully described below or set forth in the applicable
prospectus supplement, we may sell capital securities of one or
multiple series through trusts, companies or similar entities.
If any such capital securities are issued, they will have the
benefit of certain subordinated guarantees of Deutsche Bank AG
described below.
Set forth below is a description of the trust preferred
securities, company preferred securities and related instruments
we may issue in connection with an issuance of capital
securities. Issuances of capital securities in the future may or
may not conform to the descriptions below, and such descriptions
may be modified or superseded by the terms of any particular
series of capital securities set forth in the relevant
prospectus supplement.
Description of
Trust Preferred Securities
This prospectus describes the general terms and provisions of
the trust preferred securities that the trusts may issue. When a
trust offers to sell its trust preferred securities, we will
describe the specific terms of those trust preferred securities
in a supplement to this prospectus. We will also indicate in the
applicable prospectus supplement whether the general terms and
provisions that we describe in this prospectus apply to those
securities. If there are any differences between the applicable
prospectus supplement and this prospectus, the prospectus
supplement will control. For a complete description of the
material terms of the particular issue of trust preferred
securities, you must refer to both the applicable prospectus
supplement and to the following description.
Each trust may issue, from time to time, in one or more series,
trust preferred securities under the relevant amended and
restated trust agreement, which we refer to as trust agreement.
The trust agreements may or may not limit the aggregate amount
of trust preferred securities that may be issued or the
aggregate amount of any particular series. Each of the trust
agreements will be qualified as an indenture under the
Trust Indenture Act. The trusts may issue trust preferred
securities and trust common securities at any time without your
consent and without notifying you.
Each of the trust agreements will authorize the regular trustees
of the relevant trusts, on behalf of the relevant trust, to
issue the trust preferred securities. These securities will
represent the undivided preferred beneficial ownership interests
in the assets of the relevant trust. The form of a trust
agreement has been included as an exhibit to the registration
statement of which this prospectus forms a part, and you should
read the form of trust agreement for provisions that may be
important to you. You should read the applicable prospectus
supplement for the specific terms of any authorized series of
trust preferred securities, including:
|
|
|
the specific designation of the trust preferred securities;
|
|
|
the number and liquidation preference amount of the trust
preferred securities;
|
|
|
the rate or rates at which the trust will pay distributions
(which we also refer to as capital payments), or method of
calculation of such rate, the payment date or dates for any
distributions and the record date for any distributions;
|
|
|
the amount or amounts that the trust will pay, or the property
that the trust will deliver, out of its assets to the holders of
the trust preferred securities upon the trusts liquidation;
|
|
|
the obligation or option, if any, of the trust to purchase or
redeem the trust preferred securities and the price or prices
(or formula for determining the price) at which, the period or
periods within which, and the terms and conditions upon which
the trust will or may purchase or redeem trust preferred
securities, in whole or in part, pursuant to the obligation or
option;
|
|
|
the voting rights, if any, of the trust preferred securities,
including any vote required to amend the relevant trust
agreement;
|
33
|
|
|
the criteria for determining whether and to what extent the
trust will be required to pay distributions on the trust
preferred securities or will be prohibited from paying
distributions on the trust preferred securities;
|
|
|
terms for any optional or mandatory conversion or exchange of
trust preferred securities into other securities;
|
|
|
whether and to what extent the trust will be required to pay any
additional amounts in respect of withholding taxes; and
|
|
|
any other relative rights, preferences, privileges, limitations
or restrictions of the trust preferred securities not
inconsistent with the relevant trust agreement or applicable law.
|
The prospectus supplement relating to the particular trust
preferred securities may also include, if applicable, a
discussion of certain U.S. federal income tax and ERISA
considerations.
In the event of an offering of trust preferred securities, the
proceeds from the sale of the trust preferred securities will be
used by the relevant trust to purchase corresponding company
preferred securities. The company preferred securities will be
owned by the trust for the benefit of the holders of the trust
preferred securities and the holder of the trust common
security. The rights under the subordinated company preferred
guarantee of the company preferred securities of the
corresponding company issued by Deutsche Bank AG will be held in
the name of the company preferred guarantee trustee for the
benefit of the trust as owner of the company preferred
securities who in turn holds it for the benefit of the holders
of the trust preferred securities.
Except as provided in the applicable prospectus supplement, the
trust preferred securities will be perpetual and non-cumulative.
The relevant trust will pass through the distributions it
receives on the company preferred securities as distributions on
the trust preferred securities. It will also pass through any
redemption payment it receives on the company preferred
securities to redeem a corresponding amount of the trust
preferred securities as well as any liquidation payment it
receives on the company preferred securities upon liquidation of
the relevant company.
Each of the trusts (and any series of trust preferred securities
issued thereunder) is a legally separate entity and the assets
of one trust or series will not be available to satisfy the
obligations of any of the other trusts or series.
Holders of the trust preferred securities will have the benefit
of Deutsche Bank AGs subordinated guarantees of the
distribution, redemption and liquidation payment obligations
under the trust preferred securities (which we refer to as the
trust preferred guarantee) and the company preferred securities
(which we refer to as the company preferred guarantee) as set
forth in the applicable prospectus supplement and in this
prospectus under Description of Subordinated
Guarantees in Connection with Capital Securities.
Unless provided otherwise in the applicable prospectus
supplement, the trust preferred securities will be issued in
fully registered form without coupons.
Trust Common
Securities
The trust will also issue one common security (which we refer to
as the trust common security), representing an undivided common
interest in the trusts assets. The trust common security
will be owned by Deutsche Bank AG or one of its consolidated
subsidiaries.
Information
Concerning the Trustees
Pursuant to the trust agreement, there will be one or more
trustees. First, there will be one or more trustees, which we
refer to as regular trustees, each of whom will be an individual
who is an employee or officer of, or who is affiliated with,
Deutsche Bank AG. Second, there will be a trustee, which we
refer to as the property trustee, who will be a financial
institution that is unaffiliated with Deutsche Bank AG. Unless
provided otherwise in the applicable prospectus supplement, The
Bank of New York Mellon will be the property trustee of each of
the trusts. Third, there will be a trustee, which we refer to as
the Delaware
34
trustee, that is an individual or entity resident in Delaware.
Unless provided otherwise in the applicable prospectus
supplement, Deutsche Bank Trust Company Delaware, will be
the Delaware trustee for each of the trusts.
The regular trustees have the exclusive authority to cause the
relevant trust to issue and sell the trust preferred securities
in accordance with the provisions of the related trust agreement
and in connection with the issue and sale of the trust preferred
securities to cause the relevant trust to acquire company
preferred securities.
The property trustee holds, for the benefit of the holders of
the trust preferred securities and the holder of the trust
common security, the legal title to any company preferred
securities purchased by the trust. The property trustee as
holder of the company preferred securities is also the
beneficiary under the company preferred guarantee issued by
Deutsche Bank AG, which it holds for the benefit of the holders
of the trust preferred securities.
The property trustee is required to perform only those duties
that are specifically set forth in the relevant trust agreement,
except when a default has occurred and is continuing with
respect to the trust preferred securities. After a default, the
property trustee must exercise the same degree of care a prudent
person would exercise under the circumstances in the conduct of
her or his own affairs.
Subject to these requirements, the property trustee will be
under no obligation to exercise any of the powers vested in it
by the relevant trust agreement at the request of any holder of
trust preferred securities, unless the holder offers the
property trustee reasonable indemnity against the cost, expenses
and liabilities that might be incurred by exercising those
powers.
We and our subsidiaries maintain ordinary banking relationships
and custodial facilities with the property trustee and
affiliates of the property trustee.
Governing
Law
The trust preferred securities and the trust agreement will be
governed by and construed in accordance with the laws of the
State of Delaware.
Description of
Company Preferred Securities
This prospectus describes the general terms and provisions of
the company preferred securities that the Delaware companies may
issue. When a company issues company preferred securities, we
will describe the specific terms of those securities in a
supplement to this prospectus. We will also indicate in the
applicable prospectus supplement whether the general terms and
provisions that we describe in this prospectus apply to those
securities. If there are any differences between the applicable
prospectus supplement and this prospectus, the prospectus
supplement will control. For a complete description of the
material terms of the particular issue of company preferred
securities, you must refer to both the applicable prospectus
supplement and to the following description.
Each company may issue, from time to time, in one or more
series, company preferred securities under an amended and
restated limited liability company agreement, which we refer to
as the LLC agreement. The companies may issue company preferred
securities and other securities at any time without your consent
and without notifying you.
The relevant LLC agreement will authorize a company to issue
company preferred securities, which may be purchased by a trust
or sold directly to investors, and to issue company common
securities to Deutsche Bank AG or one of its branches or
subsidiaries. In addition, the relevant LLC agreement will
authorize a company in connection with the issuance and sale of
company preferred securities to a trust or directly to investors
to issue a separate class of company preferred securities to
Deutsche Bank AG or one of its branches or subsidiaries, which
we refer to as intra-group company preferred securities. The
terms company preferred securities and capital securities as
used in this prospectus do not include the intra-group company
preferred securities issued to Deutsche Bank AG or one of its
branches or subsidiaries. A
35
form of the LLC agreement will be included as an exhibit to the
registration statement of which this prospectus forms a part.
You should read the LLC agreement for provisions that may be
important for you. You should read the applicable prospectus
supplement for the specific terms of any authorized series of
company preferred securities, including:
|
|
|
the specific designation of the company preferred securities;
|
|
|
the number and liquidation preference amount of the company
preferred securities;
|
|
|
the rate or rates at which the company will pay distributions
(which we also refer to as capital payments), or method of
calculation of such rate, the payment date or dates for any
distributions and the record date for any distributions;
|
|
|
the amount or amounts that the company will pay out of its
assets to the holders of the company preferred securities upon
the companys liquidation;
|
|
|
the obligation or option, if any, of the company to purchase or
redeem the company preferred securities and the price or prices
(or formula for determining the price) at which, the period or
periods within which, and the terms and conditions upon which
the company will or may purchase or redeem company preferred
securities, in whole or in part, pursuant to the obligation or
option;
|
|
|
the voting rights, if any, of the company preferred securities
and company common securities, including any vote required to
amend the relevant LLC agreement;
|
|
|
the criteria for determining whether and to what extent the
company will be authorized to pay distributions on the company
preferred securities or will be required to pay distributions on
the company preferred securities;
|
|
|
terms for any optional or mandatory conversion or exchange of
company preferred securities into other securities;
|
|
|
whether and to what extent the company will be required to pay
any additional amounts in respect of withholding taxes; and
|
|
|
any other relative rights, preferences, privileges, limitations
or restrictions of the company preferred securities not
inconsistent with the relevant LLC agreement or applicable law.
|
The prospectus supplement relating to the particular company
preferred securities may also include, if applicable, a
discussion of certain U.S. federal income tax and ERISA
considerations.
In the event of an offering of company preferred securities, the
proceeds from their sale to the trust or directly to investors
will be used by the relevant company to purchase subordinated
debt obligations (which we refer to as initial debt obligations)
of Deutsche Bank AG or one of its branches or subsidiaries or
other eligible investments.
Except as otherwise set forth in the applicable prospectus
supplement, the company preferred securities will be perpetual
and non-cumulative.
Holders of the company preferred securities (but not the
intra-group company preferred securities) will have the benefit
of Deutsche Bank AGs subordinated guarantees of the
distribution, redemption and liquidation payment obligations
under the company preferred securities (which we refer to as the
company preferred guarantee) as set forth in the applicable
prospectus supplement and in this prospectus under
Description of Subordinated Guarantees in
Connection with Capital Securities. The terms of any
intra-group company preferred securities and the company common
securities issued to Deutsche Bank AG will be set forth in the
relevant LLC agreement and described in the applicable
prospectus supplement.
Governing
Law
The company preferred securities and the LLC agreement will be
governed by and construed in accordance with the laws of the
State of Delaware.
36
Description of
Subordinated Guarantees in Connection with Capital
Securities
Set forth below is a summary of information concerning the
subordinated guarantees that Deutsche Bank AG will execute and
deliver concurrently with any issuance of capital securities.
Each of the subordinated guarantees will be qualified as an
indenture under the Trust Indenture Act. The subordinated
guarantees are for the benefit of the holders from time to time
of the capital securities of any series issued by the relevant
trust or the relevant company. The terms of the subordinated
guarantees will include both those stated in the subordinated
guarantee agreements entered into between Deutsche Bank AG and
the guarantee trustee and those made part of the subordinated
guarantee agreements by the Trust Indenture Act. Forms of
the subordinated guarantee agreements are included as exhibits
to the registration statement of which this prospectus forms a
part. The forms of the subordinated guarantee agreements may be
modified in connection with the issuance of any series of
capital securities, and any such modification that is material
will be filed with a post-effective amendment to, or on a
Form 6-K
incorporated by reference in, the registration statement of
which this prospectus forms a part. You should read the relevant
subordinated guarantee agreement and any such amendment or
supplement for provisions that may be important to you.
Guaranteed
Obligations
Under the subordinated guarantees, Deutsche Bank AG will fully
and unconditionally guarantee, on a subordinated basis, the
payment by the relevant trust or the relevant company, as
applicable, of the following, without duplication, with respect
to capital securities of any series:
|
|
|
any dividends or distributions (which we may refer to as capital
payments) due and payable on the trust preferred securities or
on the company preferred securities;
|
|
|
the redemption price payable with respect to any capital
securities called for redemption by the relevant trust or
company; and
|
|
|
the liquidating distribution on each capital security payable
upon liquidation of the relevant trust or company,
|
in each case, to the extent provided in the applicable
prospectus supplement. In particular, Deutsche Bank AG will
guarantee the payment of a distribution on company preferred
securities, and the related trust preferred securities, only to
the extent the company has declared, or is deemed to have
declared, the distribution on the company preferred securities.
Subject to the subordination provisions described below,
Deutsche Bank AG will be obligated to make such payments as and
when due, regardless of any defense, right of set-off or
counterclaim that Deutsche Bank AG may have or assert, other
than the defense of payment, and whether or not the company has
legally available funds for the payments so guaranteed. Deutsche
Bank AGs obligations under the relevant subordinated
guarantee will be several and independent of the obligations of
the relevant trust or company with respect to the capital
securities.
Subordination
The subordinated guarantees will be general and unsecured
obligations of Deutsche Bank AG and will rank both as to payment
and in the liquidation of Deutsche Bank AG:
|
|
|
subordinate to all senior and subordinated debt obligations of
Deutsche Bank AG that do not expressly rank on parity with the
obligations of Deutsche Bank AG under the subordinated
guarantees;
|
|
|
on parity with the most senior ranking preference shares of
Deutsche Bank AG, if any, and with its obligations under any
guarantee or support agreement or undertaking relating to any
preference shares or other instrument of any subsidiary of
Deutsche Bank AG qualifying as consolidated Tier 1 capital
of Deutsche Bank AG that does not expressly rank junior to the
obligation of Deutsche Bank AG under the subordinated
guarantees; and
|
37
|
|
|
senior to any other preference shares and the common shares of
Deutsche Bank AG, any other securities of Deutsche Bank AG
expressed to rank junior to the most senior preference shares of
Deutsche Bank AG, and any preference shares or any other
instruments of any subsidiary of the Bank subject to any
guarantee or support agreement which ranks junior to the
obligations under the subordinated guarantees.
|
The foregoing liabilities that rank senior to the subordinated
guarantees are collectively called
senior
liabilities.
The subordination provisions set out above will be irrevocable.
Except as set forth in the applicable prospectus supplement,
Deutsche Bank AG may not create or permit to exist any charge or
other security interest over its assets to secure its
obligations in respect of the subordinated guarantees.
Additional
Amounts
If Deutsche Bank AG is required to withhold or deduct any
portion of a payment under the relevant subordinated guarantee,
the applicable prospectus supplement will provide whether and to
what extent it will pay additional amounts in order to cause the
net amounts received by the holders of capital securities to be
the same as the holders would have received in the absence of
the withholding or deduction.
Other
Provisions
The guarantee trustee, on behalf of the holders of capital
securities, will have the right to enforce the relevant
subordinated guarantee directly against Deutsche Bank AG if
Deutsche Bank AG defaults under such subordinated guarantee.
Each of the subordinated guarantee agreements will provide that,
to the fullest extent permitted by law, without the need for any
action on the part of the relevant guarantee trustee or any
other holder of capital securities, each holder of capital
securities will be entitled to enforce its rights directly under
the relevant subordinated guarantee with respect to any of
Deutsche Bank AGs payment obligations that have become due
thereunder.
No
Assignment
Deutsche Bank AG may not assign its obligations under the
subordinated guarantees, except in the case of merger,
consolidation, sale, lease or other transfer of substantially
all of its assets in which Deutsche Bank AG is not the surviving
entity.
Termination
The subordinated guarantees will terminate on the earlier of:
|
|
|
the full payment of the redemption price for all capital
securities or repurchase and cancellation of all capital
securities of the relevant series; and
|
|
|
the full payment of the liquidating distribution on all capital
securities of the relevant series.
|
However, the subordinated guarantees will continue to be
effective or will be reinstated, as the case may be, if the
holder is required to return any liquidation or redemption
payment made under the capital securities or the subordinated
guarantees.
Amendments
Any changes to the subordinated guarantees that affect the
amount and timing of the payments under the subordinated
guarantees or reduce the amount of capital securities whose
holders must consent to an amendment must be approved by each
holder of capital securities of each affected series. Any other
provision of the subordinated guarantees may be modified only
with the prior approval of the holders of not less than a
majority (based on the aggregate liquidation preference amount)
of the outstanding capital securities of each affected series
(voting as a class).
38
Notwithstanding the foregoing, without the consent of any holder
of capital securities of any series, Deutsche Bank AG may amend
or supplement the subordinated guarantee agreements:
|
|
|
to evidence the succession of another entity to Deutsche Bank AG
and the assumption by any such successor of any covenants of
Deutsche Bank AG in the subordinated guarantee agreements;
|
|
|
to add to the covenants, restrictions or obligations of Deutsche
Bank AG for the benefit of the holders of capital securities of
such series, or to surrender any right or power conferred upon
Deutsche Bank AG under the subordinated guarantee agreements;
|
|
|
to correct or supplement any provision in the subordinated
guarantee agreements that may be defective or inconsistent with
any other provision therein;
|
|
|
to modify, eliminate and add to any provision in the
subordinated guarantee agreements to such extent as may be
necessary or desirable, provided that any such action does not
materially adversely affect the rights, preferences or
privileges of the holders of capital securities of such series;
|
|
|
to modify or supplement the subordinated guarantee agreements to
give effect to any provision made invalid by any changes in the
Investment Company Act of 1940, as amended, or the
Trust Indenture Act or any other applicable law, provided
that any such action does not have a material adverse effect on
the rights, preferences or privileges of the holders of capital
securities of such series;
|
|
|
to make any changes to the subordinated guarantee agreements to
give holders of capital securities such rights and entitlements
contained in any guarantee or undertaking relating to the
support or payment of amounts in connection with other
preference shares or other instruments issued by Deutsche Bank
AG or an affiliated entity to permit the capital securities to
rank at least on parity with such new securities;
|
|
|
to cure any ambiguity or correct any mistake; or
|
|
|
in connection with the creation of any series of capital
securities and the establishment of the particular terms thereof.
|
Information
Concerning the Trustees
Pursuant to the subordinated guarantee agreements there will be
one trustee who will be a financial institution that is
unaffiliated with Deutsche Bank. Unless provided otherwise in
the applicable prospectus supplement, The Bank of New York
Mellon will be the guarantee trustee. The guarantee trustee will
be required to perform only those duties that are specifically
set forth in the subordinated guarantee agreements, except when
an event of default has occurred and is continuing with respect
to any subordinated guarantee agreement. If an event of default
under a subordinated guarantee has occurred and is continuing,
the guarantee trustee will be required to use the same degree of
care and skill as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
Subject to these requirements, the guarantee trustee will be
under no obligation to exercise any of the rights or powers
vested in it by any subordinated guarantee agreements at the
request or direction of any holder of related company preferred
securities or any trust preferred securities, as the case may
be, unless the holders offer the guarantee trustee reasonable
indemnity against the costs, expenses and liabilities that might
be incurred in exercising those powers.
We and our subsidiaries maintain ordinary banking relationships
and custodial facilities with the guarantee trustee and
affiliates of the guarantee trustee.
Governing
Law
The subordinated guarantees will be governed by and construed in
accordance with the laws of the State of New York.
39
Description of
Subordinated Debt Obligations in Connection with Certain
Capital
Securities
Concurrently with an offering of capital securities, Deutsche
Bank AG, directly or through one of its branches, or a
subsidiary of Deutsche Bank, will issue subordinated debt
obligations, which we refer to as initial debt obligations, to
the relevant company. This prospectus briefly outlines certain
general terms and provisions of the initial debt obligations we
may issue. You should read the applicable prospectus supplement
for additional terms relating to the initial debt obligations.
The specific terms of an initial debt obligation as described in
the applicable prospectus supplement will supplement and, if
applicable, may modify or replace the general terms described in
this section. If there are differences between the applicable
prospectus supplement and this prospectus, the prospectus
supplement will control.
The aggregate principal amount of the initial debt obligation
will be such that the interest income paid on the initial debt
obligation on any interest payment date will be sufficient to
make the capital payments on the company preferred securities on
the corresponding payment date.
Interest on the initial debt obligations will be payable on the
interest payment dates, which generally will be the same as the
payment dates under the related capital securities, and at the
rate or rates, including fixed or floating rates, specified in
the applicable prospectus supplement.
The initial debt obligations will be represented by one or more
definitive notes registered in the name of the relevant company.
Redemption
The initial debt obligations may be redeemable at the option of
Deutsche Bank AG or its subsidiary at the price or prices,
within the period or periods and upon the terms, conditions or
events (including any required consents) specified in the
applicable prospectus supplement.
Additional
Amounts
The applicable prospectus supplement will specify any additional
amounts payable if Deutsche Bank AG or its subsidiary is
required to withhold any taxes, duties or other governmental
charges with respect to any payment in respect of the initial
debt obligations.
Subordination
If issued by Deutsche Bank AG, the initial debt obligations will
be a direct, unsecured subordinated obligation of Deutsche Bank
AG and, in liquidation of Deutsche Bank AG, will rank:
|
|
|
subordinate and junior to all senior and subordinated debt
obligations of Deutsche Bank AG that do not expressly rank on
parity with the obligations of the Bank under the subordinated
debt obligation;
|
|
|
on parity with the most senior ranking preference shares of
Deutsche Bank AG, if any, and with its obligations under any
guarantee or support agreement or undertaking relating to any
preference shares or other instrument of any subsidiary
qualifying as consolidated Tier 1 capital of Deutsche Bank
AG that does not expressly rank junior to the obligation under
the relevant subordinated guarantee; and
|
|
|
senior to any other preference shares and the common shares of
Deutsche Bank AG, any other securities of Deutsche Bank AG
expressed to rank junior to the most senior preference shares of
Deutsche Bank AG, and any preference shares or any other
instruments of any subsidiary of Deutsche Bank AG subject to any
guarantee or support agreement which ranks junior to the
obligations under the subordinated guarantees.
|
Initial debt obligations of any subsidiary of Deutsche Bank AG
will be subordinated obligations of such subsidiary guaranteed
on a subordinated basis by Deutsche Bank AG.
In the event of the dissolution or liquidation of, or insolvency
proceedings against Deutsche Bank AG, the initial debt
obligations will be subordinated to the claims of all
unsubordinated creditors of Deutsche Bank
40
AG so that in any event no amounts will be payable under the
initial debt obligations until the claims of all unsubordinated
creditors of Deutsche Bank AG have been satisfied in full. The
claims of a holder of initial debt obligations may not be set
off against any claims of Deutsche Bank AG. No security of
whatever kind is or will at any time be, provided by Deutsche
Bank AG or any other person securing the rights of holders of
initial debt obligations arising under the initial debt
obligations. No subsequent agreement may limit the subordination
provisions applicable to any initial debt obligation or amend
the maturity or redemption date in respect of any initial debt
obligation to an earlier date. If any initial debt obligations
are redeemed or repurchased before the date on which such
redemption or repurchase is permitted under the terms thereof
(other than in respect of certain tax events specified with
respect thereto) by Deutsche Bank AG otherwise than in
accordance with the provisions of § 10(5a) sentence 6
of the German Banking Act (
Kreditwesengesetz
), then the
amounts redeemed or paid must be returned to Deutsche Bank AG
irrespective of any agreements to the contrary unless the
amounts paid have been replaced by other regulatory banking
capital (
haftendes Eigenkapital
) of at least equal status
within the meaning of the German Banking Act, or the Federal
Financial Supervisory Authority (
Bundesanstalt für
Finanzdienstleistungsaufsicht
) has consented to such
redemption or repurchase.
Enforcement of
the Subordinated Debt Obligations
Any consent, notice or other action (including any enforcement
action) given or taken by or on behalf of the relevant company
may be given or taken at the discretion of the management of the
company, as described in the applicable prospectus supplement.
Events of
Default
Except as set forth in the applicable prospectus supplement with
respect to certain events of insolvency that will constitute
events of default, the initial debt obligations will not provide
for acceleration if Deutsche Bank AG or its subsidiary fails to
make a payment when due. In the event of any default on the
initial debt obligations, the relevant company as holder of the
initial debt obligation will enforce its rights for payment of
any overdue amounts, but will not be able to accelerate the
maturity of the initial debt obligation.
Modification and
Amendment of the Subordinated Debt Obligations
The initial debt obligations may be modified or amended only by
the written agreement of Deutsche Bank AG or its subsidiary, on
the one hand, and the relevant company, on the other. However,
except as otherwise set forth in the applicable prospectus
supplement, the relevant LLC agreement will provide that the
company may not agree to any modification or amendment of, or
waive any default in the payment of any amount under, the
initial debt obligation in a manner that would materially affect
the interest of the holders of the company preferred securities,
unless holders of at least
66
2
/
3
%
(based on the aggregate liquidation preference amount) of
outstanding company preferred securities affected thereby
(voting as a class), consent to such modification or amendment.
Substitution;
Redemption and Reinvesting of Proceeds
The applicable prospectus supplement will specify any
requirements for the substitution, redemption of and
reinvestment of proceeds of, the initial debt obligations.
Governing
Law
Unless the applicable prospectus supplement provides otherwise,
initial debt obligations issued by Deutsche Bank AG will be
governed by and construed in accordance with the laws of the
State of New York.
41
FORMS OF
SECURITIES
Each debt security, warrant, purchase contract, unit, and
capital security will be represented either by:
|
|
|
one or more global securities representing the entire issuance
of securities, or
|
|
|
a certificate issued in definitive form to a particular investor.
|
Certificated securities in definitive form and global securities
both may be issued either (1) in registered form, where our
obligation runs to the holder of the security named on the face
of the security or (2) in bearer form, where our obligation
runs to the bearer of the security, subject to the limitations
explained below under Limitations on Issuance
of Bearer Securities.
Unless the applicable prospectus supplement specifies otherwise,
our ordinary shares will be issued in the form of global
registered shares represented by one or more global securities.
Unless the applicable prospectus supplement specifies otherwise,
tradable subscription rights to subscribe for our ordinary
shares will be issued as book-entry interests in global
registered form.
Legal
Ownership
Global Securities.
Global securities will
name a depositary or its nominee as the owner of the debt
securities, warrants, purchase contracts, units or capital
securities represented by these global securities (other than
global bearer securities, which name the bearer as owner).
Investors in global securities can own only beneficial interests
in such securities. The depositary maintains a computerized
system that will reflect each investors beneficial
ownership of the securities through an account maintained by the
investor with its broker/dealer, bank, trust company or other
representative, as we explain more fully below under
Global Securities.
Definitive Securities.
Definitive securities
will name you or your nominee as the owner of the security
(other than definitive bearer securities, which will specify the
bearer as owner). In order to transfer or exchange these
securities or to receive payments other than interest or other
interim payments, you or your nominee must physically deliver
the securities to the trustee, registrar, paying agent or other
agent, as applicable.
Our Obligations Are to Legal Owners Only.
Our
obligations, as well as the obligations of the trustees under
any indenture and trustees under any trust agreement, LLC
agreement or subordinated guarantee, and the obligations, if
any, of any warrant agents, purchase contract agents and unit
agents and any other agents of ours, any agents of the trustees
or any agents of any warrant agents, purchase contract agents or
unit agents, run only to the persons or entities named as
holders of the securities in the relevant security register, in
the case of registered securities, or the persons or entities
that are the bearers of those securities, in the case of bearer
securities.
Neither we nor any trustee, warrant agent, purchase contract
agent, unit agent, other agent of ours, agent of the trustee or
agent of the warrant agents, purchase contract agents or unit
agents have obligations to investors who hold beneficial
interests in global securities, in street name or by any other
indirect means.
Upon making a payment or giving a notice to the holder or bearer
as required by the terms of that security, we will have no
further responsibility for that payment or notice even if that
holder or bearer is required, under agreements with depositary
participants or customers or by law, to pass it along to the
indirect owners of beneficial interests in that security but
does not do so. Similarly, if we want to obtain the approval or
consent of the holders or bearers of any securities for any
purpose, we would seek the approval only from the holders or
bearers, and not the indirect owners, of the relevant
securities. Whether and how the holders or bearers contact the
indirect owners would be governed by the agreements between such
holders and bearers and the indirect owners.
42
Global
Securities
Registered Global Securities.
We may issue
ordinary shares, registered debt securities, warrants, purchase
contracts, units and capital securities in the form of one or
more fully registered global securities that will be deposited
with a depositary or its nominee identified in the applicable
prospectus supplement and registered in the name of that
depositary or its nominee. In those cases (except with regard to
ordinary shares), one or more registered global securities will
be issued in a denomination or aggregate denominations equal to
the portion of the aggregate principal, face amount or
liquidation preference amount of the securities to be
represented by registered global securities. In the case of
ordinary shares, one or more registered global securities will
be issued in the aggregate amount of the number of ordinary
shares to be represented. Unless and until it is exchanged in
whole for securities in definitive registered form, a registered
global security may not be transferred except as a whole by and
among the depositary for the registered global security, the
nominees of the depositary or any successors of the depositary
or those nominees.
If not described below, any specific terms of the depositary
arrangement with respect to any securities to be represented by
a registered global security will be described in the prospectus
supplement relating to those securities. We anticipate that the
following provisions will apply to all depositary arrangements.
Ownership of beneficial interests in a registered global
security will be limited to persons, called
participants,
who have accounts with the
depositary or persons who may hold interests through
participants. Upon the issuance of a registered global security,
the depositary will credit, on its book-entry registration and
transfer system, the participants accounts with the
respective principal or face amounts of the securities
beneficially owned by the participants. Any dealers,
underwriters or selling agents participating in the distribution
of the securities will designate the accounts to be credited.
Ownership of beneficial interests in a registered global
security will be shown on, and the transfer of ownership
interests will be effected only through, records maintained by
the depositary, with respect to interests of participants, and
on the records of participants, with respect to interests of
persons holding through participants. The laws of some states
may require that some purchasers of securities take physical
delivery of these securities in definitive form. These laws may
impair your ability to own, transfer or pledge beneficial
interests in registered global securities.
So long as the depositary, or its nominee, is the registered
owner of a registered global security, that depositary or its
nominee, as the case may be, will be considered the sole owner
or holder of the securities represented by the registered global
security for all purposes under the Articles of Association,
indenture, warrant agreement, purchase contract, unit agreement,
trust agreement or LLC agreement. Except as described below,
owners of beneficial interests in a registered global security
will not be entitled to have the securities represented by the
registered global security registered in their names, will not
receive or be entitled to receive physical delivery of the
securities in definitive form and will not be considered the
owners or holders of the securities under the Articles of
Association, indenture, warrant agreement, purchase contract,
unit agreement, trust agreement or LLC Agreement. Accordingly,
each person owning a beneficial interest in a registered global
security must rely on the procedures of the depositary for that
registered global security and, if that person is not a
participant, on the procedures of the participant through which
the person owns its interest, to exercise any rights of a holder
under the Articles of Association, indenture, warrant agreement,
purchase contract, unit agreement, trust agreement or LLC
agreement. We understand that under existing industry practices,
if we request any action of holders or if an owner of a
beneficial interest in a registered global security desires to
give or take any action that a holder is entitled to give or
take under the Articles of Association, indenture, warrant
agreement, purchase contract, unit agreement, trust agreement or
LLC agreement, the depositary for the registered global security
would authorize the participants holding the relevant beneficial
interests to give or take that action, and the participants
would authorize beneficial owners owning through them to give or
take that action or would otherwise act upon the instructions of
beneficial owners holding through them.
Payments of principal of, and premium (if any) and interest (if
any) on, debt securities, and any payments to holders with
respect to ordinary shares, warrants, purchase contracts, units
or capital securities, represented by a registered global
security registered in the name of a depositary or its nominee,
will be made to the depositary or its nominee, as the case may
be, as the registered owner of the registered
43
global security. None of the Bank, the trustee, the warrant
agents, the purchase contract agents, the unit agents or any
other agent of the Bank, agent of the trustee or agent of the
warrant agents, purchase contract agents or unit agents will
have any responsibility or liability for any aspect of the
records relating to payments made on account of beneficial
ownership interests in the registered global security or for
maintaining, supervising or reviewing any records relating to
those beneficial ownership interests.
We expect that the depositary for any of the securities
represented by a registered global security, upon receipt of any
payment of dividend, principal, premium, interest or other
distribution of underlying securities or other property to
holders on that registered global security, will immediately
credit participants accounts in amounts proportionate to
their respective beneficial interests in that registered global
security as shown on the records of the depositary. We also
expect that payments by participants to owners of beneficial
interests in a registered global security held through
participants will be governed by standing customer instructions
and customary practices, as is now the case with the securities
held for the accounts of customers in bearer form or registered
in street name, and will be the responsibility of
those participants, not us.
Discontinuance of Any Depositary.
If the
depositary for any of these securities represented by a
registered global security is at any time unwilling or unable to
continue as depositary or ceases to be a clearing agency
registered under the Exchange Act, and a successor depositary
registered as a clearing agency under the Exchange Act is not
appointed by us within 90 days, we will issue securities in
definitive form in exchange for the registered global security
that had been held by the depositary. In addition, we may at any
time request the withdrawal from the depositary of any of the
securities represented by one or more registered global
securities. Upon receipt of such request, the depositary will
issue a notice to its participants of our request, and will
process any withdrawal requests submitted by those participants
in accordance with its procedures. If participants request
withdrawal following our request, we will issue securities in
definitive form in exchange for that portion of the registered
global security or securities representing the securities held
by participants requesting such withdrawal. Any securities
issued in definitive form in exchange for a registered global
security will be registered in the name or names that the
depositary gives to the trustee, warrant agent, purchase
contract agent, unit agent or other relevant agent of ours or
theirs. It is expected that the depositarys instructions
will be based upon directions received by the depositary from
participants with respect to ownership of beneficial interests
in the registered global security that had been held by the
depositary.
Bearer Global Securities.
The securities may
also be issued in the form of one or more bearer global
securities that will be deposited with a common depositary for
Euroclear Bank S.A./ N.V., as operator of the Euroclear System,
and Clearstream Banking,
société anonyme
, or
with a nominee for the depositary identified in the prospectus
supplement relating to those securities. The specific terms and
procedures, including the specific terms of the depositary
arrangement, with respect to any securities to be represented by
a bearer global security will be described in the prospectus
supplement relating to those securities.
Limitations on
Issuance of Bearer Securities
In compliance with U.S. federal income tax laws and
regulations, bearer securities, including bearer securities in
global form, will not be offered, sold or delivered, directly or
indirectly, in the United States or its possessions or to United
States persons, as defined below, except as otherwise permitted
by United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D). Any underwriters, selling
agents or dealers participating in the offerings of bearer
securities, directly or indirectly, must agree that:
|
|
|
they will not, in connection with the original issuance of any
bearer securities or during the restricted period with respect
to such securities (as defined in United States Treasury
Regulations
Section 1.163-5(c)(2)(i)(D)),
which we refer to as the
restricted period,
offer, sell or deliver, directly or indirectly, any bearer
securities in the United States or its possessions or to United
States persons, other than as permitted by the applicable
Treasury regulations described above; and
|
|
|
they will not, at any time, offer, sell or deliver, directly or
indirectly, any bearer securities in the United States or
its possessions or to United States persons, other than as
permitted by the applicable Treasury regulations described above.
|
44
In addition, any underwriters, selling agents or dealers must
have procedures reasonably designed to ensure that their
employees or agents who are directly engaged in selling bearer
securities are aware of the above restrictions on the offering,
sale or delivery of bearer securities.
Bearer securities, other than bearer securities that satisfy the
requirements of United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(3)(iii) and any coupons or
talons appertaining thereto, will not be delivered in definitive
form, and no interest will be paid thereon, unless the Bank has
received a signed certificate in writing, or an electronic
certificate described in United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(3)(ii), stating that on the
date of that certificate the bearer security:
|
|
|
is owned by a person that is not a United States person; or
|
|
|
is owned by a United States person that:
|
|
|
|
|
(1)
|
is a foreign branch of a United States financial institution, as
defined in applicable United States Treasury Regulations,
which we refer to as a
financial institution,
purchasing for its own account or for resale, or
|
|
|
(2)
|
is acquiring the bearer security through a foreign branch of a
United States financial institution and who holds the bearer
security through that financial institution through that date,
|
and in either case (1) or (2) above, each of those
United States financial institutions agrees and certifies, on
its own behalf or through its agent, that the Bank may be
advised that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code of 1986, as amended, and the regulations
thereunder; or
|
|
|
is owned by a United States or foreign financial institution for
the purposes of resale during the restricted period and, in
addition, if the owner of the bearer security is a United States
or foreign financial institution described in this clause,
whether or not also described in the first or second clause
above, the financial institution certifies that it has not
acquired the bearer security for purposes of resale directly or
indirectly to a United States person or to a person within the
United States or its possessions.
|
We will make payments on bearer securities only outside the
United States and its possessions except as permitted by the
above regulations.
Bearer securities, other than temporary global securities, and
any coupons issued with bearer securities will bear the
following legend: Any United States person who holds this
obligation will be subject to limitations under the United
States income tax laws, including the limitations provided in
sections 165(j) and 1287(a) of the Internal Revenue
Code. The sections referred to in this legend provide
that, with exceptions, a United States person will not be
permitted to deduct any loss, and will not be eligible for
capital gain treatment with respect to any gain realized on the
sale, exchange or redemption of that bearer security or coupon.
As used in this section, the term bearer securities includes
bearer securities that are part of units. As used herein,
United States person
means a citizen or
resident of the United States for U.S. federal income tax
purposes, a corporation or partnership, including an entity
treated as a corporation or partnership for U.S. federal
income tax purposes, created or organized in or under the laws
of the United States, or any state of the United States or the
District of Columbia, an estate the income of which is subject
to U.S. federal income taxation regardless of its source,
or a trust if a court within the United States is able to
exercise primary supervision over the administration of the
trust and one or more United States persons have the authority
to control all substantial decisions of the trust. In addition,
some trusts treated as United States persons before
August 20, 1996 that elect to continue to be so treated to
the extent provided in the Treasury regulations shall be
considered United States persons.
Form of
Securities Included in Units
The form of the warrant or purchase contract included in a unit
will correspond to the form of the other components of the
security.
45
PLAN OF
DISTRIBUTION (CONFLICTS OF INTEREST)
We may sell the securities being offered by this prospectus in
four ways: (1) directly, including through one or more of
our branches, (2) through selling agents, (3) through
underwriters
and/or
(4) through dealers. Any of these selling agents,
underwriters or dealers in the United States or outside the
United States may include affiliates of the Bank.
In some cases, we or dealers acting for us or on our behalf may
also repurchase securities and reoffer them to the public by one
or more of the methods described above.
In addition, we may issue the securities as a dividend or
distribution or in a subscription rights offering to our
existing security holders.
We may designate selling agents from time to time to solicit
offers to purchase these securities. We will name any such
agent, who may be deemed to be an underwriter as that term is
defined in the Securities Act, and state any commissions or the
possible range of commissions we are to pay to that agent in the
applicable prospectus supplement. That agent will be acting on a
reasonable efforts basis for the period of its appointment or,
if indicated in the applicable prospectus supplement, on a firm
commitment basis.
If we use any underwriters to offer and sell these securities,
we will enter into an underwriting agreement with those
underwriters when we and they determine the offering price of
the securities, and we will include the names of the
underwriters and the terms of the transaction in the applicable
prospectus supplement.
If we use a dealer to offer and sell these securities, we will
sell the securities to the dealer, who will purchase the
securities as principal, and we will name the dealer in the
applicable prospectus supplement. The dealer may then resell the
securities to the public at varying prices to be determined by
that dealer at the time of resale.
Our net proceeds will be the purchase price in the case of sales
to a dealer, the public offering price less discount in the case
of sales to an underwriter or the purchase price less commission
in the case of sales through a selling agent in each
case, less other expenses attributable to issuance and
distribution.
In order to facilitate the offering of these securities, the
underwriters may engage in transactions that stabilize, maintain
or otherwise affect the price of these securities or any other
securities the prices of which may be used to determine payments
on these securities. Specifically, the underwriters may sell
more securities than they are obligated to purchase in
connection with the offering, creating a short position for
their own accounts. A short sale is covered if the short
position is no greater than the number or amount of securities
available for purchase by the underwriters under any
over-allotment option. The underwriters can close out a covered
short sale by exercising the over-allotment option or purchasing
these securities in the open market. In determining the source
of securities to close out a covered short sale, the
underwriters will consider, among other things, the open market
price of these securities compared to the price available under
the over-allotment option. The underwriters may also sell these
securities or any other securities in excess of the
over-allotment option, creating a naked short position. The
underwriters must close out any naked short position by
purchasing securities in the open market. A naked short position
is more likely to be created if the underwriters are concerned
that there may be downward pressure on the price of these
securities in the open market after pricing that could adversely
affect investors who purchase in the offering. As an additional
means of facilitating the offering, the underwriters may bid
for, and purchase, these securities or any other securities in
the open market to stabilize the price of these securities or of
any other securities. Finally, in any offering of the securities
through a syndicate of underwriters, the underwriting syndicate
may also reclaim selling concessions allowed to an underwriter
or a dealer for distributing these securities in the offering,
if the syndicate repurchases previously distributed securities
to cover syndicate short positions or to stabilize the price of
these securities. Any of these activities may raise or maintain
the market price of these securities above independent market
levels or prevent or retard a decline in the market price of
these securities. The underwriters are not required to engage in
these activities, and may end any of these activities at any
time.
46
Selling agents, underwriters and dealers may be entitled under
agreements with us to indemnification by us against some civil
liabilities, including liabilities under the Securities Act, and
may be customers of, engage in transactions with or perform
services for the Bank in the ordinary course of business.
If so indicated in the prospectus supplement, we will authorize
selling agents, underwriters or dealers to solicit offers by
some purchasers to purchase ordinary shares, tradable
subscription rights to subscribe for ordinary shares, debt
securities, warrants, purchase contracts or units, as the case
may be, from us at the public offering price stated in the
prospectus supplement under delayed delivery contracts providing
for payment and delivery on a specified date in the future.
These contracts will be subject only to those conditions
described in the prospectus supplement, and the prospectus
supplement will state the commission payable for solicitation of
these offers.
Conflicts of Interest.
To the extent an initial
offering of the securities will be distributed by an affiliate
of the Bank, each such offering of securities will be conducted
in compliance with the requirements of NASD Rule 2720 of
the Financial Industry Regulatory Authority, or
FINRA
, regarding a FINRA member
firms distribution of securities of an affiliate and
related conflicts of interest. No underwriter, selling agent or
dealer utilized in the initial offering of securities who is an
affiliate of the Bank will confirm sales to accounts over which
it exercises discretionary authority without the prior specific
written approval of its customer.
Following the initial distribution of any of these securities,
affiliates of the Bank may offer and sell these securities in
the course of their businesses. Such affiliates may act as
principals or agents in these transactions and may make any
sales at varying prices related to prevailing market prices at
the time of sale or otherwise. Such affiliates may also use this
prospectus in connection with these transactions. None of our
affiliates is obligated to make a market in any of these
securities and may discontinue any market-making activities at
any time without notice.
In accordance with FINRA Rules, in no situation will the
underwriting discounts and commissions on securities sold in the
initial distribution exceed 8% of the offering proceeds.
47
EXPENSES OF THE
ISSUE
The following is a statement of expenses, other than
underwriting discounts and commissions, in connection with the
distribution of the securities registered. All amounts shown are
estimates.
|
|
|
|
|
|
|
Amount to be
|
|
|
|
paid
|
|
|
Securities and Exchange Commission Registration Fee
|
|
|
*
|
|
Federal taxes, state taxes and fees
|
|
|
N/A
|
|
Trustees and transfer agents fees
|
|
$
|
20,000
|
|
Legal Fees
|
|
$
|
500,000
|
|
Accounting Fees
|
|
$
|
50,000
|
|
Printing and Engraving Costs
|
|
$
|
20,000
|
|
|
|
|
|
|
Total
|
|
$
|
590,000
|
|
|
|
|
|
|
|
|
|
(*)
|
|
Unknown because the filing is being
deferred pursuant to Rule 456(b) and 457(r) under the
Securities Act.
|
48
LEGAL
MATTERS
Certain legal matters with respect to German, United States and
New York law relating to the validity of certain of the offered
securities may be passed upon for the issuer of those securities
by Cleary Gottlieb Steen & Hamilton LLP. Certain legal
matters with respect to Delaware law relating to the validity of
certain capital securities may be passed upon by Richards,
Layton, & Finger, P.A.
Certain legal matters with respect to German law relating to the
validity of certain of the offered securities will be passed
upon for the issuer of those securities by Group Legal Services
of Deutsche Bank Aktiengesellschaft. Certain legal matters with
respect to the validity of certain of the offered securities for
any underwriters, dealers or selling agents will be passed upon
by the firms or persons identified in the applicable prospectus
supplement.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The consolidated financial statements of Deutsche Bank
Aktiengesellschaft and its subsidiaries as of December 31,
2008 and 2007, and for each of the years in the three-year
period ended December 31, 2008, which were prepared in
accordance with IFRS, are incorporated by reference herein in
reliance upon the audit report of KPMG AG
Wirtschaftsprüfungsgesellschaft (which we refer to as
KPMG
), Marie-Curie-Strasse 30, D-60439
Frankfurt am Main, Germany, independent registered public
accounting firm, given upon the authority of that firm as
experts in auditing and accounting.
The audit report of KPMG refers to the fact that Deutsche Bank
Aktiengesellschaft changed its accounting policy for the
recognition of actuarial gains and losses related to
post-employment benefits for defined benefit plans in accordance
with IAS 19 Employee Benefits and has changed its
method of accounting for certain financial assets in the year
ended December 31, 2008 following the adoption of
Reclassification of Financial Assets (Amendments to
IAS 39 Financial Instruments: Recognition and
Measurement and IFRS 7 Financial Instruments:
Disclosures).
BENEFIT PLAN
INVESTOR CONSIDERATIONS
The Bank and some of our affiliates may each be considered a
party in interest within the meaning of ERISA, or a
disqualified person within the meaning of the
Internal Revenue Code with respect to many employee benefit
plans and perhaps certain other types of arrangements, such as
individual retirement accounts. Prohibited transactions within
the meaning of ERISA or the Internal Revenue Code may arise, for
example, if the securities are acquired by or with the assets of
a pension or other plan with respect to which the Bank or any of
its affiliates is a service provider, unless those securities
are acquired pursuant to an exemption from the applicable
prohibited transaction rules. The assets of a pension or other
plan may include assets held in certain investment funds or in
the general account of an insurance company that are deemed to
be plan assets under ERISA and the Internal Revenue
Code.
Any pension or other plan, or any person investing the
assets of a pension or other plan, proposing to invest in the
securities should read the ERISA considerations described in the
relevant prospectus or pricing supplement(s) applicable to the
securities being purchased and should consult with legal counsel
prior to investing in the securities.
49
No person is authorized to give any information or to make any
representations other than those contained or incorporated by
reference in this prospectus, and, if given or made, such
information or representations must not be relied upon as having
been authorized. This prospectus does not constitute an offer to
sell or the solicitation of an offer to buy any securities other
than the securities described in an accompanying prospectus
supplement or an offer to sell or the solicitation of an offer
to buy such securities in any circumstances in which such offer
or solicitation is unlawful. Neither the delivery of this
prospectus, nor any sale made hereunder and thereunder shall,
under any circumstances, create any implication that there has
been no change in the affairs of Deutsche Bank AG since the date
hereof or that the information contained or incorporated by
reference herein or therein is correct as of any time subsequent
to the date of such information.
Deutsche Bank Contingent
Capital Trust V
(a wholly owned subsidiary of
Deutsche Bank Aktiengesellschaft)
[ ],000 8.05% Trust Preferred
Securities
(Liquidation Preference Amount $25 per Trust Preferred
Security)
guaranteed on a subordinated
basis by
Deutsche Bank Aktiengesellschaft
Prospectus Supplement
Deutsche Bank
Securities
March [ ], 2010
Deutsche Bank Contingent... (NYSE:DKT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Deutsche Bank Contingent... (NYSE:DKT)
Historical Stock Chart
From Jul 2023 to Jul 2024