DKT Deutsche Bank Contingent Cap Trust V

CALCULATION OF REGISTRATION FEE

	Title of Each Class of			Aggregate Offering			Amount of
	Securities Offered			Price			Registration Fee
	$138,828,000 8.05% Trust Preferred Securities of Deutsche Bank Contingent Capital Trust V			$138,828,000 (1)			$9,898.44 (2)

(1)		Includes up to $18,108,000 aggregate principal amount of the securities to cover for the over-allotment option of the underwriters.
(2)		Based upon the registration of $138,828,000, a filing fee of $9,898.44 has been calculated and paid by Deutsche Bank Aktiengesellschaft in accordance with Rule 457(r).

 

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)

 

4,800,000 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 4,800,000 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 Company’s 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.

 

 

 

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 two occasions within 15 days from the date of this prospectus supplement, to purchase up to an aggregate total of 720,000 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 12, 2010.

 

TABLE OF CONTENTS

 

 

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.

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 Bank’s 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 Bank’s consolidated and unconsolidated financial statements are stated in Euro.

 

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 AG’s financial condition and results of operations.

 

In this document, forward-looking statements include, among others, statements relating to:

 

 

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 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:

 

 

The Trust exists exclusively to:

 

 

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:

 

 

The Company exists exclusively to:

 

 

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.

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

 

Germany’s 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.

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.

 

Issuer		Deutsche Bank Contingent Capital Trust V, a Delaware statutory trust formed for the purpose of issuing Trust Preferred Series Securities.
Securities Offered		4,800,000 8.05% additional Trust Preferred Securities with a liquidation preference amount of $25 per Trust Preferred Security (assuming no exercise of the underwriter’s 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		$25.15 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 two occasions within 15 days from the date of this prospectus supplement, to purchase up to an aggregate total of 720,000 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. The underwriter will not receive a commission or other underwriting fees in connection with the additional Trust Preferred Securities.
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 $25.15 per Class B Preferred Security. The Class B Preferred Securities will not have a maturity date or be subject to any mandatory redemption provisions.

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 $120,720,000.
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 Trust’s only assets.

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 Company’s 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 not pay commissions or other underwriting fees to the underwriter (which is an affiliate of the Bank) 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

		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 Company’s 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

		• 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.”

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.

		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

		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 Moody’s Investor Service, Inc. rates the Trust Preferred Securities at least Baa2, Standard & Poor’s 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 agency’s judgment, circumstances so warrant.

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 $120,000,000 (which we refer to as the Principal Amount) and is equal to the Company’s 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 Bank’s 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

		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.

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.

 

 

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 Bank’s 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 Company’s 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.

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 Company’s 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 Company’s 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 Bank’s 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 Bank’s 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 Bank’s 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.”

 

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 Company’s 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 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

 

 

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 Company’s 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.

 

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 AG’s 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.

 

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 not pay commissions or other underwriting fees to the underwriter (which is an affiliate of the Bank) in connection with the Offering. See “Underwriting.”

 

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 Trust’s business and affairs are conducted by the Regular Trustees and, with respect to the Trust Estate, the Property Trustee.

 

The Trust exists exclusively to:

 

 

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.

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 (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.

 

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 Company’s 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:

 

 

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.

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.

 

The Company’s 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 ( Jahresüberschuss/Jahresfehlbetrag ), 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 Bank’s 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 Bank’s 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 Bank’s audited unconsolidated balance sheet that relate to the foregoing discussion:

 

 

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. Based on the number of ordinary shares as of year end 2009, this proposal would result in a total dividend amount of €466 million.

 

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 Trust’s 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

exercise of the underwriter’s 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

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 Bank’s 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 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

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 Company’s Board of Directors.

 

Capital Payments on the Upper Tier 2 Percentage of the Class B Preferred Securities can be paid only out of the Company’s 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

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:

 

 

 

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;

 

 

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 Bank’s 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 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 Company’s Board of Directors.

 

Capital Payments on the Tier 1 Percentage of the Class B Preferred Securities can be paid only out of the Company’s 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:

 

 

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.

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:

 

 

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:

 

 

 

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):

 

 

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 Company’s 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.

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 Trustee’s actions.

 

Liquidation Distribution upon Dissolution

 

Pursuant to the Trust Agreement, the Trust will dissolve:

 

 

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

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 Trustee’s 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:

 

 

 

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

 

 

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

 

 

provided, that no such amendment will have a material adverse effect on the rights, preferences or privileges of the holders of the Trust Securities.

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

 

 

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 DTC’s 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.

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 DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interests in the Global Certificates, or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s 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. DTC’s 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 DTC’s 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 DTC’s procedures and will be settled in same-day funds. Cross market transfers

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.

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.

 

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:

 

 

 

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 Company’s 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.

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.

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 Bank’s 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 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 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 Company’s Board of Directors. Capital Payments on the Upper Tier 2 Percentage of the Class B Preferred Securities can be paid only out of the Company’s 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:

 

 

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

 

 

 

 

 

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:

 

 

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.

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 Company’s 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:

 

 

 

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;

 

 

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 Bank’s 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.

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 Company’s Board of Directors. Capital Payments on the Tier 1 Percentage of the Class B Preferred Securities will be paid out of the Company’s 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:

 

 

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

 

 

 

 

 

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:

 

 

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.

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:

 

 

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:

 

 

 

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:

 

 

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 underwriter’s 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 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):

 

 

No redemption of the Class B Preferred Series for any reason may take place unless on the Redemption Date:

 

 

 

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:

 

 

 

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 DTC’s 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.

 

The following, together with “Description of Capital Securities—Description 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 officer’s certificate meeting the requirements set forth in such Guarantee.

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):

 

 

 

 

 

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

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,

 

 

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

 

 

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

 

 

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 Guarantor’s 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

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 Guarantor’s 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 Guarantor’s 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:

 

 

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

 

 

 

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.

 

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.

 

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 $120,000,000 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 Company’s 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

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:

 

 

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.

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 Bank’s 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

 

 

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

 

 

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.

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.

 

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.

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 Company’s 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. Holder’s 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 holder’s 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 Bank’s 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 Bank’s audited financial statements and the Company’s current expectations regarding the value and nature of the Bank’s 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.”

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. Holder’s 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. Holder’s 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. Holder’s aggregate tax basis in its Trust Preferred Securities, and a U.S. Holder’s 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

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. Holder’s 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 Company’s 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 Securityholder’s 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 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 holder’s 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.

 

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 Plan’s 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 Plan’s or other account’s, plan’s or arrangement’s 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

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.

 

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 12, 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, 4,800,000 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 two occasions within 15 days from the date of this prospectus supplement, to purchase up to an aggregate total of 720,000 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. The underwriter will not receive a commission or other underwriting fees in connection with the additional Trust Preferred Securities.

 

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 twelfth New York business day following the date of pricing of the Trust Preferred Securities (such settlement cycle being referred to as “T+12”). 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+12, 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. 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 underwriter will not receive a commission or other underwriting fees in connection with the Offering. However, the underwriter (which is an affiliate of the Bank) will receive certain profits resulting from a derivative transaction entered into by the Bank designed to hedge the Bank’s interest rate exposure from the obligations under the Trust Preferred Securities. We estimate that the out-of-pocket expenses of the Bank for this Offering will be $200,000.

 

The following table shows the Offering Price, underwriting discounts and commissions and proceeds before expenses to the Trust (assuming no exercise of the underwriter’s over-allotment option).

 

 

 

 

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. 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 FINRA Rule 2310.

 

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 FINRA Rule 2720 regarding a member firm’s 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 Bank’s 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 Bank’s 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 Bank’s 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.

 

 

 

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, 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:

 

 

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.

United Kingdom

 

The underwriter has represented, warranted and agreed that:

 

 

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.

 

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).

 

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.

 

“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.

“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.$120,000,000 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 underwriter’s 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.

“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 $25.15 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.

“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 $120,000,000 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.

“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

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 4,800,000 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.

“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.

 

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.

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:

 

 

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

 

 

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.

 

 

 

 

 

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.

 

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 SEC’s 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 SEC’s 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:

 

 

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 AG’s 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.

 

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.

 

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:

 

 

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:

 

 

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.

 

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.

 

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.

 

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.

 

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 AG’s 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 AG’s 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.

THE FOLLOWING TABLE SETS FORTH OUR UNAUDITED CONSOLIDATED CAPITALIZATION

IN ACCORDANCE WITH IFRS

 

 

 

 

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.

 

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:

 

 

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 Bank’s 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.

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:

 

 

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.

 

 

 

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.

 

 

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

Bank’s 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:

 

 

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.

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

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.

 

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:

 

 

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 agent’s 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.

 

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.

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 holder’s 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:

 

 

 

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 Bank’s 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

would generally have a right to receive payment that is superior to Deutsche Bank AG’s right to receive payment from the assets of that subsidiary, holders of debt securities will be effectively subordinated to creditors of Deutsche Bank AG’s subsidiaries. In addition, there are various regulatory requirements applicable to some of Deutsche Bank AG’s 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:

 

 

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:

 

 

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 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:

 

 

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: