Invitation to the Ordinary Annual General Meeting on 12 June 2014

Transcription

1 DVB Bank SE Frankfurt / Main German Securities Code (WKN) ISIN DE Invitation to the Ordinary Annual General Meeting on 12 June 2014 We hereby invite our shareholders to attend the Ordinary Annual General Meeting held on Thursday 12 June 2014, at 10:00 a.m. at the German National Library (Deutsche Nationalbibliothek), Adickesallee 1, Frankfurt/Main, Germany. 1

2 Agenda 1 Presentation of the confirmed financial statements (in accordance with the German Commercial Code Handelsgesetzbuch, "HGB") and the Management Report of DVB Bank SE for the 2013 business year, including the explanatory report of the Board of Managing Directors regarding the information under section 289 (4) of the HGB as well as the report of the Supervisory Board Presentation of the approved consolidated financial statements (in accordance with IFRS) and the Group Management Report for the 2013 business year including the explanatory report of the Board of Managing Directors regarding the information under section 315 (4) of the HGB and the Report of the Supervisory Board 2 Passing of a resolution on the appropriation of net retained profit for the 2013 business year 3 Passing of a resolution on the formal approval of the members of the Board of Managing Directors for the 2013 business year 4 Passing of a resolution on the formal approval of the members of the Supervisory Board for the 2013 business year 5 Passing of a resolution on the appointment of the external auditors for the 2014 business year 6 Passing of a resolution on the new elections to the Supervisory Board 7 Resolution on the authorisation of higher variable remuneration in accordance with section 25a (5) sentence 5 of the German Banking Act (Kreditwesengesetz, "KWG") 8 Passing of a resolution on the cancellation of the existing authorisation to purchase treasury shares, pursuant to section 71 (1) no. 7 of the German Public Limited Companies Act (Aktiengesetz "AktG"), and on the granting of a new authorisation to purchase treasury shares pursuant to section 71 (1) no. 7 of the AktG 9 Passing of a resolution on the cancellation of the existing Authorised Capital 2010 and the creation of new Authorised Capital 2014, and on the amendment of Article 4 (2) of the Company s Memorandum and Articles of Association 10 Passing of a resolution on the cancellation of an existing authorisation and on the granting of a new authorisation to issue convertible bonds and bonds cum warrants; on the cancellation of the existing Conditional Capital 2010 and on the creation of a new Conditional Capital 2014, and on the amendment of Article 4 (3) of the Company's Memorandum and Articles of Association 11 Passing of a resolution on changes to the remuneration of Supervisory Board members and the corresponding amendment to Article 19 (1) and (2) of the Company's Memorandum and Articles of Association 2

3 12 Passing of a resolution on further amendments to the Company's Memorandum and Articles of Association 3

4 Proposals for Resolution Re: Item 1 of the agenda Presentation of the confirmed financial statements (in accordance with the German Commercial Code Handelsgesetzbuch, "HGB") and the Management Report of DVB Bank SE for the 2013 business year, including the explanatory report of the Board of Managing Directors regarding the information under section 289 (4) of the HGB as well as the report of the Supervisory Board Presentation of the approved consolidated financial statements (in accordance with IFRS) and the Group Management Report for the 2013 business year including the explanatory report of the Board of Managing Directors regarding the information under section 315 (4) of the HGB and the Report of the Supervisory Board In accordance with section 172 sentence 1 of the German Public Limited Companies Act (AktG), the Supervisory Board approved, on 7 March 2014, the annual financial statements prepared by the Board of Managing Directors; the financial statements have thus been confirmed. The Supervisory Board approved the consolidated financial statements prepared by the Board of Managing Directors on 27 March The passing of a resolution on this agenda item is therefore not required. Said documents, including the proposal of the Board of Managing Directors regarding the appropriation of net retained profit, which is included in the Group Management Report, are available for download on the Company's website > English > Investors > Publications > Financial reports and are available for inspection by shareholders at the Company's premises, from the time of convening the General Meeting, during business hours (09:00 to 17:00 CET): DVB Bank SE Group Corporate Communications c/o Ms Elisabeth Winter Platz der Republik Frankfurt/Main By contacting this address, shareholders may also request that these documents be forwarded to them, free of charge and without delay. The above documents will also be available at the General Meeting. 4

5 Re: Item 2 of the agenda Passing of a resolution on the appropriation of net retained profit for the 2013 business year The Board of Managing Directors and the Supervisory Board propose the following resolution: The net retained profit of DVB Bank SE for the 2013 business year of 27,880, shall be used in full to pay a dividend of 0.60 per no-par value share entitled to dividend payments. To the extent that the Company holds treasury shares at the time of the Annual General Meeting, that portion of the net retained profit that relates to any such treasury shares will be transferred to retained earnings. Re: Item 3 of the agenda Passing of a resolution on the formal approval of the members of the Board of Managing Directors for the 2013 business year The Board of Managing Directors and the Supervisory Board propose that formal approval be granted for the members of DVB Bank SE's Board of Managing Directors for the 2013 business year. Re: Item 4 of the agenda Passing of a resolution on the formal approval of the members of the Supervisory Board for the 2013 business year The Board of Managing Directors and the Supervisory Board propose that formal approval be granted for the members of DVB Bank SE's Supervisory Board for the 2013 business year. Re: Item 5 of the agenda Passing of a resolution on the appointment of the external auditors for the 2014 business year The Supervisory Board recommends the adoption of the following resolution: Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart, shall be appointed as external auditors of both the annual financial statements and the consolidated financial statements of DVB Bank SE for the 2014 business year. Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart, shall also be appointed as the auditors for any review of (i) condensed financial statements and the interim management report (pursuant to sections 37w (5) and 37y no. 2 of the German Securities Trading Act (WpHG)) as at 30 June 2014; and (ii) interim financial statements and interim consolidated financial statements (pursuant to sections 340a (3), 340i (4) of the HGB) prepared prior to the Ordinary Annual General Meeting held in

6 Re: Item 6 of the agenda Passing of a resolution on the new elections to the Supervisory Board The term of office of all Members of the Supervisory Board will end at the close of the Annual General Meeting of DVB Bank SE on 12 June The Supervisory Board is made up of nine members (comprising six shareholder representatives and three employee representatives) in accordance with (i) Article 40 (2) and (3) of EC Council Regulation 2157/2001 of 8 October 2001 on the Statute for a European company (SE), (ii) section 17 of the German SE Implementing Act (SE- Ausführungsgesetz), (iii) section 21 (3) of the German Act on the Participation of Employees in a European company (SE-Beteiligungsgesetz), (iv) clause 19 of the agreement on the participation of employees in DVB Bank SE of 7/19 August 2008 (hereinafter referred to as the Co-Determination Agreement ) and (v) Article 11 (1) of the Company s Memorandum and Articles of Association. The Annual General Meeting resolves, pursuant to section 11 (1), sentence 2 of DVB Bank SE s Memorandum and Articles of Association, solely on the election of the six shareholder representatives, as the Co-Determination Agreement provides that the three employee representatives be elected directly by the SE works council, rather than by the General Meeting. With regard to elections of shareholder representatives to the Supervisory Board, the General Meeting is not bound by nominations. In accordance with the recommendation by the Nomination Committee, the Supervisory Board proposes to adopt the following resolution: The following persons are appointed as Members of DVB Bank SE s Supervisory Board for a term of office ending at the conclusion of the General Meeting which resolves on the formal approval (Entlastung) for the fourth financial year after their election; for the purposes of this calculation, the financial year in which the term of office commences shall be disregarded: 1. Frank Westhoff, Eppstein, Member of the Board of Managing Directors of DZ BANK AG Deutsche Zentral- Genossenschaftsbank, Frankfurt/Main 2. Wolfgang Köhler, Kelkheim, Member of the Board of Managing Directors of DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt/Main 3. Professor Dr h.c. Stephan Götzl, Nuremberg, President and Chairman of Genossenschaftsverband Bayern e.v. 4. Anders Ingebrigtsen, Oslo, Norway, Managing Director of Koenig AS, Oslo, Norway 6

7 The following persons are appointed due to the age limit of 71 years established in Article 17 No. 3 of the ordinance of the Supervisory Board as Members of DVB Bank SE s Supervisory Board only for a term of office ending at the conclusion of the General Meeting which resolves on the formal approval (Entlastung) for the financial year 2014: 5. Dr Peter Klaus, Mörfelden-Walldorf Former Director and Member of the Board of Managing Directors of KfW Bankengruppe, Frankfurt am Main 6. Dr Klaus Nittinger, Hamburg Independent Aviation Advisor It is intended to carry out the election of members to the Supervisory Board at the Annual General Meeting by way of individual polls. Notice is given, in accordance with section sentence 3 of the German Corporate Governance Code, that in the event of Mr Frank Westhoff, Eppstein, member of the Board of Managing Directors of DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt/Main, being elected to the Supervisory Board, the plan is to nominate Mr Frank Westhoff for election as Chairman of the Supervisory Board. Dr Peter Klaus is independent and possesses the requisite expertise in the areas of accounting or auditing as defined in section 100 (5) of the AktG. Mr Frank Westhoff possesses sufficient expertise and professional experience in the area of risk management and risk control, particularly concerning the alignment of remuneration systems with the Company's overall risk appetite and strategy and its level of equity, as defined in section 25d (12) sentence 3 of the KWG. Supplementary information to agenda item no. 6, pursuant to section 125 (1) sentence 5 of the AktG, concerning the candidates nominated for election to the Supervisory Board The persons nominated for election to the Supervisory Board under agenda item 6 are members of a statutory supervisory board (indicated by "a)"), or a similar governing body within Germany or abroad (indicated by "b)"), of the companies or enterprises listed below: Frank Westhoff, Eppstein, Member of the Board of Managing Directors of DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt/Main a) Chairman of the Supervisory Board of Deutsche Genossenschafts- Hypothekenbank Aktiengesellschaft, Hamburg 1 2 ; Deputy Chairman of the Supervisory Board of TeamBank AG Nürnberg, Nürnberg 1 2 ; Member of the Supervisory Board of BAG Bankaktiengesellschaft, Hamm 2 ; Member of the Supervisory Board of Deutsche WertpapierService Bank AG, Frankfurt am Main 2 b) Chairman of the Board of Directors of DZ BANK Ireland Public Limited Company, Dublin, Irland 1 7

8 Wolfgang Köhler, Kelkheim, Member of the Board of Managing Directors of DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt/Main a) Member of the Supervisory Board of R+V Lebensversicherung AG, Wiesbaden 1 b) Member of the Supervisory Board of DZ PRIVATBANK S.A., Luxemburg 1 Prof Dr h.c. Stephan Götzl, Nuremberg, President and Chairman of Genossenschaftsverband Bayern e.v. a) Deputy Chairman of the Supervisory Board of Bayerische Raiffeisen-Beteiligungs- Aktiengesellschaft, Beilngries 3 ; Member of the Supervisory Board of Süddeutsche Krankenversicherung a.g., Fellbach; Member of the Supervisory Board of BayWa AG, München At the time of the Annual General Meeting on 12 June 2014 Prof Dr h.c. Götzl is expected to hold the following mandates: Deputy Chairman of the Supervisory Board of Bayerische Raiffeisen-Beteiligungs- Aktiengesellschaft, Beilngries 3 ; Member of the Supervisory Board of BayWa AG, Munich; Member of the Supervisory Board of Bayern-Versicherung Lebensversicherungs AG, Munich b) Chairman of the Supervisory Board of ABG GmbH, Beilngries Dr Peter Klaus, Mörfelden-Walldorf, Former Director and Member of the Board of Managing Directors of KfW Bankengruppe, Frankfurt am Main a) None b) Member in the Council of The Sentient Group Limited, Grand Cayman, Cayman Islands Dr Klaus Nittinger, Hamburg, Selbständiger Aviation Advisor a) None b) Non-Executive Director of Lufthansa Malta Aircraft-Leasing Ltd, St. Julians, Malta Anders Ingebrigtsen, Oslo, Norway, Managing Director of Koenig AS, Oslo, Norway a) None b) Chairman of the Board of Montana Shipholding AS, Oslo, Norway; Chairman of the Control Committee of Nordea Eiendomskreditt AS, Oslo, Norway; Member of the Control Committee of Nordea Finans Norge AS, Oslo, Norway; Member of the Board of Persontransport Norge AS, Oslo, Norway; 8

9 Member of the Board of Global Shipholding 1 AS, Oslo, Norway; Member of the Board of Global Shipholding 2 AS, Oslo, Norway; Member of the Board of Lorentzen Skibs AS, Oslo, Norway; Member of the Board (Styre) of Koenig AS At the time of the Annual General Meeting on 12 June 2014 Mr Ingebrigtsen will hold only the following mandates: Chairman of the Control Committee of Nordea Eiendomskreditt AS 4, Oslo, Norway; Member of the Control Committee of Nordea Finans Norge AS 4, Oslo, Norway; Member of the Board of Persontransport Norge AS, Oslo, Norway 1) Offices held within the DZ BANK AG Deutsche Zentral-Genossenschaftsbank Group, Frankfurt/Main. Pursuant to section 100 (2) sentence 2 of the AktG, the offices held in Group Supervisory Boards marked shall not count towards the maximum number of Supervisory Board offices under section 100 (2) sentence 1 No. 1 of the AktG. Pursuant to section 25d (3) sentence 2 of the German Banking Act (KWG) mandates held with undertakings belonging to the same group of credit institutions are deemed to be one mandate for the purpose of calculating the maximum number of Supervisory Board offices pursuant to section 25d (3) sentence 1 of the KWG. 2 Member of the Sicherungseinrichtung des Bundesverbandes der Deutschen Volksbanken und Raiffeisenbanken (BVR). 3 The undertaking is not predominantly commercially active. 4 Mandates within a group of credit institutions. Supplementary information to agenda item no. 6, pursuant to section (4) to (6) of the German Corporate Governance Code Regarding the disclosures required in accordance with section of the German Corporate Governance Code, the nominated candidates have the following personal or business relationships with the Company, the Company's executive bodies, or with a shareholder holding a material interest in the Company: 1. Frank Westhoff, Eppstein Personal relationships: None Business relationships: Member of the Board of Managing Directors of DZ BANK AG Deutsche Zentral- Genossenschaftsbank, Frankfurt/Main, which holds a 95.45% stake in the Company. There are manifold business relationships between DZ BANK AG Deutsche Zentral- Genossenschaftsbank, Frankfurt/Main, and DVB Bank SE; in particular, DVB Bank SE raises a substantial portion of its funding with DZ BANK AG Deutsche Zentral- Genossenschaftsbank, Frankfurt/Main. 2. Wolfgang Köhler, Kelkheim Personal relationships: None Business relationships: Member of the Board of Managing Directors of DZ BANK AG Deutsche Zentral- Genossenschaftsbank AG, Frankfurt/Main, which holds a 95.45% stake in the 9

10 Company. There are manifold business relationships between DZ BANK AG Deutsche Zentral- Genossenschaftsbank, Frankfurt/Main, and DVB Bank SE; in particular, DVB Bank SE raises a substantial portion of its funding with DZ BANK AG Deutsche Zentral- Genossenschaftsbank, Frankfurt/Main. 3. Professor Dr h.c. Stephan Götzl, Nuremberg Personal relationships: None Business relationships: None 4. Dr Peter Klaus, Mörfelden-Walldorf Personal relationships: None Business relationships: None 5. Dr Klaus Nittinger, Hamburg Personal relationships: None Business relationships: None 6. Anders Ingebrigtsen, Oslo, Norway Personal relationships: None Business relationships: Mr Ingebrigtsen is at the time of convocation of the Annual General Meeting Member of the Board of an undertaking which has entered into a credit relationship with DVB Bank SE. 10

11 Re: Item 7 of the agenda Resolution on the authorisation of higher variable remuneration in accordance with section 25a (5) sentence 5 of the German Banking Act (Kreditwesengesetz, "KWG") As a consequence of the inclusion of the provisions of the Capital Requirements Directive IV into the German Banking Act with effect from 1 January 2014, restrictions apply to the share of variable remuneration in relation to the share of fixed remuneration. Therefore, the Board of Managing Directors and the Supervisory Board propose the following resolution: The Company's Board of Managing Directors shall be authorised in accordance with section 25a (5) sentence 5 of the KWG to set, for the staff groups (as specified in greater detail in the rationale for the resolution, under b) below) of DVB Bank SE and its subsidiaries, a ratio between the variable and fixed annual remuneration that may exceed the statutory upper limit of 100% of the fixed remuneration for each of the relevant staff members pursuant to section 25a (5) sentence 2 of the KWG, as long as the ratio does not exceed an upper limit of 200% of the fixed remuneration. a) Rationale for the requested approval of a variable remuneration share exceeding 100% of the fixed remuneration aa) Prevention of competitive disadvantages DVB Bank SE and its affiliated companies (hereinafter DVB) provide financial services in selected segments of the international transport market as well as services related to the international transport market. Large parts of DVB's business are transacted via DVB's subsidiaries at locations outside Europe (e.g. Singapore or New York). London is another important DVB location. In terms of its activities in the financial services market for the international transport market, DVB is, more specifically, competing with banks from countries outside the European Union that are not subject to a limitation of the variable remuneration share to a level of 100% of the fixed remuneration. Further competitors are banks from member states of the European Union that restrict the limitation of the variable remuneration share to 100% of the fixed remuneration (in concordance with Directive 2013/36/EU ("CRD IV")) to certain staff groups and, in contrast to the German legislator, do not apply this limitation to all staff members. Moreover, DVB is competing with market participants that are not regulated, but act as providers of external finance or service providers. To be able to maintain its international competitiveness within this environment, in the future DVB also has to be in a position to remunerate staff particularly at locations outside the European Union on the basis of competitive remuneration structures. This requires that DVB is able to pay a variable remuneration that exceeds 100% of the fixed remuneration where staff members have achieved an extraordinary level of performance of a business division, or of DVB, has been particularly successful. 11

12 bb) Prevention of an increase in fixed costs In order to be able to continue offering competitive salary packages to employees amongst the staff groups covered, whose variable remuneration exceeded 100% of fixed remuneration in the past (this applied to 31 employees on average over the past three years), while at the same time observing a limitation of the variable remuneration to 100% of the fixed remuneration, an increase in fixed remuneration would be unavoidable. As the resulting permanent increase of personnel expenditure would not be brought about by any factual reasons, it is in the interest of both the Bank and its shareholders to maintain the current level of flexibility in structuring the variable remuneration of its staff and to avail itself of the option provided by section 25a (5) sentence 5 of the KWG. b) Description of the staff groups affected by the resolution The Board of Managing Directors and the Supervisory Board request approval for the authorisation to specify variable remuneration exceeding 100% of the fixed remuneration for staff who (i) (ii) (iii) (iv) rank at least at Vice President level; are employed in or at one of the divisions or locations set out below; exercise one of the functions described below, and are not employed by any AIF management company (section 1 (14) KAGB) (together, Potentially Eligible Staff Members). The authorisation of the option to set a higher variable remuneration than 100% of the fixed remuneration for staff is intended to apply to staff in the following areas: (1) only for London, Singapore and New York: - staff in DVB's Transport Finance divisions (Shipping Finance, Aviation Finance, Offshore Finance, Land Transport Finance); (2) at all locations: staff in areas performing the following tasks: - Asset Management; - Distribution/Syndication; - Corporate Finance/Capital Markets; - Investment Management. 12

13 The authorisation of the option to set a higher variable remuneration than 100% of the fixed remuneration for staff is intended to apply to staff in the above-mentioned divisions performing the following functions: - Persons with executive functions in the above-mentioned divisions - Relationship managers - (Product) Specialists - Analysts As at 13 March 2014, the above-mentioned divisions and locations of DVB employed 80 staff exercising the above-mentioned functions and ranking at least at Vice President level. As at 13 March 2014, the Potentially Eligible Staff Members affected by the authorisation are divided as follows across the following locations: Location Number Amsterdam, Netherlands 6 London, UK 29 Singapore, Singapore 23 New York, USA 19 Willemstad, Curaҫao 1 Oslo, Norway 2 Total 80 The number of Potentially Eligible Staff Members may vary over time. However, it is not planned to significantly increase the group of staff members affected by this arrangement. The resolution would apply, for the first time, to the variable remuneration earned by the Potentially Eligible Staff Members during the 2014 business year and continue to apply until further notice. c) Description of the effect of the resolution in connection with the present remuneration system The remuneration of all Potentially Eligible Staff Members is based on DVB's current remuneration system, under which the total remuneration of the respective staff members is made up of a fixed as well as a variable component. The variable remuneration, which in aggregate will not exceed 200% of fixed remuneration, is made up of two components: an annual bonus rewarding the performance of the past business year and payments under a long-term incentive plan ("LTI"). Annual bonus The setting of the annual bonus for Potentially Eligible Staff Members will be based on annual targets agreed with these staff members. The target value of the annual bonus (defined in local currency) will be set for each staff member and each business year in advance on the assumption of a 100% target achievement. The following factors will be taken into consideration for determining whether the target value has been reached: (i) the target achievement of the individual staff member, (ii) the success of the corporate unit(s) to which the staff member belongs, and (iii) the corporate performance of DVB as a whole. A bonus in excess of the target value 13

14 depends on a target achievement of more than 100% of the targets, since the annual bonus payable is determined by multiplying per each target the portion of the target value agreed in case of a 100% target achievement with the degree to which the target was achieved (expressed as a percentage). At present, the payment of an annual bonus depends on the following ratio: achievement of DVB's overall corporate targets (30%), achievement of the targets of the division/sector, in which the employee works (45%), and achievement of individual targets (25%). In addition to the arrangement described above, the Board of Managing Directors may grant discretionary bonuses to reward a particular achievement. Long Term Incentive Plan ("LTI") The determination of payments under an LTI is based on the medium-term targets agreed with staff; achievement of these targets depends exclusively upon DVB's corporate performance. There is a three-year interval between the determination of targets and any potential payouts. The target value (defined in euros) that applies to the LTI is pre-set for each staff member and each LTI in advance. The payout fluctuates in line with the degree of target achievement. d) Potential impact of variable remuneration exceeding 100% of fixed remuneration on the requirement of maintaining an appropriate level of own funds aa) Maximum possible amount of variable remuneration exceeding 100% of fixed remuneration The amount of the variable remuneration that exceeds 100% of the fixed remuneration is of secondary importance with regard to its impact on the requirement to maintain an appropriate level of equity. The aggregate volume of the annual fixed remuneration of the Potentially Eligible Staff Members for 2014 amounted, as at 13 March 2014, to approximately 14.1 million. If the variable remuneration was limited to 100% of the fixed remuneration, the total sum of the permissible variable remuneration for Potentially Eligible Staff Members would therefore amount to approximately 14.1 million. If the variable remuneration was limited to 200% of the fixed remuneration, the total sum of the permissible variable remuneration for Potentially Eligible Staff Members would therefore amount to approximately 28.2 million. The expense of the variable remuneration exceeding 100% of the fixed remuneration (hereinafter referred to as the "Relevant Amount") could therefore potentially equate to a maximum amount of 14.1 million. However, the target value set for the 2014 annual bonuses for Potentially Eligible Staff Members, which is based on a 100% target achievement, only equates to approximately 7.7 million and thus only 54.6% of the fixed remuneration of the Potentially Eligible Staff Members for The target value set under the LTI 2012 (for which target achievement in 2014 is relevant) for Potentially Eligible Staff Members, which is based on a 100% target achievement, only equates to approximately 1.6 million and thus only 11.3% of the fixed remuneration of the Potentially Eligible Staff Members for

15 bb) Potential impact on own funds (1) Assessment as to DVB Bank SE's capability to strengthen its own funds Assuming that the approval had already applied to the 2013 business year, it would have had no impact on the net income for the year and thus no detrimental effect on DVB Bank SE's ability to strengthen its equity, as variable remuneration had already been paid for this period to a degree that DVB intends to maintain in the future. The resolution is intended to permit the Bank to maintain its current salary system. This salary system has not impaired the Bank's ability of strengthening its own funds. Based on the premise that financial performance will remain at comparable levels, the continuation of the current remuneration policy will not preclude a further strengthening of the Bank's own funds. (2) Assessment with regard to the absolute relevance of the Relevant Amount The total expenditure of the variable remuneration exceeding 100% of the fixed remuneration equates to a maximum amount of approximately 14.1 million. On the assumption that (i) the Potentially Eligible Staff Members will achieve the agreed targets to the same extent that they did on average during the past three years, and (ii) payouts under an LTI are made in line with the average of the past three years, this would not lead to an expense in variable remuneration that would exceed 100% of the fixed remuneration. Even if the potential additional expenditure resulting from variable remuneration exceeding 100% of the fixed remuneration were to materialise, this would be of secondary importance in relation to DVB Bank SE's own funds. As at 31 December 2013, DVB's own funds stood at 1,356.9 million and DVB's total capital ratio under Basel II equated to 22.20% as at 31 December Expenditure of 14.1 million is equivalent to 1.04% of own funds and might lower the total capital ratio by 0.23 percentage points to 21.97%. 15

16 Re: Item 8 of the agenda Passing of a resolution on the cancellation of the existing authorisation to purchase treasury shares, pursuant to section 71 (1) no. 7 of the German Public Limited Companies Act (Aktiengesetz "AktG"), and on the granting of a new authorisation to purchase treasury shares pursuant to section 71 (1) no. 7 of the AktG The authorisation granted by the Ordinary Annual General Meeting 2010 to acquire treasury shares for trading purposes will expire, as scheduled, on 8 June For this reason it is proposed that the Ordinary Annual General Meeting on 12 June 2014 cancel said authorisation and grant its approval for a new authorisation. The new authorisation is intended to replace the authorisation granted by the General Meeting of 9 June 2010 for the purchase of treasury shares in accordance with Section 71 (1) No. 7 of the AktG; and to remain in force until 11 June The Board of Managing Directors and the Supervisory Board therefore propose the following resolution: In accordance with section 71 (1) No. 7 of the AktG, DVB Bank SE is hereby authorised to purchase and sell its own shares (treasury shares) for the purpose of securities trading. This authorisation will expire on 11 June The trading portfolio of shares acquired for this purpose must not exceed 5% of the issued share capital of DVB Bank SE at the end of any given day. Furthermore, any shares acquired due to this authorisation together with other treasury shares acquired and still held by the Company, or to be attributed to the Company pursuant to sections 71a et seq. of the AktG, must not exceed 10% of the Company s issued share capital at any given time. The lowest price at which treasury shares may be purchased will be set at the closing price for the relevant shares as quoted in Xetra trading at the Frankfurt Stock Exchange (or any successor system thereto) on the trading day prior to the purchase, less 10%. The highest price for purchasing treasury shares will be set at said closing price, plus 10%. The existing authorisation granted by the General Meeting of 9 June 2010 for the purchase of treasury shares in accordance with section 71 (1) no. 7 of the AktG, which is due to expire on 8 June 2015, is hereby revoked, with said revocation taking effect upon the effective date of the new authorisation. 16

17 Re: Item 9 of the agenda Passing of a resolution on the cancellation of the existing Authorised Capital 2010 and the creation of new Authorised Capital 2014, and on the amendment of Article 4 (2) of the Company s Memorandum and Articles of Association The term of the Authorised Capital originally approved in the amount of 50 million by the Ordinary Annual General Meeting 2010, which is still outstanding in the same amount, will expire on 8 June 2015 (Article 4 (2) of the Memorandum and Articles of Association). To enable the Company to cover its financing requirements quickly and flexibly in the future, it is proposed that the existing Authorised Capital 2010 be cancelled and replaced by a new Authorised Capital 2014, in the amount of 50 million. The new Authorised Capital 2014 shall be approved for the statutory maximum period of five years, having essentially the same terms and conditions as the existing authorisation, and will expire on 11 June In line with the existing authorisation, it is proposed to be exercisable for capital increases against cash contributions, with shareholders' pre-emptive subscription rights to be excluded for fractional amounts only. The Board of Managing Directors and the Supervisory Board propose the following resolution: a) The current Authorised Capital 2010 pursuant to Article 4 (2) of the Company's Memorandum and Articles of Association shall be cancelled at the time the new 2014 Authorised Capital pursuant to b) to d) below enters into effect by way of entry in the Commercial Register of the amended version of Article 4 (2). b) The Board of Managing Directors shall be authorised to increase, on one or more occasions, the Company s share capital by a maximum total amount of 50 million (Authorised Capital 2014) via issuance of new no-par value bearer shares for contribution in cash, subject to the approval of the Supervisory Board; this authority will expire on 11 June The shareholders shall be granted a subscription right. However, subject to approval by the Supervisory Board, the Board of Managing Directors may exclude shareholders subscription rights with respect to fractional shares. Subject to approval by the Supervisory Board, the Board of Managing Directors may determine the rights associated with shares so issued and the terms and conditions of such share issues, as well as all other details regarding said capital increases and their execution. Furthermore, the Supervisory Board shall be authorised to amend the wording of the Memorandum and Articles of Association of the Company in accordance with the extent of any capital increases on the basis of Authorised Capital c) Article 4 (2) of the Memorandum and Articles of Association shall be amended to read as follows (cancelling its former version): "The Board of Managing Directors shall be authorised to increase, on one or more occasions, the Company s share capital by a maximum total amount of 50 million (Authorised Capital 2014) via issuance of new no-par value bearer shares for contribution in cash, subject to the approval of the Supervisory Board; this authority will expire on 11 June The shareholders shall be granted a subscription right. 17

18 However, subject to approval by the Supervisory Board, the Board of Managing Directors may exclude shareholders subscription rights with respect to fractional shares. Subject to approval by the Supervisory Board, the Board of Managing Directors may determine the rights associated with shares so issued and the terms and conditions of such share issues, as well as all other details regarding said capital increases and their execution. Furthermore, the Supervisory Board shall be authorised to amend the wording of the Memorandum and Articles of Association of the Company in accordance with the extent of any capital increases on the basis of Authorised Capital 2014." d) The Supervisory Board is authorised to amend the wording of Article 4 (1) and (2) of the Memorandum and Articles of Association, to reflect the current utilisation of the Authorised Capital 2014 and after expiry of the authorisation. e) The Board of Managing Directors is directed to submit this resolution (cancellation of the existing Article 4 (2) and insertion of a new Article 4 (2) of the Memorandum and Articles of Association) for registration in the Commercial Register in such a way as to ensure that the cancellation of the existing authorisation (Authorised Capital 2010), which was resolved under a) above, shall not enter into effect without said authorisation having been replaced by the new Authorised Capital 2014 resolved under b) and c) above. Report of the Board of Managing Directors to the General Meeting in accordance with sections 203 (2) sentence 2, 186 (4) sentence 2 of the AktG regarding agenda item 9: The proposed resolution will enable the Board of Managing Directors to issue new shares, subject to a total amount of 50 million, during a five-year period starting with this General Meeting. The purpose of this authorisation is to enable the Board of Managing Directors to create additional tier 1 capital by issuing new shares. The authorisation of the Board of Managing Directors to exclude shareholders pre-emptive subscription rights with respect to fractional shares is a precautionary measure, to be used in situations where fractional shares are incurred as a result of the subscription ratio for an increase of the share capital, and where it is impossible to allocate such fractional shares to each shareholder, in a ratio that is in line with such shareholder s stake in the share capital prior to such increase. Hence, the sole purpose of the proposed authorisation to exclude shareholders subscription rights is to ensure an even, practicable subscription ratio. Fractional amounts will in each case be sold at the prevailing exchange market price. Section 202 (3) of the AktG limits the maximum amount of authorised capital to 50% of the share capital. To comply with this limitation, the existing authorisation (Authorised Capital 2010) will be cancelled. 18

19 Re: Item 10 of the agenda Passing of a resolution on the cancellation of an existing authorisation and on the granting of a new authorisation to issue convertible bonds and bonds cum warrants; on the cancellation of the existing Conditional Capital 2010 and on the creation of a new Conditional Capital 2014, and on the amendment of Article 4 (3) of the Company's Memorandum and Articles of Association The authorisation granted by the ordinary General Meeting 2010 to the Board of Managing Directors, to issue convertible bonds and/or bonds cum warrants (or combinations thereof) will expire, together with the corresponding Conditional Capital, on 8 June To enable the Company to cover its financing requirements quickly and flexibly in the future, it is proposed that the existing authorisation, together with the Conditional Capital authorised for this purpose, be cancelled and replaced by a new authorisation to issue convertible bonds and/or bonds cum warrants, and by a new Conditional Capital The Board of Managing Directors and the Supervisory Board propose the following resolution: a) Cancellation of the existing authorisation to issue convertible bonds and/or bonds cum warrants (or combinations thereof) The authorisation granted by the General Meeting held on 9 June 2010, under agenda item no. 7, to issue convertible bonds and/or bonds cum warrants (or combinations thereof) will be cancelled. b) Revocation of the existing Conditional Capital 2010 The Conditional Capital 2010 authorised by the General Meeting held on 9 June 2010, under agenda item no. 7, will be cancelled, revoking Article 4 (3) of the Memorandum and Articles of Association. c) New authorisation to issue convertible bonds and/or bonds cum warrants (or combinations thereof) Authorisation period, nominal amount, amount of share capital The Board of Managing Directors is authorised, subject to approval by the Supervisory Board, to issue by 11 June 2019, on one or more occasions, bearer and/or registered convertible bonds and/or bonds cum warrants, or combinations thereof, (collectively the "Bonds"), with or without fixed term to maturity, and to confer upon the holders or creditors of Bonds conversion and/or option rights to no-par value bearer shares of the Company, in accordance with the terms and conditions governing such convertible bonds or bonds cum warrants. The aggregate nominal amount of convertible bonds and/or bonds cum warrants to be issued under this authorisation shall not exceed 250 million. Conversion or option rights issued shall relate to shares having an aggregate pro-rata share in the Company's share capital not exceeding 25 million. The Bonds may also be issued against contributions in kind. The Bonds may be issued in euro as well as in any other currency in the corresponding equivalent amount which qualifies as legal tender. They may also be 19

20 issued by a direct or indirect majority-owned subsidiary of the Company; in such cases, the Board of Managing Directors shall be authorised to guarantee, subject to the approval of the Supervisory Board, the redemption of the Bonds and to grant to the holders of any such Bonds option or conversion rights to new bearer unit shares of the Company, or to enter into corresponding conversion obligations. The bond issues may be divided into pari-passu tranches having equal rights. Option right Where bonds cum warrants are issued, one or more warrant(s) shall be attached to each tranche. These warrants shall entitle the holder to subscribe new bearer unit shares of the Company in accordance with the options terms yet to be established by the Board of Managing Directors, subject to approval by the Supervisory Board. The lifetime of the option rights may not exceed the term of the respective bond cum warrants. Finally, provisions may be made for the combination of fractional shares and/or a related cash settlement. Conversion right, mandatory conversion Where convertible bonds are issued, the holders of the respective tranches shall be entitled to convert their tranche into new bearer no-par value shares of the Company in accordance with the convertible bond terms to be determined by the Board of Managing Directors. Moreover, the terms and conditions for conversion may create a conversion obligation at the end of the lifetime of the option right or earlier (in each case "final maturity"). To the extent permissible under German company law, as amended at the time of using the authorisation, the terms and conditions of a convertible bond may also provide for mandatory conversion only. Exchange ratio The exchange ratio shall be based on the division of the nominal value of a tranche by the fixed conversion price of one new bearer unit share of the Company. Where the issue price falls below the nominal value, the exchange ratio may also be ascertained by dividing the issue price of a tranche by the fixed conversion price of one new bearer unit share of the Company. The exchange ratio may be rounded up or down to an integer; an additional cash contribution may also be required. Finally, provisions may be made for the combination of fractional shares and/or a related cash settlement. The proportion of equity capital attributed to each individual share to be issued upon conversion, or upon exercise of option rights, may not exceed the nominal value of the tranche, or the issue price of a tranche (if said issue price falls below the nominal value). The terms and conditions governing convertible bonds or bonds cum warrants may determine that the Company's treasury shares can also be granted in the event of conversion or when option rights are exercised. Furthermore, the terms and conditions may provide that the Company pays the equivalent value in monetary funds, rather than granting shares in the Company to conversion or option beneficiaries. Moreover, the option and/or convertible bond terms may also allow for a certain degree of variability in terms of the number of shares to be subscribed upon exercise of the option and/or conversion rights or upon performance of conversion obligations, and the ability to change the option and/or conversion price, during the term, within the range 20

21 to be determined by the Board of Managing Directors, depending on the development of the share price or as a result of applicable provisions for the protection against dilution. Right to substitute The terms and conditions governing convertible bonds or bonds cum warrants may provide for the right on the part of the Company to substitute the cash payment due, in whole or in part, by the granting of new shares of the Company, or treasury shares, to the bond creditors ("right to substitute"). Such shares will be credited at the value that corresponds, in accordance with the bond terms, to the arithmetic mean (rounded up to full cents) of the closing price for the Company's shares in Xetra trading at the Frankfurt Stock Exchange (or any successor system thereto) on the ten consecutive trading days prior to the conversion or option right being exercised, or prior to final maturity. Conversion/exercise price The specific conversion and/or option price to be set for a bearer unit share of the Company will be determined in euros and must be even where the exchange ratio/conversion or option price is variable no less than 80% of the average closing price of the Company's shares in floor trading at the Frankfurt Stock Exchange (or any other successor system) during the ten trading days prior to the day on which the Board of Managing Directors passes a resolution on the issue of convertible bonds and/or bonds cum warrants, or no less than 80% of the average closing price of the Company's shares in Xetra trading at the Frankfurt Stock Exchange (or any successor system thereto) during the days on which the relevant subscription rights are traded at the Frankfurt Stock Exchange (with the exception of the last two days of trading in subscription rights). However, where bonds are issued which provide for mandatory conversion, the conversion price may never fall short of 50% of the average price of the Company's shares during the ten exchange trading days preceding the final decision by the Board of Managing Directors on the publication of a subscription offer for such bonds, or on the Company's declaration of acceptance following an invitation to submit subscription offers. Notwithstanding the provision of section 9 (1) of the AktG, in accordance with a dilution protection clause to be contained in the applicable convertible bond and/or option terms, the conversion and/or option price or the option and/or conversion ratio may be reduced or adjusted, upon exercise of the conversion right or performance of the conversion obligation, by payment of the respective cash amount or by reduction of the additional contribution if the Company increases its registered share capital during the conversion or option period, while at the same time granting its shareholders a subscription right, or issues additional convertible bonds and/or bonds cum warrants, or grants any other option rights, but does not grant subscription rights to the existing holders of convertible bonds and/or bonds cum warrants to which these holders would be entitled upon exercising their conversion and/or option rights. To the extent possible, the exchange ratio may also be adjusted by way of division by the reduced conversion price (in lieu of a cash payment or reduction of the additional contribution). In addition, with regard to capital reductions, share splits, special dividends or other measures that may have a dilutive effect on the value of the conversion and/or option rights, the terms and conditions governing conversion or option rights may also provide for a value-securing adjustment of the conversion or option rights. 21

22 Subscription rights, exclusion of subscription rights In principle, the shareholders are entitled to a subscription right regarding the convertible bonds and/or bonds cum warrants. The Bonds may also be subscribed by one or more banks, subject to the obligation of offering these to the shareholders for subscription (so-called "indirect subscription right"). The Board of Managing Directors shall be authorised to exclude, subject to the Supervisory Board's approval, shareholders' subscription rights with respect to fractional amounts and to also exclude subscription rights, subject to the Supervisory Board's approval, to the extent that this is necessary to grant subscription rights to the holders of conversion or option rights to bearer unit shares of the Company to the same extent as they would have been entitled upon exercising their conversion or option rights or upon performance of conversion obligations. Furthermore, the Management Board shall be authorised to exclude shareholders' subscription rights, subject to the Supervisory Board's approval, where Bonds are issued for contribution in kind and provided that the value of the contribution in kind is commensurate with the theoretical market price of the Bonds determined in accordance with recognised mathematical valuation methods. If the bonds are issued by another company directly or indirectly majority-owned by the Company, the Company shall ensure that the statutory subscription rights are granted to the Company's shareholders, whereby such subscription rights may also be excluded in accordance with the authorisations set out above. Authorisation to determine specific bond terms The Board of Managing Directors shall be authorised, subject to approval by the Supervisory Board, to determine any further specifications with regard to said issue and its features (including, but not limited to, interest rates, type of return, issue price, conversion or option price, lifetime, denomination, conversion and/or option period, requirement of an additional cash contribution, compensation or consolidation of fractional amounts, cash payment in lieu of delivery of bearer unit shares and delivery of existing bearer unit shares in lieu of issuance of new bearer unit shares) or to agree on these specifications with the executive bodies of the issuing subsidiaries that are, either directly or indirectly, majority-owned by the Company. This also applies to any decision to structure the specifications of convertible bonds and/or bonds cum warrants (or combinations thereof) in a manner that they are eligible as additional tier 1 items in accordance with Article 52 (1) of Regulation 2013/575/EU, or otherwise as regulatory capital. d) Capital increase The Company's share capital is subject to a conditional capital increase not exceeding 25 million by issuance of up to 9,779,149 new bearer no-par value shares (Conditional Capital 2014). The purpose of the conditional capital increase is the granting of shares to holders or creditors of convertible bonds and/or bonds cum warrants issued in accordance with the above authorisation. The issuance of new bearer shares may only be effected at a conversion and/or option price that corresponds to the specifications under c) above. The conditional capital increase may only be executed to the extent that holders of conversion or option rights exercise such rights or any conversion obligations from such convertible bonds and/or bonds cum 22