SUPPLEMENT to the Base Prospectus

Transcription

1 SUPPLEMENT to the Base Prospectus for Certificates relating to shares / securities representing shares / indices / precious metals / non-ferrous metals / commodities / futures contracts / fund units / Exchange Traded Funds (ETFs) / exchange rates and interest rates and baskets containing one or more of the underlyings mentioned above (hereinafter referred to in each case as 'Basket') dated 3 August 2007 as amended by Supplement dated 25 September 2007 issued by Sal. Oppenheim jr. & Cie. Kommanditgesellschaft auf Aktien dated 25 March 2008 pursuant to 16 (1) of the Securities Prospectus Act (Wertpapierprospektgesetz; 'WpPG')

2 Capitalised terms used herein and not otherwise defined in this Supplement dated 25 March 2008 (the 'Supplement') shall have the same meaning as in the Base Prospectus for Certificates relating to shares / securities representing shares / indices / precious metals / non-ferrous metals / commodities / futures contracts / fund units / Exchange Traded Funds (ETFs) / exchange rates and interest rates and baskets containing one or more of the underlyings mentioned above (hereinafter referred to in each case as 'Basket') dated 3 August 2007 as amended by Supplement dated 25 September 2007 ('Base Prospectus'). Application has been made to the BaFin for its approval of this Supplement. Approval by the BaFin means the positive act at the outcome of the scrutiny of the completeness of this Supplement including the consistency of the information given and its comprehensibility. Pursuant to 16 (1), 14 (1) WpPG, this Supplement has been filed with the BaFin as the competent authority. The Issuer applied for a notification of this Supplement into Italy pursuant to 18 (2) in connection with 18 (1) WpPG. Copies of this Supplement as well as all previous supplements to the Base Prospectus and the Base Prospectus itself will be available, during normal business hours on any weekday (except Saturdays and public holidays), at the registered office of the Issuer specified in the Address List below. The Base Prospectus to which this Supplement relates was filed with the BaFin and as long as the Base Prospectus is valid (i.e. for 12 months from the date of the publication of the Base Prospectus) copies of the Base Prospectus will be available during normal business hours on any weekday (except Saturdays and public holidays), at the registered office of the Issuer specified in the Address List below. In accordance with 16 (3) WpPG, investors who have already submitted purchase orders in relation to Certificates issued under the Base Prospectus prior to the publication of this Supplement are entitled to withdraw their orders within two working days of this Supplement having been published provided that no discharge has occurred. A withdrawal, if any, of an order must be communicated in writing to the Issuer at its registered office specified in the Address List hereof. 2

3 The Issuer hereby supplements and amends certain information contained in the Base Prospectus as follows: Profit / (loss) from ordinary activities Equity ratio (%) Amendments to 'A. Summary' The following wording on pages 10 to 11: Cost/income ratio (%) Summary information about the Issuer General information about the Issuer The Issuer, Sal. Oppenheim jr. & Cie. Kommanditgesellschaft auf Aktien, also referred to in business parlance as 'Sal. Oppenheim Bank', was originally established in 1789 as a German commercial partnership under the name Sal. Oppenheim jr. & Cie. In 1989, the bank was transformed into a partnership limited by shares (Kommanditgesellschaft auf Aktien, 'Kommanditgesellschaft auf Aktien'). The Issuer is subject to German law. Its registered office is in Cologne, Germany (with branches, affiliates and representative offices in Frankfurt / Main, Berlin, Düsseldorf, Hamburg, Munich, Stuttgart, Baden- Baden, as well as in Luxembourg, Prague and Paris). The Issuer s main office is also located in Cologne. Business activities The Issuer s business activities comprise the transaction of all forms of banking business, with the exception of investing. Besides services, the Issuer focuses on its two core divisions: Asset Management, which includes both asset management and private banking, and Investment Banking, which comprises corporate finance and financial markets. Key financial figures The following table contains selected (audited) key figures for the Sal. Oppenheim Group pursuant to IFRS for the past two financial years ending on 31 December 2005 and 31 December m (audited) 2006 m (audited) Total assets 32,029 35,347 Risk assets 13,658 15,807 Equity 1,764 1,935 Key events in the Issuer s recent activities Since the end of financial year 2006, there have been three events that are of particular relevance to the Issuer: the formation of the joint venture with the Belgian holding company belonging to the Frère Bourgeois Group, NPM/CNP (Compagnie Nationale à Portefeuille / Nationale Portefeuille Maatschappij), the acquisition of a 10% stake in the US investment bank Miller Buckfire & Co., LLC and the increase in the stake held by Sal. Oppenheim jr. & Cie. (Luxembourg) International S.A., Luxembourg in the French asset management company Financière Atlas S.A. from 10% to 100%. Group structure Effective from 1 July 2007 upon the completion of the restructuring of the group, Sal. Oppenheim jr. & Cie. S.C.A. ('Group Parent Company'), based in Luxembourg, will be the parent company of the Group. In the new Group structure, the material Group companies will be subordinated to the new Group Parent Company in several steps under company law. The previous holding company, Sal. Oppenheim International S.A, which held the Group s material shareholdings, will be divested by the Issuer, the previous Group Parent Company, to the beforehand newly founded Sal. Oppenheim jr. & Cie. S.C.A. and merged into the new Group Parent Company. Subsequently, the Issuer will be integrated in the new Group Parent Company. In a final step, the Issuer s previous subsidiaries, BHF- BANK, Bank Sal. Oppenheim jr. & Cie. (Österreich) AG and the Issuer s 50 % interest in Oppenheim-Esch Holding GbR will be sold before the end of 31 December 2007 to the new Group Parent Company Sal. Oppenheim jr. & Cie. S.C.A. The Group included in the scope of the consolidated financial statements presently comprises (i.e. before the Group restructuring), besides the present Group company, Sal. Oppenheim jr. & Cie. KGaA, a further 35 domestic and 38 foreign subsidiaries in which the Bank directly or indirectly holds a majority of capital and voting rights, or over which the Issuer has a significant influence. In addition to these subsidiaries six special purpose entities and institutional funds were included in the consolidated financial statements in the financial year in accordance with IAS 27 in conjunction with SIC 12. Furthermore, 11 companies were accounted for using the equity method. 3

4 125 subsidiaries and associated companies that have no significant impact on the presentation of the Group's net assets, financial position and results of operation were not included in the scope of consolidated financial statements. These companies account for less than 2% of the Group's total assets. Business address The Issuer s business address is: Sal. Oppenheim, Unter Sachsenhausen 4, Cologne, Germany. Tel.: +49 (0) Website The Issuer s website can be found at: IFRS for the past two financial years ending on 31 December 2005 and 31 December m (audited) 2006 m (audited) Total assets 32,029 35,347 Risk assets 13,658 15,807 Equity 1,764 1,935 Profit / (loss) from ordinary activities Equity ratio (%) Shall be replaced by the following wording: Cost/income ratio (%) Summary Information about the Issuer General Data about the Issuer The Issuer is also known as "Sal. Oppenheim Bank" in customary business usage. The firm was originally established in 1789 as a German commercial partnership under the name Oppenheim jr. & Cie. In 1989, the banking house was converted into a partnership limited by shares ("Kommanditgesellschaft auf Aktien"). The Issuer is subject to German law. The registered place of business is Cologne, Germany (with branches and/or affiliates or representatives in Frankfurt / Main, Berlin, Düsseldorf, Hamburg, Munich, Stuttgart, and Baden-Baden, as well as in Luxembourg, Vienna, Salzburg and Prague). The Issuer's main office is also located in Cologne, Germany. Business Activity The Issuer's business activity comprises the transaction of all forms of banking business, with the exception of investing. Besides the service segment, the Issuer's two core areas are wealth management, which includes both asset management and private banking, and investment banking, which comprises mergers and acquisitions, real estate deals, financing, equity capital transactions, institutional securities consulting, trading, derivatives, and currency management. The following table contains selected key figures for the Sal. Oppenheim Group pursuant to IFRS as of 31 December 2006 for the financial year ending on 31 December 2006 (audited) and as of 30 June 2007 for the first half year 2007 ending on 30 June 2007 (unaudited) m (audited) m (unaudited) Total assets 35,347 41,626 Risk assets 15,807 18,489 Equity 1,935 2,012 The following table contains selected key figures (unaudited) for the Sal. Oppenheim Group pursuant to IFRS for the first half year 2006 (from 1 January 2006 through 30 June 2006) and for the first half year 2007 (from 1 January 2007 through 30 June 2007 unaudited). Key Performance Figures for the Issuer The following table contains selected (audited) key figures for the Sal. Oppenheim Group pursuant to 4

5 Profit / (loss) from ordinary activities m (unaudited) Equity ratio (%) Cost/income ratio (%) m (unaudited) Key events in the Issuer s recent activities Since the end of financial year 2006, there have been three events that are of particular relevance to the Issuer: the formation of the joint venture with the Belgian holding company belonging to the Frère Bourgeois Group, NPM/CNP (Compagnie Nationale à Portefeuille / Nationale Portefeuille Maatschappij), the acquisition of a 10% stake in the US investment bank Miller Buckfire & Co., LLC and the increase in the stake held by Sal. Oppenheim jr. & Cie. (Luxembourg) International S.A., Luxembourg in the French asset management company Financière Atlas S.A. from 10% to 100%. With effect as of June 30, 2007, the Bank Sal. Oppenheim jr. & Cie. (Luxemburg) S.A. has taken over a 50% stake held by the US financial service provider Prudential Financial, Inc. of the United States (PFI) in the joint venture Oppenheim Pramerica. In July 2007 the Bank thus became the sole owner of the investment fund business of Oppenheim Pramerica Fonds Trust GmbH and Oppenheim Pramerica Asset Management S.à. r.l. The names of these two companies have meanwhile been changed to Oppenheim Fonds Trust GmbH and Oppenheim Asset Management Services S.à. r.l., respectively. Sal. Oppenheim and PFI decided to continue their close partnership. Since the restructuring of the Group in July 2007, as part of which Sal. Oppenheim International S.A., Luxemburg, was merged into the new parent company of the Group, the shares in the two companies are held by Sal. Oppenheim jr. & Cie. S.C.A. Group structure In the fiscal year 2007 Sal. Oppenheim group ("Sal Oppenheim Group" or the "Group") was restructured. The Bank Sal. Oppenheim jr. & Cie. (Luxemburg) S. A. and Sal. Oppenheim International S.A. were consolidated to form the new parent company of the Group, Sal. Oppenheim jr. & Cie. S.C.A., with legal seat in Luxemburg. restructuring of the Sal. Oppenheim Group is an intra-group transaction, the book values of the assets and liabilities will be continued. Following completion of the restructuring, Sal. Oppenheim jr. & Cie. S.C.A. will, therefore, draw up consolidated financial statements as of December 31, 2007 which are continued on the basis of the values of the consolidated financial statements of Sal. Oppenheim jr. & Cie. KGaA as of December 31, The previous parent company of the Group, Sal. Oppenheim jr. & Cie. KGaA, Cologne, will prepare (partial) consolidated financial statements as of December 31, Sal. Oppenheim Group corresponds in the scope of the consolidated financial statements (i.e. before the Group restructuring) as of 30 June 2007, essentially to the one as of 31 December Besides Sal. Oppenheim jr. & Cie. KGaA, the Group comprises a further 35 domestic and 38 foreign subsidiaries in which the Bank directly or indirectly holds a majority of capital and voting rights, or over which the Bank has a significant influence. In addition to these subsidiaries six special purpose entities and institutional funds were included in the consolidated financial statements in the financial year in accordance with IAS 27 in conjunction with SIC 12. Furthermore, 11 companies were accounted for using the equity method. 125 subsidiaries and associated companies that have no significant impact on the presentation of the Group's net assets, financial position and results of operation were not included in the scope of consolidated financial statements. These companies account for less than 2% of the Group's total assets. Business Address The Issuer s business address is: Sal. Oppenheim, Unter Sachsenhausen 4, Cologne, Germany. Tel.: +49 (0) Website The Issuer s website can be found at: 2. Amendments to 'C. Issuer Information' The following wording on page 27: A description of the Issuer, including information on its net assets, financial position and results of operation, can be found in the registration form of Sal. Oppenheim jr. & Cie. Kommanditgesellschaft auf Aktien, Cologne, dated 19 June 2007 (see section H.6 in the Base Prospectus). The restructuring was carried out in several steps and was completed by July 1, As the 5

6 Shall be replaced by the following wording: General The profile of the Issuer, including data about its assets, financial condition and profitability, can be found in the Registration Form of Sal. Oppenheim jr. & Cie, Kommanditgesellschaft auf Aktien, Cologne, Germany, dated 19 June (See Section H.6 of the Base Prospectus). Semi-annual financial information as of 30 June 2007 are disclosed under I. Annex. Important Recent Events in the Issuer Business Operations In the fiscal year 2007 the Sal. Oppenheim Group was restructured. The Bank Sal. Oppenheim jr. & Cie. (Luxemburg) S. A. and Sal. Oppenheim International S. A. were consolidated to form the new parent company of the Group, Sal. Oppenheim jr. & Cie. S.C.A., with legal seat in Luxemburg. The restructuring was carried out in several steps and was completed by July 1, As the restructuring of the Sal. Oppenheim Group is an intra-group transaction, the book values of the assets and liabilities will be continued. Following completion of the restructuring, Sal. Oppenheim jr. & Cie. S.C.A. will, therefore, draw up consolidated financial statements as of December 31, 2007 which are continued on the basis of the values of the consolidated financial statements of Sal. Oppenheim jr. & Cie. KGaA as of December 31, The previous parent company of the Group, Sal. Oppenheim jr. & Cie. KGaA, Cologne, will prepare (partial) consolidated financial statements as of December 31, Sal. Oppenheim Group corresponds in the scope of the consolidated financial statements (i.e. before the Group restructuring) as of 30 June 2007, essentially to the one as of 31 December Besides Sal. Oppenheim jr. & Cie. KGaA, the Group comprises a further 35 domestic and 38 foreign subsidiaries in which the Bank directly or indirectly holds a majority of capital and voting rights, or over which the Bank has a significant influence. In addition to these subsidiaries six special purpose entities and institutional funds were included in the consolidated financial statements in the financial year in accordance with IAS 27 in conjunction with SIC 12. Furthermore, 11 companies were accounted for using the equity method. consolidated financial statements. These companies account for less than 2% of the Group's total assets. With effect as of June 30, 2007, the Bank Sal. Oppenheim jr. & Cie. (Luxemburg) S.A. has taken over a 50% stake held by the US financial service provider Prudential Financial, Inc. of the United States (PFI) in the joint venture Oppenheim Pramerica. In July 2007 Sal. Oppenheim jr. & Cie. KGaA thus became the sole owner of the investment fund business of Oppenheim Pramerica Fonds Trust GmbH and Oppenheim Pramerica Asset Management S.à. r.l. The names of these two companies have meanwhile been changed to Oppenheim Fonds Trust GmbH and Oppenheim Asset Management Services S.à. r.l., respectively. Sal. Oppenheim and PFI decided to continue their close partnership. Since the restructuring of the Group in July 2007, as part of which Sal. Oppenheim International S.A., Luxemburg, was merged into the new parent company of the Group, the shares in the two companies are held by Sal. Oppenheim jr. & Cie. S.C.A. 3. Amendments to 'E. Tables and Certificate Terms and Conditions' The following wording on pages 71 to 72: Section 9 [Exercising the Certificates[, ]][Termination by the Certificate Holder] [(1) Exercising the Certificates (also referred to as 'Redemption') presupposes that [by [10.00 a.m.][ ] [(Frankfurt / Main local time)]] [on the Exercise Date] [on the th Banking Day prior to the Valuation Date [n]][ ] at the latest, the Certificate Holder (a) has submitted a written declaration with a legally binding signature (the 'Exercise Notice') containing all information required in paragraph (2) below, to Xchanging Transaction Bank GmbH, Wilhelm-Fay-Strasse 31-37, Haus 1, Ground Floor (Corporate Actions), Frankfurt / Main, Fax: +49 (0) 69/ , the 'Exercise Agent') and (b) has transferred the relevant co-ownership interests in the global bearer certificate to the Issuer s account no. [4135][ ] at the specified Depository Agent. (2) The Exercise Notice must include: 125 subsidiaries and associated companies that have no significant impact on the presentation of the Group's net assets, financial position and results of operation were not included in the scope of (a) the name and address of the exercising party, 6

7 (b) the [ISIN][WKN], the description and number of Certificates for which the Certificate Right is to be exercised, and (c) details [of an account [in EUR with a credit institution in the Federal Republic of Germany] to which the Redemption Amount is to be transferred] [for physical delivery: [and] of a securities account [with ]]. (3) The Exercise Notice is binding and irrevocable. It shall become effective on the day on which the requirements set out in paragraph (1) above have been fulfilled by [10.00 a.m.][ ] [(Frankfurt / Main local time)] [(the 'Exercise Date')]. [The Certificates can only be exercised in each case for [one][ ] Certificate[s] or an integral multiple thereof. In the event that the number of Certificates specified in the Exercise Notice differs from the number of co-ownership interests transferred within the period specified, only the smaller number of Certificates is considered to have been exercised. Any remaining co-ownership interests will be transferred back to the exercising party at the latter s own cost and risk.] (4) Upon exercise of Certificate Rights within the meaning of paragraph (1),a declaration is deemed to have been automatically made that the beneficial owner of the Certificates is not a US Person or a person within the United States, and that these Certificates are not in the beneficial ownership of a US Person or a person within the United States. In this context, the terms 'United States' and 'US Person' have the meaning specified in section 14. (5) The Issuer is under no obligation to verify the authorization of persons redeeming Certificates.] [A right to termination of the Certificates by the Certificate Holders is excluded.] [other provisions governing termination by the Certificate Holder::.] [The Certificate Holders are entitled to waive the automatic exercise of the Certificates as set out in Section 2 (2) of these Terms and Conditions pursuant to Article b) 2. of the 'Rules of The Markets Organised and Managed by Borsa Italiana S.p.A.'. The Certificate Holders shall have the right to notify the Paying Agent by fax of their intention to waive the exercise, using the form attached as 'Appendix A' to these Terms and Conditions. The Certificate Holder shall send such form (i) for Certificates on an Underlying consisting of Italian shares traded on regulated markets organised and managed by Borsa Italiana S.p.A. or of indexes managed by Borsa Italiana S.p.A.(the 'Italian Underlying'), by a.m. (Milan time) on the [Exercise][Valuation] Date (ii) for Certificates on an underlying other than an Italian Underlying, by 3.00 p.m. (Milan time) on the Banking Day in [ ] following the [Exercise] [Valuation Date] or, in case of Market Disruption Events, on the Bank Day in [ ] immediately following the Market Disruption Event. The declaration of a waiver of exercise by a Certificate Holder will be irrevocable. In such case the Certificates will not be redeemed.] Shall be replaced by the following wording: Section 9 [Exercising the Certificates[, ]][Termination by the Certificate Holder] [(1) Exercising the Certificates (also referred to as 'Redemption') presupposes that [by [10.00 a.m.][ ] [(Frankfurt / Main local time)]] [on the Exercise Date] [on the th Banking Day prior to the Valuation Date [n]][ ] at the latest, the Certificate Holder (a) has submitted a written declaration with a legally binding signature (the 'Exercise Notice') containing all information required in paragraph (2) below, to Xchanging Transaction Bank GmbH, Wilhelm-Fay-Strasse 31-37, Haus 1, Ground Floor (Corporate Actions), Frankfurt / Main, Fax: +49 (0) 69/ , the 'Exercise Agent') and (b) has transferred the relevant co-ownership interests in the global bearer certificate to the Issuer s account no. [4135][ ] at the specified Depository Agent. (2) The Exercise Notice must include: (a) the name and address of the exercising party, (b) the [ISIN][WKN], the description and number of Certificates for which the Certificate Right is to be exercised, and (c) details [of an account [in EUR with a credit institution in the Federal Republic of Germany] to which the Redemption Amount is to be transferred] [for physical delivery: [and] of a securities account [with ]]. (3) The Exercise Notice is binding and irrevocable. It shall become effective on the day on which the requirements set out in paragraph (1) above have been fulfilled by [10.00 a.m.][ ] [(Frankfurt / Main local time)] [(the 'Exercise Date')]. [The Certificates can only be exercised 7

8 in each case for [one][ ] Certificate[s] or an integral multiple thereof. In the event that the number of Certificates specified in the Exercise Notice differs from the number of co-ownership interests transferred within the period specified, only the smaller number of Certificates is considered to have been exercised. Any remaining co-ownership interests will be transferred back to the exercising party at the latter s own cost and risk.] (4) Upon exercise of Certificate Rights within the meaning of paragraph (1),a declaration is deemed to have been automatically made that the beneficial owner of the Certificates is not a US Person or a person within the United States, and that these Certificates are not in the beneficial ownership of a US Person or a person within the United States. In this context, the terms 'United States' and 'US Person' have the meaning specified in section 14. (5) The Issuer is under no obligation to verify the authorization of persons redeeming Certificates.] [A right to termination of the Certificates by the Certificate Holders is excluded.] [other provisions governing termination by the Certificate Holder::.] [The Certificate Holders are entitled to waive the automatic exercise of the Certificates as set out in Section 2 (2) of these Terms and Conditions pursuant to the 'Rules of The Markets Organised and Managed by Borsa Italiana S.p.A.'. The Certificate Holders shall have the right to notify the Paying Agent by fax of their intention to waive the exercise, using the form attached as 'Appendix A' to these Terms and Conditions. The Certificate Holder shall send such form (i) for Certificates on an Underlying consisting of [Italian shares traded on regulated markets organised and managed by Borsa Italiana S.p.A.][indexes managed by Borsa Italiana S.p.A.](the 'Italian Underlying'), by a.m. (Milan time) on the [Exercise Date][Valuation Date][Banking Day following the Valuation Date (the 'Maturity Date of the Option')] (ii) for Certificates on an underlying other than an Italian Underlying, by 3.00 p.m. (Milan time) on the Banking Day following the [Exercise] [Valuation Date] [Maturity Date of the Option ]. The declaration of a waiver of exercise by a Certificate Holder will be irrevocable. In such case the Certificates will not be redeemed.] 3. Amendments to 'F. Taxation' The following wording on pages 77 to Taxation in the Federal Republic of Germany The following is a general discussion of certain German tax consequences of the acquisition and ownership of certificates. It does not purport to be a comprehensive description of all tax considerations that may be relevant to a decision to purchase certificates offered. The information is based on the tax law in Germany applicable at the date of approval of this Base Prospectus, which is subject to change. The information relates solely to the relevant regulations governing the taxation of income from capital assets (section 20 (1) no. 7 and section 20 (2) no. 4 of the German Income Tax Act (Einkommensteuergesetz - EStG)) and from private sales transactions (section 23 (1) no. 2 and 4 EStG) for private investors. It does not examine all aspects of the taxation of such income. This information does not look at the individual tax circumstances of individual investors. It is imperative that a tax advisor be consulted in individual cases. Since there are currently no supreme court rulings or explicit ordinances by the tax authorities on innovative investment instruments such as the Certificates under this Base Prospectus it cannot be ruled out that the tax authorities will deem different tax implications to be appropriate. Taxation of Certificates held as private assets in the Federal Republic of Germany In accordance with section 20 (1) no. 7 EStG, all types of income from other financial claims (Erträge aus sonstigen Kapitalforderungen) are classed as income from capital assets (Einkünfte aus Kapitalvermögen) if the repayment of the capital or compensation for the right to use the capital has been agreed or granted. The formulation 'or has been granted' is designed to cover cases in which the repayment of the capital provided or the payment of compensation is guaranteed due to the structure of the investment, without the need for an express or implied agreement. No compensation or capital repayment within the meaning of the last sentence is granted under these Certificates. Unfavourable circumstances can lead to substantial losses. In accordance with the Certificate Terms and Conditions, a total loss of the capital invested is possible. [As a result, the regulations governing savings taxation are unlikely to apply here, as the instrument only allows for the generation of uncertain price differences.] According to a circular by the German Federal Ministry of Finance dated 27 November 2001 (IVC 3 Pg / 265/1), too, certificates are generally to be regarded as 'speculative 8

9 securities'. From the Issuer s point of view, other regulations can only apply if the repayment of the capital provided or the payment of compensation is guaranteed due to the structure of the respective Certificate. If such a guarantee exists, it cannot be ruled out that any gains from disposal [or exercise ]will be subject to income tax as income from capital assets in accordance with section 20 (2) no. 4 EStG (financial innovations). In such cases, any gains from disposal or exercise amounting to the difference between the proceeds from the disposal or exercise and the issue or purchase price are subject to personal income tax for private investors, as well as the solidarity charge on the income tax assessed, even outside of the oneyear speculation period. In case of sale or exercise, the sales charge ('Front-end Load') paid at the time of issue can be offset against the gains from disposal or exercise that are subject to taxation in accordance with section 20 (2) no. 4 sentence 2 of the EStG, thus reducing the tax liability. Losses stemming from the disposal or exercise of certificates with (partial) capital protection can, within the framework of the statutory provisions, be offset, as negative income from capital assets, against positive capital income or (where such income does not exist) against positive income from other types of income. In particular, investors should note the provisions on limiting the loss carryback or with respect to the minimum taxation for loss carryforwards. From the Issuer s point of view, the taxation of income from capital assets (section 20 (1) no. 7 and section 20 (2) no. 4 EStG) does not apply if a partial or total loss of the capital invested is possible. In such cases, taxation may be based on section 23 (1) no. 2 and no. 4 EStG (private sales transactions). In accordance with section 23 (1) no. 2 EStG, the sale of a Certificate within one year of purchase is subject to taxation. In accordance with section 23 (1) no. 4 EStG, forward transactions, by means of which the individual that is liable to tax receives differential compensation or a cash amount determined by the value of a variable reference asset, are also subject to taxation insofar as the period between purchase and termination of the right does not exceed one year. As a result, section 23 (1) no. 4 EStG should apply to certificates, provided that the period of time between purchase and expiry of the right does not exceed one year. The maximum income tax rate currently stands at 45%; on a taxable income of up to EUR 250,000, or EUR 500,000 in the case of a joint assessment of a married couple in the calendar year concerned, the maximum tax rate is 42%. In addition, a solidarity surcharge of 5.5% is levied on the income tax liability in question. Losses stemming from the disposal or exercise of certificates can, within the framework of the statutory provisions, be offset, as negative other income, against positive other income or (where such income does not exist) against positive income from other types of income. In particular, investors should note the provisions on limiting the loss carryback or with respect to the minimum taxation for loss carryforwards. Taxation on Certificates held as business assets in the Federal Republic of Germany If the Certificate is held as business assets, any income or gains (or losses) are to be included for income, corporation or trade tax purposes. If one follows the controversial opinion that certificates are forward transactions within the meaning of section 15 (4) sentences 3 to 5 EStG, losses can only be offset against gains from forward transactions to a limited extent. The half-income procedure/tax exemption does not apply to certificates corporate tax reform General information The 2008 Corporate Tax Reform Act (Unternehmensteuerreformgesetz) dated 14 August 2007, leads, among other things, to fundamental changes to the taxation of capital income in private assets and private sale transactions within the meaning of section 23 of the German Income Tax Act (EStG). These changes shall apply as of 1 January 2009 subject to certain transitional regulations for existing cases. In the opinion of the Issuer, the tax-related consequences of an investment in certificates, based on the 2008 Corporate Tax Reform Act, are as follows: Taxation of certificates held as private assets In the case of private investors, gains from the sale or redemption of the certificates (hereinafter referred to collectively as 'capital gains') are to be considered as capital income within the meaning of section 20 (2) sentence 1 no. 7 EStG in the version of the Corporate Tax Reform Act, and are subject to income tax at a (generally) uniform tax rate of 25 %, plus a solidarity surcharge of 5.5 %. Nevertheless, the Act sets out transitional provisions for certain existing cases, depending on the point in time at which the certificates were purchased. In accordance with these regulations, the 9

10 final withholding tax (Abgeltungssteuer) shall apply, for the first time, without limitation to certificates purchased on or after 1 January Certificates known as 'full-risk certificates (Vollrisiko-Zertifikate)' (i.e. certificates that do not guarantee either capital repayment or regular considerations for the use of capital), which were purchased before 1 January 2009 and after 14 March 2007, are subject to final withholding tax if the certificate holder receives the capital gains after 30 June 2009 and the period of time between the purchase and sale/redemption of the certificates exceeds one year. If, however, the period of time between the purchase and sale/redemption of fullrisk certificates acquired before 1 January 2009 and after 14 March 2007 equals exactly one year or less, the current legal situation shall continue to apply irrespective of the point in time at which the certificate holder receives the capital gains, meaning that these capital gains are to be taxed as a private sale transaction in line at the investor's individual rate of tax. No transitional period shall apply for certificates other than full-risk certificates, known as financial innovation instruments (Finanzinnovationen), which are already subject to taxation on disposal irrespective of the holding period. Capital gains resulting from such financial innovation instruments shall be subject to final withholding tax from 1 January 2009 irrespective of the holding period. The Corporate Tax Reform Act will also mean fundamental changes to the options available for offsetting losses. Losses from private sale transactions (or, in accordance with the new terminology 'losses from capital assets') can be offset against income from capital assets within the meaning of section 20 EStG in the version of the Corporate Tax Reform Act as of 1 January 2009, i.e. against interest income and dividends, too. By contrast, investors will no longer be able to offset income from capital assets, i.e. in particular interest payments and dividends, against other types of income from the 2009 assessment period onwards. One exception in this case relates to losses from the disposal of equities. These can only be offset against gains from equity disposals. This means that losses from the disposal of equities cannot be offset against other capital income within the meaning of section 20 EStG, including gains and income from certificates. Losses from capital assets may not be carried back, but can only be carried forward to subsequent years. Previous losses from private sale transactions within the meaning of section 23 EStG (current version) that arose in the period up to the end of 2008 can be offset against positive income from capital assets within the meaning of section 20 (2) EStG in the version of the Corporate Tax Reform Act, i.e. not against dividends and other income within the meaning of section 20 (1) EStG, for a transitional period that will run until 31 December Withholding at source If the certificates are held in custody at, or managed by a domestic credit institution, a domestic financial services institutions (including a domestic branch of a foreign institution), a domestic securities trading company or a domestic securities trading bank, capital yield tax will be withheld by the relevant institution/company at a rate of 25 % (plus 5.5 % solidarity surcharge) in the event of redemption or sale. If the certificates have been held in custody at, or managed by the relevant institution/company since the time of acquisition, the tax withheld shall correspond to the difference between the sale or redemption amount following deductions for expenses that are directly related to the sale transaction and the acquisition costs for the certificates. If the custodian has changed since the acquisition of the certificates and no evidence can be furnished on the acquisition costs, capital yield tax shall be levied at a rate of 25 % (plus solidarity surcharge) on 30 % of the income from the sale or redemption of the certificates. In accordance with German tax law, the issuer insofar as it does not qualify as paying agent is not obliged to levy withholding tax when the certificates are redeemed. Possible opt-out The amount of tax withheld shall, in principle, have a discharge effect, provided that the certificates are held as private assets. Nevertheless, the taxpayer can request that the capital income be included, as a whole, in the assessment procedure and subjected to his or her personal income tax rate, if this results in a lower income tax burden. The taxpayer must disclose any capital income that has not already been subject to capital yield tax in his or her income tax return. Taxation of certificates held as business assets Insofar as certificates are held as business assets, the amount of tax withheld is offset against the investor's personal income or corporation tax liability (and the solidarity surcharge), i.e. the tax withheld does not have a discharge effect. Any remaining balance shall be refunded.] 10

11 Shall be replaced by the following wording: 2. Taxation in the Federal Republic of Germany The information on taxation set out below is not an exhaustive presentation of the information that may be required in order to make a personal decision to purchase the certificates offered. Unless explicitly stated otherwise, the information is based on applicable tax regulations in Germany as of the date this Base Prospectus was approved. It is recommended that investors seek advice from a professional tax advisor. [Taxation of income of German natural persons, who hold the certificates as private assets Income from purely speculative certificates, which was earned by natural persons with residence or ordinary residence in the Federal Republic of Germany, is exclusively subject to taxation on private sales transactions (section 23 of the German Income Tax Act EStG) and, in any case, is no longer taxable upon expiration of the one-year holding period. Certificates are only deemed to be purely speculative in nature when both repayment of principal and payment of a consideration for the use of capital are uncertain. If the certificates issued under this Base Prospectus guarantee a minimum repayment in the amount of a portion of the principal, the tax authorities do not consider the certificate in its entirety to be speculative (for example, letter from the Federal Ministry of Finance dated 16 March 1999, IV C 1 S /99). Contrary to that, the Federal Fiscal Court decided in its judgment of 4 December 2007 (Ref. No. VIII R 53/05) that in the event the certificate has a partial capital guarantee, it is to be treated as partially speculative. In the case the Court s decision was based on, repayment in the amount of 10% of the nominal value was guaranteed with the result that 90% of the net income resulting to the taxpayer was subject to the regime of section 23 EStG and was not taxed due to expiration of the one-year holding period. Whether and to what extent the tax authorities adhere to the judgment cannot yet be determined so shortly after publication, as thus far neither an official statement has been made on the matter nor has the judgment been published in the Federal Tax Gazette. If certificates are not speculative, as a general rule, income earned is subject to taxation as investment income (section 20 (1) no. 7, (2) nos. 2-4 EStG). Issue yield is, as a general rule, subject to taxation as investment income (section 20 (2) sentence 1 no. 4 sentence 1 EStG). Issue yield is the yield which can be achieved with certainty by redemption of the paper or maturity of a debt claim and is promised by the issuer when the investment is issued. Taxation according to issue yield avoids taxation of capital appreciation realised on the certificate. Whether or not a certificate has issue yield is determined by the structure of the individual certificate; the certificates to be issued under this Base Prospectus can be judged differently in this regard. If certificates have no issue yield or the taxpayer does not provide evidence, the market yield generally applies, that is, the difference between the purchase price and the proceeds from the sale, assignment or redemption (section 20 (2) sentence 2 and sentence 4 EStG). In taxation according to market yield, capital appreciation (or depreciation) realised on the certificate is subject to taxation. The Federal Fiscal Court has decided that in derogation of the above-rendered wording of the law, investments will not be taxed on market yield in the case of no issue yield if after the fact the consideration for the use of capital and the realisation of the capital appreciation can clearly be delimited. (Federal Fiscal Court, 13 December 2006, VIII R 6/05: down rating bonds; Federal Fiscal Court, 20 November 2006, VIII R 97/02: reverse floaters). The tax authorities concurred with the Federal Fiscal Court judicial decision with the proviso that it should only be applied for assessment (with the exception of reverse floaters and down rating bonds) but not for purposes of withholding tax (Federal Ministry of Finance, 18 July 2007). Moreover, the Federal Ministry of Finance expressly points out that numerous floater types did not enable delimitation of consideration for the use of capital and capital appreciation and thus should be considered on a case by case basis as to whether taxation should occur according to market yield. The Federal Fiscal Court in its judgment of 11 July 2006 decided against the opinion of the tax authorities that in the case of the existence of an issue yield, the taxpayer has no right to opt for taxation on market yield. The tax authorities generally concurred with this decision; however, for administrative/financial reasons, they objected to a taxpayer s choice of market yield only if there was a reason in an individual case, i.e. in the case of significant tax impact or declaration of a loss (Federal Ministry of Finance, 18 July 2007, IV B 8 S 2252/0). After deducting the actual income-related expenses (Werbungskosten) or the blanket allowance for these expenses ( or for spouses filing for joint assessment), the savings allowance (Sparerfreibetrag) must be deducted ( or 1, for spouses filing jointly). Income is taxed at the personal income tax rate, which is 45% on an 11

12 income of more than 250, (or more than 500, for spouses filing jointly). Moreover, there is a solidarity surcharge of 5.5% of the income tax determined (festgesetzte Einkommensteuer). Realised losses can be offset under the general provisions, particularly by other positive income or deducted under loss carryback or forward, subject to a deduction ceiling (section 10 d (1), (2) EStG). The investment income from not purely speculative certificates issued under this Base Prospectus is, as a general rule, subject to the withholding tax (Zinsabschlag). Withholding tax is levied, as a general rule, at a rate of 30% of the total investment income before any deduction (section 43 a (1) no. 3, (2) sentence 1 EStG). This notwithstanding, the withholding tax in the cases of section 20 (2) sentence 1 no. 4 EStG, that is, for redemption, sale or assignment of certificates issued under this Base Prospectus, is 30 % of market yield, if the certificates were purchased or sold through, and have since been held in custody or managed by, the paying agent for the investment income (section 43 a (2) sentence 2 EStG). If the paying agent did not purchase or sell the certificates nor has not held them in custody or managed them since then that is, mainly in the case of a change in the custodian bank a flat withholding tax rate of 30% is applied to the proceeds from the sale or redemption (section 43 a (2) sentence 3 EStG). In addition, a solidarity surcharge of 5.5 % is levied on the withholding tax amount. The amount withheld (withholding tax plus solidarity surcharge) is allowable against the income tax or solidarity surcharge (section 36 (2) no. 2 EStG, section 1 (2) of the Solidarity Surcharge Act SolZG). In the case of a surplus in favour of the taxpayer, the taxpayer is entitled to a payout in the corresponding amount (section 36 (4) sentence 2 EStG, section 1 (2) SolZG). Taxation of income earned on certificates held as business assets in Germany Income from certificates which are held as business assets in the Federal Republic of Germany are subject to German income taxation, regardless of whether or not they are of a purely speculative nature. The realised capital appreciation on the certificates is also subject to taxation, without exception. Blanket allowances for income-related expenses or savings income may not be applied; there is exclusively a business expense deduction (Betriebsausgaben). Losses can be offset under the general provisions and deducted subject to a deduction ceiling under the loss carryback or carryforward. Income earned on certificates held as business assets is subject to income tax or corporation tax as well as the solidarity surcharge and trade tax. Income on certificates held as business assets is also subject to withholding tax and solidarity surcharge. As regards the amount of the deduction and the tax credit, the above comments on certificates held as private assets apply accordingly. Taxation of income of non-residents Income from certificates issued under this Base Prospectus, which are held by a non-resident, as a general rule, is not subject to German taxation, particularly not to withholding tax, if the certificates are not attributable to a permanent establishment in Germany (including a permanent representative). Non-residents in the above-stated meaning are those natural persons with residence or ordinary residence outside Germany as well as legal entities which have their registered office and central management and control outside Germany. In accordance with the German Interest Information Regulation (ZIV), German paying agents are obligated to report to the Federal Tax Office in particular the name and address of beneficial owners of interest living in another EU member state as well as the amount, by 31 May of the year subsequent to the year of the receipt of the interest payment (section 8 ZIV). The Federal Tax Office conveys the information received to the responsible authorities of the member state in which the beneficial owner resides (section 9 ZIV). In accordance with the letter of introduction of the Federal Ministry of Finance dated 6 January 2006, interest payment as defined in the ZIV covers in particular investment income within the meaning of section 20 (1) no. 7, (2) no. 2 and no. 4 of the EStG and thus, as a general rule, all income from not purely speculative certificates. The above-described procedure applies beyond the member states of the European Union also to beneficial owners resident in certain other countries, including Switzerland (section 16a ZIV) corporate tax reform With the 2008 corporate tax reform dated 14 August 2007 (BGBl I 1912), a final withholding tax (Abgeltungssteuer) was introduced, to which, as a general rule, certificates that are held as private assets are subject, independent of whether or not they are classified as speculative. This means that the (one-year) holding period that previously applied to purely speculative assets, under which income was not taxed after the holding period expired, has been abolished. The final withholding tax is levied at source and the income tax liability is deemed discharged with this 12

13 deduction. In other words, the investment income tax withheld is the final income tax. The investment income tax will amount to 25 % in the future (without taking any church tax into account). Moreover, a solidarity surcharge of 5.5% of the investment income tax is levied. The assessment base continues to be, as a general rule, the total investment income before any deduction. In cases of selling the certificates as well as redemption, the investment income tax, as a general rule, is based on the difference between the proceeds of the sale less the costs of the sale or the redemption amount, on the one hand, and the purchase costs for which evidence is provided, on the other hand. Thus, realised capital appreciation is also taken into account. If evidence for the purchase costs is not provided or is impossible, the investment income tax is 30 % of the proceeds of the sale or the redemption. Income-related expenses cannot be deducted. The tax is reduced if an exemption order (Freistellungsauftrag) has been given ( or 1, for spouses filing jointly). If, as an exception, no investment income tax is withheld, the income is taxed in the assessment process; this also applies if the taxpayer opts for assessment. In such cases, investment income is subject to what is called the special income tax rate of 25% (without taking any church tax into account), plus the solidarity surcharge. The actual income-related expenses may not be deducted. Instead, a blanket allowance for savings income of (or 1, for spouses filing jointly) is deducted. This also applies if the taxpayer exercises his or her option for taxation at the individual tax rate. Losses in the investment income category may no longer be offset by other types of income; they may also no longer be deducted under section 10 d EStG. Losses only reduce partly under application of further restrictions the investment income earned in subsequent assessment periods. The new law applies to payments received after 31 December 2008 (also as a result of sales or redemptions). In derogation to this, the new law shall not be applied to sales and redemptions of certificates, which, according to existing law, generate interest income within the meaning of section 20 (1) no. 7 EStG, former version, without being financial innovations within the meaning of section 20 (2) sentence 1 no. 4 EStG, former version, provided the certificates were purchased prior to 1 January For sales and redemptions of purely speculative investments which, according to existing law, do not generate interest income within the meaning of section 20 (1) no. 7 EStG, former version, the new law is, as a general rule, applicable, if the certificate (i) was purchased after 31 December 2008 or (ii) was purchased between 14 March 2007 and 1 January 2009; the income was received after 30 June 2009 and the period between the purchase and sale was more than one year. Which of the transitional provisions the certificate is fully or partially subject to is determined by the structure of the individual certificate; the certificates to be issued under this Base Prospectus can be judged differently in this regard. If certificates are held as German business assets, they are not subject to any final withholding tax in the future, that is, the investment income tax will not have as before any definitive discharging effect. Income will be taxed as before through inclusion in assessment by crediting the investment income tax withheld. The applicable limits for deduction of income-related expenses and losses described above for investment income do not apply, that is, there is still a business expense deduction under general provisions, as there was before; the same applies to offsetting and deducting losses, subject to a deduction ceiling. The special income tax rate for investment income in the amount of 25% does not apply. For natural persons on the other hand, the income is subject to the personal income tax rate and the solidarity surcharge as well as, if applicable, trade tax (that is, for trade or business income), as before.] [Insert updated information on taxation: ] 4. Further Amendments Following page 85 will be inserted: I. Annex 13