EFTA Document EFTA01393169

The following language is inserted immediately fol- lowing the last paragraph on page 22 of the Booklet. The following is a description of certain special fea- tures of binary stock options: As in the case of other stock options, the exercise price of a binary stock option is ordinarily slated as a price per share of the underlying security. Premium val- ues may be stated in an amount that must be multiplied by a multiplier to obtain the premium price per option contract. The listing exchange specifies the method for deter- mining the exercise settlement value of the underlying stock for a binary stock option. This method may be based on a volume weighted average price for a speci- fied time period preceding expiration, such as the last trading day before expiration. The exercise settlement value for a stock underlying a binary option is the value of the stock as reported by the reporting authority desig- nated by the listing options market for that purpose. Unless OCC directs otherwise, the value as initially reported by the reporting authority is conclusively pre- sumed to be accurate and deemed to be final for the purpose of determining whether the option is automati- cally exercised and returns a cash settlement amount. This is true even if the value is subsequently revised or determined to have been inaccurate. Adjustments In the terms of binary stock options will be made to reflect some, but not ail, of the sane events that result in adjustments to other stock options. and any adjustment that is made will not necessarily be the same as the adjustment made to other options on the same underlying security. As in the case of other stock options. adjustments will not normally be made to the terms of binary stock options to account for ordinary dividends or distributions. The guidelines stated in Part I of the May 2007 Supplement to this booklet for determining when a distribution is considered -ordinary" will generally be applied to distributions with respect to securities underly- ing binary stock options. Adjustments in the terms of binary stock options will ordinarily be made for stock dividends, stock distribu- tions and stock splits. subject to the exception stated above where an adjustment panel determines to treat a stock distribution as ordinary. If an adjustment panel determines to make an adjustment to binary stock options to reflect a stock divi- dend. stock distribution, or stock split, the exercise price of the option will ordinarily be proportionately reduced — regardless of whether a whole number of shares, or other 131 CONFIDENTIAL - PURSUANT TOEFEESCIMOIMS8616 P. 6(e) CONFIDENTIAL SDNY_GM_00244800 EFTA01393169