Stability Note Underlying: Euro Stoxx 50 Coupon 2.85% - Quanto CHF Maturity: 10 February 2017

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1 IMPLIFIED PROPECTU tability Note Underlying: Euro toxx 50 Coupon 2.85% - Quanto CHF Maturity: 10 February 2017 This product is not a collective investment within the meaning of the wiss Federal Investment Fund Act and is not subject to the authorization or supervision of the wiss Financial Market upervisory Authority (FINMA). Investors are also exposed to the risk of insolvency of the issuer. ec. No. / IIN / ymbol Issuer 1. PRODUCT DECRIPTION Issue details / IIN CH / no listing is planned Banque Cantonale Vaudoise, Lausanne, witzerland (&P AA/stable) Lead manager / Calculation Banque Cantonale Vaudoise, Lausanne, witzerland agent / Paying agent Prudential supervision BCV, Lausanne, witzerland is subject to prudential supervision by FINMA Nominal amount (N) CHF 1,000 Issue size 1,200 (includes an increase and reopening clause) Minimum investment CHF 1,000 Base currency CHF Issue price: 100% Distribution fees No distribution fees Initial fixing date 03 February 2016 (official closing price of the underlying asset(s) on the reference stock exchange) Payment date 10 February 2016 Final fixing date 03 February 2017 (official closing price of the underlying asset(s) on the reference stock exchange) Maturity date 10 February 2017 Definition This product is based on the stability of the underlying index and a specific event known as a stability disruption event. Market indexes are designed to be well-diversified and less volatile than individual stocks. A major single-day drop in performance is an extremely rare event which would be equivalent to a stock market crash. This Note determines the stability level the index must respect to avoid a stability disruption event. As compensation for the risk borne by the investor, the product pays an annual coupon which is prorated if a stability disruption event occurs. To determine whether a stability disruption event has taken place, the difference between the index closing prices on two consecutive trading days is measured and compared to the fixed stability level. If the index performance falls below the stability level, a stability disruption event has occurred and the product is automatically redeemed. This may result in a significant or total loss of capital. For example, if the stability level is fixed at -11%, and performance drops to -15%, a stability disruption event will have occurred. Each percentage point drop below the stability level corresponds to a loss of 10% of the nominal. In this example, the difference is 4 percentage points, or 40% of the nominal. The product would therefore pay out 600 francs plus the interest accrued on the coupon. In the extreme case of a single-day loss of 21%, the entire capital would be lost and only the interest accrued on the coupon would be paid out

2 cenario For examples of possible scenarios, please see Profit and Loss Expectations" on page 4. PA category Yield enhancement products Various yield enhancement products (1299). ee the wiss Derivative Map, available at Underlying asset Name Bloomberg symbol ec. No. / IIN Index sponsor Initial fixing (i,0) Euro toxx 50 index X5E index / EU TOXX Limited Changes that are unplanned or not agreed Terms and conditions Information about any changes that are unplanned or not agreed contractually (e.g.,capital transactions that affect the underlying assets such as splits, par-value reimbursements or conversions) shall be provided at To receive alerts about these changes, you can sign up on the website and add this product to your favorites. Coupon (C) The full coupon will be paid out only if the Note is not redeemed early (i.e., before the final fixing date). If the Note is redeemed early, please see "Early redemption" below. 2.85% (2.85% p.a.) The coupon will be paid on 10 February 2017 (360/360 days), in two tranches: 0.00% (0.00% p.a.) in the form of interest 2.85% (2.85% p.a.) in the form of a capital gain (option premium). tability Level (L) -11% tability disruption event Index closing value Reference exchanges A stability disruption event takes place if index performance between two consecutive trading days satisfies the following equation: t -t-1 < L t-1 where t = The closing price of the underlying index at date t t-1 = The closing price of the underlying index at date t-1 The index sponsor is responsible for publishing the index closing value according to a calender available on the following website: If the index sponsor is not in a position to do so, there will be no closing price for the day in question and performance will be calculated based on the closing price of the next day on which there is no market disruption event. Each of the principal exchanges where the stocks that comprise the index are traded. Early redemption If a stability disruption event occurs between the initial and final fixing dates, the product is redeemed immediately and the total amount redeemed in cash (including accrued interest) is calculated using the following formula: Early redemption date Payout at maturity where 1, % 10 Max C = Coupon of bond as a percentage 0;Min 10%;89% - t t - 1 Nbd + C x 360 Nbd = Number of days between the payment date (included) and the date of the stability disruption event (t) (excluded), calculated on a 30/360 basis. The early redemption date is 3 working days after the date of the stability disruption event. If early redemption does not occur before the final fixing date, the investor receives 100% of the nominal amount in CHF. 2/5

3 econdary market, Listing and Clearing Listing, market segment econdary market Clearing Form of notes No listing on the IX wiss Exchange is planned. BCV will operate a daily secondary market between 9:15am and 5:15pm (wiss time, CET). The price on the secondary market is dirty, i.e., accrued interest is included. Prices may be consulted on Reuters BCVINDEX <BCV DERIVATIVE>, IX Telekurs , BCV. IX I A The security takes the form of a book-entry security registered in the IX I A clearing system. It is uncertificated and individual securities will not be printed or delivered. Taxation Tax disclaimer witzerland Negative Interest EU taxation of savings This tax information provides only a general overview of possible tax consequences related to this product on its issue date. Laws and tax practices can change with retroactive effect. Investors should always consult with their tax advisor for a specific evaluation of their profile before carrying out any transaction. This product is considered a transparent product whose yield consists predominantly of a onetime interest payment (IUP intérêt unique predominant). The coupon s interest component is subject to withholding tax and constitutes taxable income for individuals with tax domicile in witzerland who hold these investments as part of their private assets. Any coupon payment or gain resulting from the option component represents an untaxed capital gain for these individuals. econdary market transactions are not subject to wiss federal stamp duty. If, due to unusual market conditions, the interest component is negative, the interest income shall be deemed to be zero and no expense shall be incurred. The negative interest therefore does not constitute either debit interest, as defined in Article 33 of the wiss Federal Direct Taxation Act (LIFD), or any other expense and is thus not tax deductible. It may not be offset by credit interest when calculating taxable income or any withholding tax. For wiss paying agents, this product is not subject to EU taxation of savings (TK7). Legal information Applicable law and jurisdiction implified prospectus Lausanne, wiss law. This document is not an issue prospectus within the meaning of Articles 652a and 1156 of the wiss Code of Obligations. This document serves as a simplified prospectus pursuant to the provisions of Article 5(2) of the Federal Investment Funds Act and can be obtained free of charge from BCV at the contact addresses below. 2. PROFIT AND LO EXPECTATION Market forecast cenario 1 (profit) This product is intended for investors who consider that the index is unlikely to fall below the fixed stability level in a single day. 3/5

4 cenario 2 (loss) cenario 3 (maximum loss) Risk tolerance 3. IGNIFICANT RIK INCURRED BY THE INVETOR The value of this product at maturity may be lower than the purchase price. The risks inherent in certain investments, particularly derivatives, may not be suitable for all investors. Before conducting any transaction, investors should evaluate their risk profile and seek information on inherent risks, and are urged to read the wissbanking brochure "pecial Risks in ecurities Trading" (available at BCV offices or online at: Investors are exposed to the risk of insolvency of the issuer, which could lead to the loss of all or part of the invested capital. Whether an investment product retains its value does not depend solely on the performance of the underlying asset(s) but also on the solvency of the issuer, which may change during the product s lifetime. The rating stated in this document for the issuer was valid at the time of issuance and may change during the product s lifetime. Exchange-rate risk Market risk Investors whose base currency is not the settlement currency for the product should be aware of exchange-rate risk. Investors are exposed to the risks of adjustments in the underlying asset, non-convertibility, extraordinary market situations and emergencies, such as suspension of listing of the underlying asset, trading restrictions, and any other measures that materially restrict the tradability of the underlying asset. Investors are subject to the legal and contractual obligations of the markets on which the underlying asset is traded and to the legal and contractual obligations provided by or governing the issuer. uch market events could affect the dates and other terms and conditions in this document. 4/5

5 econdary market/market liquidity In the event that a regulated secondary market exists, the issuer endeavors, under normal market conditions, to provide bid and ask prices for the product on a regular basis. However, the issuer makes no firm commitment to provide liquidity by means of bid and ask prices and is under no legal obligation with respect to the provision or determination of these prices. Under special market conditions, if the issuer is unable to enter into hedging transactions, or if such transactions prove difficult, the spread between bid and ask prices may be temporarily expanded in order to limit the economic risks for the issuer. Important information General information Past performance does not guarantee present or future performance. This document is for information purposes only; unless otherwise stated, it is not financial analysis within the meaning of the wiss Bankers Association's "Directives on the Independence of Financial Research," nor is it an offer, invitation or personalized recommendation to buy or sell specific products. Unless otherwise stated, the issuer is under no obligation to acquire the underlying asset(s). Any changes to the initial terms and conditions of the structured product that are unplanned or not agreed contractually will be published on the website ubscription period During the subscription period, the terms and conditions are for information purposes only and may be changed; the issuer is under no obligation to issue this product. Conflict of interest In addition to distribution fees, BCV or an entity within BCV Group may receive from third parties one-time or recurrent compensation relative to this issuance or product. The contents of this document may have been used for transactions by BCV Group prior to their publication. BCV Group may acquire, hold and/or dispose of interests or positions in the components of this product. ales restrictions Distribution of this document and/or the sale of this product are subject to restrictions (e.g., UA, U persons, UK, EU, Guernsey) and are only authorized in accordance with applicable law. Euro toxx Index disclaimer TOXX will not have any liability in connection with this product on Euro TOXX 50. pecifically, TOXX does not make any warranty, express or implied and disclaim any warranty about: 1) the results to be obtained by the product on Euro TOXX 50, the owner of the product on Euro TOXX 50 or any other person in connection with the use of the Euro TOXX 50 and the data included in the Euro TOXX 50 ; the accuracy or completeness of the Euro TOXX 50 and its data; the merchantability and the fitness for a particular purpose or use of the Euro TOXX 50 and its data. TOXX will have no liability for any errors, omissions or interruptions in the Euro TOXX 50 or its data. Under no circumstances will TOXX or be liable for any lost profits or indirect, punitive, special or consequential damages or losses, even if TOXX knows that they might occur. The licensing agreement between the Banque Cantonale Vaudoise and TOXX is solely for their benefit and not for the benefit of owners of the product on Euro TOXX 50 or any other third parties. Publication date 04 February 2016 Contact information ales team tructured products sales team / BCV Asset Management & Trading Division Phone Please note that phone calls to this number may be recorded. In the event that you call us, we shall assume that you have no objections to this procedure. Fax Website/ / structures@bcv.ch Mailing address BCV / / CP 300 / 1001 Lausanne / witzerland 5/5