Filed Pursuant to Rule 424(b)(3)
Registration Statement No. 333-283969
Product Supplement MLN-WF-2 to the Prospectus dated February 26, 2025
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The Toronto-Dominion Bank
Senior Debt Securities, Series E
Senior Debt Securities, Series H
Notes Linked to One or More Indices, Exchange-Traded Funds or Equity Securities
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GENERAL TERMS
The Toronto-Dominion Bank (the “Bank”) may, from time to time, offer and sell notes linked to one or more equity indices (each, an “Index” and collectively, the “Indices”),
exchange-traded funds (each, a “Fund” and collectively, the “Funds”) or common equity securities or American depositary shares (“ADSs”) of a company not affiliated with us (each, an “Underlying Stock” and collectively, the
“Underlying Stocks”), or any combination thereof. The Indices, Funds and Underlying Stocks are sometimes referred to herein collectively as the “Market Measures” and individually as a “Market Measure.” The notes provide for the
repayment of principal at maturity regardless of the performance of the relevant Market Measure(s) (subject to issuer credit risk), as well as the potential for a positive return based on the performance of the relevant Market Measure(s). We refer to
all notes offered under this product supplement as the “notes.”
The notes are senior debt securities of The Toronto-Dominion Bank as referenced in the accompanying prospectus. Any payments due on the notes, including any repayment of principal,
will be subject to credit risk of the Bank. If the Bank were to default on its obligations, you could lose some or all of your investment.
This prospectus supplement, which we refer to as a “product supplement,” describes some of the general terms that may apply to the notes. This product supplement supplements
the disclosure in any pricing supplement that may reference it, the accompanying prospectus and/or any other accompanying supplement(s), as applicable. A separate pricing supplement will describe terms that apply to specific issuances of the notes
and may include changes to the terms specified in this product supplement. If the disclosure in the relevant pricing supplement is inconsistent with the disclosure in this product supplement, any other accompanying prospectus supplement(s) or the
accompanying prospectus (together, the “base offering documents”), the disclosure in the relevant pricing supplement will control.
You should carefully review the specific terms of the notes described in the applicable pricing supplement together with the information contained in this product supplement and the
other base offering documents before investing in the notes.
The notes will not be listed on any securities exchange or automated quotation system.
TD Securities (USA) LLC. and Wells Fargo Securities, LLC (“Wells Fargo Securities”) will be the agents for the distribution of the notes (the “Agents”). The
calculation agent will be the Bank.
The notes have complex features and investing in the notes involves risks not associated with an investment in conventional debt securities. See “Risk Factors”
beginning on page PS-5 of this product supplement. In addition, see the applicable pricing supplement, which will describe more specifically the risks relating to the particular issuance of notes as well as the risks associated with the particular
Market Measure(s) to which your notes are linked.
Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission or other regulatory body has approved or disapproved of
these notes or passed upon the accuracy or adequacy of this product supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
The Bank may use this product supplement in the initial sale of notes. In addition, TD Securities (USA) LLC, Wells Fargo Securities or another of the Bank’s affiliates may use this product supplement
in a market-making transaction in notes after their initial sale. Unless the Bank or its agent informs the purchaser otherwise in the confirmation of sale, this product supplement is being used in
a market-making transaction.
The notes are unsecured and unsubordinated deposit liability obligations of the Bank and will rank on a parity in right of payment with all of the Bank’s deposit liabilities, except for obligations
preferred by mandatory provisions of law. The notes will not constitute deposits insured under the Canada Deposit Insurance Corporation Act (Canada) or by the U.S. Federal Deposit Insurance Corporation or any other Canadian or U.S. governmental
agency or instrumentality.
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TD Securities (USA) LLC
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Wells Fargo Securities
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The date of this product supplement is March 27, 2026.
Product Supplement
Page
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PS-2
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PS-3
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PS-5
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PS-14
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PS-31
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PS-33
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PS-34
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PS-41
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Prospectus
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Documents Incorporated by Reference
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ii
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Where You Can Find More Information
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iii
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Further Information
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About This Prospectus
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iii
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Risk Factors
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1
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The Toronto-Dominion Bank
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6
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Presentation of Financial Information
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7
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Caution Regarding Forward-Looking Statements
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8
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Use of Proceeds
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10
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Consolidated Capitalization and Indebtedness
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11
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Description of the Debt Securities
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12
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Canadian Bank Resolution Powers
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29
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Description of Common Shares and Preferred Shares
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34
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Description of Warrants
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37
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Description of Subscription Receipts
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43
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Description of Units
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44
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Ownership, Book-Entry Procedures and Settlement
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45
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Tax Consequences
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53
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Benefit Plan Investor Considerations
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68
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Plan of Distribution (Conflicts of Interest)
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71
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Limitations on Enforcement of U.S. Laws Against the Bank, Our Management and Others
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74
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Legal Matters
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75
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Experts
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76
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Other Expenses of Issuance and Distribution
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77
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In this product supplement, unless the context otherwise indicates, the “Bank,” “we,” “us” or “our” means The Toronto-Dominion Bank and its subsidiaries. Also,
references to the “prospectus” or the “accompanying prospectus” mean the prospectus, dated February 26, 2025, of The Toronto-Dominion Bank. References to the “base offering documents” mean, together, this product
supplement, any other applicable prospectus supplement(s) and the prospectus. References to the “applicable pricing supplement” mean the pricing supplement that describes the specific terms of your notes.
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The Bank has filed a registration statement (including a prospectus) with the SEC for the offering for which this product supplement relates. Before you invest, you should read the prospectus dated
February 26, 2025 relating to our notes (the “accompanying prospectus”), the other base offering documents and any other documents related to the notes that the Bank has filed with the SEC for more complete information about the Bank and this
offering. You may obtain these documents without cost by visiting EDGAR on the SEC Website at www.sec.gov. Our Central Index Key, or CIK, on the SEC Website is 0000947263.
You should read this product supplement, together with the other base offering documents and the applicable pricing supplement, which together contain a description of the terms of the notes to be
offered, and which supersede all prior or contemporaneous oral statements as well as any other written materials.
You should carefully consider, among other things, the matters set forth under “Risk Factors” in this product supplement and the applicable pricing supplement, as the notes have complex features and
involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting and other advisers before you invest in the notes.
Defined terms used in this product supplement and not otherwise defined herein shall have the meanings ascribed to them in the accompanying prospectus.
You should rely only on the information incorporated by reference or provided in the base offering documents and the applicable pricing supplement. We have not authorized anyone to provide you with
different information. We are not making an offer of these notes in any state where the offer is not permitted. You should not assume that the information in this product supplement is accurate as of any date other than the date on the front of the
document.
Below is a summary of some of the key terms used throughout this product supplement. The applicable pricing supplement may use another term to describe the same feature, some of
which are identified below.
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General:
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The notes are senior debt securities of the Bank. Any payments due on the notes, including any repayment of principal, are subject to the
credit risk of the Bank. If the Bank were to default on its obligations, you could lose some or all of your investment.
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Maturity
Payment
Amount:
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The notes provide for a maturity payment amount that may be greater than or equal to the principal amount of the notes, depending on the performance of one or more:
• equity
indices (each, an “Index” and collectively, the “Indices”);
• exchange-traded
funds (each, a “Fund” and collectively, the “Funds”);
• common equity
securities or American depositary shares of a company not affiliated with us, the Agents or our or their respective affiliates (each, an “Underlying Stock” and collectively, the “Underlying Stocks”); or
• any
combination of the foregoing,
as specified in the applicable pricing supplement. Accordingly, although the notes provide for the repayment of principal at maturity, you
may receive no positive return on the notes.
In this product supplement, we sometimes refer to the Indices, Funds and Underlying Stocks to which your notes may be linked collectively as the “Market Measures” and
individually as a “Market Measure.” The index underlying a Fund is sometimes referred to as a “fund underlying index.” We refer to the issuer of an Underlying Stock as an “Underlying Stock Issuer.”
The applicable pricing supplement may also refer to a Market Measure as an “Underlier” or an “Underlying.” In addition, if the notes are linked to a weighted
basket composed of two or more Market Measures, the applicable pricing supplement may refer to each Market Measure as a “basket component.” The notes may also be linked to the worst performing or best performing of two or more Market
Measures, as described in the accompanying pricing supplement.
You should carefully read the applicable pricing supplement to understand the circumstances in which the performance of the relevant Market Measure(s) will cause you to
receive no positive return on your investment.
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Coupon:
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The notes will not pay a coupon unless the applicable pricing supplement specifically provides otherwise. If the applicable pricing supplement provides for the payment of a
coupon, the coupon rate and the coupon payment date(s) will be specified in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, any coupon will be payable to the persons in whose names the notes are registered at the close of business
on the business day immediately preceding the related payment date.
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Principal Amount
and Original
Offering Price:
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The principal amount of each note and the original offering price of each note will be specified in the applicable pricing supplement.
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Pricing Date:
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We refer to the date on which a particular issuance of notes is priced for initial sale to the public as the “pricing date.” The applicable pricing supplement may
also refer to the pricing date as the “trade date.”
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Calculation
Day(s):
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We refer to each date on which the value of any Market Measure is to be referenced in the determination of any payment on the notes as a “calculation day.” If there is a single
calculation day for the notes, references to the “final calculation day” herein mean such calculation day.
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The applicable pricing supplement may also refer to a calculation day as a “valuation date,” an “observation date,” a “determination date” or such other
term as specified in the applicable pricing supplement. The calculation day(s) will be specified in the applicable pricing supplement and will be subject to postponement due to non-trading days and market
disruption events. See “General Terms of the Notes—Consequences of a Market Disruption Event; Postponement of a Calculation Day.”
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Payment Date(s):
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The relevant pricing supplement will specify the stated maturity date and any other date on which amounts will or may be payable on the notes (each referred to as a “payment
date”). Each payment date is subject to postponement as described under “General Terms of the Notes—Payment Dates.”
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Closing Value:
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When we refer to the “closing value” of a Market Measure herein we mean, on any date of determination, (i) with respect to an Index, its closing level (as defined
herein) on that day; (ii) with respect to a Fund, its fund closing price (as defined herein) on that day; and (iii) with respect to an Underlying Stock, its stock closing price (as defined herein) on that day.
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Calculation
Agent:
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Unless otherwise specified in the applicable pricing supplement, the Bank.
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No Listing:
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The notes will not be listed on any securities exchange or automated quotation system.
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Material Tax
Consequences:
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For a discussion of the material U.S. and Canadian federal income and certain estate tax consequences of the ownership and disposition of the notes, see “Material U.S. Federal Income Tax
Consequences” and “Supplemental Discussion of Canadian Tax Consequences.”
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The notes have complex features and investing in the notes will involve risks not associated with an investment in conventional debt securities. You should carefully consider the
risk factors set forth below as well as the other information contained in the applicable pricing supplement and the base offering documents, including the documents they incorporate by reference. The risk factors set forth below describe certain
significant risks associated with an investment in the notes. You should read these risk factors together with the risk factors included in the applicable pricing supplement, which will describe more specifically the risks relating to the particular
issuance of notes as well as the risks associated with the particular Market Measure(s) to which your notes are linked. As described in more detail below, the value of the notes may vary considerably before the stated maturity date due to events that
are difficult to predict and are beyond our control. You should reach an investment decision only after you have carefully considered with your advisors the appropriateness of an investment in the notes in light of your particular circumstances.
General Risk Factors Relating To Return Characteristics And All Market Measures
You May Receive No Positive Return On The Notes.
The notes provide for a maturity payment amount that may be greater than or equal to the principal amount of the notes, depending on the performance of the relevant Market
Measure(s) and other terms of the notes, as described in the applicable pricing supplement. If the relevant Market Measure(s) do not perform favorably, you may receive no positive return on your investment in the notes. Although the notes provide for
the repayment of the principal amount at maturity regardless of the performance of the relevant Market Measure(s), you may nevertheless suffer a loss on your investment in the notes in real value terms if you receive no positive return on the notes.
This is because inflation may cause the real value of the principal amount to be less at maturity than at the time you invest, and because an investment in the notes represents a forgone opportunity to invest in an alternative asset that does
generate a positive return. The potential loss in real value terms will be greater the longer the term of the notes. Even if you do receive a positive return on your investment in the notes, there can be no assurance that your total return at
maturity on the notes will compensate you for the effects of inflation and your yield on the notes may be less than the yield you would earn if you bought a traditional, interest-bearing senior debt security of the Bank or of another issuer with a
similar credit rating and with a similar term. You should carefully consider whether an investment that may not provide for any positive return, or may provide a return that is lower than the return on conventional debt securities, is appropriate for
you.
The Notes Do Not Pay Interest.
Unless otherwise specified in the applicable pricing supplement, the notes will not pay any interest. Accordingly, unless the applicable pricing supplement specifically provides for a coupon payment,
you should not invest in the notes if you seek current income during the term of the notes.
In addition, if the applicable pricing supplement provides for a coupon payment, any such coupon payment may be contingent on the performance of the relevant Market Measure(s). In that case, you may
receive few or no contingent coupon payments over the term of the notes, depending on the performance of the relevant Market Measure(s). You should not invest in notes with such terms if you seek certainty of receiving current income during the
term of the notes.
Investing In The Notes Is Not The Same As Investing In Any Market Measure.
Investing in the notes is not equivalent to investing in any Market Measure. As an investor in the notes, your return will not reflect the return you would
realize if you actually owned and held any Underlying Stock, the shares of any Fund or the securities included in any Index for a period similar to the term of the notes because you will not receive any dividend payments, distributions or any other
payments paid on those shares or securities. As a holder of the notes, you will not have any voting rights or any other rights as would holders of an Underlying Stock, a Fund or the securities included in an Index.
Historical Values Of A Market Measure Should Not Be Taken As An Indication Of The Future Performance Of Such Market Measure During The Term Of The Notes.
It is impossible to predict whether the value of a Market Measure will fall or rise. The value of a Market Measure will be influenced by complex
and interrelated political, economic, financial and other factors that can affect such Market Measure. Accordingly, any historical values of a Market Measure do not provide an indication of the future performance of such Market Measure.
A Payment Date And The Stated Maturity Date May Be Postponed If A Calculation Day Is Postponed.
A calculation day is subject to postponement for non-trading days and market disruption events as described under “General Terms of the Notes” below. If such a postponement occurs
with respect to a calculation day other than the final calculation day (if any), then the related payment date will be postponed. If such a postponement occurs with respect to the final calculation day, the stated maturity date will be the later of
(i) the initial stated maturity date and (ii) three business days after the last final calculation day as postponed.
The Notes Are Subject To Market Risk.
The return on the notes will be directly linked to the performance of the Market Measure(s) and, in the case of a Market Measure that is an Index or a Fund, to the components of such Market Measure. The return on the
notes will depend on level or price of the Market Measure(s) on specified dates of determination, as will be specified in the applicable pricing supplement. The level of a Market Measure or its components can rise or fall sharply due to factors
specific to the Market Measure or its components, as well as general market factors, such as general market volatility and levels, interest rates and economic and political conditions. We urge you to review financial and other information relating
to each Market Measure and/or its components.
Risks Relating To Estimated Value And Liquidity
The Estimated Value Of Your Notes Is Expected To Be Less Than The Original Offering Price Of Your Notes.
The estimated value of your notes, which will be set forth in the applicable pricing supplement, is expected to be less than the original offering price of your notes. The difference between the
original offering price of your notes and the estimated value of the notes reflects costs and expected profits associated with selling and structuring the notes, as well as hedging our obligations under the notes. Because hedging our obligations
entails risks and may be influenced by market forces beyond our control, this hedging may result in a profit that is more or less than expected, or a loss.
The Estimated Value Of Your Notes Will Be Based On Our Internal Funding Rate.
The estimated value of your notes, which will be set forth in the applicable pricing supplement, will be determined by reference to our internal funding rate. The internal funding rate used in the
determination of the estimated value of the notes generally represents a discount from the credit spreads for our conventional, fixed-rate debt securities and the borrowing rate we would pay for our conventional, fixed-rate debt securities. This
discount is based on, among other things, our view of the funding value of the notes as well as the higher issuance, operational and ongoing liability management costs of the notes in comparison to those costs for our conventional, fixed-rate debt,
as well as estimated financing costs of any hedge positions, taking into account regulatory and internal requirements. If the interest rate implied by the credit spreads for our conventional, fixed-rate debt securities, or the borrowing rate we would
pay for our conventional, fixed-rate debt securities were to be used, we would expect the economic terms of the notes to be more favorable to you. Additionally, assuming all other economic terms are held constant, the use of an internal funding rate
for the notes is expected to increase the estimated value of the notes at any time.
The Estimated Value Of The Notes Will Be Based On Our Internal Pricing Models, Which May Prove To Be Inaccurate And May Be Different From The Pricing Models Of Other Financial
Institutions.
The estimated value of your notes, which will be set forth in the applicable pricing supplement, will be based on our internal pricing models, which take into account a number of variables, such as
our internal funding rate on the pricing date, and are based on a number of subjective assumptions, which are not evaluated or verified on an independent basis and may or may not materialize. Further, our pricing models may be different from other
financial institutions’ pricing models and the methodologies used by us to estimate the value of the notes may not be consistent with those of other financial institutions that may be purchasers or sellers of the notes in the secondary market. As a
result, the secondary market price of your notes may be materially less than the estimated value of the notes determined by reference to our internal pricing models. In addition, market conditions and other relevant factors in the future may change,
and any assumptions may prove to be incorrect.
The Estimated Value Of Your Notes Will Not Be A Prediction Of The Prices At Which You May Sell Your Notes In The Secondary Market, If Any, And Such Secondary Market Prices, If
Any, Will Likely Be Less Than The Original Offering Price Of Your Notes And May Be Less Than The Estimated Value Of Your Notes.
The estimated value of the notes, which will be set forth in the applicable pricing supplement, will not be a prediction of the prices at which the Agents, other affiliates of ours or third parties
may be willing to purchase the notes from you in secondary market transactions (if they are willing to purchase, which they are not obligated to do). The price at which you may be able to sell your notes in the secondary market at any time, if any,
may be based on pricing models that differ from our pricing models and will be influenced by many factors that cannot be predicted, such as market conditions and any bid and ask spread for similar sized trades, and may be substantially less than our
estimated value of the notes. Further, as secondary market prices of your notes take into account the levels at which our debt securities trade in the secondary market and do not take into account our various costs and expected profits associated
with selling and structuring the notes, as well as hedging our obligations under the notes, secondary market prices of your notes will likely be less than the original offering price of your notes. As a result, the price at which the Agents, other
affiliates of ours or third parties may be willing to purchase the notes from you in secondary market transactions, if any, will likely be less than the price you paid for your notes, and any sale prior to the maturity date could result in a
substantial loss to you.
The Temporary Price At Which We May Initially Buy The Notes In The Secondary Market May Not Be Indicative Of Future Prices Of Your Notes.
Assuming that all relevant factors remain constant after the pricing date, on applicable pricing supplement, the price at which the Agents may initially buy or sell the notes in the secondary market (if the Agents make
a market in the notes, which they are not obligated to do) may exceed the estimated value of the notes on the pricing date, as well as the secondary market value of the notes, for a temporary period
after the pricing date of the notes, as specified in the applicable pricing supplement. The price at which the Agents may initially buy or sell the notes in the secondary market may not be indicative of
future prices of your notes.
The Agent Discount, Offering Expenses And Certain Hedging Costs Are Likely To Adversely Affect Secondary Market Prices.
Assuming no changes in market conditions or any other relevant factors, the price, if any, at which you may be able to sell the notes will likely be less than the original offering price. The
original offering price includes, and any price quoted to you is likely to exclude, the agent discount paid in connection with the initial distribution, offering expenses as well as the cost of hedging our obligations under the notes. In addition,
any such price is also likely to reflect dealer discounts, mark-ups and other transaction costs, such as a discount to account for costs associated with establishing or unwinding any related hedge transaction. In addition, because an affiliate of
Wells Fargo Securities is to conduct hedging activities for us in connection with the notes, that affiliate may profit in connection with such hedging activities and such profit, if any, will be in addition to the compensation that the dealer
receives for the sale of the notes to you. You should be aware that the potential to earn fees in connection with hedging activities may create a further incentive for the dealer to sell the notes to you in addition to the compensation they would
receive for the sale of the notes.
There May Not Be An Active Trading Market For The Notes—Sales In The Secondary Market May Result In Significant Losses.
There may be little or no secondary market for the notes. The notes will not be listed or displayed on any securities exchange or any electronic communications network. The Agents and their
respective affiliates may make a market for the notes; however, they are not required to do so. The Agents and their respective affiliates may stop any market-making activities at any time. Even if a secondary market for the notes develops, it may
not provide significant liquidity or trade at prices advantageous to you. We expect that transaction costs in any secondary market would be high. As a result, the difference between bid and ask prices for your notes in any secondary market could be
substantial.
If you sell your notes before the maturity date, you may have to do so at a substantial discount from the principal amount irrespective of the level of the Market Measure, and as a result, you may
suffer substantial losses.
Risks Relating To Hedging Activities And Conflicts Of Interest
Trading And Business Activities By The Bank Or Its Affiliates May Adversely Affect The Market Value Of, And Amount Payable On, The Notes.
We, the Agents and our or their respective affiliates may hedge our obligations under the notes by purchasing securities, futures, options or other derivative instruments with returns linked or
related to changes in the level of an Underlying Stock, an Index, a Fund or one or more securities included in an Index or held by a Fund, as the context requires, and we may adjust these hedges by, among other things, purchasing or selling any of
the foregoing at any time. It is possible that we or one or more of our affiliates could receive substantial returns from these hedging activities while the market value of the notes declines. We or one or more of our affiliates may also issue or
underwrite other securities or financial or derivative instruments with returns linked or related to changes in the performance of an Underlying Stock, an Index, a Fund or one or more securities included in an Index or held by a Fund (as applicable).
These trading activities may present a conflict between the holders’ interest in the notes and the interests we and our affiliates will have in our or their proprietary accounts, in facilitating
transactions, including options and other derivatives transactions, for our or their customers’ accounts and in accounts under our or their management. These trading activities could be adverse to the interests of the holders of the notes.
We, the Agents and our or their respective affiliates may, at present or in the future, engage in business with one or more of the issuers of an Underlying Stock, a Fund or one or more securities
included in an Index or held by a Fund (as the context requires) including making loans to or providing advisory services to those companies. These services could include investment banking and merger and acquisition advisory services. These business
activities may present a conflict between our, the Agents’ and our affiliates’ obligations, and your interests as a holder of the notes. Moreover, we, the Agents or our affiliates may have published, and in the future expect to publish, research
reports with respect to an Underlying Stock, an Index, a Fund or one or more securities included in an Index or held by a Fund. This research is modified from time to time without notice and may express opinions or provide recommendations that are
inconsistent with purchasing or holding the notes. Any of these activities by us or one or more of our affiliates or the Agents or their affiliates may adversely affect the value of an Underlying Stock, an Index, a Fund or one or more securities
included in an Index or held by a Fund and, therefore, the market value of, and amount payable on, the notes.
There Are Potential Conflicts Of Interest Between You And The Calculation Agent.
The calculation agent will, among other things, determine the amount payable on the notes. We will serve as the calculation agent and may appoint a different calculation agent after the issue date
specified in the applicable pricing supplement without notice to you. The calculation agent will exercise its judgment when performing its functions. For example, the calculation agent may have to determine whether a market disruption event affecting
a Market Measure has occurred which may, in turn, depend on the calculation agent’s judgment as to whether the event has materially interfered with our ability or the ability of one of our affiliates to unwind our hedge positions. Because this
determination by the calculation agent may affect the amount payable on the notes, the calculation agent may
have a conflict of interest if it needs to make a determination of this kind. For additional information on the calculation agent’s role, see “General Terms of the Notes — Calculation and Calculation
Agent” below.
Additional Risk Factors Relating To Notes Linked To An Index
Changes That Affect An Index May Adversely Affect The Value Of The Notes And Any Payments On The Notes.
The policies of a sponsor or publisher of an Index (each, an “index sponsor”) concerning the calculation of the relevant Index and the addition, deletion or substitution of
securities comprising such Index and the manner in which an index sponsor takes account of certain changes affecting such securities may adversely affect the value of such Index and, therefore, may adversely affect the value of the notes and any
payments on the notes. An index sponsor may discontinue or suspend calculation or dissemination of the relevant Index or materially alter the methodology by which it calculates such Index. Any such actions could adversely affect the value of the
notes.
We Cannot Control Actions By Any Of The Unaffiliated Companies Whose Securities Are Included In Any Index.
Actions by any company whose securities are included in any Index to which your notes are linked may have an adverse effect on the price of its security, the
closing level of such Index on any calculation day and the value of the notes. Unless otherwise disclosed in any applicable market measure supplement or in the applicable pricing supplement, none of the Bank, the Agents or any of our or their
respective affiliates will be affiliated with any of the companies whose securities are included in any Index. These unaffiliated companies will not be involved in the offering of the notes and will have no obligations with respect to the notes,
including any obligation to take our or your interests into consideration for any reason. These companies will not receive any of the proceeds of the offering of the notes and will not be responsible for, and will not have participated in, the
determination of the timing of, prices for, or quantities of, the notes to be issued. These companies will not be involved with the administration, marketing or trading of the notes and will have no obligations with respect to any amounts to be paid
to you on the notes.
We And Our Affiliates And The Agents And Their Affiliates Have No Affiliation With Any Index Sponsor And Have Not Independently Verified Their Public
Disclosure Of Information.
We, the Agents and our or their respective affiliates are not affiliated in any way with any index sponsor and have no ability to control or predict their actions, including any
errors in or discontinuation of disclosure regarding the methods or policies relating to the calculation of the applicable Index. We will derive the information about any Index and its index sponsor contained in the applicable pricing supplement from
publicly available information, without independent verification. You, as an investor in the notes, should make your own investigation into any applicable Index and its index sponsor. No index sponsor will be involved in the offering of the notes in
any way nor will have any obligation to consider your interests as an owner of the notes in taking any actions that might affect the value of the notes.
Additional Risk Factors Relating To Notes Linked To A Fund
Changes That Affect A Fund Or Its Fund Underlying Index May Adversely Affect The Value Of The Notes And Any Payments On The Notes.
The policies of the sponsor of a Fund (a “fund sponsor”) concerning the calculation of such Fund’s net asset value, additions, deletions or substitutions of securities in such Fund and the
manner in which changes in its fund underlying index are reflected in such Fund, and changes in those policies, could affect the closing price of the shares of such Fund and, therefore, may adversely affect the value of the notes and any payments on the notes. Similarly, the policies of the sponsor of a fund underlying index (a “fund underlying index sponsor”) concerning the calculation of such
fund underlying index and the addition, deletion or substitution of securities comprising such fund underlying index and the manner in which such fund underlying index sponsor takes account of certain changes affecting such securities may adversely
affect the level of such fund underlying index and the closing price of the shares of the related Fund and, therefore, may adversely affect the value of the notes and any payments on the notes. A fund underlying index sponsor may also discontinue or suspend calculation or dissemination of such fund underlying index or materially alter the methodology by which it calculates such fund underlying
index. Any such actions could adversely affect the value of the notes.
We, The Agents And Our Or Their Respective Affiliates Cannot Control Actions By Any Of The Unaffiliated Companies Whose Securities Are Included In A Fund Or Its
Fund Underlying Index.
Actions by any company whose securities are included in a Fund or in its fund underlying index may have an adverse effect on the price of its security, the fund closing price of such Fund on any
calculation day and the value of the notes. Unless otherwise disclosed in any applicable market measure supplement or in the applicable pricing supplement, none of the
Bank, the Agents or our or their respective affiliates will be affiliated with any of the companies whose security is represented in any Fund or its fund underlying index. These unaffiliated companies will not be involved in the offering of
the notes and will have no obligations with respect to the notes, including any obligation to take our or your interests into consideration for any reason. These
companies will not receive any of the proceeds of the offering of the notes and will not be responsible for, and will not have participated in, the determination of the timing of, prices for, or quantities
of, the notes to be issued. These companies will not be involved with the administration, marketing or trading of the notes and will have no obligations with
respect to any amounts to be paid to you on the notes.
We, The Agents And Our Or Their Respective Affiliates Have No Affiliation With Any Fund Sponsor Or Fund Underlying Index Sponsor And Have Not
Independently Verified Their Public Disclosure Of Information.
We, the Agents and our or their respective affiliates are not affiliated in any way with any fund sponsor or fund underlying index sponsor (collectively, the “sponsors”) and
have no ability to control or predict their actions, including any errors in or discontinuation of disclosure regarding their methods or policies relating to the management or calculation of the applicable Fund or its fund underlying index. We have
derived the information about any Fund, its fund underlying index and the related sponsors contained in any applicable pricing supplement from publicly available information, without independent verification. You, as an investor in the notes , should
make your own investigation into any applicable Fund, its fund underlying index and the sponsors. The sponsors are not involved in the offering of the notes made hereby in any way and have no obligation to consider your interests as an owner of the
notes in taking any actions that might affect the value of the notes.
An Investment Linked To The Shares Of A Fund Is Different From An Investment Linked To Its Fund Underlying Index.
The performance of the shares of a Fund may not exactly replicate the performance of the related fund underlying index because such Fund may not invest in all of the securities included in the related
fund underlying index and because such Fund will reflect transaction costs and fees that are not included in the calculation of the related fund underlying index. A Fund may also hold securities or derivative financial instruments not included in the
related fund underlying index. It is also possible that a Fund may not fully replicate the performance of its fund underlying index due to the temporary unavailability of certain securities in the secondary market or due to other extraordinary
circumstances. In addition, because the shares of a Fund are traded on a securities exchange and are subject to market supply and investor demand, the value of a share of a Fund may differ from the net asset value per share of such Fund. As a result,
the performance of a Fund may not correlate perfectly with the performance of the related fund underlying index, and the return on the notes based on the performance of a Fund will not be the same as the
return on notes based on the performance of the related fund underlying index.
There Are Management And Liquidity Risks Associated With A Fund.
Although the shares of any Fund to which your notes are linked will be listed for trading on a United States securities exchange and a number of similar
products have been traded on such securities exchanges for varying periods of time, there is no assurance that an active trading market will continue for the shares of any Fund or that there will be liquidity in the trading market.
In addition, a Fund will be subject to management risk, which is the risk that a fund sponsor’s investment strategy, the implementation of which is subject to a number of constraints, may not produce
the intended results. For example, a fund sponsor may elect to invest certain of its assets in shares of equity securities that are not included in the related fund underlying index. A Fund, unless otherwise noted in the applicable pricing
supplement, will also not be actively managed and may be affected by a general decline in market segments relating to its fund underlying index. Further, a fund sponsor may invest in securities included in, or representative of, the applicable fund
underlying index regardless of their investment merits, and a fund sponsor will not attempt to take defensive positions in declining markets.
Further, under continuous listing standards adopted by the relevant securities exchange, a Fund will be required to confirm on an ongoing basis that the securities included in its fund underlying index
satisfy the applicable listing requirements. In the event that a fund underlying index does not comply with the applicable listing requirements, the applicable Fund would be required to rectify such non-compliance by requesting that the relevant fund
underlying index sponsor modify the relevant fund underlying index, transitioning to a new fund underlying index or obtaining relief from the SEC. There can be no assurance that a fund underlying index sponsor would modify the relevant fund
underlying index or that relief would be obtained from the SEC and, therefore, non-compliance with the continuous listing standards may result in a Fund being delisted. If a Fund were delisted, the calculation agent would select a successor fund or,
if no successor fund is available, would determine the fund closing price of such Fund on any date of determination.
These risks may adversely affect the price of the shares of any applicable Fund and, consequently, the value of the notes.
Anti-dilution Adjustments Relating To The Shares Of A Fund Do Not Address Every Event That Could Affect Such Shares.
An adjustment factor, as described herein, will be used to determine the fund closing prices of a Fund. The adjustment factor for a Fund will be adjusted by the calculation agent for certain events
affecting the shares of such Fund. However, the calculation agent will not make an adjustment for every event that could affect such shares. If an event occurs that does not require the calculation agent to adjust the adjustment factor, the value of
the notes may be adversely affected.
Additional Risk Factors Relating To Notes Linked To An Underlying Stock
The Notes May Become Linked To The Common Stock Of A Company Other Than An Original Underlying Stock Issuer.
Following certain corporate events relating to an Underlying Stock, such as a stock-for-stock merger where the applicable Underlying Stock Issuer is not the surviving entity, the
shares of a successor corporation to such Underlying Stock Issuer will be substituted for such Underlying Stock for all purposes of the notes. Following certain other corporate events relating to an Underlying Stock in which holders of such
Underlying Stock would receive all of their consideration in cash and the surviving entity has no marketable securities outstanding or there is no surviving entity (including, but not limited to, a leveraged buyout or other going private transaction
involving such Underlying Stock Issuer, or a liquidation of such Underlying Stock Issuer), the common stock of another company in the same industry group as such Underlying Stock Issuer will be substituted for such Underlying Stock for all purposes
of the notes. Such substitution may also occur if an Underlying Stock consists of ADSs and such ADSs are delisted or the applicable ADS facility is terminated. In any such event, the equity-linked nature of the notes would be significantly altered.
We describe the specific events that can lead to these adjustments and the procedures for selecting a replacement stock in the section entitled “General Terms of the Notes—Certain Terms For Notes Linked To An Underlying Stock—Adjustment Events.” The
occurrence of such events and the consequent adjustments may materially and adversely affect the value of the notes and any payments on the notes.
We, The Agents And Our Or Their Respective Affiliates Cannot Control Actions By An Underlying Stock Issuer.
Actions by an Underlying Stock Issuer may have an adverse effect on the price of such Underlying Stock, the stock closing price of such Underlying Stock on any calculation day and
the value of the notes. None of the Bank, the Agents or our or their respective affiliates are affiliated with any Underlying Stock Issuer. No Underlying Stock Issuer will be involved in the offering of the notes nor will any Underlying Stock Issuer
have any obligations with respect to the notes, including any obligation to take our interests or your interests into consideration for any reason. No Underlying Stock Issuer will receive any of the proceeds of the offering of the notes nor will be
responsible for, or will have participated in, the determination of the timing of, prices for, or quantities of, the notes to be issued. No Underlying Stock Issuer will be involved with the administration, marketing or trading of the notes nor will
have any obligations with respect to any amounts payable on the notes.
We, The Agents And Our Or Their Respective Affiliates Have No Affiliation With Any Underlying Stock Issuer And Have Not Independently Verified Their Public
Disclosure Of Information.
We, the Agents and our or their respective affiliates are not affiliated in any way with any Underlying Stock Issuer. This product supplement and any applicable pricing supplement
relates only to the notes and do not relate to any Underlying Stock. The material provided in this product supplement and any applicable pricing supplement concerning an Underlying Stock Issuer is and will be derived from publicly available documents
without independent verification. None of the Bank, the Agents or any of our or their respective affiliates have or will have participated in the preparation of any of those documents or made any “due diligence” investigation or any inquiry of the
Underlying Stock Issuers. Furthermore, none of the Bank, the Agents or our or their respective affiliates know whether any Underlying Stock Issuer has disclosed all events occurring before the date of this product supplement or the applicable pricing
supplement—including events that could affect the accuracy or completeness of the publicly available documents referred to above. Subsequent disclosure of any event of this kind or the disclosure of or failure to disclose material future events
concerning an Underlying Stock Issuer could affect the value of the notes and any payments on the notes. You, as an investor in the notes, should make your own investigation into any applicable Underlying Stock Issuer.
In addition, there can be no assurance that an Underlying Stock Issuer will continue to be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and will distribute any reports, proxy statements, and other information required thereby to its shareholders. In the event that an Underlying Stock Issuer ceases to be subject to such reporting requirements and the notes
continue to be outstanding, pricing information for the notes may be more difficult to obtain and the value and liquidity of the notes may be adversely affected. None of the Bank, the Agents or our or their respective affiliates are responsible for
the public disclosure of information by any Underlying Stock Issuer, whether contained in filings with the SEC or otherwise.
You Have Limited Anti-Dilution Protection.
The calculation agent will adjust the adjustment factor of an Underlying Stock for certain events affecting such Underlying Stock, such as stock splits and stock dividends, and certain other
corporate actions involving the applicable Underlying Stock Issuer, such as mergers. However, the calculation agent is not required to make an adjustment for every corporate event that can affect an Underlying Stock. For example, the calculation
agent is not required to make any adjustments to the adjustment factor of an Underlying Stock if the applicable Underlying Stock Issuer or anyone else makes a partial tender or partial exchange offer for such Underlying Stock. Consequently, this
could affect the value of the notes and any payments on the notes. See “General Terms of the Notes—Certain Terms For Notes Linked To An Underlying Stock—Adjustment Events” for a description of the general circumstances in which the calculation agent
will make adjustments to the adjustment factor of an Underlying Stock.
Notes Linked To ADSs Carry Exchange Rate Risk.
Because ADSs are denominated in U.S. dollars but represent non-U.S. equity securities that are denominated in a non-U.S. currency, changes in currency exchange rates may adversely impact the value of
the ADSs. Exchange rate movements for a particular currency can often be volatile and are the result of numerous factors including the supply of, and the demand for, those currencies, as well as the relevant government policy, intervention or
actions, but are also influenced significantly from time to time by political or economic developments, and by macroeconomic factors and speculative actions related to the relevant region. Of particular importance to potential currency exchange
risk are: existing and expected rates of inflation; existing and expected interest rate levels; the balance of payments in the relevant countries and the United States and between each relevant country and its major trading partners; the extent of
governmental surplus or deficit in the relevant countries and the United States; and intervention by the relevant countries or the United States in currency exchange rates, including through the imposition of currency controls. All of these factors
are, in turn, sensitive to the monetary, fiscal and trade policies pursued by the relevant countries, the United States and those of other countries important to international trade and finance. Therefore, exposure to exchange rate risk may result
in reduced returns for notes linked to ADSs.
Additional Risks Relating To Notes Linked To ADSs.
There are important differences between the rights of holders of ADSs and the rights of holders of the shares of equity securities underlying the ADSs. Each ADS is a security evidenced by American
depositary receipts that represent a certain number of shares of the issuing company. The ADSs are issued pursuant to a deposit agreement, which sets forth the rights and responsibilities of the depositary, the company, and holders of the ADSs,
which may be different from the rights of holders of the underlying shares. For example, a company may make distributions in respect of the underlying shares that are not passed on to the holders of its ADSs. Any differences between the rights of
holders of the ADSs and the rights of holders of the underlying shares of the company may be significant and may materially and adversely affect the value of the ADSs and, as a result, the value of notes that are linked to ADSs.
The trading patterns of the ADSs will generally reflect the characteristics and valuations of the ADS underlying stock; however, the value of the ADSs may not completely track the value of those
shares. Trading volume and pricing on the applicable non-U.S. exchange may, but will not necessarily, have similar characteristics as the ADSs. For example, certain factors may increase or decrease the public float of the ADSs and, as a result, the
ADSs may have less liquidity or lower market value than the ADS underlying stock.
Holders of the underlying company’s ADSs may surrender the ADSs in order to receive and trade the ADS underlying stock. This provision permits investors in the ADSs to take advantage of price
differentials between markets. However, this provision may also cause the market prices of the Underlying Stock to more closely correspond with the values of the common shares in the applicable non-U.S. markets. As a result, a market outside of the
U.S. for the ADS underlying stock that is not liquid may also result in an illiquid market for the ADSs.
Additional Risk Factors Relating To Notes Linked To Non-U.S. Market Measures
In the below risk factors, “Non-U.S. Market Measures” means a non-U.S. equity security, an Index of non-U.S. equity securities and/or a Fund that holds non-U.S. equity securities.
Notes Linked To Non-U.S. Market Measures Will Be Subject To Risks Associated With Non-U.S. Securities Markets.
Non-U.S. equity securities are issued by non-U.S. companies in non-U.S. securities markets. Investments in notes linked to the value of a Non-U.S. Market Measure will be subject to risks associated with non-U.S.
securities markets in the home countries of the issuers of those non-U.S. equity securities. Non-U.S. securities markets may have less liquidity and may be more volatile than U.S. securities markets, and market developments may affect non-U.S.
markets differently than U.S. securities markets. Direct or indirect government intervention to stabilize a non-U.S. securities market, as well as cross-shareholdings in non-U.S. companies, may affect trading prices and volumes in those markets.
In addition, governments may seek to regulate not only the Market Measures or the equity securities composing or held by the Market Measures to which your notes are linked but also derivative instruments based on the equity securities, which can
affect the value of the equity securities and your notes. Also, there is generally less publicly available information about companies in some of these jurisdictions than there is about U.S. companies that are subject to the reporting
requirements of the SEC, and generally non-U.S. companies are subject to accounting, auditing and financial reporting standards and requirements and securities trading rules different from those applicable to U.S. reporting companies. The prices
of securities in non-U.S. markets may be affected by political, economic, financial and social factors in those countries, or global regions, including changes in government, economic and fiscal policies and currency exchange laws.
Further, non-U.S. equity securities may be issued by companies in countries based in emerging markets. Emerging markets pose further risks in addition to the risks associated with investing in foreign equity markets
generally. Countries with emerging markets may have relatively unstable financial markets and governments; may present the risks of nationalization of businesses; may impose restrictions on currency conversion, exports or foreign ownership and
prohibitions on the repatriation of assets; may pose a greater likelihood of regulation by the national, provincial and local governments of the emerging market countries, including the imposition of currency exchange laws and taxes; and may have
less protection of property rights, less access to legal recourse and less comprehensive financial reporting and auditing requirements than more developed countries. The economies of countries with emerging markets may be based on only a few
industries, may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme and volatile debt burdens or inflation rates. Local securities markets may trade a small number of securities and may be unable to
respond effectively
to increases in trading volume, potentially making prompt liquidation of holdings difficult or impossible at times. Moreover, the economies in such countries may differ unfavorably from the economy in the United States
in such respects as growth of gross national product, rate of inflation, capital reinvestment, resources, self-sufficiency and balance of payment positions. The currencies of emerging markets may also be less liquid and more volatile than those
of developed markets and may be affected by political and economic developments in different ways than developed markets. The foregoing factors may adversely affect the performance of companies based in emerging markets.
Some or all of these factors may adversely affect the performance of the applicable non-U.S. equity securities and, as a result, the market value of the notes and any amounts payable on the notes.
For Notes Linked To An Index Of Non-U.S. Equity Securities, If The Prices Of Those Non-U.S. Equity Securities Are Converted Into U.S. Dollars
For Purposes Of Calculating The Value Of That Index, The Notes Will Be Subject To Currency Exchange Risk.
If the notes are linked to an Index of non-U.S. equity securities and the prices of those non-U.S. equity securities are converted into U.S. dollars for purposes of calculating the value of that Index, then investors
in those notes will be exposed to the currency exchange rate risk with respect to each of the currencies in which the non-U.S. equity securities underlying that Index trade. Exchange rate movements for a particular currency can often be volatile
and are the result of numerous factors including the supply of, and the demand for, those currencies, as well as the relevant government policy, intervention or actions, but are also influenced significantly from time to time by political or
economic developments, and by macroeconomic factors and speculative actions related to the relevant region. An investor’s net exposure will depend on the extent to which the currencies of the non-U.S. equity securities underlying the applicable
Index strengthen or weaken against the U.S. dollar and the relative weight of the non-U.S. equity securities denominated in those currencies. If, taking into account that weighting, the dollar strengthens against the currencies of the securities
underlying that Index, the value of that Index will be adversely affected and any amounts payable on the notes may be reduced.
Of particular importance to potential currency exchange risk are: existing and expected rates of inflation; existing and expected interest rate levels; the balance of payments in the relevant countries and the United
States and between each relevant country and its major trading partners; the extent of governmental surplus or deficit in the relevant countries and the United States; and intervention by the relevant countries or the United States in currency
exchange rates, including through the imposition of currency controls. All of these factors are, in turn, sensitive to the monetary, fiscal and trade policies pursued by the relevant countries, the United States and those of other countries
important to international trade and finance.
For Notes Linked To An Index Of Non-U.S. Equity Securities, If The Prices Of Those Non-U.S. Equity Securities Are Not Converted Into U.S. Dollars For Purposes Of Calculating The Value Of That Index,
Any Amounts Payable On The Notes Will Not Be Adjusted For Fluctuations In Exchange Rates.
If the notes are linked to an Index of non-U.S. equity securities and the prices of those non-U.S. equity securities are not converted into U.S. dollars for purposes of calculating the value of that Index, then the
value of the notes will not be adjusted for exchange rate fluctuations between the U.S. dollar and the currencies in which the non-U.S. equity securities underlying that Index are denominated, although any currency fluctuations could affect the
performance of that Index. If any applicable currency appreciates relative to the U.S. dollar over the term of the notes, investors will not receive the benefit of that increase, which they would have had they owned the non-U.S. equity securities
underlying that Index directly.
Notes Linked To A Fund Holding Non-U.S. Equity Securities Will Be Subject To Currency Exchange Risk.
Because the value of a Fund that holds non-U.S. equity securities is related to the U.S. dollar value of those non-U.S. equity securities, investors in notes linked to such a Fund will be exposed to the currency
exchange rate risk with respect to each of the currencies in which the non-U.S. equity securities held by that Fund trade. Exchange rate movements for a particular currency can often be volatile and are the result of numerous factors including
the supply of, and the demand for, those currencies, as well as the relevant government policy, intervention or actions, but are also influenced significantly from time to time by political or economic developments, and by macroeconomic factors
and speculative actions related to the relevant region. An investor’s net exposure will depend on the extent to which the currencies of the non-U.S. equity securities held by a Fund strengthen or weaken against the U.S. dollar and the relative
weight of the non-U.S. equity securities denominated in those currencies. If, taking into account that weighting, the U.S. dollar strengthens against the currencies of the securities held by a Fund, the value of that Fund’s portfolio will be
adversely affected, which is expected to have an adverse effect on the price per share of that Fund, and any amounts payable on the notes may be reduced.
Of particular importance to potential currency exchange risk are: existing and expected rates of inflation; existing and expected interest rate levels; the balance of payments in the relevant countries and the United
States and between each relevant country and its major trading partners; the extent of governmental surplus or deficit in the relevant countries and the United States; and intervention by the relevant countries or the United States in currency
exchange rates, including through the imposition of currency controls. All of these factors are, in turn, sensitive to the monetary, fiscal and trade policies pursued by the relevant countries, the United States and those of other countries
important to international trade and finance.
Risks Relating To General Credit Characteristics
Investors Are Subject To The Bank’s Credit Risk, And The Bank’s Credit Ratings And Credit Spreads May Adversely Affect The Market Value Of The Notes.
The payment of any amount due on the notes is subject to the Bank’s credit risk. The notes are the Bank’s senior unsecured debt obligations. Investors are dependent on the Bank’s ability to pay all
amounts due on the notes and, therefore, investors are subject to the credit risk of the Bank and to changes in the market’s view of the Bank’s creditworthiness. Any decrease in the Bank’s credit ratings or increase in the credit spreads charged by
the market for taking the Bank’s credit risk is likely to adversely affect the market value of the notes. If the Bank becomes unable to meet its financial obligations as they become due, investors may not receive any amounts due under the terms of
the notes.
Risks Relating To Canadian And U.S. Federal Income Taxation
Significant Aspects Of The Tax Treatment Of The Notes Are Uncertain.
Significant aspects of the tax treatment of the notes are uncertain. There is no direct legal authority as to the proper U.S. federal income tax treatment of the notes, and we do not plan to request a
ruling from the U.S. Internal Revenue Service (the “IRS”) regarding the tax treatment of the notes, and the IRS or a court may not agree with the tax treatment described in this product supplement or the applicable pricing supplement. If the
IRS were successful in asserting an alternative treatment for the notes, the timing and/or character of income on the notes could be affected materially and adversely. Please read carefully the sections entitled “Material U.S. Federal Income Tax
Consequences” herein. You should consult your tax advisor about your own tax situation.
Please read carefully the section entitled “Material U.S. Federal Income Tax Consequences” in this product supplement. You should consult your tax advisor about your own tax situation.
For a discussion of the Canadian federal income tax consequences of investing in the notes, please see “Tax Consequences — Canadian Taxation” in the accompanying prospectus, the section entitled
“Supplemental Discussion of Canadian Tax Consequences” in this product supplement, and any applicable tax consequences discussed in the applicable pricing supplement. If you are not a Non-resident Holder (as that term is defined in “Tax Consequences
– Canadian Taxation” in the accompanying prospectus) or if you acquire the notes in the secondary market, you should consult your tax advisors as to the consequences of acquiring, holding and disposing of the notes and receiving the payments that
might be due under the notes.
U.S. Taxpayers Will Be Required To Pay Taxes Each Year On Notes That Are Treated As Variable Rate Debt Instruments, Contingent Payment Debt Instruments And Notes That Are Issued With Original Issue
Discount.
If the notes are subject to special rules governing contingent payment debt instruments for U.S. federal income tax purposes and the holder is a U.S. individual or taxable entity, that holder generally will be
required to pay taxes on ordinary income over the term of such notes based on the comparable yield for the notes, even though that holder may not receive any payments from us until maturity. This comparable yield is determined solely to calculate
the amounts a holder will be taxed on prior to maturity and is neither a prediction nor a guarantee of what the actual yield will be. Any gain that may be recognized on the taxable disposition (including cash settlement) of such notes will
generally be ordinary income. Any loss that may be recognized upon the taxable disposition of such notes will generally be ordinary loss to the extent of the interest that the holder included as income in the current or previous taxable years in
respect of the notes and thereafter will be capital loss. The deductibility of capital losses is subject to limitations.
If the notes are instead treated as variable rate debt instruments all stated interest will be treated as “qualified stated interest” and will generally be taxable to a holder that is a U.S. individual or taxable
entity as ordinary interest income at the time it accrues or is received. Additionally, a variable rate debt instrument may have a stated principal amount that exceeds its issue price by more than a de minimis amount, in which case the excess will
be treated as “original issue discount” and will be included in income over the term of the note as detailed in the next paragraph.
Similarly, if the notes are treated as issued with original issue discount, U.S. holders will be required to accrue interest on the notes and pay tax accordingly, even though such holders may not receive any payments
from us until maturity. For further discussion, see “Material U.S. Federal Income Tax Consequences” herein.
Non-U.S. Investors May Be Subject to Certain Additional Risks.
This product supplement contains a general description of certain U.S. tax considerations relating to the notes. If you are a non-U.S. investor, you should consult your tax advisors as to the consequences, under the
tax laws of the country where you are resident for tax purposes, of acquiring, holding and disposing of the notes and receiving the payments that may be due under the notes.
The Bank will issue the notes as part of its Series E senior debt securities or Series H senior debt securities, which will be specified in the applicable pricing supplement and as
more fully described in the accompanying prospectus. Information included in this product supplement supersedes information in the other base offering documents to the extent that it is different from that information.
The specific terms of the notes will be described in the applicable pricing supplement. If the terms described in the applicable pricing supplement are
inconsistent with those described herein, the terms described in the applicable pricing supplement shall control.
Specified Currency
Unless otherwise specified in the applicable pricing supplement, all payments of principal and interest will be made in U.S. dollars (“$”).
No Listing
Unless otherwise specified in the applicable pricing supplement, your notes will not be listed or displayed on any securities exchange, electronic communications network or interdealer market
quotation system.
Business Day
The term “business day” means, for any note, a day that meets all the following applicable requirements:
| (A) |
for all notes, is a Monday, Tuesday, Wednesday, Thursday or Friday that is neither a legal holiday nor a day on which banking institutions are authorized or required by law to close in New York City;
|
| (B) |
if the note has a specified currency other than U.S. dollars or euros, is also a day on which banking institutions are not authorized or obligated by law, regulation or executive order to close in the applicable principal financial center;
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If the applicable pricing supplement specifies a different meaning for the term business day, we will use that modified definition in determining any payment date as well as the maturity date for your
notes.
Certain Terms For Notes Linked To An Index
Certain Definitions
A “multiple exchange index” means the EURO STOXX 50® Index, the EURO STOXX® Banks Index, the MSCI ACWI Index®, the MSCI EAFE Index®,
the MSCI Emerging Markets IndexSM, and any other equity index designated as a multiple exchange index in the applicable pricing supplement.
A “trading day” with respect to an Index (other than a multiple exchange index) means a day, as determined by the calculation agent, on which (i) the relevant stock exchanges
with respect to each security underlying such Index are scheduled to be open for trading for their respective regular trading sessions and (ii) each related futures or options exchange with respect to such Index is scheduled to be open for trading
for its regular trading session.
A “trading day” with respect to a multiple exchange index means a day, as determined by the calculation agent, on which (i) the relevant index sponsor is scheduled to publish
the level of such Index and (ii) each related futures or options exchange with respect to such Index is scheduled to be open for trading for its regular trading session.
The “relevant stock exchange” for any security underlying an Index means the primary exchange or quotation system on which such security is traded, as determined by the
calculation agent.
The “related futures or options exchange” for an Index means an exchange or quotation system where trading has a material effect (as determined by the calculation agent) on
the overall market for futures or options contracts relating to such Index.
The “closing level” with respect to an Index on any trading day means the official closing level of that Index reported by the relevant index sponsor on such trading day, as obtained by the
calculation agent on such trading day from the licensed third-party market data vendor contracted by the calculation agent at such time; in particular, taking into account the decimal precision and/or rounding convention employed by such licensed
third-party market data vendor on such date. Currently, the calculation agent obtains market data from Bloomberg L.P., but the calculation agent may change its market data vendor at any time without notice. The foregoing provisions of this definition
of “closing level” are subject to the provisions set forth below under “—Market Disruption Events,” “—Adjustments to an Index,” “—Discontinuance of an Index” and “General Terms of the Notes—Consequences of a Market Disruption Event; Postponement of a
Calculation Day.”
Market Disruption Events
A “market disruption event” with respect to an Index (other than a multiple exchange index) means any of the following events as determined by the calculation agent in its
sole discretion:
| (A) |
The occurrence or existence of a material suspension of or limitation imposed on trading by the relevant stock exchanges or otherwise relating to securities which then comprise 20% or more of the level of such Index or any successor equity
index at any time during the one-hour period that ends at the close of trading on that day, whether by reason of movements in price exceeding limits permitted by those relevant stock exchanges or otherwise.
|
| (B) |
The occurrence or existence of a material suspension of or limitation imposed on trading by any related futures or options exchange or otherwise in futures or options contracts relating to such Index or any successor equity index on any
related futures or options exchange at any time during the one-hour period that ends at the close of trading on that day, whether by reason of movements in price exceeding limits permitted by the related futures or options exchange or
otherwise.
|
| (C) |
The occurrence or existence of any event, other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, securities that then comprise
20% or more of the level of such Index or any successor equity index on their relevant stock exchanges at any time during the one-hour period that ends at the close of trading on that day.
|
| (D) |
The occurrence or existence of any event, other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, futures or options contracts
relating to such Index or any successor equity index on any related futures or options exchange at any time during the one-hour period that ends at the close of trading on that day.
|
| (E) |
The closure on any exchange business day of the relevant stock exchanges on which securities that then comprise 20% or more of the level of such Index or any successor equity index are traded or any related futures or options exchange with
respect to such Index or any successor equity index prior to its scheduled closing time unless the earlier closing time is announced by the relevant stock exchange or related futures or options exchange, as applicable, at least one hour prior
to the earlier of (1) the actual closing time for the regular trading session on such relevant stock exchange or related futures or options exchange, as applicable, and (2) the submission deadline for orders to be entered into the relevant
stock exchange or related futures or options exchange, as applicable, system for execution at such actual closing time on that day.
|
| (F) |
The relevant stock exchange for any security underlying such Index or successor equity index or any related futures or options exchange with respect to such Index or successor equity index fails to open for trading during its regular
trading session.
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For purposes of determining whether a market disruption event has occurred with respect to an Index (other than a multiple exchange index):
| (1) |
the relevant percentage contribution of a security to the level of such Index or any successor equity index will be based on a comparison of (x) the portion of the level of such index attributable to that security and (y) the overall level
of such Index or successor equity index, in each case immediately before the occurrence of the market disruption event;
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| (2) |
the “close of trading” on any trading day for such Index or any successor equity index means the scheduled closing time of the relevant stock exchanges with respect to the securities underlying such Index or successor equity index
on such trading day; provided that, if the actual closing time of the regular trading session of any such relevant stock exchange is earlier than its scheduled closing time on such trading day, then
(x) for purposes of clauses (A) and (C) of the definition of “market disruption event” above, with respect to any security underlying such Index or successor equity index for which such relevant stock exchange is its relevant stock exchange,
the “close of trading” means such actual closing time and (y) for purposes of clauses (B) and (D) of the definition of “market disruption event” above, with respect to any futures or options contract relating to such Index or successor equity
index, the “close of trading” means the latest actual closing time of the regular trading session of any of the relevant stock exchanges, but in no event later than the scheduled closing time of the relevant stock exchanges;
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| (3) |
the “scheduled closing time” of any relevant stock exchange or related futures or options exchange on any trading day for such Index or any successor equity index means the scheduled weekday closing time of such relevant stock
exchange or related futures or options exchange on such trading day, without regard to after hours or any other trading outside the regular trading session hours; and
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| (4) |
an “exchange business day” means any trading day for such Index or any successor equity index on which each relevant stock exchange for the securities underlying such Index or any successor equity index and each related futures or
options exchange with respect to such Index or any successor equity index are open for trading during their respective regular trading sessions, notwithstanding any such relevant stock exchange or related futures or options exchange closing
prior to its scheduled closing time.
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A “market disruption event” with respect to a multiple exchange index means, any of (A), (B), (C) or (D) below, as determined by the calculation agent in its sole discretion:
| (A) |
Any of the following events occurs or exists with respect to any security included in such Index or any successor equity index, and the aggregate of all securities included in such Index or successor equity index with respect to which any
such event occurs comprise 20% or more of the level of such Index or successor equity index:
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| • |
a material suspension of or limitation imposed on trading by the relevant stock exchange for such security or otherwise at any time during the one-hour period that ends at the scheduled closing time for the relevant stock exchange for such
security on that day, whether by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise;
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| • |
any event, other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, such security on its relevant stock exchange at any time
during the one-hour period that ends at the scheduled closing time for the relevant stock exchange for such security on that day; or
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| • |
the closure on any exchange business day of the relevant stock exchange for such security prior to its scheduled closing time unless the earlier closing is announced by such relevant stock exchange at least one hour prior to the earlier of
(i) the actual closing time for the regular trading session on such relevant stock exchange and (ii) the submission deadline for orders to be entered into the relevant stock exchange system for execution at the scheduled closing time for such
relevant stock exchange on that day.
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| (B) |
Any of the following events occurs or exists with respect to futures or options contracts relating to such Index or any successor equity index:
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| • |
a material suspension of or limitation imposed on trading by any related futures or options exchange or otherwise at any time during the one-hour period that ends at the close of trading on such related futures or options exchange on that
day, whether by reason of movements in price exceeding limits permitted by the related futures or options exchange or otherwise;
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| • |
any event, other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, futures or options contracts relating to such Index or
successor equity index on any related futures or options exchange at any time during the one-hour period that ends at the close of trading on such related futures or options exchange on that day; or
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| • |
the closure on any exchange business day of any related futures or options exchange prior to its scheduled closing time unless the earlier closing time is announced by such related futures or options exchange at least one hour prior to the
earlier of (i) the actual closing time for the regular trading session on such related futures or options exchange and (ii) the submission deadline for orders to be entered into the related futures or options exchange system for execution at
the close of trading for such related futures or options exchange on that day.
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| (C) |
The relevant index sponsor fails to publish the level of such Index or any successor equity index (other than as a result of the relevant index sponsor having discontinued publication of such Index or successor equity index and no
successor equity index being available).
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| (D) |
Any related futures or options exchange fails to open for trading during its regular trading session.
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For purposes of determining whether a market disruption event has occurred with respect to a multiple exchange index:
| (1) |
the relevant percentage contribution of a security included in such Index or any successor equity index to the level of such Index will be based on a comparison of (x) the portion of the level of such Index or any successor equity index
attributable to that security to (y) the overall level of such index, in each case using the official opening weightings as published by the relevant index sponsor as part of the market opening data;
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| (2) |
the “scheduled closing time” of any relevant stock exchange or related futures or options exchange on any trading day means the scheduled weekday closing time of such relevant stock exchange or related futures or options exchange on
such trading day, without regard to after hours or any other trading outside the regular trading session hours; and
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| (3) |
an “exchange business day” means any trading day on which (i) the relevant index sponsor publishes the level of such index or any successor equity index and (ii) each related futures or options exchange is open for trading during
its regular trading session, notwithstanding any related futures or options exchange closing prior to its scheduled closing time.
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Adjustments to an Index
If at any time the method of calculating an Index or a successor equity index, or the closing level thereof, is changed in a material respect, or if an Index or a successor equity
index is in any other way modified so that such index does not, in the opinion of the calculation agent, fairly represent the level of such index had those changes or modifications not been made, then the calculation agent will, at the close of
business in New York, New York, on each date that the closing level of such index is to be calculated, make such calculations and adjustments as, in the good faith judgment of the calculation agent, may be necessary in order to arrive at a level of
an index comparable to such Index or successor equity index as if those changes or modifications had not been made, and the calculation agent will calculate the closing level of such Index or successor equity index with reference to such index, as so
adjusted. Accordingly, if the method of calculating an Index or successor equity index is modified so that the level of such index is a fraction or a multiple of what it would have been if it had not been modified (e.g.,
due to a split or reverse split in such equity index), then the calculation agent will adjust such Index or successor equity index in order to arrive at a level of such index as if it had not been modified (e.g.,
as if the split or reverse split had not occurred).
Discontinuance of an Index
If an index sponsor discontinues publication of an Index, and such index sponsor or another entity publishes a successor or substitute equity index that the calculation agent determines, in its sole
discretion, to be comparable to such Index (a “successor equity index”), then, upon the calculation agent’s notification of that determination to the trustee and the Bank, the calculation agent will substitute the successor equity index as
calculated by the relevant index sponsor or any other entity for purposes of calculating the closing level of such Index on any date of determination. Under these circumstances, the calculation agent may in its sole discretion adjust any value of
the original Index and the successor equity index (including but not limited to the starting value, any value derived from the starting value, the ending value and the closing level or any other relevant value of the original Index or the successor
equity index on any date of determination) with a view to offsetting, to the extent practicable, any difference in the relative values of the original Index and the successor equity index at the time the original Index is replaced by the successor
equity index.
In the event that an index sponsor discontinues publication of an Index prior to, and the discontinuance is continuing on, a calculation day and the calculation agent determines
that no successor equity index is available at such time, the calculation agent will calculate a substitute closing level for such Index in accordance with the formula for and method of calculating such Index last in effect prior to the
discontinuance, but using only those securities that comprised such Index immediately prior to that discontinuance. If a successor equity index is selected or the calculation agent calculates a level as a substitute for such Index, the successor
equity index or level will be used as a substitute for such Index for all purposes, including the purpose of determining whether a market disruption event exists.
If on a calculation day an index sponsor fails to calculate and announce the level of an Index, the calculation agent will calculate a substitute closing level of such Index in
accordance with the formula for and method of calculating such Index last in effect prior to the failure, but using only those securities that comprised such Index immediately prior to that failure; provided
that, if a market disruption event occurs or is continuing on such day with respect to such Index, then the provisions set forth below under “General Terms of the Notes—Consequences of a Market Disruption Event; Postponement of a Calculation Day”
shall apply in lieu of the foregoing.
Notwithstanding these alternative arrangements, discontinuance of the publication of, or the failure by the relevant index sponsor to calculate and announce the level of, an Index
may adversely affect the value of the notes.
Certain Terms For Notes Linked To A Fund
Certain Definitions
A “trading day” with respect to a Fund means a day, as determined by the calculation agent, on which the relevant stock exchange and each related futures or options exchange
with respect to such Fund or any successor thereto, if applicable, are scheduled to be open for trading for their respective regular trading sessions.
The “relevant stock exchange” for a Fund means the primary exchange or quotation system on which shares (or other applicable securities) of such Fund are traded, as
determined by the calculation agent.
The “related futures or options exchange” for a Fund means each exchange or quotation system where trading has a material effect (as determined by the calculation agent) on
the overall market for futures or options contracts relating to such Fund.
The “closing price” for one share of a Fund (or one unit of any other security for which a closing price must be determined) on any trading day means the official closing
price on such day published by the principal United States securities exchange registered under the Exchange Act, on which such Fund (or any such other security) is listed or admitted to trading.
The “fund closing price” with respect to a Fund on any trading day means the product of (i) the closing price of one share of such Fund (or one unit of any other security for
which a fund closing price must be determined) on such trading day and (ii) the adjustment factor applicable to such Fund on such trading day.
The “adjustment factor” means, with respect to a share of a Fund (or one unit of any other security for which a fund closing price must be determined), 1.0, subject to
adjustment in the event of certain events affecting the shares of such Fund. See “—Anti-dilution Adjustments Relating to a Fund; Alternate Calculation” below.
Market Disruption Events
A “market disruption event” with respect to a Fund means any of the following events as determined by the calculation agent in its sole discretion:
| (A) |
The occurrence or existence of a material suspension of or limitation imposed on trading by the relevant stock exchange or otherwise relating to the shares (or other applicable securities) of such Fund or any successor fund on the relevant
stock exchange at any time during the one-hour period that ends at the close of trading on such day, whether by reason of movements in price exceeding limits permitted by such relevant stock exchange or otherwise.
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| (B) |
The occurrence or existence of a material suspension of or limitation imposed on trading by any related futures or options exchange or otherwise in futures or options contracts relating to the shares (or other applicable securities) of
such Fund or any successor fund on any related futures or options exchange at any time during the one-hour period that ends at the close of trading on that day, whether by reason of movements in price exceeding limits permitted by the related
futures or options exchange or otherwise.
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| (C) |
The occurrence or existence of any event, other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, shares (or other applicable
securities) of such Fund or any successor fund on the relevant stock exchange at any time during the one-hour period that ends at the close of trading on that day.
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| (D) |
The occurrence or existence of any event, other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, futures or options contracts
relating to shares (or other applicable securities) of such Fund or any successor fund on any related futures or options exchange at any time during the one-hour period that ends at the close of trading on that day.
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| (E) |
The closure of the relevant stock exchange or any related futures or options exchange with respect to such Fund or any successor fund prior to its scheduled closing time unless the earlier closing time is announced by the relevant stock
exchange or related futures or options exchange, as applicable, at least one hour prior to the earlier of (1) the actual closing time for the regular trading session on such relevant stock exchange or related futures or options exchange, as
applicable, and (2) the submission deadline for orders to be entered into the relevant stock exchange or related futures or options exchange, as applicable, system for execution at the close of trading on that day.
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| (F) |
The relevant stock exchange or any related futures or options exchange with respect to such Fund or any successor fund fails to open for trading during its regular trading session.
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For purposes of determining whether a market disruption event has occurred with respect to a Fund:
| (1) |
“close of trading” means the scheduled closing time of the relevant stock exchange with respect to such Fund or any successor fund; and
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| (2) |
the “scheduled closing time” of the relevant stock exchange or any related futures or options exchange on any trading day for such Fund or any successor fund means the scheduled weekday closing time of such relevant stock exchange
or related futures or options exchange on such trading day, without regard to after hours or any other trading outside the regular trading session hours.
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Anti-dilution Adjustments Relating to a Fund; Alternate Calculation
Anti-dilution Adjustments
The calculation agent will adjust the adjustment factor with respect to a Fund as specified below if any of the events specified below occurs with respect to such Fund and the effective date or
ex-dividend date, as applicable, for such event is after the pricing date and on or prior to the final calculation day for such Fund.
The adjustments specified below do not cover all events that could affect a Fund, and there may be other events that could affect a Fund for which the calculation agent will not make any such adjustments, including,
without limitation, an ordinary cash dividend. Nevertheless, the calculation agent may, in its sole discretion, make additional adjustments to any terms of the notes upon the occurrence of other events that affect or could potentially affect the
market price of, or shareholder rights in, a Fund, with a view to offsetting, to the extent practical, any such change, and preserving the relative investment risks of the notes. In addition, the calculation agent may, in its sole discretion, make
adjustments or a series of adjustments that differ from those described herein if the calculation agent determines that such adjustments do not properly reflect the economic consequences of the events specified in this product supplement or would not
preserve the relative investment risks of the notes. All determinations made by the calculation agent in making any adjustments to the terms of the notes, including adjustments that are in addition
to, or that differ from, those described in this product supplement, will be made in good faith and a commercially reasonable manner, with the aim of ensuring an equitable result.
In determining whether to make any adjustment to the terms of the notes, the calculation agent may consider any adjustment made by The Options Clearing Corporation or any other equity derivatives
clearing organization on options contracts on the affected Fund.
For any event described below, the calculation agent will not be required to adjust the adjustment factor for a Fund unless the adjustment would result in a change to such
adjustment factor then in effect of at least 0.10%. The adjustment factor resulting from any adjustment will be rounded up or down, as appropriate, to the nearest one-hundred thousandth.
| (A) |
Stock Splits and Reverse Stock Splits
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If a stock split or reverse stock split has occurred with respect to a Fund, then once such split has become effective, the adjustment factor for such Fund will
be adjusted to equal the product of the prior adjustment factor for such Fund and the number of securities which a holder of one share (or other applicable security) of such Fund before the effective date of such stock split or reverse stock split
would have owned or been entitled to receive immediately following the applicable effective date.
| (B) |
Stock Dividends
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If a dividend or distribution of shares (or other applicable securities) of a Fund has been made by such Fund ratably to all holders of record of such shares (or
other applicable security), then the adjustment factor for such Fund will be adjusted on the ex-dividend date to equal the prior adjustment factor for such Fund plus the product of the prior adjustment factor for such Fund and the additional number
of shares (or other applicable security) of such Fund which a holder of one share (or other applicable security) of such Fund before the ex-dividend date would have been entitled to receive immediately following that date; provided, however, that no adjustment will be made for a distribution for which the number of securities of such Fund paid or distributed is based on a fixed cash equivalent value.
| (C) |
Extraordinary Dividends
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If an extraordinary dividend (as defined below) has occurred with respect to a Fund, then the adjustment factor for such Fund will be adjusted on the ex-dividend
date to equal the product of the prior adjustment factor for such Fund and a fraction, the numerator of which is the closing price per share (or other applicable security) of such Fund on the trading day preceding the ex-dividend date, and the
denominator of which is the amount by which the closing price per share (or other applicable security) of such Fund on the trading day preceding the ex-dividend date exceeds the extraordinary dividend amount (as defined below).
For purposes of determining whether an extraordinary dividend has occurred:
| (1) |
“extraordinary dividend” means any cash dividend or distribution (or portion thereof) that the calculation agent determines, in its sole discretion, is extraordinary or special; and
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| (2) |
“extraordinary dividend amount” with respect to an extraordinary dividend for the securities of a Fund will equal the amount per share (or other applicable security) of such Fund of the applicable cash dividend or distribution that
is attributable to the extraordinary dividend, as determined by the calculation agent in its sole discretion.
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A distribution on the securities of a Fund described below under the section entitled “—Reorganization Events” below that also constitutes an extraordinary
dividend will only cause an adjustment pursuant to that “—Reorganization Events” section.
| (D) |
Other Distributions
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If a Fund declares or makes a distribution to all holders of the shares (or other applicable security) of such Fund of any non-cash assets, excluding dividends or
distributions described under the section entitled “—Stock Dividends” above, then the calculation agent may, in its sole discretion, make such adjustment (if any) to the adjustment factor as it deems appropriate in the circumstances. If the
calculation agent determines to make an adjustment pursuant to this paragraph, it will do so with a view to offsetting, to the extent practical, any change in the economic position of a holder of the notes that results solely from the applicable
event.
| (E) |
Reorganization Events
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If a Fund, or any successor fund, is subject to a merger, combination, consolidation or statutory exchange of securities with another exchange traded fund, and such Fund or such successor fund is not
the surviving entity (a “reorganization event”), then, on or after the date of such event, the calculation agent shall, in its sole discretion, make an adjustment to the adjustment factor for such Fund or such successor fund or the method of
determining the maturity payment amount or any other terms of the notes as the calculation agent determines appropriate to account for the economic effect on the notes of such event, and determine the effective
date of that adjustment. If the calculation agent determines that no adjustment that it could make will produce a commercially reasonable result, then the calculation agent may deem such event a liquidation event
(as defined below).
Liquidation Events
If a Fund is de-listed, liquidated or otherwise terminated (a “liquidation event”), and a successor or substitute exchange traded fund exists that the calculation agent
determines, in its sole discretion, to be comparable to such Fund, then, upon the calculation agent’s notification of that determination to the trustee and the Bank, any subsequent fund closing price for such Fund will be determined by reference to
the fund closing price of such successor or substitute exchange traded fund (such exchange traded fund being referred to herein as a “successor fund”), with such adjustments as the calculation agent determines are appropriate to account for
the economic effect of such substitution on holders of the notes.
If a Fund undergoes a liquidation event prior to, and such liquidation event is continuing on, the date that any fund closing price of such Fund is to be determined and the
calculation agent determines that no successor fund is available at such time, then the calculation agent will, in its discretion, calculate the fund closing price for such Fund on such date by a computation methodology that the calculation agent
determines, in its discretion, will as closely as reasonably possible replicate such Fund, provided that if the calculation agent determines that it is not practicable to replicate such Fund (including but
not limited to the instance in which a fund underlying index sponsor discontinues publication of the relevant fund underlying index), then the calculation agent will calculate the fund closing price for such Fund in accordance with the formula last
used to calculate such fund closing price before such liquidation event, but using only those securities that were held by such Fund immediately prior to such liquidation event without any rebalancing or substitution of such securities following such
liquidation event. Notwithstanding the foregoing, in the case of a Fund that does not track an index of equity securities, if such Fund undergoes a liquidation event prior to, and such liquidation event is continuing on, the date that any fund
closing price of such Fund is to be determined and the calculation agent determines (i) that no successor fund is available at such time and (ii) that it is not practicable to replicate such Fund, then the calculation agent will, in its discretion,
calculate the fund closing price for such Fund on such date in good faith and in a commercially reasonable manner.
If a successor fund is selected or the calculation agent calculates the fund closing price as a substitute for a Fund, such successor fund or fund closing price will be used as a
substitute for such Fund for all purposes, including for purposes of determining whether a market disruption event exists with respect to such Fund. Notwithstanding these alternative arrangements, a liquidation event with respect to a Fund may
adversely affect the value of the notes.
If any event is both a reorganization event and a liquidation event, such event will be treated as a reorganization event for purposes of the notes unless the calculation agent
makes the determination referenced in the last sentence of the section entitled “—Anti-dilution Adjustments—Reorganization Events” above.
Alternate Calculation
If at any time the method of calculating a Fund or a successor fund, or the related fund underlying index, is changed in a material respect, or if a Fund or a successor fund is in any other way
modified so that such Fund or such successor fund does not, in the opinion of the calculation agent, fairly represent the price of the securities of such Fund or such successor fund had such changes or modifications not been made, then the
calculation agent may, at the close of business in New York City on the date that any fund closing price is to be determined, make such calculations and adjustments as, in the good faith judgment of the calculation agent, may be necessary in order
to arrive at a closing price of an exchange traded fund comparable to such Fund or such successor fund, as the case may be, as if such changes or modifications had not been made, and calculate the fund closing price of such Fund or such successor
fund and determine the maturity payment amount and any other terms of the notes with reference to such adjusted closing price of such Fund or such successor fund, as applicable.
Certain Terms For Notes Linked To An Underlying Stock
Certain Definitions
A “trading day” with respect to an Underlying Stock means a day, as determined by the calculation agent, on which trading is generally conducted on the principal trading
market for such Underlying Stock (as determined by the calculation agent, in its sole discretion), the Chicago Mercantile Exchange and the Chicago Board Options Exchange and in the over-the-counter market for equity securities in the United States.
The “closing price” for one share of an Underlying Stock (or one unit of any other security for which a closing price must be determined) on any trading day means:
| • |
if such Underlying Stock (or any such other security) is listed or admitted to trading on a national securities exchange, the official closing price on such day published by the principal United States securities exchange registered under
the Exchange Act on which such Underlying Stock (or any such other security) is listed or admitted to trading; or
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•
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if such Underlying Stock (or any such other security) (i) is not listed or admitted to trading on any national securities exchange; or (ii) is listed or admitted to trading on any national securities
exchange but the official closing price is not available pursuant to the preceding bullet, the last reported sale price of the principal trading session on any other market system or quotation system that is the primary market for the
trading of such Underlying Stock.
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If the official closing price or the last reported sale price, as applicable, for such Underlying Stock (or any such other security) is not available pursuant to either of the two preceding sentences,
then the closing price per share for any trading day will be the mean, as determined by the calculation agent, of the bid price for such Underlying Stock (or any such other security) obtained from as many recognized dealers in such security, but
not exceeding three, as will make such bid prices available to the calculation agent. Bids of Wells Fargo Securities, the calculation agent or any of our or their respective affiliates may be included in the calculation of such mean, but only to
the extent that any such bid is the highest of the bids obtained. If no bid prices are provided from any third-party dealers, the closing price for such Underlying Stock on such trading day will be determined by the calculation agent in its sole
discretion, taking into account any information that it deems relevant.
The “stock closing price” with respect to an Underlying Stock on a trading day, means the product of the closing price of such Underlying Stock and the adjustment factor for
such Underlying Stock, each on such trading day.
The “adjustment factor” for an Underlying Stock is initially 1.0. The adjustment factor for an Underlying Stock will remain constant for the term of the notes, subject to
adjustment for certain corporate events relating to the applicable Underlying Stock Issuer as described in the section entitled “—Adjustment Events” below.
Market Disruption Events
A “market disruption event” means, with respect to an Underlying Stock, the occurrence or existence of any of the following events:
| • |
a suspension, absence or material limitation of trading in such Underlying Stock on its primary market for more than two hours of trading or during the one-half hour before the close of trading in that market, as determined by the
calculation agent in its sole discretion;
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| • |
a suspension, absence or material limitation of trading in option or futures contracts relating to such Underlying Stock, if available, in the primary market for those contracts for more than two hours of trading or during the one-half
hour before the close of trading in that market, as determined by the calculation agent in its sole discretion;
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| • |
such Underlying Stock does not trade on the New York Stock Exchange, The Nasdaq Global Select Market, The Nasdaq Global Market or what was the primary market for such Underlying Stock, as determined by the calculation agent in its sole
discretion; or
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| • |
any other event, if the calculation agent determines in its sole discretion that the event materially interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with respect to the
notes that we or our affiliates have effected or may effect.
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The following events will not be a market disruption event with respect to an Underlying Stock:
| • |
a limitation on the hours or number of days of trading in such Underlying Stock in its primary market, but only if the limitation results from an announced change in the regular business hours of the relevant market; and
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| • |
a decision to permanently discontinue trading in the option or futures contracts relating to such Underlying Stock.
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For this purpose, a “suspension, absence or material limitation of trading” in the applicable market will not include any time when that market is itself closed for trading under
ordinary circumstances. In contrast, a “suspension, absence or material limitation of trading” in the applicable market for such Underlying Stock or option or futures contracts relating to such Underlying Stock, as applicable, by reason of any of:
| • |
a price change exceeding limits set by that market;
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| • |
an imbalance of orders relating to such Underlying Stock or those contracts; or
|
| • |
a disparity in bid and asked quotes relating to such Underlying Stock or those contracts
|
will constitute a “suspension, absence or material limitation of trading” in such Underlying Stock or those contracts, as the case may be, in the applicable
market.
Adjustment Events
The adjustment factor for an Underlying Stock is initially 1.0. However, the adjustment factor for an Underlying Stock is subject to adjustment by the calculation agent as a result
of the dilution and reorganization events described in this section. The adjustments described below do not cover all events that could affect the Underlying Stocks and, consequently, the value of your notes, such as a tender or exchange offer by the
applicable Underlying Stock Issuer for such Underlying Stock at a premium to its market price or a tender or exchange offer made by a third party for less than all outstanding shares of such Underlying Stock. We describe the risks relating to
dilution above under “Risk Factors—Additional Risk Factors Relating to Notes Linked to An Underlying Stock—You Have Limited Anti-dilution Protection.”
How adjustments will be made
If one of the events described below occurs with respect to an Underlying Stock and the calculation agent determines that the event has a dilutive or concentrative effect on the
market price of such Underlying Stock, the calculation agent will calculate a corresponding adjustment to the adjustment factor for such Underlying Stock as the calculation agent deems appropriate to account for that dilutive or concentrative effect.
For example, if an adjustment is required because of a two-for-one stock split, then the adjustment factor for such Underlying Stock will be adjusted by the calculation agent by multiplying the existing adjustment factor by a fraction whose numerator
is the number of shares of such Underlying Stock outstanding immediately after the stock split and whose denominator is the number of shares of such Underlying Stock outstanding immediately prior to the stock split. Consequently, the adjustment
factor for such Underlying Stock will be adjusted to double the prior adjustment factor, due to the corresponding decrease in the market price of such Underlying Stock. Adjustments to the adjustment factor for an Underlying Stock will be made for
events with an effective date or ex-dividend date, as applicable, from but excluding the pricing date to and including the applicable calculation day for such Underlying Stock (the “adjustment period”).
The calculation agent will also determine the effective date of that adjustment, and the replacement of an Underlying Stock, if applicable, in the event of a consolidation or merger
or certain other events in respect of the applicable Underlying Stock Issuer. Upon making any such adjustment, the calculation agent will give notice as soon as practicable to the trustee and the paying agent, stating the adjustment to the adjustment
factor of such Underlying Stock. The calculation agent will not be required to make any adjustments to the adjustment factor for purposes of calculating the stock closing price for a calculation day after the close of business on such calculation
day; provided that any such adjustments to the adjustment factor will be taken into account for purposes of determining the stock closing price for any subsequent calculation day. In no event, however, will
an anti-dilution adjustment to the adjustment factor of an Underlying Stock during the term of the notes be deemed to change the principal amount per note.
If more than one event requiring adjustment occurs with respect to an Underlying Stock, the calculation agent will make an adjustment for each event in the order in which the events
occur, and on a cumulative basis. Thus, having made an adjustment for the first event, the calculation agent will adjust the adjustment factor for such Underlying Stock for the second event, applying the required adjustment to the adjustment factor
for such Underlying Stock as already adjusted for the first event, and so on for any subsequent events.
For any dilution event described below, other than a consolidation or merger, the calculation agent will not have to adjust the adjustment factor for an Underlying Stock unless the
adjustment would result in a change to the adjustment factor of such Underlying Stock then in effect of at least 0.10%. The adjustment factor of such Underlying Stock resulting from any adjustment will be rounded up or down, as appropriate, to the
nearest one-hundred thousandth.
If an event requiring an anti-dilution adjustment occurs with respect to an Underlying Stock, the calculation agent will make the adjustment with a view to offsetting, to the extent
practical, any change in your economic position relative to your notes that results solely from that event. The calculation agent may, in its sole discretion, modify the anti-dilution adjustments as necessary to ensure an equitable result.
The calculation agent will make all determinations with respect to anti-dilution adjustments, including any determination as to whether an event requiring adjustment has occurred
with respect to an Underlying Stock, as to the nature of the adjustment required for such Underlying Stock and how it will be made or as to the value of any property distributed in a reorganization event, and will do so in its sole discretion. In the
absence of manifest error, those determinations will be conclusive for all purposes and will be binding on you and us, without any liability on the part of the calculation agent. You will not be entitled to any compensation from us for any loss
suffered as a result of any of these determinations by the calculation agent. The calculation agent will provide information about the adjustments that it makes upon your written request.
If any of the adjustments specified below is required to be made with respect to an amount or value of any cash or other property that is distributed by an Underlying Stock Issuer organized outside
the United States, such amount or value will be converted to U.S. dollars, as applicable, and will be reduced by any applicable foreign withholding taxes that would apply to such distribution if such distribution were paid to a U.S. person that is
eligible for the benefits of an applicable income tax treaty, if any, between the United States and the jurisdiction of organization of such Underlying Stock Issuer, as determined by the calculation agent, in its sole discretion.
No adjustments will be made for certain other events, such as offerings of common stock by an Underlying Stock Issuer for cash or in connection with the occurrence of a partial
tender or exchange offer for an Underlying Stock by the Underlying Stock Issuer of such Underlying Stock or any other person.
Stock Splits and Reverse Stock Splits
A stock split is an increase in the number of a corporation’s outstanding shares of stock without any change in its stockholders’ equity. Each outstanding share will be worth less
as a result of a stock split.
A reverse stock split is a decrease in the number of a corporation’s outstanding shares of stock without any change in its stockholders’ equity. Each outstanding share will be worth
more as a result of a reverse stock split.
If an Underlying Stock is subject to a stock split or a reverse stock split, then once the split has become effective the calculation agent will adjust the adjustment factor for
such Underlying Stock to equal the product of the prior adjustment factor of such Underlying Stock and the number of shares issued in such stock split or reverse stock split with respect to one share of such Underlying Stock.
Stock Dividends
In a stock dividend, a corporation issues additional shares of its stock to all holders of its outstanding stock in proportion to the shares they own. Each outstanding share will be
worth less as a result of a stock dividend.
If an Underlying Stock is subject to a stock dividend payable in shares of such Underlying Stock that is given ratably to all holders of shares of such Underlying Stock, then once
the dividend has become effective the calculation agent will adjust the adjustment factor for such Underlying Stock on the ex-dividend date to equal the sum of the prior adjustment factor for such Underlying Stock and the product of:
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the number of shares issued with respect to one share of such Underlying Stock, and
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the prior adjustment factor for such Underlying Stock.
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The “ex-dividend date” for any dividend or other distribution is the first day on and after which such Underlying Stock trades without the right to receive that dividend or
distribution.
No Adjustments for Other Dividends and Distributions
Unless otherwise specified in the applicable pricing supplement, the adjustment factor for an Underlying Stock will not be adjusted to reflect dividends, including cash dividends,
or other distributions paid with respect to such Underlying Stock, other than:
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stock dividends described above,
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issuances of transferable rights and warrants as described in “ —Transferable Rights and Warrants” below,
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distributions that are spin-off events described in “ —Reorganization Events” below, and
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extraordinary dividends described below.
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An “extraordinary dividend” means each of (a) the full amount per share of an Underlying Stock of any cash dividend or special dividend or distribution that is identified by
the applicable Underlying Stock Issuer as an extraordinary or special dividend or distribution, (b) the excess of any cash dividend or other cash distribution (that is not otherwise identified by the applicable Underlying Stock Issuer as an
extraordinary or special dividend or distribution) distributed per share of such Underlying Stock over the immediately preceding cash dividend or other cash distribution, if any, per share of such Underlying Stock that did not include an
extraordinary or special dividend (as adjusted for any subsequent corporate event requiring an adjustment as described in this section, such as a stock split or reverse stock split) if such excess portion of the dividend or distribution is more than
5.00% of the closing price of such Underlying Stock on the trading day preceding the ex-dividend date for the payment of such cash dividend or other cash distribution (such closing price, the “extraordinary dividend base closing price”) and
(c) the full cash value of any non-cash dividend or distribution per share of such Underlying Stock (excluding marketable securities, as defined below).
If an Underlying Stock is subject to an extraordinary dividend, then once the extraordinary dividend has become effective the calculation agent will adjust the adjustment factor for
such Underlying Stock on the ex-dividend date to equal the product of:
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the prior adjustment factor for such Underlying Stock, and
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a fraction, the numerator of which is the extraordinary dividend base closing price of such Underlying Stock on the trading day preceding the ex-dividend date and the denominator of which is the amount by which the extraordinary dividend
base closing price of such Underlying Stock on the trading day preceding the ex-dividend date exceeds the extraordinary dividend.
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Notwithstanding anything herein, the initiation by an Underlying Stock Issuer of an ordinary dividend on such Underlying Stock or any announced increase in the ordinary dividend on
such Underlying Stock will not constitute an extraordinary dividend requiring an adjustment.
To the extent an extraordinary dividend is not paid in cash or is paid in a currency other than U.S. dollars, the value of the non-cash component or non-U.S. currency will be
determined by the calculation agent, in its sole discretion. A distribution on an Underlying Stock that is a dividend payable in shares of such Underlying Stock, an issuance of rights or warrants or a spin-off event and also an extraordinary dividend
will result in an adjustment to the number of shares of such Underlying Stock only as described in “—Stock Dividends” above, “—Transferable Rights and Warrants” below or “—Reorganization Events” below, as the case may be, and not as described here.
Transferable Rights and Warrants
If an Underlying Stock Issuer issues transferable rights or warrants to all holders of such Underlying Stock to subscribe for or purchase such Underlying Stock at an exercise price
per share that is less than the closing price of such Underlying Stock on the trading day before the ex-dividend date for the issuance, then the adjustment factor for such Underlying Stock will be adjusted to equal the product of:
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the prior adjustment factor for such Underlying Stock, and
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a fraction, (1) the numerator of which will be the number of shares of such Underlying Stock outstanding at the close of trading on the trading day before the ex-dividend date (as adjusted for any subsequent event requiring an adjustment
hereunder) plus the total number of shares of such Underlying Stock offered for subscription or purchase pursuant to the rights or warrants and (2) the denominator of which will be the number of shares of such Underlying Stock outstanding at
the close of trading on the trading day before the ex-dividend date (as adjusted for any subsequent event requiring an adjustment hereunder) plus the number of additional shares of such Underlying Stock (referred to herein as the “additional
shares”) that the aggregate offering price of the total number of shares of such Underlying Stock so offered for subscription or purchase pursuant to the rights or warrants would purchase at the closing price on the trading day before
the ex-dividend date for the issuance.
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The number of additional shares will be equal to:
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the product of (1) the total number of shares of such Underlying Stock offered for subscription or purchase pursuant to the rights or warrants and (2) the exercise price of the rights or warrants, divided by
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the closing price of such Underlying Stock on the trading day before the ex-dividend date for the issuance.
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If the number of shares of such Underlying Stock actually delivered in respect of the rights or warrants differs from the number of shares of such Underlying Stock offered in
respect of the rights or warrants, then the adjustment factor for such Underlying Stock will promptly be readjusted to the adjustment factor for such Underlying Stock that would have been in effect had the adjustment been made on the basis of the
number of shares of such Underlying Stock actually delivered in respect of the rights or warrants.
Reorganization Events
Each of the following is a reorganization event with respect to an Underlying Stock:
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such Underlying Stock is reclassified or changed (other than in a stock split or reverse stock split),
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the applicable Underlying Stock Issuer has been subject to a merger, consolidation or other combination and either is not the surviving entity or is the surviving entity but all outstanding shares of such Underlying Stock are exchanged for
or converted into other property,
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a statutory share exchange involving outstanding shares of such Underlying Stock and the securities of another entity occurs, other than as part of an event described above,
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the applicable Underlying Stock Issuer sells or otherwise transfers its property and assets as an entirety or substantially as an entirety to another entity,
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the applicable Underlying Stock Issuer effects a spin-off, other than as part of an event described above (in a spin-off, a corporation issues to all holders of its common stock equity securities of another issuer), or
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the applicable Underlying Stock Issuer is liquidated, dissolved or wound up or is subject to a proceeding under any applicable bankruptcy, insolvency or other similar law, or another entity completes a tender or exchange offer for all the
outstanding shares of such Underlying Stock.
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Adjustments for Reorganization Events
If a reorganization event occurs with respect to an Underlying Stock, then the calculation agent will adjust the adjustment factor for such Underlying Stock to reflect the amount
and type of property or properties—whether cash, securities, other property or a combination thereof—that a holder of one share of such Underlying Stock would have been entitled to receive in relation to the reorganization event. We refer to this new
property as the “reorganization property.”
Reorganization property can be classified into two categories:
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an equity security listed on a national securities exchange, which we refer to generally as a “marketable security” and, in connection with a particular reorganization event, “new stock,” which may include any tracking stock,
any stock received in a spin-off (“spin-off stock”) or any marketable security received in exchange for the applicable Underlying Stock; and
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cash and any other property, assets or securities other than marketable securities (including equity securities that are not listed, that are traded over the counter or that are listed on a non-U.S. securities exchange), which we refer to
as “non-stock reorganization property.”
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For the purpose of making an adjustment required by a reorganization event, the calculation agent, in its sole discretion, will determine the value of each type of the
reorganization property. For purposes of valuing any new stock, the calculation agent will use the closing price of the security on the relevant trading day. The calculation agent will value non-stock reorganization property in any manner it
determines, in its sole discretion, to be appropriate. In connection with a reorganization event in which reorganization property includes new stock, for the purpose of determining the adjustment factor for any new stock as described below, the term
“new stock reorganization ratio” means the product of (i) the number of shares of the new stock received with respect to one share of such Underlying Stock and (ii) the adjustment factor for the applicable Underlying Stock on the trading day
immediately prior to the effective date of the reorganization event.
If a holder of shares of the applicable Underlying Stock may elect to receive different types or combinations of types of reorganization property in the reorganization event, the
reorganization property will consist of the types and amounts of each type distributed to a holder of shares of such Underlying Stock that makes no election, as determined by the calculation agent in its sole discretion.
If any reorganization event occurs with respect to an Underlying Stock, then on and after the effective date for such reorganization event (or, if applicable, in the case of spinoff
stock, the ex-dividend date for the distribution of such spinoff stock) the term “Underlying Stock” in this product supplement will be deemed to mean the following with respect to such Underlying Stock, and for each share of such Underlying
Stock, new stock and/or replacement stock so deemed to constitute such Underlying Stock, the adjustment factor for such Underlying Stock will be equal to the applicable number indicated:
| (a) |
if such Underlying Stock continues to be outstanding:
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that Underlying Stock (if applicable, as reclassified upon the issuance of any tracking stock) at the adjustment factor for such Underlying Stock in effect on the trading day immediately prior to the effective date of the reorganization
event; and
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if the reorganization property includes new stock, a number of shares of new stock equal to the new stock reorganization ratio;
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provided that, if any non-stock reorganization property is received in the reorganization event, the results of (a)(1)
and (a)(2) above will each be multiplied by the “gross-up multiplier,” which will be equal to a fraction, the numerator of which is the closing price of the original Underlying Stock on the trading day immediately prior to the effective date
of the reorganization event and the denominator of which is the amount by which such closing price of the original Underlying Stock exceeds the value of the non-stock reorganization property received per share of such Underlying Stock as determined
by the calculation agent as of the close of trading on such trading day; or
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if such Underlying Stock is surrendered for reorganization property:
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that includes new stock, a number of shares of new stock equal to the new stock reorganization ratio; provided that, if any non-stock reorganization property is received in the reorganization
event, such number will be multiplied by the gross-up multiplier; or
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that consists exclusively of non-stock reorganization property:
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if the surviving entity has marketable securities outstanding following the reorganization event and either (A) such marketable securities were in existence prior to such reorganization event or (B) such marketable securities were
exchanged for previously outstanding marketable securities of the surviving entity or its predecessor (“predecessor stock”) in connection with such reorganization event (in either case of (A) or (B), the “successor stock”), a
number of shares of the successor stock determined by the calculation agent on the
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trading day immediately prior to the effective date of such reorganization event equal to the adjustment factor for such Underlying Stock in effect on the
trading day immediately prior to the effective date of such reorganization event multiplied by a fraction, the numerator of which is the value of the non-stock reorganization property per share of such Underlying Stock on such trading day and the
denominator of which is the closing price of the successor stock on such trading day (or, in the case of predecessor stock, the closing price of the predecessor stock multiplied by the number of shares of the successor stock received with respect to
one share of the predecessor stock); or
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if the surviving entity does not have marketable securities outstanding, or if there is no surviving entity (in each case, a “replacement stock event”), a number of shares of replacement stock (selected as defined below) with an
aggregate value on the effective date of such reorganization event equal to the value of the non-stock reorganization property multiplied by the adjustment factor for such Underlying Stock in effect on the trading day immediately prior to the
effective date of such reorganization event.
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If a reorganization event occurs with respect to the shares of an Underlying Stock and the calculation agent adjusts the adjustment factor of such Underlying Stock to reflect the
reorganization property in the event as described above, the calculation agent will make further anti-dilution adjustments for any later events that affect the reorganization property, or any component of the reorganization property, comprising the
new adjustment factor of such Underlying Stock. The calculation agent will do so to the same extent that it would make adjustments if the shares of such Underlying Stock were outstanding and were affected by the same kinds of events. If a subsequent
reorganization event affects only a particular component of the number of shares of such Underlying Stock, the required adjustment will be made with respect to that component as if it alone were the number of shares of such Underlying Stock.
For purposes of adjustments for reorganization events, in the case of a consummated tender or exchange offer or going-private transaction involving reorganization property of a
particular type, reorganization property will be deemed to include the amount of cash or other property paid by the offeror in the tender or exchange offer with respect to such reorganization property (in an amount determined on the basis of the rate
of exchange in such tender or exchange offer or going-private transaction). In the event of a tender or exchange offer or a going-private transaction with respect to reorganization property in which an offeree may elect to receive cash or other
property, reorganization property will be deemed to include the kind and amount of cash and other property received by offerees who elect to receive cash.
Replacement Stock Events
Following the occurrence of a replacement stock event described in paragraph (b)(2)(ii) above or in “—Delisting of American Depositary Shares or Termination of
American Depositary Receipt Facility” below with respect to an Underlying Stock, the stock closing price of the applicable underlying stock on any calculation day on or after the effective date of the
replacement stock event will be determined by reference to a replacement stock and an adjustment factor (subject to any further anti-dilution adjustments) for such replacement stock as determined in accordance with the following paragraphs.
The “replacement stock” will be the stock having the closest “option period volatility” to the applicable original Underlying Stock among the stocks that then comprise the replacement stock
selection index (or, if publication of such index is discontinued, any successor or substitute index selected by the calculation agent) with the same GICS Code (as defined below) as the applicable original Underlying Stock Issuer; provided, however, that a replacement stock will not include (i) any stock that is subject to a trading restriction under the trading restriction policies of the Bank, the hedging counterparties of the Bank or
any of their affiliates that would materially limit the ability of the Bank, the hedging counterparties of the Bank or any of their affiliates to hedge the notes with respect to such stock or (ii) any stock where the aggregate market value of the
stock held by non-affiliates of the issuer of the stock is less than $1 billion as of the replacement determination date (any stock excluded under clause (i) or (ii), an “excluded stock”).
If a replacement stock is selected in connection with a reorganization event for an original Underlying Stock, the adjustment factor with respect to such replacement stock will be
equal to the number of shares of such replacement stock with an aggregate value, based on the closing price on the effective date of such reorganization event, equal to the product of (a) the value of the non-stock reorganization property received
per share of such original Underlying Stock and (b) the adjustment factor of such Underlying Stock in effect on the trading day immediately prior to the effective date of such reorganization event. If a replacement stock is selected in connection
with an ADS termination event (as defined below), the adjustment factor with respect to such replacement stock will be equal to the number of shares of such replacement stock with an aggregate value, based on the closing price on the change date (as
defined below), equal to the product of (x) the closing price of the original Underlying Stock on the change date and (y) the adjustment factor in effect on the trading day immediately prior to the change date.
The “option period volatility” means, in respect of any trading day, the volatility (calculated by referring to the closing price of the applicable Underlying Stock on its primary exchange) for
a period equal to the 125 trading days immediately preceding the announcement date of the reorganization event, as determined by the calculation agent.
“GICS Code” means the Global Industry Classification Standard (“GICS”) sub-industry code assigned to the applicable Underlying Stock Issuer; provided, however, if (i) there is no other stock in
the replacement stock selection index in the same GICS sub-industry or (ii) a replacement stock that is not an excluded stock cannot be identified from the replacement stock selection index in the same GICS sub-
industry, the GICS Code will mean the GICS industry code assigned to such original Underlying Stock Issuer. If no GICS Code has been assigned to such original Underlying Stock Issuer, the applicable
GICS Code will be determined by the calculation agent to be the GICS sub-industry code assigned to companies in the same sub-industry (or, subject to the proviso in the preceding sentence, industry, as applicable) as such original Underlying Stock
Issuer at the time of the relevant replacement stock event.
The “replacement stock selection index” means the S&P 500® Index.
Notwithstanding the foregoing:
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in the event that the calculation agent determines in its sole discretion that the replacement stock selected as described above would fail to reasonably represent your economic position relative to the
securities, the calculation agent may select a replacement stock in its sole discretion taking into account the factors used above and such other factors as the calculation agent deems relevant; and
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•
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the calculation agent may in its sole discretion elect to modify the adjustment factor from the value determined as described above with a view toward offsetting, to the extent practicable, any difference
in the relative prices of the original Underlying Stock and the replacement stock on the date on which the original Underlying Stock is replaced by the replacement stock, on the announcement date or effective date of the relevant
replacement stock event, or on such other day as the calculation agent determines in its sole discretion to be appropriate (for this purpose, the “replacement determination date”).
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Delisting of American Depositary Shares or Termination of American Depositary Receipt Facility. If an Underlying Stock is an American Depositary Share and
such Underlying Stock is no longer listed or admitted to trading on a U.S. securities exchange registered under the Exchange Act or any other market system or quotation system that is the primary market for the trading of such Underlying Stock,
or if the American depositary receipt facility between the applicable Underlying Stock Issuer and the depositary is terminated for any reason (each, an “ADS termination event”), then, on the last trading day on which the applicable
Underlying Stock is listed or admitted to trading or the last trading day immediately prior to the date of such termination, as applicable (the “change date”), a replacement stock event shall be deemed to occur.
Consequences of a Market Disruption Event; Postponement of a Calculation Day
As used in this section, the “final disrupted calculation day” means, with respect to a calculation day, (i) for an Index or a Fund, the eighth trading day for that Index or Fund after such
originally scheduled calculation day or (ii) for an Underlying Stock, the eighth scheduled trading day for that Underlying Stock after such originally scheduled calculation day.
Notes Linked to a Single Market Measure
If any calculation day is not a trading day with respect to the Market Measure, such calculation day will be postponed to the next succeeding day that is a trading day with
respect to the Market Measure.
If a market disruption event occurs or is continuing with respect to the Market Measure on any calculation day, then such calculation day will be postponed to the first
succeeding trading day for the Market Measure on which a market disruption event for the Market Measure has not occurred and is not continuing; however, if such first succeeding trading day has not occurred as of the final disrupted calculation day
for the Market Measure, that final disrupted calculation day shall be deemed to be the calculation day. If a calculation day has been postponed to the final disrupted calculation day and a market disruption event occurs or is continuing with respect
to the Market Measure on such final disrupted calculation day, the calculation agent will determine the closing value of the Market Measure on such final disrupted calculation day:
| (i) |
in the case of an Index, in accordance with the formula for and method of calculating the closing level of such Index last in effect prior to commencement of the market disruption event, using the closing price
(or, with respect to any relevant security, if trading in such security has been materially suspended or materially limited, its good faith estimate of the value of such security at (a) with respect to an Index that is not a multiple exchange
index, the scheduled closing time of the relevant stock exchange for such security or, if earlier, the actual closing time of the regular trading session of such relevant stock exchange or (b) with respect to a multiple exchange index, the
time at which the official closing level of such Index is calculated and published by the relevant index sponsor) on such date of each security included in such Index;
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| (ii) |
in the case of a Fund, based on its good faith estimate of the value of the shares (or other applicable securities) of such Fund as of the close of trading on such date; and
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| (iii) |
in the case of an Underlying Stock, by using its good faith estimate of the closing price that would have prevailed for such Underlying Stock on such day.
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As used in (i) above, “closing price” means, with respect to any security on any date, the relevant stock exchange traded or quoted price of such security as of (a) with respect to an Index that
is not a multiple exchange index, the scheduled closing time of the relevant stock exchange for such security or, if earlier, the actual closing time of the regular trading session of such relevant stock exchange or (b) with respect to a multiple
exchange index, the time at which the official closing level of such Index is calculated and published by the relevant index sponsor.
Notes Linked to Multiple Market Measures
If any calculation day is not a trading day with respect to any Market Measure, such calculation day for each Market Measure will be postponed to the next succeeding day that is
a trading day with respect to each Market Measure.
If a market disruption event occurs or is continuing with respect to any Market Measure on any calculation day, then such calculation day for such Market Measure will be
postponed to the first succeeding trading day for such Market Measure on which a market disruption event for such Market Measure has not occurred and is not continuing; however, if such first succeeding trading day has not occurred as of the final
disrupted calculation day for such Market Measure, that final disrupted calculation day shall be deemed to be the calculation day for such Market Measure. If a calculation day for a Market Measure has been postponed to the final disrupted calculation
day for that Market Measure and a market disruption event occurs or is continuing with respect to such Market Measure on such final disrupted calculation day, the calculation agent will determine the closing value of such Market Measure on such final
disrupted calculation day:
| (i) |
in the case of an Index, in accordance with the formula for and method of calculating the closing level of such Index last in effect prior to commencement of the market disruption event, using the closing price
(or, with respect to any relevant security, if trading in such security has been materially suspended or materially limited, its good faith estimate of the value of such security at (a) with respect to an Index that is not a multiple exchange
index, the scheduled closing time of the relevant stock exchange for such security or, if earlier, the actual closing time of the regular trading session of such relevant stock exchange or (b) with respect to a multiple exchange index, the
time at which the official closing level of such Index is calculated and published by the relevant index sponsor) on such date of each security included in such Index;
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| (ii) |
in the case of a Fund, based on its good faith estimate of the value of the shares (or other applicable securities) of such Fund as of the close of trading on such date; and
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| (iii) |
in the case of an Underlying Stock, by using its good faith estimate of the closing price that would have prevailed for such Underlying Stock on such day.
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As used in (i) above, “closing price” means, with respect to any security on any date, the relevant stock exchange traded or quoted price of such security as of (a) with
respect to an Index that is not a multiple exchange index, the scheduled closing time of the relevant stock exchange for such security or, if earlier, the actual closing time of the regular trading session of such relevant stock exchange or (b) with
respect to a multiple exchange index, the time at which the official closing level of such Index is calculated and published by the relevant index sponsor.
Notwithstanding the postponement of a calculation day for a Market Measure due to a market disruption event with respect to such Market Measure on such
calculation day, the originally scheduled calculation day will remain the calculation day for any Market Measure not affected by a market disruption event on such day.
Payment Dates
The applicable pricing supplement will specify the stated maturity date as well as any other date on which amounts will or may be payable on the notes (each referred to in this
section as a “payment date”).
If any scheduled payment date is not a business day, the payment (if any) required to be made on the notes on such payment date will be made on the next succeeding business day. If a calculation day with respect to any payment date preceding the stated maturity date is postponed, the relevant payment date will be the business day that follows such
postponed calculation day by a number of business days equal to the number of business days between the originally scheduled calculation day and the originally scheduled payment date. If the final calculation day is postponed, the stated maturity
date will be the later of (i) the originally scheduled stated maturity date and (ii) three business days after the final calculation day as postponed. If the notes are linked to more than one Market Measure and a calculation day is
postponed, the related payment date will be postponed as described in this paragraph after the last such calculation day as postponed.
If any payment date is postponed due to a non-business day, a market disruption event on the related calculation day or otherwise, the payment, if any, due on that payment date will
be made on that payment date as so postponed with the same force and effect as if it had been made on the originally scheduled payment date, that is, with no additional amount accruing or payable as a result of the postponement.
Calculations and Calculation Agent
Unless otherwise specified in the applicable pricing supplement, the Bank, will act as calculation agent for the notes. We may appoint a different institution to serve as
calculation agent from time to time without your consent and without notifying you of the change. The calculation agent will determine any amounts payable on the notes. In addition, the calculation agent will, among other things:
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determine whether a market disruption event has occurred;
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determine the closing value of a Market Measure under certain circumstances;
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determine if adjustments are required to the closing value of a Market Measure under various circumstances;
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if publication of an Index is discontinued, select a successor equity index or, if no successor equity index is available, determine the closing level of such Index;
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if a Fund undergoes a liquidation event, select a successor fund or, if no successor fund is available, determine the fund closing price of such Fund; and
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select a replacement stock for an Underlying Stock under certain circumstances.
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Unless otherwise specified in the applicable pricing supplement, all calculations with respect to the maturity payment amount will be rounded to the nearest one hundred-thousandth,
with five one-millionths rounded upward (e.g., 0.000005 would be rounded to 0.00001); and the maturity payment amount will be rounded to the nearest cent, with one-half cent rounded upward.
All determinations made by the calculation agent will be in its sole discretion and, in the absence of manifest error, will be conclusive for all purposes and binding on us and you.
The calculation agent will have no liability for its determinations.
Canadian Bail-in
The notes are not bail-inable debt securities under the CDIC Act, as described in the accompanying
prospectus.
Payment of Additional Amounts and Tax Redemption
Unless otherwise set forth in the applicable pricing supplement or herein, the Bank will pay additional amounts as described under
“Description of the Debt Securities — Payment of Additional Amounts” in the accompanying prospectus and will have the option to redeem the notes as described under “—Tax Redemption” in the accompanying prospectus.
Events of Default Amount
If an event of default with respect to an issue of notes has occurred and is continuing, the amount payable to a holder of a security upon any acceleration
permitted by such notes, with respect to each security, will be equal to the maturity payment amount, calculated as provided in the applicable pricing supplement. If the applicable pricing supplement specifies that the notes will pay a coupon, then
the amount described in the immediately preceding sentence will also include a portion of a final coupon payment, if any. The maturity payment amount and any final coupon payment will be calculated as though the date of acceleration were the
calculation day (or the final calculation day, if there is more than one calculation day). The final coupon payment, if any, will be prorated from and including the immediately preceding coupon payment date to, but excluding, the date of
acceleration.
Form, Exchange and Transfer
Unless we specify otherwise in the applicable pricing supplement, the notes will be issued:
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only in fully‑registered form;
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without interest coupons; and
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in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof.
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If a security is issued as a registered global note, only the depositary — e.g., DTC, Euroclear and Clearstream, each as defined under “Ownership, Book-Entry Procedures and Settlement” in the
accompanying prospectus — will be entitled to transfer and exchange the security as described in this subsection because the depositary will be the sole registered holder of the security and is referred to below as the “holder.” Those who own
beneficial interests in a global security do so through participants in the depositary’s securities clearance system, and the rights of these indirect owners will be governed by the applicable procedures of the depositary and its participants. We
describe book‑entry procedures under “Ownership, Book-Entry Procedures and Settlement” in the accompanying prospectus.
Holders of notes issued in fully‑registered form may have their securities broken into more securities of smaller denominations of not less than $1,000, or combined into fewer securities of larger
denominations, as long as the total principal amount is not changed. This is called an exchange.
To the extent the notes are certificated, holders may exchange or register the transfer of securities at the office of the trustee. Securities may be transferred by endorsement. Holders may also
replace lost, stolen or mutilated securities at that office. The trustee acts as our agent for registering securities in the names of holders and registering the transfer of securities. We may change this appointment to another entity or perform it
ourselves. The entity performing the role of maintaining the list of registered holders is called the security registrar. It will also record transfers. The trustee may require an indemnity before replacing any securities.
Holders will not be required to pay a service charge to register the transfer or exchange of securities, but holders may be required to pay for any tax or other governmental charge associated with the
exchange or transfer. The registration of a transfer or exchange will only be made if the security registrar is satisfied with your proof of ownership.
If we designate additional transfer agents, they will be named in the applicable pricing supplement. We may cancel the designation of any particular transfer agent. We may also approve a change in the
office through which any transfer agent acts.
If the notes are redeemable and we redeem less than all of the securities of a particular series, we may block the registration of transfer or exchange of securities during the period beginning 15
days before the day we mail the notice of redemption and ending on the day of that mailing, in order to freeze the list of holders entitled to receive the mailing. We may also refuse to register transfers or exchanges of securities selected for
redemption, except that we will continue to permit registration of transfers and exchanges of the unredeemed portion of any security being partially redeemed.
Payment and Paying Agents
We will pay interest to the person listed in the trustee’s records on the record date in advance of each due date for interest, even if that person no longer owns notes on the interest due date.
Holders (or those who own a beneficial interest in the notes) buying and selling notes must work out between them how to compensate for the fact that we will pay all the interest for an interest period to the one who is the registered holder on the
record date. The most common manner is to adjust the sale price of the notes to prorate interest fairly between buyer and seller. Unless otherwise specified in the applicable pricing supplement, the “record date” will be the business day immediately
preceding the applicable payment date.
We will pay interest, principal and any other money due on the debt securities at the corporate trust office of the trustee in the City of New York. That office is currently located at 240 Greenwich
Street, 7E, New York, NY 10286. Holders must make arrangements to have their payments picked up at or wired from that office. We may also choose to pay interest by mailing checks.
Book-entry and other indirect holders should consult their banks, brokers or other financial institutions for information on how they will receive payments.
We may also arrange for additional payment offices and may cancel or change these offices, including our use of the trustee’s corporate trust office. These offices are called paying agents. We may
also choose to act as our own paying agent or choose one of our subsidiaries to do so. We must notify holders of changes in the paying agents for any particular series of notes.
Notices
We and the trustee will send notices regarding the notes only to registered holders, using their addresses as listed in the trustee’s records. With respect to who is a registered “holder” for this
purpose, see “Forms of the Debt Securities” and “Ownership, Book-Entry Procedures and Settlement” in the accompanying prospectus.
Manner of Payment and Delivery
Any payment on the notes at maturity will be made to accounts designated by you and approved by us, or at the office of the trustee in New York City. The maturity payment amount will only be made when
the notes are surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable procedures of the depositary.
Other Provisions; Addenda
Any provisions relating to the notes may be modified and/or supplemented by the terms as specified under “Other Provisions” in the applicable notes or in an addendum relating to the applicable notes
and, in each case, in the applicable pricing supplement.
We will use the net proceeds we receive from the sale of the notes for the purposes we describe in the accompanying prospectus under “Use of Proceeds”. We and/or our affiliates may also use those
proceeds in transactions intended to hedge our obligations under the notes as described herein.
In anticipation of the sale of the notes, we and/or our affiliates expect to enter into hedging transactions involving purchases of notes or over-the-counter derivative instruments linked to the
applicable Market Measure(s) or the constituents of a Market Measure. From time to time, we and/or our affiliates may enter into additional hedging transactions or unwind those we have entered into.
We and/or our affiliates may acquire a long or short position in notes similar to the notes from time to time and may, in our or their sole discretion, hold or resell those similar notes.
We and/or our affiliates may close out our or their hedge position relating to the notes on or before any calculation day for your notes. That step may involve sales or purchases of the instruments
described above. No holder of the notes will have any right or interest in our or any affiliates’ hedging activity or any positions we or our affiliates may take in connection with any hedging activity.
The hedging activity discussed above may adversely affect the market value of the notes from time to time. See “Risk Factors — Trading And
Business Activities By The Bank Or Its Affiliates May Adversely Affect The Market Value Of, And Amount Payable On, The Notes” in this product supplement for a discussion of these adverse effects.
SUPPLEMENTAL PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST) –SELLING RESTRICTIONS
Delivery of the notes will be made against payment therefor on or about the issue date specified in the applicable pricing supplement. Under Rule 15c6-1 of the Exchange Act trades in the secondary
market generally are required to settle in one business day after the date the notes are priced, unless the parties to any such trade expressly agree otherwise. Accordingly, if the applicable pricing supplement specifies that the issue date is more
than one business day after the date on which the notes are priced, purchasers who wish to trade such notes at any time prior to one business day preceding the issue date will be required, by virtue of the fact that the notes will not settle in T+1,
to specify an alternative settlement cycle at the time of any such trade to prevent a failed settlement; such purchasers should also consult their advisors in this regard.
Conflicts of Interest
TDS is an affiliate of the Bank and, as such, has a “conflict of interest” in this offering within the meaning of Financial Industry Regulatory Authority, Inc. (“FINRA”) Rule 5121. In addition,
the Bank will receive the net proceeds from the initial public offering of the notes, thus creating an additional conflict of interest within the meaning of FINRA Rule 5121. This offering of the notes will be conducted in compliance with the
provisions of FINRA Rule 5121. In accordance with FINRA Rule 5121, neither TDS nor any other affiliated agent of ours is permitted to sell the notes in this offering to an account over which it exercises discretionary authority without the prior
specific written approval of the account holder.
We, TDS, another of our affiliates or third parties may use this pricing supplement in the initial sale of the notes. In addition, we, TDS, another of our
affiliates or third parties may use this pricing supplement in a market-making transaction in the notes after their initial sale. If a purchaser buys the notes from us,
TDS, another of our affiliates or third parties, this pricing supplement is being used in a market-making transaction unless we, TDS, another of our affiliates or third parties informs such purchaser otherwise in the confirmation of sale.
Prohibition of Sales to European Economic Area Retail Investors
The notes may not be offered, sold or otherwise made available to any retail investor in the European Economic Area (“EEA”). For the purposes of this provision:
| (a) |
the expression “retail investor” means a person who is one (or more) of the following:
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| (i) |
a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or
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| (ii) |
a customer within the meaning of Directive (EU) 2016/97 (the “Insurance Distribution Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or
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| (iii) |
not a qualified investor as defined in Regulation (3)(e) (EU) 2017/1129 (as amended, the “Prospectus Regulation”); and
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| (b) |
the expression an “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the notes so as to enable an investor to decide to purchase or subscribe for the notes.
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Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the notes or otherwise making them available to
retail investors in the EEA has been prepared and therefore offering or selling the notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
Prohibition of Sales to United Kingdom Retail Investors
The notes may not be offered, sold or otherwise made available to any retail investor in the United Kingdom. For the purposes of this provision:
| (a) |
the expression “retail investor” means a person who is neither:
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| (i) |
a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (“EUWA”); nor
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| (ii) |
a qualified investor as defined in paragraph 15 of Schedule 1 to the Public Offers and Admissions to Trading Regulations 2024; and
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| (b) |
the expression an “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the notes so as to enable an investor to decide to purchase or subscribe for the notes.
|
Consequently no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA, subject to amendments made by the Packaged Retail and
Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (SI 2019/403) (as may be amended or superseded from time to time, the “UK PRIIPs Regulation”) for offering or selling any notes or otherwise making them available to
retail investors in the United Kingdom has been prepared and therefore offering or selling any notes or otherwise making them available to any retail investor in the United Kingdom may be unlawful under the UK PRIIPs Regulation.
An investor should read carefully the description of the principal Canadian federal income tax considerations relevant to a Non-resident Holder (as defined in the prospectus) owning notes under “Tax Consequences –
Canadian Taxation” in the accompanying prospectus. The applicable pricing supplement may describe the principal Canadian federal income tax considerations relevant to a Non-resident Holder owning notes which shall, to the extent so described or to
the extent inconsistent with the accompanying prospectus, replace or modify the description in the accompanying prospectus.
General
The U.S. federal income tax consequences of an investment in the securities are uncertain. There are no statutory provisions, regulations, published rulings or judicial decisions
addressing the characterization for U.S. federal income tax purposes of how the securities should be treated for U.S. federal income tax purposes and we do not plan to request a ruling from the IRS.
The following is a general description of certain material U.S. federal income tax consequences of the ownership and disposition of the notes and does not purport to be a complete analysis of all tax
considerations relating to the notes. The following discussion is based upon the U.S. Internal Revenue Code of 1986, as amended (the “Code”), final, temporary and proposed U.S. Treasury Department (the “Treasury”) regulations, rulings
and decisions, in each case, as available and in effect as of the date of this document, all of which are subject to change, possibly with retroactive effect. Tax consequences under state, local and non-U.S. laws, and under gift tax laws or any
minimum tax, are not addressed herein. The applicable pricing supplement will contain a further discussion of the U.S. federal income tax consequences applicable to that offering of the notes, which may differ from the discussion herein. The
discussion of the U.S. federal income tax consequences contained in the applicable pricing supplement supersedes the following discussion to the extent it is inconsistent therewith. Prospective purchasers of the notes are urged to read the
discussion below in connection with the discussion in the applicable pricing supplement relating to the notes and to consult their tax advisors as to the consequences under the tax laws of the country of which they are a resident for tax purposes
and the federal, state, and local tax laws of the U.S. of acquiring, holding and disposing of, and receiving payments under, the notes. For additional information, see “United States Taxation” in the accompanying prospectus. The following section
supplements the discussion of U.S. federal income taxation the accompanying prospectus.
The following discussion applies to you only if you purchase a note for cash in the initial offering at the “issue price,” which is the first price at which a substantial amount of
the issue of notes is sold to the public (not including sales to bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers), and hold it as a capital asset within the meaning of
Section 1221 of the Code. Purchasers of notes at another time or price should consult their tax advisers regarding the U.S. federal tax consequences to them of the ownership and disposition of the notes. This discussion does not address all of the
tax consequences that may be relevant to you in light of your particular circumstances or if you are a holder subject to special rules, such as:
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a dealer in securities or currencies,
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a trader in securities that elects to use a mark-to-market method of tax accounting for your securities holdings,
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a financial institution or a bank,
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a regulated investment company (a “RIC”) or a real estate investment trust (a “REIT”) or a common trust fund,
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an insurance company,
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a tax-exempt organization or an investor holding notes in a tax-advantaged account (such as an Individual Retirement Account or Roth IRA), as defined in Section 408 or 408A of the Code, respectively,
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a person that owns notes as part of a hedging transaction, straddle, synthetic security, conversion transaction, or other integrated transaction, or enters into a “constructive sale” with respect to the notes or a “wash sale” with respect
to the notes or any Market Measure,
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a U.S. holder (as defined below) whose functional currency for U.S. tax purposes is not the U.S. dollar,
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| • |
a former citizen or resident of the U.S., or
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taxpayers subject to special tax accounting rules under Section 451(b) of the Code.
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If a partnership, or any entity or arrangement treated as a partnership for U.S. federal income tax purposes, holds the notes, the U.S. federal income tax treatment of a partner in
such partnership will generally depend on the status of the partner and the tax treatment of the partnership. A partnership or a partner in a partnership holding the notes should consult its tax advisors with regard to the U.S. federal income tax
treatment of an investment in the notes.
If you are considering the purchase of the notes, you should consult your tax advisors concerning the application of the U.S. federal income tax laws to your particular situation,
as well as any tax consequences arising under the laws of any state, local or non-U.S. jurisdictions.
U.S. Federal Income Tax Treatment
Unless otherwise indicated in the applicable pricing supplement, we intend to treat the notes as debt instruments for U.S. federal income tax purposes, and the discussion herein is based on this
treatment. With respect to notes with a term of longer than one year (calculated
as described below), the applicable pricing supplement generally will specify whether we intend to treat such notes as “variable rate debt instruments” or as “contingent payment debt
instruments,” each as discussed below.
The discussion below is subject to, and should be read in conjunction with, the discussion below under “Possible Taxable Event.”
Tax Consequences to U.S. Holders
For purposes of this discussion, a U.S. holder is a beneficial owner of the notes that is generally: (i) an individual who is a citizen or a resident of the U.S. for U.S. federal
income tax purposes; (ii) a corporation or other entity that is treated as a corporation for U.S. federal income tax purposes and is created or organized in or under the laws of the U.S., any state thereof or the District of Columbia; (iii) an estate
whose income is subject to U.S. federal income tax regardless of its source; or (iv) a trust if a court within the U.S. is able to exercise primary supervision over its administration, and one or more U.S. persons for U.S. federal income tax purposes
have the authority to control all substantial decisions of the trust.
An individual may, subject to certain exceptions, be deemed to be a resident of the U.S. for U.S. federal income tax purposes by reason of being present in the U.S. for at least 31
days in the calendar year and for an aggregate of at least 183 days during a three-year period ending in the current calendar year (counting for such purposes all of the days present in the current year, one-third of the days present in the
immediately preceding year, and one-sixth of the days present in the second preceding year).
Section 1297
We will not attempt to ascertain whether an Underlying Stock Issuer, a Fund, or the issuer of a security included in an Index would be treated as a “passive foreign investment
company” (a “PFIC”) within the meaning of Section 1297 of the Code. In general, if a U.S. taxpayer holds an interest in a PFIC, such U.S. taxpayer is required to report any gain on disposition of an interest in such PFIC as ordinary income,
rather than as capital gain. Such gain would be allocated ratably over the U.S. taxpayer’s holding period, and the amount allocated to each year (other than the year of disposition or any year before the relevant company became a PFIC) would be
subject to tax at the highest ordinary income tax rate in effect for individuals or corporations, as appropriate, for that taxable year, and a non-deductible interest charge at the federal underpayment rate would be imposed on the tax on such amount.
In the event that any such entity is treated as a PFIC, the application of the PFIC rules to the notes would be unclear, and it is possible that U.S. holders of the notes could be subject to the PFIC rules to the extent that the notes directly or
indirectly reference shares in one or more PFICs. If you are a U.S. holder and you own or are deemed to own an equity interest in a PFIC for any taxable year, you would generally be required to file IRS Form 8621 with your annual U.S. federal income
tax return for that year, subject to certain exceptions. Failure to timely file the form may extend the time for tax assessment by the IRS. You should refer to information filed with the SEC or the equivalent governmental authority by such entities
and consult your tax advisors regarding the possible consequences to you if any such entity is or becomes a PFIC.
Short-Term Notes
The following discussion applies only to notes with a term of one year or less, from but excluding the issue date to and including the last possible date that the notes could be
outstanding pursuant to their terms (“short-term notes”). Generally, a short-term note is treated as issued at a discount equal to the sum of all payments required on the note minus its issue price.
If you are a cash-method U.S. holder, you generally will not be required to recognize income with respect to a short-term note prior to maturity, other than with respect to the
receipt of interest payments, if any, or pursuant to a sale or other taxable disposition of the note. If you are an accrual-method U.S. holder (or a cash-method U.S. holder who elects to accrue income on the note currently), you will be subject to
rules that generally require accrual of discount on short-term notes over the term of the notes, which would be calculated on a straight-line basis unless you elect a constant-yield method of accrual based on daily compounding. In the case of
short-term notes that provide for one or more contingent payments, it is not clear whether or how any accrual should be determined prior to the time at which the related payment is calculated. You should consult your tax adviser regarding the amount
and timing of any accruals on such notes.
Upon a taxable disposition (including a sale, exchange, early redemption, or retirement) of a short-term note, you will generally recognize gain or loss equal to the difference
between the amount realized on the sale or other taxable disposition and your adjusted tax basis in the note. Your adjusted tax basis in the note should equal the amount you paid to acquire the note increased, if you accrue income on the notes
currently, by any previously accrued but unpaid discount. The amount of any resulting loss generally will be treated as a short-term capital loss, the deductibility of which is subject to limitations. The excess of the amount received at maturity
over your adjusted tax basis in the note generally should be treated as ordinary income. Any gain recognized on the taxable disposition of a short-term note prior to maturity should generally be ordinary income to the extent of accrued and unpaid
discount on the note, which is calculated on a straight-line basis unless you elect to calculate such accrual on a constant-yield basis. However, if you sell a short-term note providing for a contingent payment at maturity prior to the time the
contingent payment has been fixed, it is not clear whether any gain you recognize in respect of such contingent payment should be treated as ordinary income, short-term capital gain, or a combination of ordinary income and short-term capital gain.
You should consult your tax adviser regarding the treatment of a taxable disposition of short-term notes providing for contingent payments.
If you are a cash-method U.S. holder, unless you make the election to accrue income currently on a short-term note, you will generally be required to defer deductions for interest paid on
indebtedness incurred to purchase or carry the note in an amount not exceeding the
accrued discount that you have not included in income. As discussed above, in the case of a short-term note providing for a contingent payment, it is unclear whether or how accrual of discount
should be determined prior to the time at which the related payment is calculated. If you make the election to accrue income currently, that election will apply to all short-term debt instruments acquired by you on or after the first day of the
first taxable year to which that election applies. You should consult your tax adviser regarding these rules.
Notes Treated as Variable Rate Debt Instruments
The following discussion applies only to notes treated as variable rate debt instruments for U.S. federal income tax purposes (“VRDIs”) and that provide for stated interest
at a single variable rate. The treatment of other VRDIs will be addressed in the applicable pricing supplement.
Stated interest on a VRDI will be treated as “qualified stated interest” (“QSI”) and will be taxable to you as ordinary interest income at the time it accrues or is received,
in accordance with your method of accounting for U.S. federal income tax purposes. If the stated principal amount of a VRDI exceeds its issue price by at least a specified de minimis amount, this excess will be treated as “original issue discount” (“OID”)
that you must include in income as it accrues, in accordance with a constant-yield method based on compounding of interest before the receipt of cash payments attributable to this income. The amount of QSI in each period, and the constant-yield
accrual of OID on a VRDI with OID (an “OID note”), are determined by substituting a fixed rate that reflects the yield that is reasonably expected for the VRDI for each scheduled payment of the variable rate. The amount of OID required to be
recognized in income on an OID note in each accrual period is equal to the “adjusted issue price” of the note at the beginning of the period multiplied by the yield to maturity of the OID note (adjusted to reflect the length of the accrual period)
minus the QSI in such period. The “adjusted issue price” of an OID note at the beginning of any accrual period will generally be the sum of its issue price and the amount of OID allocable to all prior accrual periods, reduced by the amount of
payments in all prior accrual periods other than QSI.
You may make an election to include in gross income all interest that accrues on any note (including, among other things, QSI, OID and de minimis OID) in accordance with a
constant-yield method based on the compounding of interest (a “constant-yield election”). This election may be revoked only with the consent of the IRS.
If you purchase a VRDI for an amount that is less than its stated principal amount or, in the case of an OID note, its adjusted issue price, the amount of the difference generally
will be treated as market discount for U.S. federal income tax purposes, unless this difference is less than a specified de minimis amount. Any payment other than QSI on, or any gain upon a taxable disposition of, a VRDI with market discount
generally will be treated as ordinary income to the extent of the accrued market discount not previously included in income. Market discount accrues on a straight-line basis, unless you elect a constant-yield method of accrual based on daily
compounding (as described above). If a VRDI is disposed of in one of certain nontaxable transactions, accrued market discount will be included as ordinary income as if you had sold the VRDI in a taxable transaction at its then fair market value.
Unless you elect to include market discount in income as it accrues, you generally will be required to defer deductions for any interest on indebtedness you incur to purchase or carry the VRDI in an amount not exceeding the accrued market discount
that you have not included in income. If you make an election to include market discount in income as it accrues (a “market discount accrual election”), that election will apply to all market discount bonds acquired on or after the first day
of the first taxable year to which that election applies. If you make a constant-yield election with respect to a VRDI purchased with market discount, that election will result in a deemed market discount accrual election for the taxable year in
which the VRDI was acquired.
If you purchase an OID note for an amount greater than its adjusted issue price at the purchase date and less than or equal to the sum of all amounts, other than QSI, payable on the
OID note after the purchase date, the excess is “acquisition premium.” Under the rules applicable to acquisition premium, in general, the amount of OID that must be included in income for the OID note for any taxable year (or any portion of a taxable
year in which the OID note is held) will be reduced (but not below zero) by the portion of the acquisition premium allocated to the period. The amount of acquisition premium allocated to each period is determined by multiplying the OID that
otherwise would have been included in income by a fraction, the numerator of which is the excess of the cost over the adjusted issue price of the OID note and the denominator of which is the excess of the OID note’s stated principal amount over its
adjusted issue price.
Subject to the discussion above of market discount, upon the sale or other taxable disposition of a VRDI, you generally will recognize capital gain or loss equal to the difference
between the amount realized (other than amounts attributable to accrued but unpaid QSI, which will be treated as a payment of interest and taxed as described above) and your adjusted tax basis in the VRDI. Your adjusted tax basis in a VRDI will
generally equal the amount you paid to purchase the VRDI, increased by the amounts of OID or market discount (if any) you previously included in income with respect to the VRDI and reduced by any payments other than QSI you received. Such gain or
loss generally will be long-term capital gain or loss if you held the VRDI for more than one year at the time of disposition. The deductibility of capital losses is subject to limitations.
Notes Treated as Contingent Payment Debt Instruments
The following discussion applies only to notes treated as contingent payment debt instruments for U.S. federal income tax purposes (“CPDIs”).
We are required to determine a “comparable yield” for each issuance of CPDIs. The “comparable yield” is, as of the issue date of the CPDIs, the greater of (i) the yield at which we could issue a fixed-rate debt
instrument with terms similar to those of the CPDIs, including the
level of subordination, term, timing of payments and general market conditions, but excluding any adjustments for the
riskiness of the contingencies or the liquidity of the CPDIs and (ii) the relevant applicable federal rate. Solely for purposes of determining the amount of interest income that you will be required to accrue, we are also required to construct a
“projected payment schedule” in respect of the CPDIs representing a payment or a series of payments the amount and timing of which would produce a yield to maturity on the CPDIs equal to the comparable yield.
Neither the comparable yield nor the projected payment schedule constitutes a representation by us regarding the actual amounts that we will pay on the CPDIs.
For U.S. federal income tax purposes, you are required to use our determination of the comparable yield and projected payment schedule in determining interest accruals and
adjustments in respect of the CPDIs, unless you timely disclose and justify the use of other estimates to the IRS. Regardless of your method of accounting for U.S. federal income tax purposes, you will be required to accrue, as interest income, OID
on the CPDIs at the comparable yield, adjusted upward or downward to reflect the difference, if any, between the actual and the projected payments on the CPDIs during the year (as described below).
You will be required for U.S. federal income tax purposes to accrue an amount of OID, for each accrual period prior to and including the maturity (or earlier sale or other taxable
disposition) of a CPDI, that equals the product of (i) the “adjusted issue price” of the CPDI (as defined below) as of the beginning of the accrual period, (ii) the comparable yield of the CPDI, adjusted for the length of the accrual period and (iii)
the number of days during the accrual period that you held the CPDI divided by the number of days in the accrual period. The adjusted issue price of a CPDI is its issue price increased by any interest income you have previously accrued (determined
without regard to adjustments due to differences between projected and actual payments) and decreased by the projected amounts of any payments previously made on the CPDI (without regard to actual amounts paid).
In addition to interest accrued based upon the comparable yield as described above, you will be required to recognize interest income equal to the amount of any net positive
adjustment (i.e., the excess of actual payments over projected payments) in respect of a CPDI for a taxable year. A net negative adjustment (i.e., the excess of projected payments over actual payments) in respect of a CPDI for a taxable year:
| • |
will first reduce the amount of interest in respect of the CPDI that you would otherwise be required to include in income in the taxable year; and
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to the extent of any excess, will give rise to an ordinary loss, but only to the extent that the total amount of all previous interest inclusions under the CPDI exceeds the total amount of the net negative adjustments treated as ordinary
loss on the CPDI in prior taxable years.
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A net negative adjustment is not treated as a miscellaneous itemized deduction. Any net negative adjustment in excess of the amounts described above may be carried forward to offset
future interest income in respect of the CPDI or to reduce the amount realized on a sale or other taxable disposition of the CPDI.
Upon a sale or other taxable disposition of a CPDI, you generally will recognize taxable income or loss equal to the difference between the amount received and your adjusted tax basis in the CPDI.
Your adjusted tax basis in the CPDI will equal your purchase price for the CPDI, increased by any interest income you have previously accrued (determined without regard to adjustments due to differences between projected and actual payments) and
decreased by the projected amounts of any payments previously made on the CPDI (without regard to actual amounts paid). At maturity, you will be treated as receiving the projected amount for that date (reduced by any carryforward of a net negative
adjustment), and any difference between the amount actually received and that projected amount will be treated as a positive or negative adjustment governed by the rules described above. You generally must treat any income realized on the sale or
other taxable disposition of a CPDI as interest income and any loss as ordinary loss to the extent of previous interest inclusions (reduced by the total amount of net negative adjustments previously taken into account as ordinary losses), and the
balance as capital loss, the deductibility of which is subject to limitations. You may be required to report to the IRS losses in respect of the notes in excess of certain thresholds. See “—Reportable
Transactions” below for more information.
Special rules may apply if all of the remaining payments on a CPDI become fixed substantially contemporaneously prior to maturity. For this purpose, payments will be treated as
fixed if the remaining contingencies with respect to them are remote or incidental. Under these rules, you would be required to account for the difference between the originally projected payments and the fixed payments in a reasonable manner over
the period to which the difference relates. In addition, you would be required to make adjustments to, among other things, your accrual periods and your adjusted tax basis in the CPDI. The character of any gain or loss on a sale or other taxable
disposition of your CPDI also might be affected. If one or more (but not all) contingent payments on a CPDI become fixed more than six months prior to the relevant payment dates, you would be required to account for the difference between the
originally projected payments and the fixed payments on a present value basis. You should consult your tax adviser regarding the application of these rules.
If you purchase a CPDI for an amount that is different from its “adjusted issue price,” you will be required to account for this difference, generally by allocating it reasonably among projected
payments on the CPDI or daily portions of interest that you are required to accrue with respect to the CPDI and treating these allocations as adjustments to your income when the payment is made or the interest accrues. You should consult your tax
adviser with respect to these rules.
Medicare Tax on Net Investment Income
U.S. holders that are individuals, estates or certain trusts are subject to an additional 3.8% tax on all or a portion of their “net investment income” or “undistributed net
investment income” in the case of an estate or trust, which may include any income or gain realized with respect to the notes, to the extent of their net investment income or undistributed net investment income (as the case may be) that when added to
their other modified adjusted gross income, exceeds certain amounts. The 3.8% Medicare tax is determined in a different manner than the regular income tax. U.S. holders should consult their tax advisors regarding their tax consequences in respect of
the 3.8% Medicare tax.
Information Reporting with Respect to Specified Foreign Financial Assets
U.S. holders may be subject to reporting obligations with respect to their notes if they do not hold their notes in an account maintained by a financial institution and the
aggregate value of their notes and certain other “specified foreign financial assets” (applying certain attribution rules) exceeds an applicable threshold. Significant penalties can apply if a U.S. holder is required to disclose its notes and fails
to do so. U.S. holders are urged to consult their tax advisers regarding the application of this reporting requirement to their ownership of the notes.
Tax Consequences to Non-U.S. Holders
This section applies only to non-U.S. holders. For purposes of this discussion, generally you are a non-U.S. holder if you are the beneficial owner of the notes and are neither a
U.S. holder nor a partnership or entity or arrangement treated as a partnership for U.S. federal income tax purposes.
Subject to the discussions below regarding “Section 871(m),” “FIRPTA,” “FATCA,” and “Backup Withholding,” payments (including OID) with respect to a note, and gain recognized on the
sale, exchange or other disposition of the note, should not be subject to U.S. federal income or withholding tax under current law, provided that:
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you do not own, directly or by attribution, ten percent or more of the total combined voting power of all classes of Bank stock entitled to vote;
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you are not a controlled foreign corporation related, directly or indirectly, to the Bank through stock ownership;
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you are not a bank receiving interest under Section 881(c)(3)(A) of the Code; and
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the certification requirement described below has been fulfilled with respect to the beneficial owner.
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The certification requirement referred to in the preceding paragraph will be fulfilled if the beneficial owner of a note (or a financial institution holding a note on behalf of the
beneficial owner) furnishes to the applicable withholding agent an applicable IRS Form W-8 on which the beneficial owner certifies under penalties of perjury that it is not a U.S. person.
We, or our Agents, including Wells Fargo Securities, will not be required to pay any additional amounts with respect to U.S. federal withholding taxes.
If you are engaged in a U.S. trade or business, and if income (including gain) from the notes is effectively connected with the conduct of that trade or business, you generally will
be subject to regular U.S. federal income tax with respect to that income in the same manner as if you were a U.S. holder, subject to the provisions of an applicable income tax treaty. If you are a corporation, you should also consider the potential
application of a 30% (or lower treaty rate) branch profits tax. You would be required to provide an IRS Form W-8ECI to the applicable withholding agent to establish an exemption from withholding for amounts, otherwise subject to withholding, paid on
a note.
Section 871(m)
The Treasury has issued regulations under which a 30% withholding tax (which may be reduced by an applicable income tax treaty) is imposed on certain “dividend equivalents” paid or
deemed paid to a non-U.S. holder with respect to a “specified equity-linked instrument” that references one or more U.S.-source dividend-paying equity securities (an “871(m) Specified ELI”). The withholding tax can apply even if the 871(m)
Specified ELI does not provide for payments that reference dividends. Under these regulations, the withholding tax generally will apply to 871(m) Specified ELIs (or a combination of 871(m) Specified ELIs treated as having been entered into in
connection with each other) issued (or reissued, as discussed below) on or after January 1, 2018, but will also apply to certain 871(m) Specified ELIs (or a combination of 871(m) Specified ELIs treated as having been entered into in connection with
each other) that have a delta of one (“Delta-One Specified ELIs”) issued (or reissued, as discussed below) on or after January 1, 2017. However, the IRS has issued guidance that states that the Treasury and the IRS intend to amend the
effective dates of the Treasury regulations to provide that withholding on dividend equivalents paid or deemed paid will not apply to 871(m) Specified ELIs that are not Delta-One Specified ELIs and are issued before January 1, 2027.
The 30% withholding tax may also apply if the notes are deemed to be reissued for tax purposes upon the occurrence of certain
events affecting a Market Measure or the notes, and following such occurrence the notes could be treated as Delta-One Specified ELIs that are subject to withholding on dividend equivalents. It is also possible that withholding tax or other Section
871(m) tax could apply to the notes under these rules if a non-U.S. holder enters, or has entered, into certain other transactions in respect of a Market Measure or the notes. Because of the uncertainty regarding the application of the 30%
withholding tax on dividend equivalents to the notes, non-U.S. holders are urged to consult with their tax advisors regarding the potential application of Section 871(m) of the Code to the notes (including in the context of their other transactions
in respect of a Market Measure or the notes) and the 30% withholding tax to an investment in the notes.
FIRPTA
We will not attempt to ascertain whether an Underlying Stock Issuer, a Fund, or the issuer of a security included in an Index would be treated as a “United States real property
holding corporation” (“USRPHC”) within the meaning of Section 897 of the Code. We will also not attempt to determine whether the notes should be treated as “United States real property interests” (“USRPI”) as defined in Section 897 of
the Code. If any such entity were treated as a USRPHC and/or the notes were treated as USRPI, certain adverse U.S. federal income tax consequences could possibly apply, including subjecting any gain to a non-U.S. holder in respect of the notes upon a
disposition of the notes (including cash settlement) to U.S. federal income tax on a net basis (with the potential requirement to file a U.S. federal income tax return), or, possibly, the proceeds from such a disposition to a 15% withholding tax.
Non-U.S. holders should consult their tax advisors regarding the potential treatment of any such entity as a USRPHC and/ or the notes as USRPI.
U.S. Federal Estate Tax
The notes may be subject to U.S. federal estate tax if an individual non-U.S. holder holds the notes at the time of his or her death. The gross estate of a non-U.S. holder domiciled
outside the U.S. includes only property situated in the U.S. Individual non-U.S. holders should consult their tax advisors regarding the U.S. federal estate tax consequences of holding the notes at death.
FATCA
The Foreign Account Tax Compliance Act (“FATCA”) generally imposes a 30% U.S. withholding tax on “withholdable payments” (i.e., certain U.S.-source payments, including
interest (and original issue discount), dividends, other fixed or determinable annual or periodical gain, profits and income, and the gross proceeds from a disposition of property of a type which can produce U.S.-source interest or dividends) and
“pass-thru payments” (i.e., certain payments attributable to withholdable payments) made to certain foreign financial institutions (and certain of their affiliates) unless the payee foreign financial institution agrees (or is required), among other
things, to disclose the identity of any U.S. individual with an account at the institution (or the relevant affiliate) and to annually report certain information about such account. FATCA also requires withholding agents making withholdable payments
to certain foreign entities that do not disclose the name, address, and taxpayer identification number of any substantial U.S. owners (or do not certify that they do not have any substantial U.S. owners) to withhold tax at a rate of 30%. Under
certain circumstances, a holder may be eligible for refunds or credits of such taxes.
Pursuant to final and temporary Treasury regulations and other IRS guidance, the withholding and reporting requirements under FATCA will generally apply to certain “withholdable payments,” will not
apply to gross proceeds on a sale or disposition and will generally apply to certain foreign passthru payments only to the extent that such payments are made after the date that is two years after final regulations defining the term “foreign
passthru payment” are published. If withholding is required, we, Wells Fargo Securities or the applicable paying agent will not be required to pay additional amounts with respect to the amounts so withheld. Foreign financial institutions and
non-financial foreign entities located in jurisdictions that have an intergovernmental agreement with the U.S. governing FATCA may be subject to different rules.
Holders should consult their tax advisors about the application of FATCA, in particular if they may be classified as financial institutions (or if they hold their notes through a
foreign entity) under the FATCA rules.
Possible Taxable Event
A change in the methodology by which an Index is calculated, a change in the components of an Index, the designation of a successor Market Measure, the designation of a substitute
or successor rate, an assumption of the notes (as discussed in the paragraph below) or other similar circumstances resulting in a material change to a Market Measure or to the method by which amounts payable are determined on the notes could result
in a “significant modification” of the affected notes.
Reportable Transactions
Treasury regulations require U.S. taxpayers to report certain transactions (“Reportable Transactions”) on IRS Form 8886. Reportable Transactions include, among other things,
certain transactions identified by the IRS as well as certain losses recognized in an amount that exceeds a specified threshold level. You should consult with your tax advisor regarding any tax filing and reporting obligations that may apply in
connection with acquiring, owning or disposing of the notes.
Backup Withholding and Information Reporting
The proceeds received by a holder from a taxable disposition (including cash settlement) of the notes may be subject to information reporting unless such holder is an “exempt
recipient,” and may also be subject to backup withholding at the rate specified in the Code if such holder fails to provide certain identifying information (such as an accurate taxpayer number in the case of a U.S. holder) or meet certain other
conditions. A non-U.S. holder that provides an applicable, fully completed and properly executed IRS Form W-8 will generally establish an exemption from backup withholding.
Amounts withheld under the backup withholding rules are not additional taxes and may be refunded or credited against the applicable holder’s U.S. federal income tax liability, provided that the
required information is furnished to the IRS.
Both U.S. and non-U.S. holders should consult their tax advisors regarding the U.S. federal income tax consequences of an investment in the notes (including possible alternative treatments), as
well as any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction (including that of the Bank and the issuer of any Market Measure or security included in any Market Measure, as applicable).
ERISA imposes certain requirements on “employee benefit plans” (as defined in Section 3(3) of ERISA) subject to ERISA, and on entities such as collective investment funds and insurance company
separate accounts whose underlying assets include the assets of such plans (collectively, “ERISA Plans”), and on those persons who are fiduciaries with respect to ERISA Plans. Each fiduciary of an ERISA Plan should consider the fiduciary
standards of ERISA in the context of the ERISA Plan’s particular circumstances before authorizing an investment in the notes. Accordingly, among other factors, the fiduciary should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA and would be consistent with the documents and instruments governing the ERISA Plan.
In addition, Section 406 of ERISA and Section 4975 of the Internal Revenue Code prohibit certain transactions involving the assets of an ERISA Plan, as well as those plans that are not subject to
ERISA but which are subject to Section 4975 of the Internal Revenue Code, such as individual retirement accounts (or IRAs), including entities whose underlying assets include the assets of such plans (together with ERISA Plans, “Plans”) and
certain persons (referred to as “parties in interest” under ERISA or “disqualified persons” under Section 4975 of the Code) having certain relationships to such Plans, unless a statutory or administrative exemption is applicable to the transaction.
Governmental and other plans may be subject to similar prohibitions. Therefore, a plan fiduciary considering purchasing notes should consider whether the purchase or holding of such instruments might constitute a prohibited transaction.
The Bank and certain of its affiliates each may be considered a “party in interest” or a “disqualified person” with respect to many Plans by reason of, for example, the Bank (or its affiliate)
providing services to such plans. Prohibited transactions within the meaning of ERISA or the Internal Revenue Code may arise, for example, if notes are acquired by or with the assets of a Plan, and with respect to which the Bank or any of its
affiliates is a ‘‘party in interest” or a “disqualified person”, unless those notes are acquired under an exemption for transactions effected on behalf of that Plan. The U.S. Department of Labor has issued five prohibited transaction class exemptions
(“PTCEs”) that may provide exemptive relief for prohibited transactions that may arise from the purchase or holding of the notes. These exemptions are PTCE 84‑14 (for transactions determined by independent qualified professional asset
managers), 90‑1 (for insurance company pooled separate accounts), 91‑38 (for bank collective investment funds), 95‑60 (for insurance company general accounts) and 96‑23 (for transactions managed by in‑house asset managers). Section 408(b)(17) of
ERISA and Section 4975(d)(20) of the Internal Revenue Code also may provide an exemption for the purchase and sale of the notes, provided neither the Bank nor any of its affiliates have or exercise any discretionary authority or control with respect
to the investment of the assets of the Plan involved in the transaction or render investment advice with respect to those assets, and the Plan pays no more and receives no less than “adequate consideration” in connection with the transaction. There
can be no assurance that all of the conditions of any such exemptions will be satisfied.
In addition to the prohibited transaction considerations noted above, ERISA and the regulations promulgated thereunder by the U.S. Department of Labor, as modified by Section 3(42)
of ERISA (the “plan asset regulations”), provide that if a covered plan invests in an “equity interest” of an entity that is neither a “publicly-offered security” (as defined in the plan asset regulations) nor a security issued by an
investment company registered under the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”), the covered plan’s assets will include both the equity interest and an undivided interest in each of the entity’s
underlying assets, unless it is established that the entity is an “operating company” or that “benefit plan investors” (within the meaning of the plan asset regulations) own less than 25% of the total value of each class of equity interests in the
entity. An “operating company” is defined under the plan asset regulations as an entity that is primarily engaged, directly or through a majority owned subsidiary or subsidiaries, in the production or sale of a product or service other than the
investment of capital. It is not anticipated that the notes will constitute “publicly-offered securities” or that the Bank will register under the Investment Company Act, and the Bank will not monitor whether “benefit plan investors” will own 25% or
more of the total value of any class of equity interests in the Bank. That said, while no assurance can be given, we believe that the Bank should qualify as an “operating company” within the meaning of the plan asset regulations. If the underlying
assets of the Bank were deemed to be “plan assets” of a covered plan, this would result, among other things, in the application of the prudence and other fiduciary responsibility standards of ERISA to activities engaged in by the Bank and the
possibility that certain transactions in which the Bank might seek to engage could constitute “prohibited transactions” under ERISA and the Code.
The person making the decision on behalf of a Plan or a governmental or other plan shall be deemed, on behalf of itself and any such plan, by purchasing and holding the notes, or (when relevant)
exercising any rights related thereto, to represent that (a) such purchase, holding, disposition and (when relevant) exercise of any rights related to the notes will not constitute or result in a non‑exempt prohibited transaction under ERISA or the
Internal Revenue Code (or, with respect to a governmental or other plan, under any similar applicable law or regulation) and (b) neither the Bank nor any of its affiliates is a “fiduciary” (within the meaning of Section 3(21) of ERISA) with respect
to the purchaser or holder in connection with such person’s acquisition, disposition or holding of the notes, or (when relevant) any exercise of any rights related thereto or otherwise as a result of any exercise by the Bank or any of its affiliates
of any rights in connection with the notes.
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If you are an insurance company or the fiduciary of a Plan or a governmental or other plan, and propose to invest in notes, you should consult your legal counsel.
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No dealer, salesman or other person has been authorized to give any information or to make any representation not contained in this product
supplement, the accompanying prospectus or any pricing supplement and, if given or made, such information or representation must not be relied upon as having been authorized by The Toronto-Dominion Bank or the agent. This product supplement, the
accompanying prospectus and any pricing supplement do not constitute an offer to sell or a solicitation of an offer to buy any notes other than the notes described in
the applicable pricing supplement nor do they constitute an offer to sell or a solicitation of an offer to buy the notes in any jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. The delivery of this product supplement, the accompanying prospectus and any pricing supplement at any time does not imply that the information they contain is correct as of any time subsequent to their respective
dates.
The Toronto-Dominion Bank
Senior Debt Securities, Series E
Senior Debt Securities, Series H
Notes Linked to One or More Indices, Exchange-Traded Funds or Equity Securities
March 27, 2026
PS-42