Series 1, Advisors Category 1

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1 NBC Optimarket TM GIC Canadian Banks Plus GIC Series 1, Advisors Category 1 SALES PERIOD: September 13, 2016 to October 4, 2016 at 4 p.m. ISSUANCE DATE: On or about October 12, 2016 VALUATION DATE: On or about April 5, 2021 MATURITY DATE: On or about April 12, 2021 INV ESTMENT HIGHLIGHTS Ter m: 4.5-year s Minimum Investment: $1, % principal protected at maturity Par ticipation Factor : 35.00% Variable Return Threshold : 2.25% Guaranteed Semi-Annual Interest: 0.25% semi-annually Eligible for the CDIC deposit insur ance 2 Eligible for all types of accounts (RRSP, RRIF, DPSP, RESP, RDSP and TFSA). No secondar y market The Canadian Banks Plus GIC offers the growth potential linked to the performance of an equally weighted portfolio of the common shares of 5 Canadian Banks all while ensuring 100% principal protection at maturity. The Variable Interest, if any, is calculated at maturity based on the arithmetic average of the price return of 5 Shares multiplied by the Participation Factor of 35.00% (please refer to page 2 for more details on the Variable Interest calculation). Should you have any questions, do not hesitate to contact your advisor. FUNDSERV CODE: NBC3095 Dated September 14, 2016

2 2 INVESTING Canadian Banks Plus GIC, Series 1 Return of your Deposits Payments at maturity of your Deposits will be linked to the price performance of each Asset included in the Portfolio. The Deposits will have a principal amount of $100 each (the Principal Amount ). The investment objective of your Deposits is to (i) provide you with Guaranteed Semi-Annual Interest payment and (ii) repay you, on the Maturity Payment Date, your Principal Amount and provide you with a Variable Return if the Portfolio Return is higher than the Variable Return Threshold on the Valuation Date. Maturity Redemption Payment: An amount per Deposit to which you are entitled on the Maturity Date based on the performance of the Portfolio which is equal to your Principal Amount X (1 + Variable Return). Variable Return: means a percentage calculated as follows: (i) (ii) where the Portfolio Return on the Valuation Date is higher than the Variable Return Threshold, the Variable Return will be equal to the product of (i) the amount by which the Portfolio Return exceeds the Variable Return Threshold on the Valuation Date and (ii) the Participation Factor; or where the Portfolio Return on the Valuation Date is less than or equal to the Variable Return Threshold, the Variable Return will be equal to 0%. Variable Return Threshold: 2.25%, being a percentage equal to the sum of the Guaranteed Semi-Annual Interest payments over the term of the Deposit. Participation Factor: means 35.00% Portfolio Return: On any day, the sum of the Weighted of each Asset comprising the Portfolio. Weighted : For each Asset contained in the Portfolio and on any day, the product of (i) the and (ii) the Asset Weight. Asset Weight: The weight of each Asset comprising the Portfolio. : For each Asset contained in the Portfolio and on any day, a number, which may be positive or negative, expressed as a percentage, calculated as follows: ( on such day / on the Issuance Date) 1. : shall be, on any day, the closing price, the closing level or the official net asset value, as applicable, and reported and/or published by the applicable Price Source as specified in the table under Portfolio. If there is no closing price, no closing level or no official net asset value, as applicable, reported on that day, then the will be the closing price, the closing level or the official net asset value, as applicable, on the immediately preceding day on which such closing price, closing level or official net asset value is reported or published by the applicable Price Source (except if this occurs on the Issuance Date or on the Valuation Date, in which case the closing price, the closing level or the official net asset value, as applicable, on the immediately following day on which such closing price, closing level or official net asset value is reported or published by the applicable Price Source will be used, subject to the provisions under Extraordinary Events and Special Circumstances up to a maximum postponement of five Business Days. If the absence of a closing level or official net asset value or a market disruption event should last for five Business Days, the closing price of the relevant Asset shall be a price determined on such fifth Business Day by the Calculation Agent in its sole discretion and in good faith using market-accepted practices.) The is a price return, and will not take into account dividends and/or distributions paid by the issuers of each Asset. As of August 31, 2016, the dividends and/or distributions paid on account of all of the Assets in the Portfolio represented a semi-annual return of approximately 4.14%. Guaranteed Semi-Annual Interest: Holders will be entitled to receive a coupon of 0.25% on each of the Interest Dates. Asset Weight: means the weight of each Asset comprising the Portfolio. Interest Dates: April 12, 2017, October , April 12, 2018, October 12, 2018, April 12, 2019, October 15, 2019, April 13, 2020, October 13, 2020, and the Maturity Payment Date (provided that if any of such dates (other than the Maturity Payment Date) is not a Business Day, it will be postponed to the next Business Day). The Deposits have certain investment characteristics that differ from those of conventional fixed income investments in that they may not provide you with a return or income stream prior to maturity, or a return at maturity, calculated by reference to a fixed or floating rate of interest that is determinable prior to maturity, other than the Guaranteed Semi-Annual Interest. The return on the Deposits, other than the Guaranteed Semi-Annual Interest, unlike the return on many deposit liabilities of Canadian chartered banks, is uncertain in that if the Portfolio does not generate a positive return, the Deposits will produce no return on your original investment.

3 3 INVESTING Canadian Banks Plus GIC, Series 1 Portfolio Exposure to 5 Canadian banks Asset name Asset ticker Price Source Asset type Asset Weight Common shares of Bank of Montreal BMO TSX Closing Price Equity Security 20.00% Common shares of The Bank of Nova Scotia Common shares of Canadian Imperial Bank of Commerce BNS TSX Closing Price Equity Security 20.00% CM TSX Closing Price Equity Security 20.00% Common shares of Royal Bank of Canada RY TSX Closing Price Equity Security 20.00% Common shares of The Toronto-Dominion Bank TD TSX Closing Price Equity Security 20.00%

4 4 INVESTING Canadian Banks Plus GIC, Series 1 Scenario analysis The following are hypothetical examples that illustrate how the Maturity Redemption Payment shall be calculated under different scenarios. These examples are included for illustration purposes only. The amounts and all other variables used in the following examples are hypothetical and are not forecasts or projections of the of each Asset, the Portfolio or the performance of the Deposits. No assurance can be given that the results shown in these examples will be achieved. (1) Hypothetical example of a positive Variable Return The following table is based on the assumption that most of the s for the Assets will increase during the 4.5-year term of the Deposits and the Portfolio Return is greater than the Variable Return Threshold. Issuance Date Valuation Date Asset Closing Level Weighted Common shares of Bank of Montreal $86.19 $ % 3.20% Common shares of The Bank of Nova Scotia $70.39 $ % 26.20% Common shares of Canadian Imperial Bank of Commerce $ $ % 33.40% Common shares of Royal Bank of Canada $81.05 $ % 23.60% Common shares of The Toronto-Dominion Bank $58.25 $ % 21.40% Sum of the Weighted s % Portfolio Return on the Valuation Date : % Variable Return Threshold : 2.25% Variable Return : MAX [0%, (107.80% %) x 35.00%] = 36.94% Guaranteed Semi-Annual Interest payments : 2.25$ Maturity Redemption Payment : $100 x [ %] = $ Total payments for every $ 100 invested : $ Annualized compounded return (including the Guaranteed Semi-Annual payments) over the 4.5-year term 7.63% In this example, the sum of the Weighted of the Assets is %. The Variable Return would be 36.94% and the Maturity Redemption Payment payable on the Maturity Payment Date would be $ The total payments including the Guaranteed Semi-Annual Interest payments on a $100 investment would be $ (approximately 7.63% compounded annually over 4.5 years).

5 5 INVESTING Canadian Banks Plus GIC, Series 1 (2) Hypothetical example of a Nil Variable Return The following table is based on the assumption that the s for the Assets will generally increase during the 4.5-year term of the Deposits but the Portfolio Return is less than the Variable Return Threshold. Issuance Date Valuation Date Asset Closing Level Weighted Common shares of Bank of Montreal $86.19 $ % -1.45% Common shares of The Bank of Nova Scotia $70.39 $ % 5.72% Common shares of Canadian Imperial Bank of Commerce $ $ % -4.87% Common shares of Royal Bank of Canada $81.05 $ % -5.84% Common shares of The Toronto-Dominion Bank $58.25 $ % 7.13% Sum of the Weighted s 0.68% Portfolio Return on the Valuation Date : 0.68% Variable Return Threshold : 2.25% Variable Return : MAX [0%, (0.68% %) x 35.00%] = 0.00% Guaranteed Semi-Annual Interest payments : 2.25$ Maturity Redemption Payment : $100 x [ %] = $ Total payments for every $100 invested : $ Annualized compounded return (including the Guaranteed Semi-Annual payments) over the 4.5-year term 0.50% In this example, the sum of the Weighted s of each of the Assets is 0.68%. The Portfolio Return is positive but less than the Variable Return Threshold. Accordingly, the Variable Return would be nil and the total payments including the Guaranteed Semi-Annual Interest payments on a $100 investment would be $ (approximately 0.50% compounded annually over 4.5 years).

6 6 INVESTING Canadian Banks Plus GIC, Series 1 (3) Hypothetical example of a nil Variable Return The following table is based on the assumption that most of the s for the Assets will decrease during the 4.5-year term of the Deposits. Issuance Date Valuation Date Asset Closing Level Weighted Common shares of Bank of Montreal $86.19 $ % -6.40% Common shares of The Bank of Nova Scotia $70.39 $ % 12.45% Common shares of Canadian Imperial Bank of Commerce $ $ % -7.64% Common shares of Royal Bank of Canada $81.05 $ % -3.43% Common shares of The Toronto-Dominion Bank $58.25 $ % -4.32% Sum of the Weighted s -9.35% Portfolio Return on the Valuation Date : -9.35% Variable Return Threshold : 2.25% Variable Return : MAX [0%, (-9.35% %) x 35.00%] = 0.00% Guaranteed Semi-Annual Interest payments : 2.25$ Maturity Redemption Payment : $100 x [ %] = $ Total payments for every $100 invested : $ Annualized compounded return (including the Guaranteed Semi-Annual payments) over the 4.5-year term 0.50% In this example, the sum of the Weighted of the Assets is -9.35%. The Variable Return would be nil. Since the Deposits are principalprotected at maturity the total payments including the Guaranteed Semi-Annual Interest Payments on a $100 investment would be $ (approximately 0.50% compounded annually over 4.5 years).

7 7 INVESTING Canadian Banks Plus GIC, Series 1 Risk Factors An investment in the Canadian Banks Plus GIC involves a variety of risks which all investors should consider prior to making this investment. These risks are summarized in the Information Statement dated September 12, 2016 and you are encouraged to read the Information Statement carefully. Suitability Considerations and Guidelines An investment in the Canadian Banks Plus GIC is not suitable for all investors and even if suitable, investors should consider what part the Canadian Equity GIC should serve in an overall investment plan. The Information Statement includes a summary of various suitability considerations and guidelines. You are encouraged to read the Information Statement carefully. 1. The Canadian Banks Plus GIC, Series 1, Advisors Category, herein referred as a Canadian Banks Plus GIC. 2. The Canadian Banks Plus GIC is a deposit eligible for deposit insurance by the Canada Deposit Insurance Corporation (CDIC), subject to the maximum dollar limit of CDIC cover age and applicable conditions. More information about CDIC deposit insurance can be found in the Protecting Your Deposits brochure (available online at cdic.ca or by telephone at ). 3. A change in the Portfolio has a direct impact on the Variable Interest payable at maturity. No interest or any other amount will be paid during the term of the Canadian Banks Plus GIC. The statements contained herein are based upon information which we believe to be reliable but we cannot represent that they are complete or accurate. The complete information related to this issue of the Canadian Banks Plus GIC will be contained in an Information Statement which will be sent to investors prior to the Issue Date. This document is provided for information purposes only and does not constitute an offer to sell or a solicitation to buy the Canadian Banks Plus GIC referred to herein. All information about the Canadian Banks Plus GIC is available at nbcstructuredsolutions.ca and on request by contacting the Structured Solutions Group at The Canadian Banks Plus GIC is not a conventional fixed income investment. The Canadian Banks Plus GIC is not suitable for all types of investors. An investment in the Canadian Banks Plus GIC is subject to a number of risk factors. Potential purchasers should consult the Information Statement before investing. Capitalized terms used and not otherwise defined herein have the meaning ascribed thereto in the Information Statement. NBC Optimarket TM GIC is a trademark of the National Bank of Canada National Bank of Canada. All rights reserved. Any reproduction, in whole or in part, is strictly prohibited without the prior written consent of National Bank of Canada