Annual Digital Yield Generator Certificates of Deposit

Transcription

1 KEY TERMS Instrument: CUSIP: Issuer: Term: Reference Stock(s): Payment at Maturity: PRELIMINARY Terms Supplement dated July 26, 2017 to BMO Harris Disclosure Statement for the Annual Digital Yield Generator CD due August 31, 2021 Annual Digital Yield Generator Certificates of Deposit 05581WQV0 BMO Harris Bank N.A. Four (4) years Trade Date: On or about August 28, 2017 Settlement Date: On or about August 31, 2017 Issue Date: On or about August 31, 2017 Maturity Date: Coupon Payment Dates: Coupon Determination Dates: Digital Coupon: Coupon Payment: Coupon Rate: The equity securities of the companies comprising the Basket. See the description of Basket and a summary of each company included in the Basket elsewhere in this Terms Supplement for more information. At maturity, you will receive a cash payment equal to the deposit amount plus the Coupon Payment for the final Coupon Payment Date, if any. August 31, 2021 (or if not a Business Day then on the next Business Day). The last Business Day of the month of August of each year, beginning on August 31, 2018 and ending on the Maturity Date. Each Coupon Payment Date is subject to adjustment as set forth below in the Disclosure Statement in the section headed Special Circumstances Relating to Reference Stocks - Market Disruption Event. Three (3) Business Days prior to each Coupon Payment Date; provided however, a Coupon Determination Date shall be postponed from a scheduled Business Day if a Market Disruption Event occurs on such day. A percentage used in the calculation of the Coupon Rate equal to [ ]% per annual period, which corresponds to an annual percentage yield ( APY ) of [ ]%. To be determined by the Issuer on Trade Date. The annual Coupon Rate on the CDs cannot exceed the Digital Coupon, and may be significantly less, or even 0%. The Coupon Payment on each Coupon Payment Date will equal your deposit amount multiplied by the Coupon Rate. The Coupon Rate for each Coupon Payment Date will be equal to the sum of the weighted percentage changes of the Reference Stocks. The weighted percentage change for each Reference Stock will equal (i) the Stock Performance for that Reference Stock on the applicable Coupon Determination Date multiplied by (ii) the applicable Stock Weighting. The Coupon Rate could be, but shall not be less than, 0%. Floor: Stock Return: Stock Performance: See the section headed Calculating the Coupon Rate and Examples of Coupon Rate Determination below for further information % (per Reference Stock) The Stock Return will equal the following, for each Reference Stock on each Coupon Determination Date: Final Share Price Initial Share Price Initial Share Price The Stock Performance for each Reference Stock on each Coupon Determination Date shall be: -1-

2 Initial Share Price: Final Share Price: Closing Price: Business Day: Basket: (1) If the Stock Return is greater than zero (0%), the Digital Coupon; (2) If the Stock Return is less than or equal to zero (0%) but greater than the Floor, the Stock Return; or (3) If the Stock Return is less than or equal to the Floor, the Floor. The Initial Share Price will equal, for each Reference Stock, the Closing Price of each Reference Stock on the Trade Date, as set forth in the table below. The Final Share Price will equal, for each Reference Stock, the Closing Price of each Reference Stock on the applicable Coupon Determination Date. On any trading day the price per share on the relevant primary exchange of each Reference Stock at the close of the trading day. Any day other than a Saturday, Sunday, legal holiday or day on which banking institutions are authorized or obligated by law or executive order to close in New York City or Chicago, Illinois. The Basket is comprised of the common stock of ten (10) U.S. publicly traded companies (each, a Reference Stock and collectively, the Reference Stocks ). The Reference Stocks and their Stock Weighting within the Basket are further described as follows: Reference Stock Stock Ticker Exchange Stock Weighting Initial Share Price* Verizon Communications Inc. VZ NYSE 1/10 $[ ] McDonald's Corporation MCD NYSE 1/10 $[ ] Exxon Mobil Corporation XOM NYSE 1/10 $[ ] Qualcomm Incorporated QCOM NASDAQ 1/10 $[ ] The Procter & Gamble Company PG NYSE 1/10 $[ ] Consolidated Edison, Inc. ED NYSE 1/10 $[ ] Vodafone Group PLC VOD NASDAQ 1/10 $[ ] The Coca-Cola Company KO NYSE 1/10 $[ ] Chevron Corporation CVX NYSE 1/10 $[ ] Target Corporation TGT NYSE 1/10 $[ ] * The Initial Share Price will be determined on the Trade Date as set forth above. Denomination: $1,000 Minimum deposit amount: $1,000 The public offering price of the CDs is $1,000 per $1,000 principal amount of CDs. We or one of our affiliates may pay varying selling concessions, fees or commissions of up to $22.50 per $1,000 principal amount of CDs. Certain dealers who purchase the CDs from us for sale to certain fee-based advisory accounts may forgo some or all of their selling concessions, fees or commissions. The public offering price for investors purchasing the CDs in these accounts may be between $ and $1,000 per $1,000 in principal amount. On the date of this Terms Supplement, the estimated initial value of the CDs is $ per $1,000 in principal amount. We estimate that, on the Trade Date, the initial value of the CDs will be at least $ per $1,000 in principal amount. However, as discussed in more detail in this Terms Supplement, the actual value of the CDs at any time, including on the Trade Date, will reflect many factors and cannot be predicted with accuracy. You should consult your advisor to determine whether the CD is appropriate or suitable for you. This Terms Supplement should be read in conjunction with and supplements the terms of the BMO Harris Disclosure Statement dated as of November 2015 ( BMO Disclosure Statement ) and any trade confirmation relating to the Certificates of Deposit (the CDs ). Terms not defined in this Terms Supplement are defined in the BMO Disclosure Statement. The CDs MAY NOT BE -2-

3 APPROPRIATE OR SUITABLE FOR EVERY INVESTOR. Please refer to Important Investment Considerations and Risk Factors in the BMO Disclosure Statement and Selected Risk Factors in this Terms Supplement for a discussion of the risks and other factors involved with an investment in the CDs. The CDs are our certificates of deposit. As a result, except to the extent that FDIC insurance is available, your receipt of Coupon Payments, as applicable, and the Payment at Maturity are each dependent upon the Issuer s ability to repay its obligations at that time. No assurance can be given as to what the Issuer s financial condition will be at any time during the term of the CDs. See the section titled Deposit Insurance: General in the BMO Disclosure Statement. -3-

4 THE REFERENCE STOCKS All information contained in this Terms Supplement about the Reference Stocks and the issuers of such Reference Stock is derived from publicly available sources and is provided for information purposes only. Companies with securities registered under the Securities Exchange Act of 1934, as amended (the Exchange Act ), are required to periodically file certain specified financial, business and other information with the Securities and Exchange Commission ( SEC ). Information filed with the SEC by a Reference Stock company pursuant to the Exchange Act can be accessed through by providing the full name of the company or its stock exchange ticker symbol which is referenced below. Although we believe that these publicly available documents are reliable, we have not confirmed such reliability and make no representation as to the accuracy or completeness of the publicly available documents of each Reference Stock company. The price graph for each Reference Stock is provided for information purposes only. You should not take the historical performance of a Reference Stock as an indication of its future performance, which may be better or worse than the prices set forth below. You are urged to read the publicly available documents for each Reference Stock company and not rely on the business summary of each Reference Stock company included in the Terms Supplement when making an investment decision. Verizon Communications Inc. Verizon Communications Inc. is an integrated telecommunications company that provides wire line voice and data services, wireless services, internet services, and published directory information. The company also provides network services for the federal government including business phone lines, data services, telecommunications equipment, and payphones. Its common stock is traded on the New York Stock Exchange under the symbol VZ. Verizon Communications Inc. (Ticker: VZ) as of July 26,

5 McDonald's Corporation McDonald's Corporation franchises and operates fast-food restaurants in the global restaurant industry. The company's restaurants serve a variety of value-priced menu products in countries around the world. Its common stock is traded on the New York Stock Exchange under the symbol MCD. McDonald's Corporation (Ticker: MCD) as of July 26,

6 Exxon Mobil Corporation Exxon Mobil Corporation operates petroleum and petrochemicals businesses on a worldwide basis. The company operations include exploration and production of oil and gas, electric power generation, and coal and minerals operations. Exxon Mobil also manufactures and markets fuels, lubricants, and chemicals. Its common stock is traded on the New York Stock Exchange under the symbol XOM. Exxon Mobil Corporation (Ticker: XOM) as of July 26, 2017 Qualcomm Incorporated Qualcomm Incorporated manufactures digital wireless communications equipment. The company licenses its code division multiple access (CDMA) and orthogonal frequency division multiplexing access intellectual property to other companies and produces CDMA-based integrated circuits, as well as equipment and software used to track workers, assets, and software for wireless content enablement. Its common stock is traded on the NASDAQ Global Select Market under the symbol QCOM. Qualcomm Incorporated (Ticker: QCOM) as of July 26,

7 The Procter & Gamble Company The Procter & Gamble Company manufactures and markets consumer products in countries throughout the world. The company provides products in the laundry and cleaning, paper, beauty care, food and beverage, and health care segments. Procter & Gamble products are sold primarily through mass merchandisers, grocery stores, membership club stores, drug stores, and neighborhood stores. Its common stock is traded on the New York Stock Exchange under the symbol PG. The Procter & Gamble Company (Ticker: PG) as of July 26, 2017 Consolidated Edison, Inc. Consolidated Edison, Inc. through its subsidiaries, provides a variety of energy related products and services. The company supplies electric service in New York, parts of New Jersey, and Pennsylvania as well as supplies electricity to wholesale customers. Its common stock is traded on the New York Stock Exchange under the symbol ED. Consolidated Edison, Inc. (Ticker: ED) as of July 26,

8 Vodafone Group PLC Vodafone Group PLC is a mobile telecommunications company providing a range of services, including voice and data communications. The company operates in Continental Europe, the United Kingdom, the United States, Asia Pacific, Africa and the Middle East through its subsidiaries, associates, and investments. Its American Depositary Receipts are traded on the NASDAQ Global Select Market under the symbol VOD. Vodafone Group PLC (Ticker: VOD) as of July 26, 2017 * The American Depositary Receipts of Vodafone Group PLC were listed on the New York Stock Exchange through October 28, Since October 29, 2009, the American Depositary Receipts of Vodafone Group PLC have been listed on the NASDAQ Global Select Market. The Coca-Cola Company The Coca-Cola Company manufactures, markets, and distributes soft drink concentrates and syrups. The company also distributes and markets juice and juice-drink products. Coca-Cola distributes its products to retailers and wholesalers in the United States and internationally. Its common stock is traded on the New York Stock Exchange under the symbol KO. The Coca-Cola Company (Ticker: KO) as of July 26,

9 Chevron Corporation Chevron Corporation is an integrated energy company with operations in countries located around the world. The company produces and transports crude oil and natural gas. Chevron also refines, markets, and distributes fuels, as well as is involved in chemical operations, mining operations, power generation, and energy services. Its common stock is traded on the New York Stock Exchange under the symbol CVX. Chevron Corporation (Ticker: CVX) as of July 26, 2017 Target Corporation Target Corporation operates general merchandise discount stores. The company focuses on merchandising operations which includes general merchandise and food discount stores and a fully integrated online business. Target also offers credit to qualified applicants through its branded proprietary credit cards. Its common stock is traded on the New York Stock Exchange under the symbol TGT. Target Corporation (Ticker: TGT) as of July 26,

10 SELECTED PURCHASE CONSIDERATIONS Minimum Payment at Maturity You will receive 100% of your deposit amount if you hold the CD to maturity, regardless of the performance of the Reference Stocks, subject to FDIC insurance limits as further described in the BMO Disclosure Statement. Coupon Payments The CDs provide you the potential to earn Coupon Payments with a variable Coupon Rate that will not be less than 0% or greater than the Digital Coupon. Each Coupon Payment will be equal to the deposit amount multiplied by the Coupon Rate for the applicable Coupon Payment Date. The Coupon Rate for each Coupon Payment Date will equal the sum of the weighted percentage changes of the Reference Stocks. The weighted percentage change for each Reference Stock will equal (i) the Stock Performance for that Reference Stock on the applicable Coupon Determination Date multiplied by (ii) the applicable Stock Weighting. The Coupon Rate shall not be less than 0%. The Stock Performance for each Reference Stock on each Coupon Determination Date will be equal to (A) the Digital Coupon, if the Closing Price of such Reference Stock on such Coupon Determination Date has any appreciation from the Trade Date, or (B) the Stock Return for such Reference Stock, if the Stock Return of such Reference Stock on such Coupon Determination Date is zero or negative but not less than the Floor, or (C) the Floor, if the Stock Return of such Reference Stock on such Coupon Determination Date is less than or equal to the Floor. Thus, you will receive a Coupon Payment on a Coupon Payment Date only if the weighted average of the Stock Performances is positive on the relevant Coupon Determination Date. No Coupon Payments or other interest will accrue under any circumstances after the scheduled Maturity Date. The Coupon Rate is Linked to the Basket of Ten (10) Reference Stocks The Coupon Rate on the CDs is linked to the performance (i.e., the change in share price) of the Basket of Ten (10) Reference Stocks, which are discussed elsewhere in this Terms Supplement. Annual Percentage Yield (APY) The interest rate on the CD is based on the performance of the Reference Stocks, and accordingly, the actual annual percentage yield (i.e. interest rate) of the CDs cannot be determined as of the date of this document. The interest rate will not exceed the Digital Coupon nor be less than zero for each Coupon Payment Date. Interest is not compounded. Early Withdrawal Early withdrawal of a CD will be permitted only in the event of death or the adjudication of incompetence of the owner of the CD, subject to the conditions set forth in the BMO Disclosure Statement. In the event of early withdrawal, BMOCM (as defined below) will endeavor to obtain funds for you, in the principal amount of your CD, as soon as possible. BMOCM will not advance funds in connection with early withdrawals and can give no assurances that payment pursuant to early withdrawals will be made by a specified date. The Issuer or BMOCM may require documentation evidencing the death or adjudication of incompetence of the owner of the CD and that any conditions for early withdrawal have been met. No interest (Coupon Payment) will be paid in the event of early withdrawal. Calculation Agent Each Coupon Payment will be determined by the Calculation Agent. The Calculation Agent is BMO Capital Markets Corp. ( BMOCM ), an affiliate of the Issuer. -10-

11 Secondary Market The CDs are not securities and will not be listed on a securities exchange. BMOCM or one of its affiliates, though not obligated to do so, may maintain a secondary market in which you may be able to sell your CDs after the Settlement Date and prior to the Maturity Date. Proceeds from a sale of CDs prior to maturity may be less than the principal amount initially invested. -11-

12 SELECTED RISK FACTORS You May Not Receive Coupon Payments on Your CDs The only return on your investment in the CDs will be the Coupon Payments, if any, that may be paid annually over the term of the CDs. If the Closing Price of one or more of the Reference Stocks declines from the Trade Date to the applicable Coupon Determination Date, this will result in a negative Stock Return for that Reference Stock, and any such negative Stock Return(s) (subject to the Floor), will offset, in some instances entirely, the positive contribution to the Coupon Rate from any Reference Stocks that have positive Stock Returns, resulting in a reduction in the Coupon Rate. In the event that negative Stock Returns entirely offset any positive Stock Returns, the Coupon Rate will be equal to 0% and you will receive no Coupon Payment on the applicable Coupon Payment Date. If the Coupon Rate is determined to be 0% for each of the Coupon Payment Dates, you will not receive any Coupon Payments during the term of the CDs. The return on your investment in the CDs may be less than the amount that would be paid on a conventional CD having a similar maturity issued by us or an issuer with a comparable credit rating. The Coupon Payments, if any, paid over the term of the CDs may not compensate you for any loss in value due to inflation and other factors relating to the value of money over time. However, you will receive 100% of your deposit amount at maturity, subject to FDIC insurance limits as further described in the BMO Disclosure Statement, regardless of whether you receive any Coupon Payments. In addition, the Calculation Agent will calculate the Stock Performance for each interest period by comparing only the Initial Share Price of each Reference Stock as of the Trade Date to its Final Share Price on the applicable Coupon Determination Date. As a result, if the Stock Return of any Reference Stock is negative as of any Coupon Determination Date, it is possible that its value will not increase sufficiently as of any subsequent Coupon Determination Dates to result in a Stock Return that is positive. Accordingly, to the extent that one or more Reference Stocks has a Stock Return that is negative as of any Coupon Determination Date, the Coupon Rate on the CDs may be more likely to be lower, or even zero, in any subsequent interest period. Limited Return on the CDs The amount of each Coupon Payment, if any, is limited to the Digital Coupon, which acts as a cap on maximum potential payout. On each Coupon Determination Date, even if one or more of the Stock Returns is greater than the Digital Coupon, the Coupon Rate will not exceed the Digital Coupon. Accordingly, each Coupon Payment may be limited despite the greater actual appreciation in the Closing Prices of the Reference Stocks, which may be significant. Your return on the CDs may be significantly less than the return of a direct investment in one or more of the Reference Stocks as well as the return on investment if you had invested in a traditional CD having a similar maturity. Changes in the Closing Prices of the Reference Stocks May Offset Each Other Your return on the CDs is linked to a Basket of Ten (10) Reference Stocks. The respective prices of each of the Reference Stocks may fluctuate such that when their Stock Returns are determined on any Coupon Determination Date such fluctuations in price may not correlate with each other. The Closing Price of one or more Reference Stocks on a Coupon Determination Date may have increased, while the Closing Price of one or more other Reference Stocks on the same Coupon Determination Date may have decreased or not increased as much as other Reference Stocks. Thus, when the Coupon Rate is calculated for any Coupon Payment Date, the effect of appreciation in the Closing Price of one or more Reference Stocks on the Coupon Determination Date may be offset in part or in full by the depreciation in the Final Share Price of one or more other Reference Stocks on the same Coupon Determination Date. There is no assurance that the Closing Price for any Reference Stock will be higher than its Initial Share Price on any Coupon Determination Date. In addition, the Digital Coupon is less than the absolute value of the Floor. Accordingly, to the extent that one or more of the Reference Stocks have a decrease in their price that exceeds a percentage equal to the Digital Coupon, it will take an increase in price of more than one Reference Stock to offset that decrease. -12-

13 Initial Estimated Value of the CDs will be Lower than the Price to Public Our initial estimated value of the CDs is only an estimate, and is based on a number of factors. The price to public of the CDs will exceed our initial estimated value, because costs associated with offering, structuring and hedging the CDs are included in the price to public, but are not included in the estimated value. These costs include the brokerage commission and the profits that we and our affiliates expect to realize for assuming the risks in hedging our potential payment obligations under the CDs, as well as the estimated cost of hedging these potential payment obligations. The initial estimated value may be as low as the amount indicated on page 2 of this Terms Supplement. Initial Estimated Value Does Not Represent any Future Value of the CDs, and May Differ from the Estimated Value of any Other Party Our initial estimated value of the CDs as of the date of this Terms Supplement is, and our estimated value as determined on the Trade Date will be derived using our internal pricing models. This value is based on market conditions and other relevant economic factors. Different pricing models and assumptions could provide values for the CDs that are greater than or less than our initial estimated value. In addition, market conditions and other relevant economic factors after the Trade Date, including our creditworthiness and other factors set forth in this Terms Supplement may rapidly change, and our assumptions in determining the initial estimated value may prove to be incorrect. These changes, if they were to occur, are likely to impact the price, if any, at which we or BMOCM would be willing to purchase the CDs from you in any secondary market transactions. Our initial estimated value does not represent a minimum price at which we or our affiliates would be willing to buy your CDs in any secondary market transaction. Terms of the CDs are Not Determined by Reference to the Credit Spreads for our Conventional Fixed-Rate CDs To determine the terms of the CDs, we use an internal funding rate that represents a discount from the credit spreads for our conventional fixed-rate CDs. As a result, the terms of the CDs are less favorable to you than if we had used a higher funding rate. Economic and Market Factors Will Influence the Value of the CDs In addition to the Closing Price of the Reference Stock on any Coupon Determination Date, the value of the CDs will be affected by a number of economic and market factors that may also offset or magnify each other, including: General volatility of the prices of the Reference Stocks Time to maturity of the CDs Dividends paid on the Reference Stocks Correlation of performances (price increases or decreases) of the Reference Stocks General interest and yield rates in the market Other economic, financial, political, regulatory, or judicial events Certain events affecting one or more Reference Stock companies, including a merger or acquisition; and Creditworthiness of the Issuer, including actual or anticipated downgrades in its credit ratings Certain Adjustments by the Calculation Agent The Calculation Agent may make adjustments with respect to one or more Reference Stocks comprising the Basket upon any occurrence, as applicable, of a Potential Adjustment Event, a Merger Event and Tender Offer, a Substitution Event, or a Market Disruption Event, each as discussed in greater detail in the BMO Disclosure Statement. However, the Calculation Agent will not make an adjustment in response to all events that could affect the value of the Reference Stocks. If an event occurs that does not require the Calculation Agent to make an adjustment to one or more Reference Stocks, the value of the CDs may be materially and adversely affected. -13-

14 The CDs Are Expected to Have Limited Liquidity The CDs are not securities, and will not be listed on any securities exchange. In addition, there may be little or no secondary market for the CDs. Even if a secondary market for the CDs develops, it may not provide significant or any liquidity. We expect that costs in any secondary market transaction would be high. As a result, the difference between bid and ask prices for the CDs in any secondary market could be substantial. If you sell the CDs before maturity, you may have to do so at a substantial discount from the issue price, and as a result, you may lose some or all of your initial investment. * * * * Please see the section in the BMO Disclosure Statement, Risk Factors, for a discussion of additional risks that you should consider in connection with a purchase of the CDs. -14-

15 CALCULATING THE COUPON RATE AND EXAMPLES OF COUPON RATE DETERMINATION Calculating the Interest A Coupon Payment, if any, on the CDs will be paid on each Coupon Payment Date. In addition to a potential Coupon Payment, if any, at maturity you will also receive your deposit amount, subject to FDIC limits. The Coupon Payment on the CDs will be determined by multiplying the deposit amount by the Coupon Rate which is the weighted average of the Stock Performances of all Reference Stocks on the applicable Coupon Determination Date, provided that (a) no Coupon Rate shall be less than 0% and (b) each Coupon Rate shall be limited to the Digital Coupon. Examples of Interest Determination The examples set out below are included for illustration purposes only. The Reference Stocks used for purposes of these examples are hypothetical, as are the Initial Share Prices and Final Share Prices used on each Coupon Determination Date in the table below. These hypothetical prices are not estimates or forecasts of the Initial Share Prices or Final Share Prices for any Reference Stock in the Basket, and none of them will be used to determine the Coupon Payments that you may receive on the CDs. All examples assume that a customer has purchased a CD with a deposit amount of $1,000 and that no Market Disruption Event has occurred. As demonstrated by some of the examples below, the possibility exists that you may not earn a Coupon Payment on your CDs on one or more Coupon Payment Dates. For the four examples that follow, the below grid will be used in determining the hypothetical Coupon Rate for each annual Coupon Determination Date ( CDD ). All examples below use a hypothetical Digital Coupon of 4.75% per annual period (corresponding to an APY of 4.75%) and a Floor of %. The actual returns on the CDs and the actual APY cannot be determined as of the date of this document. Reference Initial Share 1st CDD 2nd CDD 3rd CDD 4th CDD Stock Price 1 $ $ $94.00 $ $ $ $ $95.00 $ $ $ $ $97.00 $87.00 $ $ $ $99.00 $78.00 $ $ $ $94.00 $ $ $ $ $95.00 $85.00 $ $ $ $98.00 $92.00 $ $ $ $92.00 $86.00 $ $ $ $99.00 $ $ $ $ $98.00 $87.00 $

16 Example #1: In this hypothetical example, the Stock Return for each of the Reference Stocks is positive and exceeds the Digital Coupon of 4.75%. Notwithstanding, however, each Reference Stock is given a Stock Performance equal to the Digital Coupon. Since the weighted average of the Stock Performances is 4.75%, a Coupon Rate of 4.75% (corresponding to an APY of 4.75%) will be assigned for this Coupon Determination Date. Therefore, the Coupon Payment on the applicable Coupon Payment Date would be $47.50 based on a deposit amount of $1, Reference Stock Initial Share Price 1st CDD Stock Return Stock Performance Stock Performance x Stock Weighting Stock 1 $ $ % 4.75% 0.475% Stock 2 $ $ % 4.75% 0.475% Stock 3 $ $ % 4.75% 0.475% Stock 4 $ $ % 4.75% 0.475% Stock 5 $ $ % 4.75% 0.475% Stock 6 $ $ % 4.75% 0.475% Stock 7 $ $ % 4.75% 0.475% Stock 8 $ $ % 4.75% 0.475% Stock 9 $ $ % 4.75% 0.475% Stock 10 $ $ % 4.75% 0.475% Weighted Average Stock Performance: 4.750% Coupon Rate: 4.750% APY: 4.750% Example #2: In this hypothetical example, all of the Reference Stocks had negative Stock Returns and were given a negative Stock Performance equal to their actual performance. Since the weighted average of the Stock Performances is less than zero, a Coupon Rate of 0.00% (corresponding to an APY of 0.00%) will be assigned for this Coupon Determination Date. Therefore, the Coupon Payment on the applicable Coupon Payment Date would be $0.00 based on a deposit amount of $1, Reference Stock Initial Share Price 2nd CDD Stock Return Stock Performance Stock Performance x Stock Weighting Stock 1 $ $ % -6.00% % Stock 2 $ $ % -5.00% % Stock 3 $ $ % -3.00% % Stock 4 $ $ % -1.00% % Stock 5 $ $ % -6.00% % Stock 6 $ $ % -5.00% % Stock 7 $ $ % -2.00% % Stock 8 $ $ % -8.00% % Stock 9 $ $ % -1.00% % Stock 10 $ $ % -2.00% % Weighted Average Stock Performance: % Coupon Rate: 0.000% APY: 0.000% -16-

17 Example #3: In this hypothetical example, although some Reference Stocks had positive Stock Returns and were given a Stock Performance equal to the Digital Coupon of 4.75%, some had negative Stock Returns below the Floor and were given a Stock Performance equal to the Floor (-10.00%). Although certain individual returns were positive, the weighted average of the Stock Performances is less than zero and, therefore a Coupon Rate of 0.00% (corresponding to an APY of 0.00%) will be assigned for this Coupon Determination Date. Therefore, the Coupon Payment on the applicable Coupon Payment Date would be $0.00 based on a deposit amount of $1, Reference Stock Initial Share Price 3rd CDD Stock Return Stock Performance Stock Performance x Stock Weighting Stock 1 $ $ % 4.75% 0.475% Stock 2 $ $ % 4.75% 0.475% Stock 3 $ $ % % % Stock 4 $ $ % % % Stock 5 $ $ % 4.75% 0.475% Stock 6 $ $ % % % Stock 7 $ $ % -8.00% % Stock 8 $ $ % % % Stock 9 $ $ % 4.75% 0.475% Stock 10 $ $ % % % Weighted Average Stock Performance: % Coupon Rate: 0.000% APY: 0.000% Example #4: In this hypothetical example, the Stock Return for the Reference Stocks is varied. Since the weighted average of the Stock Performances is 0.76%, a Coupon Rate of 0.76% (corresponding to an APY of 0.76%) will be assigned for this Coupon Determination Date. Therefore, the Coupon Payment on the applicable Coupon Payment Date would be $7.60 based on a deposit amount of $1, Reference Stock Initial Share Price 4th CDD Stock Return Stock Performance Stock Performance x Stock Weighting Stock 1 $ $ % 4.75% 0.475% Stock 2 $ $ % -6.10% % Stock 3 $ $ % 4.75% 0.475% Stock 4 $ $ % -1.20% % Stock 5 $ $ % 4.75% 0.475% Stock 6 $ $ % -2.53% % Stock 7 $ $ % 4.75% 0.475% Stock 8 $ $ % -4.52% % Stock 9 $ $ % 4.75% 0.475% Stock 10 $ $ % -1.80% % Weighted Average Stock Performance: 0.760% Coupon Rate: 0.760% APY: 0.760% -17-

18 All numbers provided in these examples are for illustrative purposes only and do not reflect predictions of prices of any Reference Stock. -18-

19 FEDERAL INCOME TAX CONSIDERATIONS Set forth below is a summary of certain U.S. Federal income tax considerations relating to an investment in the CDs by a United States holder (as defined in the BMO Disclosure Statement). The following summary is not complete and is qualified in its entirety by the discussion under the section entitled Federal Income Tax Considerations of the BMO Disclosure Statement, which you should carefully review prior to investing in the CDs. Capitalized terms used and not defined herein have the meanings ascribed to them in the BMO Disclosure Statement. There are no statutory provisions, regulations, published rulings, or judicial decisions addressing the characterization, for U.S. Federal income tax purposes, of the CDs or other instruments with terms substantially the same as the CDs. For purposes of the discussion under the section entitled Federal Income Tax Considerations of the BMO Disclosure Statement, we intend to treat the CDs as variable rate debt instruments for U.S. Federal income tax purposes, and the balance of this discussion assumes that this characterization is proper and will be respected. Under this characterization, interest on a CD generally will be included in your income as ordinary income at the time it is accrued or is received in accordance with your regular method of accounting for U.S. Federal income tax purposes. For accrual method United States holders, the accrual is generally determined by constructing a fixed rate debt instrument assuming that the variable rate is a fixed rate equal to a fixed rate that reflects the yield that is reasonably expected for the CD and making appropriate adjustments for interest allocable to an accrual period when interest is actually paid. Upon the sale or maturity of a CD that is properly characterized as a variable rate debt instrument, you will recognize gain or loss equal to the difference between the amount realized upon the sale or maturity (except to the extent attributable to accrued but unpaid interest) and your adjusted tax basis in the CD. Your adjusted tax basis in a CD generally will be your cost of the CD. Gain or loss realized on the sale or maturity of a CD generally will be capital gain or loss and will be long-term capital gain or loss if the CD has been held for more than one year. The deductibility of capital losses is subject to limitations. Because there are no statutory provisions, regulations, published rulings or judicial decisions addressing the characterization for U.S. Federal income tax purposes of the CDs, other characterizations and treatments are possible. As a result, the timing and character of income in respect of the CDs might differ from the treatment described above. For example, the CDs may be treated as contingent payment debt instruments for U.S. Federal income tax purposes, subject to taxation under the noncontingent bond method, as described in the discussion under the section entitled Federal Income Tax Considerations United States Holders Contingent Payment Debt Instruments in the BMO Disclosure Statement. You should carefully consider the discussion of all potential tax consequences as set forth in the BMO Disclosure Statement. You should consult your own tax advisor concerning the U.S. Federal income tax consequences to you of acquiring, owning, and disposing of the CDs, as well as any tax consequences arising under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes in U.S. Federal or other tax laws. See the discussion under the section entitled Federal Income Tax Considerations in the BMO Disclosure Statement. -19-

20 PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST) In connection with the distribution of the CDs, our affiliate, BMOCM, and certain unaffiliated broker-dealers will receive the compensation described on page 2 of this Terms Supplement. Certain dealers who purchase the CDs for sale to certain feebased advisory accounts may forgo some or all of their selling concessions, fees or commissions. The public offering price for investors purchasing the CDs in these accounts may be less than $1,000 per $1,000 in principal amount. Investors that hold their CDs in these accounts may be charged fees by the investment advisor or manager of that account based on the amount of assets held in those accounts, including the CDs. Additional Information Relating to the Estimated Initial Value of the CDs Our estimated initial value of the CDs on the date of this Terms Supplement, and that will be set forth on page 2 of the final Terms Supplement relating to the CDs, equals the sum of the values of the following hypothetical components: A fixed-income debt component with the same tenor as the CDs, valued using our internal funding rate for structured CDs; and One or more derivative transactions relating to the economic terms of the CDs. The internal funding rate used in the determination of the initial estimated value generally represents a discount from the credit spreads for our conventional fixed-rate debt. The value of these derivative transactions are derived from our internal pricing models. These models are based on factors such as the traded market prices of comparable derivative instruments and on other inputs, which include volatility, interest rates and other factors. As a result, the estimated initial value of the CDs on the Trade Date will be determined based on market conditions at that time. -20-

21 Certificates of Deposit Linked to One or More Reference Stocks DISCLOSURE STATEMENT This Disclosure Statement relates to the certificates of deposit (the CDs ) of BMO Harris Bank N.A. (the Issuer ). The CDs may be sold from time to time by BMO Capital Markets Corp. and certain other broker-dealers (each, a Broker ). The terms of each CD will be described in a separate Terms Supplement. Each CD is a deposit obligation of the Issuer, the deposits and accounts of which are insured by the Federal Deposit Insurance Corporation (the FDIC ) within the limits described below. The CDs may be purchased both upon issuance (the primary market ) and, subject to the limitations discussed below, in the secondary market. If purchased in the primary market, the applicable Broker will advise you of the date on which your CD will be established with the Issuer (the Settlement Date ). The CDs (principal and accrued interest) will be eligible for federal deposit insurance up to $250,000. The insurance limit applicable to each insurable capacity will be referred to as the Maximum Applicable Deposit Insurance Amount. For purposes of the Maximum Applicable Deposit Insurance Amount, you must aggregate all deposits that you maintain with the Issuer in the same insurable capacity, including deposits you hold directly with the Issuer, deposits of the Issuer you hold through your account with the applicable Broker and deposits of the Issuer you hold through any other intermediaries. In the case of some CDs, most United States holders of the CDs, other than those purchasing the CDs through a tax advantaged retirement account (such as an IRA), are subject to tax rules requiring them to include in their taxable income the interest paid or accrued on the CDs (depending on the accounting method of the holder) during each tax year in which the CDs are outstanding until maturity. For additional information, see the section Federal Income Tax Considerations below. In making a decision to purchase a CD, you must rely on your own examination of the Issuer and the terms of the CDs, including the merits and risks involved. You should compare the features of the CDs to other available investments before deciding to purchase a CD. The rate of return ultimately realized on the CDs may be higher or lower than the rates on other deposits available through the Issuer or the applicable Broker. You should review the investment considerations discussed below in the section headed Important Investment Considerations and in the applicable Terms Supplement. The information contained in this Disclosure Statement may not be modified by any oral representation made prior or subsequent to the purchase of your certificate of deposit. Disclosure Statement, dated November 2015 BMO Capital Markets

22 THE ISSUER... 2 GENERAL TERMS... 2 YOUR RELATIONSHIP WITH THE ISSUER AND THE BROKER... 2 IMPORTANT INVESTMENT CONSIDERATIONS... 3 RISK FACTORS... 3 SPECIAL CIRCUMSTANCES RELATING TO REFERENCE STOCKS... 8 DEPOSIT INSURANCE ADDITIONS OR WITHDRAWALS SECONDARY MARKET FEES FEDERAL INCOME TAX CONSIDERATIONS... 19

23 THE ISSUER The Issuer is a national bank, with over 600 branches in Illinois, Arizona, Florida, Indiana, Kansas, Minnesota, Missouri and Wisconsin. The Issuer s headquarters are in Chicago, Illinois. As of June 30, 2015, the Issuer had approximately $99.0 billion in assets. The Issuer is a wholly-owned indirect subsidiary of Bank of Montreal ( BMO ). In July 2011, BMO closed a merger with Marshall & Ilsley Corporation ( M&I ). Following the merger, certain banking subsidiaries of M&I, including M&I Marshall & Ilsley Bank, merged with and into the Issuer, with the Issuer as the surviving entity in the merger. GENERAL TERMS Each CD will mature on the date indicated in the applicable Terms Supplement. Interest payments, if any, are payable on each interest payment date. Interest on the CDs is not compounded. No interest will be earned after maturity or after redemption, if the CD is called. The interest and any other amounts payable on each CD will be determined by the calculation agent, BMO Capital Markets Corp. (the Calculation Agent ), which is an affiliate of the Issuer. See the Terms Supplement for additional information. The CDs will not be automatically renewed or rolled over. All payments to be made in connection with the CDs, including the CD balances (and interest, if any) at maturity, will be credited to your account with the applicable Broker. If the Maturity Date is not a business day, the CD balances will be paid on the next succeeding business day. If an interest payment date is not a business day, interest payments, if any, will be paid on the next succeeding business day and no additional interest will be payable as a result of that postponement. See the Terms Supplement for additional information. YOUR RELATIONSHIP WITH THE ISSUER AND THE BROKER You will not receive a passbook, certificate or other evidence of ownership of the CDs from the Issuer. The CDs are evidenced by one or more master certificates issued by the Issuer, each representing a number of individual CDs. These master certificates are held by The Depository Trust Company ( DTC ). The applicable Broker, or a broker with which that Broker has a correspondent relationship (a Clearing Broker ), as custodian, keeps records of the ownership of each CD and will provide you with a written confirmation of your purchase. You will also be provided with a periodic account statement from the applicable Broker that will reflect your CD ownership. You should retain the trade confirmation and the account statement(s) for your records. The purchase of the CDs is not recommended for persons who wish to take actual possession of a certificate. Your account statement from the applicable Broker may provide an estimate of the value of your CDs, but any such valuation included in your statement will be an estimate only and will not be based on actual market prices. You should ask the applicable Broker to explain its statement pricing policies. Your deposit insurance coverage will be determined based on the outstanding principal amount of your CD, not the estimated price. See the sections headed Deposit Insurance and Secondary Market below. Each CD constitutes a direct obligation of the Issuer and is not, either directly or indirectly, an obligation of any Broker. No deposit relationship shall be deemed to exist prior to the receipt and acceptance of your funds by the Issuer. Financial information concerning the Issuer can be obtained from the FDIC website at If you have questions regarding financial information with respect to the Issuer, please contact your Broker. No Broker guarantees in any way the financial condition of the Issuer or the accuracy of any financial information provided by the Issuer. If you choose to remove your Broker as your agent with respect to your CD, you may (i) transfer your CD to another agent, provided that the agent is a member of DTC (most major brokerage firms are members; many banks and savings institutions are not) or (ii) request that your ownership of the CD be evidenced directly on the books of the Issuer, subject to applicable law and the Issuer s terms and conditions, including those related to the manner of evidencing CD ownership. If you choose to remove your Broker as your agent, that Broker will have no -2-

24 further responsibility for payments made with respect to your CD. If your CD is established on the books of the Issuer, you will have the ability to enforce your rights in the CD directly against the Issuer. IMPORTANT INVESTMENT CONSIDERATIONS In addition to the following important investment considerations, please review the disclosures in the Terms Supplement. Liquidity. The CDs are suitable for purchasing and holding to maturity. Early withdrawal by the depositor generally is not available. Although not obligated to do so, one or more of the Brokers, including BMO Capital Markets Corp. ( BMOCM ), or one or more other affiliates of the Issuer, may maintain a secondary market in the CDs after their Settlement Date. Any such entity may discontinue this market at any time. If you are able to sell your CD, the price you receive will reflect prevailing market conditions and the contingent nature of the payments on the CDs. Your sales proceeds may be less than the amount you paid for your CD. If you wish to dispose of your CD prior to maturity, you should read with special care the sections headed Additions or Withdrawals and Secondary Market below. Compare Features. You should compare the rates of return and other features of the CDs to other available investments before deciding to purchase a CD. The rates paid with respect to the CDs may be higher or lower than the rates on deposits or other instruments, including other CDs available directly from the Issuer or through the applicable Broker. Call Feature. If so specified in the applicable Terms Supplement, CDs may be called prior to the Maturity Date. If called, the CD will be redeemed and paid. If called, you may not be able to reinvest the funds at the same rate or terms. Insolvency of the Issuer. In the event the Issuer approaches insolvency or becomes insolvent, the Issuer may be placed in regulatory conservatorship or receivership with the FDIC. The FDIC may thereafter pay off the CDs prior to maturity or transfer the CDs to another depository institution. If the CDs are transferred to another depository institution, you may be offered a choice of retaining the CDs, possibly at a lower interest rate, or having the CDs paid off. See the sections headed Deposit Insurance and Payments Under Adverse Circumstances below. SEC Investor Tips. The Securities and Exchange Commission periodically publishes tips for investors in various financial products, including CDs, on its website. You may access these tips at RISK FACTORS Owning the CDs is not the same as owning the applicable Reference Stocks or an instrument directly linked to the performance of the applicable Reference Stocks. The return on your CDs will not reflect the return you would realize if you actually owned the applicable Reference Stocks or an instrument directly linked to the performance of the applicable Reference Stocks and held that investment for a similar period. For example, your return on the CDs will not reflect the return you would receive if you actually owned the applicable Reference Stocks and received the dividends paid on them. To the extent they trade, Your CDs may trade quite differently from the applicable Reference Stocks. Changes in the prices of the applicable Reference Stocks may not result in comparable changes in the market value of your CDs. Even if the prices of the applicable Reference Stocks increase from their Initial Levels during the term of the CDs, the market value of the CDs prior to maturity may not increase to the same extent. It is also possible for the market value of the CDs prior to maturity to decrease while the prices of the applicable Reference Stocks increase. The market value of your CDs may be influenced by many unpredictable factors. The following factors, many of which are beyond our control, may influence the market value of your CDs and your ability to sell the CDs prior to maturity: the prices of the applicable Reference Stocks; the volatility of the price of the applicable Reference Stocks; the dividend rate on the applicable Reference Stocks; -3-