Information Statement Date: December 12, 2016

Transcription

1 CIBC Canadian Blue Chip Growth Deposit Notes, Series 28 Information Statement Principal Protected Notes Information Statement Date: December 12, 2016 Issue Date: January 20, 2017 Maturity Date: January 20, 2023 Price: $ per Deposit Note 1 ISIN CA13596ZJY21 CBL 473

2 Overview The following is a summary only and is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this Information Statement. Capitalized terms that are used but not defined in this summary are defined elsewhere in this Information Statement. CIBC Canadian Blue Chip Growth Deposit Notes, Series 28 (each a Deposit Note ) are issued by Canadian Imperial Bank of Commerce. A Deposit Note entitles the investor to repayment at maturity of the Principal Amount, in addition to Variable Interest, if any, based on the price performance of a notional equally weighted portfolio of common shares (each a Share and collectively the Shares ) of the following 10 Canadian companies: Company Symbol Company Symbol Canadian Natural Resources Limited CNQ Rogers Communications, Inc. RCI.B Cenovus Energy Inc. CVE Shaw Communications, Inc. SJR.B Enbridge Inc. ENB Suncor Energy, Inc. SU Inter Pipeline Limited IPL TELUS T Pembina Pipeline Corporation PPL TransCanada Corporation TRP Variable Interest, if any, payable at maturity will be equal to the Principal Amount multiplied by the Variable Return. Generally stated, the Variable Return will be a percentage amount equal to 50% of the average of the 10 Share Returns (each of which may be positive or negative). The Share Return for a Share is the percentage increase or decrease in the closing price of the Share from the Issue Date to the fifth Banking Day prior to the Maturity Date. Variable Interest will not be payable at maturity unless the average of the Share Returns is positive. Investors should carefully consider with their advisors the suitability of the Deposit Notes in light of their investment objectives and the information in this Information Statement, and should carefully consider certain risk factors associated with an investment in the Deposit Notes, including those set out under Risk Factors to Consider. The Deposit Notes mature on January 20, ISIN CA13596ZJY21

3 Table of Contents Overview... 1 Summary... 4 Calculation of Variable Interest... 8 How Variable Interest is Calculated... 8 Hypothetical Example Calculations Description of the Deposit Notes Issue Principal Amount and Minimum Subscription Maturity & Repayment of Principal Amount Variable Interest Secondary Trading of Deposit Notes Special Circumstances Forms of the Deposit Notes Status and Credit Rating Plan of Distribution The FundSERV Network Dealings with Companies Notification Amendments Investors Right of Cancellation Canadian Federal Income Tax Considerations The Portfolio Risk Factors to Consider Canadian Imperial Bank of Commerce ( CIBC ) has taken all reasonable care to ensure that the facts stated in this Information Statement in relation to the Deposit Notes (as defined above) are true and accurate in all material respects and that there are no other material facts in relation to the Deposit Notes the omission of which would make any statement herein, whether of fact or opinion, misleading as of the date hereof. No person has been authorized to give any information or to make any representations other than those that may be contained in: (a) this Information Statement, (b) any amendments made from time to time to this Information Statement, or (c) any supplementary terms and conditions provided in any related global deposit note lodged with a depository or other definitive replacement deposit note therefor, in connection with the offering or sale of the Deposit Notes and, if given or made, such information or representations must not be relied upon as having been authorized. Neither the delivery of this Information Statement nor the issue of the Deposit Notes nor any sale thereof will, under any circumstances, constitute a representation or create any implication that there has been no change in the affairs of CIBC since the date hereof. This Information Statement does not constitute an offer or invitation by anyone in any jurisdiction in which such offer or invitation is not authorized or to any person to whom it is unlawful to make such offer or invitation. The distribution of this Information Statement and the offering or sale of the Deposit Notes in some jurisdictions may be restricted by law. Persons into whose possession this Information Statement comes are required by CIBC and the Selling Agent to inform themselves about and to observe any such restriction. This Information Statement constitutes an offering of the Deposit Notes only in those jurisdictions and to those persons where and to whom they may be lawfully offered for sale, and then only through persons duly qualified to effect such sales. The Deposit Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the U.S. Securities Act ), and subject to certain exceptions, may not be offered or sold within the United States or to U.S. persons as contemplated under the U.S. Securities Act and the regulations thereunder. No securities commission or similar authority has in any way passed upon the merits of the Deposit Notes and any representation to the contrary may be an offence. In this Information Statement, capitalized terms will have the meanings ascribed to them and references to $ and CAD are to Canadian dollars. 3 ISIN CA13596ZJY21

4 Summary Issuer Principal Amount Issue Price Issue Date The Deposit Notes will be issued by Canadian Imperial Bank of Commerce ( CIBC ). The Deposit Notes will be sold in a denomination of $ per Deposit Note (the Principal Amount ), with a minimum subscription of fifty (50) Deposit Notes per holder (each an Investor ). 1 2 Price to an Investor 1 Selling Agent Fees Proceeds to CIBC 2 $ (Par) per Deposit Note $2.50 $97.50 The price to be paid by each Investor upon issuance (the Issue Price ) has been determined by negotiation between CIBC and CIBC World Markets Inc. (the Selling Agent ). Before deduction of expenses of issue that will be paid by CIBC out of its general funds. The Deposit Notes will be issued on January 20, 2017 (the Issue Date ) Maturity Date / Term The Deposit Notes will mature on January 20, 2023 (the Maturity Date ), resulting in a term to maturity of 6 years. Investors will be paid interest ( Variable Interest ), if any, in Canadian dollars on the Maturity Date (subject to the provisions outlined under Description of the Deposit Notes Special Circumstances ). Variable Interest, if any, per Deposit Note that may be payable on the Maturity Date will be an amount in Canadian dollars, rounded to the nearest cent, equal to the result obtained using the following formula: Variable Interest = $ x Variable Return Variable Interest Generally stated, the Variable Return will be a percentage amount equal to 50% of the average of the 10 Share Returns (each of which may be positive or negative), provided that if such average is not positive, the Variable Return shall be nil, and no Variable Interest will be paid to Investors. The Share Return for a Share is the percentage increase or decrease in the closing price of the Share from the Issue Date to the fifth Banking Day prior to the Maturity Date. There is no minimum Share Return for any Share. If a Share Return is negative, there is no floor on such Share s negative contribution to the average price return of the Portfolio. Sufficiently negative performance by some Shares in the Portfolio may offset any positive performance and may result in no Variable Interest being paid. No Variable Interest will be payable at maturity unless the average of the Share Returns is positive. Any Variable Interest payable in respect of the Deposit Notes will not include any dividends declared on the Shares. Investors cannot elect to receive Variable Interest prior to the Maturity Date. See Calculation of Variable Interest for the precise formula for determining Variable Interest and for example calculations. CIBC will pay any Variable Interest to CDS Clearing and Depository Services Inc., or a successor, or its nominee ( CDS ) and CIBC understands that payment of such Variable Interest will be credited by CDS in the appropriate amount to the relevant CDS participants. See Description of the Deposit Notes Forms of the Deposit Notes for further details. Principal Amount Repayment On the Maturity Date, the Principal Amount of $ per Deposit Note will be repaid, regardless of the price performance of the Shares. The Deposit Notes cannot be redeemed or retracted prior to the Maturity Date. CIBC will repay the Principal Amount of the Deposit Notes to CDS and CIBC understands that such payments will be credited by CDS in the appropriate amounts to the relevant CDS participants. See Description of the Deposit Notes Forms of the Deposit Notes for further details. 4 ISIN CA13596ZJY21

5 The Portfolio The notional portfolio (the Portfolio ) consists of the common shares of the following 10 Canadian companies (the respective issuers thereof being each a Company and collectively, the Companies ): Canadian Natural Resources Limited Cenovus Energy Inc. Enbridge Inc. Inter Pipeline Limited Pembina Pipeline Corporation Rogers Communications, Inc. Shaw Communications, Inc. Suncor Energy, Inc. TELUS Corporation TransCanada Corporation Each of the Companies is more completely described under The Portfolio. The Portfolio is a notional portfolio only. Investors will not have any direct or indirect ownership interest or rights (including, without limitation, voting rights or rights to receive dividends) in the Shares. Investors will not have any direct or indirect recourse to any of the Companies or the Shares, and will only have a right against CIBC to be repaid the Principal Amount at maturity together with any Variable Interest. Special Circumstances If a Market Disruption Event in respect of a Share occurs on a day on which the Closing Price of such Share is to be determined for calculating Variable Interest, determination of that Closing Price will be postponed to a later date. The occurrence of an Extraordinary Event may accelerate or delay the payment of Variable Interest, if any, and change the manner in which Variable Interest is calculated. However, the Principal Amount of each Deposit Note will not be repaid until the Maturity Date regardless of the occurrence of a Market Disruption Event or Extraordinary Event. Upon the occurrence of certain events in respect of a Company, such as a merger, nationalization or insolvency, CIBC may add a new share to the Portfolio as a replacement for the Share of such Company, and may accordingly make other adjustments. In other circumstances, such as a stock split or extraordinary dividend in respect of a Share in the Portfolio, CIBC may adjust any one or more of the Initial Price or the formula for calculating its Share Return, or another component or variable relevant to the determination of Variable Interest to account for those circumstances. See Description of the Deposit Notes Special Circumstances. Eligibility for Investment The Deposit Notes, if issued on the date of this Information Statement, would be qualified investments under the Income Tax Act (Canada) (the Act ) for trusts governed by registered retirement savings plans ( RRSPs ), registered retirement income funds ( RRIFs ), registered education savings plans ( RESPs ), registered disability savings plans ( RDSPs ), deferred profit sharing plans ( DPSPs ) (other than a trust governed by a DPSP to which contributions are made by CIBC or an employer with which CIBC does not deal at arm s length within the meaning of the Act) and tax-free savings accounts ( TFSAs ). The Deposit Notes will not be a prohibited investment for trusts governed by a TFSA, RRSP or RRIF unless the holder of such a TFSA or the annuitant of such RRSP or RRIF (as applicable), (i) does not deal at arm s length with CIBC for purpose of the Act, or (ii) has a significant interest (as defined in the Act) in CIBC. Holders of a TFSA and annuitants of an RRSP or RRIF should consult their own tax advisors with respect to whether the Deposit Notes would be prohibited investments in their particular circumstances. The Deposit Notes, if issued on the date hereof, would not be a prohibited investment for the purposes of subsection 8514(1) of the regulations under the Act for a registered pension plan (as defined in the Act), including an individual pension plan (as defined in the regulations under the Act). Where an Investor purchases Deposit Notes through dealers and other firms that use the FundSERV Inc. ( FundSERV ) network to facilitate order flow and payments, such dealers or other firms may not be able to accommodate a purchase of Deposit Notes through certain registered plans. Investors should consult their financial advisors as to whether their orders for Deposit Notes will be made using the FundSERV network and any limitations on their ability to purchase Deposit Notes through registered plans. 5 ISIN CA13596ZJY21

6 Secondary Market The Deposit Notes will not be listed on any stock exchange. CIBC World Markets Inc. intends to provide a daily secondary market for the Deposit Notes, but reserves the right not to do so in the future in its sole discretion, without providing prior notice to Investors. An Investor who sells a Deposit Note to CIBC World Markets Inc. prior to the Maturity Date will receive sales proceeds equal to the bid price for the Deposit Note (which may be less than $ per Deposit Note) and which will reflect the deduction of any applicable early trading charge (the Early Trading Charge ). See Description of the Deposit Notes Secondary Trading of Deposit Notes. See Canadian Federal Income Tax Considerations for a discussion of the taxation of gains and losses on a secondary market sale, including the effect of the 2016 Budget Proposals (as defined herein). A sale of Deposit Notes originally purchased using the FundSERV network will be subject to certain additional procedures and limitations established by the FundSERV network. See Description of the Deposit Notes The FundSERV network. Book-Entry Registration The Deposit Notes will be evidenced by a single global deposit note held by CIBC in its capacity as domestic custodian (the Custodian ) for CDS, as depository and registered holder of the Deposit Notes. Registration of interests in and transfers of the Deposit Notes will be made only through the depository s book-entry registration and transfer system. Subject to certain limited exceptions, no Investor will be entitled to any certificate or other instrument from CIBC or the depository evidencing the ownership thereof and no Investor will be shown on the records maintained by the depository except through an agent who is a participant of the depository. Additional information about the Deposit Notes, a copy of the Information Statement and certain ongoing information regarding the Deposit Notes will be available to Investors at including: Additional Information about the Deposit Notes Status the current Closing Prices of the Shares; the formula for determining Variable Interest of the Deposit Notes; and if available, CIBC World Markets Inc. s most recent secondary market bid price for the Deposit Notes (and the applicable Early Trading Charge) Investors may also contact their investment advisor to request additional information about the Deposit Notes, a written copy of this Information Statement or any of the above information. The Deposit Notes will constitute direct, unsubordinated and unsecured obligations of CIBC ranking pari passu among themselves with all other direct, unsubordinated and unsecured indebtedness of CIBC from time to time outstanding, including its deposit liabilities. The Deposit Notes are not insured by the Canada Deposit Insurance Corporation or any other entity. Credit Rating The Deposit Notes have not been and will not be specifically rated by any rating agency. However, the unsubordinated indebtedness of CIBC with a term to maturity of one year or more (which would include CIBC's obligations under the Deposit Notes) are rated AA (negative outlook) by DBRS, Aa3 (negative outlook) by Moody's Investors Service, AA- (stable outlook) by Fitch Ratings and A+ (stable outlook) by Standard & Poor s Rating Service. A rating is not a recommendation to buy, sell or hold investments, and may be subject to revision or withdrawal at any time by the relevant rating agency. Tax Considerations Investors should consider the income tax consequences of an investment in the Deposit Notes, including those arising from a disposition of the Deposit Notes prior to maturity. See Canadian Federal Income Tax Considerations for a summary of certain Canadian federal income tax considerations generally applicable to a Canadian resident individual who invests in the Deposit Notes, including under the 2016 Budget Proposals (as defined herein). Counsel to CIBC has advised that the Canada Revenue Agency ( CRA ) has been reviewing whether the existence of a secondary market for prescribed debt obligations such as the Deposit Notes should be taken into consideration in determining whether interest is deemed to accrue on such obligations. The status of such review in light of the 2016 Budget Proposals is unclear. Any such review could result in changes to the existing published administrative position of CRA and the income tax considerations described herein. 6 ISIN CA13596ZJY21

7 Risk Factors Investors should consider certain risk factors before reaching a decision to purchase any Deposit Notes, including but not limited to (i) the Deposit Notes are not suitable for all Investors; (ii) the Deposit Notes are different than conventional fixed income investments; (iii) no Variable Interest may be payable over the term of the Deposit Notes and any Variable Return payable will be equal to 50% of the average of the Share Returns; (iv) Investors in the Deposit Notes have no ownership of, or recourse to, the Shares; (v) CIBC has not performed any review of the Companies and Investors should undertake an independent investigation as deemed necessary; (vi) the likelihood that Investors will receive the payment owing to them in connection with the Deposit Notes will be dependent upon the financial health and creditworthiness of CIBC. The Deposit Notes will not be insured by the Canada Deposit Insurance Corporation or any other entity; (vii) there is no assurance that CIBC World Markets Inc. will provide a secondary market for the Deposit Notes and if not, a secondary market may not be available; (viii) Investors should consider the tax consequences of an investment in the Deposit Notes; (ix) the occurrence of Special Circumstances may accelerate or delay the payment of Variable Interest, if any, and change the manner in which Variable Interest is calculated; however, the Principal Amount will not be repaid until maturity; (x) CIBC is the issuer of the Deposit Notes, will calculate the amount of Variable Interest that may be payable and may be required to exercise its judgment in relation to the Deposit Notes from time to time. CIBC or one or more of its affiliates may publish research reports with respect to the Shares that may express opinions inconsistent with purchasing the Deposit Notes. CIBC World Markets Inc. provides the bid price and facilitates sales of the Deposit Notes in a secondary market. As such, CIBC and CIBC World Markets Inc. may have economic interests that are adverse to those of Investors; (xi) changes in economic conditions may adversely affect the business and prospects of the Companies and their Shares and are not within the control of CIBC, and (xii) changes made to federal and provincial legislation, regulations or administrative practice, including with respect to taxation, may adversely affect Investors. See Risk Factors to Consider for further details. 7 ISIN CA13596ZJY21

8 Calculation of Variable Interest How Variable Interest is Calculated Each Deposit Note will bear interest (referred to as Variable Interest), if any, payable in Canadian dollars, without any need for the Investor to elect or otherwise take any action. Any Variable Interest will be paid on the Maturity Date (subject to (i) postponement of the determination of the amount of Variable Interest due to a Market Disruption Event or (ii) the earlier occurrence of an Extraordinary Event, as described under Description of the Deposit Notes Special Circumstances ). Variable Interest per Deposit Note that may be payable on the Maturity Date will be an amount in Canadian dollars, rounded to the nearest cent, equal to the result obtained using the following formula: Where: Variable Interest = $ x Variable Return Banking Day: Closing Price: Exchange: Exchange Day: Final Price: Initial Price: Related Exchange: Scheduled Closing Time: Share Return: means a day (other than a Saturday or a Sunday) on which commercial banks are open for business in Toronto, Ontario. means, in respect of a Share, the official closing price for that Share as announced by the relevant Exchange, provided that, if on or after the Issue Date such Exchange materially changes the time of day at which such official closing price is determined or no longer announces such official closing price, CIBC may thereafter deem the Closing Price to be the price of that Share as of the time of day used by such Exchange to determine the official closing price prior to such change or failure to announce. means, in respect of a Share, the exchange or trading system identified under the relevant Company information set out in The Portfolio. provided that if such exchange or trading system is no longer the primary exchange for the trading of that Share, as CIBC may determine, CIBC may designate another exchange or trading system as the relevant Exchange for such Share. means, in respect of a Share, any day on which the Exchange and each Related Exchange for that Share are scheduled to be open for trading during their respective regular trading sessions, notwithstanding any such Exchange or Related Exchange closing prior to its Scheduled Closing Time. means, in respect of a Share, the Closing Price of that Share on the Valuation Date, subject to the provisions set out under Description of the Deposit Notes Special Circumstances. means, in respect of a Share, the Closing Price of that Share on the Issue Date, provided that, if the Issue Date is not an Exchange Day in respect of that Share, then the Initial Price in respect of that Share means the Closing Price of that Share for the immediately following Exchange Day, and further subject to the provisions set out under Description of the Deposit Notes Special Circumstances. means, in respect of a Share, any exchange or trading system on which futures or options contracts on that Share are listed from time to time. means, in respect of an Exchange or Related Exchange and an Exchange Day, the scheduled weekday closing time of the Exchange or Related Exchange on that Exchange Day, without regard to after hours or any other trading outside of the regular trading session hours. means, in respect of a Share, the number, which may be positive or negative, expressed as a percentage, calculated as follows: Final Price Initial Price Initial Price Valuation Date: means, in respect of a Share, the fifth Banking Day immediately preceding the Maturity Date, provided that, if such day is not an Exchange Day in respect of that Share, then the Valuation Date in respect of that Share will be the immediately preceding Exchange Day for that Share, and further subject to the provisions set out under Description of the Deposit Notes Special Circumstances. 8 ISIN CA13596ZJY21

9 Variable Return: means the number, expressed as a percentage, equal to 50% of the average of the 10 Share Returns, provided that if the average is zero or negative, the Variable Return will be zero. The amount of Variable Interest, if any, that may be payable on the Maturity Date is uncertain. There is a possibility that no Variable Interest will be payable at maturity. Investors will not be paid any Variable Interest unless the average of the Share Returns is positive. Any Variable Interest payable in respect of the Deposit Notes will not include any dividends declared on the Shares. There is no minimum Share Return for any Share. If a Share Return is negative, there is no floor on such Share s negative contribution to the average price return of the Portfolio. 9 ISIN CA13596ZJY21

10 Hypothetical Example Calculations The following examples demonstrate how Variable Interest is to be calculated pursuant to the above formula and are included for illustration purposes only. The prices of the Shares used to illustrate the calculation of Variable Interest are hypothetical and are not estimates or forecasts of the prices of the Shares on the Issue Date or the Valuation Date. The examples assume the Investor has purchased a single Deposit Note and that none of the events set out under Special Circumstances has occurred. The actual performances of the Shares may be different from these hypothetical examples and the differences may be material. Example #1: Assumes Overall Positive Price Performance of the Portfolio Initial Price ($) Final Price ($) Actual % Change Share Return Canadian Natural Resources % 56.00% Cenovus Energy % 87.11% Enbridge % 20.56% Inter Pipeline % 34.70% Pembina Pipeline % 44.50% Rogers Communications % 68.97% Shaw % 90.12% Suncor Energy % 56.01% TELUS % 45.35% TransCanada % 48.52% Average of Share Returns = 55.18% Variable Return = x 50.00% = 27.59% Variable Interest = $27.59 Compounded Annual Return = 4.14% The price performance of the Shares in this hypothetical example would have generated a Variable Return of 27.59% (annually compounded return of 4.14%). Accordingly, Investors would have received Variable Interest of $27.59 per Deposit Note, in addition to the Principal Amount of $ on the Maturity Date. Example #2: Assumes Overall Negative Price Performance of the Portfolio Initial Price ($) Final Price ($) Actual % Change Share Return Canadian Natural Resources % -8.55% Cenovus Energy % -0.24% Enbridge % 1.55% Inter Pipeline % 10.24% Pembina Pipeline % -3.51% Rogers Communications % -4.98% Shaw % % Suncor Energy % 12.64% TELUS % % TransCanada % -5.40% Average of Share Returns = -3.28% Variable Return = 0.00% Variable Interest = $0.00 Compounded Annual Return = 0.00% The price performance of the Shares in this hypothetical example would have generated an average of the Share Returns of -3.28%. As the average of the Share Returns would have been negative, the Variable Return would have been 0.00% and no Variable Interest would have been payable on the Maturity Date. However, Investors would have still received the Principal Amount of $ per Deposit Note on the Maturity Date. 10 ISIN CA13596ZJY21

11 What Should Be Learned from the Examples and Formula for Variable Interest Investors should note that, although Variable Interest is generally linked to the future price performance of the Shares, Variable Interest, if any, payable at maturity will depend upon the prices of the Shares on the Valuation Date. Specifically: The Variable Return will be equal to 50% of the average of the ten (10) Share Returns (each of which may be positive or negative). There is no minimum Share Return for any Share. If a Share Return is negative, there is no floor on such Share s negative contribution to the average price return of the Portfolio. Sufficiently negative performance by some Shares in the Portfolio may offset any positive performance and may result in no Variable Interest being paid No Variable Interest will be payable unless the average of the Share Returns is positive Variable Interest payable at maturity may be less than the return Investors could have earned by investing in the Shares directly and holding the Shares to maturity The Principal Amount per Deposit Note will be repaid on the Maturity Date regardless of the price performance of the Shares An investment in the Deposit Notes will not offer the same return as a direct investment in the Shares Investing in the Deposit Notes is subject to various risks. See Risk Factors to Consider. 11 ISIN CA13596ZJY21

12 Description of the Deposit Notes Issue CIBC Canadian Blue Chip Growth Deposit Notes, Series 28 will be issued by CIBC on the Issue Date. CIBC reserves the right to issue the Deposit Notes in an aggregate number as CIBC may determine in its absolute discretion. Principal Amount and Minimum Subscription Each Deposit Note will be issued in a face amount of $ (also referred to as the Principal Amount). The minimum subscription per Investor will be 50 Deposit Notes ($5,000.00). Maturity & Repayment of Principal Amount Each Deposit Note matures on the Maturity Date, on which date the Principal Amount will be repaid (i.e., $ per Deposit Note). However, if the Maturity Date does not occur on a Banking Day, then the Maturity Date will be deemed to occur on the immediately following Banking Day and no interest or other compensation will be paid in respect of such postponement. CIBC will repay the Principal Amount of the Deposit Notes to CDS and CIBC understands that such payments will be credited by CDS in the appropriate amounts to the relevant CDS participants. See Description of the Deposit Notes Forms of the Deposit Notes for further details. Variable Interest Variable Interest, if any, payable on the Maturity Date (subject to postponement or acceleration as described herein) will be an amount in Canadian dollars, rounded to the nearest cent, determined by CIBC in accordance with the formula and related definitions specified under Calculation of Variable Interest. The amount of Variable Interest, if any, that may be payable on the Maturity Date is uncertain. There is a possibility that no Variable Interest will be payable at maturity. Investors will not be paid any Variable Interest unless the average of the Share Returns is positive. Any Variable Interest payable in respect of the Deposit Notes will not include any dividends declared on the Shares. There is no minimum Share Return for any Share. If a Share Return is negative, there is no floor on such Share s negative contribution to the average price return of the Portfolio. Any Variable Interest will be paid in Canadian dollars on the Maturity Date without any need for the Investor to elect or otherwise take any action (subject to the provisions outlined under Description of the Deposit Notes Special Circumstances ). However, the timing and manner of determining Variable Interest may be affected by the occurrence of certain unusual events. Payment of Variable Interest will be made by CIBC on the fifth Banking Day immediately following the determination of all Final Prices used in the calculation of Variable Interest, which may be later than the Maturity Date. Accordingly, the payment date for Variable Interest will be the Maturity Date, provided that the determination of the Final Price for a Share is not postponed due to a Market Disruption Event or the determination of Variable Interest is not accelerated to an earlier date due to an Extraordinary Event as described under Description of the Deposit Notes Special Circumstances. No interest or other compensation will be paid in respect of such postponement. CIBC will pay any Variable Interest to CDS and CIBC understands that payment of such Variable Interest will be credited by CDS in the appropriate amounts to the relevant CDS participants. See Description of the Deposit Notes Forms of the Deposit Notes for further details. 12 ISIN CA13596ZJY21

13 Secondary Trading of Deposit Notes Secondary Market Investors cannot elect to receive the Principal Amount or Variable Interest prior to the Maturity Date and the Deposit Notes will not be listed on any stock exchange. However, Investors may be able to sell the Deposit Notes prior to maturity in any available secondary market. CIBC World Markets Inc. intends to provide a daily secondary market for the Deposit Notes, but reserves the right not to do so in the future at its sole discretion, without providing prior notice to Investors. No other secondary market for the Deposit Notes may be available. See also Description of the Deposit Notes The FundSERV network for details in respect of secondary market trading where the Deposit Notes are held by participants using the FundSERV network. The sale of a Deposit Note to CIBC World Markets Inc. will be effected at a price equal to the bid price for the Deposit Note (which may be less than $ per Deposit Note) and which will be reduced by any applicable Early Trading Charge. If available, CIBC World Markets Inc. s most recent secondary market bid price for the Deposit Notes (including any applicable Early Trading Charge) may be obtained by Investors at Investors should not base their decision to purchase the Deposit Notes on the availability of a secondary market or, if a secondary market is available, on the expectation that the bid price for the Deposit Notes will be equal to or greater than the Principal Amount invested by Investors. Investors should be prepared to hold the Deposit Notes until the Maturity Date. Investors choosing to sell their Deposit Notes prior to the Maturity Date may be unable to sell their Deposit Notes and, if a sale is possible, may receive sales proceeds that do not reflect the performance of the Shares up to that time. Factors Affecting the Bid Price of the Deposit Notes Many factors may affect the bid price of the Deposit Notes. These factors interrelate in complex ways and the effect of one factor may offset or magnify the effect of another factor, potentially having a negative effect on the bid price of the Deposit Notes. It is also important to note that the price received by Investors who sell Deposit Notes to CIBC World Markets Inc. during the first 360 days from the Issue Date will reflect the deduction of the applicable Early Trading Charge at the time that the Deposit Notes are sold to CIBC World Markets Inc. The following list, although not exhaustive, identifies some of the factors that may affect the bid price of the Deposit Notes and where possible, how each factor may affect the bid price of the Deposit Notes given a change in the factor, assuming all other factors affecting the bid price, or the Deposit Notes generally, remain unchanged. The performance of the Shares The bid price of the Deposit Notes will be affected by the current prices of the Shares relative to the Initial Prices of the Shares and by the current performance of the Shares relative to the maximum Share Return. However, the bid price might have a non-linear sensitivity to the rise and fall in the Closing Prices of the Shares (i.e. the bid price of a Deposit Note might increase and decrease at a different rate compared to the respective percentage increase and decrease of the Closing Prices of the Shares). The value of CIBC s obligation to repay the Principal Amount at maturity The Principal Amount of the Deposit Notes will be repaid on the Maturity Date regardless of the performance of the Shares. The value at any time of CIBC s obligation to repay the Principal Amount of a Deposit Note is effectively the value of a Canadian dollar zero-coupon bond issued by CIBC with a face amount of $ that is purchased on the Issue Date and that matures on the Maturity Date. The value of such zero-coupon bond at any time will depend on a number of factors, including the initial discount rate at which the zero-coupon bond was purchased, the time remaining to maturity, prevailing market interest rates and the perceived creditworthiness of CIBC, all of which may affect the bid price of the Deposit Notes. Changes in the level of interest rates The bid price of the Deposit Notes will be affected by changes in Canadian interest rates. If Canadian interest rates increase, it is expected that the bid price of the Deposit Notes will decrease. Conversely, if Canadian interest rates decrease, it is expected that the bid price of the Deposit Notes will increase. 13 ISIN CA13596ZJY21

14 CIBC s credit rating, financial condition and results of operations Actual or anticipated changes in CIBC s current credit rating for its senior, unsubordinated debt, CIBC s financial conditions or results of operations may significantly affect the bid price of the Deposit Notes. The time value associated with the Deposit Notes There is value within the Deposit Notes associated with the passing of time. The magnitude of the time value within the Deposit Notes and whether it has a positive or negative impact on the bid price of the Deposit Notes will depend upon a number of related factors including but not limited to, the current prices of the Shares, the current performance of the Shares relative to the maximum Share Return, the length of the remaining term of the Deposit Notes, and the amount by which the prices of the Shares are expected to fluctuate over this remaining term. Volatility in the prices of the Shares Volatility is the term used to describe the size of market fluctuations in a given time period. Changes in the expectations of the volatility in the prices of the Shares over the remaining term of the Deposit Notes will affect the bid price. The magnitude of the impact and whether it is positive or negative will depend upon a number of related factors including but not limited to, the current prices of the Shares, the current performance of the Shares relative to the maximum Share Return, and the length of the remaining term of the Deposit Notes. The dividend yield of the Shares Dividend yield is a term used to describe the ratio of the amount a company pays out in dividends each year relative to its share price. Changes in the expectations of the dividend yield of the Shares over the remaining term of the Deposit Notes will have an impact on the bid price of the Deposit Notes. In general, an increase in the dividend yield of the Shares would result in a lower bid price of the Deposit Notes. Upfront Costs A portion of the upfront costs incurred in creating, distributing and issuing the Deposit Notes will be recovered from any Investors who sell their Deposit Notes prior to the Maturity Date, initially through the Early Trading Charge, and as the Early Trading Charge declines to zero after 360 days, through such other adjustments as may be required to the bid price for the Deposit Notes. CIBC s expected profit CIBC s profit in relation to the Deposit Notes (which may or may not be realized) will be the difference between the amount it is obligated to pay under the Deposit Notes to Investors and the total cost incurred by CIBC in creating, issuing, maintaining and hedging the Deposit Notes and will depend, in part, on CIBC s ability to successfully hedge its obligations under the Deposit Notes during the term of the Deposit Notes. Early Trading Charges The Deposit Notes are designed for Investors who are prepared to hold the Deposit Notes to maturity. If Investors sell any Deposit Notes in the secondary market to CIBC World Markets Inc. within the first 360 days from the Issue Date, the sale price received for those Deposit Notes will reflect the deduction of an Early Trading Charge of 4.32% initially, declining daily by 0.012% of the Principal Amount to 0% after 360 days from the bid price of the Deposit Notes. The applicable Early Trading Charge will be available to Investors at The Early Trading Charge is specifically applicable only with respect to sales of the Deposit Notes to CIBC World Markets Inc. in the secondary market. Sales to other parties may or may not be subject to early trading charges that, if applicable, are not determined or provided by CIBC World Markets Inc. The Early Trading Charge ensures that the CIBC group of companies is able to recover a portion of the upfront costs that it has incurred in creating, distributing and issuing the Deposit Notes. Investors should be aware that any price for the Deposit Notes appearing on their investment account statement, as well as any bid price quoted to Investors to sell their Deposit Notes within the first 360 days, will be before the application of any applicable Early Trading Charge. Investors wishing to sell Deposit Notes prior to the Maturity Date should consult with their investment advisor regarding any applicable Early Trading Charge. Investors should consult their investment advisor on whether it would be more favourable in the circumstances at any time to sell the Deposit Notes (assuming the availability of a secondary market) or hold the Deposit Notes until the Maturity Date. Investors should also consult their tax advisor as to the income tax consequences arising from a sale prior to the Maturity Date as compared to holding the Deposit Notes until the Maturity Date (see Canadian Federal Income Tax Considerations and, in particular, the discussion of the 2016 Budget Proposals therein). 14 ISIN CA13596ZJY21

15 Special Circumstances Good Faith Determinations CIBC s calculations and determinations in respect of the Deposit Notes will, absent manifest error, be final and binding on Investors. Potential Adjustment Event Following the declaration by a Company of the terms of any Potential Adjustment Event in respect of its Share, CIBC will determine whether such Potential Adjustment Event has a diluting or concentrating effect on the theoretical value of the relevant Share and, if so, will (i) make the corresponding adjustments, if any, to any one or more of the Initial Price of such Share, the formula for calculating the Share Return of such Share, or any other component or variable relevant to the determination of Variable Interest as CIBC determines appropriate to account for the diluting or concentrating effect and (ii) determine the effective date of the adjustments. CIBC may (but need not) determine any appropriate adjustments by reference to the adjustments in respect of such Potential Adjustment Event made by an options exchange to options on the relevant Share traded on such options exchange. Save as expressly provided below, CIBC will make no adjustment in respect of any distribution of cash. Potential Adjustment Event means, in respect of a Share, the occurrence of any of the following events: a) a subdivision, consolidation or reclassification of relevant Shares (unless resulting in a Merger Event), or a free distribution or dividend of any such Shares to existing holders by way of bonus, capitalization or similar issue; b) a distribution, issue or dividend to existing holders of the relevant Shares of (i) such Shares, or (ii) other share capital or securities granting the right to payment of dividends and / or the proceeds of liquidation of the applicable Company equally or proportionately with such payments to holders of such Shares, or (iii) share capital or other securities of another issuer acquired or owned (directly or indirectly) by the applicable Company as a result of a spin-off or other similar transaction, or (iv) any other type of securities, rights or warrants or other assets, in any case for payment (cash or other consideration) at less than the prevailing market price as determined by CIBC; c) an extraordinary dividend in respect of such Shares (where the characterization of a dividend as extraordinary will be determined by CIBC); d) a call by the applicable Company in respect of the relevant Shares that are not fully paid; e) a repurchase by the applicable Company or any of its subsidiaries of the relevant Shares whether out of profits or capital and whether the consideration for such repurchase is cash, securities or otherwise; f) in respect of the applicable Company, an event that results in any shareholder rights being distributed or becoming separated from shares of common stock or other shares of the capital stock of such Company pursuant to a shareholder rights plan or arrangement directed against hostile takeovers that provides upon the occurrence of certain events for a distribution of preferred stock, warrants, debt instruments or stock rights at a price below their market value, as determined by CIBC, provided that any adjustment effected as a result of such an event will be readjusted upon any redemption or such rights; or g) any other event that may have a diluting or concentrating effect on the theoretical value of the relevant Shares 15 ISIN CA13596ZJY21

16 Merger Event and Tender Offer On or after a Merger Date or Tender Offer Date, CIBC will either (i) (A) make adjustment(s), if any, to any one or more of the Initial Price of the relevant Share, the formula for calculating the Share Return of such Share, or any other component or variable relevant to the determination of Variable Interest as CIBC determines appropriate to account for the economic effect on the Deposit Notes of the relevant Merger Event or Tender Offer, which may, but need not, be determined by reference to the adjustments made in respect of such Merger Event or Tender Offer by an options exchange to options on the relevant Shares traded on such options exchange and (B) determine the effective date of the adjustments, or (ii) if CIBC determines that no adjustments that it could make under (i) will produce a commercially reasonable result, CIBC may deem the relevant Merger Event or Tender Offer to be a Substitution Event subject to the provisions described under Description of the Deposit Notes Substitution Event. Merger Event means, in respect of a Share, any (i) reclassification or change of the relevant Shares that results in a transfer of or an irrevocable commitment to transfer all of such Shares outstanding to another entity or person, (ii) consolidation, amalgamation, merger or binding share exchange of the relevant Company with or into another entity or person (other than a consolidation, amalgamation, merger or binding share exchange in which such Company is the continuing entity and which does not result in a reclassification or change of all of such Shares outstanding), (iii) takeover offer, tender offer, exchange offer, solicitation, proposal or other event by any entity or person to purchase or otherwise obtain 100% of the outstanding Shares of such Company that results in a transfer of or an irrevocable commitment to transfer all such Shares (other than such Shares owned or controlled by such other entity or person), or (iv) consolidation, amalgamation, merger or binding share exchange of such Company or its subsidiaries with or into another entity in which such Company is the continuing entity and which does not result in a reclassification or change of all such Shares outstanding but results in the outstanding Shares (other than Shares owned or controlled by such other entity) immediately prior to such event collectively representing less than 50% of the outstanding Shares immediately following such event (commonly referred to as a reverse merger ), in each case if the Merger Date is on or before the date on which the Share Return in respect of such Share is determined. Merger Date means the closing date of a Merger Event or, where a closing date cannot be determined under the local law applicable to such Merger Event, such other date as determined by CIBC. Tender Offer means, in respect of a Share, a takeover offer, tender offer, exchange offer, solicitation, proposal or other event by any entity or person that results in such entity or person purchasing, or otherwise obtaining or having the right to obtain, by conversion or other means, greater than 10% and less than 100% of the outstanding relevant Shares of the applicable Company, as determined by CIBC, based upon the making of filings with governmental or self-regulatory agencies or such other information as CIBC deems relevant. Tender Offer Date means, in respect of a Tender Offer, the date on which the relevant Shares in the amount of the applicable percentage threshold are actually purchased or otherwise obtained (as determined by CIBC). Substitution Event Upon CIBC making a determination that a Substitution Event has occurred in respect of a Share in the Portfolio (the Deleted Share ), the following will apply, effective on a date as determined by CIBC (the Substitution Date ): a) any adjustments set out in Potential Adjustment Event in respect of such Share will not apply; b) CIBC may choose (in its absolute discretion) a new share (the Replacement Share ) of a large Canadian company listed on a major exchange or market quotation system as a substitute for such Deleted Share; c) such Deleted Share will be deleted from the Portfolio and will not be considered a Share for purposes of determining Variable Interest on or after the Substitution Date; d) the Replacement Share will be a Share in the Portfolio, the issuer of such Replacement Share will be the Company in respect of such Replacement Share, and the primary exchange or market quotation system on which such Replacement Share is listed will be the Exchange in respect of such Replacement Share; and 16 ISIN CA13596ZJY21

17 e) CIBC will determine in its discretion the Initial Price of such Replacement Share by taking into account all relevant market circumstances, including the Initial Price of such Deleted Share and the Closing Price or estimated value on the Substitution Date of the Deleted Share and the Closing Price on the Substitution Date of the Replacement Share, and will make adjustments, if any, to any one or more of the formula for calculating the Share Return of such Replacement Share, or any other component or variable relevant to the determination of Variable Interest as CIBC determines appropriate to account for the economic effect on the Deposit Notes of the relevant Substitution Event (including adjustments to account for changes in volatility, expected dividends, stock loan rate or liquidity relevant to the applicable substitution) The Replacement Share chosen by CIBC may be any share of a large Canadian company listed on a major exchange or market quotation system that offers sufficient liquidity in order for CIBC to place, maintain or modify hedges in respect of such shares, and may be a company that was the continuing entity in respect of a Merger Event. If CIBC determines that there are no appropriate shares of a company that meet the foregoing criteria, CIBC may determine that an Extraordinary Event has occurred, as set out under Description of the Deposit Notes Extraordinary Event. Substitution Event means, in respect of a Share, the determination by CIBC that a Nationalization, Insolvency, Delisting or Hedging Event has occurred in respect of such Share, or any Merger Event or Tender Offer in respect of such Share that is deemed by CIBC to be a Substitution Event, or the occurrence and continuation for at least ten consecutive applicable Exchange Days of a Market Disruption Event in respect of such Share. Nationalization means, in respect of a Share, that all such Shares or all the assets or substantially all the assets of the applicable Company are nationalized, expropriated or otherwise required to be transferred to any governmental agency, authority or entity. Insolvency means, in respect of a Share, that by reason of the voluntary or involuntary liquidation, bankruptcy, insolvency, dissolution or winding-up of or any analogous proceeding affecting the applicable Company, (i) all the relevant Shares of such Company are required to be transferred to a trustee, liquidator or other similar official or (ii) holders of the Shares of such Company become legally prohibited from transferring them. Delisting means, in respect of a Share, that the relevant primary Exchange announces that pursuant to the rules of such Exchange, the Shares cease (or will cease) to be listed, traded or publicly quoted on such Exchange for any reason (other than a Merger Event or Tender Offer) and are not immediately re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such Exchange. Hedging Event means, in respect of a Share, the occurrence of an event that has a material adverse effect on CIBC s ability to place, maintain or modify any hedge with respect to such Share including, without limitation, (i) the adoption of or any change in any applicable law or regulation (including tax law), or the promulgation or any change in the interpretation by any court, tribunal or regulatory authority of any applicable law or regulation (including by a taxing authority), (ii) the termination of any hedging contract with a third party, (iii) the inability of CIBC, after using commercially reasonable efforts, to acquire, establish, re-establish, substitute, maintain, unwind or dispose of any transaction or asset for hedging its equity price risk in relation to such Share, or realize, recover or remit the proceeds of any such transaction or asset, or (iv) a material increase in the amount of tax, duty, expense or fee to acquire, establish, re-establish, substitute, maintain, unwind or dispose of any transaction or asset for hedging its equity price risk in relation to such Share or realize, recover or remit the proceeds of any such transaction or asset. Market Disruption Event If CIBC determines that a Market Disruption Event (as defined below) in respect of a Share has occurred and is continuing on any date that but for that event would be a Valuation Date in respect of such Share, then Variable Interest will be calculated (and the applicable Closing Price will be determined) on the basis that such Valuation Date will be postponed to the next Exchange Day on which there is no Market Disruption Event in effect in respect of such Share. 17 ISIN CA13596ZJY21