Canadian DCA Callable Deposit, Series 3

> Investment Highlights

• 7 year term to maturity • 100 % Principal Protected by Bank of Montreal, as issuer, if held to maturity. • Portfolio consists of a basket of twenty (20) Canadian common equities diversified across eight (8) different sectors. • Callable by Bank of Montreal at any time prior to maturity at a 10% compounded annual rate of return calculated from the closing date to the call date. • If not called, investors are entitled to receive 100% of the percentage increase - which could be zero - from the Initial Average Portfolio Value to the Portfolio Value at Maturity. The portfolio return will not include any dividends or distributions declared on the securities. As of June 16, 2010 the average 12-month dividend yield was 4.32%. If there is no price appreciation of the underlying portfolio over the term, the variable return will be zero. • Dollar Cost Averaging Entry Point: for purposes of calculating the Variable Return, the Initial Average Portfolio Value is the value of a $100 investment in the Portfolio on the Closing Date as determined by averaging seven (7) monthly valuation dates observed during the first six (6) months, including date of closing. • The Dollar Cost Averaging feature allows the investor to lock in a potentially attractive entry point by taking advantage of the current market volatility.

> Diversified Portfolio

Alimentation Astral Bell Alliant Canadian Capital Power CML Healthcare Cogeco Finning Couche-Tard Media Regional Utilities Income L.P Income Fund Cable Incorporated Inc. International Inc. Inc. Communications Limited Inc. Inc. Income Fund

Fortis Inc. George IGM Financial Inc. Loblaw Manitoba Metro Inc. RONA Shaw Shoppers Weston Companies Telecom inc Communications Drug Mart Corporation Limited Limited Services Inc

> Dollar Cost Averaging Feature

The Initial Average Portfolio Value (Dollar Cost Averaging) Feature: Market volatility has been a challenge in recent months, making it difficult to select the appropriate time to invest in the market. The Initial Average Portfolio Value feature removes part of the uncertainty of trying to time the market. Holders have the opportunity to receive a return that is based on the average portfolio value over the six months from the Closing Date.

300 Dollar Cost Averaging Entry Point: For 6 months averaging purpose of calculating the Variable Return, the 250 period Initial Average Portfolio Value is the average value of a $100 investment in the Portfolio on 200 the Closing Date and the following 6 monthly valuation dates 150

100 Portfolio Level 50

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Closing 1 2 3 4 5 6 7 Date Months

For further information, please contact your Investment Advisor > Variable Return Scenario

The following examples are included for illustration purposes only. The values of the Deposit Notes used to illustrate the three different scenarios are hypothetical and are not estimates or forecasts of expected returns from the Closing Date to and including the Final Valuation Date. Each of the scenarios refers to a Holder holding a single Deposit Note and assumes that no Extraordinary Event or Market Disruption Event has occurred.

300

250 Note is called at $127.05$127.00 for a 10% 6 months averaging annual compound rate period 200 2

1 150

100 Portfolio Level 50 3

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0 1 2 3 4 5 6 7 Years Scenario 1: Call Right Example

In the scenario indicated by the number one in the above graph, the Deposit Notes are called for redemption by Bank of Montreal on a hypothetical Call Date of February 11, 2013 and the Holder receives the Deposit Amount plus the Redemption Coupon of $27.00, representing a 10% annual compounded rate of return calculated from the Closing Date to the Call Date. In this event, the Holder will not receive any return based on the price performance of the Securities.

Scenario 2: Positive Return Example with no Call

In the scenario indicated by the number two in the above graph, the Deposit Notes are not called for redemption by Bank of Montreal, the Portfolio has positive price performance at Maturity (compared to the Initial Average Portfolio Value) and the Holder receives the Deposit Amount at Maturity plus the Variable Return. In this example, the Initial Average Portfolio Value is $100 and the Final Portfolio Value is $170. Therefore, the Holder will receive a Variable Return of $70.00 at Maturity, being $100 × ($170 − $100) ÷ $100, which is equal to a 7.88% annual compounded rate of return.

Scenario 3: No Variable Return Example

In the scenario indicated by the number three in the above graph, the Deposit Notes are not called for redemption by Bank of Montreal, the Portfolio has negative price performance at Maturity (compared to the Initial Average Portfolio Value) and the Holder receives the Deposit Amount at Maturity. In this example, the Initial Average Portfolio Value is $100 and the Final Portfolio Value is $50. No Variable Return is payable at Maturity and the Holder will receive only the Deposit Amount at Maturity. > Company Description

George Weston Limited: processes and distributes food Alimentation Couche-Tard Inc: Alimentation Couche-Tard Inc. operates a throughout North America to grocer wholesalers, warehouses, and independent network of 24-hour convenience stores in Quebec, , and Alberta, accounts. The Company also processes and packages fish. . The Company offers a variety of food and other products, fast-food services, lottery and gasoline sales, and automated banking machines. IGM Financial, Inc: IGM Financial, Inc offers a variety of personal financial planning services. The Company provides mutual funds, Guaranteed Investment Certificates, Astral Media Inc: Astral Media Inc. is a media company with operations in insurance products, and mortgage loans. IGM operates throughout Canada. Canada. The Company's core areas include English and French specialty, pay, and pay-per-view television services, as well as radio, outdoor advertising, and Limited: Loblaw Companies Limited is a retail and wholesale new media. Astral also, through a subsidiary, provides technical service for the food distributor with operations across Canada. The Company's operations include film and television industry. both company and franchisee operated stores, warehouses, and cash and carry outlets. Bell Aliant Regional Communications Income Fund: Bell Aliant Regional Communications Income Fund combines the wire line operations of Aliant within Manitoba Telecom Services Inc: Manitoba Telecom Services Inc. provides full- the company's different territories. service telecommunications in Manitoba, Canada. The Company offers local, long distance, wireless, directory, and on-line multimedia services. Canadian Utilities Limited: Canadian Utilities Limited conducts operations in Metro Inc: Metro Inc. is primarily a food distributor and retailer in Quebec, the electrical utility services, independent power production, and retail gas and Ottawa region, and the north-eastern part of Ontario, Canada. The Company electricity marketing. The Company also distributes, transmits, gathers, supplies franchised and corporate stores that carry the Metro, Super C, Loeb, and processes, and stores natural gas. In addition, Canadian Utilities provides Marche Richelieu banners, as well as restaurants, hotels, and institutions. Metro is technical logistical services and billing and call center services. also the franchisor for the Brunet and Clini-Plus drugstore chains.

Capital Power Income LP: Capital Power Income LP owns electricity RONA Inc: RONA Inc. is a Canadian retailer and distributor of home improvement and gardening products. The Company operates a multi-format, multi-banner generating plants in Canada and the United States. network with locations throughout Canada. RONA addresses the needs of every consumer segment of the home improvement and gardening products industry from CML Healthcare Income Fund: CML Healthcare Income Fund is an income large metropolitan areas to small rural communities. trust that owns the existing drug development and pharmaceutical research businesses of CML Healthcare Inc. The Company provides healthcare and , Inc: Shaw Communications, Inc. provides broadband diagnostic services across Canada. CML also provides pharmaceutical research cable television, Internet, and satellite television services. services throughout North America. Corporation: Shoppers Drug Mart Corporation is a drugstore Cogeco Cable Inc: Cogeco Cable Inc. is a cable television operator. The retailer in Canada. The Company offers pharmacy services, health information, and Company markets basic cable television services and various discretionary beauty products. services, which include pay television, audio programming, and high-speed Internet access by cable modem. Cogeco Cable serves customers throughout Canada. Telus Corporation: Telus Corporation is a telecommunications company providing a variety of communications products and services. The Company provides voice, data, Internet, and wireless services to businesses and consumers in Canada. Emera Inc: Emera Inc. provides diversified energy and services through its subsidiaries. The Company supplies electric generation, transmission, and distribution in Nova Scotia, Canada. Emera also delivers bunker oil, diesel fuel, and light fuel. In addition, the Company delivers Sable Island natural gas to markets in Maritime Canada and the north-eastern United States

Enbridge Inc: Enbridge Inc. provides energy transportation, distribution, and related services in North America and internationally. The Company operates a crude oil and liquids pipeline system, is involved in international energy projects, and is involved in natural gas transmission and midstream businesses. Enbridge also distributes natural gas and electricity, and provides retail energy products.

Finning International Inc: Finning International Inc. sells, finances, and services Caterpillar and complementary equipment. The Company operates principally in Western Canada, the United Kingdom, and Chile.

Fortis, Inc: Fortis, Inc. holds investments in several electric distribution utilities located in Canada, Belize, and the Cayman Islands. The Company also has subsidiaries involved in electricity generation in New York State and Belize. In addition, Fortis, through its non-utility subsidiary, has investments in commercial real estate and hotels throughout Atlantic Canada. An Early Trading Charge will apply to secondary market redemption orders for Deposit Notes placed using the FundSERV network within the first 360 days from the Closing Date, determined a

Terms of the Offering read be should and summarythe Offering a is only of This

Issuer Bank of Montreal (the “Bank”).

Rating As of the date of the Information Statement, the deposit liabilities of the Bank with a term to maturity of more than one year are >rated Summary “AA” by DBRS, “A+” by Standard & Poor’s and “Aa2” by Moody’s. The Deposit Notes have not been rated and there is no assurance that, if the Deposit Notes were specifically rated by such rating agencies, they would have the same rating as the other deposit liabilities of the Bank. The Deposit Notes will not be deposits insured under the Canada Deposit Insurance Corporation Act or any other deposit insurance regime designed to ensure the payment of all or a portion of a deposit upon the insolvency of the deposit taking financial institution.

Issue Price $100 per Deposit Note (the “Deposit Amount”).

Selling Period Until August 6, 2010.

Issue Date On or about August 11, 2010.

Maturity Unless the Bank exercises its right to call the Deposit Notes for redemption, the Deposit Notes will mature on August 11, 2017 Date/Term Maturity Date”), resulting in a term to Maturity of 7 years.

Minimum Purchase $2,000 (20 Deposit Notes).

Call Date Callable at the option of the Bank at any time prior to Maturity.

Amounts Payable If the Bank, in its sole discretion, calls the Deposit Notes on the Call Date, then no Variable Return will be payable on the Deposit on Call Date Notes and the Holder will only be entitled to receive in respect of a Deposit Note, the Deposit Amount of $100 plus the Redemption Coupon representing interest equivalent to an annual compounded rate of return of 10% calculated from the Closing Date to the Call Date, which will be paid on the third Business Day following the Call Date. In such event, the Holder will not receive any return based on the performance of the Portfolio.

Portfolio Twenty (20) Canadian Issuers

Payment at Subject to the Bank’s right to call the Deposit Notes for redemption on the Call Date and subject to the occurrence of certain special Maturity circumstances, for each Deposit Note a Holder holds at Maturity, the Holder will receive (i) the Deposit Amount, and (ii) a Variable with the in Informat conjunction Return, if any. The Variable Return, if any, is based on the price performance of the Securities in the Portfolio from the Closing Date and six valuation dates at one-month intervals after that date to the Final Valuation Date and will not reflect any distributions or dividends declared on the Securities in the Portfolio. More specifically, on certain valuation days after the Closing Date, BMO Capital Markets measures the value of a notional $100 investment allocated equally among the Securities and made on the Closing Date. The Variable Return, if any, will be payable in an amount per Deposit Note equal to the greater of (i) $100 multiplied by the percentage by which the value, on the Final Valuation Date, of such an investment exceeds the Initial Average Portfolio Value, and (ii) zero. The Initial Average Portfolio Value usedto determine the Variable Return is the simple average of the Portfolio Values on each of the Initial Valuation Dates, being the Closing Date and the same day of the month as the Closing Date in each of the next six calendar months.

Fees and Expenses Expenses of this offering of $4.00 (4.00%) per Deposit Note will be paid out of the proceeds of this offering to BMO Nesbitt Burns of the Offering Inc. for its services as selling agent. The selling agent will pay all or a portion of this amount to qualified selling members for selling the Deposit Notes.

Secondary Market The Deposit Notes will not be listed on any stock exchange. Moreover, Holders do not have the right to redeem the Deposit Notes prior to Maturity. However, BMO Capital Markets, in normal market conditions, will use reasonable efforts to arrange for a secondary market for the sale of Deposit Notes but reserves the right not to do so in the future, without providing prior noticeto Holders. Secondary market “redemption” orders and settlements can be made using the FundSERV network. Sale of a Deposit Note dated June 29,2010ion Statement prior to Maturity may result in a loss even if the performance of the Securities in the Portfolio has been positive.

Early Trading If sold within 0-60 days 61-120 days 121-180 days 181-240 days 241-300 days 301-360 days Thereafter Charge Early Trading Charge 5.00% 4.25% 3.50% 2.75% 2.00% 0.75% Nil

CDIC Eligibility The Deposit Notes are not insured under the Canada Deposit Insurance Corporation Act.

The Deposit Notes are issued by and constitute direct, unconditional obligations of Bank of Montreal. This summary is issued for discussion purposes only to provide an overview of the proposed Deposit Notes and does not constitute investment advice or an offer to sell or a solicitation to purchase. Details of certain risks of investing in the Deposit Notes, as well as complete disclosure of how variable return, if any, on the Deposit Notes is calculated are contained in the related Information Statement which will be available through your financial advisor or at www.bmosp.com. You should read the Information Statement carefully before investing and discuss all the key features, of the Deposit Notes, including their suitability for you with your financial advisor. The Deposit Notes may not be suitable for all types of investors. The prices and value of the Deposit Notes may fluctuate and/or be adversely affected by a number of factors. The fluctuation of the performance of the underlying Portfolio will directly impact the variable return, if any, payable on the Deposit Notes at Maturity. The Deposit Notes will not be listed on any stock exchange. You do not have the right to require Bank of Montreal to redeem the Deposit Notes prior to maturity

Bank of Montreal makes no recommendations concerning equity investments as asset classes or the suitability of investing in securities generally or Deposit Notes in particular. No person has been authorized to give any information or to make any representation not contained in the Information Statement relating to the Deposit Notes and Bank of Montreal does not accept any responsibility for any information not contained in the Information Statement.

“BMO (M-bar roundel symbol)” and “BMO Capital Markets” are registered trade-marks of Bank of Montreal. “Nesbitt Burns” is a registered trade-mark of BMO Nesbitt Burns Corporation Limited used under license.