Bank of Montreal Canadian Bank Positive Performance Coupon Protected Deposit, Series 2
> Key Features
5 year term to Maturity
Return based on the price performance of the S&P/TSX Banks Index®
Potential Variable Return : If the return on the Index is positive, investors will receive 24% at Maturity (equal to an annual compounded rate of return of 4.40%) plus 5% of the percentage increase in the Index over the term.
100% Principal Protection by Bank of Montreal as issuer, if held to Maturity
> Hypothetical Return Examples
The following examples are included for illustration purposes only. The values of the Deposit Notes used to illustrate the 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 none of the events set out under “Special Circumstances” outlined in the Information Statement has occurred. Variable Return Example Variable Return Example Positive Coupon Example 2700 The Index has positive price performance at Maturity 2400 (compared to the Initial Index Value) and the investor receives the Deposit Amount at Maturity, a $24 dollar coupon and an 2100 additional coupon equal to 5% of the Index Return. In this example, the Initial Index Value is 1800 and the Final Index Index Level 1800 Value is 2390. Therefore, the investor will receive a Variable Return of 25.64% (comprised of a 24 % fixed return plus 5% of the Index Return) at Maturity. 500
Year 1 Year 2 Year 3 Year 4 Year 5
Positive Coupon Example No Variable Return Example No Coupon Example Variable Return Example 2700 In the first scenario, the Index Return at Maturity is zero (as the Final Index Value and the Initial Index Value are the same) and the investor receives the Deposit Amount 2400 at Maturity. In this example, both the Initial Index Value and the Final Index Value are 1800. 2100 In the second scenario, the Index Return at Maturity is 1800
Index Level Index negative (as the Final Index Value is less than the Initial Index Value) and the investor receives the Deposit 500 Amount at Maturity. In this example, the Initial Index Value is 1800 and the Final Index Value is 700. 200 In both scenarios, no Variable Return is payable at Year 1 Year 2 Year 3 Year 4 Year 5 Maturity. No Coupon Example S&P/TSX Banks Index® The S&P/TSX Banks Index® is a large-cap index comprising nine (9) actively traded Canadian financial companies. The constituents are a subset of the constituents of the S&P/TSX Composite Index® that have been classified according to the Global Industry Classification Standard.
Each stock in the Index is evaluated for sector representation, liquidity, size, and positive company fundamentals. The Index is maintained by the Canadian S&P Index Committee, whose members include representatives from both S&P and the Toronto Stock Exchange. The Index value is determined by multiplying the price of the individual components by their corresponding free-float share amount. The free-float share amount adjusts the outstanding float for control blocks. The market capitalization of all the individual components are summed and divided by the Index divisor, which may be adjusted for corporate actions and significant restructurings. Criteria for removal from the Index include a violation of one or more Index requirements, as well as mergers or acquisitions involving companies in the Index.
The Index has an average 12-month dividend yield of 4.16% as at August 12, 2009 and a market capitalization of $245.1 billion as at September 3, 2009 (Source: Bloomberg). The Index does not reflect the payment of any dividends or distributions declared on the securities represented in the Index.
The composition of the Index as at September 4, 2009 is set out below
Financial Institution TSX Symbol Index Weight
Bank of Montreal BMO 11.44%
Bank of Nova Scotia (The) BNS 18.40%
Canadian Imperial Bank of Commerce CM 9.60%
Canadian Western Bank CWB 0.47%
Home Capital Group Inc. HCG 0.47%
Laurentian Bank of Canada LB 0.36%
National Bank of Canada NA 3.91%
Royal Bank of Canada RY 32.17%
Toronto-Dominion Bank (The) TD 23.14%
The current composition of the Index does not necessarily reflect the composition of the Index in the future.
The following graph illustrates the performance of the Index from September 1, 1999 through September 4, 2009 using daily Closing Levels obtained from Bloomberg under the symbol “STBANKX
S&P/TSX Banks 10 Year Historical Performance
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0 9/01/99 1/01/00 5/01/00 9/01/00 1/01/01 5/01/01 9/01/01 1/01/02 5/01/02 9/01/02 1/01/03 5/01/03 9/01/03 1/01/04 5/01/04 9/01/04 1/01/05 5/01/05 9/01/05 1/01/06 5/01/06 9/01/06 1/01/07 5/01/07 9/01/07 1/01/08 5/01/08 9/01/08 1/01/09 5/01/09 9/01/09 This is only a summary of the Offering and should be read in in read be should and summarythe Offering a is only of This
Issuer > SummaryBank of Montreal (the “Bank”). Selling Period Until October 23, 2009.
Issue Date On or about October 28, 2009.
Maturity The Deposit Notes will mature on October 28, 2014 (“Maturity” or “Maturity Date”), resulting in a term to Date/Term Maturity of 5 years.
Minimum $2,000 (20 Deposit Notes). Purchase
Index S&P / TSX Banks Index®
Payment at Subject to the occurrence of certain special circumstances, for each Deposit Note a Holder holds at Maturity Maturity, the Holder will receive (i) the Deposit Amount, and (ii) a Variable Return, if any, based on the performance of the Index.
More specifically, the Variable Return per Deposit Note, if any, will be payable in an amount per Deposit Note equal to (i) the sum of (A) the Deposit Amount multiplied by 5% of the Index Return, and (B) $24, if the Final Index Value is greater than the Initial Index Value, or (ii) zero, if the Final Index Value is equal to or less than the Initial Index Value.
Fees and Expenses of this offering of $2.50 (2.50%) per Deposit Note will be paid out of the proceeds of this with the Information conjunction Expenses of the offering to BMO Nesbitt Burns Inc. for its services as selling agent. The selling agent will pay all or a Offering portion of this amount to qualified selling members for selling the Deposit Notes.
FundServ Code JHN062
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 notice to Holders. Secondary market “redemption” orders and settlements can be made using the FundServ network. Changes in laws and regulations may impact the procedures and timing relating to selling Deposit Notes on the secondary market.
Early Trading An Early Trading Charge will apply to secondary redemption orders for Deposit Notes placed using the Charge FundSERV network within the first 360 days from the Closing Date, determined as a percentage of the
Deposit Amount as follows: 14, 200 dated September Statement
0-60 61-120 121-180 181-240 241-300 301-360 If sold within Thereafter days days days days days days
Early Trading 3.50% 3.00% 2.50% 1.50% 1.00% 0.50% Nil Charge
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 Index 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 9 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 rounded symbol” and “BMO Capital Markets” are registered trademarks of Bank of Montreal used under license. “Standard & Poor's®”, “S&P®” and “S&P/TSX Banks Index ®” are trademarks of The McGraw-Hill Companies, Inc. used under license by Bank of Montreal and its affiliates.