Notice of Annual Meeting of Shareholders and Proxy Circular Annual Meeting — February 27, 2001 Table of Contents 1 Invitation to Shareholders 2 Notice of Annual Meeting of Shareholders 3 Q&A on Proxy Voting 5 Business of the Meeting 6 Nominees for Election to Board of Directors 10 Board of Directors Compensation/Attendance 11 Report of the Audit Committee 12 Report of the Governance Committee 16 Report of the Risk Review Committee 17 Report of the Conduct Review Committee 17 Report of the Executive Committee 18 Report of the Human Resources and Management Compensation Committee on Executive Compensation 21 Executive Compensation 24 Directors, Executive Officers and Senior Officers – Indebtedness 24 Performance Graph 25 Directors’ and Officers’ Insurance 25 Additional Information 25 Directors’ Approval 26 Schedule “A” – Shareholder Proposals Invitation to Shareholders Please accept my personal invitation to join us at Bank of Montreal’s next annual meeting, which takes place on February 27, 2001 at the Four Seasons Hotel in Vancouver. This is your opportunity to meet and question members of the Board of Directors and the senior leadership team, become well informed about last year’s performance, and receive a first-hand account of our relentless pursuit of maximum value for shareholders. It should be a very informative and gratifying occasion. Please do try to join us if you can. Sincerely, Tony Comper (signed) Chairman and Chief Executive Officer January 12, 2001 P.S. In the meantime, you can view the Bank’s 2000 Annual Report, quarterly results, analysts’ presentations and a wealth of other information about the Bank by visiting our web site at www.bmo.com. Bank of Montreal Proxy Circular ■ 1 Notice of Annual Meeting of Shareholders The 2001 Annual Meeting of Shareholders will commence at 9:30 a.m. (Pacific Standard Time) on Tuesday, February 27, 2001 in the Park Ballroom, Four Seasons Hotel, 791 West Georgia Street, Vancouver, British Columbia, and will have the following purposes: 1. To receive the financial statements of the Bank for the year ended October 31, 2000 and the auditors’ report on those statements; 2. To appoint auditors for 2001; 3. To elect the Board of Directors for 2001; 4. To consider and, if thought fit, confirm by Special Resolution an amendment to Special By-law “A” – Remuneration of Directors (the Special Resolution is set out on page 5 of the Proxy Circular); 5. To consider shareholder proposals attached as Schedule “A” of the Proxy Circular; and 6. To transact any other business properly before the meeting. Shareholders as at January 12, 2001 will be entitled to vote at the meeting. If you cannot attend the meeting in person, please complete the enclosed form of proxy and return it in the postage prepaid envelope provided or fax it to (514) 877-9676. For your vote to be recorded, the proxy must be in the hands of The Trust Company of Bank of Montreal, at its Montreal office, no later than 5:00 p.m. Eastern Standard Time (EST)on Monday, February 26, 2001. By order of the Board of Directors, Velma J. Jones (signed) Vice-President and Secretary January 12, 2001 Please note: Light refreshments will be served prior to the meeting commencing at 8:45 a.m. 2 ■ Bank of Montreal Proxy Circular Q&A on Proxy Voting Q: What am I voting on? Q: What if I sign the form of proxy enclosed with this circular? A: Shareholders are voting on the appointment of auditors A: Signing the enclosed form of proxy gives authority to for the Bank for 2001, election of directors to the Board Tony Comper or Blair MacAulay, each of whom is a of the Bank for 2001, the Special Resolution confirming director of the Bank, or to another person you have an amendment to Special By-law “A” – Remuneration appointed to vote your shares at the meeting. of Directors, and shareholder proposals. Q: Can I appoint someone other than these directors to vote Q: Who is entitled to vote? my shares? A: Shareholders as of the close of business on January 12, A: Yes. Write the name of this person, who need not 2001 are entitled to vote. Each Common Share is entitled be a shareholder, in the blank space provided in the to one vote on those items of business identified in the form of proxy. Note, however, that the terms of the Notice of Meeting, except shares of the Bank which are Bank Act disallow voting by persons representing those beneficially owned by: entities referred to in the answer to “Who is entitled the Government of Canada or of a province or any to vote?” of their agencies; or the government of a foreign It is important to ensure that any other person you country or any political subdivision thereof or any appoint is attending the meeting and is aware that he of its agencies. or she has been appointed to vote your shares. Proxy- If you acquired your shares after January 12, 2001, holders should, at the meeting, present themselves to please refer to the answer to “What if ownership of a representative of The Trust Company of Bank shares has been transferred after January 12, 2001?” of Montreal. to determine how you may vote such shares. Q: What do I do with my completed proxy? Q: How do I vote? A: Return it to the Bank’s transfer agent, The Trust A: There are two ways in which you can vote your shares Company of Bank of Montreal, in the envelope provided, if you are a registered shareholder. You can vote in or fax to (514) 877-9676 so that it arrives no later than person at the meeting or you can sign the enclosed form 5:00 p.m. EST on Monday, February 26, 2001. This will of proxy appointing the named persons or some other ensure your vote is recorded. person you choose, who need not be a shareholder, to represent you and vote your shares at the meeting. Q: If I change my mind, can I take back my proxy once I have given it? If your shares are held in the name of a nominee, please see the box on page 4 for voting instructions. A: Yes. If you change your mind, prepare a written state- ment to that effect. The statement must be signed by you or your attorney as authorized in writing or, if Q: What if I plan to attend the meeting and vote in person? the shareholder is a corporation, under its corporate A: If you plan to attend the meeting on February 27, 2001 seal or by an officer or attorney of the corporation duly and wish to vote your shares in person at the meeting, authorized. This statement must be delivered either do not complete or return the form of proxy. Your to the head office of the Bank no later than 5:00 p.m. EST vote will be taken and counted at the meeting. Please on Monday, February 26, 2001 or to the Chairman register with the transfer agent, The Trust Company on the day of the meeting, February 27, 2001, or any of Bank of Montreal, upon arrival at the meeting. adjournment of the meeting. Q: Who is soliciting my proxy? Q: How will my shares be voted if I give my proxy? A: The enclosed form of proxy is being solicited by Bank A: The persons named on the form of proxy must vote for of Montreal and the associated costs will be borne by or against or withhold from voting your shares in accor- the Bank. The solicitation will be primarily by mail but dance with your directions. In the absence of such may also be made by telephone, in writing or in person directions, however, your shares will be voted in favour by regular employees of the Bank and/or The Trust of the appointment of auditors, the election of directors CompanyofBankofMontreal.TheBankwillalsousethe to the Board, and the Special Resolution confirming services of an outside agency, Georgeson Shareholder the amendment to Special By-law “A” – Remuneration Communications Canada, to solicit proxies, and the cost of Directors, and against the shareholder proposals of such services is $32,500. as set out in Schedule “A” of this Proxy Circular. Bank of Montreal Proxy Circular ■ 3 Q&A on Proxy Voting Q: What if amendments are made to these matters or if Q: Who counts the votes? other matters are brought before the meeting? A: The Bank’s transfer agent, The Trust Company of Bank A: The person named in the form of proxy will have of Montreal, counts and tabulates the proxies. This discretionary authority with respect to amendments is done independently of the Bank to preserve the con- to and variations on matters identified in the Notice fidentiality of individual shareholder votes. Proxies are of Meeting as well as to other matters which may prop- referred to the Bank only in cases where a shareholder erly come before the meeting. clearly intends to communicate with management or As of the time of printing of this Proxy Circular, man- when it is necessary to do so to meet the requirements agement of the Bank knows of no such amendment, of applicable law. variation or other matter expected to come before the meeting. If any other matters properly come before Q: If I need to contact the transfer agent, the meeting, the persons named in the form of proxy will how do I reach them? vote on them in accordance with their best judgment. A: You can contact the transfer agent by mail at: The Trust Company of Bank of Montreal Q: How many shares are entitled to vote? P.O.