Bank of Canadian Financials Protected Deposit Notes, Series 1

> Key Features

6 year term to maturity Return linked to the price performance of a portfolio of 9 Canadian Financial Issuers. Potential Variable Return: At maturity, an investor may receive a Variable Return, if any, equal to the simple average of the price return of each in the Reference Portfolio, subject to a maximum price return for each Security of 60% and a lower limit of negative 35%. 100% principal protected by BMO as issuer if held to maturity

> Reference Portfolio

The Reference Portfolio will initially consist of the common shares of 9 Canadian Financial issuers. As of December 15, 2010, the Securities in the Reference Portfolio had an average dividend yield of 3.60% and an average market capitalization of $35.31 billion (Source: Bloomberg). The following chart provides information on each Security, including the TSX and the indicated gross dividend yield and market capitalization as at December 15, 2010 (Source: Bloomberg). The information in the following table is not intended to be, nor should it be construed to be, an indication as to the future dividend or distributionyield of the securities. The Reference Portfolio will not include any dividends or distributions declared on the Securities. Investors must be prepared to waive the aggregate dividend yield provided by the Securities, representing approximately 23.64% over the 6-year term of the Deposit Notes assuming the average dividend yield of the Securities remains constant at 3.60% each year and assuming dividends are reinvested in the Securities.

Indicated Gross Market Capitalization Issuer Symbol Dividend Yield ($ millions)

Bank of Nova Scotia BNS 3.43% $59,612.90

Brookfield Management BAM.A 1.68% $18,384.08

Canadian Imperial Bank of Commerce CM 4.41% $30,998.93

Manulife Financial Corp. MFC 3.13% $29,436.88

National Bank of NA 3.48% $11,577.53

Power Corp of Canada POW 4.28% $12,431.00

Royal RY 3.85% $74,095.94

Sun Life Financial SLF 4.76% $17,311.32

Toronto Dominion Bank TD 3.36% $63,936.25

Source: Bloomberg as of December 15, 2010.

For further information, please contact your Advisor > Hypothetical Return Examples

The following examples are included for illustration purposes only. The Security Returns and Closing Prices used to illustrate the two different scenarios are hypothetical and are not estimates or forecasts of expected changes in the Closing Prices of the Securities from the Closing Date to and including the Final Valuation Date and are not intended as a forecast of future prices of the securities in the Reference Portfolio. 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” in the Information Statement has occurred. Positive Return Example Price on Closing Price on Final Valuation Security Date (Example) Date (Example) Security Return Effective Security Return Bank of Nova Scotia $57.16 $52.02 -9.00% -9.00% Brookfield $31.91 $47.87 50.00% 50.00% Canadian Imperial Bank of Commerce $78.93 $110.50 40.00% 40.00% Financial Corp. $16.61 $20.93 26.00% 26.00% of Canada $71.23 $124.65 75.00% 60.00% Power Corp of Canada $27.13 $36.35 34.00% 34.00% $52.00 $93.60 80.00% 60.00% $30.27 $39.65 31.00% 31.00% Dominion Bank $72.68 $93.76 29.00% 29.00% Simple Average of Returns 39.56% 35.67% Portfolio Return 35.67% Positive Example – In the example above, a Holder would receive a Variable Return of $35.67 at Maturity, representing a cumulative return of 35.67% and an annually compounded rate of return of approximately 5.22%. In addition, at Maturity, a Holder would be entitled to receive the Deposit Amount of $100, regardless of the price performance of the Securities. Note that in this example, although the Security Returns for certain issuers exceeded 60%, the corresponding Effective Security Returns were capped at 60% for all of the Securities

Negative Return Example Price on Closing Price on Final Valuation Date (Example) Date (Example) Security Return Effective Security Return Bank of Nova Scotia $57.16 $52.02 -9.00% -9.00% Brookfield Asset Management $31.91 $47.87 50.00% 50.00% Canadian Imperial Bank of Commerce $78.93 $71.04 -10.00% -10.00% Manulife Financial Corp. $16.61 $15.61 -6.00% -6.00% $71.23 $52.71 -26.00% -26.00% Power Corp of Canada $27.13 $24.69 -9.00% -9.00% Royal Bank of Canada $52.00 $53.04 2.00% 2.00% Sun Life Financial $30.27 $28.76 -5.00% -5.00% Toronto Dominion Bank $72.68 $34.89 -52.00% -35.00% Simple Average of Returns -7.22% -5.33% Portfolio Return 0.00% Negative Example – In the example above, the simple average of the Effective Security Returns is negative. As a result, the Portfolio Return is zero and a Holder would not be entitled to receive any Variable Return at Maturity but would receive the Deposit Amount of $100 at Maturity > Company Description Bank of Nova Scotia: Bank of Nova Scotia provides retail, commercial, Power Corporation of Canada: Power Corporation of Canada is a international, corporate, investment and services and products. diversified management and holding company. The Company has holdings in the and communications sectors in North America. Brookfield Asset Management Inc.: Brookfield Asset Management Inc. is a Power Corp., through Europeon-based Pargesa Group, invests in global asset management company focused on property, infrastructure and communications, utility, industrial, energy, financial services and food renewable power. The Company owns office buildings in major business companies in Europe. The Company also has diversified interest in Asia. centres. Brookfield also owns and operates power generating plants, ports, railways, utilities and timberlands, and invests on behalf of third parties. Royal Bank of Canada: Royal Bank of Canada is a diversified financial services company. The Company provides personal and commercial Canadian Imperial Bank of Commerce: Canadian Imperial Bank of banking, services, , corporate and investment Commerce provides banking and financial services to consumers, individuals, banking, and transaction processing services. Royal Bank offers its services and corporate clients in Canada and around the world. to personal, business, public sector and institutional clients with operations Manulife Financial Corporation: Manulife Financial Corporation provides worldwide. financial protection products and services to Sun Life Financial Inc.: Sun Life Financial Inc. is an international financial individuals, families, businesses, and groups. The Company conducts services organization providing a diverse range of wealth accumulation and operations in Canada, the , and Japan, as well as protection products and services. The Company provides insurance, mutual operations on a global basis. Manulife offers products such as annuities, funds, annuities, pensions, investment management, trust services, and pension products, life insurance, health insurance, and mutual funds. banking services. Sun Life serves individuals and corporate customers National Bank of Canada: National Bank of Canada provides a full array of worldwide. banking services, including retail, corporate and . The Bank, Toronto-Dominion Bank: Toronto-Dominion Bank conducts a general through its subsidiaries, is involved in securities brokerage, insurance and banking business through banking branches and offices located throughout wealth management, as well as and retirement plan management. Canada and overseas. The Bank and other subsidiaries offer a broad range of banking, advisory services, and discount brokerage to individuals, businesses financial institutions, governments, and multinational Source: Bloomberg corporations. This is only a summary of the Offering and should be read in conjunction with the Information Statement dated December 29, 2010 datedDecember Statement Information the with conjunction in be read andshould the Offering of summary a only is This Issuer (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 “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 conventional 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 February 11, 2011. Issue Date On or about February 16, 2011. Maturity Date/Term The Deposit Notes will mature on February 16, 2017 (“Maturity” or “Maturity Date”), resulting in a term to Maturity of 6 years. Minimum Purchase $2,000 (20 Deposit Notes). Payment at Maturity An investor will be paid a Variable Return, if any, in Canadian dollars on the Maturity Date. The Variable Return will be equal to the product of the Deposit Amount and the Portfolio Return, where the Portfolio Return is the greater of (i) the simple average of the percentage changes in the Closing Prices of the Securities from the Issue Date to the Final Valuation Date (where such Closing Price changes may be positive or negative and are subject to a maximum of 60% and a lower limit of negative 35%), and (ii) zero. If the percentage change in the Closing Price of any Security is zero or negative, this will offset positive percentage changes in the Closing Prices of other Securities, potentially resulting in no Variable Return being payable. While the Securities had an average dividend yield of 3.60% and an average market capitalization of $35.31 billion as of December 15, 2010, the Variable Return will not reflect any dividends or distributions declared on the Securities. Fees and Expenses Expenses of this offering of $3.00 (3.00%) per Deposit Note will be paid out of the proceeds of this offering to of the Offering BMO Nesbitt Burns 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. FundSERV Code JHN 919 Secondary Market The Deposit Notes will not be listed on any stock exchange. Moreover, the Bank does not have the right to redeem the Deposit Notes prior to Maturity and a Holder may not require the Bank to redeem the Deposit Notes prior to Maturity. However, BMO Capital Markets will use reasonable efforts, subject to normal market conditions, 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. Sale of a Deposit Note prior to Maturity may result in a loss even if the price performance of the securities in the Reference Portfolio has been positive. 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: 0-60 61-120 121-180 181-240 241-300 301-360 If sold within Thereafter days days days days days days Early Trading Charge 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% Nil

No CDIC 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 the 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 securities 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 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)”, “BMO” 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.