FundSERV Code: JHN 301
The Faircourt Principal Protected Income Trust Deposit Notes, Series 2 (the “Deposit Notes”) issued by Bank of Montreal will mature on or about August 5, 2014 (“Maturity”). The Deposit Notes have been developed to provide investors with a principal protected product that provides up to 200% of exposure to the distributions and capital appreciation of a portfolio of income trust and income fund units that could have otherwise been purchased with the net proceeds of the offering of the Deposit Notes.
Each month prior to Maturity beginning in September, 2005, Bank of Montreal will pay to each holder of the Deposit Notes (each, a “Holder”) interest in an amount equal to their pro rata share of 75% of all distributions, if any, paid on the Units held in the Basket and not yet paid to the Holders or notionally reinvested in the Basket at the end of the month. An amount equal to 25% of all such distributions will be notionally reinvested in the Basket.
If held to Maturity, each Holder will receive an amount per Deposit Note equal to the greater of (i) the amount deposited of $100 (the “Deposit Amount”) and (ii) the Deposit Amount plus a variable return, if any, calculated in accordance with the Variable Return Repayment Formula (as hereinafter defined). Under the Variable Return Repayment Formula, the variable return will be based on the return on the Basket after the payments of interest to Holders prior to Maturity.