FundSERV Code: JHN 303
The Bank of Montreal Faircourt Principal Protected Income Trust Deposit Notes, Series 3 (the Deposit Notes ) issued by Bank of Montreal will mature on or about December 15, 2014 ( Maturity ). The Deposit Notes are a principal protected product that endeavours to replicate an exposure of up to two times (200%) the monthly distributions and capital appreciation of the Series A units of the Faircourt Pooled Monthly High Income Fund (the Fund ) that could have otherwise been purchased with the net proceeds of the offering of the Deposit Notes.
Within 10 business days of the end of each month prior to Maturity, commencing December, 2005, Bank of Montreal will pay to the holders of Deposit Notes (each, a Holder ) interest in an amount equal to such Holder s pro rata share of 75% of all distributions, if any, received on the Equity Portfolio component of the Basket and not yet paid to the Holders or notionally reinvested in the Basket. An amount equal to 25% of all such distributions will be notionally reinvested in the Basket. The amount and frequency of interest payments during the term of the Deposit Notes will not affect a Holder s right to receive at least $100 per deposit note at Maturity.
At 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 Payment Formula (as hereinafter defined). Under the Variable Return Payment Formula, the variable return will be based on the return on the Basket after the payments of interest to Holders prior to Maturity.