Bank of Montreal DYNAMIC RetirementEdge Income Portfolio, Current Pay Notes, Series 5
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INFORMATION STATEMENT DATED JANUARY 7, 2008
This Information Statement has been prepared solely for assisting prospective purchasers in making an investment decision with respect to these
Deposit Notes. This Information Statement constitutes an offering of these Deposit Notes only in those jurisdictions where they may be lawfully
offered for sale and therein only by persons permitted to sell the Deposit Notes. No securities commission or similar authority in Canada has in
any way passed upon the merits of the Deposit Notes offered hereunder and any representation to the contrary is an offence. The Deposit Notes
offered under this Information Statement have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or
any State securities laws and may not be offered for sale or sold in the United States or to United States persons.
Bank of Montreal
DYNAMIC® RetirementEdge Income Portfolio™,
Current Pay Notes™, Series 5
PRICE: $100 PER DEPOSIT NOTE
Minimum Subscription: $2,000 (20 Deposit Notes)
Bank of Montreal Dynamic RetirementEdge Income Portfolio, Current Pay Notes, Series 5 (the “Deposit Notes”) issued by
Bank of Montreal will mature on or about March 17, 2023 (“Maturity”). The Deposit Notes provide investors with the
opportunity to acquire an integrated investment product that seeks to address evolving investment objectives that take into
account retirement years. The Deposit Notes will, except in certain circumstances described herein as a capital preservation
event or an extraordinary event, provide holders (collectively the “Holders” and each a “Holder”) with 100% exposure to the
distributions and capital appreciation of a portfolio (the “Fund Portfolio”) of notional shares or units of eight equity mutual
funds and two bond mutual funds (each a “Fund” and collectively, the “Funds”) that could have been notionally purchased
with the net proceeds of the offering of the Deposit Notes. The proportion of the equity Funds and the bond Funds will be
systematically “rebalanced” to a progressively more conservative risk profile over the 15-year term of the Deposit Notes.
Holders, subject to adjustments for inflation as discussed below, will receive monthly principal repayments in an amount
equal to a pro rata portion of 6.60% per annum of the amount deposited of $100 per Deposit Note. Such monthly principal
repayments generally will be adjusted annually to reflect any increases in inflation and will not be subject to tax when
received by a Holder but will reduce the Holder’s adjusted cost base of the Deposit Notes. Principal repayments will
continue until they reach $99 per Deposit Note, following which no further payments will be made by Bank of Montreal to a
Holder until Maturity. At Maturity, a Holder will receive an amount per Deposit Note equal to the unpaid principal balance
plus variable return in the amount, if any, by which the net asset value per Deposit Note at Maturity exceeds the unpaid
principal balance. Variable return at Maturity, if any, will depend on the distributions on and capital appreciation of the
shares or units of the Funds in the Fund Portfolio during the term of the Deposit Notes.
BMO Nesbitt Burns Inc. (“BMO Capital Markets”) will use reasonable efforts to arrange for a secondary market for the sale
of Deposit Notes purchased using the FundSERV network. Subject to the availability of such a secondary market, during
the last five and a half years of the term of the Deposit Notes (commencing in September 2017), a Holder may choose to
submit a “Periodic Standing Order” to sell Deposit Notes in such secondary market at prevailing secondary market prices in
amounts determined by the Holder.
BMO Capital Markets is the selling agent (the “Selling Agent”) and is a wholly-owned subsidiary of BMO Nesbitt Burns
Corporation Limited which, in turn, is an indirect majority-owned subsidiary of Bank of Montreal. Consequently, Bank of
Montreal is a related issuer of the Selling Agent under applicable securities legislation. See “Plan of Distribution”.
The closing of this offering is scheduled to occur on or about March 19, 2008 (the “Closing Date”). Subscriptions will be
received subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any
time without notice. Subscriptions for Deposit Notes may be made through FundSERV’s transaction processing system,
JHN 434 – 3 Year Load Notes
JHN 435 – 1.5 Year Load Noteswhich will result in funds being accumulated in a non-interest bearing account of BMO Capital Markets pending execution
of all required documents and satisfaction of closing conditions, if any. Upon acceptance of a subscription, a confirmation
of acceptance will be sent by prepaid mail or other means of delivery to the subscriber. If for any reason the closing of this
offering does not occur, all subscription funds will be returned to subscribers without interest or deduction. There are two
ways to purchase the Deposit Notes, which involve different commission structures and early trading charges. See “Plan of
Distribution”, “Expenses of the Offering” and “Fees and Expenses of the Note Program” for a description of the “3 Year
Load Notes” (FundSERV Code: JHN 434) and “1.5 Year Load Notes” (FundSERV Code: JHN 435) comprising the Deposit
Notes.
“Dynamic” and “Dynamic logo” are registered trademarks of Dundee Corporation and have been licensed for use by BMO
Nesbitt Burns Corporation Limited and its affiliates. Dynamic Global Value Fund”, “Dynamic Power Global Growth Class”,
“Dynamic Value Fund of Canada”, “Dynamic Dividend Fund”, “Dynamic Global Discovery Fund”, “Dynamic Global
Dividend Value Fund”, “Dynamic Power Canadian Growth Fund”, “Dynamic Power Small Cap Fund”, “Dynamic Canadian
Bond Fund” and “Dynamic High Yield Bond Fund” are trademarks of Dundee Corporation and have been licensed for use
by BMO Nesbitt Burns Corporation Limited and its affiliates. “BMO (M-bar rounded symbol)” is a registered trademark
and “BMO Capital Markets” is a trademark of Bank of Montreal. “Nesbitt Burns” is a registered trademark and
“RetirementEdge”, “RetirementEdge Income Portfolio” and “Current Pay Notes” are trademarks of BMO Nesbitt Burns
Corporation Limited used under license.
2TABLE OF CONTENTS
SUITABILITY FOR INVESTMENT ................................. 4 GLOBAL NOTES ............................................................. 40
SUMMARY OF THE OFFERING...................................... 5 CUSTODIAN ................................................................... 40
DEFINITIONS .................................................................. 12 DEFINITIVE NOTES ........................................................ 41
NOTE PROGRAM............................................................ 16 NOTICES TO HOLDERS ................................................... 41
DESCRIPTION OF THE DEPOSIT NOTES.................... 16 AMENDMENTS TO THE GLOBAL NOTES .......................... 41
OFFERING ...................................................................... 16 RANK; NO DEPOSIT INSURANCE..................................... 42
FUND PORTFOLIO........................................................... 17 CANADIAN INVESTOR PROTECTION FUND ...................... 42
RISK PROFILE REBALANCING SCHEDULE ........................ 18 CREDIT RATING ............................................................. 42
PRINCIPAL REPAYMENT ................................................. 18 SETTLEMENT OF PAYMENTS ........................................... 42
VARIABLE RETURN PAYABLE AT MATURITY .................. 18 DEFERRED PAYMENT ..................................................... 42
EXTRAORDINARY EVENTS.............................................. 19 HOLDERS’ RIGHT OF RESCISSION ................................... 43
CAPITAL PRESERVATION EVENT .................................... 19 DETERMINATIONS .......................................................... 43
EXPENSES OF THE OFFERING .................................... 19 INCOME TAX CONSIDERATIONS ............................... 43
FEES AND EXPENSES OF THE NOTE PROGRAM ..... 20 PRINCIPAL REPAYMENT AMOUNTS ................................ 43
ANNUAL PORTFOLIO FEES ............................................. 20 VARIABLE RETURN ........................................................ 43
DYNAMIC FUNDS .......................................................... 20 DISPOSITION OF DEPOSIT NOTES .................................... 44
THE INVESTMENT MANAGER ......................................... 20 ELIGIBILITY FOR INVESTMENT................................. 44
INVESTMENT OBJECTIVES, STRATEGIES AND TOP 10 RISK FACTORS ............................................................... 45
HOLDINGS OF THE FUNDS ........................................... 21 SUITABILITY OF DEPOSIT NOTES FOR INVESTMENT ........ 45
PAST PERFORMANCE OF THE FUNDS ............................... 33 NON-CONVENTIONAL DEPOSIT NOTES ........................... 45
UNITS OF THE FUNDS ..................................................... 35 DEPENDENCE ON INVESTMENT MANAGER ...................... 45
VALUATION OF DEPOSIT NOTES............................... 35 SECONDARY TRADING OF DEPOSIT NOTES ..................... 45
DETERMINATION OF NAV PER NOTE.............................. 35 FEES AND EXPENSES ...................................................... 46
TEMPORARY SUSPENSION OF CALCULATION OF NAV CONFLICTS OF INTEREST ................................................ 46
PER NOTE ................................................................... 35 LEGISLATIVE AND REGULATORY CHANGE ..................... 46
CONSEQUENCES OF SUSPENSION OF CALCULATION OF CREDIT RATING ............................................................. 46
NAV PER NOTE .......................................................... 36 CREDIT RISK ................................................................. 47
SECONDARY MARKET ................................................. 36 NO DEPOSIT INSURANCE ................................................ 47
PLAN OF DISTRIBUTION .............................................. 37 CANADIAN INVESTOR PROTECTION FUND ...................... 47
FUNDSERV ...................................................................... 38 CAPITAL PRESERVATION EVENT AND EXTRAORDINARY
GENERAL INFORMATION ................................................ 38 EVENT ........................................................................ 47
DEPOSIT NOTES HELD THROUGH THE CUSTODIAN ......... 38 NO INDEPENDENT VALUATION....................................... 47
PURCHASE OF FUNDSERV NOTES ................................. 39 VALUATION OF THE FUND PORTFOLIO............................ 47
SALE OF FUNDSERV NOTES .......................................... 39 RISKS RELATING TO THE FUNDS..................................... 47
GENERAL MATTERS RELATING TO DEPOSIT NO OWNERSHIP OF UNITS OR NOTIONAL FIXED
NOTES .............................................................................. 39 ANNUITIES ................................................................. 48
BOOK-ENTRY SYSTEM ................................................... 39
This Information Statement has been prepared for the sole purpose of assisting prospective investors in making an
investment decision with respect to the Deposit Notes. Bank of Montreal has taken reasonable care to ensure that the facts
stated in this Information Statement with respect to the description of the Deposit Notes are true and accurate in all material
respects. All information in this Information Statement relating to the investment manager, Goodman & Company,
Investment Counsel Ltd. (the “Investment Manager”), the shares or units of the Funds and the Funds has been provided by
the Investment Manager. Bank of Montreal makes no assurances, representations or warranties with respect to the accuracy,
reliability or completeness of information obtained from third parties including information provided by the Investment
Manager. Furthermore, Bank of Montreal makes no recommendation concerning the Investment Manager, the shares or
units of the Funds, the Funds, mutual funds or the suitability of investing in securities generally or the Deposit Notes in
particular. In connection with the issue and sale of Deposit Notes by Bank of Montreal, no person is authorized to give any
information or to make any representation not contained in this Information Statement and Bank of Montreal does not accept
any responsibility for any information not contained herein.
3SUITABILITY FOR INVESTMENT
A person should make a decision to invest in the Deposit Notes only after carefully considering, with his or her advisors,
whether the Deposit Notes are a suitable investment in light of his or her investment objectives, investment horizon and risk
tolerance and the information set out in this Information Statement. No recommendation is made herein as to whether the
Deposit Notes are a suitable investment for any person.
The Deposit Notes are not conventional indebtedness in that they have no fixed yield. There will be no interest payments to
Holders during the term of the Deposit Notes. The entire Deposit Amount of a Deposit Note will be repaid only if the
Deposit Note is held throughout the term and at Maturity. In addition, the return, if any, on the Deposit Notes generally will
be uncertain until Maturity and will depend on the performance of the Fund Portfolio over the term of the Deposit Notes. It
is possible that the fund portfolio will not appreciate in value at Maturity and therefore the Deposit Notes could produce no
yield at Maturity and an investor may not receive anything more at Maturity than the Deposit Balance (as hereinafter
defined). Accordingly, the Deposit Notes are not suitable investments for investors who require or expect certainty of yield
and are not prepared to assume risks associated with a long-term investment whose return is based on the performance of the
fund portfolio over a term of 15 years.
4SUMMARY OF THE OFFERING
This is a summary of the offering of Deposit Notes under this Information Statement. Because this is a summary, it does not
contain all of the information that may be important to you and you should read the more detailed information appearing
elsewhere in this Information Statement. In this summary, “$” refers to Canadian dollars, unless otherwise specified,
“we”, “ us” and “our” each refer to Bank of Montreal and “BMO Capital Markets” refers to a company owned by us
called BMO Nesbitt Burns Inc. and any of its affiliates.
Issue: Bank of Montreal Dynamic RetirementEdge Income Portfolio, Current Pay Notes, Series 5 (the
“Deposit Notes”).
Issuer: Bank of Montreal.
Subscription Price: $100 per Deposit Note (the “Deposit Amount”).
Minimum You must invest a minimum of $2,000 (20 Deposit Notes).
Subscription:
Issue Size: Concurrently with offering the Deposit Notes, we are also offering Bank of Montreal Dynamic
RetirementEdge Income Portfolio, Deferred 5 Notes, Series 5, Bank of Montreal Dynamic
RetirementEdge Income Portfolio, Deferred 10 Notes, Series 5, Bank of Montreal Dynamic
RetirementEdge Income Portfolio, Current Pay Notes, Class F, Series 3 and Bank of Montreal
Dynamic RetirementEdge Income Portfolio, Current Pay Notes, No-load Class, Series 1, which
will all have the same closing date. The maximum issue size is an aggregate of $100,000,000 for
all five offerings. We may change the maximum issue size of the offerings at our discretion.
Closing Date: The Deposit Notes will be issued on or about March 19, 2008.
Maturity Date: The Deposit Notes will mature on or about March 17, 2023. The term to maturity is
approximately 15 years.
Offering: The Deposit Notes are a principal protected product developed to provide investors, except in
certain circumstances described herein as a capital preservation event or an extraordinary event,
with 100% exposure to the distributions and capital appreciation of a notional portfolio (the
“Fund Portfolio”) of Units (as defined below) of eight equity mutual funds (the “equity
component”) and two bond mutual funds (the “fixed income component”) that could have been
notionally purchased with an amount equal to the net proceeds of the offering of the Deposit
Notes. The ten funds are managed by Goodman & Company, Investment Counsel Ltd. (the
“Investment Manager”).
During the 15-year term of the Deposit Notes, the equity component and fixed income
component of the Fund Portfolio will be systematically “rebalanced” to a progressively more
conservative risk profile as the term nears maturity.
The allocation to the equity component in the Fund Portfolio will be 60% on the closing date and
will systematically decrease to 25% by the maturity date. Conversely, the allocation to the fixed
income component in the Fund Portfolio will be 40% on the closing date and will systematically
increase to 75% by the maturity date. Such changes in allocation will be made annually on each
“annual rebalancing date”. A schedule setting out the allocations to the equity component and
the fixed income component on each annual rebalancing date during the term of the Deposit
Notes is set out under “Description of the Deposit Notes – Risk Profile Rebalancing Schedule”.
During the 15-year term of the Deposit Notes investors will receive monthly principal
repayments in an amount not less than a pro rata portion of 6.60% per annum of the Deposit
Amount. Principal repayment amounts will continue until they reach $99 per Deposit Note,
following which no further payments will be made by us to you until maturity. Principal
repayment amounts will be adjusted annually to reflect any increase in inflation, except where a
capital preservation event or an extraordinary event has occurred (as described herein).
5100%
90%
80%
Fixed Income Component
70%
60%
Target Weighting
50%
40%
30%
20%
Equity Component
10%
0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Years
Monthly Payments: During the 15-year term of the Deposit Notes investors will receive monthly principal
repayments. Each monthly repayment of principal will, subject to adjustments for inflation as
discussed below, be in an amount equal to $0.55 per Deposit Note (being equivalent to $6.60 per
Deposit Note annually). On each annual rebalancing date, the calculation agent will determine
an “inflation factor” reflecting any increase in inflation based on the Canadian consumer price
index, and principal repayment amounts for the following twelve month period will be multiplied
by such inflation factor, provided that a capital preservation event or an extraordinary event has
not occurred. We will pay the first principal repayment amount on or about April 14, 2008, and
we will make monthly repayments of principal to you within 10 business days of the end of each
month thereafter prior to maturity. When the aggregate principal repayment amounts reach $99
per Deposit Note, no further payments will be made by us to you until maturity. Principal
repayments will be made through a notional pro rata sale of Units of funds in the Fund Portfolio,
thus reducing the value of the Fund Portfolio. No interest payments will be made to you during
the term of the Deposit Notes.
Principal Repayment at At maturity, you will receive an amount per Deposit Note equal to the unpaid principal balance.
Maturity: When we refer to the “unpaid principal balance” of your deposit or Deposit Note we are
referring, for each of your Deposit Notes, to the deposit amount of $100 less the total principal
repayment amounts paid to you prior to maturity.
If you hold Deposit Notes until maturity, you will be repaid $100 per Deposit Note regardless of
the performance of the Fund Portfolio.
Variable Return at At maturity, in addition to the unpaid principal balance, you will receive a variable return in the
Maturity: amount, if any, by which the net asset value, on a per Deposit Note basis, of the Fund Portfolio
on the third business day prior to the maturity date (the “final valuation date”) or, in certain
circumstances described herein as an extraordinary event, of the Notional Fixed Annuities (as
defined below) on the maturity date, exceeds the unpaid principal balance. Variable return, if
any, on the Deposit Notes will depend on the performance of the Units in the Fund Portfolio
during the term of the Deposit Notes.
There is no assurance that the investment objectives and strategies of the funds and the
investment decisions made by the Investment Manager will generate any positive returns for the
Fund Portfolio. While you will be repaid the initial amount you deposited with us if you hold
your Deposit Notes until maturity, you should be aware that, for you to receive a return on the
Deposit Notes, the Fund Portfolio must generate a return that exceeds the total fees and expenses
of the note program. See “Note Program”, “Dynamic Funds” and “Fees and Expenses of the
Note Program”. All fees and expenses of the note program will be deducted from the value of
the Fund Portfolio prior to any payments to you. Accordingly, there is no assurance that you will
receive any amount other than repayment of your original deposit with us.
6Fund Portfolio: The return, if any, on the Deposit Notes will depend on the performance of the Units of the
following funds comprising the equity component and fixed income component of the Fund
Portfolio. The respective proportions of Units of the funds comprising the equity component and
fixed income component will vary from time to time as a result of fluctuations in the relative
market values of the Units for each fund. However, the relative proportions of each fund within
the equity component and fixed income component will be restored to the targets indicated in the
following table on each annual rebalancing date during the term of the Deposit Notes.
Fund Name Target
Equity Component
Dynamic Global Value Fund 20%
Dynamic Power Global Growth Class of 20%
Dynamic Global Fund Corporation
Dynamic Value Fund of Canada 15%
Dynamic Dividend Fund 10%
Dynamic Global Discovery Fund 10%
Dynamic Global Dividend Value Fund 10%
Dynamic Power Canadian Growth Fund 10%
Dynamic Power Small Cap Fund 5%
100%
Fixed Income Component
Dynamic Canadian Bond Fund 66.7%
Dynamic High Yield Bond Fund 33.3%
100%
In the event of a capital preservation event or an extraordinary event, the Fund Portfolio will be
replaced by Notional Fixed Annuities (as defined below). However, in the case of an event
affecting a fund that would otherwise constitute an extraordinary event, BMO Capital Markets
will, prior to making a determination that the Fund Portfolio will be replaced by Notional Fixed
Annuities, first use reasonable good faith efforts to replace the affected fund with one or more
other Dynamic mutual funds managed or sponsored by the Investment Manager (or an affiliate of
the Investment Manager), provided however BMO Capital Markets will have sole discretion to
determine whether to effect such replacement. See “Description of the Deposit Notes –
Extraordinary Events”.
A “Unit” comprises a notional share or unit of a fund, the investment performance of which
reflects the actual investment performance of a Series A share or unit of the fund that would
otherwise occur if the management expense ratio of the Series A share or unit was nil and
distributions on the Series A share or unit, if any, were reinvested.
The Fund Portfolio and Notional Fixed Annuities are notional investments. You should be
aware that you will not have, and the Deposit Notes do not represent, any direct or indirect
ownership interest in the Fund Portfolio, the funds, any of the underlying investments of the
funds, or the Notional Fixed Annuities and you will not have the rights of a holder of shares or
units of the funds or the Notional Fixed Annuities. All actions (e.g., purchases, sales,
liquidations, etc.) taken in connection with the Units, the Fund Portfolio and the Notional Fixed
Annuities are notional actions only.
Investment Manager of Goodman & Company, Investment Counsel Ltd. is the investment manager of each fund. The
the Funds: investment objectives and strategies of the funds are described under “Dynamic Funds” in this
Information Statement. Further information about the funds can be obtained at www.sedar.com
or through your financial advisor.
Risk Profile The risk profile rebalancing schedule under the note program establishes a schedule for
Rebalancing: systematically “rebalancing” the allocations to the equity component and fixed income
component in the Fund Portfolio to a progressively more conservative risk profile over the 15-
year term of the Deposit Notes. On the closing date, the Fund Portfolio will have exposure of
760% to the equity component and 40% to the fixed income component. These relative
allocations will be systematically “rebalanced” during the term of the Deposit Notes until the
exposure to the equity component has decreased to 25% and the fixed income component has
increased to 75% by maturity. The specific allocations to the equity component and the fixed
income component in any year will be made in accordance with the table set out under
“Description of the Deposit Notes – Risk Profile Rebalancing Schedule”.
Consequences of an Where, in respect of any event described as an “Extraordinary Event” in the definitions on page
Extraordinary Event: 12 of this Information Statement, BMO Capital Markets has determined that the Fund Portfolio
will be replaced by notional annuities (collectively “Notional Fixed Annuities” and each, a
“Notional Fixed Annuity”) providing for payments corresponding to repayments of principal
under a Deposit Note, (i) the entire value of the Fund Portfolio calculated as of the date of the
extraordinary event will be invested in Notional Fixed Annuities, (ii) any positive returns on the
Series A shares or units of the funds following the extraordinary event will not increase the value
of the Deposit Notes, (iii) you will be entitled to receive monthly repayments of principal in an
amount (determined without regard to future inflation) equal to the monthly repayment of
principal in respect of the month in which the extraordinary event occurred, provided that such
repayments, in aggregate, do not exceed $99, and (iv) the possibility of you receiving more than
the original deposit amount of the Deposit Notes is significantly reduced. See “Description of
the Deposit Notes – Extraordinary Events”.
However, if an event occurs in respect of any fund that would otherwise be an extraordinary
event, then prior to making a determination that the Fund Portfolio will be replaced by Notional
Fixed Annuities, BMO Capital Markets will first use reasonable good faith efforts, with the
consent of the Investment Manager of the funds and in consultation with the calculation agent, to
replace the affected fund with one or more other Dynamic mutual funds managed or sponsored
by the Investment Manager (or an affiliate of the Investment Manager) instead of making a
determination to replace the Fund Portfolio with Notional Fixed Annuities. See “Description of
the Deposit Notes – Extraordinary Events”.
Consequences of a If, on any business day, the value of the Fund Portfolio on a per Deposit Note basis does not
Capital Preservation exceed the present value of a Notional Fixed Annuity providing for payments corresponding to
Event: repayments of principal under a Deposit Note, a capital preservation event will have occurred
and the Fund Portfolio will be replaced by Notional Fixed Annuities. In other words, a capital
preservation event will occur when the value of the Fund Portfolio is insufficient to make
payments in excess of all future repayments of principal. Following the occurrence of a capital
preservation event, you will not participate in any subsequent performance (positive or negative)
of the funds, but will be entitled to receive monthly repayments of principal, determined without
regard to future inflation, provided that such repayments, in aggregate, do not exceed $99. If the
capital preservation event occurs, monthly repayments of principal after the capital preservation
event will be in the same amount as the monthly repayment of principal in respect of the month
in which the capital preservation event occurred. On each business day BMO Capital Markets or
a third party appointed by BMO Capital Markets will, as calculation agent, calculate such values
and determine whether the Fund Portfolio should be replaced with Notional Fixed Annuities
because of a capital preservation event. A number of factors will affect the occurrence of a
capital preservation event at any time, including the performance of the Fund Portfolio, the
prevailing unpaid principal balance, the remaining term of the Deposit Notes and prevailing
interest rates.
Expenses of the Expenses of this offering of $5.00 (5.00%) per Deposit Note will be paid out of the proceeds of
Offering: this offering. With respect to the 3 Year Load Notes, $5.00 (5.00%) per Deposit Note will be
paid on the closing of the offering to BMO Capital Markets for its services as selling agent (all or
a portion of which the selling agent will pay to qualified selling members for selling the Deposit
Notes). With respect to the 1.5 Year Load Notes, $2.00 (2.00%) per Deposit Note will be paid
on the closing of the offering to BMO Capital Markets for its services as selling agent (all or a
portion of which the selling agent will pay to qualified selling members for selling the Deposit
Notes) and the remainder will be used to pay ongoing sales fees of the 1.5 Year Load Notes
described below. See “Fees and Expenses of the Note Program”.
8Fees and Expenses: The following fees and expenses will be paid prior to payment to you of any variable return
at maturity of the Deposit Notes:
The total annual fees applicable to the Fund Portfolio under the note program will be comprised
of annual fund portfolio fees of 1.99% of the value of the Fund Portfolio. The fund portfolio fees
will be calculated and accrued daily and paid to us monthly by selling Units of the funds in the
Fund Portfolio on a proportionate basis. The fund portfolio fees account for all fees and
expenses applicable to the Fund Portfolio under the note program, including management fees
for the management services provided by the Investment Manager and its affiliates.
During the term of the Deposit Notes, amounts equal to the percentages of the Deposit Amount
specified in the table set out below will be paid to sales representatives of qualified selling
members in respect of each 3 Year Load Note and 1.5 Year Load Note held by clients of such
sales representatives. A portion of the total annual fees and, in the case of 1.5 Year Load Notes,
a portion of the expenses of the offering described above, will be used to pay these ongoing sales
fees. The remainder of the total annual fees will be retained by BMO Capital Markets as
manager of the note program.
Year 1 to 3 4 to 5 6 to 10 11 to15
3 Year Load Note 0.55% 0.55% 0.60% 0.65%
1.5 Year Load Note 0.50% 1.00% 1.00% 1.00%
Following a capital preservation event or extraordinary event, no fees will apply to the Notional
Fixed Annuities that replace the Fund Portfolio and no ongoing sales fees will be paid to
qualified selling members.
While you will be repaid the amount you deposited if you hold your Deposit Notes over
their term until maturity, the performance of the Fund Portfolio will have to exceed the
aggregate fees and expenses paid by the note program during the term of the Deposit Notes
in order for you to receive a variable return on the Deposit Notes.
Secondary Market: Deposit Notes cannot be redeemed prior to maturity by either Bank of Montreal or a holder.
BMO Capital Markets will use reasonable efforts to arrange for a secondary market for the sale
of Deposit Notes by using the FundSERV network. This secondary market is only available for
Deposit Notes purchased using the FundSERV network and is the only way that you may seek to
sell such Deposit Notes prior to maturity. The price that BMO Capital Markets will pay to you
for Deposit Notes prior to maturity in the secondary market, if available, will be determined by
BMO Capital Markets, acting in its sole discretion, and will be based on, among other things,
factors described under “Secondary Market”. If you sell your Deposit Notes prior to maturity,
you may have to do so at a discount from the unpaid principal balance of your Deposit Note even
if the performance of the Series A shares or units of the funds has been positive, and as a result,
you may suffer a loss.
If you sell a 3 Year Load Note within the first 3 years or a 1.5 Year Load Note within the first
1.5 years from the closing date of this offering, the proceeds from such sale of a Deposit Note
will be reduced by an early trading charge that will be equal to the percentage of the Deposit
Amount of such Deposit Note as set out in the following table:
If sold within
0-6 7-12 13-18 19-24 25-30 31-36 Thereafter
months months months months months months
3 Year Load Note 5.95% 4.45% 2.95% 2.20% 1.45% 0.70% Nil
1.5 Year Load Note 2.95% 1.95% 0.95% Nil Nil Nil Nil
See “Secondary Market”.
9The Deposit Notes will not be listed on any stock exchange. Moreover, BMO Capital Markets is
under no obligation to facilitate or arrange for such secondary market and such secondary
market, if commenced, may be suspended at any time at the sole discretion of BMO Capital
Markets, without notice to you. Accordingly, if there is no secondary market, you will not be
able to sell your Deposit Notes. The Deposit Notes are intended to be instruments held to
maturity with the unpaid principal balance of your deposit being repayable on the maturity date.
Periodic Standing Subject to the availability of a secondary market, you may, during the last five and a half years of
Order: the term of the Deposit Notes (commencing in September 2017), choose to submit a standing
order to sell the Deposit Notes in such secondary market at prevailing secondary market prices in
amounts determined by you. If you sell Deposit Notes in the secondary market you may receive
less than the unpaid principal balance of your deposit.
You should consult your financial advisor on whether it would be more favourable in the
circumstances at any time to sell Deposit Notes on the secondary market, if available, or hold
Deposit Notes until maturity. You should also consult your tax advisor as to the income tax
consequences arising from a sale of Deposit Notes prior to maturity as compared to holding
Deposit Notes until maturity.
Use of Proceeds: The proceeds we receive from the issuance of Deposit Notes will be deposits with us. We will
use the net proceeds from the issuance of Deposit Notes for our general banking purposes. See
“Plan of Distribution”.
Rank: The Deposit Notes will rank equally with all of our other deposit liabilities. 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. See “General Matters Relating to Deposit
Notes-Rank; No Deposit Insurance”.
Credit Rating: As at the date of this Information Statement, our deposit liabilities with a term to maturity of
more than one year are rated AA by DBRS Limited, A+ by Standard & Poor’s Ratings Services
and Aa1 by Moody’s Investors Service Inc. The Deposit Notes have not been rated. There can
be no assurance that, if the Deposit Notes were specifically rated by these rating agencies, they
would have the same rating as our other deposit liabilities. A rating is not a recommendation
to buy, sell or hold investments and may be subject to revision or withdrawal at any time
by the relevant rating agency. See “General Matters Relating to Deposit Notes-Credit Rating”.
Book-Entry System: All of the Deposit Notes will be evidenced by one or more global deposit notes held by CDS
Clearing and Depository Services Inc. or its nominee (“CDS”) as registered holder of the Deposit
Notes. Registration of the interests in and transfers of the Deposit Notes will be made through
CDS’ book-entry system. Subject to certain exceptions, you will not be entitled to any certificate
or other instrument from us or from CDS evidencing your ownership of Deposit Notes. See
“General Matters Relating to Deposit Notes – Book-Entry System”.
Eligibility for In the opinion of McMillan Binch Mendelsohn LLP, counsel to Bank of Montreal, Deposit Notes
Investment: offered hereby will, at the date of issue, be qualified investments for trusts governed by
registered retirement savings plans, registered retirement income funds, registered education
savings plans, registered disability savings plans and deferred profit sharing plans (other than a
trust governed by a deferred profit sharing plan to which contributions are made by Bank of
Montreal or by an employer with which Bank of Montreal does not deal at arm’s length within
the meaning of the Income Tax Act (Canada)).
Income Tax This income tax summary is subject to the limitations and qualifications set out under “Income
Considerations: Tax Considerations” in the body of this Information Statement.
In the opinion of McMillan Binch Mendelsohn LLP, counsel to Bank of Montreal, any amount
of principal repaid to you prior to maturity in respect of the Deposit Notes will reduce the
principal amount of the Deposit Notes and your adjusted cost base of the Deposit Notes and will
not be required to be included in your income in the taxation year that such amounts are received
by you.
10Except where the entire Fund Portfolio is replaced by Notional Fixed Annuities by reason of an
extraordinary event, you should not be required to include any amount in income prior to
maturity. At maturity, you will be required to include in your income the amount, if any, by
which the payment made by us at maturity on your Deposit Note exceeds the unpaid principal
balance of your Deposit Note, except to the extent the amount has otherwise been included in
your income in a previous taxation year. Bank of Montreal will file an information return with
the Canada Revenue Agency in respect of any interest or deemed interest to be included in your
income and will provide you with a copy of such information return.
Provided an extraordinary event has not occurred and while the matter is not free from doubt, a
disposition of a Deposit Note by you (other than on or following the final valuation date) should
give rise to a capital gain (or capital loss) to you to the extent your proceeds of disposition,
excluding accrued and unpaid interest, if any, exceed (or are less than) the aggregate of your
adjusted cost base of the Deposit Note (generally being your cost of the Deposit Note less any
repayments of principal previously received by you) and any reasonable costs of disposition.
You should consult your tax advisor with respect to your particular circumstances if you plan to
sell a Deposit Note prior to maturity. See “Income Tax Considerations”.
Risk Factors: You should take into account various risk factors associated with the ownership of Deposit
Notes. See “Risk Factors - Suitability of Deposit Notes for Investment”. The Deposit Notes
have certain characteristics that differ from conventional fixed income investments. The Deposit
Notes do not provide you with a return or income stream prior to maturity and do not provide a
return at maturity that is calculated by reference to a specified fixed or floating rate of interest.
The return on the Deposit Notes, if any, unlike the return on many deposit liabilities of Canadian
chartered banks, is uncertain in that, if the Fund Portfolio does not generate positive returns, the
Deposit Notes could produce no return on your original investment. There is no assurance that
the Fund Portfolio will generate positive returns. Therefore, Deposit Notes are not suitable
investments for you if you need or expect to receive a guaranteed return from your investments.
Deposit Notes are designed for investors with a long-term investment horizon who are prepared
to hold the Deposit Notes over their 15-year term to maturity and assume risks with respect to a
return based on the performance of the Fund Portfolio. In addition, there is no assurance that any
fund will be able to meet its investment objectives, achieve the benefits of its strategies or avoid
losses.
11DEFINITIONS
In this Information Statement, unless the context otherwise requires:
“1.5 Year Load Note” means a Deposit Note subscribed for under mutual fund order code “JHN 435”;
“3 Year Load Note” means a Deposit Note subscribed for under mutual fund order code “JHN 434”;
“Aggregate Notional Fixed Annuities Value” means, as at the relevant date of determination, the sum of the Notional
Fixed Annuity Value of each of the Notional Fixed Annuities;
“Annual Rebalancing Date” has the meaning provided for in the definition of “Risk Profile Proportions”;
“BMO Capital Markets” means, collectively, BMO Nesbitt Burns Inc. and any of its affiliates;
“Book-Entry System” means the record entry securities transfer and pledge system established and governed by one or
more agreements between CDS and CDS Participants pursuant to which the operating rules and procedures for such system
are established and administered by CDS, including in relation to CDS;
“Business Day” means any day (other than a Saturday, a Sunday or a statutory holiday) on which commercial banks are
open for business in Toronto, Ontario;
“Calculation Agent” means BMO Capital Markets or a third party appointed by BMO Capital Markets to act as calculation
agent for the Note Program;
“Calculation Date” means each Business Day on which the Calculation Agent calculates Fund Portfolio Value and
Notional Fixed Annuity Value;
“Capital Preservation Event” means, on a Calculation Date, the occurrence of the Fund Portfolio Value no longer
exceeding the Notional Fixed Annuity Value, as further described under “Description of the Deposit Notes - Capital
Preservation Event”;
“CDS” means CDS Clearing and Depository Services Inc. or its nominee;
“CDS Participant” means a broker, dealer, bank or other financial institution or other person for whom CDS effects book-
entry transfers and pledges of Deposit Notes under the Book-Entry System;
“Closing Date” means on or about March 19, 2008;
“CRA” means Canada Revenue Agency;
“Custodian” means Bank of Montreal or a person appointed by Bank of Montreal;
“DBRS” means DBRS Limited;
“Deposit Amount” means $100 per Deposit Note;
“Deposit Balance” means, in respect of a Deposit Note, the Deposit Amount less the aggregate of all Principal Repayment
Amounts paid to a Holder in respect of such Deposit Note;
“Deposit Notes” means Bank of Montreal Dynamic RetirementEdge Income Portfolio, Current Pay Notes, Series 5;
“Dynamic Power Global Growth Class” means the Dynamic Power Global Growth Class of Dynamic Global Fund
Corporation;
“Early Trading Charge” means the early trading charge per Deposit Note, if any, described under “Secondary Market”;
“Equity Component” means, collectively, Units of Dynamic Global Value Fund, Dynamic Value Fund of Canada,
Dynamic Dividend Fund, Dynamic Global Discovery Fund, Dynamic Global Dividend Value Fund, Dynamic Power
Canadian Growth Fund and, Dynamic Power Small Cap Fund, each a mutual fund trust, and Dynamic Power Global Growth
Class, a class of a mutual fund corporation, created under the laws of Ontario and a “Fund”, subject to, in the case of each
Fund, adjustments required to give effect to one or more Replacement Funds, if any, in respect of the Fund, in the
circumstances of what would otherwise be an Extraordinary Event;
“Extraordinary Event” means any of the events set out in (i) to (xiv) below that occurs after the Closing Date and prior to
Maturity where the Manager, acting in its sole and absolute discretion, has determined in good faith that such event
constitutes an “Extraordinary Event” and in respect of which the Manager and the Calculation Agent have determined that
the entire Fund Portfolio will be replaced with Notional Fixed Annuities having an Aggregate Notional Fixed Annuities
Value equal to the product of the Fund Portfolio Value times the number of Deposit Notes outstanding, as at the time of such
event: (i) the winding-up, dissolution or liquidation of a Fund or other cessation of trading of any shares or units of a Fund;
(ii) the Investment Manager or any affiliate of the Investment Manager ceases to act as the manager of a Fund; (iii) the
12investment objective, investment restrictions or investment policies of a Fund or any shares or units of a Fund are modified
(except where such modification is of a formal, minor or technical nature); (iv) a material modification (other than any
modifications referred to in (iii) above) of the terms and conditions relating to a Fund or any shares or units of a Fund
(including but not limited to a material modification of the constating documents of a Fund) or the occurrence of any event
or change having a material adverse effect on any shares or units of a Fund (including, but not limited to, the interruption,
breakdown or suspension for a significant period of time of the calculation or publication of the net asset value per share or
unit); (v) the non-execution or partial-execution by a Fund of a subscription or redemption order given by an investor in any
shares or units of a Fund or a refusal to transfer any shares or units of a Fund to an eligible transferee except where such
non-execution, partial execution or refusal is the result of circumstances beyond the control of a Fund; (vi) any mandatory
redemption or other reduction (actual or potential as determined by the Manager in its sole discretion) in the number of
shares or units of a Fund held by any holder of such shares or units for any reason beyond the control of such holder; (vii)
any failure by the Investment Manager to calculate or publish the daily official net asset value per share or unit of a Fund
within five Business Days after the relevant valuation date except as provided in the case of a suspension of determination of
the net asset value per share or unit in accordance with the provisions set out in the constating documents of a Fund; (viii) a
Fund imposes in whole or part any restriction, charge or fee in respect of a redemption or subscription of any shares or units
of a Fund by any holder thereof (other than any fee applicable to a holder of shares or units of a Fund as at the Closing
Date); (ix) any relevant activities of or in relation to a Fund or the Investment Manager are or become unlawful, illegal or
otherwise prohibited in whole or in part as a result of compliance with any present or future law, regulation, judgment, order
or directive of any governmental, administrative, legislative or judicial authority or power, or in the interpretation thereof;
(x) a relevant authorisation or licence is revoked or is under review by a competent authority in respect of a Fund or the
Investment Manager; (xi) any change in or in the official interpretation or administration of any laws or regulations relating
to taxation that has or is likely to have a material adverse effect on any shareholder or unitholder of a Fund or in respect of
any hedge established in connection with the Offering; (xii) a party is unable to effectively acquire, establish, re-establish,
substitute, maintain, unwind or dispose of any hedging transaction in connection with the Offering or to realize, recover or
remit the proceeds of any such hedging transaction; (xiii) an increase in the cost of acquiring, establishing, re-establishing,
substituting, maintaining, unwinding or disposing of any hedging transaction in connection with the Offering or in the cost
of realizing, recovering or remitting the proceeds of any such hedging transaction; or (xiv) as a result of any adoption of, or
any change in, any law, order, regulation, decree or notice, howsoever described, or issuance of any directive or
promulgation of, or any change in the interpretation, whether formal or informal, by any court, tribunal, regulatory authority
or similar administrative or judicial body of any law, order, regulation, decree or notice, howsoever described, after the date
thereof or as a result of any other event, (1) it would become unlawful for any shareholder or unitholder of a Fund to hold,
purchase or sell any shares or units of a Fund, (2) the cost of investing in any shares or units of a Fund would materially
increase, other than ordinary course increases in the market value of shares or units of a Fund, or (3) a shareholder or
unitholder of a Fund would be subject to a material loss as a result of holding any shares or units of a Fund;
“Final Valuation Date” means March 14, 2023;
“Fixed Income Component” means Units of Dynamic Canadian Bond Fund and Dynamic High Yield Bond Fund, each a
mutual fund trust created under the laws of Ontario and a “Fund”, subject to, in the case of each Fund, adjustments required
to give effect to one or more Replacement Funds, if any, in the circumstances of what would otherwise be an Extraordinary
Event;
“Fund” means a fund, Units of which are included in the Equity Component or the Fixed Income Component, and “Funds”
means, collectively, two or more Funds as required by the circumstances;
“Fund Portfolio” means, from time to time, the portfolio of Units in which the Note Program has made a notional
investment excluding, for greater certainty, Units notionally sold to account for Principal Repayment Amounts and annual
fund portfolio fees applicable to the Fund Portfolio;
“Fund Portfolio Value” means, as at any Calculation Date, the quotient obtained by dividing (i) the value of the Units in
the Fund Portfolio at such time less accrued but unpaid annual fund portfolio fees applicable to the Fund Portfolio at such
time by (ii) the number of Deposit Notes outstanding at such time, provided that in the case of determining Fund Portfolio
Value subsequent to the Final Valuation Date, the value of the Units in the Fund Portfolio will be determined as of the Final
Valuation Date;
“FundSERV” means FundSERV Inc.;
“Holder” means a beneficial owner of a Deposit Note;
“Inflation Factor” means, in respect of a twelve-month period commencing on an anniversary of the Closing Date, the
greater of (i) one, and (ii) the quotient obtained by dividing the level of the Inflation Index as at the end of February prior to
the first month of the twelve-month period by the level of the Inflation Index as at the end of February 2008, where
“Inflation Index” is the Canadian Consumer Price Index, a measure of the prices for goods and services bought by
Canadian consumers, published by Statistics Canada or any successor index;
13“Initial Proportions” means, (a) in respect of the Equity Component, proportions by value of the Units of each of the Funds
(including any applicable Replacement Fund) in the Equity Component listed in the table below and (b), in respect of the
Fixed Income Component, proportions by value of the Units of each of the Funds (including any applicable Replacement
Funds) in the Fixed Income Component listed in the table below:
Fund Name Initial Proportions
Equity Component
Dynamic Global Value Fund 20%
Dynamic Power Global Growth Class of
20%
Dynamic Global Fund Corporation
Dynamic Value Fund of Canada 15%
Dynamic Dividend Fund 10%
Dynamic Global Discovery Fund 10%
Dynamic Global Dividend Value Fund 10%
Dynamic Power Canadian Growth Fund 10%
Dynamic Power Small Cap Fund 5%
100%
Fixed Income Component
Dynamic Canadian Bond Fund 66.7%
Dynamic High Yield Bond Fund 33.3%
100%
“Initial Fund Portfolio Value” means $95;
“Investment Manager” means Goodman & Company, Investment Counsel Ltd.;
“Manager” means BMO Capital Markets or a person appointed by BMO Capital Markets;
“Maturity” or “Maturity Date” means on or about March 17, 2023;
“Moody’s” means Moody’s Investors Service Inc.;
“NAV of the Notes” means, as at any time, the product of NAV per Note at such time and the number of Deposit Notes
outstanding at such time;
“NAV per Note” means (i) at any time prior to the occurrence of a Capital Preservation Event or an Extraordinary Event, an
amount equal to Fund Portfolio Value, and (ii) at any time on or following a Capital Preservation Event or an Extraordinary
Event, an amount equal to the quotient obtained by dividing (x) the Aggregate Notional Fixed Annuities Value at such time
by (y) the number of Deposit Notes outstanding at such time;
“Note Program” means Bank of Montreal Dynamic RetirementEdge Income Portfolio, Current Pay Notes, Series 5 note
program administered by BMO Capital Markets;
“Notional Fixed Annuity” means, as at any time, a hypothetical annuity that (i) is denominated in Canadian dollars, (ii)
provides for payments prior to Maturity in amounts and at times of payments corresponding to Principal Repayment
Amounts of a Deposit Note, and (iii) payments on the Maturity Date in an amount equal to the Deposit Balance of a Deposit
Note on the Maturity Date;
“Notional Fixed Annuity Value” means, as at the relevant date of determination, the present value of a Notional Fixed
Annuity calculated by the Calculation Agent based on yields equal to the prevailing mid-market Government of Canada
yield with a term matched to each payment over the remaining term of the Notional Fixed Annuity, provided however that if
the Calculation Agent is unable to make the determinations or calculations necessary, the Calculation Agent shall adjust the
procedures as it determines appropriate to determine the Notional Fixed Annuity Value;
“Offering” means the offering of the Deposit Notes to prospective investors under this Information Statement;
“Payment at Maturity” means the payment to be made at Maturity in an amount per Deposit Note equal to the Deposit
Balance at Maturity plus the Variable Return, if any;
“Principal Repayment Amount” means, in respect of a Deposit Note, a portion of the Deposit Amount repaid to a Holder
of such Deposit Note within 10 Business Days of the end of March 2008 and each month thereafter prior to the month of
Maturity equal to (i) (so long as (ii) below is not applicable) one-twelfth of $6.60 per annum multiplied, in the case of a
twelve-month period commencing on an anniversary of the Closing Date, by the Inflation Factor determined as at the end of
February prior to the first month of the twelve-month period and (ii) commencing with the month following the month, if
any, in which a Capital Preservation Event or an Extraordinary Event occurs, the portion of the Deposit Amount paid in
14respect of the month in which the Capital Preservation Event or the Extraordinary Event occurred, provided that such
repayments, in aggregate, do not exceed $99;
“Replacement Fund” means a mutual fund managed or sponsored by the Investment Manager or any affiliate, as further
described under “Description of the Deposit Notes - Extraordinary Events”;
“Risk Profile Proportions” means (i) on the Closing Date, and (ii) so long as neither a Capital Preservation Event nor an
Extraordinary Event has occurred, on March 19, 2009 (an “Annual Rebalancing Date”) and on dates approximately annually
thereafter as specified in the table set out below (each also an “Annual Rebalancing Date”), the proportions by value of the
Equity Component and Fixed Income Component in the Fund Portfolio on the Closing Date or the applicable Annual
Rebalancing Date, as the case may be, specified in the table set out below;
Annual
Equity Fixed Income
Year Rebalancing
Component Component
Date
1 Closing Date 60.0% 40.0%
2 3/19/2009 57.5% 42.5%
3 3/19/2010 55.0% 45.0%
4 3/18/2011 52.5% 47.5%
5 3/19/2012 50.0% 50.0%
6 3/19/2013 47.5% 52.5%
7 3/19/2014 45.0% 55.0%
8 3/19/2015 42.5% 57.5%
9 3/18/2016 40.0% 60.0%
10 3/20/2017 37.5% 62.5%
11 3/19/2018 35.0% 65.0%
12 3/19/2019 32.5% 67.5%
13 3/19/2020 30.0% 70.0%
14 3/19/2021 27.5% 72.5%
15 3/18/2022 25.0% 75.0%
“S&P” means Standard & Poor’s Rating Services;
“Selling Agent” means BMO Capital Markets;
“Series A Unit” means a Series A share or unit of a Fund and “Series A Units”, means, collectively, Series A shares or units
of all of the Funds, subject to adjustments required to give effect to one or more Replacement Funds, if any, in the
circumstances of what would otherwise be an Extraordinary Event;
“Subscription Price” means $100 per Deposit Note;
“Unit” means, from time to time, a notional share or unit of a Fund in which the Note Program has made a notional
investment, the investment performance of which reflects the actual investment performance of a Series A Unit of the Fund
that would otherwise occur if the management expense ratio of the Series A Units of the Fund was nil and distributions on
the Series A Unit were reinvested in the Fund Portfolio during the relevant period, and “Units” means, collectively, Units of
all of the Funds in which a notional investment has been made, subject to adjustments required to give effect to one or more
Replacement Funds, if any, in the circumstances of what would otherwise be an Extraordinary Event;
“Variable Return” means, in respect of a Deposit Note, the amount, if any, by which NAV per Note at Maturity exceeds
Deposit Balance at Maturity; and
“$” means Canadian dollars, unless otherwise specified.
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