A responsible-investment arm of Canada’s Bank of Montreal (BMO.TO) sold roughly $275 million worth of Microsoft Corp (MSFT.O) shares because of the company"s recent U.S. Army contract for augmented reality headsets, a bank spokesman said on Friday. BMO"s responsible investment managers worried that the $22 billion Army contract Microsoft won in March moves the technology from a proof-of-concept phase to a battlefield-ready product outside its investment strategies" mandate, BMO representatives said. The contract "sits at odds with our central investment philosophy to avoid companies with damaging businesses practices, and we class bespoke military equipment as one component of our avoid criteria," Jamie Jenkins, head of the Responsible Global Equities team at BMO, said in an e-mailed statement. Microsoft representatives did not immediately respond to a request for comment. Many traditional socially focused investment funds bar ownership of defense contractors or companies involved in areas like alcohol or gambling. BMO"s move shows how such prohibitions can extend to technology companies doing business with government agencies. On Tuesday, Amazon.com Inc (AMZN.O) indefinitely extended a moratorium it imposed last year on police use of its facial recognition software due to civil rights concerns. read more Over the past two years, Microsoft has worked with the Army on the prototyping phase of what is called the Integrated Visual Augmentation System, or IVAS. The project is based on Microsoft"s HoloLens product and backed by the Azure cloud computing services. In March the company said the Army had moved into the production phase of the project. read more BMO will continue to own Microsoft in traditional investment strategies not bound to social-investing strategies, a spokesman said. A deal by BMO to sell its European asset-management business to Ameriprise Financial Inc (AMP.N) for $1.1 billion remains on track to close in the fourth quarter, the BMO spokesman said.