DISK004:[98CLG6.98CLG3726]BA3726A.;28 - About TELUS

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The Transaction Review Committee was granted the power and authority to engage, at the expense of TELUS, such professional advisors as the Transaction Review Committee considered appropriate, including legal, financial and accounting advisors. The Transaction Review Committee concluded, based on its own discussions and information provided by the financial, accounting and legal advisors of TELUS, that the Transaction Review Committee did not require independent financial or accounting advisors in the circumstances. The Transaction Review Committee did retain the services of Burnet, Duckworth & Palmer to act as counsel to the Transaction Review Committee. Deliberations In accordance with its mandate the Transaction Review Committee: (i) reviewed and discussed details of the Arrangement with management of TELUS and TELUS financial and legal advisors; (ii) with the assistance of experts, attempted to assess the value of TELUS and its shares so as to properly consider the Arrangement and its alternatives; (iii) considered and advised the Board of Directors of TELUS as to whether the Arrangement was in the best interest of TELUS shareholders and whether the potential transaction should be recommended to those shareholders; (iv) considered available alternatives to the Arrangement and reported to the Board of Directors of TELUS with respect to any available alternatives; and (v) provided full and complete advice to the Board of Directors with respect to all aspects of its deliberations. The Transaction Review Committee met on 15 occasions in respect of the business combination, independently and with management and financial and legal advisors in attendance for all or part of certain meetings. In addition to these meetings, members of the Transaction Review Committee spoke to each other numerous times by telephone and in person regarding various aspects of the Arrangement and the TELUS growth strategy and various alternative transactions. The purpose of the various meetings and conversations included: clarification of the duties and responsibilities of the directors in such circumstances; settling the scope and terms of authority of the Transaction Review Committee; consideration of the appropriateness of the appointment of independent advisors to the Transaction Review Committee and the Board of Directors of TELUS; review of various issues arising out of the Arrangement; and review of the information provided to members of the Transaction Review Committee regarding the negotiation of certain governance issues including, but not limited to, selection of the Chairman and Chief Executive Officer of BCT.TELUS, location of the head office of BCT.TELUS, the composition of the Board of Directors of BCT.TELUS after the implementation of the Arrangement and a review of information provided by management and the professional advisors of TELUS in connection with the Arrangement. The Transaction Review Committee or certain of its members also met on several occasions with representatives of Bennett Jones, legal counsel to TELUS, and Burnet, Duckworth & Palmer, legal counsel to the Transaction Review Committee, and the financial advisors to TELUS, RBC DS and Salomon Smith Barney. Conclusions and Recommendation The Transaction Review Committee in considering whether to proceed with the business combination considered, among other things: (i) its knowledge, as directors of TELUS, of the operations, assets, prospects and general industry environment in the telecommunications industry; (ii) the business rationale discussed under ‘‘Benefits of the Transaction’’; (iii) the strategic alternatives available to TELUS; (iv) the business prospects affecting the TELUS Shareholders if the business combination is implemented and the risks in achieving those prospects; (v) the RBC DS Opinion and the Salomon Smith Barney Opinion; (vi) the advice of counsel; and (vii) the advice of Deloitte & Touche LLP. In particular, the Transaction Review Committee concluded that the Arrangement provided a number of strategic benefits to TELUS and was a logical step in TELUS growth strategy. Based on the foregoing, the Transaction Review Committee concluded that the business combination is in the best interests of TELUS Common Shareholders and recommended that the TELUS Board of Directors resolve to proceed with the business combination. Opinions of Financial Advisors to TELUS Opinions of RBC Dominion Securities Inc. and Salomon Smith Barney Inc. TELUS retained RBC DS and Salomon Smith Barney to provide financial and strategic advice in connection with the Arrangement and to render opinions as to the fairness of the transaction from a financial point of view. 26
In connection with the TELUS Board of Directors’ consideration of the Arrangement, RBC DS delivered its written opinion, to the effect that, as at October 19, 1998, and based upon the assumptions made, scope of review and limitations set forth in its written opinion the Transaction (as defined in the opinion of RBC DS) is fair, from a financial point of view, to the TELUS Common Shareholders. In connection with the TELUS Board of Directors’ consideration of the Arrangement, Salomon Smith Barney delivered its written opinion, to the effect that, as at October 19, 1998, and based upon the assumptions made, scope of review and limitations set forth in its written opinion, the Exchange Ratio (as defined in the opinion of Salomon Smith Barney) is fair, from a financial point of view, to the TELUS Common Shareholders. On October 27, 1998 and again on December 8, 1998, RBC DS and Salomon Smith Barney reconfirmed their opinions to the Board of Directors of TELUS. The full text of the opinions of RBC DS and Salomon Smith Barney, each dated December 8, 1998 (the ‘‘RBC DS Opinion’’ and the ‘‘Salomon Smith Barney Opinion’’), which set forth the assumptions made, scope of review and limitations, both on the review undertaken and the resultant opinions, are attached and contained in Appendix F — Fairness Opinions. TELUS Shareholders are urged to read the RBC DS Opinion and the Salomon Smith Barney Opinion carefully in their entirety. The foregoing summaries of the RBC DS Opinion and the Salomon Smith Barney Opinion are qualified in their entirety by reference to the full text of such opinions. The RBC DS Opinion and the Salomon Smith Barney Opinion were prepared at the request and for the information of the Board of Directors of TELUS and do not constitute a recommendation to any TELUS Shareholder as to how such shareholder should vote with respect to the Arrangement. RBC DS and Salomon Smith Barney will receive fees for their respective services in connection with the Arrangement, portions of each of which are contingent upon consummation of the Arrangement. RBC DS, Salomon Smith Barney and their respective affiliates have, in the past, provided or may, in the ordinary course of their business, perform investment banking or financial advisory services for TELUS, BC TELECOM, GTE or any of their respective associates or affiliates, RBC DS and Salomon Smith Barney have and will receive customary fees for such services. In the ordinary course of business, RBC DS, Salomon Smith Barney or their affiliates may hold or actively trade the securities of TELUS, BC TELECOM and GTE for their own accounts and for the accounts of their customers and, accordingly, may at any time hold a long or short position in such securities. Recommendation of TELUS Board of Directors The Board of Directors of TELUS has unanimously determined, based on the considerations noted below, that the terms of the business combination are in the best interests of TELUS and are fair to TELUS Common Shareholders, and unanimously recommends that TELUS Shareholders vote in favour of the Arrangement and the TELUS Special Resolution. In reaching its conclusion, the Board of Directors considered, among other things, the following: (a) Management’s review of, and advice with respect to, the financial condition, results of operations, business plans and prospects of each of BC TELECOM and TELUS and the prospects of BCT.TELUS after the Arrangement; (b) The Transaction Review Committee’s report and recommendation; (c) The TELUS Exchange Ratio and the BC TELECOM Exchange Ratio in light of the relative trading values of and relative contributions to BCT.TELUS by TELUS and BC TELECOM; (d) The opinion of RBC DS that the Transaction (as defined in the RBC DS Opinion) was fair from a financial point of view to TELUS Common Shareholders, as of the date of such written opinion, and based upon the assumptions made, scope of review and limitations set forth therein. See ‘‘Opinions of Financial Advisors to TELUS’’ and Appendix F — Fairness Opinions — Opinion of RBC Dominion Securities Inc.; (e) The opinion of Salomon Smith Barney that the Exchange Ratio (as defined in the Salomon Smith Barney Opinion) was fair from a financial point of view to the TELUS Common Shareholders, as of the date of such written opinion, and based upon the assumptions made, scope of review and 27
Page 1 and 2: NOTICES OF SPECIAL MEETINGS AND JOI
Page 3 and 4: Dear Shareholders of BC TELECOM Inc
Page 5 and 6: BC TELECOM Inc. NOTICE OF SPECIAL M
Page 7 and 8: SUMMARY The following is a summary
Page 9 and 10: from a financial point of view, to
Page 11 and 12: Selected Pro Forma Combined Consoli
Page 13 and 14: the Arrangement. BC TELECOM and TEL
Page 15 and 16: GLOSSARY OF TERMS ‘‘ABCA’’
Page 17 and 18: ‘‘Interim Orders’’ means th
Page 19 and 20: JOINT MANAGEMENT PROXY CIRCULAR Thi
Page 21 and 22: amendment or other matter except as
Page 23 and 24: Meeting, that the transferee’s na
Page 25 and 26: On July 24, 1998, management report
Page 27 and 28: public debt of BC TELECOM, BC TEL a
Page 29 and 30: Conclusions and Recommendation The
Page 31: Arrangement and the BC TELECOM Spec
Page 35 and 36: Option Exchange For the BC TELECOM
Page 37 and 38: BCT.TELUS COMMUNICATIONS INC. Busin
Page 39 and 40: Key Operating Statistics The follow
Page 41 and 42: The directors’ compensation will
Page 43 and 44: espectively, and BCT.TELUS pro form
Page 45 and 46: The following is a summary of the m
Page 47 and 48: Directors, to convert the excess vo
Page 49 and 50: Compensation and Option Agreements
Page 51 and 52: The BCCA requires court approval in
Page 53 and 54: BC TELECOM or BCT.TELUS, provided t
Page 55 and 56: action or make any announcement to
Page 57 and 58: Stentor Alliance Each of the curren
Page 59 and 60: holding corporation. The Regulation
Page 61 and 62: Depository for pickup by the holder
Page 63 and 64: governed by registered retirement s
Page 65 and 66: On November 30, 1998, the CRTC issu
Page 67 and 68: determined but the computer systems
Page 69 and 70: Act as described below, be deemed t
Page 71 and 72: Capital gains realized by an indivi
Page 73 and 74: stock options or otherwise as compe
Page 75 and 76: BC TELECOM SHAREHOLDERS RIGHTS OF D
Page 77 and 78: The above is only a summary of the
Page 79 and 80: Recent Developments Dividends On Oc
Page 81 and 82: The making of a modifying or supers
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On October 16, 1998, the last full
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TELUS CERTIFICATE The contents of t
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APPENDIX A SPECIAL RESOLUTIONS A-1
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TELUS CORPORATION SPECIAL RESOLUTIO
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APPENDIX B — ARRANGEMENT AGREEMEN
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TABLE OF CONTENTS Article Subject P
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AMENDED AND RESTATED ARRANGEMENT AG
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‘‘GTE’’ means GTE Corporati
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1.2 Interpretation Not Affected by
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in the case of Salomon Smith Barney
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5.3 Consultation BC TELECOM and TEL
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interfere with or be inconsistent w
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of Directors of such Party determin
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(v) provide notice to BC TELECOM of
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(g) in a timely and expeditious man
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or actual application by the Comp.
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statements delivered on the date of
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immediately available funds to an a
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In the event of the termination of
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10.3 Time of Essence Time shall be
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1.1 Definitions Plan of Arrangement
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‘‘Plan of Arrangement’’ or
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encumbrances) in exchange for Merge
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shares. If the foregoing calculatio
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‘‘Exchange’’) for the first
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(ii) if to a Shareholder: to the la
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SCHEDULE B REPRESENTATIONS AND WARR
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6. Disclosure. BC TELECOM has publi
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hereto and except for such failure
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date hereof, the execution and deli
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11. Insurance. Policies of insuranc
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SCHEDULE D GOVERNANCE ARRANGEMENTS
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SCHEDULE E MEMORANDUM AND ARTICLES
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Part Article Subject Page 8 BORROWI
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Part Article Subject Page 20 DIVIDE
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PROVINCE OF BRITISH COLUMBIA COMPAN
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3.3. Except as otherwise permitted
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and with such consents of members h
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9.3. The Directors may, whenever th
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this Article 10.15 shall continue n
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12.2. The remuneration of the Direc
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PART 16 PROCEEDINGS OF DIRECTORS 16
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designated at the Effective Date, u
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20.6. No dividend shall bear intere
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Shares of all series shall particip
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PART 27 COMMON SHARES AND NON VOTIN
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ight of withdrawal from the Exclusi
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27.6.1 In this Article 27.6, unless
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conversion as is such holder’s pr
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are not suspended, is reduced to no
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surrender of such certificate and a
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(b) whether or not any shareholder
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IN THE SUPREME COURT OF BRITISH COL
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11. The only persons entitled to at
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C-6 ACTION NO: A983181 VANCOUVER RE
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2. The TELUS Common Shareholders an
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evidence or material which is to be
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APPENDIX D PROCEDURE TO EXERCISE DI
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(8) Share certificate. — A dissen
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APPENDIX E PROCEDURE TO EXERCISE DI
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(8) Unless the Court otherwise orde
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APPENDIX F FAIRNESS OPINIONS F-1
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December 8, 1998 The Board of Direc
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Scope of Review In connection with
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The Fairness Opinion is given as of
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and financial condition of BC TELEC
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The board of directors of BCT (the
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(xx) representations contained in a
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Fairness of the Technology Heads of
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financial and operating contributio
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We obtained financial projections f
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the underlying value of BCT was a m
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Relationship With Interested Partie
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In preparing the Fairness Opinion,
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independent evaluation or appraisal
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APPENDIX G — INFORMATION RELATING
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BC TELECOM INC. ANNUAL INFORMATION
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major groups including Law and Regu
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telecommunications services through
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PROPERTY Property of BC TEL The pri
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The price cap plan does not have an
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• In July 1996, Stentor filed an
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anticipates that its provision of P
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• Toll contribution will remain t
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In Decisions 97-19 and 97-20, the C
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SELECTED CONSOLIDATED FINANCIAL INF
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Name and Residence Principal Occupa
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DIVIDEND REINVESTMENT AND SHARE PUR
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APPENDIX B Please refer to Manageme
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MANAGEMENT’S DISCUSSION AND ANALY
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BC TEL reported increases in equipm
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BC TEL Advanced Communications inve
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Forbearance on Long Distance Servic
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currently expect that our networks
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part due to the introduction of the
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After adjusting cash from operation
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BC TELECOM INC. AUDITED COMPARATIVE
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BC TELECOM INC. CONSOLIDATED STATEM
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BC TELECOM INC. CONSOLIDATED STATEM
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BC TELECOM INC. NOTES TO CONSOLIDAT
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BC TELECOM INC. UNAUDITED INTERIM C
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What does it mean for employees? Ob
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BC TELECOM INC. CONSOLIDATED BALANC
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BC TELECOM INC. EXECUTIVE COMPENSAT
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1. Summary Compensation Table (Cont
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3. Defined Benefit Plans (Continued
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an annual 360 feedback process. The
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In the case of the outgoing Chief E
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APPENDIX H TELUS Corporation INFORM
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TELUS CORPORATION ANNUAL INFORMATIO
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NAME AND INCORPORATION OF TELUS COR
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Local Services Local services allow
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With the exception of terminal devi
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deliver all aspects of the computin
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no recovery schedule of TELUS Commu
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Forbearance In 1996 and 1997 the CR
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Competition Currently, competition
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Five Year Data SELECTED CONSOLIDATE
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DIRECTORS AND OFFICERS Directors Th
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The directors and senior management
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Revenues from other services such a
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Operations 1997 1996 Change % Opera
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Future Income Tax Asset January 1,
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Investing Activities 1997 1996 Chan
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Long distance competition was activ
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Competitive Strategy In late 1996 T
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TELUS TELUS TELUS TELUS Advertising
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Operating expenses Operating expens
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Liquidity and Capital Resources Cas
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The debt component as a proportion
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AUDITORS’ REPORT TO: THE SHAREHOL
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TELUS CORPORATION CONSOLIDATED STAT
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TELUS CORPORATION CONSOLIDATED BALA
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TELUS CORPORATION NOTES TO CONSOLID
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9. Deferred Charges TELUS CORPORATI
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TELUS CORPORATION UNAUDITED INTERIM
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By pooling resources, the joint ven
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centre and additional staffing. Exp
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TELUS CORPORATION CONSOLIDATED STAT
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TELUS CORPORATION CONSOLIDATED BALA
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EXECUTIVE COMPENSATION SUMMARY COMP
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REPORT ON EXECUTIVE COMPENSATION Th
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PERFORMANCE GRAPH The following gra
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APPENDIX I BCT.TELUS COMMUNICATIONS
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COMPILATION REPORT To the Directors
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BCT.TELUS Communications Inc. PRO F
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BC TELECOM INC. RECLASSIFIED CONSOL
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BCT.TELUS Communications Inc. NOTES
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BCT.TELUS Communications Inc. NOTES
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LONG-TERM RELATIONSHIP AGREEMENT TH
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(b) in the case of a partnership or
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material assets or material sale of
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non-Canadian residents. GTE and Ang
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5.13 GTE Responsibility GTE agrees
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IN THE SUPREME COURT OF BRITISH COL
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IN THE COURT OF QUEEN’S BENCH OF
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DISK004:[98CLG6.98CLG3726]BA3726A.;28 - About TELUS

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