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

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The obligations of TELUS under the TELUS Option Plans as so converted will be assumed by BCT.TELUS and BCT.TELUS will be substituted for TELUS as the sponsor of the TELUS Option Plans. Schematic Representations of the Arrangement Process The following schematics have been simplified to illustrate the Arrangement process and material subsidiaries: I. BC TELECOM and TELUS as of Date of the Joint Circular GTE 50.8% BC TEL Mobility Cellular Inc. BC TELECOM PUBLIC 49.2% BC TEL BCT.TELUS TELUS Communications Inc. PUBLIC 100% TELUS TELUS Mobility Inc. II. BC TELECOM, TELUS and BCT.TELUS Following the Arrangement (1)(2)(3) GTE 26.7% BC TEL Mobility Cellular Inc. BCT.TELUS Common Shares (75%) Non-Voting Shares (25%) BC TEL Notes: (1) BC TELECOM is wound up into BCT.TELUS pursuant to the Arrangement. PUBLIC 73.3% TELUS TELUS Communications Inc. TELUS Communications (Edmonton) Inc. (2) Pursuant to an internal reorganization to be effective January 1, 1999, the operations of TELUS Communications Inc., TELUS Communications (Edmonton) Inc., TELUS Mobility Inc. and certain other TELUS subsidiaries will be combined in one company to be called TELUS Communications Inc. See ‘‘Information Relating to TELUS — Recent Developments — Internal Reorganization’’. (3) All the subsidiaries indicated above will be wholly-owned by BCT.TELUS. TELUS Communications Inc. is incorporated pursuant to the ABCA and BC TEL Mobility Cellular Inc. and BC TEL are incorporated pursuant to the CBCA. 30
BCT.TELUS COMMUNICATIONS INC. Business Strategy The BCT.TELUS business combination developed from a strategy to maximize shareholder value and respond to the challenges imposed by rapid technological innovation, deregulation, convergence, globalization and increased competition. BCT.TELUS will be a combination of the second and third largest domestic telecommunications providers in Canada. As the premier telecommunications provider in its serving territory, BCT.TELUS will focus its business efforts on: • enhancing its core business and market position; • successfully integrating its business operations to realize the synergies available from the business combination; and • implementing a national growth strategy. BCT.TELUS will concentrate on the successful continuation of its core business operations and fulfillment of its customers’ telecommunications requirements. Core market and business strengths will be enhanced as BCT.TELUS realizes synergies from the business combination of BC TELECOM and TELUS and benefits from reduced costs in a competitive environment. The scale and scope of BCT.TELUS will enable it to grow its existing businesses and expand into emerging communications businesses faster than either BC TELECOM or TELUS could achieve individually. The current telecommunications market in British Columbia and Alberta represents approximately 28% of the revenues of the total Canadian telecommunications market, providing significant potential for revenue growth in the national market. Growth outside of British Columbia and Alberta will be facilitated by BCT.TELUS: • strong financial capacity; • expertise in telecommunications, provided by a highly skilled and motivated workforce; • proven ability to provide excellent customer service; • access to GTE technology, branding and marketing capabilities; and • access to transmission capacity in Ontario and Québec and to key centres in the United States through the acquisition of fibre optic systems. Fibre Acquisition On October 8 and 10, 1998, BC TELECOM entered into agreements to acquire rights in fibre optic systems to be constructed by Ledcor Industries Limited (‘‘Ledcor’’) and by its affiliate, Pacific Fiber Link, LLC. (‘‘PFL’’). These agreements will be assumed by BCT.TELUS as part of the Arrangement. These systems will provide BCT.TELUS with the capability to access markets in Eastern Canada and various networks in the United States, including those of GTE. Under the agreement with Ledcor, BC TELECOM agreed to purchase, for an initial 20 year term, rights of use to 12 strands of fibre within Ontario and Québec (Toronto to Detroit, Toronto to Ottawa, Ottawa to Montreal, Toronto to Montreal, Montreal to Québec City) as well as cross-border links from Montreal to Albany, Toronto to Buffalo and Buffalo to Albany. Under the agreement with PFL, PFL agreed to grant to BC TELECOM, for an initial 25 year term, renewable for an additional 25 years, an indefeasible right of use to 12 strands of dark fibre within a fibre optic system to be constructed by PFL between Seattle and the Canada-U.S. border. These systems are anticipated to be available by December 1999. The agreement also includes an option to acquire an indefeasible right of use to 12 additional strands of dark fibre between Vancouver and the Canada-U.S. border. BC TELECOM has also obtained an option to purchase additional rights in fibre optic systems between Québec City and Halifax, Calgary and Edmonton and Albany and New York City. 31
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 and 32: Arrangement and the BC TELECOM Spec
Page 33 and 34: In connection with the TELUS Board
Page 35: Option Exchange For the BC TELECOM
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
Page 83 and 84: On October 16, 1998, the last full
Page 85 and 86: TELUS CERTIFICATE The contents of t
Page 87 and 88:
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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Page 285 and 286:
Page 287 and 288:
Page 289 and 290:
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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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