Telus 2012 Annual Report Download - page 23

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Second Preferred shares, Common Shares and Non-Voting Shares with respect to
priority in payment of dividends and in the distribution of assets in the event of
liquidation, dissolution or winding up of TELUS.
Second Preferred shares
The Second Preferred shares may be issued from time to time in one or more series,
each series comprising the number of shares, and having attached thereto the
designation, rights, privileges, restrictions and conditions, which the board of directors of
TELUS determines by resolution and subject to filing an amendment to the Notice of
Articles and Articles of TELUS. No series of Second Preferred shares may have
attached thereto the right to vote at any general meeting of TELUS or the right to be
convertible into or exchangeable for Common Shares. Except as required by law, the
holders of the Second Preferred shares as a class are not entitled to receive notice of,
attend or vote at any meeting of the shareholders of TELUS. The Second Preferred
shares rank, subject to the prior rights of the holders of the First Preferred shares, prior
to the Common Shares and Non-Voting Shares with respect to priority in payment of
dividends and in the distribution of assets in the event of liquidation, dissolution or
winding up of TELUS.
TELUS shareholder rights plan
We first adopted a shareholder rights plan in March 2000, which expired on March 20,
2010. The TELUS Board of Directors adopted a substantially similar shareholder rights
plan (the “Rights Plan”) on March 12, 2010 (the “Effective Date”), which was ratified by
shareholders of both share classes at the May 2010 annual and special meeting and is
required to be put to a shareholder vote for re-confirmation at the May 2013 annual and
special meeting. Under the current Rights Plan, TELUS issued one right (a “Series A
Right”) in respect of each Common Share outstanding as at the Effective Date and
issued one right (a “Series B Right”) in respect of each Non-Voting Share outstanding as
of the Effective Date. The Rights Plan has a term of just over nine years, subject to
shareholder confirmation every three years. Each Series A Right or Series B Right, other
than those held by an Acquiring Person (as defined in the Rights Plan) and certain of its
related parties, entitles the holder in certain circumstances following the acquisition by
an Acquiring Person of 20% or more of the Common Shares of TELUS (otherwise than
through the “Permitted Bid” requirements of the Rights Plan) to purchase from TELUS
$320 worth of Common or Non-Voting Shares for $160 (i.e. at a 50% discount)
respectively.
On March 13, 2013, the Board recommended for shareholder approval amendments to
the Rights Plan to reflect the elimination of the Non-Voting Share class from TELUS’
authorized share structure in the event that shareholders approve the proposal being put
to them to effect this change in the authorized share structure (as described above).
Accordingly, if approved by the shareholders, references to the Series B Rights
associated with Non-Voting Shares will be removed and Series A Rights associated with
Common Shares will be referred to simply as Rights under the Rights Plan. Additionally,
minor amendments are being proposed to reflect TELUS’ use of the Direct Registration
System Advice system since February 2013. References to share certificates will now
also include a reference to securities that have been issued and registered in
uncertificated from that are evidenced by an advice or other statement and which are