Amended Registration Statement for Securities of Certain Canadian Issuers Under the Securities Act of 1933 (f-10/a)
July 19 2019 - 2:24PM
Edgar (US Regulatory)
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AS FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ON JULY 19, 2019
REGISTRATION No. 333-232601
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1
to
FORM F-10
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TELUS CORPORATION
(Exact name of Registrant as specified in its charter)
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British Columbia, Canada
(Province or other jurisdiction of
incorporation or organization)
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4812
(Primary Standard Industrial
Classification Code Number)
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Not Applicable
(I.R.S. Employer Identification No.,
if applicable)
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23
rd
Floor, 510 West Georgia Street
Vancouver, British Columbia V6B 0M3
Canada
(604) 697-8044
(Address and telephone number of Registrant's principal executive offices)
CT Corporation System
28 Liberty St.
New York, New York 10005
(212) 590-9200
(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)
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Copies to:
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Andrew J. Foley
Paul, Weiss, Rifkind, Wharton &
Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
(212) 373-3000
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Stephen Lewis
TELUS Corporation
510 W. Georgia St., 23rd Floor
Vancouver, British Columbia V6B 0M3
Canada
(604) 697-8044
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Pierre Dagenais
Norton Rose Fulbright
Canada LLP
Bureau 2500, 1 Place Ville Marie
Montreal, Quebec, H3B 1R1
Canada
(514) 847-4747
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Approximate date of commencement of proposed sale of the securities to the public:
From time to time after the effective date of this
Registration Statement.
British Columbia, Canada
(Principal jurisdiction regulating this offering)
It
is proposed that this filing shall become effective (check appropriate box below):
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A.
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ý
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upon filing with the Commission pursuant to Rule 467(a) (if in connection with an offering being made contemporaneously in the United States and Canada).
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B.
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at some future date (check the appropriate box below):
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1.
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pursuant to Rule 467(b) on ( ) at ( ) (designate a time
not sooner than seven calendar days after filing).
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2.
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pursuant to Rule 467(b) on ( ) at ( ) (designate a time
seven calendar days or sooner after filing) because the securities regulatory authority in the review jurisdiction has issued a receipt or notification of clearance on
( ).
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3.
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pursuant to Rule 467(b) as soon as practicable after notification of the Commission by the Registrant or the Canadian securities regulatory authority of the review jurisdiction that a receipt or
notification of clearance has been issued with respect hereto.
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4.
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after the filing of the next amendment to this Form (if preliminary material is being filed).
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If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to the home jurisdiction's shelf
prospectus offering procedures, check the following box.
ý
Pursuant to Rule 429 under the Securities Act, the prospectus contained in this Registration Statement relates to Registration
Statement 333-224895.
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PART I
INFORMATION REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS
I-1
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SHORT FORM BASE SHELF PROSPECTUS
TELUS Corporation
$3,000,000,000
Debt Securities
Preferred Shares
Common Shares
Warrants to Purchase Equity Securities
Warrants to Purchase Debt Securities
Share Purchase Contracts
Share Purchase or Equity Units
Subscription Receipts
TELUS Corporation ("TELUS" or the "Company") may offer and issue from time to time any bonds, debentures, notes or other evidences of indebtedness of any kind, nature or
description (collectively, "Debt Securities"), preferred shares or common shares (collectively, the "Equity Securities"), warrants to purchase Equity Securities and warrants to purchase Debt
Securities (collectively, the "Warrants"), Share Purchase Contracts (as defined under "Description of Share Purchase Contracts and Share Purchase or Equity Units" herein), Share Purchase or
Equity Units (as defined under "Description of Share Purchase Contracts and Share Purchase or Equity Units" herein), and subscription receipts that entitle the holder to receive upon
satisfaction of certain release conditions, and for no additional consideration, Debt Securities, Equity Securities, Warrants, Share Purchase Contracts or Share Purchase or Equity Units ("Subscription
Receipts", and together with the Debt Securities, Equity Securities, Warrants, Share Purchase Contracts or Share Purchase or Equity Units, the "Securities") of up to $3,000,000,000 aggregate initial
offering price of Securities (or the equivalent thereof in one or more foreign currencies or composite currencies, including United States dollars) during the 25-month period that this
short form base shelf prospectus (the "Prospectus"), including any amendments thereto, is valid. Securities may be offered separately or together, in amounts, at prices and on terms to be
determined based on market conditions at the time of sale and set forth in an accompanying shelf prospectus supplement (a "Prospectus Supplement").
The
specific terms of the Securities with respect to a particular offering will be set out in the applicable Prospectus Supplement and may include, where applicable (i) in the case of Debt
Securities, the specific designation, aggregate principal amount, the currency or the currency unit for which the Debt Securities may be purchased, the maturity, interest provisions, authorized
denominations, offering price, covenants, events of default, any terms for redemption or retraction, any exchange or conversion terms, whether the debt is senior or subordinated and any other terms
specific to the Debt Securities being offered; (ii) in the case of common shares of TELUS ("Common Shares"), the number of Common Shares offered and the offering price; (iii) in the case
of Equity Securities other than Common Shares, the designation of the particular class and series, the number of shares offered, the issue price, dividend rate, if any, and any other terms specific to
the Equity Securities being offered; (iv) in the case of Warrants, the designation, number and terms of the Equity Securities or Debt Securities purchasable upon exercise of the Warrants, any
procedures that will result in the adjustment of these numbers, the exercise price, dates and periods of exercise, the currency in which the Warrants are issued and any other specific terms;
(v) in the case of Share Purchase Contracts, the designation, number and terms of the Equity Securities to be purchased under the Share Purchase Contract, any procedures that will result in the
adjustment of these numbers, the purchase price and purchase date or dates of the Equity Securities, any requirements of the purchaser to secure its obligations under the Share Purchase Contract and
any other specific terms; (vi) in the case of Share Purchase or Equity Units, the terms of the component Share Purchase Contract and Debt Securities or third party obligations, any requirements
of the purchaser to secure its obligations under the Share Purchase Contract by the Debt Securities or third party obligations and any other specific terms; and (vii) in the case of
Subscription Receipts, the offering price (or the manner of determination thereof if offered on a non-fixed price basis), the procedures for the exchange of Subscription Receipts for Debt
Securities, Equity Securities, Warrants, Share Purchase Contracts or Share Purchase or Equity Units, as the case may be, and any other specific terms thereof. Where required by statute, regulation or
policy, and where Securities are offered in
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currencies
other than Canadian dollars, appropriate disclosure of foreign exchange rates applicable to such Securities will be included in the Prospectus Supplement describing such Securities. The
sale of Common Shares may be effected from time to time in one or more transactions at non-fixed prices pursuant to transactions that are deemed to be "at-the-market distributions" as defined in
National Instrument 44-102 Shelf Distributions, including sales made directly on the Toronto Stock Exchange (the "TSX") or the New York
Stock Exchange (the "NYSE") or other existing trading markets for the Common Shares, and as set forth in a Prospectus Supplement for such purpose. See "Plan of Distribution".
All
information permitted under applicable securities laws to be omitted from this Prospectus will be contained in one or more Prospectus Supplements that will be delivered to purchasers together with
this Prospectus. Each Prospectus Supplement will be deemed to be incorporated by reference into this Prospectus as of the date of the Prospectus Supplement and only for the purposes of the
distribution of the Securities to which the Prospectus Supplement pertains.
TELUS
has filed an undertaking with the British Columbia Securities Commission that it will not distribute Securities that, at the time of distribution, are novel specified derivatives or asset-backed
securities without pre-clearing with the applicable regulator the disclosure to be contained in the Prospectus Supplement pertaining to the distribution of such Securities.
For
the purpose of calculating the Canadian dollar equivalent of the aggregate principal amount of Securities issued under this Prospectus from time to time, Securities denominated in or issued in, as
applicable, a currency (the "Securities Currency") other than Canadian dollars will be translated into Canadian dollars using the Bank of Canada daily exchange rate of Canadian dollars with the
Securities Currency in effect as of 4:30 p.m. (Toronto time) on the business day before the issue of such Securities.
TELUS
maintains its registered office at 510 W. Georgia St., 7th Floor, Vancouver, British Columbia V6B 0M3 and its executive office at 510 W. Georgia St.,
23
rd
Floor, Vancouver, British Columbia V6B 0M3.
This offering is made by a Canadian issuer that is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this Prospectus in
accordance with the disclosure requirements of Canada. Prospective investors in the United States should be aware that such requirements are different from those of the United States.
The financial statements included or incorporated herein have been prepared using International Financial Reporting Standards as issued by the International Accounting Standards Board and they are
subject to Canadian and United States auditing and auditor independence standards. They may not be comparable to financial statements of United States companies.
Prospective investors should be aware that acquisition of the Securities described herein may have tax consequences both in the United States and in Canada. Such
consequences for investors who are resident in, or citizens of, the United States may not be described fully herein.
The enforcement by investors of civil liabilities under the United States federal securities laws may be affected adversely by the fact that TELUS is incorporated or
organized under the laws of the Province of British Columbia, that some or all of its officers and directors may be residents of Canada, that some or all of the underwriters or experts named in this
Prospectus and/or in a Prospectus Supplement may be residents of Canada, and that all or a substantial portion of the assets of TELUS and said persons may be located outside the
United States.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR HAS THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This
Prospectus constitutes a public offering of the Securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such Securities.
The Company may offer and sell Securities to or through underwriters or dealers and also may offer and sell certain Securities directly to other purchasers or through agents. A Prospectus Supplement
relating to each issue of Securities offered thereby will set forth the names of any underwriters, dealers or agents involved in the sale of such Securities and the compensation of any such
underwriters, dealers or agents. The Common Shares are listed on the TSX under the symbol "T" and the NYSE under the symbol "TU". Unless otherwise specified in the applicable Prospectus Supplement,
Securities other than the Common Shares will not be listed on any securities exchange.
The
offering of Securities hereunder is subject to approval of certain legal matters on behalf of TELUS by Norton Rose Fulbright Canada LLP, Toronto, Ontario and by Paul, Weiss, Rifkind,
Wharton & Garrison LLP, New York, New York.
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Unless the context otherwise indicates, references in this Prospectus to "TELUS" or the "Company" are references to TELUS Corporation, its consolidated
subsidiaries and predecessor companies.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents of the Company, each of which has been filed by the Company with the securities commissions or similar
regulatory authorities in each of the provinces of Canada, are specifically incorporated by reference into, and form an integral part of, this Prospectus:
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(a)
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the annual information form of the Company dated February 14, 2019, for the year ended December 31, 2018;
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(b)
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the audited consolidated financial statements of the Company as at and for the years ended December 31, 2018 and 2017, together with the report of the independent registered public accounting firm thereon and the
notes thereto;
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(c)
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Management's Discussion and Analysis of financial results for the year ended December 31, 2018;
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(d)
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the unaudited condensed interim consolidated financial statements of the Company as at and for the three-month period ended March 31, 2019 together with the notes thereto;
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(e)
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Management's Discussion and Analysis of financial results for the three-month period ended March 31, 2019; and
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(f)
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the information circular dated March 13, 2019, prepared in connection with the Company's annual general meeting held on May 9, 2019.
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Any documents of a type described in Item 11.1 of Form 44-101F1
Short Form
Prospectus
, including the types referred to above, any material change reports (excluding confidential reports), and business acquisition reports filed by the Company pursuant
to the requirements of securities legislation of any province of Canada, and any other disclosure document which the Company has filed pursuant to an undertaking to a securities regulatory authority
of any province of Canada, in each case, after the date of this Prospectus and prior to the date on which this Prospectus ceases to be effective, shall be deemed to be incorporated by reference into
this Prospectus. In addition, to the extent indicated in any Report on Form 6-K filed with the SEC or in any Report on Form 40-F filed with the United States Securities and Exchange Commission (the
"SEC"), any information included therein shall be deemed to be incorporated by reference in this Prospectus.
Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes
of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes
such statement. The modifying or superseding statement need not state
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that it has modified or superseded a prior statement or include any other information set forth in the document which it modifies or supersedes. The making of such a modifying or superseding statement
shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state
a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall
not constitute a part of this Prospectus, except as so modified or superseded.
A
Prospectus Supplement containing the specific terms of an offering of Securities, updated disclosure of earnings coverage ratios, if applicable, and other information relating to the
Securities, will be delivered to prospective purchasers of such Securities together with this Prospectus and will be deemed to be incorporated by reference into this Prospectus as of the date of such
Prospectus Supplement only for the purpose of the offering of the Securities covered by that Prospectus Supplement.
Upon
the filing of a subsequent annual information form and the related annual financial statements by the Company with and, where required, accepted by, the applicable securities
regulatory authorities during the currency of this Prospectus, the previous annual information form, the previous annual financial statements and all interim financial statements, and the accompanying
Management's Discussion and Analysis, and material change reports filed prior to the commencement of the Company's financial year in which such subsequent annual information form is filed, and
information circulars and business acquisition reports filed prior to the commencement of the Company's financial year in respect of which such subsequent annual information form is filed, shall be
deemed no longer to be incorporated into this Prospectus for purposes of further offers and sales of Securities hereunder. Upon interim financial statements and the accompanying Management's
Discussion and Analysis for subsequent interim periods being filed with the applicable securities regulatory authorities during the currency of this Prospectus, all interim financial statements and
the accompanying Management's Discussion and Analysis filed prior to such subsequent interim financial statements will be deemed no longer to be incorporated into this Prospectus for purposes of
further offers and sales of Securities hereunder. Upon the Company filing an information circular in connection with an annual general meeting, the information circular filed in connection with the
previous annual general meeting (unless such information circular also related to a special meeting) will be deemed no longer to be incorporated into this Prospectus for purposes of further offers and
sales of the Securities hereunder.
In
addition to its continuous disclosure obligations under the securities laws of the provinces of Canada, TELUS is subject to the information requirements of the
United States Securities Exchange Act of 1934
, as amended, and in accordance therewith files reports and other information with the SEC. Under the
multijurisdictional disclosure system adopted by the United States, such reports and other information may be prepared in accordance with the disclosure requirements of Canada, which requirements are
different from those of the United States. Such reports and other information, when filed by TELUS in accordance with such requirements, can be inspected and copied at the public reference facilities
maintained by the SEC at 100 F Street, N.E., Washington, D.C., 20549. Copies of such material can be obtained at prescribed rates from such public reference facilities of the SEC at
100 F Street, N.E., Washington, D.C., 20549. In addition, such materials are also available to the public on the SEC's website at www.sec.gov. The Common Shares
are listed on the NYSE and reports and other information concerning TELUS can be inspected at the offices of the NYSE, 20 Broad Street, New York, New York, 10005.
Prospective
investors should rely only on the information contained in or incorporated by reference in this Prospectus or any applicable Prospectus Supplement. The Company has not
authorized anyone to provide prospective investors with different or additional information. The Company is not making an offer of the Securities in any jurisdiction where the offer is not permitted
by law. Prospective investors should not assume that the information contained in or incorporated by reference in this Prospectus or any applicable Prospectus Supplement is accurate as of any date
other than the date on the front of this Prospectus or the applicable Prospectus Supplement.
Any
"template version" of any "marketing materials" (as such terms are defined in National
Instrument 41-101
General Prospectus Requirements
) filed after the date of a Prospectus Supplement and
before the termination of the distribution of the Securities offered pursuant to such Prospectus Supplement (together with this Prospectus) is deemed to be incorporated by reference in such Prospectus
Supplement.
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REFERENCE TO CURRENCY
Unless the context otherwise requires, all references herein to currency are references to Canadian dollars. For Securities issued in
other than Canadian currency, potential purchasers should be aware that foreign exchange fluctuations are likely to occur from time to time and that the Company does not make any representation with
respect to currency values from time to time. Investors should consult their own advisors with respect to the potential risk of currency fluctuations.
FORWARD-LOOKING STATEMENTS
This Prospectus, together with the documents incorporated by reference herein and therein, contains forward-looking statements about
expected events and the financial and operating performance of TELUS.
Forward-looking
statements include any statements that do not refer to historical facts. They include, but are not limited to, statements relating to the Company's objectives and its
strategies to achieve those objectives, its targets, outlook, updates, and its multi-year dividend growth program. Forward-looking statements are typically identified by the words "assumption",
"goal", "guidance", "objective", "outlook", "strategy", "target" and other similar expressions, or future or conditional verbs such as "aim", "anticipate", "believe", "could", "expect", "intend",
"may", "plan", "predict", "seek", "should", "strive" and "will".
By
their nature, forward-looking statements are subject to inherent risks and uncertainties and are based on assumptions, including assumptions about future economic conditions and
courses of action. These assumptions may ultimately prove to have been inaccurate and, as a result, the Company's actual results or events may differ materially from expectations expressed in or
implied by the forward-looking statements. An update to the Company's trends and assumptions for 2019 is presented in the Company's Management's Discussion and Analysis of financial results for the
three-month period ended March 31, 2019.
Risks
and uncertainties that could cause actual performance or events to differ materially from the forward-looking statements made herein and in other TELUS filings incorporated by
reference herein include, but are not limited to, the following:
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Regulatory decisions and developments
including: changes to the Company's regulatory regime
or the outcomes of proceedings, cases or inquiries relating to its application, such as: the potential of government intervention to further increase wireless competition, including through policy
directions to the Canadian Radio-television and Telecommunications Commission ("CRTC"); any new regulatory requirements as a result of the CRTC's ongoing review of the wireless regulatory framework;
the federal government's announcement in its 2019 budget that it intends to propose new legislation and make necessary amendments to existing federal legislation in order to introduce a new critical
cyber systems framework; the potential for government intervention concerning the CRTC's decision on lower-cost data-only plans; changes to the cost burden associated with CRTC-mandated network
interconnections; disputes with certain municipalities regarding rights-of-way bylaws, and other potential threats to unitary federal regulatory authority over telecommunications, including provincial
wireless and consumer protection legislation; the impact of the CRTC's wireline wholesale services review, with a review of rates and configurations for wholesale access currently in progress for
TELUS; follow-up proceedings further to the CRTC's report on the retail sales practices of Canada's large telecommunications carriers; the Competition Bureau's market study on competition in broadband
services; the CRTC's phase-out of the local service subsidy regime and corresponding establishment of a broadband funding regime to support the enhancement of high-speed Internet services focusing on
unserved and underserved areas in Canada; the CRTC's review of the price cap and local forbearance regimes; the CRTC's proceeding to create a mandatory code of conduct to address the clarity and
content of contracts for retail fixed Internet access and related issues; broadcasting-related issues, such as: the CRTC's implementation of new initiatives discussed in its May 2018 report
"Harnessing Change: The Future of Programming Distribution in Canada"; the federal government's legislative review of the Broadcasting Act, Telecommunications Act and Radiocommunication Act as
announced on June 5, 2018; the review of the Copyright Act, which began in early 2018; spectrum and compliance with licences, including the Company's compliance with licence conditions, changes
to spectrum licence fees, spectrum policy determinations such as restrictions on the purchase, sale and transfer of spectrum licences, and the cost and availability of spectrum in the
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3500 MHz
and millimeter wave (mmWave bands); the federal government's announcement of a formal consultation on the auctioning of 3800 MHz spectrum, expected to take place in 2022; the
impact on the Company and other Canadian telecommunications carriers of government or regulatory actions with respect to certain countries or suppliers, including the executive order signed by U.S.
President Donald Trump permitting the Secretary of Commerce to block certain technology transactions deemed to constitute national security risks and the imposition of additional license requirements
on the export, re-export and transfer of goods, services and technology to Huawei Technologies Co. Ltd. and its non-U.S. affiliates; restrictions on non-Canadian ownership and
control of TELUS common shares and the ongoing monitoring and compliance with such restrictions; and the Company's ability to comply with complex and changing regulation of the healthcare and medical
devices industry in the provinces of Canada in which we operate, including as an operator of health clinics.
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Competitive environment
including: the Company's ability to continue to retain customers
through an enhanced customer service experience, including through the deployment and operation of evolving wireless and wireline infrastructure; intense wireless competition, including the ability of
industry competitors to successfully combine a mix of Internet services and, in some cases, wireless services under one bundled and/or discounted monthly rate, along with their existing broadcast or
satellite-based TV services; the success of new products, new services and supporting systems, such as home automation security and Internet of Things (IoT) services for Internet-connected devices;
wireline voice and data competition including continued intense rivalry across all services among wireless and wireline telecommunications companies, cable-TV providers, other communications companies
and over-the-top (OTT) services, which, among other things, places pressures on current and future mobile phone average billing per subscriber unit per month (ABPU), mobile phone average revenue per
subscriber unit per month (ARPU), cost of acquisition, cost of retention and churn rate for all services, as do customer usage patterns, increased data bucket sizes or flat-rate pricing trends for
voice and data, inclusive rate plans for voice and data and availability of Wi-Fi networks for data; mergers and acquisitions of industry competitors; pressures on Internet and TV ARPU and churn rate
resulting from market conditions, government actions and customer usage patterns; residential voice and business network access line losses; subscriber additions and retention volumes, and associated
costs for wireless, TV and Internet services; the Company's ability to obtain and offer content on a timely basis across multiple devices on wireless and TV platforms at a reasonable cost; vertical
integration in the broadcasting industry resulting in competitors owning broadcast content services, and timely and effective enforcement of related regulatory safeguards; the Company's ability to
compete successfully in customer care and business services (CCBS) given the Company's competitors' brand recognition, consolidation and strategic alliances as well as technology development and the
Company's TELUS Health business, the ability to compete with other providers of electronic medical records and pharmacy management products, systems integrators and health service providers including
those that own a vertically integrated mix of health services delivery, IT solutions, and related services, and global providers that could achieve expanded Canadian footprints.
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Technological substitution
including: reduced utilization and increased commoditization of
traditional wireline voice local and long distance services from impacts of OTT applications and wireless substitution, a declining overall market for paid TV services, including as a result of
content piracy and signal theft and as a result of a rise in OTT direct to consumer video offerings and virtual multichannel video programming distribution platforms; the increasing number of
households that have only wireless and/or Internet-based telephone services; potential mobile phone ABPU and mobile phone ARPU declines as a result of, among other factors, substitution to messaging
and OTT applications; substitution to increasingly available Wi-Fi services; and disruptive technologies, such as OTT IP services, including Network as a Service in the business market, that may
displace or re-rate the Company's existing data services.
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Technology
including: high subscriber demand for data that challenges wireless networks and
spectrum capacity levels and may be accompanied by increases in delivery cost; the Company's reliance on information technology and its need to streamline its legacy systems; the roll-out and
evolution of wireless broadband technologies and systems including video distribution platforms and
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telecommunications
network technologies (broadband initiatives, such as fibre to the premises (FTTP), wireless small-cell deployment, 5G wireless and availability of resources and ability to build out
adequate broadband capacity); the Company's reliance on wireless network access agreements, which have facilitated the Company's deployment of wireless technologies; choice of suppliers and those
suppliers' ability to maintain and service their product lines, which could affect the success of upgrades to, and evolution of, technology that it offers; supplier limitations and concentration and
market power for network equipment, TELUS TV® and wireless handsets; the performance of wireless technology; the Company's expected long-term need to acquire additional spectrum capacity
through future spectrum auctions and from third parties to address increasing demand for data; deployment and operation of new wireline broadband network technologies at a reasonable cost and
availability and success of new products and services to be rolled out using such network technologies; network reliability and change management; self-learning tools and automation that may change
the way the Company interacts with customers; and uncertainties around the Company's strategy to replace certain legacy wireline network technologies, systems and services to reduce operating costs.
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Capital expenditure levels and potential outlays for spectrum licences in spectrum auctions or from third
parties
, due to: the Company's broadband initiatives, including connecting more homes and businesses directly to fibre; the Company's ongoing deployment of newer wireless technologies,
including wireless small cells to improve coverage and capacity and prepare for a more efficient and timely evolution to 5G wireless services; utilizing acquired spectrum; investments in network
resiliency and reliability; subscriber demand for data; evolving systems and business processes; implementing efficiency initiatives; supporting large complex deals; and future wireless spectrum
auctions held by Innovation, Science and Economic Development Canada ("ISED"), including the 3500 MHz and mmWave spectrum auctions expected to take place in 2020 and 2021, respectively, and the
announcement of a formal consultation on the auctioning of 3800 MHz spectrum, expected to take place in 2022. The Company's capital expenditure levels could be impacted if it does not achieve
its targeted operational and financial results.
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Operational performance and business combination risks
including: the Company's reliance on
legacy systems and ability to implement and support new products and services and business operations in a timely manner; the Company's ability to implement effective change management for system
replacements and upgrades, process redesigns and business integrations (such as the Company's ability to successfully integrate acquisitions, complete divestitures or establish partnerships in a
timely manner, and realize expected strategic benefits, including those following compliance with any regulatory orders); the Company's ability to identify and manage new risks inherent to new service
offerings that we may provide, including as a result of acquisitions, which could result in damage to the Company's brand, the Company's business in the relevant area or as a whole, additional
exposure to litigation or regulatory proceedings; and real estate joint venture risks.
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Data protection
including: risks that malfunctions or unlawful acts could result in the
unauthorized access to, change, loss, or distribution of data, which may compromise the privacy of individuals and could result in financial loss and harm to the Company's reputation and brand.
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Security threats
including: intentional damage or unauthorized access to the Company's
physical assets or the Company's IT systems and networks, which could prevent the Company from providing reliable service or result in unauthorized access to the Company's information or that of the
Company's customers.
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Ability to successfully implement cost reduction initiatives and realize planned savings, net of
restructuring and other costs, without losing customer service focus or negatively affecting business operations
. Examples of these initiatives are: the Company's operating efficiency
and effectiveness program to drive improvements in financial results; business integrations; business product simplification; business process outsourcing; offshoring and reorganizations, including
any full-time equivalent employee reduction programs; procurement initiatives; and real estate rationalization.
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Implementation of large enterprise deals
, which may be adversely impacted by available
resources, system limitations and degree of co-operation from other service providers.
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Foreign operations
and the Company's ability to successfully manage operations in foreign
jurisdictions, including managing risks such as currency fluctuations.
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Business continuity events
including: the Company's ability to maintain customer service and
operate the Company's network in the event of human error or human-caused threats, such as cyberattacks and equipment failures that could cause various degrees of network outages; supply chain
disruptions; delays and economics including as a result of government restrictions or trade actions; natural disaster threats; epidemics; pandemics; political instability in certain international
locations; information security and privacy breaches, including data loss or theft of data; and the completeness and effectiveness of business continuity and disaster recovery plans
and responses.
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Human resource matters
including: recruitment, retention and appropriate training in a highly
competitive industry, and the level of employee engagement.
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Financing and debt requirements including
: the Company's ability to carry out financing
activities, the Company's ability to refinance its maturing debt and the Company's ability to maintain investment grade credit ratings in the range of BBB+ or the equivalent. The Company's business
plans and growth could be negatively affected if existing financing is not sufficient to cover the Company's funding requirements.
-
-
Lower than planned free cash flow could constrain the Company's ability to invest in operations, reduce debt
or return capital to shareholders, and could affect the Company's ability to sustain its dividend growth program through 2022
. This program may be affected by factors such as the
competitive environment, economic performance in Canada, the Company's earnings and free cash flow, the Company's levels of capital expenditures and spectrum licence purchases, acquisitions, the
management of the Company's capital structure, and regulatory decisions and developments. Quarterly dividend decisions are subject to assessment and determination by the Company's Board of Directors
based on the Company's financial position and outlook. Shares may be purchased under the Company's normal course issuer bid ("NCIB") when and if we consider it opportunistic, based on the Company's
financial position and outlook, and the market price of TELUS common shares. There can be no assurance that the Company's dividend growth program or any NCIB will be maintained, not changed and/or
completed.
-
-
Taxation matters
including: interpretation of complex domestic and foreign tax laws by the
relevant tax authorities that may differ from the Company's interpretations; the timing and character of income and deductions, such as tax depreciation and operating expenses; tax credits or other
attributes; changes in tax laws, including tax rates; tax expenses being materially different than anticipated, including the taxability of income and deductibility of tax attributes; elimination of
income tax deferrals through the use of different tax year-ends for operating partnerships and corporate partners; and changes to the interpretation of tax laws, including as a result of changes to
applicable accounting standards or tax authorities adopting more aggressive auditing practices, tax reassessments or adverse court decisions impacting the tax payable by the Company.
-
-
Litigation and legal matters
including: the Company's ability to successfully respond to
investigations and regulatory proceedings; the Company's ability to defend against existing and potential claims and lawsuits (including intellectual property infringement claims and class actions
based on consumer claims, data, privacy or security breaches and secondary market liability) or to negotiate and execute upon indemnity rights or other protections in respect of such claims and
lawsuits; and the complexity of legal compliance in domestic and foreign jurisdictions, including compliance with competition, anti-bribery and foreign corrupt practices laws.
-
-
Health, safety and the environment
including: lost employee work time resulting from illness
or injury, public concerns related to radio frequency emissions, environmental issues affecting the Company's business including climate change, waste and waste recycling, risks relating to fuel
systems on the Company's properties, and changing government and public expectations regarding environmental matters and the Company's responses.
-
-
Economic growth and fluctuations
including: the state of the economy in Canada, which may be
influenced by economic and other developments outside of Canada, including potential outcomes of yet unknown policies and actions of foreign governments; future interest rates; inflation; unemployment
6
Table of Contents
levels;
effects of fluctuating oil prices; effects of low business spending (such as reducing investments and cost structure); pension investment returns, funding and discount rates; fluctuations in
foreign exchange rates of the currencies in the regions in which we operate; the impact of tariffs on trade between Canada and the U.S.; and global implications of a trade conflict between the U.S.
and China.
These
risks are described in additional detail in the Company's Management's Discussion and Analysis of financial results for the year ended December 31, 2018 and the three-month
period ended March 31, 2019. Those descriptions are incorporated by reference in this cautionary statement but are not intended to be a complete list of the risks that could affect
the Company.
Many
of these factors are beyond the Company's control or its current expectations or knowledge. Additional risks and uncertainties not currently known to the Company or that it
currently deems to be immaterial may also have a material adverse effect on its financial position, financial performance, cash flows, business or reputation. Except as otherwise indicated in this
Prospectus and the documents incorporated by reference herein and therein, the forward-looking statements made herein do not reflect the potential impact of any non-recurring or special items or any
mergers, acquisitions, dispositions or other business combinations or transactions that may be announced or that may occur after the date of this document.
Readers
are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements in this document describe the Company's expectations and are based on its
assumptions as at the date hereof and are subject to change after this date. Except as required by law, the Company disclaims any intention or obligation to update or revise any forward-looking
statements.
This
cautionary statement qualifies all of the forward-looking statements in this Prospectus and the documents incorporated by reference herein and therein.
TELUS CORPORATION
TELUS was incorporated under the
Company Act
(British Columbia) (the "BC Company
Act") on October 26, 1998 under the name BCT.TELUS Communications Inc. ("BCT"). On January 31, 1999, pursuant to a court-approved plan of arrangement under the
Canada Business Corporations Act
among BCT, BC TELECOM Inc. ("BC TELECOM") and the former Alberta based TELUS Corporation ("TC"), BCT
acquired all of the shares of BC TELECOM and TC in exchange for common shares and non-voting shares of BCT, and BC TELECOM was dissolved. On May 3, 2000, BCT changed its name to TELUS
Corporation and in February 2005, the Company transitioned under the
Business Corporations Act
(British Columbia), successor to the BC Company
Act. On February 4, 2013, in accordance with the terms of a court-approved plan of arrangement under the
Business Corporations Act
(British
Columbia), TELUS exchanged all of its issued and outstanding non-voting shares (the "Non-Voting Shares") into Common Shares on a one-for-one basis. On April 16, 2013, TELUS subdivided
its Common Shares on a two-for-one basis. On May 9, 2013, TELUS amended its Articles and Notice of Articles to eliminate the Non-Voting Shares from the authorized share structure of the
Company, increase the maximum number of authorized Common Shares from 1,000,000,000 to 2,000,000,000, and incorporate certain "housekeeping" or administrative amendments. TELUS maintains its
registered office at 510 W. Georgia St., 7
th
Floor, Vancouver, British Columbia V6B 0M3 and its executive office at 510 W. Georgia St., 23rd Floor,
Vancouver, British Columbia V6B 0M3.
TELUS
is one of Canada's largest telecommunications companies, providing a wide range of telecommunications services and products including wireless and wireline voice and data. Data
services include: Internet protocol, television, hosting, managed information technology and cloud-based services, and certain healthcare solutions.
USE OF PROCEEDS
Except as may otherwise be set forth in a Prospectus Supplement, the net proceeds to be received by the Company from the issue and sale
from time to time of Securities will be added to the general funds of the Company to be used to repay existing indebtedness of TELUS, to fund capital expenditures and for other general corporate
purposes. Each Prospectus Supplement will contain specific information concerning the use of proceeds from that sale of Securities.
7
Table of Contents
EARNINGS COVERAGE RATIOS
The following consolidated earnings coverage ratios have been calculated for the 12-month periods ended December 31, 2018 and
March 31, 2019. The earnings coverage ratios refer to the ratio of (i) consolidated net income attributable to holders of Common Shares before borrowing costs and income taxes, and
(ii) borrowing costs.
For
the 12-month periods ended December 31, 2018, and March 31, 2019, the Company's consolidated net income attributable to holders of Common Shares before borrowing costs
and income taxes was $2,772 million and $2,817 million, respectively. Borrowing costs for the 12-month periods were $655 million and $672 million, respectively. The
earnings coverage ratios at December 31, 2018, and March 31, 2019, also give pro forma effect to the issuance, repayment and redemption of all long-term debt of the Company since
December 31, 2018, and March 31, 2019, respectively (including the issuance of (i) $1.0 billion aggregate principal amount of 3.30% Notes, Series CY due
May 2, 2029 (the "Series CY Notes"); (ii) US$500 million aggregate principal amount of 4.30% Notes due June 15, 2049 (the "4.30% Notes"); and
(iii) $800 million aggregate principal amount of 2.75% Notes, Series CZ due July 8, 2026, and the application or assumed application of the proceeds thereof), as if each
had occurred at the beginning of such 12-month period. The earnings coverage ratios set out below do not purport to be indicative of earnings coverage ratios for any future periods.
|
|
|
|
|
12-month period ended
|
|
December 31, 2018
|
|
March 31, 2019
|
Earnings coverage ratios
|
|
4.2 times
|
|
4.2 times
|
The
information presented herein for the 12-month period ended March 31, 2019, is based on unaudited financial information.
PRIOR SALES
Pursuant to the Company's various employee share option plans, during the 12-month period before the date of this Prospectus, the
Company issued 158,458 Common Shares on the exercise of 397,497 options at a weighted average price of $29.16 per share.
On
April 3, 2019, the Company issued the Series CY Notes. On May 28, 2019, the Company issued the 4.30% Notes. On July 2, 2019, the Company issued the
Series CZ Notes.
8
Table of Contents
MARKET PRICE AND TRADING VOLUME
The Common Shares are listed for trading on the TSX under the symbol "T" and the NYSE under the symbol "TU". The following table sets
forth the reported high and low closing sale prices and the aggregate volume of trading of the Common Shares on the TSX during the 12 months preceding the date of this Prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
Price Range
|
|
|
|
|
|
High
|
|
Low
|
|
Volume
|
|
|
|
($)
|
|
($)
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
July 1 - 18
|
|
|
49.37
|
|
|
48.13
|
|
|
11,667,649
|
|
June
|
|
|
51.22
|
|
|
47.77
|
|
|
23,572,133
|
|
May
|
|
|
50.79
|
|
|
48.33
|
|
|
21,034,024
|
|
April
|
|
|
50.61
|
|
|
48.95
|
|
|
20,864,636
|
|
March
|
|
|
49.845
|
|
|
46.85
|
|
|
28,440,609
|
|
February
|
|
|
48.24
|
|
|
45.91
|
|
|
19,786,512
|
|
January
|
|
|
46.56
|
|
|
44.51
|
|
|
25,187,046
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
December
|
|
|
48.37
|
|
|
44.32
|
|
|
26,398,725
|
|
November
|
|
|
47.86
|
|
|
44.45
|
|
|
26,127,572
|
|
October
|
|
|
47.75
|
|
|
43.88
|
|
|
23,435,014
|
|
September
|
|
|
49.11
|
|
|
46.80
|
|
|
16,321,289
|
|
August
|
|
|
49.15
|
|
|
46.50
|
|
|
18,693,677
|
|
July
|
|
|
48.38
|
|
|
46.20
|
|
|
13,908,025
|
|
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of Debt Securities sets forth certain general terms and provisions of Debt Securities in respect
of which a Prospectus Supplement may be filed. The particular terms and provisions of Debt Securities offered by any Prospectus Supplement will be described in any Prospectus Supplement filed in
respect of such Debt Securities.
Debt
Securities may be issued under an indenture dated May 22, 2001 (the "Canadian Trust Indenture") between the Company and Montreal Trust Company of Canada
(now Computershare Trust Company of Canada), as trustee (the "Canadian Trustee"), as supplemented by supplemental indentures applicable to specific Debt Securities (together with the
Canadian Trust Indenture, the "Canadian Indenture") or under an indenture dated September 19, 2016 (the "U.S. Trust Indenture") between the Company, the Canadian Trustee and
Computershare Trust Company, N.A., as U.S. trustee (the "U.S. Trustee" and together with the Canadian Trustee, the "Trustees") as supplemented by supplemental indentures
applicable to specific Debt Securities
(together with the U.S. Trust Indenture, the "U.S. Indenture"). The following summary of certain provisions of the Canadian Indenture and the U.S. Indenture (together, the "Trust
Indentures") does not purport to be complete and is qualified in its entirety by reference to the applicable Trust Indenture and any applicable supplemental indentures. All capitalized terms are as
defined in the applicable Trust Indenture (unless otherwise defined herein).
General
The Trust Indentures provide that Debt Securities may be issued thereunder from time to time in one or more series. Specific terms and
conditions which apply to such series will be set out in a supplement to the applicable Trust Indenture. The Debt Securities will be direct, unconditional and, unless otherwise indicated in the
relevant Prospectus Supplement, unsecured obligations of the Company. As of March 31, 2019, $9.8 billion principal amount of Debt Securities are outstanding under the Canadian Trust
Indenture and US$1.9 billion principal amount of Debt Securities are outstanding under the U.S. Trust Indenture.
9
Table of Contents
With
respect to Debt Securities issued under the Canadian Trust Indenture, the Prospectus Supplement relating to the particular Debt Securities offered thereby will describe the terms of
such Debt Securities, including, where applicable:
-
(i)
-
the
designation, aggregate principal amount and denominations of such Debt Securities;
-
(ii)
-
the
price at which such Debt Securities will be issued or whether such Debt Securities will be issued on a non-fixed price basis;
-
(iii)
-
the
date or dates on which such Debt Securities will mature and the portion (if less than all of the principal amount) of such Debt Securities to
be payable upon declaration of an acceleration of maturity;
-
(iv)
-
the
currency or currencies in which such Debt Securities are being sold and in which the principal of (and premium, if any), and interest, if any,
on, such Debt Securities will be payable, whether the holder of any such Debt Securities or the Company may elect the currency in which payments thereon are to be made and, if so, the manner of
such election;
-
(v)
-
whether
the Debt Securities of such series are interest bearing and, in the case of interest bearing Debt Securities, the rate or rates (which may be fixed
or variable) per annum at which such Debt Securities will bear interest, if any;
-
(vi)
-
the
date from which interest on such Debt Securities, whether payable in cash, in kind, or in shares, will accrue, the date or dates on which such interest
will be payable and the date on which payment of such interest will commence;
-
(vii)
-
the
dates on which and the price or prices at which such Debt Securities will, pursuant to any required repayment provisions, or may, pursuant to any
repurchase or redemption provisions, be repurchased, redeemed or repaid and the other terms and provisions of any such optional repurchase or redemption or required repayment;
-
(viii)
-
any
special provisions for the payment of additional interest with respect to such Debt Securities;
-
(ix)
-
any
additional covenants included for the benefit of holders of such Debt Securities;
-
(x)
-
the
general terms or provisions, if any, pursuant to which such Debt Securities are to be guaranteed or secured;
-
(xi)
-
any
additional events of default provided with respect to such Debt Securities;
-
(xii)
-
any
exchange on which Debt Securities of a series will be listed;
-
(xiii)
-
terms
for any conversion or exchange into other securities;
-
(xiv)
-
subordination
terms, if any, of the Debt Securities of such series;
-
(xv)
-
any
special tax implications of or any special tax provision, or indemnities relating to Debt Securities of such series; and
-
(xvi)
-
any
other terms of such Debt Securities.
With
respect to Debt Securities issued under the U.S. Trust Indenture, the Prospectus Supplement relating to the particular Debt Securities offered thereby will describe the terms
of such Debt Securities, including, where applicable:
-
(i)
-
the
specific designation and the aggregate principal amount of the Debt Securities of such series;
-
(ii)
-
the
extent and manner, if any, to which payment on or in respect of the Debt Securities of such series will be senior or will be subordinated to the prior
payment of the Company's other liabilities and obligations;
-
(iii)
-
the
percentage or percentages of principal amount at which the Debt Securities of such series will be issued;
10
Table of Contents
-
(iv)
-
the
date or dates on which the principal of (and premium, if any, on) the Debt Securities of such series will be payable and the portion
(if less than the principal amount) of the Debt Securities of such series to be payable upon a declaration of acceleration of maturity and/or the method by which such date or dates shall be
determined or extended;
-
(v)
-
the
rate or rates (whether fixed or variable) at which the Debt Securities of such series will bear interest, if any, and the date or dates from which such
interest will accrue;
-
(vi)
-
the
dates on which any interest will be payable and the regular record dates for the payment of interest on the Debt Securities of such series in
registered form;
-
(vii)
-
the
place or places where the principal of (and premium, if any, and interest, if any, on) the Debt Securities will be payable, and each office or
agency where the Debt Securities of such series may be presented for registration of transfer or exchange;
-
(viii)
-
if
other than U.S. dollars, the currency in which the Debt Securities of such series are denominated or in which currency payment of the principal
of (and premium, if any, and interest, if any, on) such Debt Securities of such series will be payable;
-
(ix)
-
whether
the Debt Securities of such series will be issuable in the form of one or more global securities and, if so, the identity of the depositary for the
global securities;
-
(x)
-
any
mandatory or optional redemption or sinking fund provisions;
-
(xi)
-
the
period or periods, if any, within which, the price or prices at which, the currency in which and the terms and conditions upon which the Debt
Securities of such series may be redeemed or purchased by the Company;
-
(xii)
-
the
terms and conditions, if any, upon which holders may redeem the Debt Securities of such series prior to maturity and the price or prices at which and
the currency in which the Debt Securities of such series are payable;
-
(xiii)
-
any
index used to determine the amount of payments of principal of (and premium, if any, or interest, if any, on) the Debt Securities of
such series;
-
(xiv)
-
the
terms, if any, on which the Debt Securities may be converted or exchanged for other of the Company's Debt Securities or Debt Securities of
other entities;
-
(xv)
-
any
other terms of the Debt Securities of such series, including covenants and events of default which apply solely to a particular series of the Debt
Securities being offered which do not apply generally to other Debt Securities, or any covenants or events of default generally applicable to the Debt Securities of such series which do not apply to a
particular series of the Debt Securities;
-
(xvi)
-
if
other than The Depository Trust Company, the person designated as the depositary for the Debt Securities of such series;
-
(xvii)
-
any
applicable material Canadian and U.S. federal income tax consequences;
-
(xviii)
-
whether
and under what circumstances the Company will pay Additional Amounts (defined below under "Additional Amounts") on the Debt Securities of such
series in respect of certain taxes (and the terms of any such payment) and, if so, whether the Company will have the option to redeem the Debt Securities of such series rather than pay the
Additional Amounts (and the terms of any such option);
-
(xix)
-
whether
the payment of the Debt Securities will be guaranteed by any other person; and
-
(xx)
-
if
other than denominations of US$2,000 and any integral multiple of US$1,000 in excess thereof, the denominations in which any securities of the series
shall be issuable.
11
Table of Contents
Unless otherwise indicated in the applicable Prospectus Supplement, the U.S. Trust Indenture does not afford holders of the Debt Securities the right to
tender such Debt Securities to the Company in the event that the Company has a change in control.
Debt
Securities issued under the U.S. Trust Indenture may be issued bearing no interest or at a discount below their stated principal amount. The Canadian and U.S. federal
income tax consequences and other special considerations applicable to any such discounted Debt Securities or other Debt Securities offered and sold at par which are treated as having been issued at a
discount for Canadian and/or U.S. federal income tax purposes will be described in the Prospectus Supplement relating to the Debt Securities.
Payment
Unless otherwise specified in the applicable Prospectus Supplement, payment of principal of (and premium, if any on) Debt
Securities will be made in the designated currency against surrender of such Debt Securities at the place or places specified in the applicable Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement related thereto, payment of any instalment of interest on Debt Securities will be made to the Person (as defined under " Certain Definitions"
below) in whose name such Debt Security is registered at the close of business on the record date for such interest and may be made by electronic funds transfer.
Additional Amounts
Unless otherwise specified in the applicable Prospectus Supplement, all payments made by the Company under or with respect to the Debt
Securities of each series issued under the U.S. Trust Indenture will be made free and clear of and without withholding or deduction for or on account of any present or future tax, duty, levy,
impost, assessment or other governmental charge imposed or levied by or on behalf of the Government of Canada or of any province or territory thereof or therein or by any authority or agency thereof
or therein having power to tax (collectively, "Taxes") unless the Company is required to withhold or deduct Taxes by law or by the interpretation or administration thereof by the relevant government
authority or agency. For each series of Debt Securities, if the Company is so required to withhold or deduct any amount for or on account of Taxes from any payment made under or with respect to such
series of Debt Securities, the Company will pay such additional amounts ("Additional Amounts") as may be necessary so that the net amount received by each applicable holder of Debt Securities or
beneficial owner (including Additional Amounts) after such withholding or deduction will not be less than the amount the applicable holder or beneficial owner would have received if such Taxes had not
been withheld or deducted; provided that no Additional Amounts will be payable with respect to:
-
-
any payment to a holder of Debt Securities or beneficial owner who is liable for such Taxes in respect of such Debt
Security (1) by reason of such holder of Debt Securities or beneficial owner being a person with whom the Company is not dealing at arm's length for the purposes of the Income Tax Act
(Canada) (the "Tax Act") or (2) by reason of the existence of any present or former connection between such holder of Debt Securities or beneficial owner (or between a
fiduciary, settlor, beneficiary, member or shareholder of, or possessor of power over, such holder of Debt Securities or beneficial owner, if such holder of Debt Securities or beneficial owner is an
estate, trust, partnership, limited liability company or corporation) and Canada or any province or territory thereof or therein or agency thereof or therein other than the mere acquisition, holding,
use or ownership or deemed holding, use or ownership, or receiving payments or enforcing any rights in respect of such Debt Security as a non-resident or deemed non-resident of Canada or any province
or territory thereof or therein or agency thereof or therein;
-
-
any payment to a holder of Debt Securities or beneficial owner who is a "specified shareholder" of the Company or who does
not deal at arm's length with a "specified shareholder" of the Company as defined in subsection 18(5) of the Tax Act;
-
-
any Debt Security presented for payment more than 30 days after the later of (1) the date on which such
payment first becomes due or (2) if the full amount of the monies payable has not been paid to the holders of Debt Securities on or prior to such date, the date on which the full amount of such
monies has been paid to the holders of Debt Securities, except to the extent that the holder thereof would have been entitled to such Additional Amounts on presenting the same for payment on the last
day of such period of 30 days;
12
Table of Contents
-
-
any estate, inheritance, gift, sales, transfer, excise or personal property tax or any similar tax;
-
-
any Taxes imposed as a result of the failure of a holder of Debt Securities or beneficial owner to comply with
certification, identification, declaration or similar reporting requirements concerning the nationality, residence, identity or connection with Canada or any province or territory thereof or therein
or agency thereof or therein of the holder of Debt Securities or beneficial owner of such Debt Security, if such compliance is required by statute or by regulation, as a precondition to the reduction
of, or exemption from, such Taxes;
-
-
any Taxes which are payable otherwise than by withholding or deduction from any payment made under or with respect to the
Debt Securities; or
-
-
any combination of the above items,
nor
will such Additional Amounts be paid with respect to any payment on any Debt Security to a holder of Debt Securities or beneficial owner who is a fiduciary or partnership or other
than the sole beneficial owner of such Debt Security to the extent that a beneficiary or settlor with respect to such fiduciary, or a member of such partnership or a beneficial owner thereof would not
have been entitled to receive a payment of such
Additional Amounts had such beneficiary, settlor, member or beneficial owner received directly its beneficial or distributive share of such payment.
Where
Tax is payable pursuant to Section 803 of the Income Tax Regulations by a holder of Debt Securities or beneficial owner of the Debt Securities in respect of any amount
payable under the Debt Securities to the holder of Debt Securities (other than by reason of a transfer of the Debt Securities to a person resident in Canada with whom the transferor does not deal at
arm's length for the purposes of the Tax Act), but no Additional Amount is paid in respect of such Tax, the Company will pay to the holder of Debt Securities an amount equal to such Tax within
45 days after receiving from the holder of Debt Securities a notice containing reasonable particulars of the Tax so payable, provided such holder of Debt Securities or beneficial owner would
have been entitled to receive Additional Amounts on account of such Tax but for the fact that it is payable otherwise than by deduction or withholding from payments made under or with respect to the
Debt Securities.
Whenever
in the U.S. Trust Indenture or in any Debt Security there is mention, in any context, of the payment of principal of, or premium, interest or any other amount on any Debt
Security, such mention shall be deemed to include mention of the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
The
obligation to pay Additional Amounts will survive any termination or discharge of the U.S. Trust Indenture or the redemption, repayment or purchase of the Debt Securities.
Tax Redemption
Unless otherwise specified in the applicable Prospectus Supplement, the Debt Securities of each series issued under the
U.S. Trust Indenture may be redeemed, in whole, but not in part, at the option of the Company at any time, on not fewer than 30 nor more than 60 days' prior written notice, at
100% of the outstanding principal amount, together with accrued and unpaid interest thereon to the redemption date, in the event the Company delivers to the Trustees an opinion of independent Canadian
tax counsel experienced in such matters to the effect that the Company has become or would become obligated to pay, on the next date on which any amount would be payable with respect to the applicable
series of outstanding Debt Securities any Additional Amounts (as defined herein) as a result of a change in the laws (including any regulations promulgated thereunder) of Canada, or any
province or territory thereof or therein or any agency thereof or therein having the power to tax, or any change in any official position regarding the application or interpretation of such laws or
regulations, which change is announced or becomes effective on or after the date of the original issuance of the applicable series of Debt Securities; provided that the Company determines, in its
business judgment, that the obligation to pay such Additional Amounts cannot be avoided by the use of reasonable measures available to the Company (not including substitution of the obligor
under the applicable series of Debt Securities).
13
Table of Contents
Negative Pledge
The Trust Indentures contain provisions to the effect that the Company will not, nor will it permit any Restricted Subsidiary
(as defined under " Certain Definitions" below) to, create or assume any Lien (as defined under " Certain Definitions" below) (other
than Permitted Liens (as defined herein)) upon any present or future Principal Property (as defined under " Certain Definitions" below), or any Property
(as defined under " Certain Definitions" below), which, together with any other Property subject to Liens in the same transaction or a series of related transactions,
would in the aggregate constitute a Principal Property, of the Company or any Restricted Subsidiary, to secure Indebtedness (as defined under " Certain Definitions"
below) of the Company or a Restricted Subsidiary (the "Negative Pledge") unless the Debt Securities, other than Debt Securities which by their terms do not have the benefit of the Negative
Pledge (together with, if the Company shall so determine, any other Indebtedness of the Company or any Restricted Subsidiary ranking at least equally with the Debt Securities then existing or
thereafter created), shall be concurrently secured equally and ratably with (or prior to) such other Indebtedness so long as such Lien is outstanding.
The
restrictions set forth above shall not apply to "Permitted Liens", which are defined in the Trust Indentures to include:
-
(i)
-
with
respect to any series of Debt Securities, Liens existing on the Closing Date (as defined under " Certain Definitions"
below) for such series;
-
(ii)
-
Liens
on any Property of any Person existing at the time such Person becomes a Restricted Subsidiary, or at the time such Person amalgamates or merges with
the Company or a Restricted Subsidiary, which Liens are not created in contemplation of such Person becoming a Restricted Subsidiary or effecting such amalgamation or merger;
-
(iii)
-
Liens
on any Property, including any improvements from time to time on such property, existing at the time such Property is acquired by the Company or a
Restricted Subsidiary, including any acquisition by means of amalgamation, consolidation or merger, or Liens to secure the payment of all or any part of the purchase price of such Property upon the
acquisition of such Property by the Company or a Restricted Subsidiary or to secure any Indebtedness incurred prior to, at the time of, or within 270 days after, the later of the date of
acquisition of such Property and the date such Property is placed in service, for the purpose of financing all or any part of the purchase price thereof, or Liens to secure any Indebtedness incurred
for the purpose of financing the cost to the Company or a Restricted Subsidiary of improvements to such acquired Property or to secure any indebtedness incurred for the purpose of financing all or any
part of the purchase price or the cost of construction of the Property subject to such Liens;
-
(iv)
-
Liens
securing any Indebtedness of a Restricted Subsidiary owing to the Company or to another Restricted Subsidiary;
-
(v)
-
Liens
on Property of the Company or a Restricted Subsidiary securing indebtedness or other obligations issued by Canada or the United States of
America or any province, state or any department, agency or instrumentality or political subdivision of Canada or the United States of America or any state, or by any other country or any
political subdivision of any other country, for the purpose of financing all or any part of the purchase price of, or, in the case of real property, the cost of construction on or improvement of, any
property or assets subject to the Liens, including Liens incurred in connection with pollution control, industrial revenue or similar financings;
-
(vi)
-
Liens
securing any extension, renewal or replacement (or successive extensions, renewals or replacements) in whole or in part of any Permitted Lien
pursuant to the Trust Indentures; provided, however, that such new Lien is limited to the Property which was subject to the prior Lien immediately before such extension, renewal or replacement, and
provided, further, that the principal amount of Indebtedness secured by the prior Lien immediately prior to such extension, renewal or replacement is not increased;
-
(vii)
-
any
other Liens not otherwise qualifying as a Permitted Lien provided that, at the applicable time, the aggregate principal amount of the Indebtedness
secured by all such other Liens, when added to the
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Attributable
Debt (as defined under " Certain Definitions" below) determined at such time of the then outstanding Unrestricted Sale and Lease-Back Transactions
(as defined under " Limitation on Sale and Lease-Back Transactions" below) to which the Company or a Restricted Subsidiary is a party, does not exceed 15% of the then
applicable Consolidated Net Tangible Assets (as defined under " Certain Definitions" below);
-
(viii)
-
any
interest or title of a lessor in the property subject to any capitalized lease or operating lease; and
-
(ix)
-
any
other Liens identified in the Prospectus Supplement relating to the series of Debt Securities issued.
Limitation on Sale and Lease-Back Transactions
The Trust Indentures contain provisions to the effect that neither the Company nor any Restricted Subsidiary may enter into any Sale
and Lease-Back Transaction (as defined under " Certain Definitions" below), except for:
-
(i)
-
any
Sale and Lease-Back Transaction constituting a Permitted Lien under the Trust Indentures (other than clause (vii) or (viii)) under
"Negative Pledge" above;
-
(ii)
-
any
Sale and Lease-Back Transaction that is not otherwise permitted under clause (i) above or (iii) below, and in respect of which the
Company or such Restricted Subsidiary would be entitled, in the manner described under "Negative Pledge" above, to incur Indebtedness secured by a Lien on the applicable Property at least equal in
amount to the Attributable Debt in respect of such Sale and Lease-Back Transaction without equally and ratably securing the Debt Securities (any Sale and Lease-Back Transaction entered into in
compliance with this clause (ii) being an "Unrestricted Sale and Lease-Back Transaction"); or
-
(iii)
-
any
Sale and Lease-Back Transaction if the Company or such Restricted Subsidiary shall apply or cause to be applied, in the case of such sale or transfer
for cash, an amount equal to the greater of the fair market value of the Principal Property sold or transferred and leased back pursuant to such Sale and Lease-Back Transaction or the net proceeds of
such Sale and Lease-Back Transaction and, in the case of such sale or transfer otherwise than for cash, an amount equal to the fair market value of the Principal Property sold or transferred and
leased back pursuant to such Sale and Lease-Back Transaction, to (a) the retirement (other than any mandatory retirement), within 180 days after the effective date of such Sale and
Lease-Back Transaction, of Indebtedness of the Company (which may but need not include any Debt Securities) ranking on a parity with, or prior to, such Debt Securities and owing to a Person other than
the Company or any Affiliate (as defined under " Certain Definitions" below) of the Company, or (b) the purchase, construction or improvement of real property
or personal property used by the Company or its Restricted Subsidiaries in the ordinary course of business.
Modification of the Trust Indentures
With certain exceptions, the Trust Indentures, the rights and obligations of the Company and the rights of the holders of a particular
series of Debt Securities may be modified by the Company with the consent of the holders of not less than a majority in aggregate principal amount of such series of Debt Securities or a majority in
principal amount of such series voted at a duly constituted meeting.
Under
the Canadian Trust Indenture, no such modification may be made which would: (i) reduce in any manner the amount of, or change the currency of payment of, or delay the time
of any payments (whether of principal, premium, interest or otherwise); (ii) change the definition of or the manner of calculating amounts (including any change in the applicable rate or rates
of interest) to which any holder is entitled; or (iii) reduce the above-stated percentage of Debt Securities of such series, in each case without the consent of the holder of each Debt Security
of such series so affected or the consent of 100% of the principal amount of such the Debt Securities of such series voted at a duly constituted meeting.
Under
the U.S. Trust Indenture, no such modification may be made which would: (i) change the stated maturity of the principal of (or premium, if any), or any
installment of interest, if any, on any Debt Security;
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(ii) reduce
the principal amount of (or premium, if any, or interest, if any, on) any Debt Security; (iii) reduce the amount of principal of a Debt Security payable upon
acceleration of the maturity thereof; (iv) change the place of payment; (v) change the currency of payment of principal of (or premium, if any, or interest, if any, on) any Debt
Security; (vi) impair the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security; (vii) reduce the percentage of principal amount of outstanding Debt Securities of such series, the consent of the holders of which is required for modification or
amendment of the U.S. Trust Indenture or for waiver of compliance with certain provisions of the U.S. Trust Indenture or for waiver of certain defaults; or modify any provisions of the
U.S. Trust Indenture relating to the modification and amendment of the U.S. Trust Indenture or the waiver of past defaults or covenants except as otherwise specified in the
U.S. Trust Indenture, in each case without the consent of the holder of each Debt Security of such series so affected or the consent of 100% of the principal amount of such the Debt Securities
of such series voted at a duly constituted meeting.
Events of Default
The Trust Indentures provide that an event of default with respect to any series of Debt Securities means any one of the following
events (whatever the reason for such event of default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any government
authority):
-
(i)
-
a
default in the payment by the Company of the principal of (or premium, if any, on) any Debt Securities of such series when the same becomes due and
payable at maturity, upon acceleration, redemption or otherwise, or in any obligation to repurchase Debt Securities of such series when required pursuant to the Indentures;
-
(ii)
-
a
default in the payment by the Company of interest on any Debt Securities of such series when the same becomes due and payable, and such default continues
for a period of 30 days;
-
(iii)
-
a
default by the Company in the performance of or breach of any other covenant or agreement of the Company with respect to such series of Debt Securities
and such default or breach continues for a period of 60 days after written notice to the Company by the applicable Trustee or the holders of at least 25% of the unpaid aggregate principal
amount of the outstanding Debt Securities of such series;
-
(iv)
-
if
any representation or warranty made by the Company in relation to a series of Debt Securities was incorrect in any material respect when made and, if it
is capable of being corrected with reference to the presently existing facts and circumstances, such representation or warranty is not corrected within 60 days after written notice to the
Company by the applicable Trustee or the holders of at least 25% of the unpaid aggregate principal amount of the outstanding Debt Securities of such series;
-
(v)
-
any
failure by the Company or any Subsidiary to pay when due or within any applicable grace period, any payment of Indebtedness of the Company or any
Subsidiary in an aggregate principal amount in excess of US$75 million (or its equivalent in any other currency or currencies), or any default occurs in respect of any Indebtedness of
the Company or any Subsidiary in respect of any series of Debt Securities having an aggregate principal amount exceeding US$75 million (or its equivalent in any other currency or
currencies) after the expiration of any applicable grace period, if such default has resulted in such Indebtedness in excess of such aggregate principal amount becoming due prior to its stated
maturity;
-
(vi)
-
a
distress, attachment, execution or other similar legal process for any amount exceeding US$75 million (or its equivalent in any other
currency or currencies) is levied or enforced against any part of the Property of the Company or any Subsidiary and such distress, attachment, execution or similar legal process has not been paid out,
satisfied or withdrawn within 60 days of the date of such levy or enforcement; or
-
(vii)
-
certain
events of bankruptcy, insolvency or reorganization of the Company or any Subsidiary.
Under
each of the Trust Indentures, the Company is required to file with the applicable Trustee an annual officers' certificate as to the absence of certain defaults under the applicable
Trust Indenture.
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The
Canadian Trust Indenture provides that if an event of default (other than an event of default specified in clause (vii) above in relation to the Company) shall occur and be
continuing with respect to a series of Debt Securities issued thereunder, the Canadian Trustee may in its discretion and shall upon request of the holders of not less than 25% in principal amount of
the outstanding Debt Securities of such series declare the principal of, together with accrued interest on, all Debt Securities of such series to be due and payable. In certain cases, the holders of a
majority in aggregate principal amount of such series of Debt Securities or a majority in principal amount of such series voted at a duly constituted meeting may on behalf of the holders of all such
Debt Securities waive any past default or event of default and rescind and annul any such declaration and its consequences.
The
Canadian Trust Indenture further provides that if an event of default specified in clause (vii) above in relation to the Company occurs, the principal of and any accrued
interest on the Debt Securities then outstanding shall become immediately due and payable; provided however that at any time after an automatic acceleration with respect to the Debt Securities has
been made, the holders of a majority in
aggregate principal amount of such series of Debt Securities or a majority in principal amount of such series voted at a duly constituted meeting may, under certain circumstances, rescind and annul
such acceleration and its consequences.
The
Canadian Trust Indenture contains a provision entitling the Canadian Trustee, subject to its duty during a default to act with the required standard of care, to be indemnified by the
holders of Debt Securities of such series before proceeding to exercise any right or power under the Canadian Trust Indenture at the request of such holders. The Canadian Trust Indenture provides that
no holder of Debt Securities of any series may pursue a remedy with respect to the Canadian Trust Indenture except in the case of failure of the applicable Canadian Trustee to act.
The
U.S. Trust Indenture provides that if an event of default under the U.S. Trust Indenture occurs and is continuing with respect to any series of the Debt Securities
issued thereunder, then and in every such case the Trustees or the holders of not less than 25% in aggregate principal amount of the outstanding Debt Securities of such affected series may, subject to
any subordination provisions thereof, declare the entire principal amount (or, if the Debt Securities of that series are original issue discount Debt Securities, such portion of the principal amount
as may be specified in the terms of that series) of all Debt Securities of such series and all accrued and unpaid interest thereon to be immediately due and payable. However, at any time after a
declaration of acceleration with respect to any series of the Debt Securities has been made, but before a judgment or decree for payment of the money due has been obtained, the holders of a majority
in principal amount of the outstanding Debt Securities of that series, by written notice to the Company and the Trustees under certain circumstances, may rescind and annul such acceleration.
With
respect to Debt Securities issued under the U.S. Trust Indenture, reference is made to the applicable Prospectus Supplement or supplements relating to each series of the Debt
Securities which are original issue discount Debt Securities for the particular provisions relating to acceleration of the maturity of a portion of the principal amount of such original issue discount
securities upon the occurrence of any event of default and the continuation thereof.
Defeasance
Defeasance of Certain Obligations under the Canadian Trust Indenture
If the supplement to the Canadian Trust Indenture so provides, the Company may elect, with respect to any series of Debt Securities,
either to be (a) discharged from its obligations in respect of such Debt Securities, or (b) released from its obligations under positive and negative covenants (other than its covenant
to maintain its existence and pay the principal, premium, interest and other amounts on such Debt Securities) and the occurrence of certain events will be deemed not to be or result in a default
or event of default. Following such election, the Company will be so discharged or released, provided:
-
(i)
-
the
Company has, at least 91 days prior to such discharge becoming effective, irrevocably deposited with the Canadian Trustee, as specific security
pledged for, and dedicated solely to, the due payment and ultimate satisfaction of all of its obligations under the Canadian Trust Indenture with respect to the
17
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Debt
Securities of the series affected, and free and clear of any Lien, (a) funds in the currency or currencies in which such Debt Securities are payable, and/or (b) an amount of direct
obligations of, or obligations the payment of principal of and interest, if any, on which are fully guaranteed by, the government that issued the currency or currencies in which Debt Securities of
such series are payable, and that are not subject to prepayment, redemption or call, as will together with the predetermined and certain income to accrue thereon without consideration of any
reinvestment thereof, be sufficient (in the case of such obligations, through the payment of interest and principal thereunder) to pay (x) the principal of (and premium, if any)
and interest and other amounts on the outstanding Debt Securities of the particular series on their stated due dates or maturity, as the case may be, and (y) any mandatory prepayments on the
day on which such prepayments are due and payable;
-
(ii)
-
the
Company shall have delivered to the Canadian Trustee an opinion of counsel to the effect that the holders of the Debt Securities affected will not
recognize income, gain or loss for Canadian federal income tax purposes as a result of such defeasance in respect of the Company's obligations and will be subject to Canadian federal income tax on the
same basis as if such defeasance had not occurred;
-
(iii)
-
such
defeasance will not result in a breach or violation of, or constitute a default under, the Canadian Trust Indenture or any other material agreement
or instrument to which the Company is a party or by which it is bound;
-
(iv)
-
no
event of default with respect to the Debt Securities of such series or event that, with notice or lapse of time, would become such an event of default
shall have occurred and be continuing on the date of such deposit;
-
(v)
-
if
the Debt Securities affected are listed on any stock exchange or securities exchange, the Company shall have delivered to the Canadian Trustee an opinion
of counsel to the effect that such deposit and defeasance will not cause such Debt Securities to be delisted; and
-
(vi)
-
the
Company shall have delivered to the Canadian Trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent to
the defeasance have been satisfied.
Defeasance of Certain Obligations under the U.S. Trust Indenture
Unless otherwise specified in the applicable Prospectus Supplement, the U.S. Trust Indenture provides that, at the Company's
option, the Company will be discharged from any and all obligations in respect of the outstanding Debt Securities of any series upon irrevocable deposit with the Trustees, in trust, of money and/or
Government Obligations (as defined under " Certain Definitions" below) which will provide money in an amount sufficient in the opinion of a nationally recognized firm
of independent chartered professional accountants (as evidenced by an officer's certificate delivered to the Trustees) to pay the principal of (and premium, if any, and each instalment
of interest, if any, and, to the extent applicable, any Additional Amounts on) the outstanding Debt Securities of such series (hereinafter in this section referred to as a "defeasance") (except with
respect to the authentication, transfer, exchange or replacement of the Debt Securities or the maintenance of a place of payment and certain other obligations set forth in the U.S. Trust
Indenture). Such trust may only be established if among other things:
-
-
the Company has delivered to the Trustees an opinion of counsel in the United States stating that (i) the
Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of execution of the U.S. Trust Indenture, there has been a change
in the applicable U.S. federal income tax law, in either case to the effect that the holders of the outstanding Debt Securities of such series will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred;
-
-
the Company has delivered to the Trustees an opinion of counsel in Canada or a ruling from the Canada Revenue Agency
(or successor agency) to the effect that the holders of the outstanding Debt Securities of such series should not recognize income, gain or loss for Canadian federal or provincial income tax
purposes as a result of such defeasance and should be subject to Canadian federal or provincial income tax on the same amounts, in the same manner and at the same times as would have been the case had
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The
Company may exercise its defeasance option notwithstanding the Company's prior exercise of its covenant defeasance option described in the following paragraph if the Company meets
the conditions described in the preceding sentence at the time it exercises the defeasance option.
The
U.S. Trust Indenture provides that, at the Company's option, unless and until the Company has exercised its defeasance option described in the preceding paragraph, the Company
may omit to comply with the "Negative Pledge" covenant, certain aspects of the "Amalgamation, Consolidation, Conveyance, Transfer or Lease" covenant and certain other covenants and such omission shall
not be deemed to be an event of default under the U.S. Trust Indenture and the outstanding Debt Securities upon irrevocable deposit with the Trustees, in trust, of money and/or government
securities which will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent chartered professional accountants (as evidenced by an officer's
certificate delivered to the Trustees) to pay the principal of (and premium, if any, and each installment of interest, if any, and, to the extent applicable, any Additional Amounts on) the
outstanding Debt Securities (hereinafter in this section referred to as "covenant defeasance"). If the Company exercises its covenant defeasance option, the obligations under the U.S. Trust
Indenture other than
with respect to such covenants and the events of default other than with respect to such covenants shall remain in full force and effect. Such trust may only be established if, among
other things:
-
-
the Company has delivered to the Trustees an opinion of counsel in the United States to the effect that the holders
of the outstanding Debt Securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to
U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred;
-
-
the Company has delivered to the Trustees an opinion of counsel in Canada or a ruling from the Canada Revenue Agency to
the effect that the holders of the outstanding Debt Securities should not recognize income, gain or loss for Canadian federal or provincial income or other tax purposes as a result of such covenant
defeasance and should be subject to Canadian federal or provincial income and other tax on the same amounts, in the same manner and at the same times as would have been the case had such covenant
defeasance not occurred (and for the purposes of such opinion, such Canadian counsel shall assume that holders of the outstanding Debt Securities include holders who are not resident
in Canada);
-
-
no event of default or event that, with the passing of time or the giving of notice, or both, shall constitute an event of
default shall have occurred and be continuing on the date of such deposit; and
-
-
the Company is not an "insolvent person" within the meaning of the
Bankruptcy and Insolvency Act
(Canada)
on the date of such deposit or at any time during the period ending on the 91st day following such deposit.
Other Defeasance Arrangements
If so described in the Prospectus Supplement related to Debt Securities of a specific series, the Company may enter into certain other
arrangements providing for the due payment and ultimate satisfaction of its obligations with respect to such series of Debt Securities by the deposit with the applicable Trustee of funds or
obligations of the type referred to under " Defeasance of Certain Obligations" under the Canadian Trust
19
Table of Contents
Indenture"
and " Defeasance of Certain Obligations under the U.S. Trust Indenture" above, as applicable. The Prospectus Supplement will more fully describe the
provisions, if any, relating thereto.
Amalgamation, Consolidation, Conveyance, Transfer or Lease
The Trust Indentures provide that the Company will not consolidate, merge or amalgamate with any other Person or effect any conveyance,
sale, transfer or lease of its Property substantially as an entirety, unless, in such case:
-
(i)
-
the
Person formed by such consolidation or amalgamation or with which the Company is merged (or the Person that leases or that acquires by
conveyance, sale or transfer the Property of the Company substantially as an entirety) (such Person being referred to as the "Successor Corporation") is a corporation organized and validly existing
under the laws of Canada or any province thereof;
-
(ii)
-
the
Successor Corporation shall expressly, by supplemental indenture, assume and become bound by the obligations of the Company under the terms of the
Canadian Indenture or U.S. Indenture, as applicable;
-
(iii)
-
after
giving effect to such transaction no default or event of default is or will be occurring under the applicable Trust Indenture or in respect of the
Debt Securities of any series issued pursuant to the applicable Trust Indenture; and
-
(iv)
-
the
Company delivers to the Trustees an officer's certificate and opinion of counsel confirming that the foregoing conditions have been met.
Governing Law
The Canadian Trust Indenture is governed by, and construed in accordance with, the laws of the Province of Ontario and the
U.S. Trust Indenture is governed by, and construed in accordance with, the laws of the State of New York.
Certain Definitions
-
(i)
-
"
Affiliate
" means, with respect to any Person, any other Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control with, such Person.
-
(ii)
-
"
Attributable Debt
" shall mean, in respect of a Sale and Lease-Back Transaction, at the time of
determination, the Capital Lease Obligations under the Capital Lease resulting from such Sale and Lease-Back Transaction as reflected on the consolidated balance sheet of the Company. Attributable
Debt may be reduced by the present value of the rental obligations, calculated on the same basis that any sublessee has for all or part of the same property.
-
(iii)
-
"
Capital Lease
" means a lease that is required to be capitalized for financial reporting purposes in
accordance with Canadian generally accepted accounting principles consistently applied.
-
(iv)
-
"
Capital Lease Obligations
" means indebtedness represented by obligations under a Capital Lease. The amount
of indebtedness will be the capitalized amount of the obligations determined in accordance with Canadian generally accepted accounting principles consistently applied.
-
(v)
-
"
Closing Date
" means the date on which the Debt Securities are issued.
-
(vi)
-
"
Consolidated Net Tangible Assets
" means the consolidated total assets of TELUS and its Subsidiaries as
reflected in TELUS' most recent consolidated balance sheet preceding the date of determination prepared in accordance with Canadian generally accepted accounting principles consistently applied, less
(a) current liabilities, excluding the amount of those which are by their terms extendable or renewable at the option of the obligor to a date more than 12 months after the date as of
which the amount is being determined and current maturities of long-term debt and Capital Lease Obligations, and (b) goodwill, tradenames, trademarks, patents, minority interests of others,
unamortized debt discount and expense and other similar intangible assets, excluding any investments in permits, licenses and the subscriber base.
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-
(vii)
-
"
Currency
" means any currency or currencies or composite currency issued by the government of one or more
countries or by any recognized confederation or association of such governments.
-
(viii)
-
"
Government Obligations
" means, unless otherwise specified with respect to any series of Securities
pursuant to the U.S. Trust Indenture, securities which are (i) direct obligations of the government which issued the Currency in which the Securities of a particular series are payable
or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the government which issued the Currency in which the Securities of such series are
payable, the payment of which is unconditionally guaranteed by such government, which, in either case, are full faith and credit obligations of such government payable in such Currency and are not
callable or redeemable at the option of the issuer thereof and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such Government Obligation or
a specific payment of interest on or principal of any such Government Obligation held by such custodian for the account of the holder of a depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest or principal of the Government Obligation evidenced by such depository receipt.
-
(ix)
-
"
Indebtedness
" means, with respect to any Person, (without duplication) (a) any liability of such
Person (1) for borrowed money, or under any reimbursement obligation relating to a letter of credit, or (2) evidenced by a bond, note, debenture or similar instrument (including a
purchase money obligation arising in connection with the acquisition of any businesses, properties or assets of any kind, other than a trade payable or a current liability arising in the ordinary
course of business), or (3) for the payment of Capital Lease Obligations; (b) any liability of others described in the preceding clause (a) that the Person has guaranteed or that
is otherwise its legal liability; (c) any amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in clauses (a)
and (b) above; and (d) in the case of any Restricted Subsidiary, the aggregate amount at which any preference shares of such Restricted Subsidiary are redeemable or retractable at the
option of the holder (excluding any such preference shares that are owned by the Company or any Restricted Subsidiary).
-
(x)
-
"
Lien
" means any mortgage, pledge, lien, security interest, charge or other encumbrance or preferential
arrangement (including any conditional sale or other title retention agreement or lease in the nature thereof other than a title retention agreement in connection with the purchase of goods in the
ordinary course of business which is outstanding for not more than 90 days).
-
(xi)
-
"
Person
" means any natural person, corporation, firm, partnership, joint venture or other unincorporated
association, trust, government or governmental authority and pronouns have a similar extended meaning.
-
(xii)
-
"
Principal Property
" means at any time any Property which has a fair market value or a book value in
excess of US$5 million (or its equivalent in any other currency or currencies).
-
(xiii)
-
"
Property
" means any asset, revenue or any other property or property right or interest, whether tangible
or intangible, real or personal, including, without limitation, any right to receive income.
-
(xiv)
-
"
Restricted Subsidiary
" means (a) TELUS Communications Inc. and (b) at any time any
other Subsidiary of TELUS, if at the end of the most recent fiscal quarter for which the Company has issued its financial statements, the total assets of such Subsidiary exceeds 10% of the
consolidated assets of TELUS and its Subsidiaries, determined in accordance with Canadian generally accepted accounting principles consistently applied, provided that Restricted Subsidiary shall not
include any Subsidiary that is principally engaged in the wireless business or TELUS Quebec Inc.
-
(xv)
-
"
Sale and Lease-Back Transaction
" means any transaction or series of related transactions pursuant to which
the Company or any Restricted Subsidiary sells or transfers any Principal Property, or any Property which together with any other Property subject to the same transaction or series of related
transactions would in the aggregate constitute a Principal Property, of the Company or such Restricted Subsidiary to any Person and leases back such Principal Property (or other Properties) by
way of a
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DESCRIPTION OF SHARE CAPITAL
General
The following sets forth the terms and provisions of the existing capital of the Company. The particular terms and provisions of the
Equity Securities offered by a Prospectus Supplement and the extent to which these general terms and provisions apply will be described in such Prospectus Supplement. The Company is authorized under
its Notice of Articles to issue up to 1,000,000,000 shares of each class of first preferred shares (the "First Preferred Shares"), second preferred shares (the "Second Preferred
Shares") and up to 2,000,000,000 Common Shares. Certain of the rights and attributes of each class are described below.
First Preferred Shares
Shares Issuable in Series
The First Preferred Shares may be issued at any time or from time to time in one or more series. Before any shares of a series are
issued, the Board of Directors of the Company shall fix the number of shares that will form such series and shall, subject to the limitations set out in the articles of the Company, determine the
designation, rights, privileges, restrictions and conditions to be attached to the First Preferred Shares of such series, except that no series shall be granted the right to vote at a general meeting
of the shareholders of the Company or the right to be convertible or exchangeable for Common Shares, directly or indirectly.
Priority
The First Preferred Shares of each series shall rank on a parity with the First Preferred Shares of every other series with respect to
dividends and return of capital and shall be entitled to a preference over the Second Preferred Shares and the Common Shares and over any other shares ranking junior to the First Preferred 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 the Company, whether voluntary or involuntary, or any other
distribution of the assets of the Company among its shareholders for the purpose of winding-up its affairs.
Voting Rights
Except as required by law, holders of the First Preferred Shares as a class shall not be entitled to receive notice of, to attend or to
vote at any meeting of the shareholders of the Company, provided that the rights, privileges, restrictions and conditions attached to the First Preferred Shares as a class may be added to, changed or
removed only with the approval of the holders of the First Preferred Shares given in such manner as may then be required by law, subject to a minimum requirement that such approval be given by
resolution signed by the holders of not less than two-thirds of the First Preferred Shares then outstanding, or passed by an affirmative vote of at least two-thirds of the votes cast at a meeting of
the holders of the First Preferred Shares duly called for that purpose.
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Second Preferred Shares
Shares Issuable in Series
The Second Preferred Shares may be issued at any time or from time to time in one or more series. Before any shares of a series are
issued, the Board of Directors of the Company shall
fix the number of shares that will form such series and shall, subject to the limitations set out in the articles of the Company, determine the designation, rights, privileges, restrictions and
conditions to be attached to the Second Preferred Shares of such series, except that no series shall be granted the right to vote at a general meeting of the shareholders of the Company or the right
to be convertible or exchangeable for Common Shares, directly or indirectly.
Priority
The Second Preferred Shares of each series shall rank on a parity with the Second Preferred Shares of every other series with respect
to dividends and return of capital and shall, subject to the prior rights of the holders of the First Preferred Shares, be entitled to a preference over the Common Shares and over any other shares
ranking junior to the Second Preferred 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 the Company,
whether voluntary or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding-up its affairs.
Voting Rights
Except as required by law, holders of the Second Preferred Shares as a class shall not be entitled to receive notice of, to attend or
to vote at any meeting of the shareholders of the Company, provided that the rights, privileges, restrictions and conditions attached to the Second Preferred Shares as a class may be added to, changed
or removed only with the approval of the holders of the Second Preferred Shares given in such manner as may then be required by law, subject to a minimum requirement that such approval be given by
resolution signed by the holders of not less than two-thirds of the Second Preferred Shares then outstanding, or passed by an affirmative vote of at least two-thirds of the votes cast at a meeting of
the holders of the Second Preferred Shares duly called for that purpose.
Common Shares
Priority
The holders of Common Shares shall be entitled to participate equally with each other as to dividends and the Company shall pay
dividends thereon, as and when declared by the Board of Directors of the Company out of monies properly applicable to the payment of dividends, in amounts per share and at the same time on all such
Common Shares at the time outstanding as the Board of Directors of the Company may from time to time determine. In the event of the liquidation, dissolution or winding-up of the Company or other
distribution of assets of the Company among its shareholders for the purpose of winding-up its affairs, all the property and assets of the Company which remain after payment to the holders of any
shares ranking in priority to the Common Shares in respect of payment upon liquidation, dissolution or winding-up of all amounts attributed and properly payable to such holders of such other shares in
the event of such liquidation, dissolution or winding-up or distribution, shall be paid and distributed equally, share for share, to the holders of the Common Shares, without preference
or distinction.
Voting Rights
The holders of the Common Shares shall be entitled to receive notice of and to attend (in person or by proxy) and be heard at
all general meetings of the shareholders of the Company (other than separate meetings of the holders of shares of any other class of shares of the Company or any other series of shares of such other
class of shares) and to vote at all such general meetings with each holder of Common Shares being entitled to one vote per Common Share held at all such meetings.
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Ownership and Voting Restrictions
Non-Canadian persons shall not beneficially own or control, otherwise than by way of security only, in the aggregate more than the
Restricted Percentage (as defined below) of the issued and outstanding voting shares of the Company (the "non-Canadian share constraint"). The Restricted Percentage is the maximum
percentage of the issued and outstanding voting shares of the Company that may be beneficially owned or controlled, otherwise than by way of security only, by non-Canadian persons without rendering
any subsidiary of the Company ineligible to operate as a telecommunications common carrier pursuant to the
Telecommunications Act
, or to be granted a
licence under the
Broadcasting Act
or the
Radiocommunication Act
.
The
power of the Company to issue any voting shares and to restrict the right of any holder of voting shares of the Company to transfer or vote such voting shares is as provided in the
Telecommunications Regulations, the Broadcasting Direction and the Radiocommunication Regulations, as amended from time to time (collectively, the "Applicable Regulations") or in the articles of the
Company. The Company has the power to suspend voting rights, to refuse the transfer of shares, to redeem or purchase, or to sell or to require the sale of voting shares of the Company as provided in
the Applicable Regulations or the articles of the Company, for the purpose of ensuring that any subsidiary of the Company is not ineligible to operate as a telecommunications common carrier pursuant
to the
Telecommunications Act
, or to be granted a licence under the
Broadcasting Act
or the
Radiocommunication Act
.
In
addition to declarations which may be requested by the Company pursuant to the Applicable Regulations, the Company may request that a person who: (1) is or proposes to be a
registered holder of voting shares of the Company; (2) holds or proposes to hold or is believed by the Company to hold voting shares of the Company on behalf of another person, other than as a
registered holder; (3) subscribes for voting shares of the Company; (4) requests registration of a transfer of voting shares of the Company; (5) requests a change in registration
of voting shares of the Company; or (6) elects to convert or exchange any securities into or for voting shares of the Company, file a declaration with the Company or its transfer agent
within the time limit prescribed in the request. The person to whom a request is made pursuant to the articles of the Company shall submit the declaration in a form authorized by the Company, and
shall contain the information requested by the Company to enable the Company to determine whether the non-Canadian share constraint is being or may be contravened.
Notwithstanding
any other provision of the articles of the Company or the rules or operating procedures established pursuant to the articles of the Company, a contravention of the
non-Canadian share constraint shall have no consequences except those that are expressly provided for in the articles of the Company or the Applicable Regulations. For greater certainty but without
limiting the generality of the foregoing: (1) no transfer, issue or ownership of, and no title to, voting shares of the Company; (2) no resolution of shareholders (except to the extent
that the result thereof is affected as a result of a determination pursuant to the Applicable Regulations to suspend the voting rights of any voting shareholders); and (3) no act of the
Company, including any transfer of property to or by the Company, shall be invalid or otherwise affected by any contravention of the non-Canadian share constraint or the failure to make the adjustment
in voting as may be required or permitted pursuant to the Applicable Regulations.
In
administering the ownership restriction provisions of the articles of the Company and the Applicable Regulations, including, without limitation, in making any directors'
determination, the Company and any of its directors, officers, employees and agents may rely on, among other things, the Company's central securities register.
The
ownership restriction provisions of the articles of the Company shall cease to be binding on the Company and its shareholders upon the repeal of the Applicable Regulations, and shall
cease to be applicable and binding to the extent permitted by all of the
Telecommunications Act
, the
Radiocommunication
Act
and the
Broadcasting Act
, from time to time.
TELUS Shareholder Rights Plan
TELUS first adopted a shareholder rights plan in March 2000. In May 2010, the holders of the Common Shares and Non-Voting
Shares ratified a substantially similar shareholder rights plan. On May 9, 2013, the
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holders
of the Common Shares approved the amendment of, and reconfirmation of, the shareholder rights plan (the "Rights Plan"), which among other things, reflects the elimination of the
Non-Voting Share class from TELUS' authorized share structure, and at the annual general meeting held on May 5, 2016, the holders of the Common Shares approved the reconfirmation of the Rights
Plan. Under the Rights Plan, TELUS issued one right (a "Right") in respect of each Common Share outstanding as at such date. On May 9, 2019, the holders of the Common Shares ratified and
confirmed a new shareholder rights plan (the "New Rights Plan"). The terms of the New Rights Plan are substantially similar to the terms of the Rights Plan and rights plans adopted recently by other
Canadian issuers. The primary substantive differences between the New Rights Plan and the Rights Plan are to reflect changes to the take-over bid regime that were adopted in 2016 by the Canadian
Securities Administrators, including to amend the definition of a Permitted Bid to provide that it must be outstanding for a minimum period of 105 days or such shorter period (determined in
accordance with specific provisions of Canadian securities laws) that a take-over bid must remain open for deposits of securities. The New Rights Plan has a term of nine years subject to approval of
its continuance by the shareholders of the Company at the annual meetings of the Company in 2022 and 2025. The Rights will separate from the Common Shares and will be exercisable ten trading days
after a person has acquired, or commences to acquire, 20% or more of the Common Shares, other than by acquisition pursuant to a takeover bid permitted by the New Rights Plan (a "Permitted
Bid"). The acquisition by any person (an "Acquiring Person") of more than 20% of the Voting Shares (as defined in the New Rights Plan), other than by way of a Permitted Bid, is referred
to as a "Flip-in Event". Any Rights held by an Acquiring Person will become void upon the occurrence of a Flip-in Event. Ten trading days after the occurrence of the Flip-in Event, each Right (other
than those held by the Acquiring Person), will permit the purchase of $320 worth of Common Shares for $160 (i.e. at a 50% discount).
DESCRIPTION OF WARRANTS
This section describes the general terms that will apply to any Warrants for the purchase of Equity Securities (the "Equity
Warrants") or for the purchase of Debt Securities (the "Debt Warrants").
Warrants
may be offered separately or together with Equity Securities or Debt Securities, as the case may be. Each series of Warrants will be issued under a separate Warrant agreement to
be entered into between
the Company and one or more banks or trust companies acting as Warrant agent. The applicable Prospectus Supplement will include details of the Warrant agreements covering the Warrants being offered.
The Warrant agent will act solely as the agent of the Company and will not assume a relationship of agency with any holders of Warrant certificates or beneficial owners of Warrants. The specific terms
of the Warrants, and the extent to which the general terms described in this section apply to those Warrants, will be set forth in the applicable Prospectus Supplement.
Original
purchasers of Equity Warrants or Debt Warrants (if offered separately) will be granted a contractual right of rescission against the Company in respect of the conversion,
exchange or exercise of such Equity Warrant or Debt Warrant. The contractual right of rescission will entitle such original purchasers to receive, in addition to the amount paid on the original
purchase of the Warrants, the amount paid upon conversion, exchange or exercise, upon surrender of the underlying securities gained thereby, in the event that this Prospectus (as supplemented
or amended) contains a misrepresentation, provided that: (i) the conversion, exchange or exercise takes place within 180 days of the date of the purchase of the convertible, exchangeable
or exercisable security under this Prospectus; and (ii) the right of rescission is exercised within 180 days of the date of the purchase of the convertible, exchangeable or exercisable
security under this Prospectus. This contractual right of rescission will be consistent with the statutory right of rescission described under section 131 of the
Securities Act
(British Columbia),
and is in addition to any other right or remedy available to original purchasers under section 131 of the
Securities Act
(British Columbia) or otherwise at law.
In
an offering of Warrants, investors are cautioned that the statutory right of action for damages for a misrepresentation contained in the prospectus is limited, in certain provincial
securities legislation, to the price at which the Warrant is offered to the public under the prospectus offering. This means that, under the securities legislation of certain provinces, if the
purchaser pays additional amounts upon conversion, exchange or exercise of the security, those amounts many not be recoverable under the statutory right of action for damages that applies in those
provinces. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province for the particulars of this right of action for damages and consult with a
legal adviser.
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Table of Contents
Equity Warrants
The particular terms of each issue of Equity Warrants will be described in the related Prospectus Supplement. This description will
include, where applicable:
-
(i)
-
the
designation and aggregate number of Equity Warrants;
-
(ii)
-
the
price at which the Equity Warrants will be offered;
-
(iii)
-
the
currency or currencies in which the Equity Warrants will be offered;
-
(iv)
-
the
designation and terms of the Equity Securities purchasable upon exercise of the Equity Warrants;
-
(v)
-
the
date on which the right to exercise the Equity Warrants will commence and the date on which the right will expire;
-
(vi)
-
the
number of Equity Securities that may be purchased upon exercise of each Equity Warrant and the price at which and currency or currencies in which that
amount of securities may be purchased upon exercise of each Equity Warrant;
-
(vii)
-
the
designation and terms of any securities with which the Equity Warrants will be offered, if any, and the number of the Equity Warrants that will be
offered with each security;
-
(viii)
-
the
date or dates, if any, on or after which the Equity Warrants and the related securities will be transferable separately;
-
(ix)
-
whether
the Equity Warrants are subject to redemption or call and, if so, the terms of such redemption or call provisions;
-
(x)
-
material
United States and Canadian tax consequences of owning the Equity Warrants; and
-
(xi)
-
any
other material terms or conditions of the Equity Warrants.
Debt Warrants
The particular terms of each issue of Debt Warrants will be described in the related Prospectus Supplement. This description will
include, where applicable:
-
(i)
-
the
designation and aggregate number of Debt Warrants;
-
(ii)
-
the
price at which the Debt Warrants will be offered;
-
(iii)
-
the
currency or currencies in which the Debt Warrants will be offered;
-
(iv)
-
the
aggregate principal amount, currency or currencies, denominations and terms of the series of Debt Securities that may be purchased upon exercise of the
Debt Warrants;
-
(v)
-
the
designation and terms of any securities with which the Debt Warrants will be offered, if any, and the number of the Debt Warrants that will be offered
with each security;
-
(vi)
-
the
date or dates, if any, on or after which the Debt Warrants and the related securities will be transferable separately;
-
(vii)
-
the
principal amount of Debt Securities that may be purchased upon exercise of each Debt Warrant and the price at which and currency or currencies in
which that principal amount of securities may be purchased upon exercise of each Debt Warrant;
-
(viii)
-
the
date on which the right to exercise the Debt Warrants will commence and the date on which the right will expire;
-
(ix)
-
the
minimum or maximum amount of Debt Warrants that may be exercised at any one time;
-
(x)
-
whether
the Debt Warrants will be subject to redemption or call, and, if so, the terms of such redemption or call provisions;
-
(xi)
-
material
United States and Canadian tax consequences of owning the Debt Warrants; and
-
(xii)
-
any
other material terms or conditions of the Debt Warrants.
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Table of Contents
DESCRIPTION OF SHARE PURCHASE CONTRACTS
AND SHARE PURCHASE OR EQUITY UNITS
The Company may issue share purchase contracts, including contracts obligating holders to purchase from the Company, and the Company to
sell to the holders, a specified number of Equity Securities, at a future date or dates, or similar contracts issued on a "prepaid" basis (in each case, "Share Purchase Contracts"). The price
per Equity Security and the number of Equity Securities may be fixed at the time the Share Purchase Contracts are issued or may be determined by reference to a specific formula set forth in the Share
Purchase Contracts. The Share Purchase Contracts will
require either the share purchase price be paid at the time the Share Purchase Contracts are issued or that payment be made at a specified future date. The Share Purchase Contracts may be issued
separately or as part of units consisting of a Share Purchase Contract and Debt Securities or obligations of third parties (including U.S. treasury securities) (the "Share Purchase or
Equity Units"), and may or may not serve as collateral for a holder's obligations. The Share Purchase Contracts may require holders to secure their obligations thereunder in a specified manner. The
Share Purchase Contracts also may require the Company to make periodic payments to the holders of the Share Purchase Contracts or vice versa, and such payments may be unsecured or refunded on
some basis.
The
applicable Prospectus Supplement will describe the terms of the Share Purchase Contracts or Share Purchase or Equity Units. The description in the Prospectus Supplement will not
necessarily be complete, and reference will be made to the Share Purchase Contracts, and, if applicable, collateral, depositary or custodial arrangements, relating to the Share Purchase Contracts or
Share Purchase or Equity Units. Material United States and Canadian federal income tax considerations applicable to the holders of the Share Purchase or Equity Units and the Share Purchase
Contracts will also be discussed in the applicable Prospectus Supplement.
Original
purchasers of Share Purchase Contracts or Share Purchase or Equity Units will be granted a contractual right of rescission against the Company in respect of the conversion,
exchange or exercise of such Share Purchase Contract or Share Purchase or Equity Unit. The contractual right of rescission will entitle such original purchasers to receive, in addition to the amount
paid on the original purchase of the Share Purchase Contracts or Share Purchase or Equity Units, the amount paid upon conversion, exchange or exercise, upon surrender of the underlying securities
gained thereby, in the event that this Prospectus (as supplemented or amended) contains a misrepresentation, provided that: (i) the conversion, exchange or exercise takes place within
180 days of the date of the purchase of the convertible, exchangeable or exercisable security under this Prospectus; and (ii) the right of rescission is exercised within 180 days
of the date of the purchase of the convertible, exchangeable or exercisable security under this Prospectus. This contractual right of rescission will be consistent with the statutory right of
rescission described under section 131 of the
Securities Act
(British Columbia), and is in addition to any other right or remedy available to
original purchasers under section 131 of the
Securities Act
(British Columbia) or otherwise at law.
In
an offering of Share Purchase Contracts or Share Purchase or Equity Units, investors are cautioned that the statutory right of action for damages for a misrepresentation contained in
the prospectus is limited, in certain provincial securities legislation, to the price at which the Share Purchase Contracts or Share Purchase or Equity Units are offered to the public under the
prospectus offering. This means that, under the securities legislation of certain provinces, if the purchaser pays additional amounts upon conversion, exchange or exercise of the security, those
amounts many not be recoverable under the statutory right of action for damages that applies in those provinces. The purchaser should refer to any applicable provisions of the securities legislation
of the purchaser's province for the particulars of this right of action for damages and consult with a legal adviser.
DESCRIPTION OF SUBSCRIPTION RECEIPTS
TELUS may issue Subscription Receipts that entitle the holder to receive upon satisfaction of certain release conditions, and for no
additional consideration, Debt Securities, Equity Securities, Warrants, Share Purchase Contracts or Share Purchase or Equity Units or any combination thereof. The Subscription Receipts may be offered
separately or together with other Securities, and Subscription Receipts sold with other Securities may be attached to or separate from the other Securities.
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Table of Contents
The
Subscription Receipts will be issued under one or more subscription receipt agreements that TELUS will enter into with one or more escrow agents. If underwriters or agents are
involved in the sale of Subscription Receipts, one or more of such underwriters or agents may also be parties to the subscription receipt agreement governing those Subscription Receipts. The relevant
subscription receipt agreement will establish the terms of the Subscription Receipts. Under the subscription receipt agreement, original purchasers of Subscription Receipts will be granted a
contractual right of rescission against the Company in respect of the conversion, exchange or exercise of such Subscription Receipts. The contractual right of rescission will entitle such original
purchasers to receive, in addition to the amount paid on the original purchase of the Subscription Receipts, the amount paid for the Subscription Receipts, upon surrender of the underlying securities
gained thereby, in the event that this Prospectus (as supplemented or amended) contains a misrepresentation, provided that: (i) the conversion, exchange or exercise takes place within
180 days of the date of the purchase of the convertible, exchangeable or exercisable security under this Prospectus; and (ii) the right of rescission is exercised within 180 days
of the date of the purchase of the convertible, exchangeable or exercisable security under this Prospectus. This contractual right of rescission will be consistent with the statutory right of
rescission described under section 131 of the
Securities Act
(British Columbia), and is in addition to any other right or remedy available to
original purchasers under section 131 of the
Securities Act
(British Columbia) or otherwise at law.
The
particular terms and provisions of any Subscription Receipts offered by TELUS, and the extent to which the general terms and provisions described in this section apply to those
Subscription Receipts, will be set out in the applicable Prospectus Supplement. All such terms will comply with any applicable requirements of the TSX relating to Subscription Receipts. The Prospectus
Supplement will include some or all of the following:
-
(i)
-
the
number of Subscription Receipts offered;
-
(ii)
-
the
price at which the Subscription Receipts will be offered;
-
(iii)
-
the
designation, number and terms, as applicable, of the Debt Securities, Equity Securities, Warrants, Share Purchase Contracts or Share Purchase or
Equity Units to be received by holders of Subscription Receipts upon satisfaction of the release conditions, and the anti-dilution provisions that will result in the adjustment of
those numbers;
-
(iv)
-
the
release conditions that must be met in order for holders of Subscription Receipts to receive for no additional consideration, Debt Securities, Equity
Securities, Warrants, Share Purchase Contracts or Share Purchase or Equity Units, as applicable;
-
(v)
-
the
procedure for the issuance and delivery of Debt Securities, Equity Securities, Warrants, Share Purchase Contracts or Share Purchase or Equity Units, as
applicable, to holders of Subscription Receipts upon satisfaction of the release conditions;
-
(vi)
-
whether
any payments will be made to holders of Subscription Receipts upon delivery of the Debt Securities, Equity Securities, Warrants, Share Purchase
Contracts or Share Purchase or Equity Units, as applicable, upon satisfaction of the release conditions;
-
(vii)
-
the
terms and conditions under which the escrow agent will hold in escrow all or a portion of the proceeds from the sale of the Subscription Receipts
together with any interest income earned thereon (collectively, the "Escrowed Funds"), pending satisfaction of the release conditions;
-
(viii)
-
the
terms and conditions under which the escrow agent will hold the Debt Securities, Equity Securities, Warrants, Share Purchase Contracts or Share
Purchase or Equity Units, as applicable, pending the satisfaction of the release conditions;
-
(ix)
-
the
terms and conditions under which the escrow agent will release all or a portion of the Escrowed Funds to TELUS upon satisfaction of the release
conditions;
-
(x)
-
if
the Subscription Receipts are sold to or through underwriters or agents, the terms and conditions under which the escrow agent will release a portion of
the Escrowed Funds to such underwriters or agents in payment of all or a portion of their fees or commission in connection with the sale of the Subscription Receipts;
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Table of Contents
-
(xi)
-
procedures
for the refund by the escrow agent to holders of Subscription Receipts of all or a portion of the subscription price for their Subscription
Receipts, plus any pro rata entitlement to interest earned or income generated on such amount, if the release conditions are not satisfied;
-
(xii)
-
any
entitlement of TELUS to purchase the Subscription Receipts in the open market by private agreement or otherwise;
-
(xiii)
-
whether
TELUS will issue the Subscription Receipts as global securities and, if so, who the depository will be;
-
(xiv)
-
provisions
as to modification, amendment or variation of the subscription receipt agreement or any rights or terms attaching to the Subscription Receipts;
-
(xv)
-
material
Canadian tax consequences of owning Subscription Receipts; and
-
(xvi)
-
any
other material terms, preferences, rights or limitations of, or restrictions on, the Subscription Receipts.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Securities will be issued in fully registered form without coupons attached in either global or definitive form and in
denominations and integral multiples as set out in the applicable Prospectus Supplement (unless otherwise provided with respect to a particular series of Debt Securities pursuant to the provisions of
the applicable Trust Indenture, as supplemented by a supplemental indenture). Other than in the case of book-entry only securities, Securities may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) in the city specified for such purpose at the office of the registrar or transfer agent designated by the Company for such purpose with respect to any
issue of Securities referred to in the Prospectus Supplement. No service charge will be made for any transfer, conversion or exchange of the Securities but the Company may require payment of a sum to
cover any transfer tax or other governmental charge payable in connection therewith. Such transfer, conversion or exchange will be effected upon such registrar or transfer agent being satisfied with
the documents of title and the identity of the Person making the request. If a Prospectus Supplement refers to any registrar or transfer agent designated by the Company with respect to any issue of
Securities, the Company may at any time rescind the designation of any such registrar or transfer agent and appoint another in its place or approve any change in the location through which such
registrar or transfer agent acts.
In
the case of book-entry only securities, a global certificate or certificates representing the Securities will be held by a designated depository for its participants. The Securities
must be purchased or transferred through such participants, which includes securities brokers and dealers, banks and trust companies. The depository will establish and maintain book-entry accounts for
its participants acting on behalf of holders of the Securities. The interests of such holders of Securities will be represented by entries in the records maintained by the participants. Holders of
Securities issued in book-entry only form will not be entitled to receive a certificate or other instrument evidencing their ownership thereof, except in limited circumstances. Each holder will
receive a customer confirmation of purchase from the participants from which the Securities are purchased in accordance with the practices and procedures of that participant.
RISK FACTORS
Prospective investors in the Securities should consider carefully the matters set forth in the section entitled "Risks and risk
management" in Management's Discussion and Analysis of financial results in respect of the Company's most recent annual financial statements and in Management's Discussion and Analysis of financial
results in respect of the Company's interim financial statements filed thereafter, each of which is deemed to be incorporated by reference in this Prospectus.
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Table of Contents
PLAN OF DISTRIBUTION
The Company may sell the Securities to or through underwriters or dealers, and also may sell Securities to one or more other purchasers
directly or through agents. Each Prospectus Supplement will set forth the terms of the offering, including the name or names of any underwriters or agents, the purchase price or prices of the
Securities and the proceeds to the Company from the sale of the Securities. The sale of Common Shares may be effected from time to time in one or more transactions at non-fixed prices pursuant to
transactions that are deemed to be "at-the-market distributions", including sales made directly on the TSX or NYSE or other existing trading markets for the Common Shares, and as set forth in a
Prospectus Supplement for such purpose.
The
Securities may be sold, from time to time in one or more transactions at a fixed price or prices which may be changed or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
Underwriters,
dealers and agents who participate in the distribution of the Securities may be entitled under agreements to be entered into with the Company to indemnification by the
Company against certain liabilities, including liabilities under securities legislation, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make
in respect thereof. Such underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, the Company in the ordinary course of business.
In
connection with any offering of Securities, except as otherwise set out in a Prospectus Supplement relating to a particular offering of Securities, the underwriters or agents may,
subject to applicable law, over-allot or effect transactions which stabilize or maintain the market price of the Securities offered at a level above that which might otherwise prevail in the open
market. Such transactions, if commenced, may be discontinued at any time.
LEGAL MATTERS
Certain legal matters in connection with any offering hereunder will be passed upon by Norton Rose Fulbright Canada LLP,
Toronto, Ontario and by Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, New York for the Company.
EXPERT
The auditor for the Company is Deloitte LLP, Independent Registered Public Accounting Firm, Vancouver, British Columbia.
Deloitte LLP is independent within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of British Columbia.
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT
The following documents have been or will be filed with the SEC as part of the Registration Statement of which this Prospectus
forms a part: the documents referred to under "Documents Incorporated by Reference"; consent of Deloitte LLP; powers of attorney from directors and officers of the Company; the Canadian
Indenture; the U.S. Indenture; and the statement of eligibility of the U.S. Trustee on Form T-1. The Form F-X of the Company and the Form F-X of Computershare Trust
Company of Canada have also separately been filed with the SEC.
30
Table of Contents
PART II
INFORMATION NOT REQUIRED TO BE DELIVERED TO
OFFEREES OR PURCHASERS
Indemnification
Sections 160 to 163 of the Business Corporations Act (British Columbia) (successor to the Company Act (British Columbia))
provide as follows:
160 Subject
to section 163, a company may do one or both of the following:
(a) indemnify
an eligible party against all eligible penalties to which the eligible party is or may be liable;
(b) after
the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by an eligible party in respect of that proceeding.
161 Subject
to section 163, a company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by the eligible party
in respect of that proceeding if the eligible party
(a) has
not been reimbursed for those expenses, and
(b) is
wholly successful, on the merits or otherwise, in the outcome of the proceeding or is substantially successful on the merits in the outcome of the proceeding.
162
(1) Subject to section 163 and subsection (2) of this section, a company may pay, as they are incurred in advance of the final disposition of an eligible
proceeding, the expenses actually and reasonably incurred by an eligible party in respect of that proceeding.
(2) A
company must not make the payments referred to in subsection (1) unless the company first receives from the eligible party a written undertaking that, if it is
ultimately determined that the payment of expenses is prohibited by section 163, the eligible party will repay the amounts advanced.
163
(1) A company must not indemnify an eligible party under section 160(a) or pay the expenses of an eligible party under section 160(b), 161 or 162
if any of the following circumstances apply:
(a) if
the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the agreement to indemnify or pay expenses was made,
the company was prohibited from giving the indemnity or paying the expenses by its memorandum or articles;
(b) if
the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the time that the indemnity or payment is made, the
company is prohibited from giving the indemnity or paying the expenses by its memorandum or articles;
(c) if,
in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of the
company or the associated corporation, as the case may be;
(d) in
the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party's
conduct in respect of which the proceeding was brought was lawful.
(2) If
an eligible proceeding is brought against an eligible party by or on behalf of the company or by or on behalf of an associated corporation, the company must not do
either of the following:
(a) indemnify
the eligible party under section 160(a) in respect of the proceeding;
(b) pay
the expenses of the eligible party under section 160(b), 161 or 162 in respect of the proceeding.
II-1
Table of Contents
Article 20
of the Articles of the Registrant provides as follows:
20.1 Mandatory
Indemnification of Eligible Parties
Subject
to the Business Corporations Act, the Company must indemnify an eligible party and his or her heirs and legal personal representatives against all eligible penalties to which
such person is or may be liable, and the Company must indemnify and pay expenses in advance of the final disposition of an eligible proceeding in accordance with, and to the fullest extent and in all
circumstances permitted by, the Business Corporations Act.
20.2 Indemnification
of Other Persons
Subject
to any restrictions in the Business Corporations Act, the Company may indemnify any person.
20.3 Non-Compliance
with Business Corporations Act
The
failure of an eligible party or any other person to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under
this Part.
20.4 Company
May Purchase Insurance
Subject
to the limitations contained in the Business Corporations Act, the Company may purchase and maintain insurance for the benefit of any person referred to in this
Article 20.
To
the extent permitted by law, the Company has entered into an indemnification agreement with its directors for liabilities incurred while performing their duties. The Company also
maintains Directors' & Officers' Liability and Fiduciary Liability insurance which protect individual directors and officers and the Company against claims made, provided they acted in good
faith on behalf of the Company, subject to policy restrictions.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers or persons controlling the Registrant pursuant to
the foregoing provisions, the Registrant has been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended,
and is therefore unenforceable.
The
exhibits listed in the exhibit index, appearing elsewhere in this Registration Statement, have been filed as part of this Registration Statement.
II-2
Table of Contents
PART III
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
Item 1. Undertaking
The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission
staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to the securities registered pursuant to this Form F-10 or to transactions in said
securities.
Item 2. Consent to Service of Process
Concurrently with the initial filing of this Registration Statement on Form F-10, the Registrant filed with the Commission a
written irrevocable consent and power of attorney on Form F-X.
Concurrently
with the initial filing of this Registration Statement on Form F-10, Computershare Trust Company of Canada, as a trustee under the indentures relating to the
securities registered hereby, filed with the Commission a written irrevocable consent and power of attorney on Form F-X.
Any
change to the name or address of the agent for service of the Registrant or Computershare Trust Company of Canada will be communicated promptly to the Commission by amendment to
Form F-X referencing the file number of this Registration Statement.
III-1
Table of Contents
EXHIBIT INDEX
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Exhibit No.
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Description
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4.1
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**
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Annual Information Form of the Company, dated February 14, 2019 (incorporated by reference to Exhibit 99.3
to the Company's Form 40-F filed on February 14, 2019)
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4.2
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**
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Audited Consolidated Financial Statements of the Company, including the notes thereto, as at and for the years ended
December 31, 2018 and 2017, together with the report of the independent registered public accounting firm thereon dated February 14, 2019 (incorporated by reference to Exhibit 99.4 to the Company's Form 40-F filed on
February 14, 2019)
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4.3
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**
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Management's Discussion and Analysis of the Company for the year ended December 31, 2018 (incorporated by reference to
Exhibit 99.4 to the Company's Form 40-F filed on February 14, 2019)
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4.4
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**
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Information Circular of the Company, dated as of March 13, 2019, prepared in connection with the Company's annual
general meeting held on May 9, 2019 (incorporated by reference to Exhibit 99.1 to the Company's Form 6-K filed on April 5, 2019)
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4.5
|
**
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Unaudited Condensed Interim Consolidated Financial Statements of the Company, including the notes thereto, as at and for the
three-months ended March 31, 2019 (incorporated by reference to Exhibit 99.1 to the Company's Form 6-K filed on May 9, 2019)
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4.6
|
**
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Management's Discussion and Analysis of the Company for the three-month period ended March 31, 2019 (incorporated by
reference to Exhibit 99.2 to the Company's Form 6-K filed on May 9, 2019)
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5.1
|
*
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Consent of Deloitte LLP
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6.1
|
***
|
Powers of Attorney
|
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7.1
|
**
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Form of Canadian Indenture between the Company and Computershare Trust Company of Canada (as successor to Montreal Trust Company of Canada) (incorporated by reference to the Company's Form F-10/A filed on
May 22, 2001)
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7.2
|
**
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Indenture, dated as of September 19, 2016 among the Company, Computershare Trust Company, N.A., as U.S. Trustee,
and Computershare Trust Company of Canada, as Canadian Trustee (incorporated by reference to Exhibit 99.1 to the Company's Form 6-K filed on September 19, 2016)
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7.3
|
***
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Statement of Eligibility under the Trust Indenture Act of 1939 of Computershare Trust Company, N.A., as U.S. Trustee for
the Indenture referenced at Exhibit 7.2 above.
|
-
*
-
Filed
herewith.
-
**
-
Incorporated
by reference.
-
***
-
Previously
filed.
III-2
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form F-10 and has duly caused this Amendment No. 1 to the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Vancouver, Province of British Columbia, Country of Canada, on this 19th day of July, 2019.
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TELUS CORPORATION
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By:
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/s/ DARREN ENTWISTLE
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Name:
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Darren Entwistle
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Title:
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President and Chief Executive Officer
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By:
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/s/ DOUG FRENCH
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Name:
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Doug French
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Title:
|
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Executive Vice-President and
Chief Financial Officer
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III-3
Table of Contents
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the registration statement has been signed
by the following persons in the capacities indicated on the dates indicated.
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Name
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Title
|
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Date
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/s/ DARREN ENTWISTLE
Darren Entwistle
|
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Director, President and Chief Executive Officer (Principal Executive Officer)
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July 19, 2019
|
/s/ DOUG FRENCH
Doug French
|
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Executive Vice-President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
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July 19, 2019
|
*
R.H. (Dick) Auchinleck
|
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Chair
|
|
July 19, 2019
|
*
Raymond T. Chan
|
|
Director
|
|
July 19, 2019
|
*
Stockwell Day
|
|
Director
|
|
July 19, 2019
|
*
Lisa de Wilde
|
|
Director
|
|
July 19, 2019
|
*
Mary Jo Haddad
|
|
Director
|
|
July 19, 2019
|
*
Kathy Kinloch
|
|
Director
|
|
July 19, 2019
|
*
Christine Magee
|
|
Director
|
|
July 19, 2019
|
*
John Manley
|
|
Director
|
|
July 19, 2019
|
*
Claude Mongeau
|
|
Director
|
|
July 19, 2019
|
III-4
Table of Contents
|
|
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Name
|
|
Title
|
|
Date
|
|
|
|
|
|
*
David Mowat
|
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Director
|
|
July 19, 2019
|
*
Marc Parent
|
|
Director
|
|
July 19, 2019
|
*
Denise Pickett
|
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Director
|
|
July 19, 2019
|
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*By:
|
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/s/ ANDREA WOOD
Andrea Wood
Attorney-in-Fact
|
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|
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July 19, 2019
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III-5
Table of Contents
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the authorized representative has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, solely in its capacity as the duly authorized representative of TELUS Corporation in the
United States, in the State of Delaware, Country of the United States of America, on this 19th day of July, 2019.
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PUGLISI AND ASSOCIATES
|
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By:
|
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/s/ DONALD J. PUGLISI
|
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Name:
|
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Donald J. Puglisi
|
|
|
|
|
Title:
|
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Managing Director
|
III-6
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