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Note 25 Share capital

Note 25 Share capital

Preferred shares

BCE’s articles of amalgamation provide for an unlimited number of First Preferred Shares and Second Preferred Shares, all without par value. The terms set out in the articles authorize BCE’s directors to issue the shares in one or more series and to set the number of shares and the conditions for each series.

The following table is a summary of the principal terms of BCE’s First Preferred Shares. There were no Second Preferred Shares issued and outstanding at December 31, 2016. BCE’s articles of amalgamation, as amended, describe the terms and conditions of these shares in detail.

SERIES ANNUAL
DIVIDEND
RATE
  CONVERTIBLE
INTO
  CONVERSION DATE   REDEMPTION DATE   REDEMP-
TION PRICE
 

NUMBER OF SHARES

 

STATED CAPITAL

AUTHORIZED   ISSUED AND
OUTSTANDING
  DEC. 31,
2016
  DEC. 31,
2015
 
Q(1) floating   Series R   December 1, 2025           8,000,000        
R(2) 4.13%   Series Q   December 1, 2020   December 1, 2020   $25.00   8,000,000   8,000,000   200   200  
S floating   Series T   November 1, 2021   At any time   $25.50   8,000,000   3,513,448   88   90  
T(2) 3.019%   Series S   November 1, 2021   November 1, 2021   $25.00   8,000,000   4,486,552   112   110  
Y floating   Series Z   December 1, 2017   At any time   $25.50   10,000,000   8,772,468   219   219  
Z(2) 3.152%   Series Y   December 1, 2017   December 1, 2017   $25.00   10,000,000   1,227,532   31   31  
AA(2) 3.45%   Series AB   September 1, 2017   September 1, 2017   $25.00   20,000,000   10,144,302   259   259  
AB floating   Series AA   September 1, 2017   At any time   $25.50   20,000,000   9,855,698   251   251  
AC(2) 3.55%   Series AD   March 1, 2018   March 1, 2018   $25.00   20,000,000   5,069,935   129   129  
AD floating   Series AC   March 1, 2018   At any time   $25.50   20,000,000   14,930,065   381   381  
AE floating   Series AF   February 1, 2020   At any time   $25.50   24,000,000   9,292,133   232   232  
AF(2) 3.11%   Series AE   February 1, 2020   February 1, 2020   $25.00   24,000,000   6,707,867   168   168  
AG(2) 2.80%   Series AH   May 1, 2021   May 1, 2021   $25.00   22,000,000   4,985,351   125   271  
AH floating   Series AG   May 1, 2021   At any time   $25.50   22,000,000   9,014,649   225   79  
AI(2) 2.75%   Series AJ   August 1, 2021   August 1, 2021   $25.00   22,000,000   5,949,884   149   269  
AJ floating   Series AI   August 1, 2021   At any time   $25.50   22,000,000   8,050,116   201   81  
AK(2) 2.954%   Series AL    December 31, 2021   December 31, 2021   $25.00   25,000,000   22,745,921   569   625  
AL(3) floating   Series AK    December 31, 2021   At any time       25,000,000   2,254,079   56    
AM(2) 2.764%   Series AN   March 31, 2021   March 31, 2021   $25.00   30,000,000   9,546,615   218   263  
AN(3) floating   Series AM   March 31, 2021   At any time       30,000,000   1,953,385   45    
AO(2) 4.55%   Series AP   March 31, 2017   March 31, 2017   $25.00   30,000,000   4,600,000   118   118  
AP(4) floating   Series AO   March 31, 2022           30,000,000        
AQ(2) 4.25%   Series AR   September 30, 2018   September 30, 2018   $25.00   30,000,000   9,200,000   228   228  
AR(4) floating   Series AQ   September 30, 2023           30,000,000        
                              4,004   4,004  

 

VOTING RIGHTS

All of the issued and outstanding First Preferred Shares at December 31, 2016 are non-voting, except under special circumstances, when the holders are entitled to one vote per share.

PRIORITY AND ENTITLEMENT TO DIVIDENDS

The First Preferred Shares of all series rank on a parity with each other and in priority to all other shares of BCE with respect to payment of dividends and with respect to distribution of assets in the event of liquidation, dissolution or winding up of BCE.

Holders of Series R, T, Z, AA, AC, AF, AG, AI, AK, AM, AO and AQ First Preferred Shares are entitled to fixed cumulative quarterly dividends. The dividend rate on these shares is reset every five years, as set out in BCE’s articles of amalgamation, as amended.

Holders of Series S, Y, AB, AD, AE, AH and AJ First Preferred Shares are entitled to floating adjustable cumulative monthly dividends. The floating dividend rate on these shares is calculated every month, as set out in BCE’s articles of amalgamation, as amended.

Holders of Series AL and AN First Preferred Shares are entitled to floating cumulative quarterly dividends. The floating dividend rate on these shares is calculated every quarter, as set out in BCE’s articles of amalgamation, as amended.

Dividends on all series of First Preferred Shares are paid as and when declared by the board of directors of BCE.

CONVERSION FEATURES

All of the issued and outstanding First Preferred Shares at December 31, 2016 are convertible at the holder’s option into another associated series of First Preferred Shares on a one-for-one basis according to the terms set out in BCE’s articles of amalgamation, as amended.

CONVERSION OF FIRST PREFERRED SHARES

On December 31, 2016, 2,254,079 of BCE’s 25,000,000 fixed-rate Cumulative Redeemable First Preferred Shares, Series AK (Series AK Preferred Shares) were converted, on a one-for-one basis, into floating-rate Cumulative Redeemable First Preferred Shares, Series AL (Series AL Preferred Shares).

On November 1, 2016, 455,302 of BCE’s 4,393,775 fixed-rate Cumulative Redeemable First Preferred Shares, Series T (Series T Preferred Shares) were converted, on a one-for-one basis, into floating-rate Cumulative Redeemable First Preferred Shares, Series S (Series S Preferred Shares). In addition, on November 1, 2016, 548,079 of BCE’s 3,606,225 Series S Preferred Shares were converted, on a one-for-one basis, into Series T Preferred Shares.

On August 1, 2016, 5,081,951 of BCE’s 10,754,990 fixed-rate Cumulative Redeemable First Preferred Shares, Series AI (Series AI Preferred Shares) were converted, on a one-for-one basis, into floating-rate Cumulative Redeemable First Preferred Shares, Series AJ (Series AJ Preferred Shares). In addition, on August 1, 2016, 276,845 of BCE’s 3,245,010 Series AJ Preferred Shares were converted, on a one-for-one basis, into Series AI Preferred Shares.

On May 1, 2016, 5,884,470 of BCE’s 10,841,056 fixed-rate Cumulative Redeemable First Preferred Shares, Series AG (Series AG Preferred Shares) were converted, on a one-for-one basis, into floating-rate Cumulative Redeemable First Preferred Shares, Series AH (Series AH Preferred Shares). In addition, on May  1, 2016, 28,765  of BCE’s 3,158,944 Series AH Preferred Shares were converted, on a one-for-one basis, into Series AG Preferred Shares.

On March 31, 2016, 1,953,385 of BCE’s 11,500,000 fixed-rate Cumulative Redeemable First Preferred Shares, Series AM (Series AM Preferred Shares) were converted, on a one-for-one basis, into floating-rate Cumulative Redeemable First Preferred Shares, Series AN (Series AN Preferred Shares).

 

Common shares and Class B shares

BCE’s articles of amalgamation provide for an unlimited number of voting common shares and non-voting Class B shares, all without par value. The common shares and the Class B shares rank equally in the payment of dividends and in the distribution of assets if BCE is liquidated, dissolved or wound up, after payments due to the holders of preferred shares. No Class B shares were outstanding at December 31, 2016 and 2015.

The following table provides details about the outstanding common shares of BCE.

      2016  2015
  NOTE   NUMBER OF
SHARES
  STATED
CAPITAL
  NUMBER OF
SHARES
  STATED
CAPITAL
 
Outstanding, January 1     865,614,188   18,100   840,330,353   16,717  
Shares issued under bought deal offering         15,111,000   863  
Shares issued for the acquisition of Glentel 3       5,548,908   296  
Shares issued under employee stock option plan 26   2,236,891   104   2,289,677   96  
Shares issued under dividend reinvestment plan   688,839   38      
Shares issued under ESP     2,166,414   128   2,334,250   128  
Outstanding, December 31     870,706,332   18,370   865,614,188   18,100  

On December 11, 2015, BCE issued 15,111,000 common shares to a syndicate of underwriters at a price of $57.10 per common share, representing a discount of $0.90 or 1.6% to the November 23, 2015 announcement date closing price. We incurred $35 million ($26 million net of tax) of issuance costs which were charged to the deficit.

CONTRIBUTED SURPLUS

Contributed surplus in 2016 and 2015 include premiums in excess of par value upon the issuance of BCE common shares and share-based compensation expense net of settlements.

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