3. Obligations

3.1 Obligations on all TELUS team members

TELUS team members cannot trade in securities of a Reporting Issuer while in possession of Material Information with respect to that Reporting Issuer which has not yet been generally disclosed.
TELUS team members cannot trade in securities of one of the Reporting Issuers while in possession of Material Information with respect to another Reporting Issuer which has not yet been generally disclosed and which also constitutes Material Information with respect to the first Reporting Issuer.
TELUS team members cannot trade in the securities of another public company while in possession of Material Information regarding that public company which knowledge was gained during the course of their work at TELUS, if the Material Information has not been generally disclosed to the public.
TELUS team members cannot inform other people of Material Information regarding TELUS before that Material Information has been generally disclosed, unless the TELUS team member discloses that Material Information in the "necessary course of business".
TELUS team members cannot inform other people of Material Information regarding a public company where they have gained knowledge of Material Information regarding that public company in the course of their work at TELUS before that Material Information has been generally disclosed, unless the TELUS team member discloses that Material Information in the "necessary course of business".

The "necessary course of business" exception is a limited one and exists so as not to unduly interfere with a company's ordinary business activities. The exception could cover communications that are required to be made to further the business purposes of TELUS with:

vendors, suppliers or strategic partners on issues such as sales and marketing and supply contracts;
employees, officers and board members;
lenders, legal counsel and underwriters, auditors and other professional advisors to a company;
parties to negotiations;
credit rating agencies;
labour unions and industry associations; or
government agencies.

See also the TELUS Policy on Corporate Disclosure and Confidentiality of Information for more information.

3.2 Prohibitions against short selling and certain trading

In addition to the obligations set forth in Section 3.1 above, all TELUS team members who are Insiders (as defined in section 3.3(a) below) and all TELUS team members who hold Vice-President positions in TELUS, including individuals in acting positions, shall not engage in the short selling of, or trading in puts, calls or options in respect of the securities of TELUS.

3.3 Additional Obligations on Insiders and Blacked-out Employees

Additional obligations are imposed on TELUS team members who are Insiders and Blacked-out Employees, in the manners described in this section 3.3.

Definitions
- Who is an Insider?
  The following are Insiders of TELUS Corporation:
  - directors and officers of TELUS Corporation
  - directors and officers of major subsidiaries of TELUS Corporation. A "major subsidiary" is one whose assets, on a consolidated basis with its own subsidiaries, constitute 10% or more of the consolidated assets of TELUS Corporation reported on TELUS Corporation's most recently audited balance sheet. At this time, major subsidiaries of TELUS Corporation are TELUS Communications Inc. and TELE-MOBILE Company.
  The following are Insiders of TELUS Communications Inc.:
  - directors and officers of TELUS Communications Inc.
  - directors and officers of TELE-MOBILE Company
  - directors and officers of TELUS Corporation
- Who is a Blacked-out Employee for the purposes of regularly scheduled blackout periods?
  The following are Blacked-out Employees of TELUS during regularly scheduled blackout periods:
  - All Insiders and Vice Presidents, including members in acting positions
  - All TELUS team members who receive notice from the Corporate Secretary that they are designated Blacked-out Employees during such periods.
- Who is a Blacked-out Employee for the purposes of discretionary blackout periods?
  All TELUS team members who receive notice that they are designated Blacked-out Employees during such periods.
Additional Obligations on Insiders
- Insider Reports
  Under securities laws and TELUS policy, Insiders are required to file a report (the "Insider Report") with securities regulators any time they trade in shares, debt securities, options (including the grant and exercise of options), deferred share units or restricted stock units of the Company, including certain derivative based transactions and equity monetization transactions related thereto. Examples of such derivative based transactions include total return swaps and credit default swaps. Insiders must file an Insider Report electronically through the "System for Electronic Disclosure by Insiders" ("SEDI") within 10 days after each trade.
  
  Securities legislation provides some exemptions from filing insider reports. TELUS has also obtained exemption orders that provide some relief from the insider reporting requirements with respect to trades in certain securities. Please contact the Corporate Secretary for further information on exemptions.
- Notice to Corporate Secretary
  All Insiders must give prior notice to the Corporate Secretary any time they wish to trade in any of the securities of TELUS.
Obligations on Blacked-out Employees
- During regularly scheduled blackout periods, the affected Blacked-out Employees cannot:
  - trade in any shares or debt securities of TELUS or any other Reporting Issuers;
  - exercise stock options;
  - trade in deferred share units or restricted stock units;
  - change the percentage contribution to their TELUS employee share purchase plan; and
  - change the percentage contribution to their TELUS employee share purchase plan; and
  - join or withdraw from the TELUS employee share purchase plan.
- During a discretionary blackout period, the affected Blacked-out Employees cannot
  - trade in the securities specified in the blackout notice;
  - exercise stock options;
  - trade in deferred share units or restricted stock units;
  - change the percentage contribution to their TELUS employee share purchase plan; and
  - join or withdraw from the TELUS employee share purchase plan.
  Blacked-out Employees, subject to a discretionary blackout period may, however, continue to make purchases under the TELUS employee share purchase plan.

3.4 Exceptions to trading during black-out periods

Notwithstanding the above prohibitions, in section 3.3(c), affected Blacked-out Employees may exercise options during a blackout period, but only if all of the following conditions are met:
- the options will expire during the blackout period;
- the options are in-the-money at the time of exercise;
- the Blacked-out Employee is not in possession of any Material Information that has not been generally disclosed, be it Material Information that is the cause of the blackout period or any other Material Information; and
- the Blacked-out Employee has delivered written notice to the Corporate Secretary of his or her intent to exercise options at least three business days prior to such exercise and at the same time delivers a written acknowledgement confirming that the above conditions have been met and that he or she will not trade the shares received on exercise of the options until such time that:
  - the blackout period has expired; and
  - the Blacked-out Employee is not otherwise subject to another blackout period or prohibited by law from trading in such shares.
  Please note that:
  - Blacked-out Employees may, as a result of the condition in paragraph 3.4(a)(iv) above, be prevented from trading in shares received on exercise of the options for a period that extends beyond the expiry of the blackout period during which they exercised such options; and
  - the "cashless" exercise of options is not available for options exercised pursuant to this exception.
Notwithstanding the prohibitions in section 3.3(c) imposed during a regularly scheduled blackout period, Blacked-out Employees who wish to do a cashless exercise of options at the end of a calendar year with the sale of the shares acquired on exercise of such options taking place after the calendar year end during the regularly scheduled blackout period commencing on January 1, may do so but only if all of the following conditions are met:
- the Blacked-out Employee must provide irrevocable instructions on or before the last trading day of the calendar year, to the administrator of the Company's option plan, to exercise the options and sell the shares acquired on such exercise;
- the sale of shares acquired on exercise of the options must occur on the first trading day after January 1; and
- at the time that the irrevocable instructions are given, the Blacked-out Employee must not: be in possession of any undisclosed Material Information, be otherwise subject to another trading ban, or be otherwise prohibited by law from trading in such shares.
Any shares not sold on the first trading day after January 1 may not be sold until the regularly scheduled black-out period commencing after year end has expired and the Blacked-out Employee is not otherwise prohibited by law or this Policy from selling such shares. Therefore, if the Blacked-out Employee is unable to sell all of the shares acquired on the option exercise on the first trading day, he or she will, as a result of the condition in paragraph 3.4(b)(iii) above, be required to self fund the option price of the unsold shares until such time that a sale is permitted.

3.5 Waiver

Notwithstanding any of the prohibitions contained in section 3.3, the General Counsel may, at his or her discretion, waive the prohibitions contained in section 3.3 in exceptional circumstances, provided that the TELUS team member seeking the waiver does not have any undisclosed Material Information and that making such an exception would not violate any applicable securities laws. The General Counsel will report any such waivers to the Corporate Governance Committee at the next regularly scheduled meeting of the Corporate Governance Committee.

3.6 Potential Civil and Criminal Penalties

The consequences of prohibited insider trading, tipping or a failure to file an insider report where required on a timely basis can be severe and may include dismissal, fines, and criminal sanctions.

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