SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULES 13d-l(a) AND AMENDMENTS THERETO FILED
PURSUANT TO 13d-2(a)
(Amendment No. __) *
TELEGLOBE INC.
---------------------------
(Name of Issuer)
COMMON SHARES
--------------------------------------
(Title of Class of Securities)
87941V10
------------
(CUSIP Number)
Christopher P. Kelly, Esq.
8750 North Central Expressway, Suite 2000, Dallas, Texas 75231, (214)863-8000
-----------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
February 19, 1998
-----------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
Note. Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
NYFS05...:\41\44241\0005\2097\SCH2249N.49B
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2
SCHEDULE 13D
CUSIP No. 300903101
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON - Troutt Family Trust
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) - The Trust does
not have an I.R.S. identification number (since it is not required for
federal income tax purposes).
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
00
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) [ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
7. SOLE VOTING POWER
0
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 52,326,797
OWNED BY
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON WITH 0
10. SHARED DISPOSITIVE POWER
52,326,797
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
52,326,797
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.67%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
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3
SCHEDULE 13D
CUSIP No. 300903101
---------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON - Kenny A. Troutt
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) -
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
00
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) [ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7. SOLE VOTING POWER
0
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 52,326,797
OWNED BY
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON WITH 0
10. SHARED DISPOSITIVE POWER
52,326,797
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
52,326,797
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.67%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
<PAGE>
4
Item 1. Security and Issuer.
--------------------
This statement on Schedule 13D relates to the common shares of
capital stock (the "Common Shares") of Teleglobe Inc., a corporation governed by
the Canadian Business Corporations Act (the "Issuer"). The address of the
Issuer's principal executive office is 1000 de La Gauchetiere Street West,
Montreal, Quebec, H3B 4X5.
Item 2. Identity and Background.
------------------------
(a) The persons filing this schedule (collectively, the "Reporting
Persons") are the Troutt Family Trust, a trust formed under the laws of the
State of Texas (the "Family Trust"), and Kenny A. Troutt. The sole trustee of
the Family Trust is Kenny A. Troutt.
(b) The business address of the Family Trust is 10595 Strait Lane,
Dallas, Texas 75229. The business address of Kenny A. Troutt is 8750 North
Central Expressway, Suite 2000, Dallas, Texas 75231.
(c) The principal business of the Family Trust is to hold trust
property, including the Common Shares, to invest trust property, and to make
distributions of trust property in accordance with the terms of the Agreement
and Declaration of Trust of the Family Trust. The present principal occupation
of Kenny A. Troutt is Chief Executive Officer of Excel Communications, Inc., a
Delaware corporation and a wholly-owned subsidiary of the Issuer ("Excel"), and
Vice-Chairman, President and Chief Operating Officer and a director of the
Issuer.
(d) In the past five years, none of the Reporting Persons has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) In the past five years, none of the Reporting Persons has been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) The place of organization for the Family Trust is Texas. The
place of citizenship of Kenny A. Troutt is the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
The information in Item 6 of this Schedule 13D is incorporated
herein by reference.
The Common Shares beneficially owned by the Reporting Persons were
acquired by reason of the conversion of shares of common stock of Excel
beneficially owned by them on November 10, 1998 pursuant to the terms of an
Agreement and Plan of Merger (the "Merger Agreement"), dated as of June 14,
1998, among the Issuer, North Merger Sub Corporation, a Delaware corporation and
a direct wholly-owned subsidiary of the Issuer ("Sub"), and Excel, which
provided for the merger of Sub with and into Excel (the "Merger"), with Excel as
the surviving corporation. In the Merger, each outstanding share of the common
stock of Excel was converted into the right to receive .885 of a Common
<PAGE>
5
Share of the Issuer. Prior to the Merger, Excel had been a public company
unaffiliated with the Issuer.
Item 4. Purpose of Transaction.
-----------------------
As noted above, the Reporting Persons acquired their beneficial
ownership of the Common Shares of the Issuer in exchange for their shares of
Excel common stock in connection with the Merger consummated pursuant to the
Merger Agreement.
Kenny A. Troutt is Chief Executive Officer of Excel and
Vice-Chairman, President and Chief Operating Officer and a director of the
Issuer. Accordingly, he will be in a position to influence the operations of the
Issuer.
Except as set forth above and as noted in Item 6, none of the
Reporting persons currently has any plans or proposals that relate or would
result in any of the actions set forth in parts (a) through (j) of item 4.
Item 5. Interest in Securities of the Issuer.
-------------------------------------
(a) The responses of the Reporting Persons to Rows (11) through (13)
of the cover page of this statement on Schedule 13D are incorporated herein by
reference.
Kenny A. Troutt, as trustee of the Family Trust, has sole investment
control over all of the shares held by the Family Trust. In addition, Kenny A.
Troutt can revoke the Family Trust without the consent of any other person. As a
result of such investment control and power to revoke, Kenny A. Troutt is deemed
to be a beneficial owner of the Common Shares held of record by the Family
Trust.
As of the date hereof and after giving effect to the sale of Common
Shares described in Item 6, (i) Kenny A. Troutt beneficially owns 52,326,797
Common shares of the Issuer, none of which are held of record by Mr. Troutt,
which shares represent 20.67% of the Issuer's outstanding Common Shares (ii) the
Family Trust beneficially owns 52,326,797 shares of the Issuer, all of which are
owned of record by the Family Trust, which shares represent 20.67% of the
Issuer's outstanding Common Shares. The percentages set forth above are based
upon 253,139,738 Common Shares outstanding as of February 18, 1999 (based upon
information supplied by the Issuer).
(b) The responses of the Reporting Persons to (i) Rows (7) through
(10) of the cover page of this statement on Schedule 13D and (ii) Item 5(a)
hereof are incorporated herein by reference.
(c) Except as set forth in Item 6, none of the Reporting Persons has
effected any transaction in the Common Shares within the past 60 days.
(d-e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
---------------------------------------------------------------------
1. On February 19, 1999, the Family Trust entered into an agreement
(the "Purchase Agreement") with 129201 Canada Inc. ("129201"), a wholly-owned
subsidiary of BCE Inc. ("BCE"), for the purchase by 129201 of four
<PAGE>
6
million (4,000,000) Common Shares from the Trust at a price of U.S.$29.50 per
share for an aggregate price of U.S.$118 million. Such purchase was consummated
on February 26, 1999.
Concurrently with the execution of the Purchase Agreement, Kenny A.
Troutt entered into an agreement (the "Right of First Refusal") with BCE
granting to BCE a right of first refusal on the sale of an additional
twenty-million (20,000,000) Common Shares. Kenny A. Troutt agreed, subject to
certain exceptions, not to sell or otherwise dispose of any Common Shares and to
cause any trust, partnership or corporation controlled or directed by him (a
"Seller") not to sell any Common Shares without first offering such shares to
BCE in accordance with the terms of the Right of First Refusal.
Copies of the Purchase Agreement and the Right of First Refusal are
filed as exhibits to this Schedule 13D and the foregoing is qualified in its
entirety by reference to the text of such agreements.
2. The Family Trust, as optionor, and Selby Shaver, as optionee,
entered into a stock option agreement (the "Option Agreement") as of February
13, 1999, providing, in return for certain consulting services to the Trust by
the Optionee, for the purchase by the optionee of 140,197 Common Shares at a
price of $30.75 per share (the "Option Shares"), and vesting one third of the
Common Shares on each anniversary date of the Option Agreement, provided that
the optionee has been employed by the Issuer from the date of grant until such
vesting date.
A copy of the Option Agreement is filed as an exhibit to this
Schedule 13D and the foregoing is qualified in its entirety by reference to the
text of such agreement.
Item 7. Material to be Filed as Exhibits.
---------------------------------
Exhibit 1 Agreement for the Purchase and Sale of 4,000,000 Common Shares of
Teleglobe Inc.
Exhibit 2 Agreement for the Right of First Refusal with respect to shares
of Teleglobe Inc.
Exhibit 3 Stock Option Agreement between the Troutt Family Trust and Selby
Shaver.
Exhibit 4 Joint Filing Statement.
<PAGE>
7
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
THE TROUTT FAMILY TRUST
By: /s/ Kenny A. Troutt
----------------------------------- Date: March 3, 1999
Kenny A. Troutt
Trustee
/s/ Kenny A. Troutt Date: March 3, 1999
-----------------------------------
Kenny A. Troutt, individually
<PAGE>
8
Exhibit Index
-------------
Exhibit 1 Agreement for the Purchase and Sale of 4,000,000 Common Shares of
Teleglobe Inc.
Exhibit 2 Agreement for the Right of First Refusal with respect to shares
of Teleglobe Inc.
Exhibit 3 Stock Option Agreement between the Troutt Family Trust and Selby
Shaver.
Exhibit 4 Joint Filing Statement.
WILLIAM D. ANDERSON
Chief Financial Officer,
BCE & Bell Canada
Telephone:
Fax
E-mail: [email protected]
February 19, 1999
Troutt Family Trust - Separate Trust Estate of Kenny A. Troutt
c/o: Kenny A. Troutt
10595 Strait Lane
Dallas, Texas
75229
RE: PURCHASE AND SALE OF 4,000,000 COMMON SHARES OF TELEGLOBE INC.
--------------------------------------------------------------
Sir:
Upon the terms and conditions set forth in this agreement, Troutt Family Trust -
Separate Trust Estate of Kenny A. Troutt (the "TRUST") agrees to sell, and
129201 Canada Inc. ("129201") agrees to buy, 4,000,000 common shares of
Teleglobe Inc. (the "SHARES") for a purchase price of US$ 29.50 per Share, for
an aggregate purchase price of US$ 118 million.
The closing of the purchase and sale of the Shares shall take place at the
offices of BCE Inc., Montreal, Quebec, on the fifth (5th) business day following
the date of execution of this agreement by the Trust (the "CLOSING DATE"). On
the Closing Date, the Trust will deliver to 129201 a single certificate
representing the Shares registered in the name of 129201 against payment of the
purchase price therefore by wire transfer of immediately available U.S. funds to
the order of the Trust.
The Trust represents and covenants to BCE Inc. and 129201 as follows on the date
hereof and on the Closing Date and acknowledges that BCE Inc. and 129201 are
relying upon such representations and covenants in connection with the purchase
of the Shares:
(a) the Trust is a trust duly created and subsisting and in good standing
under the laws of its jurisdiction;
(b) the Trust has all necessary power and authority to enter into this
agreement and to do all acts and things as required hereunder to be done,
observed and performed by it;
(c) the Trust has taken all necessary action, if any, to authorize the
execution of this agreement on its behalf by Kenny A. Troutt, and the
performance by it of all acts and things as are required hereunder to be
done, observed and performed by it;
BCE INC.
1000, rue de La Gauchetiere Ouest, bureau 3700,
Montreal (Quebec) H3B 4Y7
WWW.BCE.CA
<PAGE>
.2
(d) this agreement has been duly and validly executed and delivered by the
Trust and constitutes a legal, valid and binding obligation of the Trust
enforceable in accordance with its terms;
(e) the Trust is the record owner of the Shares and Kenny A. Troutt is the
sole beneficial holder of the Shares free and clear of any and all liens;
(f) no person, other than 129201 pursuant hereto, has any option or agreement
or right capable of becoming an option or an agreement relating to the
acquisition of any or all of the Shares;
(g) the entry into, execution and delivery of this agreement and the
performance by the Trust of its obligations hereunder will not result in
the violation of any of the terms and provisions of any agreement, written
or oral, to which the Trust or Kenny A. Troutt is a party or by which it
or he is bound or in the creation of any lien on the Shares and does not
require the consent, waiver, approval, license or authorization or filing
with any governmental entity or person, other than filings under Rule
13d-1 promulgated under the Securities Exchange Act of 1934;
(h) the certificate representing the Shares is free of any legend other then a
legend in relation to Section 145 of the U.S. Securities Act of 1933, as
amended (the "SECURITIES ACT") or a legend in the form attached as
Schedule A hereto;
(i) the Trust is a single inter vivos trust of which Kenny A. Troutt is the
sole settlor and trustee; and
(j) Kenny A. Troutt shall have executed an affidavit in the form attached as
Schedule B respecting certain Canadian takeover bid matters.
129201 represents to the Trust as follows on the date hereof and on the Closing
Date and acknowledges that the Trust is relying upon such representations in
connection with the sale of the Shares:
(a) this agreement has been duly and validly executed and delivered by 129201
and BCE Inc. and constitutes a legal, valid and binding obligation of
129201 and BCE Inc. enforceable in accordance with its terms;
(b) the entry into, execution and delivery of this agreement and the
performance by 129201 and BCE Inc. of its obligations hereunder will not
result in the violation of any of the terms and provisions of any
agreement, written or oral, to which 129201 or BCE Inc. is a party or by
which it is bound and does not require the consent, waiver, approval,
license or authorization or filing with any governmental entity or person;
(c) 129201 is acquiring the Shares for its own account, for investment
purposes only and not with a view to the distribution (as such term is
used in Section 2(11) of the Securities Act) thereof;
(d) 129201 and BCE Inc. understand that the sale of the Shares to 129201 has
not been registered under the Securities Act, the Shares constitute
"restricted securities" for purposes of such Act and cannot and will not
be sold unless
<PAGE>
.3
subsequently registered under the Securities Act or an exemption from such
registration is available;
(e) 129201 is an "accredited investor" within the meaning of subparagraph (a)
(3) of Rule 501 and (a) (8) under the Securities Act;
(f) 129201 is aware that it may be required to bear the economic risk of an
investment in the Shares for an indefinite period of time, and it is able
to bear such risk for an indefinite period;
(g) 129201 has received and is in possession of adequate information
concerning the legal, business and financial conditions of Teleglobe Inc.
to make an informed decision regarding an investment in the Shares and
hereby waives and releases, to the fullest extent permitted by law, any
and all claims and causes of action it may have against the Seller or any
of its affiliates relating to or arising out of any nondisclosure of
information relating to Teleglobe Inc.;
(h) to the knowledge of BCE Inc., and without any independent enquiry, no
shareholder of BCE Inc. has more than 5% of the issued and outstanding
common shares of BCE Inc. as of the date hereof;
(i) after giving effect to the purchase by BCE Inc. and 129201 of the Shares,
and taking into account any option or other right to purchase shares of
stock of Teleglobe Inc. that BCE Inc. or any entity in which BCE Inc. owns
a 5% or greater equity interest may have, BCE Inc. and any entity in which
BCE Inc. owns a 5% or greater equity interest owns in the aggregate less
than 50% of the voting power and value of the stock of Teleglobe Inc. as
of the date hereof; and
(j) BCE Inc. and 129201 are not purchasing the Shares in concert with, or
pursuant to a plan or arrangement with, Teleglobe Inc.
To the extent that the Seller has registration rights with respect to any of the
Shares, and to the extent that such rights become assignable, the Seller shall
assign such rights to 129201.
This agreement will terminate if it is not executed by the Trust and notice
thereof given to BCE Inc. and 129201 within two (2) days of the date first above
written.
This agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of New York
and the parties agree to submit to the non-exclusive jurisdiction of the courts
of the State of New York.
This Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
<PAGE>
.4
Yours very truly,
129201 CANADA INC.
By: /s/ William D. Anderson
--------------------------------------------
BCE Inc. agrees to guarantee the obligations
of 129201 hereunder.
BCE INC.
By: /s/ William D. Anderson
--------------------------------------------
The foregoing Agreement is hereby accepted by the Trust as of the date first
above written.
TROUTT FAMILY TRUST - SEPARATE TRUST ESTATE OF KENNY A. TROUTT
By: /s/ Kenny A. Troutt
--------------------------------------------
Kenny A. Troutt
Kenny A. Troutt repeats and reiterates each of
the representations and covenants in favour of BCE Inc.
and 129201 herein and acknowledges that BCE Inc.
and 129201 are relying upon such representations and
covenants in connection with the purchase of the Shares.
/s/ Kenny A. Troutt
- --------------------------------------------
Kenny A. Troutt
<PAGE>
.5
SCHEDULE A
Legend
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT")
AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION THEREFROM."
<PAGE>
.6
SCHEDULE B
AFFIDAVIT
I, the undersigned, Kenny A. Troutt, executive, domiciled at 10595 Strait
Lane, City of Dallas, State of Texas, solemnly affirm the following:
1. I have read the agreement for the purchase and sale of 4,000,000 common
shares of Teleglobe Inc. (the "SHARES") to be entered into between 129201
Canada Inc., Troutt Family Trust - Separate Trust Estate of Kenny A.
Troutt (the "TRUST"), BCE Inc. and me on the date hereof and I am familiar
with its contents;
2. the Trust is a trust duly created and subsisting and in good standing
under the laws of its jurisdiction;
3. the Trust is a single inter vivos trust of which I am the sole settlor and
trustee;
4. the Trust acquired the Shares directly from Troutt Partners, Ltd. which at
all relevant times I controlled (the "PARTNERSHIP"), which had acquired
the Shares directly from me;
5. for the period commencing two (2) years prior to the date hereof and
terminating on the date hereof, the sole owners of the Shares were the
Partnership, the Trust and me; and
6. neither the Partnership, the Trust nor I acquired the Shares in order that
the purchaser might make use of a takeover exemption under Canadian
securities legislation.
Signed at the City of Dallas, State of Texas, this 19th day of February, 1999.
- --------------------------------------------
Kenny A. Troutt
Sworn to before me at the City of Dallas, State of Texas, on this 19th day of
February, 1999.
- --------------------------------------------
Notary Public for the State of Texas
WILLIAM D. ANDERSON
Chief Financial Officer,
BCE & Bell Canada
Telephone:
Fax
E-mail: [email protected]
February 19, 1999
Kenny A. Troutt
10595 Strait Lane
Dallas, Texas
75229
RE: RIGHT OF FIRST REFUSAL WITH RESPECT TO SHARES OF TELEGLOBE INC.
---------------------------------------------------------------
Sir:
The following sets forth our agreement as to the terms and conditions of a right
of first refusal granted by you to BCE Inc. for up to 20,000,000 shares of
Teleglobe Inc.
For good and valuable consideration, receipt of which is hereby acknowledged,
you agree not to sell, transfer, alienate, pledge or otherwise dispose of any
shares of Teleglobe Inc. and to cause any trust, partnership or corporation
controlled or directed by you not to sell, transfer, alienate, pledge or
otherwise dispose of any shares of Teleglobe Inc., without first offering such
shares to BCE Inc. in accordance with this agreement. Notwithstanding the
foregoing, the provisions of this right of first refusal granted to BCE Inc.
hereunder shall not apply to: (i) donations of shares to charitable
organizations; (ii) transfers to family trusts or other entities controlled or
directed by you so long as such family trusts and entities are deemed to be
"Sellers" (as hereinafter defined) for the purposes hereof (and confirmation to
that effect is given by you at such time) and such family trusts or other
entities agree to be bound at such time (with notice at such time to BCE Inc.)
by the terms and conditions of this agreement; and (iii) sales or conversions of
shares of Teleglobe Inc. in relation to a business combination (including a
merger, recapitalization, share exchange, tender offer or takeover bid) (a
"BUSINESS COMBINATION") to which Teleglobe Inc. is a party or in which Teleglobe
Inc. is the subject where the consideration consists of cash or securities or
other non-cash consideration, or a combination of any of the foregoing.
In the event that you or any trust, partnership or corporation controlled or
directed by you (a "SELLER") wishes to sell, transfer, alienate, pledge or
otherwise dispose of any shares of Teleglobe Inc. subject to the right of first
refusal granted hereby, it shall first notify BCE Inc. in writing of such
intention to dispose of such shares, indicating the number of shares such Seller
wishes to sell and enclosing an affidavit respecting Canadian takeover bid
matters for execution by you in the form attached hereto as Schedule A. Within
three (3) business days from receipt of such notice, BCE Inc. shall then elect
by written notice to the Seller to either: (i) purchase all or a portion of such
shares; or (ii) permit such Seller to dispose of such shares. Should BCE Inc.
fail to exercise such election within such time allotted, it shall be deemed to
have permitted the disposition of such shares. Should BCE Inc. elect to
BCE INC.
1000, rue de La Gauchetiere Ouest, bureau 3700,
Montreal (Quebec) H3B 4Y7
WWW.BCE.CA
<PAGE>
.2
purchase only a portion of such shares, it shall be deemed to have permitted the
disposition of the balance of such shares.
In the event that BCE Inc. elects to, or be deemed to have elected to, permit a
disposition of shares, the Seller shall dispose of such shares within three (3)
months from the date of such election or deemed election, failing which it shall
be obligated to re-offer such shares to BCE Inc. in accordance with the terms
hereof.
Should BCE Inc. elect to purchase all or a portion of such shares, the purchase
price shall be the average of the closing price of such shares on the New York
Stock Exchange for the twenty (20) trading days ending on the trading day
immediately preceding the date of receipt by BCE Inc. of notice from the Seller
of its intention to sell such shares. The closing of the purchase and sale of
the shares shall take place at the offices of BCE Inc., Montreal, Quebec, on the
fifth (5th) business day following delivery of such notice of election to
purchase by BCE Inc. (the "CLOSING DATE") and the parties shall enter into an
agreement on the same terms and conditions as the agreement for the purchase and
sale of 4,000,000 shares of Teleglobe Inc. entered into by 129201 Canada Inc.,
Troutt Family Trust Separate Trust Estate of Kenny A. Troutt (the "TRUST"), BCE
Inc. and Kenny A. Troutt on the date hereof (including, if applicable, the BCE
Inc. guarantee set forth therein, and including the repetition and reiteration
of the representations and warranties by the Trust and affidavit set forth
therein, both signed by Kenny A. Troutt).
Notwithstanding the foregoing, in the event that a Seller has received a bona
fide arms length offer (other than with respect to a Business Combination) for
cash consideration to purchase shares of Teleglobe Inc., the Seller shall notify
BCE Inc. in writing of the number of shares subject to such offer and the
purchase price thereof and BCE Inc.'s sole rights in respect of such shares
shall be to elect to purchase all (and not less than all) of such shares at the
purchase price specified in the notice delivered to BCE Inc. notwithstanding
that such offer may be for in excess of 20,000,00 shares of Teleglobe Inc. The
other procedures set forth in this letter shall apply to such shares subject to
such bona fides arms length offer.
You agree to sign all such documents and do all such things as may be required
to carry out this right of first refusal and in the event that the Seller is a
trust, partnership or corporation, you agree to do all such things as may be
necessary to cause such trust, partnership or corporation to sell and transfer
shares to BCE Inc. or its designated affiliate in accordance with the terms
hereof.
To the extent that a Seller has registration rights with respect to any of the
shares purchased by BCE Inc. or its designated affiliate pursuant to the terms
hereof, and to the extent that such rights are assignable, the Seller shall
assign such rights to BCE Inc. or its designated affiliate concurrently with the
purchase and sale of such shares by BCE Inc. or such designated affiliate.
You have represented to us that the Trust is the record and beneficial owner of
at least 24,000,000 shares of Teleglobe Inc., that you are the sole settlor of
the Trust and that the Trust is a single inter vivos trust. Canadian securities
laws limit in certain circumstances the number of sellers from whom BCE Inc. may
purchase securities without a takeover bid circular. In order to address these
limitations, you have agreed to the undertakings with respect thereto set out in
Schedule B hereto.
<PAGE>
.3
Any notice, direction or other instrument required or permitted to be given or
made hereunder shall be in writing and shall be sufficiently given or made if
delivered in person to the address set forth below or if telexed, telegraphed,
telecopied or sent by other means of recorded electronic communication and
confirmed by delivery as soon as practicable thereafter.
Notices to a Seller shall be addressed as follows:
[name of Seller]
c/o: Kenny A. Troutt
10595 Strait Lane
Dallas, Texas
75229
Notices to BCE Inc. shall be addressed as follows:
BCE Inc.
1000, de la Gauchetiere Street West
Montreal, Quebec
H3B 4Y7
c/o: the Chief Financial Officer
with a copy to the Corporate Secretary.
No party may assign this agreement or any of its rights without the prior
written consent of the other party hereto. Notwithstanding the foregoing, BCE
Inc. may assign its rights hereunder to a direct or an indirect subsidiary.
The rights of BCE Inc. hereunder shall terminate upon the earlier of: (i) five
(5) years from the date hereof; and (ii) BCE Inc. having purchased, permitted
the disposition in accordance with the terms hereof or deemed to have permitted
the disposition of an aggregate of 20,000,000 shares of Teleglobe Inc. in
accordance with the terms hereof.
This agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of New York
and the parties agree to submit to the non-exclusive jurisdiction of the courts
of the State of New York .
This Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
<PAGE>
.4
Yours very truly,
BCE INC.
By: /s/ William D. Anderson
--------------------------------------------
The foregoing Agreement is hereby accepted by Kenny A. Troutt as of the date
first above written.
/s/ Kenny A. Troutt
- -----------------------------------------
Kenny A. Troutt
<PAGE>
.5
SCHEDULE A
AFFIDAVIT
I, the undersigned, Kenny A. Troutt, executive, domiciled at 10595 Strait
Lane, City of Dallas, State of Texas, solemnly affirm the following:
1. I have read the agreement for the purchase and sale of [number of shares]
common shares of Teleglobe Inc. (the "SHARES") to be entered into between
[BCE Inc. or designated affiliate], Troutt Family Trust - Separate Trust
Estate of Kenny A. Troutt (the "TRUST"), BCE Inc. [if applicable] and me
on the date hereof and I am familiar with its contents;
2. the Trust is a trust duly created and subsisting and in good standing
under the laws of its jurisdiction;
3. the Trust is a single inter vivos trust of which I am the sole settlor and
trustee;
4. the Trust acquired the Shares directly from Troutt Partners, Ltd. which at
all relevant times I controlled (the "PARTNERSHIP"), which had acquired
the Shares directly from me;
5. for the period commencing two (2) years prior to the date hereof and
terminating on the date hereof, the sole owners of the Shares were the
Partnership, the Trust and me; and
6. neither the Partnership, the Trust nor I acquired the Shares in order that
the purchaser might make use of a takeover exemption under Canadian
securities legislation.
Signed at the City of Dallas, State of Texas, this 19th day of February, 1999.
- --------------------------------------------
Kenny A. Troutt
Sworn to before me at the City of Dallas, State
of Texas, on this [date]
- --------------------------------------------
Notary Public for the State of Texas
<PAGE>
.6
SCHEDULE B
Except for valid business reasons, which Kenny A. Troutt agrees to discuss with
BCE Inc., should any trust, partnership or corporation controlled or directed by
Kenny A. Troutt wish to sell any shares of Teleglobe Inc., such shares shall be
sold first by Troutt Family Trust Separate Trust Estate of Kenny A. Troutt (the
"TRUST").
Except for valid business reasons, which Kenny A. Troutt agrees to discuss with
BCE Inc., the Trust shall continue to hold a minimum of 20,000,000 shares of
Teleglobe Inc., less any shares purchased or permitted to be disposed of by BCE
Inc. in accordance with the terms of the agreement to which this Schedule A
forms an integral part thereof, and Kenny A. Troutt shall continue to be the
sole settlor of such Trust.
Kenny A. Troutt and the Trust shall cooperate from time to time as reasonably
required to assist BCE Inc. in evaluating its position under securities laws
with respect to takeover bid restrictions and to assist BCE Inc. in seeking such
exemptions and no action letters as may be available from securities authorities
with respect thereto.
STOCK OPTION AGREEMENT
Date: February 13, 1999
This Agreement (the "Agreement") dated the date first stated above (the
"Date of Grant"), is entered into between the Troutt Family Trust ("Optionor")
and Selby Shaver ("Optionee").
WHEREAS, Optionee has agreed to provide certain consulting services to
Optionor; and
WHEREAS, Optionee is unwilling to provide such consulting services unless
Optionor grants to Optionee an option to purchase certain shares of Common Stock
(the "Stock") of Teleglobe Inc. (the "Company"), as set forth herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Grant of Option
---------------
a) Subject to the terms and conditions hereinafter set forth, Optionor
hereby grants to Optionee, on the Date of Grant, an option to
purchase up to one hundred and forty thousand, one hundred and
ninety seven (140,197) shares of Stock at a price of $30.75 per
share (the "Option Price"), the fair market value of such shares as
reported on the New York Stock Exchange on the Date of Grant. Such
option is hereinafter referred to as the "Option" and the shares of
Stock purchasable upon exercise of the Option are hereinafter
sometimes referred to as the "Option Shares."
b) The Option shall vest over three years. One third of the total
Option Shares shall vest on each anniversary of the Grant Date. The
first one third of the Option Shares shall vest on 2-13-2000; the
second one third of the Option Shares shall vest on 2-13-2001 and
the last one third of the Option Shares shall vest on 2-13-2002;
provided that Optionee has been employed by the Company during the
period from the Date of Grant until such date.
1
<PAGE>
2. Termination of Option
---------------------
a) The Option and all rights hereunder with respect thereto, to the
extent such rights shall not have been exercised, shall terminate
and become null and void upon the expiration of ten (10) years from
the Date of Grant (the "Option Term").
b) The Option may be exercised only by Optionee's estate, or by a
person who acquires the right to exercise the Option by bequest or
inheritance or by reason of the death of Optionee, provided that
such exercise occurs within the remaining Option Term.
3. Exercise of Option
------------------
a) Optionee may exercise the Option with respect to all or any part of
the number of Option Shares then exercisable hereunder by giving
Optionor written notice of intent to exercise. The notice of
exercise shall specify the number of Option Shares as to which
Optionee is exercising and the date of exercise thereof, which date
shall be at least five (5) days after the giving of such notice
unless an earlier time shall have been mutually agreed upon.
b) Full payment (in U.S. dollars) by Optionee of the Option Price for
the Option Shares purchased shall be made on or before the exercise
date specified in the notice of exercise in cash.
On the exercise date specified in Optionee's notice or as soon
thereafter as is practicable, Optionor shall deliver to Optionee a
certificate or certificates for the Option Shares then being
purchased upon full payment for such Option Shares, together with a
duly endorsed stock power. The obligation of Optionor to deliver
Stock shall, however, be subject to the condition that if at any
time Optionor shall determine in his discretion that the consent or
approval of any governmental regulatory body, or an agreement by
Optionee with respect to the disposition of Option Shares, is
necessary or desirable as a condition of, or in connection with, the
Option or the issuance or purchase of the Option Shares, the Option
may not be exercised in whole or in part until such consent,
approval or agreement shall have been effected or obtained free of
any conditions not acceptable to Optionor and, if it would otherwise
expire, the term of the Option shall be extended until thirty (30)
days after receipt by Optionee of the foregoing.
2
<PAGE>
c) If Optionee fails to pay for any of the Option Shares specified in
such notice or fails to accept delivery thereof, Optionee's right to
purchase such Option Shares may be terminated by Optionor. The date
specified in Optionee's notice as the date of exercise shall be
deemed the date of exercise of the Option, provided that payment in
full for the Option Shares to be purchased upon such exercise shall
have been received by such date.
4. Put by Optionee
---------------
a) Optionee shall have the right (the "Put Option") by delivery of
written notice to Optionor (the "Put Notice") to cause Optionor to
purchase, and Optionor shall purchase, the number of Option Shares
stated in such Put Notice and owned by Optionee for which the
minimum holding period specified in Rule 144(d) (or any successor
rule) of the Securities Act of 1933, as amended, has not elapsed.
Such determination shall be made by counsel to Optionor in
consultation with Optionee's legal counsel. The purchase price per
share will be equal to the Put Price (as defined in this Section 4)
applicable to such shares.
b) The term "Put Price" with respect to the Option Shares shall mean
the Fair Market Value per share as of the date the Put Notice is
delivered to Optionor. "Fair Market Value" shall mean (i) the
closing sales price per share of Stock on the principal national
securities exchange, if any, on which the Stock shall then be listed
for the last preceding date on which there was a sale of such Stock
on such exchange, (ii) if the Stock is not then listed on a national
securities exchange, the last sales price per share of Stock entered
on a national inter-dealer quotation system for the last preceding
date on which there was a sale of such Stock on such national
inter-dealer quotation system, (iii) if no closing or last sales
price per share of Stock is entered on a national inter-dealer
quotation system, the average of the closing bid and ask prices for
the Stock in the over-the-counter market for the last preceding date
on which there was a quotation for such Stock in such market, or
(iv) if no price can be determined under the preceding alternatives,
then the price per share as determined by Optionor and Optionee in
good faith.
c) The closing of the purchase of Option Shares pursuant to the Put
Option shall take place at a location determined by Optionor within
ten (10) business days after the date of the Put Notice. At any
closing pursuant to this Section 4, Optionor shall deliver to
Optionee, against delivery of certificates representing
3
<PAGE>
the Option Shares, (i) cash or certified check(s) in an amount equal
to the aggregate Put Price payable in respect of such Option Shares,
(ii) a promissory note in the principal amount equal to the
aggregate Put Price in respect of such Option Shares, payable one
year from the date of the note (such promissory note shall bear
interest payable annually at the publicly announced prime rate
published in The Wall Street Journal on the date such note is
issued), or (iii) a combination of cash/check(s) and a note
(consistent with terms in (ii)) equal to the aggregate Put Price
payable in respect of such Option Shares.
d) If Optionee exercises the Put Option simultaneously with the
exercise of the Option, Optionor agrees to pay Optionee (under any
of the alternatives in Section 4(c)(i-iii) above) the difference
between the aggregate Put Price with respect to the Option Shares
and the aggregate Option Price with respect to the Option Shares,
but only if the Put Price is greater than the Option Price.
e) Notwithstanding anything to the contrary contained in this Section
4, the obligation of Optionor to purchase the Option Shares shall,
however, be subject to the condition that if at any time Optionor
shall determine in his discretion that the consent or approval of
any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the Put Option or the purchase
of Option Shares thereunder, the Put Option may not be exercised in
whole or in part until such consent, approval or agreement shall
have been effected or obtained free of any conditions not acceptable
to Optionor and, if it would otherwise expire, the term of the Put
Option shall be extended until thirty (30) days after receipt by
Optionee of the foregoing.
5. Adjustment of and Changes in Stock
a) If there is any change in the number of shares of Stock through the
declaration of stock dividends, recapitalization resulting in stock
splits, or combinations or exchanges of such shares, then the number
of Option Shares and the Option Price of the Option shall be
proportionately adjusted as deemed appropriate by Optionor to
reflect any increase or decrease in the number of issued shares of
Stock; provided, however, that any fractional shares resulting from
such adjustment shall be eliminated.
b) In the event of a proposed dissolution or liquidation of the
Company, each Option granted pursuant to this Agreement shall
terminate as of a date to be fixed by Optionor; provided, however,
that Optionee shall have the right,
4
<PAGE>
immediately prior to such termination, to exercise the Option as to
all or any part of the Option Shares covered thereby, including
shares as to which the Option would not otherwise be exercisable.
c) In the event of any merger, consolidation or reorganization of the
Company, the Optionor shall promptly make an appropriate adjustment
to the number of shares receivable upon exercise of the Option after
the effective date of such transaction and the Option Price to
preserve Optionee's interest therein.
d) In the event of a change in the Stock as presently constituted,
which is limited to a change of all of the Company's authorized
shares without par value into the same number of shares with a par
value or, if such shares have a par value, then with a different par
value, the shares resulting from any such change shall be deemed to
be Stock within the meaning of this Agreement.
e) Except as expressly provided in this Section 5, Optionee shall have
no rights by reason of any subdivision or consolidation of shares of
stock of any class or the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class
by the Company or by reason of any dissolution, liquidation, merger,
or consolidation, and any issue by the Company of shares of stock of
any class, or securities convertible into or exchangeable for shares
of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or Option Price of
shares of Stock subject to an Option. The grant of an Option
pursuant to this Agreement shall not affect in any way the right or
power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or
to merge, consolidate, or dissolve, liquidate, sell or transfer all
or part of its business or assets.
6. Non-Transferability of Option
-----------------------------
The Option is not assignable or transferable by Optionee except by will or
by the laws of descent and distribution. During the life of Optionee, the
Option is exercisable only by such person or by such person's guardian or
legal representative.
5
<PAGE>
7. Employment Not Affected
-----------------------
Nothing in this Agreement shall confer upon Optionee the right to continue
in the employment of the Company or affect any right which the Company has
to terminate the employment of Optionee.
8. Stock for Investment
--------------------
Optionee shall upon each exercise of a part or all of the Option represent
and warrant that his purchase of Stock pursuant to the Option is for
investment only and not with a view to distribution involving a public
offering.
9. Rights as a Shareholder
-----------------------
Optionee shall have no rights as a shareholder of the Company unless and
until certificates for shares of Stock are delivered to him. No
adjustments shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other
rights for which the record date is prior to the date such certificates
are delivered to Optionee, except as expressly provided in Section 5
hereof.
10. Agreement by Optionee Regarding Withholding Taxes
-------------------------------------------------
a) No later than the date of exercise of any Option granted hereunder,
Optionee will make arrangements satisfactory to Optionor and the
Company regarding payment of any federal, state and/or local taxes
of any kind required by law to be paid or withheld upon the exercise
of the Option.
b) Optionor and the Company shall have the right to deduct from any
payment of any kind otherwise due to Optionee any federal, state
and/or local taxes of any kind required by law to be paid or
withheld upon the exercise of the Option.
11. Notice
------
Any notice to Optionor provided for in this instrument shall be addressed
to him at 8750 N. Central Expressway, Suite 2000, Dallas, TX 75231 and any
notice to Optionee shall be addressed to him at 8750 N. Central
Expressway, Suite 2000, Dallas, TX 75231. Any notice shall be deemed to be
duly given if and when
6
<PAGE>
properly addressed and posted by registered or certified mail, postage
prepaid return receipt requested.
12. Governing Law
-------------
The validity, construction, interpretation and effect of this instrument
shall exclusively be governed by and determined in accordance with the law
of the State of Texas, except to the extent preempted by federal law,
which shall to the extent govern.
IN WITNESS WHEREOF, Optionor and Optionee have placed their
signatures hereon, effective on the Date of Grant.
The Troutt Family Trust, Optionor
By: /s/ Kenny A. Troutt /s/ Selby Shaver
---------------------------- ----------------------------
Kenny A. Troutt Optionee
Trustee
7
NYFS05...:\41\44241\0003\0084\AGT1259R.52D
JOINT FILING STATEMENT
We, the undersigned, hereby express our agreement that the attached Schedule 13D
is filed on behalf of each of us.
THE TROUTT FAMILY TRUST
By: /s/ Kenny A. Troutt Date: March 3, 1999
---------------------------------
Kenny A. Troutt
/s/ Kenny A. Troutt Date: March 3, 1999
- -------------------------------------
Kenny A. Troutt, individually
NYFS05...:\41\44241\0005\2097\INS3039P.170
