Vermilion
Vermilion
Vermilion

DRIP

  • Vermilion's value driven strategy ensures delivery of sustainable dividends
  • Vermilion has a history as a successful strategic acquirer
  • Vermilion is led by a bold, disciplined, and caring team you can trust

Premium Dividend™ and Dividend Reinvestment Plan

To preserve our financial flexibility and conservatively exercise our access to capital, we have amended our existing Dividend Reinvestment Plan to include a Premium Dividend™ Component.  Under the new Premium Dividend™ and Dividend Reinvestment Plan (the “Plan”), Eligible Shareholders who elect to participate in the Dividend Reinvestment Component can continue to reinvest their dividends in common shares at an effective 2% discount to the Average Market Price (with no broker commissions or trading costs), similar to our previous Dividend Reinvestment Plan (Vermilion’s Amended and Restated Dividend Reinvestment Plan dated effective September 1, 2010 as amended effective February 27, 2014 (the “Previous DRIP”). 

With the addition of a new Premium Dividend™ Component, Eligible Shareholders will also have the option to reinvest their dividends in new common shares which will be exchanged for a premium cash payment equal to 101.5% of the reinvested dividends.  Under the Premium Dividend™ Component, shares will be issued at a 3.5% discount to the Average Market Price.  The shares will be presold at prevailing market prices by the Plan Broker (Canaccord Genuity Corporation), who will then provide participating Shareholders with a premium cash payment equal to 101.5% of their dividends, while the Plan Broker retains the balance of the discount as its fee. 

Eligible Shareholders are not required to participate in the Plan.  Eligible Shareholders who have not elected to participate in the Plan will continue to receive their regular cash dividends in the usual manner.

The total cost of equity issuance to Vermilion under the Dividend Reinvestment Component and the Premium Dividend™ Component of the Plan will be 2% and 3.5%, respectively.  The Premium Dividend™ Component, when combined with the Dividend Reinvestment Component, increases our access to the lowest cost sources of equity capital available.  We view implementation of a Premium Dividend™ as a short term measure to maintain our financial strength.  Both components of our program can be suspended or prorated at the company’s discretion, offering considerable flexibility.  We will actively monitor our ongoing needs and manage our continued use of each component as circumstances dictate.

We commenced prorating the Premium DividendTM component of our Dividend Reinvestment Plan by 25%, beginning with the dividend paid on October 17, 2016.  We increased the proration factor by a further 25% beginning with the January 16, 2017 dividend payment. Eligible shareholders who have elected to participate in the Premium DividendTM component will receive a 1.5% premium on 50% of their participating shares, and the regular cash dividend on the remaining 50% of their shares.  Subject to unexpected changes in the commodity price outlook, it is our intent to continue increasing the proration during 2017, at the end of which there would be no further equity issuance under the Premium DividendTM component of our Dividend Reinvestment Plan.

Each component of the Plan, which is explained in greater detail in the complete Plan Document, is subject to eligibility restrictions, applicable withholding taxes, prorating as provided for in the Plan, and other limitations on the availability of common shares to be issued or purchased in certain events. Only Canadian-resident Shareholders may participate in the Premium DividendTM Component of the Plan. The Dividend Reinvestment Component of the Plan is available to Canadian residents and non-U.S. resident foreign Shareholders who meet certain eligibility criteria as set forth in the complete Plan. U.S. resident Shareholders are not currently permitted to participate in either component of the Plan.  This is due to the requirement, under U.S. securities regulations, to maintain a continuous shelf registration for issuance of new equity to U.S. Shareholders.  At this time, Vermilion has not put in place the required shelf registration due to the  high cost of establishing and maintaining such a shelf registration.  We will continue to monitor the relative cost-benefit of such a registration as we go forward.    

In order to participate in either the Premium Dividend™ Component or the Dividend Reinvestment Component, an Eligible Shareholder must enroll (Enrollment Form), or be deemed to have enrolled (in the case of the Dividend Reinvestment Component), in the Plan at least five business days prior to the relevant Dividend Record Date directly (in the case of registered Shareholders) or indirectly through the broker, investment dealer, financial institution or other nominee who holds common shares on the Eligible Shareholder's behalf. 

A registered Eligible Shareholder who was enrolled in the Previous DRIP will automatically be deemed to be a participant in the Dividend Reinvestment Component of the Plan, without any further action on their part.  A beneficial owner of common shares (i.e., a holder of common shares that are not registered in the beneficial owner's name but are instead held through a broker, investment dealer, financial institution or other nominee) who was validly enrolled, through the nominee holder, in the Previous DRIP should contact such nominee holder to confirm continued participation in the Dividend Reinvestment Component of the Plan.

For more information on the Plan, defined meanings for capitalized terms above, eligibility restrictions and enrollment information among other details of the Plan, please refer to the complete copy of the Plan Document as well as a related series of Questions and Answers.

™ denotes trademark of Canaccord Genuity Capital Corporation. 

Enrollment in the Premium Dividend™ Component or the Dividend Reinvestment Component

In order to participate in either the Premium Dividend™ Component or the Dividend Reinvestment Component, an eligible Shareholder must enroll (Enrollment Form), or be deemed to have enrolled (in the case of the Dividend Reinvestment Component), in the Plan at least five business days prior to the relevant Dividend Record Date directly (in the case of registered Shareholders) or indirectly through the broker, investment dealer, financial institution or other nominee who holds common shares on the eligible Shareholder's behalf. 

A registered eligible Shareholder who was enrolled in the Previous DRIP will automatically be deemed to be a participant in the Dividend Reinvestment Component of the Plan, without any further action on their part. A beneficial owner of common shares (i.e., a holder of common shares that are not registered in the beneficial owner's name but are instead held through a broker, investment dealer, financial institution or other nominee) who was validly enrolled, through the nominee holder, in the Previous DRIP should contact such nominee holder to confirm continued participation in the Dividend Reinvestment Component of the Plan.

Withdrawal of Shares (Dividend Reinvestment Component)

Shares purchased under the Dividend Reinvestment Component and held under the Plan by the Plan Agent for the account of Participants other than CDS will be registered in the name of the Plan Agent or its nominee or in accounts designated by it for the account of Participants other than CDS.  A DRS Advice evidencing book-entry registered ownership of such Shares, or a certificate for such Shares, will only be issued to the Participant if the Plan or the Participant's participation therein is terminated or if the Participant withdraws Shares from its account.

A Participant may, without terminating participation in the Plan, withdraw from its account under the Plan, and have a DRS Advice or Share certificate issued and registered in the Participant's name for, any number of whole Shares held for its account under the Plan by delivering to the Plan Agent a duly completed withdrawal portion of the voucher located on the reverse of the statement of account issued by the Plan Agent.  A withdrawal request form may also be obtained from the Plan Agent at the address below.  Alternatively, a Participant may follow the instructions at the Plan Agent's self-service web portal at www.investorcentre.com.  The withdrawal of Shares and issuance of a DRS Advice or Share certificate will be completed within the Plan Agent's ordinary service standards, which is generally within three (3) weeks from the time the request is received.  Any remaining Shares (including any residual fraction of a Share) will continue to be held by the Plan Agent for the Participant's account under the Plan.

Shares held under the Plan by the Plan Agent for the account of a Participant may not be sold, pledged or otherwise disposed of by the Participant while so held.

For Eligible Shareholders enrolled in the Dividend Reinvestment Component indirectly through CDS, any Shares issued or delivered under the Dividend Reinvestment Component will not be held under the Plan but instead credited through the CDS depository system to the accounts of appropriate CDS Participants on behalf of such Eligible Shareholders. 

Termination of Participation

An Eligible Shareholder who is enrolled in the Plan directly and wishes to voluntarily terminate its participation in the Plan may do so by delivering to the Plan Agent a duly completed termination portion of the voucher located on the reverse of the statement of account issued by the Plan Agent.  A termination request form may also be obtained from the Plan Agent at the address below.  Alternatively, an Eligible Shareholder who is enrolled directly in the Dividend Reinvestment Component and wishes to voluntarily terminate its participation in the Plan may follow the instructions at the Plan Agent's self-service web portal at www.investorcentre.com.  In addition, participation in the Plan will be terminated automatically following receipt by the Plan Agent of written notice of an individual Participant's death.  The termination request will be processed within the Plan Agent's ordinary service standard, which is generally within three (3) weeks from the time the request is received.

A duly completed termination request (or notice of an individual Participant's death) must be received by the Plan Agent before 3:00 p.m. (Calgary time) on the fifth (5th) Business Day preceding a Dividend record date in order for the Participant's account to be closed and participation in the Plan by such Participant to be terminated prior to the Dividend payment date to which that record date relates.  If a duly completed termination request (or notice of an individual Participant's death) is not received by the Plan Agent before 3:00 p.m. (Calgary time) on the fifth (5th) Business Day preceding a Dividend record date, then the Participant's account will not be closed and participation in the Plan by such Participant will not be terminated until after the Dividend payment date to which that record date relates.

An Eligible Shareholder who is enrolled in the Plan indirectly through CDS or otherwise through its broker, investment dealer, financial institution or other nominee and wishes to terminate its participation in the Plan must contact the nominee who holds its Shares and provide appropriate instructions to do so.  The nominee should be consulted to confirm what information or documentation may be required to give effect to the termination instructions, and to inquire about any applicable deadlines that the nominee may impose or be subject to under the policies of that nominee or the CDS depository system.

In the event of termination of participation, a Participant (other than CDS) or a deceased Participant's estate or legal representative, as applicable, will be issued a DRS Advice or Share certificate for the number of whole Shares held under the Plan by the Plan Agent in the Participant's account and payment for any residual fraction of a Share so held based on the prevailing market price obtained by the Plan Agent at the time of sale. 

Change of Election

A registered Eligible Shareholder who is enrolled directly in the Plan and wishes to change its election as between the Premium Dividend™ Component and the Dividend Reinvestment Component may do so by delivering to the Plan Agent a new, duly completed Enrollment Form reflecting the new election. 

A new Enrollment Form must be received by the Plan Agent before 3:00 p.m. (Calgary time) on the fifth (5th) Business Day preceding a Dividend record date in order for the new election to apply to the Dividend to which that record date relates.  If a new Enrollment Form is not received by the Plan Agent before 3:00 p.m. (Calgary time) on the fifth (5th) Business Day preceding a Dividend record date, then the previous election will apply to the Dividend to which that record date relates and the new election will only become effective for purposes of subsequent Dividends.

An Eligible Shareholder who is enrolled in the Plan indirectly through CDS or otherwise through its broker, investment dealer, financial institution or other nominee and wishes to change its election as between the Dividend Reinvestment Component and the Premium Dividend™ Component must contact such nominee who holds its Shares and provide appropriate instructions to do so.  The nominee should be consulted to confirm what information or documentation may be required to give effect to the change of election instructions, and to inquire about any applicable deadlines that the nominee may impose or be subject to under the policies of that nominee or the CDS depository system. 

Transfer Agent

Computershare Trust Company of Canada
100 University Avenue, 9th Floor
Toronto, Ontario M5J 2Y1

Phone 1-800-564-6253
Fax 1-416-263-9394
Toll Free 1-888-453-0330