We are pleased to announce the launch of a new Stock Dividend Program ("SDP") available to all shareholders.
Benefits of the SDP include:
Shareholders can elect to receive dividends paid in Enerplus shares at a 5% discount to current market prices,
The SDP has certain attributes that make it more attractive to shareholders who hold their Enerplus shares in taxable accounts,
No commissions or fees and
Participation in the SDP is completely optional, allowing our shareholders to continue to receive cash dividends unless they elect to receive stock dividends.
The SDP will replace the current DRIP program which is only available to Canadian shareholders. The DRIP will be terminated on May 25, 2012.
In order to receive stock dividends relating to the June 20 dividend payment date under the new SDP, all shareholders must contact their broker or financial intermediary on or prior to June 4, 2012. If you are a registered owner, click here to complete the enrollment form.
Details regarding the SDP can be found in our Management Information Circular and Proxy Statement dated March 9, 2012.
Frequently Asked Questions
1. What are the main differences between the DRIP and the SDP?
- Our current DRIP gives shareholders resident in Canada the option to reinvest cash dividends into common shares of Enerplus at a 5% discount to market prices. The SDP will provide all shareholders with the option to receive dividends in the form of common shares at a 5% discount to current market prices.
- The SDP has certain tax attributes that may make it more attractive to shareholders who hold their shares in taxable accounts.
2. Why change from the DRIP to the SDP?
- Implementation of the SDP allows all of our shareholders to participate in a program to receive dividends in the form of Enerplus shares, whereas the DRIP was only available to Canadian residents.
- The SDP has a more favourable tax treatment for all taxable shareholders compared to the DRIP.
- The SDP will also continue to serve as a source of capital for Enerplus by allowing us to retain cash we would otherwise have paid out as dividends.
3. What are the tax attributes that make the SDP more attractive than the DRIP?
- For Canadian shareholders, a stock dividend is not expected to generate dividend income as Enerplus shares issued under the SDP will have a nominal cost for Canadian tax purposes. Receipt of stock dividends will result in a downward adjustment to the shareholder's overall cost base in the Enerplus shares and would be taxed as a capital gain or loss when those shares are sold.
- For non-Canadian shareholders who hold Enerplus shares in a taxable account, withholding tax that would normally apply to cash dividends should no longer apply to stock dividends. This means that the number of Enerplus shares issued under the SDP will reflect the entire amount of the stock dividend (and not the amount net of any withholding taxes). Non-resident shareholders participating in the SDP should not be subject to any Canadian taxation on capital gains when the shares are sold; however, the SDP is likely to attract some form of tax in the non-residents home country.
- All shareholders are advised to consult their own tax advisors regarding the tax consequences to them of receiving cash or stock dividends. Further information discussing the potential tax consequences of the SDP can be found in our Management Information Circular and Proxy Statement dated March 9, 2012.
4. If I am not a resident of Canada, am I still subject to Canadian withholding tax if I participate in the SDP?
- For non-Canadian shareholders who hold Enerplus shares in a taxable account, withholding tax that would normally apply to cash dividends should no longer apply to stock dividends. This means that the number of Enerplus shares issued under the SDP will reflect the entire amount of the stock dividend (and not the amount net of any withholding taxes).
5. If I am already participating in the DRIP, do I have to re-register?
- If you are a registered shareholder, you will need to complete and deliver to Computershare a stock dividend confirmation notice if you want to participate in the new SDP.
- If you hold your Enerplus shares through a broker, you will need to contact your broker to elect to participate in the new SDP.
- If a shareholder does not make an election to participate in the SDP, cash dividends will be paid to such shareholder.
6. If I hold my Enerplus shares through a broker, what do I need to do to participate?
- Simply contact your broker and advise that you wish to participate in the SDP, and they will make the election on your behalf. Generally, the cutoff date for notification is approximately one week prior to the record date in order to receive that month's dividend as stock. For more information please contact Computershare at 1-866-921-0978.
7. Do I have to enroll all my Enerplus shares in the SDP?
- No, you can enroll all or a portion of your Enerplus shares in the SDP.