PEMBINA PIPELINE CORPORATION


 


Premium DividendTM and Dividend
Reinvestment Plan


 


Certain capitalized terms in this Premium
DividendTM and Dividend Reinvestment Plan have the meaning assigned to them under "Definitions" below.


 


Overview


 


This Premium DividendTM and Dividend
Reinvestment Plan (the "Plan") provides Eligible Shareholders of Pembina Pipeline Corporation ("Pembina")
with the opportunity to reinvest their Dividends in new Shares at a 5% discount to the Average Market Price on the applicable payment
date, which new Shares will, at the Participant's election, either be (i) credited to the Participant's account under the Dividend
Reinvestment Component of the Plan or (ii) exchanged under the Premium DividendTM Component of the Plan for a cash
payment equal to 102% of the reinvested Dividends. Each component of the Plan, which is explained in greater detail below, is subject
to eligibility restrictions, applicable withholding taxes, prorating as provided herein, and other limitations on the availability
of new Shares in certain events.


 


Eligible Shareholders are not required
to participate in the Plan. An Eligible Shareholder who has not elected to participate in the Plan will continue to receive their
regular Dividends in the normal manner.


 


In order to participate in either the Dividend
Reinvestment Component or the Premium DividendTM Component, an Eligible Shareholder must enroll in the Plan directly
or through the broker, investment dealer, financial institution or other nominee who holds Shares on the Eligible Shareholder's
behalf. See "Enrollment" below.


 


Definitions


 


In this Plan:


 


"Average Market Price",
in respect of a particular Dividend payment date, refers to the arithmetic average (calculated by the Plan Broker to four decimal
places) of the daily volume weighted average trading prices of Shares on the TSX for the trading days on which at least one board
lot of Shares is traded on the TSX during the corresponding Pricing Period, subject to such adjustments as Pembina may, in its
sole discretion, determine to be appropriate to account for (i) a change in the aggregate number of Shares outstanding into a greater
or lesser number of Shares, (ii) a reclassification of the Shares, or (iii) a merger, reorganization or other transaction affecting
the Shares.


 


"Business Day"
refers to any day other than a Saturday, Sunday or statutory holiday in the Province of Ontario.


 


"CDS" refers to
CDS Clearing and Depository Services Inc., which acts as a nominee for certain Canadian brokers, investment dealers, financial
institutions and other nominees, or its nominee, as applicable.


 


"CDS Participants"
refers to brokers, investment dealers, financial institutions or other nominees in their capacity as participants in the CDS depository
service, who hold Shares registered in the name of CDS on behalf of eligible beneficial owners of Shares and who are acting on
behalf of such beneficial owners in respect of the Plan.


 





 






		TM	denotes trademark of Canaccord Genuity Corp.



 




    	 



    	 



    

 


"Depository" means
(i) with respect to the Premium DividendTM Component, CDS, and (ii) with respect to the Dividend Reinvestment Component, CDS
and/or DTC.


 


"Depository Participant"
means (i) with respect to the Premium DividendTM Component, a CDS Participant, and (ii) with respect to the Dividend Reinvestment
Component, a CDS Participant and/or a DTC Participant.


 


"Dividend" refers
to a cash dividend declared payable by Pembina on the outstanding Shares.


 


"Dividend Reinvestment Component"
refers to that component of the Plan, as more particularly described herein under the heading "Plan Components –
Dividend Reinvestment", pursuant to which Shares are purchased on the reinvestment of Dividends under the Plan but are
not exchanged for the Premium DividendTM.


 


"DTC" means The
Depository Trust & Clearing Corporation, which acts as nominee for certain United States brokers, investment dealers, financial
institutions and other nominees, or its nominee, as applicable.


 


"DTC Participants"
refers to brokers, investment dealers, financial institutions or other nominees in their capacity as participants in the DTC depository
service who hold Shares registered in the name of DTC on behalf of eligible beneficial owners of Shares who are acting on behalf
of such beneficial owners in respect of the Plan.


 


"Eligible Shareholders"
refers to Shareholders who are permitted to participate in the Plan as described herein under the heading "Eligibility
Requirements".


 


"Enrollment Form"
refers to the Reinvestment Enrollment – Participant Declaration Form (or similar enrollment form) established by Pembina
and the Plan Agent from time to time for the purpose of enrolling eligible registered holders of Shares (other than a Depository)
in the Plan.


 


"NYSE" means the
New York Stock Exchange.


 


"Participants"
refers to registered holders of Shares who, on the applicable record date for a Dividend, are Eligible Shareholders and are duly
enrolled in the Plan; provided, however, that Depositories, Depository Participants and other brokers, investment dealers, financial
institutions or other nominees, as the case may be, shall be Participants only to the extent that such Depositories, Depository
Participants or nominees, respectively, have enrolled in the Plan on behalf of Shareholders who are Eligible Shareholders.


 


"Plan Agent"
refers to Computershare Trust Company of Canada, or such other party as is appointed by Pembina from time to time to act as "Plan
Agent" under the Plan.


 


"Plan Broker" refers
to Canaccord Genuity Corp., or such other qualified investment dealer as is designated from time to time to act as "Plan Broker"
under the Plan.


 


"Premium DividendTM"
refers to a cash amount equal to 102% of a Dividend or, as the context may require, 102% of the aggregate Dividends payable by
Pembina on a particular Dividend payment date to Participants enrolled in the Premium DividendTM Component, subject to proration
in certain events as described herein.


 


"Premium DividendTM
Component" refers to that component of the Plan, as more particularly described herein under the heading "Plan
Components – Premium DividendTM", pursuant to which Shares are purchased on the reinvestment of Dividends under
the Plan and exchanged for the Premium DividendTM.


 




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"Pricing Period",
in respect of a particular Dividend, refers to the period beginning on the later of the 21st Business Day preceding
the Dividend payment date and the second Business Day following the record date applicable to that Dividend payment date,
and ending on the second Business Day preceding the Dividend payment date.


 


"Shareholders"
refers to holders of Shares.


 


"Shares" refers
to common shares in the capital of Pembina.


 


"TSX" refers to
the Toronto Stock Exchange.


 


Plan Components


 


Dividend Reinvestment


 


Under the Dividend Reinvestment Component,
the Plan Agent will, on each Dividend payment date, on behalf of Participants enrolled in the Dividend Reinvestment Component,
apply the aggregate Dividends payable on the Shares of such Participants (after the deduction of any applicable withholding taxes)
towards the purchase from treasury of Pembina of such number of new Shares (calculated to six decimal places) as is equal to the
aggregate amount of such Dividends divided by 95% of the corresponding Average Market Price. The new Shares so purchased will be
held under the Plan by the Plan Agent for the account of applicable Participants or, in the case of Eligible Shareholders who are
enrolled in the Plan indirectly through a Depository, credited through such Depository to the accounts of appropriate Depository
Participants on behalf of such Eligible Shareholders. Any subsequent Dividends paid in respect of Shares purchased under the Dividend
Reinvestment Component will be subject to reinvestment under the Plan (i) in the case of Shares held under the Plan for the account
of a Participant other than a Depository, pursuant to the Participant's current election as between the Dividend Reinvestment Component
and the Premium DividendTM Component, or (ii) in the case of Shares enrolled in the Plan indirectly through a Depository,
pursuant to instructions provided to the Plan Agent by such Depository in the manner described below under the heading "Enrollment".


 


Premium DividendTM


 


Under the Premium DividendTM Component,
the Plan Agent will, on each Dividend payment date, on behalf of Participants enrolled in the Premium DividendTM Component,
apply the aggregate Dividends payable on the Shares of such Participants (after the deduction of any applicable withholding taxes)
towards the purchase from treasury of Pembina of such number of new Shares (calculated to six decimal places) as is equal to the
aggregate amount of such Dividends divided by 95% of the corresponding Average Market Price. Additionally, a number of Shares approximately
equal to the number of new Shares to be purchased under the Premium DividendTM Component will in turn be pre-sold, through
the Plan Broker, in one or more transactions on the TSX.


 


The new Shares purchased on the reinvestment
of Dividends under the Premium DividendTM Component will not be held under the Plan by the Plan Agent or credited through
CDS to the accounts of appropriate CDS Participants on behalf of Eligible Shareholders who are enrolled in the Premium DividendTM
Component, but will instead be delivered to the Plan Broker in exchange for the Premium DividendTM in an amount equal to 102%
of the reinvested amount. The Plan Agent will in turn remit payment of the Premium DividendTM to Participants enrolled in
the Premium DividendTM Component in the same manner that regular Dividends are paid by Pembina.


 




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At the time Shares are delivered to
the Plan Broker, each Shareholder for whom Dividends are reinvested under the Premium DividendTM Component shall be deemed
to represent and warrant to Pembina, the Plan Agent and the Plan Broker that: (i) it holds good and marketable title to such Shares,
free and clear of all liens, restrictions, charges, encumbrances, claims and rights of others; (ii) such Shares are not subject
to resale restrictions; and (iii) it is an Eligible Shareholder.


 


Pembina and the Plan Agent have a commitment
from the Plan Broker to pay the Premium DividendTM to the Plan Agent against delivery of the corresponding Shares on the applicable
Dividend payment date. Although Pembina and the Plan Agent will, if necessary, make claims on this commitment, neither Pembina
nor the Plan Agent has any liability to Participants enrolled in the Premium DividendTM Component (or to any Shareholder for
which the Participant may be acting) for any failure of the Plan Broker to fulfil its obligation to pay the Premium DividendTM
when required. If the Plan Broker does not deliver sufficient funds to pay the Premium DividendTM on all Shares of Participants
enrolled in the Premium DividendTM Component, Pembina will deliver the full amount of the regular Dividend to the Plan Agent
and such Participants will be entitled to receive the regular Dividend for each such Share in respect of which the Premium DividendTM
is not paid by the Plan Broker. For greater certainty, a Participant who receives the regular Dividend in these circumstances will
not be entitled to receive the corresponding Premium DividendTM.


 


Eligibility Requirements


 


Shareholders who are resident in Canada
or the United States may participate in the Dividend Reinvestment Component. Unless otherwise announced by Pembina, only Shareholders
who are resident in Canada may participate in the Premium DividendTM Component. A Shareholder who is a resident of the
United States or is otherwise a "U.S. person" as that term is defined in Regulation S under the United States Securities
Act of 1933, as amended (including, without limitation, any natural person resident in the United States, any partnership or corporation
organized or incorporated under the laws of the United States, any estate of which any executor or administrator is a U.S. person
and any trust of which any trustee is a U.S. person), may participate in the Dividend Reinvestment Component but may not participate
in the Premium DividendTM Component unless otherwise announced by Pembina. For greater certainty, neither DTC nor beneficial
owners of Shares who hold their Shares through DTC are eligible to participate in the Premium DividendTM Component.


 


Shareholders who are resident in any other
jurisdiction outside of Canada and the United States may participate in the Dividend Reinvestment Component only if their participation
is permitted by the laws of the jurisdiction in which they reside and provided that Pembina is satisfied, in its sole discretion,
that such laws do not subject the Plan or Pembina to additional legal or regulatory requirements. Any such Shareholder wishing
to participate in the Dividend Reinvestment Component should consult legal counsel where they reside to determine their eligibility
to participate. Unless otherwise announced by Pembina, Shareholders not resident in Canada may not participate in the Premium
DividendTM Component.


 


The amount of any Dividends to be reinvested
under the Plan, whether under the Dividend Reinvestment Component or the Premium DividendTM Component, on behalf of Shareholders
who are not residents of Canada will be reduced by the amount of any applicable non-resident withholding tax. See "Withholding
Taxes" below.


 


Pembina and the Plan Agent also reserve
the right to deny participation in the Plan to, or cancel the participation of, any person or agent of any person who appears to
be, or who Pembina or the Plan Agent has reason to believe is, subject to the laws of any jurisdiction which do not permit participation
in the Plan in the manner sought by such person or which will subject the Plan or Pembina to requirements of the jurisdiction not
otherwise applicable to the Plan or Pembina, or whose participation in the Plan is suspected to be part of a scheme to avoid applicable
legal requirements or otherwise engage in unlawful behaviour.


 




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Pembina further reserves the right to determine,
from time to time, a minimum number of Shares that a Shareholder must hold in order to be eligible for, or continue to be enrolled
in, the Plan, subject to any applicable legal or regulatory requirements.


 


Enrollment


 


Indirect Enrollment


 


An Eligible Shareholder whose Shares are
not registered in its own name cannot enroll in the Plan directly but may instead do so indirectly through the broker, investment
dealer, financial institution or other nominee who holds their Shares by providing appropriate enrollment instructions to such
nominee. Where such nominee holds Shares in its own name (and not through a Depository) on behalf of an Eligible Shareholder, the
nominee may enroll in the Plan on behalf of the Eligible Shareholder by delivering to the Plan Agent a duly completed Enrollment
Form. Where the Shares are held indirectly through a Depository, enrollment instructions must be communicated to such Depository
by the applicable nominee and Depository Participant in accordance with the procedures of such Depository's depository system,
and such Depository will in turn provide instructions to the Plan Agent regarding the extent of its participation, on behalf of
Eligible Shareholders, in the Dividend Reinvestment Component and, in the case of CDS, the Premium DividendTM Component. Such
Depository's instructions will advise the Plan Agent of: (i) the aggregate number of Shares held through such Depository in respect
of which Dividends are to be reinvested under the Dividend Reinvestment Component; and (ii) in the case of CDS, the aggregate number
of Shares held through CDS in respect of which Dividends are to be reinvested under the Premium DividendTM Component.


 


Direct Enrollment


 


An Eligible Shareholder whose Shares are
registered in its own name may directly enroll in either the Dividend Reinvestment Component or the Premium DividendTM Component
online through the Plan Agent's self-service web portal at www.investorcentre.com or by delivering to the Plan Agent a duly completed
Enrollment Form. A copy of the Enrollment Form is available from the Plan Agent's website at www.computershare.com or by calling
the Plan Agent at 1-800-564-6253, or from Pembina's website at www.pembina.com.


 


A Participant who delivers an Enrollment
Form will be deemed to thereby direct Pembina to credit the Plan Agent with all Dividends payable in respect of all Shares registered
in the name of the Participant or held under the Plan by the Plan Agent for the Participant's account as of the Dividend record
date, and to direct the Plan Agent to reinvest such Dividends in new Shares in accordance with the Dividend Reinvestment Component
or the Premium DividendTM Component, as applicable, and otherwise upon and subject to the terms and conditions described herein.
See "Deemed Representations, Directions and Authorizations" below.


 


Continued Participation


 


Once a Participant (other than a Depository)
has enrolled in either the Premium DividendTM Component or the Dividend Reinvestment Component by delivering to the Plan Agent
a duly completed Enrollment Form, participation in the manner elected by the Participant continues automatically with respect to
all Shares registered in the name of the Participant or held under the Plan by the Plan Agent for the Participant's account until
the Plan or the Participant's participation therein is terminated or until the Participant changes its election.


 




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Eligible Shareholders who participate in
the Plan indirectly through a Depository or otherwise through their broker, investment dealer, financial institution or other nominee
should consult such nominee to confirm the nominee's policies concerning continued participation following initial enrollment.


 


See "Termination of Participation"
and "Change of Election" below.


 


Enrollment Deadlines


 


In order for a particular Dividend payable
on Shares held by an Eligible Shareholder to be reinvested on the Dividend payment date, the Plan Agent must receive (i) a duly
completed Enrollment Form that covers such Shares not later than 5:00 p.m. (Toronto time) on the third (3rd) business
day preceding the record date for the Dividend, or (ii) in the case of Shares enrolled indirectly through a Depository, appropriate
instructions from such Depository regarding the extent of its participation (on behalf of Eligible Shareholders) not later than
such time as may be agreed from time to time between such Depository and the Plan Agent in accordance with custom and practice
relating to the such Depository's depository system. Such Depository must in turn receive appropriate instructions from the nominee
holders that are Depository Participants not later than such deadline as may be established by such Depository from time to time.
Enrollment Forms or Depository instructions, as applicable, received by the Plan Agent after the stipulated deadline will not be
effective in respect of the corresponding Dividend unless otherwise determined by Pembina and the Plan Agent in their sole discretion.


 


Broker Requirements


 


A Depository Participant or other broker,
investment dealer, financial institution or other nominee may require certain information or documentation from an Eligible Shareholder
before it will act upon enrollment instructions relating to the Plan. Eligible Shareholders who wish to participate in the Plan
should contact the broker, investment dealer, financial institution or other nominee who holds their Shares to provide instructions
regarding their decision to enroll in and their election as between the Dividend Reinvestment Component and the Premium DividendTM
Component, to confirm any information or documentation required to give effect to their instructions, to confirm the nominee's
policies concerning continued participation following initial enrollment, and to inquire about any applicable deadlines that the
nominee may impose or be subject to under the policies of that nominee or the Depository's depository system.


 


Administration


 


Computershare Trust Company of Canada has
been appointed to act as Plan Agent for and on behalf of Participants. If Computershare Trust Company of Canada ceases to act as
Plan Agent for any reason, another qualified party will be designated by Pembina to act as Plan Agent and Participants will be
notified of the change.


 


All funds credited to the Plan Agent under
the Plan on account of the reinvestment of Dividends will be applied to the purchase of new Shares directly from Pembina on behalf
of Participants. In no event will interest be paid to Participants on any funds held for reinvestment under the Plan.


 


In carrying out its obligations under the
Plan on behalf of Participants, the Plan Agent shall only be required to act in accordance with the instructions duly received
within the appropriate time periods.


 


Proration in Certain Events


 


Pembina reserves the right to determine,
promptly following each Dividend record date and where practicable in the context of the administration of the Plan, the amount
of new equity, if any, to be made available under the Plan on the Dividend payment date to which such record date relates. No assurances
can be made that new Shares will be made available under the Plan on a regular basis, or at all.


 




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If, in respect of any Dividend payment
date, fulfilling the elections of all Participants under the Plan would result in the issuance of more than the maximum amount
of new equity determined by Pembina to be available under the Plan, then, where practicable, elections for the purchase of new
Shares on that Dividend payment date will be accepted (i) first, from Participants electing to reinvest Dividends under the Dividend
Reinvestment Component, and (ii) second, to the extent that new equity remains available under the Plan, from Participants electing
to receive the Premium DividendTM under the Premium DividendTM Component. If Pembina is not able to accept all elections
for a particular component of the Plan, then purchases of new Shares under that component on the applicable Dividend payment date
will, where practicable, be prorated among all Participants in that component according to the number of Shares enrolled therein.


 


If trading of Shares on the TSX, or the
trading thereof by the Plan Broker, is for any reason prohibited for an entire day, or if the Premium DividendTM Component
is terminated or suspended for any reason, in any such case during a Pricing Period, then purchases of new Shares under that component
on the applicable Dividend payment date will, where practicable in the context of the administration of the Plan, be prorated among
all Participants in that component according to the number of Shares enrolled therein.


 


If on any Dividend payment date Pembina
determines not to issue any equity through the Plan, or the availability of new Shares is prorated in accordance with the terms
of the Plan, or for any other reason a Dividend cannot be reinvested under the Plan, in whole or in part, then Participants will
be entitled to receive from Pembina the full cash amount of the regular Dividend for each Share in respect of which the Dividend
is payable but cannot be reinvested under the Plan in accordance with the applicable election.


 


Price of New Shares


 


The subscription price of new Shares purchased
on a Dividend payment date under both the Dividend Reinvestment Component and the Premium DividendTM Component will be 95%
of the Average Market Price for that Dividend payment date.


 


Subject to the policies of a particular
broker, investment dealer, financial institution or other nominee through which a beneficial Shareholder holds their Shares, full
reinvestment is possible as fractions of Shares may be credited to Participants' accounts maintained under the Plan.


 


Costs


 


No commissions, service charges or similar
fees are payable by Participants to Pembina, the Plan Agent or the Plan Broker in connection with the purchase of new Shares from
treasury under either the Dividend Reinvestment Component or the Premium DividendTM Component. All administrative costs of
the Plan, including the fees and expenses of the Plan Agent, will be paid by Pembina.


 


However, Eligible Shareholders whose Shares
are not registered in their own name but wish to participate in the Plan should consult the broker, investment dealer, financial
institution or other nominee who holds their Shares to confirm whether the nominee charges any fees to enroll or participate in
the Plan on their behalf.


 




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Reports to Participants


 


The Plan Agent will maintain an account
for each Participant with respect to purchases of Shares made under the Plan for that Participant's account and will issue an unaudited
statement regarding purchases made under the Dividend Reinvestment Component on a monthly basis. These statements are a Participant's
continuing record of purchases of Shares made for its account under the Plan and should be retained for income tax purposes. No
statements will be provided to Participants in respect of purchases made under the Premium DividendTM Component.


 


Eligible Shareholders who participate in
the Plan indirectly through their broker, investment dealer, financial institution or other nominee should consult such nominee
to confirm what statements or reports, if any, will be provided by the nominee, whether for tax reporting purposes or otherwise.


 


Whether or not it receives detailed statements
or reports concerning transactions made on its behalf under the Plan, each Shareholder is responsible for calculating and monitoring
its own adjusted cost base in Shares for Canadian and/or U.S. federal income tax purposes, as certain averaging and other rules
may apply and such calculations may depend on the cost of other Shares held by the Shareholder and other factors.


 


Registration of Shares


 


Shares purchased under the Dividend Reinvestment
Component and held under the Plan by the Plan Agent for the account of Participants other than a Depository will be registered
in the name of the Plan Agent or its nominee or in accounts designated by it for the account of such Participants. A Direct Registration
Advice ("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, Participants 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. 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 a Depository, any new Shares issued under the Dividend Reinvestment Component
will not be held under the Plan but instead credited through such Depository's depository system to the accounts of appropriate
Depository Participants on behalf of such Eligible Shareholders.


 


Termination of Participation


 


An Eligible Shareholder who is enrolled
in the Plan directly as a Participant and wishes to terminate their participation in the Plan may do so voluntarily 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, Participants
may follow the instructions at the Plan Agent's self-service web portal at www.investorcentre.com. In addition, participation will
be terminated automatically following receipt by the Plan Agent of written notice of an individual Participant's death.


 




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If a duly completed termination request
(or notice of an individual Participant's death) is not received by the Plan Agent before 5:00 p.m. (Toronto time) on the third
(3rd) 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 a Depository 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 such Depository's depository system.


 


In the event of termination of participation,
a Participant (other than a Depository) or a deceased Participant's estate or legal representative, as applicable, will be issued
a DRS Advice for the number of whole Shares held under the Plan by the Plan Agent in the Participant's account and payment for
the value of any residual fraction of a Share so held based on the closing price of the Shares on the TSX (in respect of Participants
resident in Canada or any jurisdiction other than the United States) or the NYSE (in respect of Participants resident in the United
States) on the trading day prior to the date of termination. Upon termination of participation in the Plan, a Participant will
receive payment for fractional entitlements to Shares, if any, in Canadian currency (for all Participants other than those resident
in the United States) or United States currency (for all Participants resident in the United States).


 


Change of Election


 


An Eligible Shareholder who is enrolled
in the Plan directly as a Participant and wishes to change its election as between the Dividend Reinvestment Component and the
Premium DividendTM Component may do so by delivering to the Plan Agent a new, duly completed Enrollment Form reflecting the
new election. Alternatively, a Participant may follow the instructions at the Plan Agent's self-service web portal at www.investorcentre.com.


 


If a new Enrollment Form is not received
by the Plan Agent before 5:00 p.m. (Toronto time) on the third (3rd) 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 a Depository 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 DividendTM 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 applicable
Depository's depository system.


 


Subdivisions


 


If Shares are distributed pursuant to a
subdivision of Shares, the additional Shares received by the Plan Agent in respect of Shares held under the Plan by the Plan Agent
for the account of Participants will be credited proportionately to the accounts of such Participants.


 




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Shareholder Voting


 


Whole Shares held under the Plan by the
Plan Agent for a Participant's account on the record date for a vote of Shareholders will be voted in accordance with the instructions
of the Participant given on a form to be furnished to the Participant for this purpose. Shares for which instructions are not received
will not be voted. No voting rights will attach to any fraction of a Share held for a Participant's account under the Plan.


 


Deemed Representations, Directions and Authorizations


 


Dividend Reinvestment Component


 


By enrolling in the Dividend Reinvestment
Component, whether directly as a Participant or indirectly through a Depository or otherwise through a broker, investment dealer,
financial institution or other nominee, a Shareholder shall be deemed to have: (i) represented and warranted to Pembina and the
Plan Agent that it is an Eligible Shareholder with respect to participation in the Dividend Reinvestment Component; (ii) appointed
the Plan Agent to receive from Pembina, and directed Pembina to credit the Plan Agent with, all Dividends (less any applicable
withholding taxes) payable in respect of all Shares registered in the name of the Shareholder or held under the Plan for its account
or, in the case of a Shareholder enrolled indirectly through a Depository or otherwise through a broker, investment dealer, financial
institution or other nominee, that are enrolled (through a Depository or otherwise) on its behalf in the Dividend Reinvestment
Component; and (iii) authorized and directed the Plan Agent to reinvest such Dividends (less any applicable withholding taxes)
in new Shares, all in accordance with the provisions of the Dividend Reinvestment Component as set forth herein (which provisions
include, without limitation, the purchase of new Shares at a 5% discount to the Average Market Price and the holding of such new
Shares under the Plan or the crediting of such new Shares through a Depository) and otherwise upon and subject to the terms and
conditions described herein.


 


Premium DividendTM Component


 


By enrolling in the Premium DividendTM
Component, whether directly as a Participant or indirectly through CDS or otherwise through a broker, investment dealer, financial
institution or other nominee, a Shareholder shall be deemed to have: (i) represented and warranted to Pembina, the Plan Agent and
the Plan Broker that it is an Eligible Shareholder with respect to participation in the Premium DividendTM Component; (ii)
appointed the Plan Agent to receive from Pembina, and directed Pembina to credit the Plan Agent with, all Dividends (less any applicable
withholding taxes) payable in respect of all Shares registered in the name of the Shareholder or held under the Plan for its account
or, in the case of a Shareholder enrolled indirectly through CDS or otherwise through a broker, investment dealer, financial institution
or other nominee, that are enrolled (through CDS or otherwise) on its behalf in the Premium DividendTM Component; and (iii)
authorized and directed the Plan Agent to reinvest such Dividends (less any applicable withholding taxes) in new Shares, all in
accordance with the provisions of the Premium DividendTM Component as set forth herein (which provisions include, without
limitation, the purchase of new Shares at the 5% discount to the Average Market Price, the pre-sale of Shares through the Plan
Broker and the delivery of new Shares to the Plan Broker in exchange for payment of the Premium DividendTM) and otherwise
upon and subject to the terms and conditions described herein.


 


Responsibilities of Pembina and the Plan Agent


 


None of Pembina, the Plan Agent or the
Plan Broker will be liable to any Shareholder, a Depository, any Depository Participant or any other nominee acting on behalf of
a Shareholder in respect of the Plan for any act or for any omission to act in connection with the operation of the Plan including,
without limitation, any claims or liability with respect to or arising out of:


 




    	- 10 -



    	 



    

 


		(a)	any failure by a Depository, a Depository Participant or any other nominee to enroll or not enroll
in the Plan any Shareholder (or, as applicable, any Shares held on the Shareholder's behalf) in accordance with the Shareholder's
instructions or to not otherwise act upon a Shareholder's instructions;



 


		(b)	the continued enrollment in the Plan of any Shareholder (or, as applicable, any Shares held on
the Shareholder's behalf) until receipt of all necessary documentation as provided herein required to terminate participation in
the Plan;



 


		(c)	the prices and times at which Shares are purchased under the Plan for the account of, or on behalf
of, any Shareholder;



 


		(d)	any decision by Pembina to issue or not issue new equity through the Plan on any given Dividend
payment date, or the amount of equity issued (if any);



 


		(e)	any decision to amend or terminate the Plan in accordance with the terms hereof;



 


		(f)	any default by the Plan Broker in delivering the Premium DividendTM to the Plan Agent on any
Dividend payment date;



 


		(g)	a prorating, for any reason, of the amount of equity available under the Plan in the circumstances
described herein or otherwise;



 


		(h)	any determination made by Pembina or the Plan Agent regarding a Shareholder's eligibility to participate
in the Plan or any component thereof, including the cancellation of a Shareholder's participation for failure to satisfy eligibility
requirements; or



 


		(h)	any income or withholding taxes or other liabilities payable by a Shareholder in connection with
their participation in the Plan.



 


None of Pembina, the Plan Agent or the
Plan Broker can assure a Participant (or any beneficial owner of Shares for which a Participant may be acting) a profit or protect
a Participant (or any such beneficial owner, as applicable) against loss on Shares purchased under the Plan.


 


The Plan Agent retains the right not to
act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Plan Agent,
in its sole judgment, determines that such act might cause it to be in non-compliance with any applicable anti-money laundering
or anti-terrorist law, regulation or policy or any other law, regulation or policy to which the Plan Agent is now or hereafter
becomes subject.


 


Canadian Federal Income Tax Considerations


 


The following is a summary of the principal
Canadian federal income tax considerations generally applicable to Eligible Shareholders who participate in the Plan. This summary
is of a general nature only, is not exhaustive of all possible tax considerations and is not intended to be legal or tax advice
to any particular Eligible Shareholder.


 


This summary is provided by and on behalf
of Pembina and not the Plan Agent or the Plan Broker. Eligible Shareholders are urged to consult their own tax advisors as to their
particular circumstances and tax position.


 




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This summary is based on the provisions
of the Income Tax Act (Canada) (the "Tax Act") and the regulations thereunder (the "Regulations"),
all specific proposals to amend the Tax Act and the Regulations publicly announced by or on behalf of the Minister of Finance (Canada),
and the administrative and assessing practices of the Canada Revenue Agency (the "CRA"), all as of April
4, 2013. This summary does not otherwise take into account or anticipate any changes in law or the administrative or assessing
practices of the CRA, nor does it take into account any provincial or territorial laws of Canada or the tax laws of any other country,
including, without limitation, any changes which may occur after April 4, 2013.


 


This summary assumes that all Shares held
by an Eligible Shareholder who participates in the Plan (a "Participating Shareholder"), including Shares
purchased pursuant to the Dividend Reinvestment Component or Premium DividendTM Component, are held by the Participating Shareholder
as capital property for the purposes of the Tax Act. The Shares will generally constitute capital property to a Participating Shareholder
provided that the Participating Shareholder does not hold or use such Shares in the course of carrying on a business in which the
Participating Shareholder buys or sells securities, and the Participating Shareholder did not acquire such Shares in one or more
transactions considered to be an adventure or concern in the nature of trade.


 


This summary is not applicable to: (i)
a Participating Shareholder that is a "financial institution" (as defined in the Tax Act) for the purposes of the "mark-to-market"
rules; (ii) a Participating Shareholder an interest in which would be a "tax shelter investment" (as defined in the Tax
Act); (iii) a Participating Shareholder that is a "specified financial institution" or a "restricted financial institution"
(each as defined in the Tax Act); (iv) a Participating Shareholder that has made a "functional currency" election under
the Tax Act to determine its Canadian tax results in a currency other than Canadian currency; or (v) a Participating Shareholder
that has entered or will enter into a "derivative forward agreement" as that term is defined in proposed amendments contained
in a Notice of Ways and Means Motion that accompanied the federal budget tabled by the Minister of Finance (Canada) on March 21,
2013 with respect to the Shares.


 


Canadian Participants


 


This portion of the summary is applicable
to Participating Shareholders who, at all relevant times and for the purposes of the Tax Act, are or are deemed to be residents
of Canada (each, a "Canadian Participant"). Certain Canadian Participants who might not otherwise be considered
to hold their Shares as capital property may, in certain circumstances, be entitled to have their Shares and any other "Canadian
security" (as defined in the Tax Act), treated as capital property by making the irrevocable election permitted by subsection
39(4) of the Tax Act. A Canadian Participant contemplating making such an election should first consult its own tax advisors.


 


Dividends


 


A Canadian Participant's reinvestment of
Dividends pursuant to the Dividend Reinvestment Component or Premium DividendTM Component, in such number of newly-issued
Shares as is equal to the aggregate amount of the Dividend payable on each Dividend payment date divided by 95% of the corresponding
Average Market Price, should not result in the Canadian Participant realizing a taxable benefit under the Tax Act.


 




    	- 12 -



    	 



    

 


The reinvestment of Dividends, or the receipt
of Premium DividendsTM, under the terms of the Plan does not, however, relieve a Canadian Participant from any liability for
income taxes that may otherwise be payable on such Dividends. In this regard, a Canadian Participant who participates in the Dividend
Reinvestment Component or Premium DividendTM Component will be treated, for tax purposes, as having received, on each Dividend
payment date, a taxable dividend equal to the amount of the Dividend payable on such date, which Dividend will be subject to the
same tax treatment accorded to taxable dividends received by the Canadian Participant from a taxable Canadian corporation. For
example, if the Canadian Participant is an individual, Dividends will be subject to the gross-up and dividend tax credit rules
contained in the Tax Act and, if appropriate designations are made at or prior to the time a Dividend is paid to qualify the Dividend
as an "eligible dividend", then the fact that the Dividend is reinvested pursuant to the Plan will not affect the status
of any Dividend as an eligible dividend for purposes of the enhanced gross-up and dividend tax credit available to individuals.
If the Canadian Participant is a corporation, then Dividends received by the Canadian Participant are generally deductible in computing
the Canadian Participant's taxable income and, if the Canadian Participant is a "private corporation" or "subject
corporation" (both defined in the Tax Act), then a refundable tax of 331⁄3% under Part IV of the Tax Act will generally
apply to the Dividend to the extent the Dividend is deductible in computing the Canadian Participant's taxable income.


 


Dispositions


 


A Canadian Participant will generally realize
a capital gain (or loss) on the sale of any Shares, whether sold pursuant to the Premium DividendTM Component or otherwise
outside the Plan (other than a sale to Pembina that is not a sale in the open market in the manner in which Shares would normally
be purchased by any member of the public in the open market), equal to the amount by which the proceeds of disposition is greater
(or less) than the Canadian Participant's adjusted cost base of such Shares and any reasonable costs incurred by the Canadian Participant
in connection with the sale.


 


For the purposes of determining the amount
of any capital gain (or loss) which may result from the disposition of Shares, the adjusted cost base of the Shares owned by a
Canadian Participant at a particular time will be the average cost of all Shares owned by the Canadian Participant at that time,
whether purchased through the Dividend Reinvestment Component or the Premium DividendTM Component or otherwise purchased outside
the Plan. Generally, a Canadian Participant's cost of a Share purchased pursuant to the Dividend Reinvestment Component or Premium
DividendTM Component will be equal to 95% of the Average Market Price of the Share for that Dividend payment date.


 


Generally, one-half of any capital gain
realized by a Canadian Participant on a disposition of Shares purchased pursuant to the Dividend Reinvestment Component or Premium
DividendTM Component must be included in the Canadian Participant's income for the year as a taxable capital gain. Subject
to certain specific rules in the Tax Act, one-half of any capital loss realized by a Canadian Participant on a disposition of Shares
in a taxation year will be an allowable capital loss which must be deducted from any taxable capital gains realized by the Canadian
Participant in the year of disposition. Allowable capital losses for a taxation year in excess of taxable capital gains for that
year generally may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in
any subsequent taxation year against net taxable capital gains realized in such years to the extent and under the circumstances
prescribed by the Tax Act.


 


A Canadian Participant that is throughout
the relevant taxation year a "Canadian controlled private corporation" (as defined in the Tax Act) may be liable to pay
an additional refundable tax of 6 2/3% on its "aggregate investment income" (as defined in the Tax Act) for the year,
which will include an amount in respect of taxable capital gains. If the Canadian Participant is a corporation, the amount of any
capital loss arising from a disposition or deemed disposition of such Shares may be reduced by the amount of dividends received
or deemed to have been received by it on such shares to the extent and under circumstances prescribed by the Tax Act. Similar rules
may apply where a corporation is a member of a partnership or a beneficiary of a trust that owns Shares. Canadian Participants
to whom these rules may be relevant should consult their own tax advisors.


 




    	- 13 -



    	 



    

 


When a Canadian Participant's participation
in the Plan is terminated by the Canadian Participant or Pembina or when the Plan is terminated by Pembina, the Canadian Participant
will receive a cash payment for the value of any residual fraction of a Share based on the closing price of the Shares on the TSX
on the trading day prior to the date of termination. A deemed dividend may arise if the cash payment for a fractional Share exceeds
the paid-up capital in respect of such fractional Share and a capital gain (or loss) may also be realized in certain circumstances.
A deemed dividend is treated in the manner described above in respect of Dividends.


 


Capital gains realized by an individual
(including certain trusts) may give rise to alternative minimum tax under the Tax Act.


 


Where a Canadian Participant has not
made the irrevocable election permitted under subsection 39(4) of the Tax Act to treat their Shares and any other "Canadian
security" (as defined in the Tax Act) as capital property, the CRA may take the position that any Shares purchased and sold
by the Canadian Participant pursuant to the Premium DividendTM Component are not capital property to the Canadian Participant,
such that the tax consequences of the Canadian Participant's sale of Shares pursuant to the Premium DividendTM Component may
differ from the consequences described above.


 


Non-Resident Participants


 


This portion of the summary is applicable
to Participating Shareholders who, at all relevant times and for the purposes of the Tax Act, are not and are not deemed to be
residents of Canada and do not use or hold, and are not deemed to use or hold, the Shares in the course of, or in connection with,
a business carried on in Canada (each, a "Non-Resident Participant"). Special rules, which are not discussed
in this summary, may apply to a Non-Resident Participant that is an issuer carrying on business in Canada or elsewhere. Such Non-Resident
Participants should consult their own tax advisors.


 


Dividends


 


Any Dividends paid or credited in respect
of a Non-Resident Participant's Shares will be subject to a non-resident withholding tax for Canadian income tax purposes. Under
the Tax Act, the rate of non-resident withholding tax on dividends is 25%. However, this rate may be subject to reduction under
the provisions of any income tax treaty between Canada and the country in which the Non-Resident Participant is resident. For example,
under the provisions of the Canada – United States Income Tax Convention, 1980 (the "Treaty"),
where a Non-Resident Participant is a resident of the United States, is fully entitled to the benefits of the Treaty, is the beneficial
owner of such Dividends, and does not maintain a "permanent establishment" or "fixed base" (each within the
meaning of the Treaty) in Canada to which the Non-Resident Participant's Shares are attributable, the rate of Canadian withholding
tax will generally be reduced to 15% of the Dividend.


 


Any Dividends reinvested pursuant to the
Dividend Reinvestment Component will first be reduced by an amount equal to the Non-Resident Participant's Canadian withholding
tax obligation prior to reinvestment.


 


Dispositions


 


A Non-Resident Participant will not be
subject to Canadian income tax under the Tax Act on any capital gains realized on the disposition of any Shares unless such Shares
constitute "taxable Canadian property" (as defined by the Tax Act) to the Non-Resident Participant. Provided the Shares
are listed on a "designated stock exchange" (as defined in the Tax Act and which currently includes the TSX and the NYSE)
at the time of disposition, Shares will not be taxable Canadian property to the Non-Resident Participant unless: (i) at any time
during the 60-month period immediately preceding the disposition, the Non-Resident Participant and/or persons with whom the Non-Resident
Participant did not deal at arm's length, held 25% or more of the issued shares of any class of Pembina's capital stock; and (ii)
more than 50% of the fair market value of the Shares was derived directly or indirectly from one or any combination of real or
immovable property situated in Canada, "Canadian resource properties" as defined in the Tax Act, "timber resource
properties" as defined in the Tax Act and options in respect of, interests in or civil law rights in such properties.


 




    	- 14 -



    	 



    

 


Notwithstanding the foregoing, Shares may
be deemed to be taxable Canadian property in certain circumstances specified in the Tax Act. Where Shares represent taxable Canadian
property to a Non-Resident Participant, any capital gains realized on the sale or deemed disposition of the Shares will be subject
to taxation in Canada, except as otherwise provided in any tax treaty between Canada and the country in which the Non-Resident
Participant is resident.


 


U.S. Federal Income Tax Considerations


 


The following is a general description
of the material United States federal income tax consequences which may be applicable to a United States person (as defined below)
who holds Shares and participates in the Dividend Reinvestment Component of the Plan (referred to as a "U.S. Participant").
This summary applies only to U.S. Participants that hold Shares, including Shares acquired under the Plan, as capital assets and
that have the U.S. dollar as their functional currency.


 


This summary is for general information
purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations
that may apply to a U.S. Participant arising from and relating to the participation in the Plan. In addition, this summary does
not take into account the individual facts and circumstances of any particular U.S. Participant that may affect the U.S. federal
income tax consequences to such U.S. Participant, including without limitation specific tax consequences to a U.S. Participant
under an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S.
federal income tax advice with respect to any U.S. Participant. This summary does not address the U.S. federal alternative minimum,
U.S. federal estate and gift, U.S. state and local, and foreign tax consequences to U.S. Participants of participation in the Plan.
In addition, except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. This
summary assumes that Pembina is not, and will not become, a passive foreign investment company, as described below. Each prospective
U.S. Participant should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal
estate and gift, U.S. state and local, and foreign tax consequences relating to the participation in the Plan.


 


No legal opinion from U.S. legal counsel
or ruling from the Internal Revenue Service (the "IRS") has been requested, or will be obtained, regarding the
U.S. federal income tax consequences of the acquisition, ownership, and disposition of Shares. This summary is not binding on the
IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary.
In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S.
courts could disagree with one or more of the conclusions described in this summary.


 


NOTICE PURSUANT TO U.S. TREASURY DEPARTMENT
CIRCULAR 230: NOTHING CONTAINED IN THIS SUMMARY CONCERNING ANY U.S. FEDERAL TAX ISSUE IS INTENDED OR WRITTEN TO BE USED, AND IT
CANNOT BE USED, BY A PARTICIPANT, FOR THE PURPOSE OF AVOIDING U.S. FEDERAL TAX PENALTIES UNDER THE CODE (AS DEFINED BELOW). THIS
SUMMARY WAS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED BY THIS DOCUMENT. EACH
PARTICIPANT SHOULD SEEK U.S. FEDERAL TAX ADVICE, BASED ON SUCH PARTICIPANT’S PARTICULAR CIRCUMSTANCES, FROM AN INDEPENDENT
TAX ADVISOR.


 




    	- 15 -



    	 



    

 


For purposes of this description, a "United
States person" means any one of the following:


 


		·	an individual who is a citizen or resident of the United States;



 


		·	a corporation (including any entity treated as a corporation for U.S. federal income tax purposes)
organized in or under the laws of the United States or of any political subdivision of the United States;



 


		·	an estate that is subject to United States federal income taxation without regard to the source
of its income; or



 


		·	a trust, if a United States court has primary supervision over its administration and one or more
United States persons have the authority to control all substantial decisions of the trust, or the trust has made a valid election
to be treated as a United States person.



 


Authorities


 


This summary is based on the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury Regulations (whether final, temporary, or proposed), published
rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America
with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the "Canada-U.S. Tax Convention"),
and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date of this document. Any
of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change
could be applied on a retroactive or prospective basis which could affect the U.S. federal income tax considerations described
in this summary. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation.


 


U.S. Participants Subject to Special
U.S. Federal Income Tax Rules Not Addressed


 


This summary does not address the U.S.
federal income tax considerations applicable to U.S. Participants that are subject to special provisions under the Code, including,
but not limited to, the following U.S. Participants that: (a) are tax-exempt organizations, qualified retirement plans, individual
retirement accounts, or other tax-deferred accounts; (b) are financial institutions, underwriters, insurance companies, real estate
investment trusts, or regulated investment companies; (c) are broker-dealers, dealers, or traders in securities or currencies that
elect to apply a mark-to-market accounting method; (d) have a “functional currency” other than the U.S. dollar; (e)
own Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving
more than one position; (f) acquired Shares in connection with the exercise of employee stock options or otherwise as compensation
for services; (g) hold Shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property
held for investment purposes); or (h) own or have owned (directly, indirectly, or by attribution) 10% or more of the total combined
voting power of the outstanding shares of the Company. This summary also does not address the U.S. federal income tax considerations
applicable to U.S. Participants who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have
been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Income Tax Act (Canada) (the "Tax
Act"); (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold Shares in connection
with carrying on a business in Canada; (d) persons whose Shares constitute "taxable Canadian property" under the Tax
Act; or (e) persons that have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax Convention. U.S. Participants
that are subject to special provisions under the Code, including, but not limited to, U.S. Participants described immediately above,
should consult their own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift,
U.S. state and local, and foreign tax consequences relating to the participation in the Plan.


 




    	- 16 -



    	 



    

 


If an entity or arrangement that is classified
as a partnership (or other "pass-through" entity) for U.S. federal income tax purposes holds Shares, the U.S. federal
income tax consequences to such entity and the partners (or other owners) of such entity generally will depend on the activities
of the entity and the status of such partners (or owners). This summary does not address the tax consequences to any such owner.
Partners (or other owners) of entities or arrangements that are classified as partnerships or as "pass-through" entities
for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences arising
from and relating to the participation in the Plan.


 


Amount Capable of Inclusion in Income


 


For U.S. federal income tax purposes, a
U.S. Participant who is a participant in the Plan will be treated as receiving a distribution equal to the sum of (i) the fair
market value as of the distribution payment date of the Shares acquired pursuant to the Plan, and (ii) any Canadian taxes which
are withheld with respect to the distribution. The amount treated as a distribution will be includible in the U.S. Participant’s
income as a taxable dividend to the extent of Pembina’s current and accumulated earnings and profits, as determined for U.S.
federal income tax purposes. Any portion of the distribution in excess of Pembina’s earnings and profits will first be treated
as a tax-free return of capital to the extent of the U.S. Participant’s tax basis in its Shares and will be applied against
and reduce that basis on a dollar-for-dollar basis (thereby increasing the amount of gain and decreasing the amount of loss recognized
on a subsequent disposition of the Shares). To the extent that the distribution exceeds the U.S. Participant’s tax basis,
the excess will constitute gain from a sale or exchange of the Shares. Dividends received on the Shares by corporate U.S. shareholders
generally will not be eligible for the "dividends received deduction". Subject to applicable limitations, dividends paid
by Pembina to non-corporate U.S. Participants, including individuals, generally would be eligible for the preferential tax rates
applicable to long-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including
that Pembina not be classified as a PFIC (as defined below) in the tax year of distribution or in the preceding tax year. The dividend
rules are complex, and each U.S. Participant should consult its own tax advisor regarding the application of such rules.


 


A U.S. Participant will not realize any
additional taxable income upon the receipt of certificates for whole Shares that were credited to the U.S. Participant’s
account either upon the U.S. Participant’s request for certificates for certain of those Shares or upon withdrawal from or
termination of the Plan although a U.S. Participant could recognize income upon the receipt of cash in lieu of a fractional Share.


 


Foreign Currency Gains


 


Taxable distributions with respect to the
Shares that are paid in Canadian dollars will be included in the gross income of a U.S. Participant as translated into U.S. dollars
calculated by reference to the exchange rate in effect on the day the dividend payment date regardless of whether the Canadian
dollars are converted into U.S. dollars at that time. A U.S. Participant who receives a payment in Canadian dollars and converts
Canadian dollars into U.S. dollars at a conversion rate other than the rate in effect on the day of the dividend payment date may
have a foreign currency exchange gain or loss that would be treated as United States source ordinary income or loss. U.S. Participants
are urged to consult their own tax advisors concerning the U.S. federal income tax consequences of acquiring, holding and disposing
of Canadian dollars.


 




    	- 17 -



    	 



    

 


In the case of a cash basis U.S. Participant
who receives Canadian dollars, or another foreign currency, in connection with a sale, exchange or other disposition of Shares,
the amount realized will be based on the U.S. dollar value of the foreign currency received with respect to the Shares as determined
on the settlement date of the sale or exchange. An accrual basis U.S. Participant may elect the same treatment required of cash
basis taxpayers with respect to a sale or exchange of Shares, provided that the election is applied consistently from year to year.
This election may not be changed without the consent of the IRS. If an accrual basis U.S. Participant does not elect to be treated
as a cash basis taxpayer, that U.S. Participant may have a foreign currency gain or loss for U.S. federal income tax purposes equal
to the difference between the U.S. dollar value of the currency received on the date of the sale or exchange of the Shares and
the date of payment. This currency gain or loss would be treated as ordinary income or loss and would be in addition to the gain
or loss, if any, recognized by that U.S. Participant on the sale, exchange or other disposition of the Shares.


 


Basis and Holding Period


 


The tax basis of Shares received by a U.S.
Participant pursuant to the Plan will equal the fair market value as of the dividend payment date of those Shares, and the holding
period for those Shares will begin on the day after the dividend payment date.


 


Sale, Exchange or Other Disposition
of the Shares


 


Upon a sale, exchange or other disposition
of the Shares acquired under the Plan, a U.S. Participant will recognize a capital gain or loss for U.S. federal income tax purposes
in an amount equal to the difference between the amount realized (which shall include the amount of taxes withheld therefrom, if
any) and its adjusted tax basis in such Shares. Any such gain or loss generally will be long-term capital gain or loss if the U.S.
Participant’s holding period in the Shares exceeds one year. Non-corporate U.S. Participants (including individuals) generally
will be subject to U.S. federal income tax on long-term capital gain at preferential rates. The deductibility of capital losses
is subject to significant limitations.


 


Additional Tax on Passive Income


 


Certain individuals, estates and trusts
whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surtax on "net investment income" including,
among other things, dividends and net gain from disposition of property (other than property held in certain trades or businesses).
U.S. Participants should consult their own tax advisors regarding the effect, if any, of this tax on their participation in the
Plan and the ownership and disposition of Shares.


 


Passive Foreign Investment Company Considerations


 


Special, generally unfavorable, rules apply
to the ownership and disposition of the stock of a passive foreign investment company ("PFIC"). In the absence
of any qualified electing fund ("QEF") or mark-to-market election, if Pembina were to be treated as a PFIC for
any year during which a U.S. Participant held Shares, the U.S. Participant would be taxed under generally unfavorable rules that
apply if a U.S. Participant recognizes a gain on the sale or other disposition of PFIC stock or receives certain distributions
with respect to PFIC stock. Among the consequences would be a loss of favorable capital gains rates and the imposition of an interest
charge. Pembina believes that it was not a PFIC during its prior taxable year and, based on its current operations and financial
expectations, Pembina expects it will not become a PFIC during its current taxable year ending December 31, 2013. However, PFIC
classification is fundamentally factual in nature, generally cannot be determined until the close of the tax year in question,
and is determined annually. Additionally, the analysis depends, in part, on the application of complex U.S. federal income tax
rules, which are subject to differing interpretations. Consequently, there can be no assurance that Pembina has never been and
will not become a PFIC for any tax year during which U.S. Participants hold Shares. U.S. Participants should consult their own
tax advisors regarding the possible classification of Pembina as a PFIC and the consequences if that classification were to occur,
and the availability of the QEF election or mark-to-market election.


 




    	- 18 -



    	 



    

 


Foreign Tax Credits


 


Regardless of whether the distribution
to a U.S. Participant under the Plan is subject to tax under the PFIC rules or as described in "Amount Capable of Inclusion
in Income" above, any tax withheld by Canadian taxing authorities with respect to a distribution under the Plan may, subject
to a number of complex limitations, be claimed as a foreign tax credit against a U.S. Participant’s U.S. federal income tax
liability or may be claimed as a deduction for U.S. federal income tax purposes. The limitation on foreign taxes eligible for credit
is calculated separately with respect to specific classes of income. For this purpose, dividends that are distributed with respect
to Shares will generally be foreign source income for purposes of computing the foreign tax credit allowable to a U.S. Participant.
Gains recognized on the sale of Shares by a U.S. Participant should be treated as U.S. source for this purpose, except as otherwise
provided in an applicable income tax treaty, and if an election is properly made under the Code. Because of the complexity of those
limitations, each U.S. Participant should consult its own tax advisor with respect to the amount of foreign taxes that may be claimed
as a credit.


 


U.S. Information Reporting and Backup
Withholding


 


Under U.S. federal income tax law and Treasury
Regulations, certain categories of U.S. Participants must file information returns with respect to their investment in, or involvement
in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who
are U.S. Participants that hold certain specified foreign financial assets. The definition of specified foreign financial assets
includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained
by a financial institution, any stock or security issued by a non-United States person, any financial instrument or contract held
for investment that has an issuer or counterparty other than a United States person and any interest in a foreign entity. U.S.
Participants may be subject to these reporting requirements unless their Shares are held in an account at a U.S. financial institution.
Penalties for failure to file certain of these information returns are substantial. U.S. Participants should consult with their
own tax advisors regarding the requirements of filing information returns, including the requirement to file an IRS Form 8938.


 


Payments made within the U.S. or by a U.S.
payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, Shares will generally
be subject to information reporting and backup withholding tax, at the rate of 28%, if a U.S. Participant (a) fails to furnish
such U.S. Participant’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S.
taxpayer identification number, (c) is notified by the IRS that such U.S. Participant has previously failed to properly report
items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Participant has furnished
its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Participant that it is subject to backup
withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding
rules. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Participant’s
U.S. federal income tax liability, if any, or will be refunded, if such U.S. Participant furnishes required information to the
IRS in a timely manner.


 


The discussion of reporting requirements
set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S. Participant.
A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess
a tax, and under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting
requirement. Each U.S. Participant should consult its own tax advisor regarding the information reporting and backup withholding
rules.


 




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Amendment or Termination of the Plan


 


Pembina reserves the right to amend or
terminate the Plan at any time, provided that no such action shall have retroactive effect prejudicial to Participants. Pembina
will publicly announce any material amendments to or termination of the Plan. Generally, no notice will be given to Participants
regarding any amendments to the Plan intended to cure, correct or rectify any ambiguities, defective or inconsistent provisions,
errors, mistakes or omissions. Amendments to the Plan will be subject to the prior approval of the TSX and any other applicable
stock exchange on which the Shares are listed.


 


In the event of termination of the Plan,
Participants will be issued a DRS Advice for the number of whole Shares held under the Plan by the Plan Agent in the Participant's
account and payment for the value of any remaining fraction of a Share so held based on the closing price of the Shares on the
TSX (in respect of Participants resident in Canada or any jurisdiction other than the United States) or the NYSE (in respect of
Participants resident in the United States) on the trading day prior to the date of termination. Upon termination, a Participant
will receive payment for fractional entitlements to Shares, if any, in Canadian currency (for all Participants other than those
resident in the United States) or United States currency (for all Participants resident in the United States).


 


Withholding Taxes


 


The Plan is subject to any withholding
obligations that Pembina may have with respect to taxes or other charges under applicable laws, and any amounts to be reinvested
hereunder shall be net of any amounts required to be withheld.


 


Interpretation


 


Any issues of interpretation arising in
connection with the Plan or its application shall be conclusively determined by Pembina.


 


Governing Law


 


The Plan shall be governed by, and administered
and construed in accordance with, the laws of the Province of Alberta and the federal laws of Canada applicable therein.


 


Notices and Inquiries


 


Any notices, documents (including a DRS
Advice or a Share certificate) or payments required under the Plan to be given or delivered to Participants by Pembina or the Plan
Agent shall be validly given or delivered if mailed to Participants at their respective addresses as recorded in the register of
Shareholders maintained by or on behalf of Pembina or, in the case of a Depository, if given in accordance with custom and practice
relating to the such Depository’s depository system.


 


Inquiries to the Plan Agent may be directed
to:


 


Computershare Trust Company of
Canada


100 University Avenue, 9th Floor,
North Tower


Toronto, Ontario M5J 2Y1


 


Attention:  Dividend
Reinvestment Department


Toll-Free Tel:    1-800-564-6253


 




    	- 20 -



    	 



    

 


Inquiries to Pembina may be directed to:


 


Pembina Pipeline Corporation


3800, 525 - 8th Avenue S.W.


Calgary, Alberta T2P 1G1


 


	Attention:	Investor Relations
	Tel:	(403) 231-3156
	Toll-Free:	1-855-880-7404
	Fax:	(403) 691-7356
	E-mail:	investor-relations@pembina.com


 


Effective Date


 


The effective date of the Plan is October
1, 2010, as amended on April 4, 2013.


 




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