Document:

Exhibit 4.2

 

 

 

CENOVUS
ENERGY INC.

 

 

DIVIDEND
REINVESTMENT PLAN

 

 

April 21,
2010

 

 

IMPORTANT NOTICE

 

As a
holder of common shares of Cenovus Energy Inc., you should read this document
carefully before making any decision regarding the Dividend Reinvestment Plan.

 

If you
are a holder of common shares of Cenovus Energy Inc. and resident of the United
States and have received this document, please see the prospectus relating to
the Dividend Reinvestment Plan, including the United States federal income tax considerations
and risk factors included therein and the documents incorporated by reference
therein, which form part of the Registration Statement on Form F-3 (the “Registration
Statement”), filed with the Securities and Exchange Commission (the “SEC”) on April 30,
2010.  The Registration Statement and our
U.S. filings are electronically available from the SEC’s Electronic Document
Gathering and Retrieval System, which is commonly known by the acronym EDGAR
and may be accessed at www.sec.gov.

 

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CENOVUS ENERGY INC.

 

Dividend Reinvestment Plan

 

1.                                      Purpose

 

The Plan (as defined
herein) permits holders of Common Shares (as defined herein) to automatically
reinvest all or any portion of the cash dividends paid on their Common Shares
in additional Common Shares.  Common
Shares distributed under the Plan will, at the option of the Corporation (as
defined herein), be issued from the treasury of the Corporation or purchased by
the Plan Agent (as defined herein) in the open market on a stock exchange, or a
combination of both and, in each case, in the manner specified herein.

 

2.                                      Definitions

 

Unless the context
otherwise requires, capitalized terms used in this Plan have the following
definitions:

 

“Average
Market Price” has, as the context dictates, the meaning set out in Section 5.6
or 5.7;

 

“beneficial owner” means a
beneficial owner of Common Shares that are registered in the name of CDS, DTC
or a broker, investment dealer, financial institution or other nominee;

 

“Board” means the board of directors of
the Corporation, as it may be constituted from time to time;

 

“Business Day”
means any day on which the Plan Agent’s offices are generally open for the
transaction of commercial business, but does not in any event include a
Saturday, Sunday, civic or statutory holiday in the Province of Alberta;

 

“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 Common Shares registered
in the name of CDS on behalf of beneficial owners of Common Shares, and who are
acting on behalf of such beneficial owners hereunder;

 

“Common
Shares” means the common shares in the capital of the Corporation;

 

“Corporation”
means Cenovus Energy Inc.;

 

“Dividend
Payment Date” means a date on which cash dividends are paid on
Common Shares;

 

“Dividend
Record Date” means a record date for the payment of cash dividends
on Common Shares;

 

 

“DTC” means The Depository
Trust Company, 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 Common
Shares registered in the name of DTC on behalf of beneficial owners of Common
Shares who are acting on behalf of such beneficial owners hereunder;

 

“Enrollment Form” has the meaning set
out in Section 3.2;

 

“Market
Purchase” has the meaning set out in Section 5.5;

 

“Market Purchase Shares” means Plan
Shares acquired by the Plan Agent pursuant to a Market Purchase;

 

“Nominees” refers to brokers, investment
dealers, financial institutions or other nominees (other than CDS or DTC) who
hold Common Shares registered in their own names on behalf of beneficial owners
of Common Shares and who are acting on behalf of such beneficial owners
hereunder;

 

“Participants” means registered
Shareholders who, on the applicable Dividend Record Date, have all or any
portion of their Common Shares enrolled in the Plan; provided, however, that
CDS, DTC and Nominees, as the case may be, shall be Participants only to the
extent that CDS, DTC or the Nominees, respectively, have enrolled in the Plan
on behalf of beneficial owners of Common Shares;

 

“Plan”
means this Cenovus Energy Inc. Dividend Reinvestment Plan, as may be amended or
supplemented from time to time;

 

“Plan Agent”
means CIBC Mellon Trust Company, or such other agent as may be appointed by the
Corporation from time to time to administer the Plan;

 

“Plan Shares”
has the meaning set out in Section 5.1;

 

“Shareholder”
means a holder of Common Shares;

 

“trading day”
means a day on which not less than 500 Common Shares were traded on the Toronto
Stock Exchange or New York Stock Exchange, as applicable;

 

“Treasury
Purchase” has the meaning set out in Section 5.5; and

 

“Treasury Purchase Shares” means Plan
Shares acquired by the Plan Agent pursuant to a Treasury Purchase.

 

3.                                      Participation in the Plan

 

3.1                               Eligibility

 

Subject to the
provisions of this Part 3, all registered and beneficial owners of Common
Shares who are residents in Canada, in the United States and any other
jurisdiction where the Common Shares are qualified for sale can participate in
the Plan.  The Common Shares are
registered under the United States Securities Exchange Act of 1934 and are
offered for sale in both Canada and the United States.  

 

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Shareholders that are
resident in jurisdictions other than Canada and the United States can also
participate in the Plan, subject to any restrictions of laws in such
shareholder’s jurisdiction of residence.

 

3.2                               Enrollment – Registered Shareholders

 

Registered Shareholders (other than CDS or DTC) may enroll all or any
portion of their Common Shares in the Plan by completing and delivering to the
Plan Agent, via facsimile or by mail in the manner provided for in Section 10,
a duly completed and executed enrollment form in the form provided by the Corporation
and the Plan Agent for this purpose (the “Enrollment Form”).  Registered Shareholders may obtain an
Enrollment Form by contacting the Plan Agent in any of the manners
specified in Section 10 or by following the instructions provided on the
Corporation’s website at www.cenovus.com. 
Each of CDS and DTC will provide separate instructions to the Plan Agent
regarding the extent of its participation in the Plan on behalf of beneficial
owners of Common Shares.

 

The Enrollment Form or instructions from CDS or DTC, as
applicable, will direct (or be deemed to direct, as applicable) the Corporation
to forward to the Plan Agent all cash dividends in respect of Common Shares
registered in the name of the Participant that are enrolled in the Plan and
will direct (or be deemed to direct, as applicable) the Plan Agent to reinvest
such cash dividends, together with cash dividends in respect of Common Shares
held by the Plan Agent for the Participant’s account under the Plan, in Plan
Shares in accordance with the Plan.

 

An Enrollment Form must be received by the
Plan Agent no later than 4:00 p.m. (Toronto time) on the fifth (5th) Business Day immediately
preceding a Dividend Record Date in order to take effect on the Dividend
Payment Date to which such Dividend Record Date relates. 
If an Enrollment Form is received by the Plan Agent from a
registered Shareholder after that time, the Enrollment Form will not take
effect on such Dividend Payment Date and will only take effect on the next
following and subsequent Dividend Payment Dates.  Instructions from CDS or DTC must be received
by the Plan Agent within two (2) days after the applicable Dividend Record
Date.

 

3.3                               Enrollment – Beneficial Owners of Common
Shares

 

Beneficial owners of
Common Shares registered in the name of CDS, DTC or a Nominee may not directly
enroll in the Plan in respect of those Common Shares, but must instead either (i) transfer
the Common Shares into their own name and then enroll such Common Shares in the
Plan directly, or (ii) make appropriate arrangements with the broker,
investment dealer, financial institution or other nominee who holds their
Common Shares to enroll in the Plan on their behalf, either as a Nominee that
delivers a completed and executed Enrollment Form to the Plan Agent, via
facsimile or by mail in the manner provided for in Section 10, or, if
applicable, as a CDS Participant or a DTC Participant through instructions from
CDS or DTC, respectively.

 

Where a beneficial owner
of Common Shares wishes to enroll in the Plan through a CDS Participant or a
DTC Participant in respect of Common Shares registered through CDS or DTC,
appropriate instructions must be received by CDS or DTC, as applicable, from
the CDS Participant or DTC Participant not later than such deadline as may be
established by CDS or DTC from time to time, in order for the instructions 

 

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to take effect on the
Dividend Payment Date to which that Dividend Record Date relates.

 

Instructions received by
CDS or DTC after their internal deadline will not take effect until the next
following Dividend Payment Date.  CDS
Participants and DTC Participants holding Common Shares on behalf of beneficial
owners of Common Shares registered through CDS or DTC must arrange for CDS or
DTC, as applicable, to enroll such Common Shares in the Plan on behalf of such
beneficial owners in respect of each Dividend Payment Date.

 

Beneficial owners of
Common Shares should contact the broker, investment dealer, financial
institution or other nominee who holds their Common Shares to provide
instructions regarding their participation in the Plan and to inquire about any
applicable deadlines that the nominee may impose or be subject to.

 

3.4                               Continued Enrollment

 

Common Shares enrolled
by a Participant (other than CDS or DTC) in the Plan will remain enrolled in
and will automatically continue to be enrolled in the Plan until such time as
the Plan is terminated by the Corporation or until the Participant’s enrollment
is terminated by the Participant or by the Corporation.  The Plan Shares acquired under the Plan for
the account of the Participant will automatically be enrolled in the Plan.

 

CDS or DTC, as
applicable, will provide instructions to the Plan Agent regarding the extent of
its participation in the Plan, on behalf of beneficial owners of Common Shares,
in respect of every Dividend Payment Date on which cash dividends otherwise
payable to CDS or DTC, as applicable, as Shareholder of record, are to be
reinvested under the Plan.

 

Common Shares purchased
by a Participant outside of the Plan and registered in exactly the same manner
as Common Shares enrolled in the Plan will be automatically enrolled in the
Plan in the same proportion as indicated on the Participant’s Enrollment
Form.  Common Shares purchased by a
Participant outside of the Plan that are not registered in exactly the same
name or manner as Common Shares enrolled in the Plan will not be automatically
enrolled in the Plan.  Participants are
advised to contact the Plan Agent in the event that the Participant wishes to
enroll such additional Common Shares in the Plan.

 

3.5                               Restrictions

 

Subject to applicable
law and regulatory policy, the Corporation reserves the right to determine,
from time to time, a minimum number of Common Shares that a Participant must
hold in order to be eligible to participate in, or continue to participate in,
the Plan.  Without limitation, the
Corporation further reserves the right to refuse participation in the Plan to,
or terminate the participation of, any person who, in the sole opinion of the
Corporation, is participating in the Plan primarily with a view to arbitrage
trading, whose participation in the Plan is part of a scheme to avoid
applicable legal requirements or engage in unlawful behaviour or has been artificially
accumulating securities of the Corporation, for the purpose of taking undue
advantage of the Plan to the detriment of the Corporation.  The Corporation may also deny the right to
participate in the Plan to any person or terminate the participation of any
Participant in the Plan if the Corporation deems it advisable under any laws or
regulations.

 

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3.6                               Fees

 

Participants will not be
responsible for any brokerage commissions, administration costs or other
service charges in connection with the purchase by the Plan Agent of Plan
Shares on behalf of the Participants. 
All such costs will be paid by the Corporation.  Plan Shares purchased on behalf of a
Participant are either purchased directly from the treasury of the Corporation,
in which case there are no brokerage commissions, or purchased in the open
market on a stock exchange, in which case all brokerage commissions are paid by
the Corporation.

 

Beneficial owners of Common Shares who wish to participate in the Plan
through the broker, investment dealer, financial institution or other nominee
who holds their Common Shares should consult that nominee to confirm what fees,
if any, the nominee may charge to enroll all or any portion of such beneficial owners’
Common Shares in the Plan on their behalf or whether the nominee’s policies
might result in any costs otherwise becoming payable by such beneficial owners.

 

4.                                      The Plan Agent

 

4.1                               Administration of the Plan

 

CIBC Mellon Trust Company has been appointed to administer the Plan on
behalf of the Corporation and the Participants pursuant to an agreement between
the Corporation and the Plan Agent.  If
CIBC Mellon Trust Company ceases to act as Plan Agent for any reason, another
qualified entity will be designated by the Corporation to act as Plan Agent and
Participants will be promptly notified of the change.

 

All funds received by the Plan Agent under the Plan (which consist of
cash dividends received from the Corporation) will be applied to the purchase
of Plan Shares.  In no event will
interest be paid to Participants on any funds held for reinvestment under the
Plan.

 

Notwithstanding the foregoing, all issues of interpretation arising in
connection with the Plan or its application shall be conclusively determined by
the Corporation.  See Section 9.5.

 

4.2                               Dealing in Corporation Securities

 

The Plan Agent or its
affiliates may, from time to time, for their own account or on behalf of
accounts managed by them, deal in securities of the Corporation and will not be
liable to account to the Corporation or to Participants in respect of such
dealings.

 

Neither the Corporation
nor the Plan Agent will exercise any direct or indirect control over the price
paid for Plan Shares purchased under the Plan.

 

4.3                               Adherence to Regulation

 

The Plan Agent is
required to comply with applicable laws, orders or regulations of any
governmental authority which impose on the Plan Agent a duty to take or refrain
from taking any action under the Plan and to permit any properly authorized
person to have access to and to examine and make copies of any records relating
to the Plan.

 

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4.4                               Resignation of Plan Agent

 

The Plan Agent may
resign as Plan Agent under the Plan in accordance with the agreement between
the Corporation and the Plan Agent, in which case the Corporation will appoint
another agent as the Plan Agent.

 

5.                                      Purchase of Common Shares Under
the Plan

 

5.1                               Aggregation of Dividends

 

On each Dividend Payment Date, the Corporation will pay all cash
dividends payable on Common Shares enrolled in the Plan to the Plan Agent.  Those cash dividends, after deduction of any
applicable withholding tax, will be aggregated and used by the Plan Agent to
purchase Common Shares (including fractional Common Shares, calculated to three
decimal places) (the “Plan Shares”)
by way of a Treasury Purchase or a Market Purchase (each, as defined herein),
or a combination of both, in each case in the manner specified below, on behalf
of Participants.

 

5.2                               Fractional Shares

 

Full reinvestment is possible under the Plan as the Plan Agent will
credit to the account of each Participant, on each reinvestment made under the
Plan, fractional Common Shares, calculated to three decimal places, for any
amount that cannot be reinvested in whole Common Shares.  The crediting of fractional Common Shares in
favour of beneficial owners who participate in the Plan through a broker,
investment dealer, financial institution or other nominee will depend on the
policies of that broker, investment dealer, financial institution or other
nominee.

 

In certain events described in the Plan, a Participant or its legal
representative will be entitled to receive a cheque in payment of the value of
any fractional Common Shares remaining in the Participant’s account.  Upon such payment being sent to the
Participant or its legal representative, the Participant’s fractional Common
Shares will be deemed to be cancelled. 
Any such payment will be made, pursuant to the Plan, after deduction of
any applicable withholding tax, for all Participants resident in Canada, in
Canadian currency and for all other Participants, in United States currency.

 

5.3                               Purchase Date

 

With respect to a Market
Purchase, the Plan Agent will acquire the applicable aggregate number of Market
Purchase Shares, in the manner provided for herein, on the applicable Dividend
Payment Date or such other date or dates as soon as practicable thereafter.

 

With respect to a
Treasury Purchase, the Plan Agent will purchase Treasury Purchase Shares from
the Corporation’s treasury on the applicable Dividend Payment Date.

 

5.4                               Crediting of Accounts

 

On the date of each
Treasury Purchase or Market Purchase, the Plan Shares acquired by the Plan
Agent on such date will be credited to the accounts of the Participants (or, in
the case of CDS and DTC, credited by the Plan Agent to CDS and DTC
respectively, which will each in turn credit the accounts of the applicable CDS
Participants or DTC Participants respectively). 
The number of Treasury Purchase Shares or Market Purchase Shares or
combination thereof comprising the Plan 

 

6

 

Shares acquired by the
Plan Agent on each date of acquisition, credited to each Participant’s account
on each such date, shall be determined, in each case, on a pro rata basis
according to the relative entitlement of each Participant to Plan Shares
pursuant to the Plan.

 

5.5                               Source of Plan Shares

 

The Plan Shares acquired
by the Plan Agent under the Plan will, at the sole option of the Corporation,
either be Common Shares issued from the treasury of the Corporation (a “Treasury Purchase”) or be Common Shares acquired on the open
market through the facilities of the Toronto Stock Exchange (in respect of
Participants resident in Canada) or the New York Stock Exchange (in respect of
Participants resident in any jurisdiction other than Canada) (in each instance,
a “Market Purchase”) or a combination of
both.

 

5.6                               Price of Market Purchase Shares

 

The price of Market
Purchase Shares will be 100 percent of the average purchase price of the Common
Shares (denominated in the currency in which the Common Shares trade on the
applicable stock exchange) purchased by the Plan Agent on behalf of the
Participants on the Toronto Stock Exchange and/or New York Stock Exchange, as
applicable, on the date that such Market Purchase Shares were acquired by the
Plan Agent pursuant to a Market Purchase (in respect of the Market Purchase
Shares, the “Average Market Price”).

 

Neither the Corporation nor the Plan Agent will exercise any direct or
indirect control over the price paid for Market Purchase Shares acquired under
the Plan.

 

5.7                               Price of Treasury Purchase Shares

 

The price allocated to
each Plan Share, or fraction thereof, acquired by the Plan Agent through a
Treasury Purchase will be 100 percent of the volume weighted average price of
the Common Shares (denominated in the currency in which the Common Shares trade
on the applicable stock exchange) traded on the Toronto Stock Exchange (with
respect to Treasury Purchase Shares acquired on behalf of Participants resident
in Canada) or the New York Stock Exchange (with respect to Treasury Purchase
Shares acquired on behalf of Participants resident in any jurisdiction other
than Canada) during the last five (5) trading days preceding the relevant
Dividend Payment Date (in respect of Treasury Purchase Shares, the “Average Market Price”).

 

The Board may, in their
sole discretion, at any time, with effect at the time of declaration of the
next dividend payment, determine that Treasury Purchase Shares are to be issued
at a discount to the Average Market Price (such discount not to exceed five (5) percent).  Participants will be promptly notified by way
of press release as to any such change and until so notified, the Treasury
Purchase Shares will not be issued at a discount to the Average Market Price.

 

In the event that the
Board determines Treasury Purchase Shares are to be issued at a discount to the
Average Market Price, such discount will apply in respect of Treasury Purchase
Shares, if any, until such time as the Board, in their sole discretion, with
effect at the time of declaration of the next dividend payment, determines to
further change or eliminate the discount then applicable in respect of 

 

7

 

Treasury Purchase
Shares.  Participants will be promptly
notified of any further change by way of press release.

 

6.                                      Withdrawal and Disposition of Plan Shares

 

6.1                               Withdrawal of Plan Shares

 

Participants may withdraw some or all of their whole Plan Shares upon
written request to the Plan Agent, deliverable via facsimile or by mail in the
manner provided for in Section 10, at any time.  The Plan Agent will confirm such withdrawal
in the next statement of account mailed to the Participant pursuant to Section 8.2
following receipt of such request.  If a
notice of withdrawal is not received by the Plan Agent before 4:00 p.m.
(Toronto time) on the fifth (5th)
Business Day immediately preceding a Dividend Record Date, the requested
withdrawal will not be processed until after the Dividend Payment Date to which
that Dividend Record Date relates.  On
the withdrawal becoming effective, the Plan Agent will, in accordance with Section 8.1,
send to the Participant a certificate representing all whole Common Shares held
for the Participant’s account under the Plan which have been withdrawn.

 

6.2                               Disposition of Plan Shares

 

Plan Shares may not be
sold, pledged, hypothecated, assigned or otherwise disposed of or
transferred.  Participants who wish to
sell, pledge, hypothecate, assign, or otherwise dispose of or transfer all or
any portion of their Plan Shares must withdraw such shares from the Plan in the
manner specified in Section 6.1 prior to such sale, pledge, hypothecation,
assignment, disposal or transfer.

 

6.3                               Plan Shares Remaining in Plan

 

If a Participant
withdraws less than all of their Plan Shares, the participation of the
Participant in the Plan will continue.

 

7.                                      Termination of Enrollment

 

7.1                               Termination by Participant

 

Participants may terminate their participation in the Plan by written
notice to the Plan Agent, deliverable via facsimile or by mail to the Plan Agent
in the manner provided for in Section 10, at any time.  On the termination becoming effective, the
Plan Agent will, in accordance with Section 8.1, send to the Participant a
certificate representing all whole Common Shares held for the Participant’s account
under the Plan and a cheque in payment of the value (less any applicable
withholding tax) of
any fractional Common Shares remaining in the Participant’s account, by
reference to the closing price of Common Shares (denominated in the currency in
which the Common Shares trade on the applicable stock exchange) on the Toronto
Stock Exchange (in respect of Participants resident in Canada) or the New York
Stock Exchange (in respect of Participants resident in any jurisdiction other
than Canada) on the trading day prior to the date of termination.

 

If a notice of termination is not received by the Plan Agent before
4:00 p.m. (Toronto time) on the fifth (5th)
Business Day immediately preceding a Dividend Record Date, the Participant’s
account will not be closed, and the Participant’s enrollment in the Plan will
not be terminated, until after the Dividend Payment Date to which that Dividend
Record Date relates.

 

8

 

7.2                               Death of a Participant

 

An individual Participant’s participation in the Plan will be
terminated automatically following receipt by the Plan Agent of written notice
of the Participant’s death, deliverable via facsimile or by mail to the Plan
Agent in the manner provided for in Section 10, from the Participant’s
duly appointed legal representative.  On
the termination becoming effective, the Participant’s account will be closed
and the Plan Agent will, in accordance with Section 8.1, issue a
certificate representing all whole Common Shares held for the Participant’s
account under the Plan together with a cheque in payment of the value (less any
applicable withholding tax) of any fractional Common Shares remaining in the Participant’s
account, by reference to the closing price of Common Shares (denominated in the
currency in which the Common Shares trade on the applicable stock exchange) on
the Toronto Stock Exchange (in respect of Participants resident in Canada) or
the New York Stock Exchange (in respect of Participants resident in any
jurisdiction other than Canada) on the trading day prior to the date of
termination.  The certificate and cheque
will be issued in the name of the deceased Participant.

 

If a notice of a Participant’s death is not received by the Plan Agent
before 4:00 p.m. (Toronto time) on the fifth (5th)
Business Day immediately preceding a Dividend Record Date, the Participant’s
account will not be closed, and the Participant’s enrollment in the Plan will
not be terminated, until after the Dividend Payment Date to which that Dividend
Record Date relates.

 

7.3                               Termination by the Corporation

 

On a Participant’s participation in the Plan being terminated by the
Corporation in the circumstances described above under Section 3.5, the
Plan Agent will send to the Participant a certificate representing all whole
Common Shares held for the Participant’s account under the Plan and a cheque in
payment of the value (less any applicable withholding tax) of any fractional Common Shares
remaining in the Participant’s account, by reference to the closing price of
Common Shares (denominated in the currency in which the Common Shares trade on
the applicable stock exchange) on the Toronto Stock Exchange (in respect of
Participants resident in Canada) or the New York Stock Exchange (in respect of
Participants resident in any jurisdiction other than Canada) on the trading day
prior to the date of termination.

 

8.                                      Administration

 

8.1                               Registration of Plan Shares and
Issuance of Certificates

 

All Plan Shares purchased under the Plan will be registered in the name
of the Plan Agent or its nominee.  This
service protects against loss, theft or destruction of share certificates.  The number of Common Shares held by each
Participant under the Plan (less the Common Shares which have previously been
withdrawn from the Plan) will be shown on each statement of account provided
under Section 8.2.

 

Certificates for Plan Shares will only be issued to Participants if the
Plan is terminated by the Corporation, participation in the Plan is terminated
by a Participant or by the Corporation, a Participant withdraws all or any
portion of its Plan Shares from its account, or upon the death of the
Participant.  Physical certificates will
only be issued in the name of the applicable Participant and will be issued
within three (3) weeks of the relevant event, or, in certain
circumstances, in respect of beneficial owners of 

 

9

 

Common Shares whose Common Shares are enrolled in the Plan and
registered in the name of CDS or DTC, Plan Shares may, where allowed for or
permitted by applicable law and subject to the eligibility and participation by
the Corporation, from time to time, in any applicable direct registration
system, be electronically issued without a certificate as soon as practicable following
the relevant event.  No person shall be
entitled to receive a certificate, by way of electronic issuance or otherwise,
for any fraction of a Common Share.

 

8.2                               Statements of Account

 

An account will be maintained by the Plan Agent for each Participant
with respect to purchases of Plan Shares under the Plan for the account of such
Participant.  An unaudited statement
regarding purchases under the Plan will be mailed on a quarterly basis to each
Participant setting out, among other things, the number of Plan Shares
purchased through the Plan, the applicable Average Market Price per Plan Share
and the amount of any applicable withholding tax.  These statements are a Participant’s
continuing record of purchases of Plan Shares made on behalf of such Participant
pursuant to the Plan and should be retained for income tax purposes.

 

Shareholders are responsible for calculating and monitoring their own
adjusted cost base in Common Shares for Canadian federal income tax purposes,
and for calculating and monitoring their own adjusted tax basis in Common
Shares for U.S. federal income tax purposes, as certain averaging and other rules may
apply and such calculations may depend on the cost of other Common Shares held
by a Shareholder and certain other factors.

 

Beneficial owners of Common Shares who are enrolled in the Plan through
a broker, investment dealer, financial institution or other nominee may or may
not be provided with such reports or forms from their broker, investment
dealer, financial institution or other nominee.

 

8.3                               Liabilities of the Corporation
and Plan Agent

 

Neither
the Corporation nor the Plan Agent will be liable:

 

(a)                                  for any act or omission to act, or will
have any duties, responsibilities or liabilities except as expressly set forth
in the Plan or required by law;

 

(b)                                 in respect of the prices at which Plan
Shares are purchased on behalf of Participants under this Plan or the timing of
purchases made under the Plan;

 

(c)                                  in respect of any decision to amend,
suspend, terminate or replace the Plan in accordance with the terms hereof;

 

(d)                                 in respect of the involuntary termination
of a shareholder’s enrollment in the Plan in the circumstances described
herein;

 

(e)                                  in respect of any failure to terminate an
individual Participant’s enrollment in the Plan upon such Participant’s death
before receipt of actual notice of death; or

 

(f)                                    in respect of income taxes or other
liabilities payable by any Participant or beneficial owner in connection with
their participation in the Plan.

 

10

 

Neither the Corporation
nor the Plan Agent can assure a profit or protect against a loss on Plan Shares
purchased under the Plan.

 

The Corporation and the
Plan Agent shall have the right to reject any request regarding enrollment,
withdrawal or termination from the Plan if such request is not received in
proper form.  Any such request will be
deemed to be invalid until any irregularities have been resolved to the
satisfaction of the Corporation and/or the Plan Agent.

 

9.                                      Miscellaneous

 

9.1                               Voting of Plan Shares

 

Whole Common 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, or its duly appointed
proxy, given on a form to be furnished to the Participant.  Common Shares for which voting instructions
are not received will not be voted.  No
voting rights will attach to any fractional Common Shares held for a
Participant’s account under the Plan.

 

9.2                               Subdivisions, Consolidations,
Stock Dividends or Rights Offerings

 

In the event of a subdivision, consolidation or similar pro rata change
in the number of outstanding Common Shares into a greater or lesser number of
Common Shares, the Plan Agent will proportionately credit or debit the account
of each Participant maintained under the Plan according to the number of Common
Shares held for the account of that Participant prior to the effective time of
the subdivision, consolidation or similar pro rata change.

 

If the Corporation makes available to Shareholders any rights to
subscribe for additional Common Shares or other securities, rights certificates
will be forwarded to a Participant in the Plan in proportion to the number of
whole Common Shares owned, including Common Shares being held for the
Participant by the Plan Agent.  Such
rights will not be made available for any fraction of a Common Share held for a
Participant.

 

Any stock dividend paid by the Corporation or other entitlements (other
than cash) to securities that a registered holder of Common Shares may be
eligible to receive as a direct consequence of being a Shareholder at the
relevant time as determined by the Corporation, if any, will be credited to a
Participant’s account or, if not Common Shares, issued in certificate form to
the Participant, in each case based on whole Common Shares being held for a
Participant by the Plan Agent.  The date
of acquisition of such Common Shares or such other security, will be the
dividend payment date on which the stock dividend is paid or the applicable
date of the issuance of securities, respectively, and any Common Shares, if
any, so issued by the Corporation will be entitled to future dividend
reinvestment in the same manner as other Common Shares held in the Participant’s
account.  Such stock dividend or other
entitlement will not be made available for any fraction of a Common Share held
for a Participant.

 

9.3                               Amendment or Termination of the
Plan

 

The Corporation reserves the right to amend or terminate the Plan at
any time, but such action shall have no retroactive effect that would prejudice
the interests of 

 

11

 

Shareholders.  In the event that
the Corporation amends the Plan, unless otherwise provided for herein, no
written notice of any such amendment will be sent to Participants unless the
interests of Participants are, in the opinion of the Corporation, materially
prejudiced as a result of such amendment. 
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.  Where required, amendments to the Plan will be
subject to the prior regulatory approvals, including those of stock exchanges.

 

In the event that the Corporation terminates the Plan, all Participants
will be sent written notice of such termination and the Plan Agent will send to
each Participant a certificate for whole Common Shares held for the Participant’s
accounts under the Plan and a cheque for the value (less any applicable
withholding tax) of
any remaining fractional Common Shares in such Participant’s account by
reference to the closing price of Common Shares on the Toronto Stock Exchange
(in respect of Participants resident in Canada) or the New York Stock Exchange
(in respect of Participants resident in any jurisdiction other than Canada) on
the trading day prior to the date of termination.  In the event that the Corporation terminates
the Plan, no investment will be made by the Plan Agent on the Dividend Payment
Date immediately following the effective date of such termination, and any cash
dividends paid after the effective date of such termination that would, but for
the termination, be reinvested under the Plan, will be remitted to Participants
in the ordinary manner.

 

9.4                               Assignment

 

A holder of Common
Shares may not assign the holder’s right to participate in the Plan.

 

9.5                               Rules

 

The Corporation may make rules and regulations to facilitate the
administration of this Plan and reserves the right to regulate and interpret
the Plan text as the Corporation deems necessary or desirable.  Any issues of interpretation arising in
connection with the Plan or its application shall be conclusively determined by
the Corporation.  The Corporation may
also adopt rules and regulations concerning the establishment of
Internet-based or other electronic mechanisms with respect to the enrollment in
this Plan, the communication of information concerning this Plan to the
Participants and any other aspects of this Plan.

 

9.6                               Governing Law

 

This Plan will be
governed by and construed in accordance with the laws of the Province of
Alberta and the federal laws of Canada applicable therein.

 

10.                               Notices and Correspondence

 

All notices or other
documents required to be given to Participants under the Plan, including
certificates for Common Shares and cheques, shall be mailed to Participants who
are registered holders of Common Shares at their addresses as shown in the
register of Shareholders maintained by the registrar and transfer agent of the
Corporation.

 

Notices or inquiries to
the Plan Agent shall be sent, in the manner directed by the Plan or otherwise,
as applicable, to:

 

12

 

	
  By telephone:

  	
  toll-free North
  America:

  	
  1-866-332-8898

  
	
   

  	
  Toronto area:

  	
  (416) 643-5500

  
	
   

  	
   

  	
   

  
	
  By Fax:

  	
  (416) 643-5020

  	
   

  
	
   

  	
   

  	
   

  
	
  By Mail:

  	
  CIBC Mellon
  Trust Company

  
	
   

  	
  Attention:
  Dividend Reinvestment

  
	
   

  	
  P.O. Box
  7010

  
	
   

  	
  Adelaide Street
  Postal Station

  
	
   

  	
  Toronto, ON M5C
  2W9

  
	
   

  	
   

  
	
  By Email:

  	
  inquiries@cibcmellon.com or by accessing the Plan
  Agent’s secure investor inquiry form at
  http://www.cibcmellon.com/investorinquiry

  
	
   

  	
   

  
	
  Notices to Cenovus Energy Inc. shall be sent to:

  
	
   

  
	
  Cenovus Energy Inc.

  
	
  421 – 7 Avenue S.W.

  
	
  P.O. Box 766

  
	
  Calgary, AB T2P 0M5

  
	
  Attention:

  	
  Corporate Secretarial

  
	
   

  	
   

  
	
  Telephone:

  	
  (403) 766-2000

  
	
  Facsimile:

  	
  (403) 766-7600

  

 

11.                               Effective Date

 

The effective date of
this Plan is April 21, 2010.

 

13Exhibit 10.(a)

 

STEPHEN
E. ROTH

DIRECT LINE: 202.383.0158

Internet:
steve.roth@sutherland.com

 

April 26, 2010

 

Board of Directors

Protective Life Insurance Company

2801 Highway 201 South

Birmingham, Alabama 35223

 

Directors:

 

We hereby consent to the reference to our
name under the caption “Legal Matters” in the statement of additional
information filed as part of
post-effective amendment number 19 to the registration statement on Form N-6
(File No. 333-52215) filed by Protective Life Insurance Company and Protective
Variable Life Separate Account with
the Securities and Exchange Commission. 
In giving this consent, we do not admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of
1933.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  SUTHERLAND ASBILL & BRENNAN LLP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen E. Roth

  
	
   

  	
   

  	
  Stephen E. Roth

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