Prospectus. November 2, 2012

Transcription

1 No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. Prospectus November 2, 2012 SCHOLARSHIP PLANS qualified to be registered as Registered Education Savings Plans subject of a continuous offering in an unlimited number, by: The UNIVERSITAS plan Trust The REFLEX plan Trust The INDIVIDUAL plan Trust Through: Universitas Management Inc. (Exclusive distributor)

2 This prospectus covers the distribution of education savings plans (the plans ) issued respectively by the UNIVERSITAS plan Trust, the REFLEX plan Trust and the INDIVIDUAL plan Trust (collectively, the Trusts ), for which the Universitas Foundation of Canada (the Foundation ) is the promoter. These securities are only available through subscription in the provinces and territories where the securities commission with jurisdiction issued an official receipt of visa approval and may only be offered by persons duly registered pursuant to securities legislation. Universitas Management Inc. ( Universitas Management ) acts as Trust Manager ( Manager ) and, by way of its representatives, as exclusive Distributor of the plans ( Distributor ). Since the Distributor is the Trust Manager, the Trusts are deemed to be its connected issuers within the meaning of Regulation respecting Underwriting Conflicts. See the Trust Manager and Distributor section. Each plan is recognized in a scholarship agreement or educational assistance payment agreement between the Foundation, acting on behalf of the Trust issuing the plan, and the physical person who purchases it (the subscriber ). A plan enables the subscriber to save while encouraging the post-secondary education of a person he designates (the beneficiary ) to obtain scholarships or educational assistance payments ( EAP ) from the Trust that issued the plan. The contributions and government incentives received by the Manager in favour of the registered education savings plan ( RESP ) pertaining to the plans of this Trust, as well as the investment income earned on these contributions and incentives and paid to this same Trust, are invested and managed in compliance with the investment policies adopted by the Foundation. The investment policies of the Foundation aim to preserve the capital invested by the subscribers and achieve a profitable return on the latter over the long term. See the Investment Objectives, Strategies and Restrictions section. They ensure reimbursement, at maturity, of contributions and membership fees payable pursuant to the provisions of the scholarship agreement or educational assistance payment agreement. To implement these policies and manage the investment portfolio constituted as a result, the Manager retained the services of Addenda Capital Inc., Fiera Capital Corporation, AlphaFixe Capital Inc., Jarislowsky Fraser Limited and Montrusco Bolton Investments Inc. These portfolio managers are registered under the securities legislation. See the Trust Organization and Management Conditions Portfolio Managers section. The provisions of a Trust plan are established in consideration of the provisions applicable to the plan in question, pursuant to the current securities legislation and tax laws. These laws and their official interpretation may be amended, restated or repealed, in which case the plan s provisions may vary accordingly. Subscription to a plan incurs fees, including membership fees. See the Summary of the Prospectus Fees and Other Deductions section. A minimum contribution amount is also required depending on the beneficiary s age and the plan chosen. See the UNIVERSITAS and REFLEX Plans Minimum Contributions and INDIVIDUAL Plan sections. Education savings, our specialty since 1964

3 To obtain the registration of an Education Savings Plan ( ESP ) established by a plan promoted by the Foundation, section of the Income Tax Act (Canada) requires the social insurance number (SIN) of the designated beneficiary as well as that of the subscriber. Obtaining this information is a prerequisite for the coming into force of the scholarship agreement or educational assistance payment agreement, as well as for eligibility for the government incentives. You can make contributions on behalf of a beneficiary whose SIN has not yet been provided. However, these contributions will be paid into a non-interest-bearing suspense account pending our receipt of the missing SIN. When the missing SIN is not provided within a 12-month delay, all contributions made to the suspense account are reimbursed since there is a total cancellation of the agreement, less the amount of membership fees already paid. As with any type of investment, subscribing to a plan involves certain risks. See the Risk Factors sections. Some of the statements presented in this prospectus or incorporated by reference, including those which are prospective by their very nature, which depend on or refer to uncertain future events or conditions, or which use terms such as expect, intend, predict, foresee, project or other similar terms are prospective statements within the meaning given to this expression by the securities legislation. Such statements include information concerning possible or expected future results from the management of the subscriber contributions, the management of the government incentives paid on their behalf, or assessments and forecasts made by the Trusts external actuary. These statements are not historical facts. Rather, they reflect the Manager s expectations, estimates and projections regarding future events. By their very nature, these statements require that the Manager make assumptions whose future veracity is subject to certain risks and uncertainties, both general and specific, which could cause the return on the investment portfolios constituted under the plans, as well as the results of a Trust Foundation itself, to differ more or less considerably from the products, performance or results expressed or implied in these prospective statements. This is why the Manager warns against the dangers of having absolute confidence in these prospective statements. The subscriber who relies on them would benefit from taking this into account and carefully considering these uncertainties and related risks. Additional information on the risks is provided in the section Risk Factors. The masculine form in this document is used to designate both men and women, and is used solely for the purpose of improving readability of the document. 3

4 TABLE OF CONTENTS DOCUMENTS INCORPORATED BY REFERENCE 7 Why is it beneficial to read the documents incorporated by reference to the prospectus before subscribing to a scholarship plan?... 7 GLOSSARY 8 SUMMARY OF THE PROSPECTUS 12 The Foundation Plans, contributions, scholarships and educational assistance payments (EAPs) The Education savings plans ESPs ORGANISATION AND MANAGEMENT OF THE TRUSTS The Trusts ELIGIBLE STUDIES ACADEMIC ITINERARY TAKEN BY A STUDENT Possible direction taken by a student in Canada or Abroad Possible direction taken by a student in the province of Quebec IMPORTANT DATES WHEN SUBSCRIBING TO AN RESP FEES AND OTHER DEDUCTIONS CONVERSION OF GROUP PLANS TO AN INDIVIDUAL PLAN ANNUAL RETURNS AND TOTAL EXPENSES The Trusts annual returns Total expenses OVERVIEW OF THE FOUNDATION S STRUCTURE 25 HISTORY AND STRUCTURE THE PLANS GENERAL IMPLEMENTATION CONDITIONS Contributions...26 Government incentives...26 Earned income...26 INVESTMENT OBJECTIVES, STRATEGIES AND RESTRICTIONS 27 INVESTMENT OBJECTIVES INVESTMENT STRATEGIES ELIGIBLE INVESTMENTS Subscriber Accounts...27 Trust Account...28 Investments eligible for an RESP...28 INVESTMENT RESTRICTIONS GOVERNMENT EDUCATION SAVINGS INCENTIVES 29 Eligibility Conditions for Government Incentives...29 CANADA EDUCATION SAVINGS GRANT What is the maximum CESG amount to which a benefi ciary is entitled?.29 Can I carry forward the annual limit giving entitlement to the CESG?...29 Is the benefi ciary eligible for the CESG if he is 16 or 17 years old?...29 CANADA LEARNING BOND QUEBEC EDUCATION SAVINGS INCENTIVE What is the maximum QESI amount to which a beneficiary is entitled?...30 Can I benefi t from the QESI cumulative rights from previous years?...30 Is the benefi ciary entitled to the QESI if he is 16 or 17 years old?...30 REFUND OF GOVERNMENT INCENTIVES What are the cases in which the CESG must be returned to the Government of Canada?...30 What are the cases in which the CLB must be returned to the Government of Canada?...31 What are the cases in which the QESI must be returned to the Government of Quebec?...31 What happens to government incentives when subscriber contributions are reimbursed at the maturity of a UNIVERSITAS or REFLEX plan?...31 In what other cases must government incentives be returned?...31 When government incentives are returned, what happens to the income earned from their investment?...31 UNIVERSITAS AND REFLEX PLANS 32 Who are these plans intended for?...32 How do the plans work?...32 Who owns the money you pay into your plan?...32 ELIGIBLE STUDIES CRITERIA UNIVERSITAS plan...32 What programs of study are admissible?...32 REFLEX plan...33 What programs are admissible?...33 DESCRIPTION OF UNITS What is a whole unit?...33 What is a unit fraction?...33 MEMBERSHIP FEES How much are the membership fees?...33 Are membership fees refundable?...33 What measures does the manager take to assume the reimbursement of membership fees?...33 MINIMUM CONTRIBUTIONS What minimum amounts must I deposit to open a scholarship agreement?...34 QUALIFYING YEAR FOR SCHOLARSHIPS CHANGE OF QUALIFYING YEAR Can the qualifying year be brought forward?...34 Is it possible to defer the qualifying year?...34 How does the manager change the qualifying year?...34 What happens to the funds available after the cut-off date?...34 FULL REIMBURSEMENT OF CONTRIBUTIONS Can I recover the contributions I have paid?...35 Is it possible to keep the government incentives paid on behalf of the benefi ciary despite a reimbursement of contributions?

5 What happens to government incentives if I defer the reimbursement of my contributions?...35 WAIVER OF INTEREST What happens to the income earned on my contributions as a subscriber?...35 DEATH OR DISABILITY OF THE BENEFICIARY What should I do in the event of the benefi ciary s death or total and permanent disability?...36 What will become of my scholarship agreement in the event of the benefi ciary s death or total and permanent disability?...36 CHANGE OF BENEFICIARY Is a change of benefi ciary possible?...36 SCHOLARSHIP APPLICATION When and how can I apply for a scholarship?...37 What happens if the application is not submitted in due time?...37 CALCULATION OF SCHOLARSHIPS Where do the scholarship amounts come from?...37 What will happen to the funds if the beneficiary can no longer qualify?...37 CANCELLATION, RE-REGISTRATION AND SUSPENSION How can I cancel my scholarship agreement?...38 What are the other causes of total cancellation?...38 What happens to the government incentives in the case of total cancellation?...38 Can the membership fees be re-credited in the event of a cancellation?...38 How can I suspend my contributions?...38 What happens in case of default or delay in the payment of my contributions?...38 PLAN CONVERSION/TRANSFER...39 Can I convert my plan into another plan promoted by the Foundation?...39 Is it possible to transfer an RESP promoted by the Foundation to an RESP offered by another institution?...39 Is it possible to partially convert or transfer an RESP?...39 What are the income tax considerations of a conversion or transfer?...39 SPECULATIVE AND UNCERTAIN NATURE LIFE AND DISABILITY INSURANCE 40 INDIVIDUAL PLAN 41 For whom is the INDIVIDUAL plan intended?...41 How does the INDIVIDUAL plan work?...41 Who owns the contributions I pay into the plan?...41 ELIGIBLE STUDIES CRITERIA What are the objective eligibility criteria?...41 Membership Fees...41 DEATH OF THE BENEFICIARY What should I do in the event of the benefi ciary s death?...41 What will become of my EAP agreement in the event of the benefi ciary s death?...42 CHANGE OF BENEFICIARY Is a change of benefi ciary possible?...42 EDUCATIONAL ASSISTANCE PAYMENTS (EAPS) When and how can one apply for an EAP?...42 What EAP amounts may the benefi ciary receive?...42 Where do the sums that make up the EAP come from?...42 What happens if the benefi ciary does not qualify?...42 CANCELLATION AND RE-REGISTRATION How can I cancel my EAP agreement?...43 Can I withdraw my contributions without cancelling my EAP agreement? PLAN CONVERSION/TRANSFER Can I convert an INDIVIDUAL plan to another plan of the foundation?...43 What are the income tax considerations of a conversion or transfer?...43 PAYMENT OF ACCUMULATED INCOME What are the requirements for receiving a payment of accumulated income?...43 How can a transfer be made from an RESP to an RRSP?...43 SPECULATIVE AND UNCERTAIN NATURE GENERAL PROVISIONS APPLICABLE TO THE THREE PLANS 44 CHANGE OF SUBSCRIBER DESIGNATION OF A BENEFICIARY Does my benefi ciary have to be a Canadian resident?...44 When do I have to provide the social insurance numbers (SINs)?...44 Can I make contributions in the benefi ciary s name before he obtains his SIN?...44 LOANS AND BURSARIES APPROVAL OF THE PLANS CONTRIBUTION LIMIT What is the cumulative limit for RESP contributions?...45 What is the maximum period for contributing to the RESP?...45 DURATION OF AN RESP (CUT-OFF DATE) When must the RESP come to an end?...45 What happens to the amounts then held by the custodian? LIMITS ON SCHOLARSHIP AND EAP AMOUNTS...45 RISK FACTORS 46 NO GUARANTEE OF ACHIEVING THE INVESTMENT OBJECTIVES LEGISLATIVE CHANGES...46 NATURE OF THE PLANS ELIGIBLE STUDIES...46 INCOME TAX CONSIDERATIONS...46 POTENTIAL CONFLICTS OF INTEREST SCHOLARSHIP AND EAP LEVELS

6 TABLE OF CONTENTS INVESTMENT RISKS...47 INTEREST RATE RISK CREDIT RISK...47 INCOME TAX CONSIDERATIONS 48 WHAT IS THE TRUST S TAXATION? WHAT IS THE SUBSCRIBER S TAXATION? WHAT IS THE BENEFICIARY S TAXATION? WHAT IS THE REGISTERED EDUCATION SAVINGS PLANS TAXATION?...48 TRUST ORGANIZATION AND MANAGEMENT CONDITIONS 49 DIRECTORS AND OFFICERS OF THE FOUNDATION PORTFOLIO MANAGERS...50 Addenda Capital Inc Fiera Capital Corporation AlphaFixe Capital Inc Jarislowsky Fraser Limited Montrusco Bolton Investments Inc Terms of the contracts to provide securities consulting CONFLICTS OF INTEREST INDEPENDENT REVIEW COMMITTEE IRC TRUSTEE...54 CUSTODIAN...54 TRUST MANAGER AND DISTRIBUTOR Terms of the trust management contract Manager Terms of the trust management contract Distributor Remuneration as trust manager and distributor Directors and offi cers of the manager EXTERNAL ACTUARY...57 AUDITORS...57 POLICIES AND PROCEDURES FOR VALUING THE TRUSTS OTHER PROVISIONS 58 RELEVANT MATTERS TO SUBSCRIBERS Notices and determination of deadlines Amendments to the agreements Modifi cation of the declaration of trust Reports for subscribers DISSOLUTION OF THE TRUSTS...58 RELATIONSHIP BETWEEN THE TRUSTS AND THE DISTRIBUTOR MAIN PLAN SUBSCRIBERS EXECUTIVE MEMBERS AND OTHER INTERESTED PARTIES IN SIGNIFICANT OPERATIONS INFORMATION REGARDING PROXY VOTE MATERIAL CONTRACTS...59 LEGAL AND ADMINISTRATIVE PROCEEDINGS EXPERTS...60 EXEMPTIONS AND APPROVALS STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION ACTUARY S CERTIFICATE AND CONSENT...61 INDEPENDENT AUDITORS CONSENT TABLES OF CONTRIBUTIONS 6 3 UNIVERSITAS GROUP PLAN...63 REFLEX GROUP PLAN...65 STATISTICS ON THE UNIVERSITAS AND REFLEX GROUP PLANS 6 7 ADDITIONS AND REDUCTIONS IN SCHOLARSHIP ELIGIBILITY...67 SUMMARY OF SCHOLARSHIPS AND RETURNS 6 8 SUMMARY OF SCHOLARSHIPS...68 SUMMARY OF AVERAGE RETURNS AS AT DECEMBER 31, SUMMARY OF THE PLANS 69 SUMMARY OF THE UNIVERSITAS GROUP PLAN AS AT DECEMBER 31, SUMMARY OF THE REFLEX GROUP PLAN AS AT DECEMBER 31, SUMMARY OF THE INDIVIDUAL PLAN AS AT DECEMBER 31, CERTIFICATES 71 6

7 DOCUMENTS INCORPORATED BY REFERENCE WHY IS IT BENEFICIAL TO READ THE DOCUMENTS INCORPORATED BY REFERENCE TO THE PROSPECTUS BEFORE SUBSCRIBING TO A SCHOLARSHIP PLAN? Certain documents containing important information with regard to each Trust are incorporated to the current prospectus by reference. This implies that they are considered to be legally part of the prospectus, even if they are not printed or physically attached hereto. For each of the Trusts, the documents incorporated by reference are: The Annual Financial Statements (audited); The Semi-Annual Financial Statements (unaudited); and The Management Report of Plan Performance. These documents contain a wealth of information to help you better understand the administration of the Trusts, of the plans they issue and of the plan to which you subscribe; including past transactions, the current financial situation, future prospects and the risks related to each plan. The financial statements of each plan comply with the applicable legislation and accounting standards in Canada. They comprise the net assets available for the payment of scholarships and EAPs and provide information regarding the increase in net assets from investment activities and the status of the investment portfolio. The additional notes will be useful in helping you better understand the applicable accounting standards, the obligation to reimburse membership fees at plan maturity and the management of the Trusts assets. The Management Report of Fund Performance, on the other hand, exposes the financial highlights of the year. This report is produced by the Manager; it presents in detail the investment objectives and strategies of the Trusts in addition to providing a comprehensive analysis of the latest returns. All these documents contribute to assist you in selecting the type of plan best suited to your situation. We encourage you to review them before subscribing to a plan issued from one or other of the Trusts. You can obtain this documentation, free of charge, through one of our certified representatives, by dialling RESP (7377), or by mailing your request to the Universitas Foundation of Canada at 3005 Maricourt Avenue, Quebec City, QC G1W 4T8. It is also possible to view the above-mentioned documents, among others, by visiting our website at universitas.ca or by visiting the AMF website at sedar.com. Moreover, as a subscriber, it is possible for you to access all documentation through our customer portal at universitas.ca under the Deposit statements tab. 7

8 GLOSSARY Beneficiary Brother CESG CLB Cohort Contribution Conversion Custodian Designated provincial program Determined program of study Distribution guide Life and Disability Insurance SSQ Distributor Earned income Earned income payment Education savings plan ESP A physical person designated individually or as a member of a cohort by a subscriber, and to whom it is agreed that scholarships or EAPs may be granted according to the subscribed plan and the RESP to which it pertains, if this person is eligible. In the context of a change of beneficiary, a conversion or the transfer of an RESP, refers to the brother of a beneficiary or the son of the spouse or common-law partner of the beneficiary s mother or father. The Canada Education Savings Grant, granted pursuant to the Canada Education Savings Act, equal to 20% of the first $2,500 annually contributed into the RESP of a beneficiary, up to the year of his 17 th birthday inclusive, and includes the enhanced CESG applicable in certain cases based on the annual family income. The Canada Learning Bond (CLB) in the amount of, subject to the conditions stipulated in the Canada Education Savings Act, $500 for the first year and $100 for subsequent years until the beneficiary reaches 15 years of age, paid into the RESP of the beneficiary born on or after January 1, 2004, aged less than 21 years, and for whom a National Child Benefit Supplement is paid as part of the Canada Child Tax Benefit. The group of beneficiaries designated under the UNIVERSITAS plan or REFLEX plan who were born in the same year and who receive scholarships of the same unit value when qualified in the same plan. An amount of money entrusted to the Foundation by a subscriber on a regular or ad hoc basis in implementation of the terms of his plan so that it may be administered by the Manager, safeguarded and kept in trust by the Trustee or for him by the Custodian, and invested according to the applicable investment policy. A contribution to an education savings plan does not include an amount paid into the plan under or because of: a) the Canada Education Savings Act or a designated provincial program; or b) any other program that has a similar purpose to a designated provincial program and that is funded, directly or indirectly, by a province (other than an amount paid into the plan by a primary caregiver in its capacity as subscriber under the plan). The transfer of an RESP related to a Trust plan to another RESP related to a Trust plan. CIBC Mellon Global Security Services Company or any successor or assignee of the latter in the duties of the Custodian, certified by the Manager. Any program administered under an agreement reached pursuant to Section 12 of the Canada Education Savings Act and any program covered by regulations adopted pursuant to this Act. For the purposes of the INDIVIDUAL plan, a post-secondary program of study with a minimum duration of three consecutive weeks, which includes courses to which a beneficiary, who is at least 16 years of age, must dedicate a minimum of 12 hours per month. Distribution guide prepared pursuant to Title VIII of the Act respecting the distribution of financial products (Quebec) and given to the subscriber by the Distributor at the time he was offered the optional life and disability insurance. The Universitas Foundation of Canada entered into a group insurance contract with SSQ, Life Insurance Company Inc. to insure the subscribers of its scholarship agreements in the event of death or disability. Universitas Management Inc. or any successor or assignee of the latter in the duties of Distributor, certified by the Manager. The interest, dividends, proceeds, gains and other income generated and earned as a result of: a) the investment and reinvestment of contributions credited to the Trust Account; and b) the investment and reinvestment of interest, dividends, proceeds, gains and other income generated and earned as a result of this investment and reinvestment. An amount paid into an RESP insofar as conditions stipulated in the Income Tax Act (Canada) and the Taxation Act (Quebec) have been respected and where the amount exceeds the fair market value of any contribution and government incentive paid into the plan for reimbursement of the amount. An education savings plan, within the meaning of the Income Tax Act (Canada) or the Taxation Act (Quebec), which is a group plan (to which a subscription makes it possible to participate) or an individual savings plan, and which is qualified for registration as an RESP pursuant to these Acts. 8

9 Educational assistance payment agreement Educational assistance payment or EAP Eligible program of study Eligible studies External actuary Family member Foundation Government incentives Guardian/Primary caregiver Investment policy Manager Maturity Membership fees Plan An educational assistance payment agreement under which a subscriber purchases from the Foundation, in its capacity as promoter of a Trust, a plan issued by the latter which enables the subscriber to establish an RESP pursuant to an INDIVIDUAL plan. Any amount that the Foundation may have paid through the Manager to a qualified beneficiary or on his behalf under the terms of a plan establishing an RESP in the INDIVIDUAL plan. For the purposes of the UNIVERSITAS and REFLEX plans, a post-secondary program, attended full-time or part-time in an educational institution offering eligible studies. Eligible programs of study or programs of study determined under the terms of a plan at maturity and provided in a post-secondary educational institution. Eckler Limited or any successor or assignee of the latter in its duties as an external actuary of a Trust, certified by the Manager. In the case of a change of beneficiary, a family member is an individual who meets the following conditions: a) the individual is the brother or sister of the former beneficiary; b) the individual (new beneficiary) and the former beneficiary are related by blood or adoption to the plan s subscriber; and c) the individual (new beneficiary) had not reached 21 years of age when the initial plan was opened. The Universitas Foundation of Canada or any successor or assignee of the latter in the duties of the Foundation. In the case of a registered education savings plan, refers to the CESG, CLB and QESI. The person with custody of the beneficiary, and eligible to receive the Canada Child Tax Benefit on his behalf when the beneficiary is eligible. An investment policy adopted by the Foundation in relation to the investment and management of: a) contributions made by subscribers to a Trust s plans; b) income earned on contributions and available for scholarships; c) government incentives posted to the assets of a Trust Account; d) income earned on government incentives; and e) amounts reserved for the obligation to reimburse membership fees at maturity. Universitas Management Inc. or any successor or assignee of the latter in the duties of the Manager, certified by the Foundation. The date stipulated in the scholarship agreement for reimbursement of contributions accumulated in the subscriber s account and the membership fees that must be returned to the latter, according to the applicable education savings plan. Fees of $200 per whole unit for the UNIVERSITAS and REFLEX plans. For unit fractions, the membership fees are equal to the above amount multiplied by this fraction as a percentage with respect to a whole unit; or Fees of $200 per educational assistance payment agreement establishing an RESP pursuant to the INDIVIDUAL plan. A plan recognized in a scholarship agreement or an educational assistance payment agreement between the Foundation on behalf of the Trust issuing the plan and a subscriber, which specifically: a) is a security within the meaning of the securities legislation and is offered and distributed by the Distributor on behalf of the Trust; b) is an arrangement establishing an education savings plan or a registered education savings plan; c) enables membership with other subscribers in the UNIVERSITAS or REFLEX plan, or establishes an RESP pursuant to the INDIVIDUAL plan; and d) provides for or refers to the Trustee s commitment to safeguard and keep in trust the contributions it receives for inclusion in a Trust s assets. A plan enables the subscriber to encourage the person he designates as beneficiary to pursue postsecondary studies, while saving for himself. 9

10 GLOSSARY Post-secondary educational institution Public guardian QESI Qualified beneficiary Registered Education Savings Plan or RESP Scholarship Scholarship agreement Sister Subscriber Refers to: a) one of the following institutions located in Canada: i) A university, college or other educational institution that is accredited by a provincial government pursuant to the Canada Student Loans Act, i.e. an authority having jurisdiction in application of the Canada Student Financial Assistance Act, or designated by the Quebec Ministère de l Éducation, du Loisir et du Sport for the purposes of application of Quebec s Act respecting financial assistance for education expenses. ii) An educational institution recognized by Human Resources and Skills Development Canada to offer courses intended to teach or improve the skills needed in the exercise of a professional activity, with the exception of courses used to obtain university credits. b) an educational institution located abroad that is a university, college or other institution offering post-secondary programs in which the beneficiary is enrolled for one or more courses having a minimum duration of 13 consecutive weeks. The public curator in the province in which the beneficiary resides for whom a special allowance is paid pursuant to the Children s Special Allowances Act (Canada) or the department, agency or institution responsible for this beneficiary. For beneficiaries who reside in Quebec, the Quebec Education Savings Incentive, granted pursuant to the Taxation Act (Quebec), equal to 10% of the first $2,500 annually contributed into the RESP of a beneficiary up to the year of his 17 th birthday inclusive, and including the enhanced QESI applicable in certain cases based on annual family income. A beneficiary registered in an eligible program of study or a determined program of study, according to the RESP for which he is the designated beneficiary. A registered education savings plan pursuant to the Income Tax Act (Canada). Any amount that the Foundation may have paid through the Manager to a qualified beneficiary under the terms of a plan permitting participation in the UNIVERSITAS or REFLEX plans. Agreement under which a subscriber purchases from the Foundation, in its capacity as promoter of a Trust, a plan issued by the latter enabling the subscriber to join with other subscribers in the UNIVERSITAS or REFLEX plans. In the context of a change of beneficiary, a conversion or the transfer of an RESP, refers to the sister of a beneficiary or the daughter of the spouse or common-law partner of the beneficiary s mother or father. An individual who subscribes to one or another of the scholarship plans offered by Universitas Management Inc. (UNIVERSITAS plan, REFLEX plan or INDIVIDUAL plan), who designates one (or many) beneficiary(ies) and who may deposit sums of money (contributions) into the plan on the beneficiary(ies) s behalf. In general, the subscriber is the child s mother or father, but can also be a grandparent, another family member or a family friend. The subscriber also includes: a) any person who is the spouse or common-law partner of an existing subscriber (pursuant to the definition that applicable legislation gives to the term spouse ) and a co-subscriber; and b) on notice given to the Foundation, i) any person who acquires subscriber rights under the plan pursuant to a decree, an order or the judgment of a competent court or by virtue of a written agreement regarding the separation of an estate between such person and the subscriber as a settlement of rights arising from their marriage, common-law relationship or from its dissolution; ii) after the death of a subscriber, the subscriber s succession or any other person who makes contributions into the plan on the beneficiary s behalf; or iii) the public guardian (and any person who has his rights in compliance with the Canada Education Savings Act). 10

11 Subscriber account Total and permanent disability Trust Trust Account Trust Agreement Trustee Unit fraction Whole unit An account safeguarded by the Custodian into which are credited the contribution amounts paid by the subscriber of this account, and which must be reimbursed to the latter at maturity. The absolute inability observed in a beneficiary by a physician to perform each of the normal activities of a person of the same age following an illness or accident. One or other of the UNIVERSITAS plan Trust, the REFLEX plan Trust or the INDIVIDUAL plan Trust, which are Trusts maintained by the declaration of Trust in compliance with the Trust Agreement and relating to which assets have been transferred, contributed, paid or entrusted to the Trustee to constitute assets to be invested, managed, safeguarded and kept in trust for the benefit of individuals who have entitlement to such assets pursuant to plans issued by these Trusts and the RESPs to which they pertain. The account maintained for each Trust with the Custodian, in which are posted the deposits and withdrawals of: a) government incentives paid to the Custodian or transferred to portfolio managers to be invested and managed; and b) income earned on contributions and government incentives; into which are credited the proceeds from the investment of these amounts insofar and according to the period determined by the Manager, and on which the Foundation can give instructions to the latter for the payment of scholarships in compliance with the plans in effect. The main Trust Agreement signed on July 9, 2010, and restated on December 23, 2010, between the Foundation, the Trustee and the Manager-Distributor. Trust Eterna Inc. or any successor or assignee of the latter in the duties of Trustee certified by the Manager. A unit fraction corresponding to one or several thousandths of a whole unit. A measurement unit used to establish, according to an evaluation validated by the external actuary, a ratio between the subscribed capital to a plan, the contributions to be paid over the term of this plan, and the scholarship or EAP levels payable in relation to these contributions at maturity of the plan. 11

12 SUMMARY OF THE PROSPECTUS The following is a summary of the main features of the three types of ESPs that can be established by subscribing to a plan promoted by the Foundation. This summary must be read together with the detailed information, the figures and the financial statements incorporated by reference to this prospectus. THE FOUNDATION The Universitas Foundation of Canada is a not-for-profit organization with no capital stock, constituted on January 10, 1964 pursuant to the Quebec Companies Act, Part III (now the Business Corporations Act). It is one of the largest providers of scholarship plans eligible for registration as RESPs in Canada. Its head office is located in Quebec City, QC. The Foundation s mission is to place its expertise and sense of commitment at the service of young Canadians by offering their parents and family members registered education savings plans (RESPs). Every effort is made to provide students with the highest scholarships on the market. PLANS, CONTRIBUTIONS, SCHOLARSHIPS AND EDUCATIONAL ASSISTANCE PAYMENTS (EAPS) Under the terms of the scholarship agreement or of the educational assistance payment agreement establishing the plan to which you subscribe, you make contributions to the Manager of the issuing Trust on a regular or ad hoc basis, and these are safeguarded and kept in trust for reimbursement to you at maturity. Accordingly, your contributions represent capital that you save and which, with its earned income, is invested and managed in compliance with the investment policies adopted by the Foundation. This income accumulates sheltered from income tax. The Manager receives these contributions for the issuing Trust, pays them progressively (after deduction of the membership fees to which it is entitled) on behalf of the Trustee to the Custodian for safekeeping and conservation. The Custodian also acts as custodian of securities and other forms of investment in which these amounts are invested in accordance with the applicable investment policy. In permitting participation or in establishing an RESP, the plan to which you subscribe also helps increase the income earned on the Trust s assets and more specifically, the contributions paid into it by subscribers. The registered education savings plan offers the Trust the possibility to access tax incentives paid by the federal and Quebec governments, if applicable, as contributions made to this plan, and that the portfolio managers can invest to draw additional earned income for the benefit of the Trust. See the Government Education Savings Incentives section. When you subscribe to a group plan, you agree beforehand to surrender to the Trust in question the income earned on your contributions to enable the funding of, on one hand, your reimbursement of these contributions and membership fees at maturity of your plan and, on the other hand, the payment of scholarships to beneficiaries qualified to receive them, according to the subscribed plan and the RESP to which it pertains (see the Investment Objectives, Strategies and Restrictions section). Until these amounts are reimbursed or paid by the Custodian to the individuals entitled to them according to the terms of the plan in effect, the contributions and income received or banked by a Trust, as well as the types of investments in which these amounts are invested, are held and safeguarded in trust by the Custodian for the benefit of its beneficiaries. As a subscriber, you are among the individuals benefiting from this Trust since, specifically, you are entitled to the reimbursement of the contributions that you have paid and which are safeguarded until such time. As for the government incentives and the income they earn, they are credited to the Trust Account maintained for the Trust in question. These incentives are held in trust for the governments that paid them, and the Manager can use them for the purposes stipulated in the registered education savings plans in question. Subscription to a plan incurs fees, including membership fees. See the Summary of the Prospectus Fees and Other Deductions section. A minimum contribution amount is also required depending on the beneficiary s age and the plan selected. See the UNIVERSITAS and REFLEX Plans Minimum Contributions and INDIVIDUAL Plan sections. As with any type of investment, subscribing to a plan involves certain risks. See the Risk Factors section. 12

13 THE EDUCATION SAVINGS PLANS ESPS In addition to applying the terms of the plan to which you subscribe, the Trust which issues this plan is also used for the application of its related ESP. Accordingly, the terms of your plan share the structure of those that govern the ESP under current securities legislation and tax laws, and are therefore incorporated into your scholarship agreement or your educational assistance payment agreement. The Foundation promotes three education savings plans for which each Trust is used in the application. These are: The UNIVERSITAS group savings and scholarship plan (UNIVERSITAS plan), in the case of the UNIVERSITAS plan Trust; The REFLEX group savings and scholarship plan (REFLEX plan), in the case of the REFLEX plan Trust; and The INDIVIDUAL savings and educational assistance payment plan (INDIVIDUAL plan), in the case of the INDIVIDUAL plan Trust. The terms of each of these ESPs qualify them for registration pursuant to the Income Tax Act (Canada) and the Taxation Act (Quebec). Upon registration, they are referred to as registered education savings plans, or RESPs. The following table presents the main features of the RESPs pertaining to the plans issued by each Trust. Main features of the types of ESPs that can be established by a plan UNIVERSITAS REFLEX INDIVIDUAL Type of ESP Group Group Individual Eligible beneficiaries 0 to15 years of age inclusive 0 to 15 years of age inclusive All ages Exclusive distributor Universitas Management Contribution limits $50,000 in accumulated lifetime contributions per beneficiary for all plans combined. In this case, income tax of 1% per month applies to contributions made in excess of this limit, unless this excess is removed from the plan before the end of the month in question. Maximum duration of capitalization 17 years 31 years following the year in which the plan came into force Agreement Scholarship agreement Educational assistance payment agreement Contributions According to the table of contributions: Minimum monthly contribution of $11.25 (for a child between 0-1 years old according to the terms of the monthly contribution). See the UNIVERSITAS and REFLEX Plans Minimum Contributions section. Table established such that each subscriber s contributions generate the same income for the payment of scholarships to qualified beneficiaries in the same cohort. Posted separately to the subscriber s account. Initial contribution of $500 including membership fees. Subsequent contributions at the subscriber s discretion, subject to the limits set by law. Posted separately to the subscriber s account. Payments Scholarships Educational assistance payments (EAPs) Eligible studies According to the plan (see the Summary of the Prospectus Eligible Studies section) Change of beneficiary Permitted for a beneficiary less than 16 years of age, if replaced by a beneficiary also younger than 16 years of age. Permitted for a beneficiary less than 21 years of age, if replaced by a beneficiary also younger than 21 years of age. Permitted at any time, subscriber s choice. Permitted, under certain conditions, at any time in the event of death or total and permanent disability. Conversions and transfers Conversions are permitted, under certain conditions, between plans promoted by the Foundation. Transfers are permitted, under certain conditions, between a plan promoted by the Foundation and that of another institution (See the UNIVERSITAS and REFLEX Plans Plan Conversion/Transfer and INDIVIDUAL Plan Plan Conversion/Transfer sections). 13

14 SUMMARY OF THE PROSPECTUS Main features of the types of ESPs that can be established by a plan UNIVERSITAS REFLEX INDIVIDUAL Cancellation You can totally or partially cancel your scholarship agreement by giving 30 days notice in writing to the Manager. The Manager will retain all membership fees unless the cancellation occurs within 60 days of the agreement signing. When an agreement is cancelled within 60 days of its signing, the representative must reimburse to the Manager the entire commission advance received. When an agreement is cancelled more than 60 days after it is signed and that the subscriber has not deposited all of the membership fees due pursuant to the agreement, the representative must reimburse the Manager the portion of the commission advance exceeding the total membership fees paid by the subscriber. See the UNIVERSITAS and REFLEX Plans Cancellation, Re-registration and Suspension section. You can cancel your educational assistance payment agreement at any time by giving notice in writing to the Manager. The Manager will keep all of the membership fees of $200 unless the cancellation occurs within 60 days of signing the agreement. When an agreement is cancelled within 60 days of its signing, the representative must reimburse the Manager the entire commission advance received. Payment structure of scholarships and EAPs Number of payments Payment amounts Earned income (according to an investment policy) on contributions credited to subscribers accounts; income which is paid into the Trust account. Government incentives and income earned on these (according to the investment policy), which are paid into the Trust account. The accumulated income is divided by cohort for payment of scholarships. A maximum of three scholarships, depending on the eligible studies pursued. (See the INDIVIDUAL Plan Cancellation and Re-registration section.) Earned income (according to the investment policy) on the assets in the subscriber s account. Government incentives and income earned on these (in accordance with the investment policy). As necessary Subject to certain conditions described below pursuant to the Income Tax Act (Canada), the total amount of scholarships and EAPs a qualified beneficiary may receive during a period of 12 months is the lesser of the following: The actual cost of the beneficiary s education (including fees, books, housing, food, transportation, etc.); or $5,000. However, the amount paid will depend essentially on the sums invested in the Trust in question and on the returns obtained. Investment objectives and strategies Qualifying year See General Provisions Applicable to the Three Plans Limits on Scholarship and EAP Amounts. Contributions (for all ESPs) and government incentives (for an RESP) are invested and managed by portfolio managers. The Foundation has adopted five investment policies, i.e. a separate policy for each of the following asset categories: subscribers contributions, the income earned on these contributions used for the purposes of reimbursing scholarships and EAPs, government incentives, the income earned on these incentives, and the income earned on the contributions used to respect the obligation to reimburse membership fees. The investments made are eligible for an RESP under the Income Tax Act (Canada). The year in which the beneficiary reaches 17 years of age and undertakes eligible studies (subject to another year, after discussion and agreement with the Manager). The year when the beneficiary pursues eligible studies. 14

15 Main features of the types of ESPs that can be established by a plan Lifetime Calculation of scholarship payments Optional life and disability insurance UNIVERSITAS REFLEX INDIVIDUAL A plan must end no later than the last day of the 35 th year following the year in which it came into effect. July 1 st of each year; Method of calculation described in Note 2 of the annual financial statements incorporated by reference to this prospectus. Available, under certain conditions, for a subscriber under 60 years of age, according to the terms presented in the distribution guide. Risk factors The scholarship amounts depend on the income earned through application of the Foundation s investment policy. If the beneficiary does not pursue eligible studies, he will not be entitled to scholarships. The time and amounts are determined by the subscriber based on his needs. Not available. The EAP amounts depend on income earned through the application of the Foundation s investment policy. If the beneficiary does not pursue eligible studies, he will not be entitled to EAPs. There is no guarantee that a Trust s investment objectives will be achieved and generate sufficient earned income. Past investment performance is no guarantee for future returns. An amendment to the legislation, more specifically to tax laws, could have an adverse impact on a Trust. The other risks to which a subscriber s investment in a plan may be exposed are the subject of additional information in the Risk Factors section. Income Tax considerations The scholarships received by a beneficiary are taxable income. EAPs received by the beneficiary are taxable income. For tax purposes, contributions to an RESP are not tax-deductible or taxable when reimbursed to the subscriber. The income earned from the contributions and its management is sheltered from income tax. ORGANISATION AND MANAGEMENT OF THE TRUSTS THE TRUSTS The UNIVERSITAS plan Trust, the REFLEX plan Trust and the INDIVIDUAL plan Trust are Trusts continued by declarations governed by a Trust Agreement (the Trust Agreement ) concluded between the Foundation, Trust Eterna Inc. and Universitas Management. The Trusts issue the scholarship and EAP plans described in this prospectus. Each plan to which you subscribe is recognized in an agreement concluded, by way of the Distributor, between the Foundation, acting on behalf of the Trust issuing the plan, and you, the physical person who purchases it (the subscriber ). A plan enables you, as a subscriber, to save while encouraging the post-secondary studies of a person or a member of a group of people that you designate (the beneficiary ) to obtain scholarships or EAPs from the Trust that issued your plan. These plans enable you, pursuant to tax legislation, to participate in a group RESP or establish an RESP which is individual. (See the Summary of the Prospectus The Education Savings Plans section.) The organization and management of Trusts, as well as the distribution and execution of their plans, require the intervention of several stakeholders. The following table identifies them and describes their main functions with regard to each Trust. You should read the information presented in this table in parallel with the more detailed information included on this subject in the prospectus. 15

16 SUMMARY OF THE PROSPECTUS The Promoter The Manager The Trustee The Universitas Foundation of Canada 3005 Maricourt Avenue Quebec City, QC Directs the implementation of the Foundation s mission and role, as well as related activities and operations. Promotes the Trust, its plans and the related RESPs. Acts on behalf of the Trust to conclude scholarship agreements or educational assistance payment agreements recognizing the plans it issues. By way of its investment committee and assisted by the external actuary, develops the investment policies for the Trust s assets. Supervises the Manager s operations and management of the Trust. Universitas Management Inc Maricourt Avenue Quebec City, QC In general, directs the Trust s activities, operations and business. After consultation with the Foundation, retains the services of the Trustee, Custodian, portfolio managers, auditors and the Trust s external actuary. Receives contributions from each subscriber and promptly sends them to the Custodian on behalf of the Trustee, for crediting to the relevant subscriber account. Provides administrative services, specifically with regard to bookkeeping and registers, and the maintaining of files. Keeps separate accounting of the subscribers accounts and provides the Custodian with access to this compiled data to enable reconciliation with the accounting of subscribers accounts maintained by the Custodian. Mandates the portfolio managers and determines the proportion of Trust assets they are respectively responsible for investing and managing. Supervises the portfolio managers investment decisions and, specifically, ensures they apply the investment policies adopted respectively by the Foundation with regard to contributions, government incentives, proceeds and income earned on investment of all of the latter, as well as amounts reserved for the reimbursement of membership fees. When the Foundation instructs it, gives the Custodian the appropriate instructions to make the payments required in accordance with the provisions of the plans. Trust Eterna Inc. Quebec City, QC Acts as trustee of the Trust and in this capacity assumes the safeguarding and conservation of assets transferred, contributed or paid to it for payment into the assets of a Trust, including contributions and government incentives. Supervises the investment and management activities of the Trust s assets according to the instructions of the Manager and the Foundation. Assumes control and acts in place of the Manager and the Foundation, for which it fulfills the responsibilities with the necessary adjustments, should one or the other refuse or find itself unable to act. 16