HERITAGE EDUCATION FUNDS INC.

Transcription

1 Education Funds HERITAGE EDUCATION FUNDS INC. NOTICE OF SPECIAL MEETING OF SUBSCRIBERS OF Heritage Plans to be held at 10:00 a.m. (EDT) on May 29, 2014 at the Duncan Room of the Westin Prince Hotel, 900 York Mills Road, Toronto, Ontario M3B 3H2 and MANAGEMENT INFORMATION CIRCULAR AFTER CAREFUL CONSIDERATION OF THE PROPOSED PLAN CHANGES CONTEMPLATED FOR THE HERITAGE PLANS, THE HERITAGE EDUCATIONAL FOUNDATION BOARD OF DIRECTORS HAS APPROVED THE PROPOSED PLAN CHANGES AND RECOMMENDS THAT SUBSCRIBERS VOTE IN FAVOUR OF THE RESOLUTION. IN ACCORDANCE WITH APPLICABLE LAW, THIS NOTICE OF MEETING AND MANAGEMENT INFORMATION CIRCULAR IS BEING SENT TO ALL UNITHOLDERS OF THE HERITAGE PLANS. ALL OF THE PROPOSED PLAN CHANGES WHICH ARE THE SUBJECT OF THIS CIRCULAR, HOWEVER, AFFECT ONLY THOSE PLANS WITH A MATURITY DATE AFTER JULY 31, April 25, 2014

2 NOTICE OF SPECIAL MEETING OF SUBSCRIBERS OF HERITAGE PLANS NOTICE IS HEREBY GIVEN that a special meeting of the subscribers (the Special Meeting ) of the Heritage Plans (the Plans ) will be held on May 29, 2014 in the Duncan Room of the Westin Prince Hotel at 10:00 a.m. (EDT) for the following purposes: 1. To consider and, if deemed appropriate, to pass a resolution as set out in Schedule A to the accompanying management information circular, to: (i) Reduce educational assistance payments ( EAP ) qualification requirements to the minimums specified by the Income Tax Act (Canada), (ii) Expand investment policy, (iii) Change the rules and procedures regarding the return of Sales Charges (formerly known as Membership Fees), and (iv) Make defaulted and inactive Plans eligible for benefits offered by the Self-Determined Option. 2. To transact such other business as may properly come before the Special Meeting or any adjournment thereof. DATED at Toronto, Ontario the 25 day of April, BY ORDER OF THE BOARD OF DIRECTORS OF HERITAGE EDUCATIONAL FOUNDATION, SPONSOR OF THE HERITAGE PLANS Scott McIndless Chairman IMPORTANT: You can vote in person by attending the Special Meeting and casting your vote. If it is not your intention to be present in person at the Special Meeting, you can vote by proxy. To vote by proxy, please sign, date and return the enclosed Form of Proxy by mail in the addressed envelope enclosed or cast your vote by telephone by calling VOTE (8683). To be voted at the Special Meeting, proxies must be signed and received by Heritage Education Funds Inc. c/o Computershare Proxy Department PO Box STN BRM B Toronto ON M7Y 3J1 or your vote must be cast at the phone number provided not later than 48 hours (excluding Saturday, Sunday and holidays) prior to the start of the Special Meeting (or any adjournment thereof), or proxies must be given to the Chairman of the Special Meeting before the meeting starts.

3 MANAGEMENT INFORMATION CIRCULAR TABLE OF CONTENTS SOLICITATION OF PROXIES... 1 INTRODUCTION... 1 REVIEW BY THE INDEPENDENT REVIEW COMMITTEE... 1 PROPOSED PLAN CHANGES...2 REASONS FOR AND IMPACTS OF PROPOSED PLAN CHANGES...4 IMPLEMENTATION OF PLAN CHANGES...5 ADDITIONAL INFORMATION...5 AUTHORIZATION BY SUBSCRIBERS...5 RECOMMENDATION OF THE FOUNDATION REGARDING THE PROPOSED PLAN CHANGES...5 APPOINTMENT AND REVOCATION OF PROXIES...6 VOTING OF PROXIES...6 MEETING QUORUM AND ADJOURNMENTS...6 RECORD DATE...6 UNITS AND PRINCIPAL SUBSCRIBERS... 7 OTHER INFORMATION... 7 CERTIFICATE... 7

4 MANAGEMENT INFORMATION CIRCULAR SOLICITATION OF PROXIES This management information circular ( Information Circular ) is being sent to subscribers ( Subscribers ) of the Heritage Plans (the Plans ) by Heritage Educational Foundation ( Foundation ), the sponsor of the Plans, in connection with the solicitation of proxies to be used at a special meeting of Subscribers of the Plans to be held on May 29, 2014 starting at 10:00 a.m. EDT (the Special Meeting ) for the reasons set out in this Information Circular and Notice calling the Special Meeting. The Special Meeting and any Special Meeting adjournments will be held in the Duncan Room of the Westin Prince Hotel at 900 York Mills Road, Toronto ON M3B 3H2. The Plans will bear the costs of soliciting proxies for the Special Meeting. Proxies may be solicited by mail, and the directors, officers and employees of the Foundation and of Heritage Education Funds Inc., the Investment Fund Manager of the Plans (the Manager ), may solicit proxies personally, by telephone, by facsimile transmission or by . Computershare Investor Services Inc. has been retained to assist in connection with the Foundation s communication with Subscribers, with registration, scrutineer services and vote tabulation. Except as otherwise stated, the information contained in this Information Circular is given as of April 1, INTRODUCTION The Foundation, a not-for-profit corporation, is the sponsor of the Plans. The Foundation has been assisting Canadian families with saving for their children s post -secondary education since The Manager has been operational since Sales of the Plans started in 1988 and have been in continuous offering since that time. To enroll in the Plans Subscribers enter into an Education Savings Plan Contract ( ESP Contract ) with the Foundation and name a child to be a beneficiary ( Beneficiary ) to qualify for educational assistance payments ( EAPs ). When the Plan matures, Subscribers choose their pay-out option and select either the Scholarship Option which provides EAPs to Beneficiaries or the Self-Determined Option, which provides EAPs to Beneficiaries or Accumulated Income Payments ( AIPs ) to Subscribers. In this Information Circular the Foundation is recommending changes to the Plans that are intended to generally increase the flexibility and benefits of the Plans, specifically: Reduce EAP qualification requirements to the minimums specified by the Income Tax Act (Canada), Expand the investment policies of the Plans; and Allow all Plans that become in default or inactive to mature and qualify for EAPs or AIPs under the Self-Determined Option. The Foundation is seeking the approval of Subscribers of the Plans to revise the Plans to include the changes specified under the heading Proposed Plan Changes in this Information Circular (the Proposed Plan Changes ). If the Proposed Plan Changes are approved by Subscribers, the terms of the ESP Contract will be updated and revised to include the Proposed Plan Changes, which revised ESP Contract would then be effective for all current Plans Subscribers whose Plans mature after July 31, 2014 and all future Plans Subscribers. REVIEW BY THE INDEPENDENT REVIEW COMMITTEE The independent review committee ( IRC ) established for the Plans under National Instrument Independent Review Committee for Investment Funds has reviewed the Proposed Plan Changes and, after making reasonable inquiry, has concluded that, if approved by Subscribers, they would achieve a fair and reasonable result for the Plans. The IRC has come to this conclusion based on the information provided to the IRC by the Foundation, the information set out in this document generally and, in particular, the reasons described under Reasons For and Impacts of Proposed Plan Changes as set out on page 4 of this Information Circular. 1

5 PROPOSED PLAN CHANGES CHANGES TO PLAN FEATURES 1. Reduce EAP Qualification Requirements to the Minimums Specified by the Income Tax Act (Canada) Reduce the qualification requirements of the Scholarship Option that need to be met by a Beneficiary in order to receive EAPs. An EAP will be paid as long as the Beneficiary is registered in a program qualified under the Income Tax Act (Canada) in each of the school years* starting in the Year of Eligibility and based on the Scholarship Option selected. Successful completion of each academic level or school year will no longer be required. Either part-time or full-time attendance programs will qualify for an EAP. The length of the full-time and part-time programs eligible for EAPs will follow the Income Tax Act (Canada) rules, which are currently as set out below: (i) (ii) In Canada: A full-time program which is a course of study of at least three consecutive weeks, with at least ten hours of study each week; or a part-time program which is a course of study of at least three consecutive weeks, with at least 12 hours of study per month. Outside of Canada: A full-time program which is a course of study at a university of at least three consecutive weeks, with at least ten hours of study each week; or a course of study at a recognized institution, other than a university, of at least 13 consecutive weeks, with at least ten hours of study each week; or a part-time program which is a course of study at a recognized institution of at least 13 consecutive weeks, with at least 12 hours of study per month. This change will be effective for Plans that will mature after July 31, 2014 (and typically have a Year of Eligibility of 2016 or thereafter). Below is the comparison of the current design of the Plans and the new design of the Plans if the Proposed Plan Changes are implemented. CURRENT PLAN DESIGN Only full-time programs of at least 6 months in length are eligible for EAPs under the Scholarship Option. Based on the Scholarship Option selected, the first and any subsequent EAP, as applicable, are only provided if the student reaches the next academic year level of post- secondary studies. The student has to pass the previous year and show acceptance into the next year of the educational program. PROPOSED PLAN CHANGES Any program that is eligible under the Income Tax Act (Canada) will be eligible for EAPs under the Scholarship Option (including part-time studies) starting in the Year of Eligibility. Based on the Scholarship Option selected, the first and any subsequent EAP, as applicable, will be provided as long as the student is enrolled in the program of study eligible under the Income Tax Act (Canada) starting in the Year of Eligibility. The student does not have to pass the previous year and does not have to show acceptance into the next year of the educational program. * A school year is defined as a 12 month period between September and August. 2. Expand Investment Policy Expand the investment policy of the Plans to include equities and index participation units. By implementing this change, the Manager will be able to expand its investment policy to invest some or all of the Plans income portion in (a) equities listed on a stock exchange in Canada and/or (b) index participation units of a Canadian Mutual Fund (ETF) whose objective is to replicate the performance of a specified widely quoted index of Canadian or U.S. equity securities. By expanding the Plans investments into these equity securities the Manager will be in a better position to capitalize on investment opportunities that may help maximize the Plans investment returns for Subscribers. If this change is made, the Plans will not make any new investments in principal protected notes. 2

6 The foregoing expansion in investment policy has been restricted under the policies of Canadian Securities Administrators up until now. However, the Plans may now so expand the investment policy if the Manager commits, in an undertaking required by the Canadian Securities Administrators, to implement certain changes and procedures to the Plans, the principal one being the changes to the EAP qualification requirements as described above. If the Proposed Plan Changes are approved at the Special Meeting, the undertaking will be signed and delivered by the Manager to the Canadian Securities Administrators. Under this Proposed Plan Change, only Plans income may be invested in equities. Subscribers contributions and government grants will continue to be invested in lower risk securities. 3. Change the Rules and Procedures Regarding the Return of Sales Charges Change the existing rules and procedures regarding return of an amount equivalent to Sales Charges (formerly known as Membership Fees) or a percentage thereof, as follows: The current entitlement of a Subscriber to Sales Charge Refunds varies depending upon the date of enrollment. The current entitlement (plan design) and proposed changes are set out in the following chart: YEAR OF ENROLLMENT IN THE PLANS Prior to August 9, 2000 Between August 9, 2000 and July 2, 2004 On and after July 2, 2004 CURRENT PLAN DESIGN 100% of Sales Charges refunded at maturity of the Plan. Scholarship Option 1 providing 1 EAP in the second year of post-secondary studies: 25% of Sales Charges refunded at maturity of the Plan. Scholarship Option 2 providing 2 EAPs in the second and third years of post-secondary studies: 50% of Sales Charges refunded at maturity of the Plan. Scholarship Option 3 providing 3 EAPs in the second, third and fourth years of postsecondary studies: 100% of Sales Charges refunded at maturity of the Plan. Scholarship Option 1 providing 1 EAP in the second year of post-secondary studies: a discretionary refund of 25% of Sales Charges with an EAP in the Year of Eligibility. Scholarship Option 2 providing 2 EAPs in the second and third years of post-secondary studies: a discretionary refund of 50% of Sales Charges with EAPs over two years. Scholarship Option 3 providing 3 EAPs in the second, third and fourth years of postsecondary studies: a discretionary refund of 100% of Sales Charges with EAPs over three years. PROPOSED PLAN CHANGES Scholarship Option 1 providing 1 EAP in the second year of post-secondary studies: up to 25% of Sales Charges refunded at maturity of the Plan. Scholarship Option 2 providing 2 EAPs in the second and third years of post-secondary studies: up to 50% of Sales Charges refunded at maturity of the Plan. Scholarship Option 3 providing 3 EAPs in the second, third and fourth years of post-secondary studies: up to 100% of Sales Charges refunded at maturity of the Plan. 4. Make Defaulted and Inactive Plans Eligible for Benefits Offered by the Self-Determined Option Make changes so as to allow defaulted and inactive Plans to mature under the Self-Determined Option and have access to EAPs or AIPs. 3

7 Rather than cancelling a Plan (after applicable notices and available reinstatement time-periods) which has become inactive because of default due to missed contributions, this proposed change would result in such Plan maturing under the Self-Determined Option. At maturity, contributions less fees will be paid to the Subscriber (or to the Beneficiary, at Subscriber s request) and the Beneficiary will be entitled to EAPs consisting of all Plan s income (including income accrued after the Plan s deactivation date) and applicable government grants. Alternatively, a Subscriber can request a withdrawal of all Plan s income as an AIP. Below is the comparison of the current design of the Plans and this Proposed Plan Change. CURRENT PLAN DESIGN Failure to continue to make scheduled contributions on time will cause the Plan s default and, if default is not remedied within the time frame specified by prospectus, will result in the Plan becoming inactive. If such inactive Plan is not reinstated within the timeperiod specified by prospectus, such Plan will not mature and a Subscriber will only be eligible to receive a refund of contributions less fees. All applicable government grants will be returned to the government and the Plan s income will be lost. PROPOSED PLAN CHANGES Subscribers who default in making their contributions on time will not risk having their Plan cancelled and losing government grants and income. Such Plan will be able to mature under the Self- Determined Option and Subscribers will be entitled to a refund of contributions less fees and Beneficiaries will be able to receive EAPs consisting of all Plan s income and government grants. REASONS FOR AND IMPACTS OF PROPOSED PLAN CHANGES The Proposed Plan Changes are expected to be beneficial to the Plans. Below are the reasons for and impacts of the Proposed Plan Changes: Expansion of investment policy and investment options is expected to result in a higher rate of return for the Plans and increase the amount of EAPs paid to the Beneficiaries or AIPs paid to the Subscribers. The current policies of Canadian Securities Administrators stipulate that the proposed expansion of investment policies cannot be implemented unless the changes to EAP qualification requirements are made, as described in the next paragraph. Changes to EAP qualification requirements will allow Beneficiaries under the Scholarship Option to enjoy increased flexibility in terms of the program they choose for their post -secondary studies. It will be easier for Beneficiaries to qualify for and receive all applicable EAPs as they will no longer have to pass each year and progress through the ensuing academic years of a post- secondary program to continue to qualify for EAPs. Additionally, part-time programs will now qualify for an EAP where they have not before this proposed change to the qualification rules. Subscribers who are having difficulty maintaining their contribution schedule and whose Plans become in default and inactive will no longer risk cancellation of their Plans. Instead, they will mature under the Self-Determined Option, which will allow:»» Subscribers to collect a refund of contributions less fees,»» Beneficiaries to become eligible for EAPs, or»» Subscribers to withdraw all of their Plan s income as an AIP. Increased Plans flexibility and ease with which students will be able to qualify for EAPs under the Scholarship Option as well as the ability for defaulted and inactive Plans to mature and have access to EAPs or AIPs under the Self- Determined Option are likely to result in:»» More Beneficiaries qualifying for EAPs,»» Less funds being allocated to the Discretionary Payment Account, and»» Less attrition available to students under the Scholarship Option. The Manager, in consultation with its actuaries, has done various analysis with what it believes to be reasonable assumptions and expects that the ability of the Plans to invest in equities is expected to result in higher EAP values, notwithstanding the reductions in pre-maturity and post-maturity attrition. 4

8 Funds in the Discretionary Payment Account are currently being used, amongst other things, to return an amount equal to the Sales Charges paid (or a percentage thereof) based on Subscriber s year of enrollment, and, where applicable, on the Scholarship Option selected. If the Proposed Plan Changes described herein are approved, the method of calculating and paying the amount of Sales Charges will be changed to an automatic sharing in the remaining Plans attrition so as to obtain up to 25%, 50% and 100% of Sales Charges paid based on the Scholarship Option selected. The amounts received on the refund of Sales Charges may be materially less than that now being received. In the unlikely event that the available funds under this Proposed Plan Change exceed the maximums of 25%, 50% and 100% in any one year, any available attrition income in excess thereof will be shared proportionally between and paid to the remaining Beneficiaries with the EAP(s). The return of Sales Charges will be paid at maturity of the Plan to the Subscribers as opposed to streaming it over up to three years and potentially missing out on a portion of amount if the Beneficiary does not complete the Scholarship Option chosen. The Proposed Plan Changes, if implemented, will better meet the needs and expectations of Subscribers and Beneficiaries as they will cater to the ever evolving post-secondary landscape in Canada and abroad by providing greater program choices, easier EAP qualifications and overall enabling more Subscribers and Beneficiaries to access funds when they need them most - for post-secondary education. IMPLEMENTATION OF PLAN CHANGES By approving the resolution that is attached to this Information Circular as Schedule A, Subscribers are giving the Foundation the authority to implement the described expansion of the investment policies of the Plans, to amend the ESP Contract and Trust Deed for the Plans and make such other changes as required to give effect to the Proposed Plan Changes identified under the heading Proposed Plan Changes on page 2 of this Information Circular. Each of the four Proposed Plan Changes are to some extent interdependent on one another and are therefore being proposed as one package of changes for approval by Subscribers. Accordingly, unless all four proposed changes are approved by Subscribers, none of the Proposed Plan Changes will be implemented. If Subscribers of the Plans approve the Proposed Plan Changes, such Changes will be made effective with respect to Plans that mature after July 31, The expansion of investment policy will be made effective August 1, The Foundation may, in its discretion, postpone implementing any, or all, of the approved Proposed Plan Changes until a later date. ADDITIONAL INFORMATION Additional information regarding the Plans is contained in the Prospectus for the Heritage Plans dated September 11, 2013 and the ESP Contract. Subscribers may review the financial statements of the Plans for the year ended December 31, 2013 (audited) at HeritageRESP.com or on the SEDAR website at Sedar.com. Copies may also be obtained by e mail at CustomerCare@ HeritageRESP.com, by phone at or by mail or in person at the offices of the Foundation, Suite 700, 2005 Sheppard Avenue East, Toronto, Ontario, M2J 5B4. AUTHORIZATION BY SUBSCRIBERS In order to carry out each of the Proposed Plan Changes, the Subscribers of the Plans must approve all of the Proposed Plan Changes listed in this Information Circular under the heading Proposed Plan Changes. To be approved, the Proposed Plan Changes requires a vote FOR by a majority of the votes cast at the Special Meeting (either in person or by sending a proxy form) or by calling VOTE (8683). RECOMMENDATION OF THE FOUNDATION REGARDING THE PROPOSED PLAN CHANGES For the reasons set out above under the sub headings Reasons for and Impacts of Proposed Plan Changes, the Foundation recommends that Subscribers of the Plans vote FOR all of the Proposed Plan Changes. 5

9 APPOINTMENT AND REVOCATION OF PROXIES The persons named in the Form of Proxy accompanying this Information Circular are officers or employees of Heritage Education Funds Inc. A Subscriber has the right to appoint a person (who need not be a Subscriber) other than the persons specified in such Form of Proxy to attend and act for and on behalf of such Subscriber at the Special Meeting. Such right may be exercised by striking out the names of the persons specified in the Form of Proxy, inserting the name of the person to be appointed in the blank space so provided, signing the Form of Proxy and returning it in the reply envelope. In order to be voted at the Special Meeting, proxies must be received by Heritage Education Funds Inc. by mail or your vote must be cast by telephone in accordance with the instructions set out in the Form of Proxy accompanying this Information Circular not later than 48 hours (excluding Saturdays, Sundays and holidays) prior to the start of the Special Meeting, or any postponement or adjournment thereof, or proxies must be deposited with the chairman of the Special Meeting on the day of this meeting, or any adjournment thereof, prior to the start of the meeting. A Subscriber who executes and returns the Form of Proxy may revoke it: (i) by delivering an instrument in writing executed by him or her (or by his or her attorney authorized in writing) to the place, and by the time, specified above for the delivery of proxies; (ii) by depositing such instrument in writing with the chairman of the Special Meeting on the day of such meeting, or any adjournment thereof, prior to the start of the meeting; or (iii) in any other manner permitted by law. The Plans will be mailing this Information Circular and the Form of Proxy accompanying this Information Circular directly to the Subscribers of the Plans in accordance with National Instrument Communication with Beneficial Owners of Securities of a Reporting Issuer. VOTING OF PROXIES If the person named on the proxy specifies a choice to vote for or against the Proposed Plan Changes, the proxy will be voted accordingly. Except as indicated below, where no direction is given by a Subscriber submitting a proxy, the persons named therein will vote in favour of the Proposed Plan Change(s) set out therein. The enclosed Form of Proxy confers discretionary authority upon the persons named therein with respect to amendments or variations to the matters identified in this Information Circular and with respect to other matters which may properly come before the Special Meeting in respect of which the proxy is granted or any adjournments of such Special Meeting. As of the date of this Information Circular, the Foundation knows of no such amendments, variations or other matters to come before the Special Meeting. MEETING QUORUM AND ADJOURNMENTS At least three (3) Subscribers shall constitute a quorum for the Special Meeting. If a quorum is present at the opening of the meeting, the meeting may start, even if a quorum is not present throughout the whole meeting. If a quorum is not present at the opening of the meeting, the meeting will be adjourned to another time and place, but no other business may be transacted. No business shall be transacted at the adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place. The Subscribers present at the adjourned meeting, whatever their number, will form a quorum. If the Special Meeting is adjourned for less than thirty five (35) Business Days, it is not necessary to give notice of the adjourned meeting, other than by announcement at the original Special Meeting that was adjourned. If the Special Meeting is adjourned for more than thirty-five (35) Business Days, notice of the adjourned meeting shall be mailed or delivered by the Manager to Subscribers at their address appearing in the Register not less than five (5) or more than twenty (20) Business Days before the adjourned meeting. RECORD DATE April 1, 2014 is the record date for the determination of Subscribers entitled to receive notice of, and to vote at, the Special Meeting. 6

10 UNITS AND PRINCIPAL SUBSCRIBERS As at April 1, 2014, the Plans had 155,978 Subscribers that were parties to the ESP Contract, who collectively subscribed for 3,856, units of the Plans and who are eligible for voting. Each current Subscriber of the Plans is entitled to one vote for each unit initially subscribed by them on all matters coming before the Special Meeting. Those Subscribers who have enrolled in the Plans solely for the purposes of collecting the Canada Learning Bond and whose plans have zero (0) units or those Subscribers with less than one unit will be entitled to one vote. If there are two Subscribers who are parties to the ESP Contract and who subscribed to units jointly, any one of them present or represented by proxy at the Special Meeting may, in the absence of the other, vote in respect thereof, but if both of them are present or represented by proxy they shall vote once together in respect of the units held jointly. Additionally, if the Foundation has two different addresses for such joint Subscribers, this Information Circular will be sent to one Subscriber only to avoid contradicting or duplicate votes. As at April 1, 2014, to the knowledge of the Foundation, no person or company owned beneficially, directly or indirectly, or exercised control or direction over, more than 10% of the outstanding units of the Plans. OTHER INFORMATION Auditors The auditors of the Plans are KPMG LLP. Interest of Certain Persons in the Proposed Plan Changes Heritage Education Funds Inc. provides management services to the Plans. If the Proposed Plan Changes are approved, Heritage Education Funds Inc. will continue to provide management services to the Plans and receive administrative fees as described in the ESP Contract and Plans prospectus. During the past completed financial year ended December 31, 2013 Heritage Education Funds Inc. received $11,193,992 in administrative fees from the Plans. No Director of Officer of Heritage Education Funds Inc. has or had any material interest in any transactions with the Plans since the beginning of the Plans last financial year. CERTIFICATE The contents of this Information Circular and its distribution have been approved by the Board of Directors of the Foundation as sponsor of the Plans. DATED at Toronto, Ontario, the 25 day of April, BY ORDER OF THE BOARD OF DIRECTORS OF THE HERITAGE EDUCATIONAL FOUNDATION, SPONSOR OF THE HERITAGE PLANS Scott McIndless Chairman 7

11 SCHEDULE A FORM OF RESOLUTION OF THE SUBSCRIBERS OF HERITAGE PLANS (the Plans ) BE IT RESOLVED THAT: 1. Heritage Educational Foundation (the Foundation ) be authorized to grant the Foundation the authority and discretion to effect four (4) Proposed Plan Changes that have received a majority of votes cast as described in the Information Circular of the Plans dated April 25, 2014 and in connection therewith to so amend the underlying Trust Deed and the Education Savings Plan Contract of all eligible existing Subscribers of the Plans and future Subscribers to: (i) (ii) Reduce EAP qualification requirements to the minimums specified by the Income Tax Act (Canada), Expand investment policy, (iii) Change the rules and procedures regarding the return of Sales Charges, and (iv) Make defaulted and inactive Plans eligible for benefits offered by the Self-Determined Option. 2. The Foundation be authorized to amend, if necessary, such other instruments and documents to give effect to the Proposed Plan Changes; and 3. Any Director or Officer of Heritage Education Funds Inc. be and is hereby authorized to take all such steps as may be necessary or desirable to give effect to the foregoing. 8

12 Education Funds For more information contact: Heritage Education Funds Inc Sheppard Ave. E., Suite 700,Toronto, ON M2J 5B4. Phone: Toll-free: Fax: Heritage Plans and Impression Plan are scholarship plans issued under the sponsorship of the Heritage Educational Foundation. Units of the Heritage Plans are offered by prospectus only, a copy of which can be obtained from the registered dealer Heritage Education Funds Inc. at HeritageRESP.com. These securities may not be appropriate for all investors and are subject to certain risk factors. See the prospectus for details. Heritage Education Funds TM is the trade name of Heritage Education Funds Inc. 2014, Heritage Education Funds Inc.