529 PRO The art of administrative simplicity sm

1. presents 529 PRO The art of administrative simplicity sm

2. 529 PRO The art of administrative simplicitysm 529 PRO Processing Confidential and Proprietary

3. 529 PRO The art of administrative simplicitysm Features • Open architecture and modular approach make the system highly adaptable - once business requirements are determined, processing modules (tasks) can specified, developed and implemented with minimal impact to the existing system • Browser based administrative system with built in on-line enrollment capability • Role based data entry process enhances workflow management • Flexible, highly functional web interfaces make shareholder self-service a reality. These interfaces can be ‘skinned’ to allow for custom look and feel • Supports multiple funding methods to promote investment: Check, ACH, payroll deposit and payroll deduction (credit card under review) • Supports a ‘two track’ investing approach - the Standard Option rolls beneficiary’s through a series of investment portfolios based on their age and the Self Directed option which allows the investor to create a customized portfolio mix from available investment funds / portfolios • Broad system design allows the program to offer myriad investment options, from’ fund of funds’ portfolios to • individual mutual fund investment options • Integration with Transfer Agency (TA) system platform provides built in access to NSCC trading and commission modules - also affords the program the ability to offer A, B and C class investment shares • Highly portable system can be integrated with various TA System or record keeping platforms with minimal code rework Confidential and Proprietary Confidential and Proprietary

4. 529 PRO The art of administrative simplicitysm Presentation & Business Rule Layer TA Record keeping Layer Enrollments, Transactions & Inquiries viaInternet direct entry by SHAREHOLDERS,BROKERS, OPERATIONS and DP entities Contribution Transactions viaFiles modules for ACH, LOCKBOX, PAYROLL, CREDIT CARD, NSCC, UPromise Principal Review viaInternet Data Repair, Transaction Entry, Inquiries, Reports & Files viaInternet to and from OPS, SALES, & MARKETING Staffs, Interested Parties Statements & Confirmations for Shareholders Reports forOps Staffs Confidential and Proprietary Confidential and Proprietary

5. 529 PRO The art of administrative simplicitysm Enrollment Processing models Confidential and Proprietary

6. 529 PRO The art of administrative simplicitysm 3 Browser Based Enrollments Applications 529 PRO database 529 PRO database SHAREHOLDERS TA database • data entry interface model • Both Retail and Broker Channel Shareholder paper applications using either a pre-processor or “in-house” entry • on-line entry screens model • Retail (and Broker Channel) Shareholders using on-line entry screens • administrative interface model • Backup data entry system Confidential and Proprietary Confidential and Proprietary

7. 529 PRO The art of administrative simplicitysm Data Entry Enrollment Application Business Rules Data Processing Application ~ business rules ~ PAPER APPLICATIONS 529 PRO System TA • capabilities: • From paper applications to pre-processing tables via browser based screens • Can be used by a pre-processing entity or by “in-house” processors • Double key entry/validation and supervisor review by pre-processor is provided – status and role based • Business rules are incorporated into the code so that only valid data is allowed to move to the database • Error correction queue by administrative staff – status and role based Confidential and Proprietary Confidential and Proprietary

8. 529 PRO The art of administrative simplicitysm

9. 529 PRO The art of administrative simplicitysm On-line Enrollment Application Business Rules Direct Shareholder Entry Screens ~ business rules ~ ON-LINE ENTRY 529 PRO System TA • capabilities: • Business rules incorporated into entry screens insure only valid data is captured • Browser based entry screens allow retail shareholders to enter data directly • Browser based entry screens allow broker assisted shareholders to enter directly Confidential and Proprietary Confidential and Proprietary

10. 529 PRO The art of administrative simplicitysm Administrative Enrollment Application Business Rules ADMIN User Interface ~ business rules ~ ADMINISTRATIVE ENTRY 529 PRO System TA • capabilities: • Browser based user interface screens serve as a backup DE system • Business rules incorporated into the code • Administrative staff use to maintenance any enrollment issues Confidential and Proprietary Confidential and Proprietary

11. 529 PRO The art of administrative simplicitysm Principal Review model Confidential and Proprietary

12. 529 PRO The art of administrative simplicitysm Administrative Principal Review Application Business Rules ADMIN User Interface ~ business rules ~ 529 PRO System REGISTERED REPRESENTATIVES TA • capabilities: • Browser based interface screens allows Registered reps from any location to access the records • Registered reps perform principal review for retail or broker channel accounts • Applicable sponsor related algorithms are integrated into the module • Account approval changes the enrollment record status to allow the enrollment to proceed Confidential and Proprietary

13. 529 PRO The art of administrative simplicitysm Contribution modules Confidential and Proprietary

14. 529 PRO The art of administrative simplicitysm Contribution Processing Modules 529 PRO database SHAREHOLDER CONTRIBUTIONS TA database • capabilities: • ACH module • Initial and periodic transactions are created and processed • Data is warehoused until trade date • Pre note processing is performed • ACH Debits and ACH Reject Files created & business rules applied • Epicware edits are included • Coupon Module • “Reminder” for shareholders making periodic check contributions • Data is warehoused until “reminder” date • Facilitates lockbox processing • Lockbox module • Initial and periodic transactions are processed • File is reformatted into contribution transaction & business rules applied • Transactions are matched to enrollment data to reconcile • Payroll module (push) • Periodic transactions are processed • Data is warehoused until trade date • Preliminary & confirming files insure proper credit prior to funding • Transactions are created & passed through business rules • Payroll module (pct) • File & funding received from payroll entity • Data is warehoused until trade date • Transactions are created & passed through business rules • NSCC module • Subsequent transactions are processed • Broker initiated NSCC trades are executed • Module translates NSCC trade into contribution and fund purchase • Transactions are passed through BR’s prior to posting • UPromise module • Subsequent transactions are processed • Accounts are specially flagged to identify • Confirming files insure proper credit prior to funding • File is reformatted into contribution transactions • File is passed through BR’s prior to posting • Credit Card module • TBD Confidential and Proprietary

15. 529 PRO The art of administrative simplicitysm ACH Contribution Module A wire is sent by the Clearing House to credit the DDA – should balance to the ACH file DDA Monthly data updates Thompson Financial EPICWARE Monthly data updates REJECT FILES are returned Pre note failures and debit rejects are returned ACH Module ~ business rules ~ Business Rules Automated Clearing House 529 PRO System SHAREHOLDERS ACH FILE is transmitted to the Clearing House and contribution transactions are posted to the tables Funding instructions sent by shareholders via enrollment and other processing from all entry points TA ACH data is warehoused for processing on assigned trade date(s) Confidential and Proprietary Confidential and Proprietary

16. 529 PRO The art of administrative simplicitysm Coupon Contribution Module COUPON Module ~ business rules ~ Business Rules 529 PRO System SHAREHOLDERS COUPON FILE is produced and invoices sent to shareholders Funding instructions sent by shareholders via enrollment and other processing from all entry points TA COUPON data is warehoused for processing on invoicing date(s) Confidential and Proprietary Confidential and Proprietary

17. 529 PRO The art of administrative simplicitysm Lockbox Contribution Module OPERATIONS Paper backup is sent to pre-processor and then to operations for retention A wire is sent to credit the DDA – should balance to CHECK file DDA Business Rules The flat CHECK FILE file is reformatted into contribution transactions. The resultant transactions are reviewed using the program’s rules and regulations prior to posting transactions to the tables. LOCKBOX Module ~ business rules ~ 529 PRO System SHAREHOLDERS Lockbox Institution Shareholders send initial and subsequent contributions to the applicable lockbox institution A flat file is produced by the lockbox institution TA Confidential and Proprietary Confidential and Proprietary

18. 529 PRO The art of administrative simplicitysm Paper Processing Enrollment forms with/without payments Reoccurring payments Paper backups (Overnight Mail) STEP 2 Pre – Processor STEP 1 Lockbox Institution LOCKBOX Module ~ business rules ~ Data Processing Application ~ business rules ~ Daily wire Business Rules 529 PRO System DDA Paper backups (Overnight Mail) ENROLLMENT records match to CHECK FILE records to reconcile contribution transactions. DDA Report TA 529 Operations Imaging Archiving Confidential and Proprietary

19. 529 PRO The art of administrative simplicitysm Payroll Deduction Contribution Module A wire is sent by the EMPLOYER to credit the DDA – should balance to the EMPLOYER file DDA Data files are exchanged to insure accurate processing at both entities PAYROLL Module ~ business rules ~ REJECT FILES are returned to EMPLOYER Business Rules Employer 529 PRO System SHAREHOLDERS EMPLOYER FINANCIAL FILE is transmitted and contribution transactions are created and posted to the tables Funding Instructions sent by shareholders via enrollment and other processing from all entry points TA PAYROLL data is warehoused for processing on payroll date Confidential and Proprietary Confidential and Proprietary

20. 529 PRO The art of administrative simplicitysm Credit Card Contribution Module A wire is sent by the Credit Card Company to credit the DDA – should balance to the CREDIT CARD FILE DDA Credit Card Module ~ business rules ~ Credit Card Company Business Rules Contribution transactions are created Rejects are returned 529 PRO System SHAREHOLDERS CC FILE is transmitted to Credit Card Company Funding Instructions sent by shareholders via enrollment and other processing from all entry points TA CC data is warehoused for processing on trade date Confidential and Proprietary Confidential and Proprietary

21. 529 PRO The art of administrative simplicitysm UPromise Contribution Module A wire is sent to credit the DDA – should balance to UPromise file DDA Data files are exchanged to insure accurate processing at both entities Business Rules The financial file is reformatted to create contribution transactions. The resultant transactions are reviewed using the program’s rules and regulations prior to posting transactions to the tables. UPromise Module ~ business rules ~ 529 PRO System SHAREHOLDERS UPromise Program Shareholders accumulate credits in their UPromise Program A flat file is produced by UPromise TA Confidential and Proprietary Confidential and Proprietary

22. 529 PRO The art of administrative simplicitysm NSCC Processing Confidential and Proprietary

23. 529 PRO The art of administrative simplicitysm NSCC Contribution Module DDA The payment is made NSCC module translates NSCC special trade into a contribution – and subsequently the funds are purchased and the funds reconciled Business Rules NSCC Module ~ business rules ~ 529 PRO System SHAREHOLDERS Broker Shareholders place a trade with broker from funds deposited in brokerage account Broker purchases shares via NSCC TA NSCC Confidential and Proprietary Confidential and Proprietary

24. 529 PRO The art of administrative simplicitysm NSCC Processing 529 Institution National Securities Clearing Corp Price/Dividends Orders FUND Confirmations Position Information Price/Dividends Orders Confirmations Settlement Price/Dividends Trustee Position Information Orders Confirmations Settlement Position Information Confidential and Proprietary

25. NSCC – Commission Settlement Services Overview • Commission Settlement is the most efficient method of accurately reporting fund commission information to financial services firms. Using a standard format in NSCC's centralized processing environment, the service supports all types of fund commissions including Contingent Deferred Sales Charge (CDSC) payouts, 12b-1 fees (or trail commissions), or other types of payments. Settlement occurs through NSCC's settlement system. • Commission Settlement is accessible via CPU-to-CPU links, or through PCWeb Direct - a Web interface that allows NSCC participants direct access to NSCC services over the Internet. Transmissions are limited to no more than two hours per file. • Commission Settlement is a service offering of National Securities Clearing Corporation, the nation's leading provider of centralized clearance, settlement and information services to more than 2,500 brokers, dealers, banks, mutual funds, insurance carriers and other organizations. NSCC develops standardized, automated solutions that promote connectivity, efficiency and lower risk in the financial services marketplace. NSCC is a subsidiary of The Depository Trust & Clearing Corporation (DTCC). Benefits • Expedites the distribution and settlement of fund commissions • Simplifies the reconciliation process by providing standardized formats for the exchange of records between funds and firms • Reduces costs associated with manual processing of commission payments • Accommodates single-batch processing • Consolidates money settlement with other NSCC activity How the service works • Input from FundsSingle-batch files are sent to NSCC for processing by 10 a.m., Monday through Saturday.Errors can be corrected through a reversal of the transmission by the fund. • Output to FirmsTwo single-batched files of detailed and summary commission data are sent to firms after 11 a.m., Monday through Saturday. • SettlementSettlement for commission files transmitted to NSCC by 2 p.m. occurs the following day. One day prior to settlement date, the NSCC notifies both fund and firms of their commission settlement obligation. Commissions are netted with other mutual fund/clearing corporation activity at the end of the day, and settlement takes place in Fed Funds.

26. 529 PRO The art of administrative simplicitysm Inquiry modules Confidential and Proprietary

27. 529 PRO The art of administrative simplicitysm On-line Inquiry Application Retail Screens ~ business rules ~ SHAREHOLDERS ON-LINE • capabilities: • View transaction history • View all displayed data Business Rules Sponsor Screens ~ business rules ~ 529 PRO System SPONSORS ON-LINE • capabilities: • Client transaction history • Sales reporting • Commission detail TA Admin Screens ~ business rules ~ ADMINISTRATORS ON-LINE • capabilities: • All 529 processing and historic information Confidential and Proprietary Confidential and Proprietary

28. 529 PRO The art of administrative simplicitysm Maintenance modules Confidential and Proprietary

29. 529 PRO The art of administrative simplicitysm On-line Maintenance Application Retail Screens ~ business rules ~ SHAREHOLDERS ON-LINE • capabilities: • Change demographics, confirm delivery, password • Change funds, allocations • Add beneficiaries, programs, funding, contributions • Cancel funding • Request distributions Business Rules Sponsor Screens ~ business rules ~ 529 PRO System SPONSORS ON-LINE • capabilities: • Change demographics TA Admin Screens ~ business rules ~ ADMINISTRATORS ON-LINE • capabilities: • All 529 processing Confidential and Proprietary Confidential and Proprietary

30. 529 PRO The art of administrative simplicitysm Distribution Module Retail Screens ~ business rules ~ Distribution Module ~ business rules ~ on-line SHAREHOLDER REQUEST DP Application ~ business rules ~ Business Rules paper 529 PRO System • capabilities: • qualified and non-qualified • only aged contributions eligible • check to shareholder, university or • beneficiary • confirmation to shareholder • or • ACH credit to university • confirmation to shareholder Admin Screens ~ business rules ~ TA any Confidential and Proprietary Confidential and Proprietary Confidential and Proprietary

31. 529 PRO The art of administrative simplicitysm Reallocation Module Retail Screens ~ business rules ~ Reallocation Module ~ business rules ~ on-line SHAREHOLDER REQUEST DP Application ~ business rules ~ Business Rules paper 529 PRO System • capabilities: • ability to reallocate across investment tracks • reallocations maintained within share class • share lot and tax lot information detail is maintained • one per calendar year rule enforced • confirmation to shareholder Admin Screens ~ business rules ~ TA any Confidential and Proprietary Confidential and Proprietary Confidential and Proprietary

32. 529 PRO The art of administrative simplicitysm Output modules Confidential and Proprietary

33. 529 PRO The art of administrative simplicitysm Output Module 529 PRO database Sponsor Daily Output File Module ~ business rules ~ Broker TA database • capabilities: • Operational reports • Statements • Confirmations • Daily Activity File Confidential and Proprietary

34. 529 PRO The art of administrative simplicitysm Shareholder Service model Confidential and Proprietary

35. 529 PRO The art of administrative simplicitysm Shareholder Service Processing Shareholders via mail and E-mail Shareholders via VRU Shareholders via Telephone Brokers via Telephone Research questions Research responses E-mail system Broker Support model 529 Web Center VRU AT+T Language line E-mail system archives Recording archives • 529 Plan Representatives • Respond to shareholder telephone inquiries • Respond to shareholder email inquiries • Broker Support • Calls WebCenter with questions • Licensed Brokers • Respond to broker trade and investment questions • Respond to broker commission questions Business Rules E-mail system 529 PRO System 529 OPS TA Confidential and Proprietary