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HomeMy WebLinkAboutC-4933 - PSA for Consulting Services Related to the City of Newport Beach Deferred Compensation Plan1 PROFESSIONAL SERVICES AGREEMENT WITH BENEFIT FUNDING SERVICES GROUP, LLC FOR CONSULTING SERVICES RELATED TO THE CITY OF NEWPORT BEACH DEFERRED COMPENSATION PLAN THIS AGREEMENT is made and entered into as of this 1st day of October, 2007, by and between the CITY OF NEWPORT BEACH, a Municipal Corporation ( "City "), and BENEFIT FUNDING SERVICES GROUP, LLC, a Delaware Limited Liability Company whose address is 2040 MAIN STREET, SUITE 150, IRVINE, CALIFORNIA 92614 ( "Consultant'), and is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. City has a need for consulting services related to its Deferred Compensation Plan ('Plan "). C. City desires to engage Consultant to provide consulting services related to the Plan ( "Project'). D. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement. E. The principal member[s] of Consultant for purposes of Project shall be John C. Campbell. F. City has solicited and received a proposal from Consultant, has reviewed the previous experience and evaluated the expertise of Consultant, and desires to retain Consultant to render professional services under the terms and conditions set forth in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM The term of this Agreement shall commence on the above written date, and shall terminate on the 1 st day of October, 2008, unless terminated earlier as set forth herein. 2. SERVICES TO BE PERFORMED Consultant shall diligently perform all the services described in the Scope of Services attached hereto as Exhibit A and incorporated herein by reference. The City may elect to delete certain tasks of the Scope of Services at its sole discretion. 3. TIME OF PERFORMANCE Time is of the essence in the performance of services under this Agreement and the services shall be performed to completion in a diligent and timely manner. The failure by Consultant to perform the services in a diligent and timely manner may result in termination of this Agreement by City. Notwithstanding the foregoing, Consultant shall not be responsible for delays due to causes beyond Consultant's reasonable control. However, in the case of any such delay in the services to be provided for the Project, each party hereby agrees to provide notice to the other party so that all delays can be addressed. 3.1 Consultant shall submit all requests for extensions of time for performance in writing to the Project Administrator not later than ten (10) calendar days after the start of the condition that purportedly causes a delay. The Project Administrator shall review all such requests and may grant reasonable time extensions for unforeseeable delays that are beyond Consultant's control. 3.2 For all time periods not specifically set forth herein, Consultant shall respond in the most expedient and appropriate manner under the circumstances, by either telephone, fax, hand - delivery or mail. 4. COMPENSATION TO CONSULTANT City shall pay Consultant for the services on a quarterly basis in accordance with the provisions of this Section. All of Consultant's work performed in accordance with this Agreement, including all reimbursable items and subconsultant fees, shall be performed for an annual fee of Twenty -five thousand dollars ($25,000.00). No additional compensation shall be provided during the term of this Agreement without the prior written approval of City. In addition, Consultant shall not receive any additional hard or soft - dollar compensation related to the Plan from any other party including but not limited to any party who is a service provider to the Plan or related to a service provider to the Plan. 4.1 Consultant shall submit quarterly invoices to City describing the work performed the preceding quarter. City shall pay Consultant no later than thirty (30) days after approval of the monthly invoice by City staff. 4.2 City shall reimburse Consultant only for those costs or expenses specifically approved in this Agreement, or specifically approved in writing in advance by City. Unless otherwise approved, such costs shall be limited and include nothing more than the following costs incurred by Consultant: A. The actual costs of subconsultants for performance of any of the services that Consultant agrees to render pursuant to this Agreement, which have been approved in advance by City and awarded in accordance with this Agreement. B. Approved reproduction charges. C. Actual costs and /or other costs and /or payments specifically authorized in advance in writing and incurred by Consultant in the performance of this Agreement. 4.3 Consultant shall not receive any compensation for Extra Work performed without the prior written authorization of City. As used herein, "Extra Work" means any work that is determined by City to be necessary for the proper completion of the Project, but which is not included within the Scope of Services and which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. 5. PROJECT MANAGER Consultant shall designate a Project Manager, who shall coordinate all phases of the Project. This Project Manager shall be available to City at all reasonable times during the Agreement term. Consultant has designated JOHN C. CAMPBELL to be its Project Manager. Consultant shall not remove or reassign the Project Manager or any personnel listed in Exhibit A or assign any new or replacement personnel to the Project without the prior written consent of City. City's approval shall not be unreasonably withheld with respect to the removal or assignment of non -key personnel. Consultant, at the sole discretion of City, shall remove from the Project any of its personnel assigned to the performance of services upon written request of City. Consultant warrants that it will continuously furnish the necessary personnel to complete the Project on a timely basis as contemplated by this Agreement. 6. ADMINISTRATION This Agreement will be administered by the Human Resources Department. Barbara Ramsey shall be the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator or his /her authorized representative shall represent City in all matters pertaining to the services to be rendered pursuant to this Agreement. 7. CITY'S RESPONSIBILITIES In order to assist Consultant in the execution of its responsibilities under this Agreement, City agrees to, where applicable: Provide access to, and upon request of Consultant, one copy of all existing relevant information on file at City. City will provide all such materials in a timely manner so as not to cause delays in Consultant's work schedule. 8. STANDARD OF CARE 8.1 All of the services shall be performed by Consultant or under Consultant's supervision. Consultant represents that it possesses the professional and technical personnel required to perform the services required by this Agreement, and that it will perform all services in a manner commensurate with community professional standards. All services shall be performed by qualified and experienced personnel who are not employed by City, nor have any contractual relationship with City. By delivery of completed work, Consultant certifies that the work conforms to the requirements of this Agreement and all applicable federal, state and local taws and the professional standard of care. 8.2 Consultant represents and warrants to City that it has, shall obtain, and shall keep in full force in effect during the term hereof, at its sole cost and expense, all licenses, permits, qualifications, insurance and approvals of whatsoever nature that is legally required of Consultant to practice its profession. Consultant shall maintain a City of Newport Beach business license during the term of this Agreement. 8.3 Consultant shall not be responsible for delay, nor shall Consultant be responsible for damages or be in default or deemed to be in default by reason of strikes, lockouts, accidents, or acts of God, or the failure of City to furnish timely information or to approve or disapprove Consultant's work promptly, or delay or faulty performance by City, contractors, or governmental agencies. 9. HOLD HARMLESS To the fullest extent permitted by law, Consultant shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers, and employees (collectively, the "Indemnified Parties ") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims "), which may arise from or in any manner relate (directly or indirectly) to any breach of the terms and conditions of this Agreement, any work performed or services provided under this Agreement including, without limitation, defects in workmanship or materials or Consultant's presence or activities conducted on the Project (including the negligent and /or willful acts, errors and /or omissions of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable or any or all of them). Notwithstanding the foregoing, nothing herein shall be construed to require Consultant to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorney's fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Consultant. 10. INDEPENDENT CONTRACTOR It is understood that City retains Consultant on an independent contractor basis and Consultant is not an agent or employee of City. The manner and means of conducting the work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the expressed terms of this Agreement. Nothing in this Agreement shall be deemed to constitute approval for Consultant or any of Consultant's employees or agents, to be the agents or employees of City. Consultant shall have the responsibility for and control over the means of performing the work, provided that Consultant is in compliance with the terms of this Agreement. Anything in this Agreement that may appear to give City the right to direct Consultant as to the details of the performance or to exercise a measure of control over Consultant shall mean only that Consultant shall follow the desires of City with respect to the results of the services. 11. COOPERATION Consultant agrees to work closely and cooperate fully with City's designated Project Administrator and any other agencies that may have jurisdiction or interest in the work to be performed. City agrees to cooperate with the Consultant on the Project. 12. CITY POLICY Consultant shall discuss and review all matters relating to policy and Project direction with City's Project Administrator in advance of all critical decision points in order to ensure the Project proceeds in a manner consistent with City goals and policies. 13. PROGRESS Consultant is responsible for keeping the Project Administrator and /or his /her duly authorized designee informed on a regular basis regarding the status and progress of the Project, activities performed and planned, and any meetings that have been scheduled or are desired. 14. INSURANCE Without limiting Consultant's indemnification of City, and prior to commencement of work. Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement, a policy or policies of liability insurance of the type and amounts described below and in a form satisfactory to City. A. Certificates of Insurance. Consultant shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Insurance certificates must be approved by City's Risk Manager prior to commencement of performance or issuance of any permit. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. B. Signature. A person authorized by the insurer to bind coverage on its behalf shall sign certification of all required policies. C. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. D. Coverage Requirements. Workers' Compensation Coverage. Consultant shall maintain Workers' Compensation Insurance and Employer's Liability Insurance for his or her employees in accordance with the laws of the State of California. In addition, Consultant shall require each subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California for all of the subcontractor's employees. Any notice of cancellation or non - renewal of all Workers' Compensation policies must be received by City at least thirty (30) calendar days (10 calendar days written notice of non - payment of premium) prior to such change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work performed by Consultant for City. ii. General Liability Coverage. Consultant shall maintain commercial general liability insurance in an amount not less than one million dollars ($1,000,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, contractual liability. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement, or the general aggregate limit shall be at least twice the required occurrence limit. iii. Automobile Liability Coverage. Consultant shall maintain automobile insurance covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit for each occurrence. iv. Professional Errors and Omissions Insurance. Consultant shall maintain professional errors and omissions insurance, which covers the services to be performed in connection with this Agreement in the minimum amount of one million dollars ($1,000,000). E. Endorsements. Each general liability and automobile liability insurance policy shall be endorsed with the following specific language: i. The City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the Consultant. ii. This policy shall be considered primary insurance as respects to City, its elected or appointed officers, officials, employees, agents and volunteers as respects to all claims, losses, or liability arising directly or indirectly from the Consultant's operations or services provided to City. Any insurance maintained by City, including any self- insured retention City may have, shall be considered excess insurance only and not contributory with the insurance provided hereunder. iii. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. iv. The insurer waives all rights of subrogation against City, its elected or appointed officers, officials, employees, agents and volunteers. V. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. vi. The insurance provided by this policy shall not be suspended, voided, canceled, or reduced in coverage or in limits, by either party except after thirty (30) calendar days (10 calendar days written notice of non - payment of premium) written notice has been received by City. F. Timely Notice of Claims. Consultant shall give City prompt and timely notice of claim made or suit instituted arising out of or resulting from Consultant's performance under this Agreement. G. Additional Insurance. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. 15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS Except as specifically authorized under this Agreement, the services to be provided under this Agreement shall not be assigned, transferred contracted or subcontracted out without the prior written approval of City. Any of the following shall be construed as an assignment: The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Consultant, or of the interest of any general partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or joint- venture or syndicate or cotenancy, which shall result in changing the control of Consultant. Control means fifty percent (50 %) or more of the voting power, or twenty -five percent (25 %) or more of the assets of the corporation, partnership orjoint- venture. 16. SUBCONTRACTING The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Consultant. Assignments of any or all rights, duties or obligations of the Consultant under this Agreement will be permitted only with the express written consent of City. Consultant shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of City. 17. OWNERSHIP OF DOCUMENTS Each and every report, draft, map, record, plan, document and other writing produced (hereinafter "Documents "), prepared or caused to be prepared by Consultant, its officers, employees, agents and subcontractors, in the course of implementing this Agreement, shall become the exclusive property of City, and City shall have the sole right to use such materials in its discretion without further compensation to Consultant or any other party. Consultant shall, at Consultant's expense, provide such Documents to City upon prior written request. Documents, including drawings and specifications, prepared by Consultant pursuant to this Agreement are not intended or represented to be suitable for reuse by City or others on any other project. Any use of completed Documents for other projects and any use of incomplete Documents without specific written authorization from Consultant will be at City's sole risk and without liability to Consultant. Further, any and all liability arising out of changes made to Consultant's deliverables under this Agreement by City or persons other than Consultant is waived against Consultant and City assumes full responsibility for such changes unless City has given Consultant prior notice and has received from Consultant written consent for such changes. 18. CONFIDENTIALITY All Documents, including drafts, preliminary drawings or plans, notes and communications that result from the services in this Agreement, shall be kept confidential unless City authorizes in writing the release of information. 19. INTELLECTUAL PROPERTY INDEMNITY The Consultant shall defend and indemnify City, its agents, officers, representatives and employees against any and all liability, including costs, for infringement of any United States' letters patent, trademark, or copyright infringement, including costs, contained in Consultant's drawings and specifications provided under this Agreement. 20. RECORDS Consultant shall keep records and invoices in connection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures and disbursements charged to City, for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a representative of City to examine, audit and make transcripts or copies of such records and invoices during regular business hours. Consultant shall allow inspection of all work, data, Documents, proceedings and activities related to the Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement. 21. WITHHOLDINGS City may withhold payment to Consultant of any disputed sums until satisfaction of the dispute with respect to such payment. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement. Consultant shall not discontinue work as a result of such withholding. Consultant shall have an immediate right to appeal to the City Manager or his /her designee with respect to such disputed sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of return that City earned on its investments during the time period, from the date of withholding of any amounts found to have been improperly withheld. 22. ERRORS AND OMISSIONS In the event of errors or omissions that are due to the negligence or professional inexperience of Consultant which result in expense to City greater than what would have resulted if there were not errors or omissions in the work accomplished by Consultant, the additional design, construction and /or restoration expense shall be borne by Consultant. Nothing in this paragraph is intended to limit City's rights under the law or any other sections of this Agreement. 23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other Consultants in connection with the Project. 24. CONFLICTS OF INTEREST The Consultant or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act "), which (1) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, Consultant shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. Consultant shall indemnify and hold harmless City for any and all claims for damages resulting from Consultant's violation of this Section. All notices, demands, requests or approvals to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first -class mail, addressed as hereinafter provided. All notices, demands, requests or approvals from Consultant to City shall be addressed to City at: Attn: Barbara Ramsey Human Resources Department City of Newport Beach 3300 Newport Boulevard Newport Beach, CA, 92663 Phone: 949 - 644 -3303 Fax: 949 - 644 -3305 All notices, demands, requests or approvals from CITY to Consultant shall be addressed to Consultant at: Attention: John C. Campbell BFSG,LLC 2040 Main Street, Suite 150 Irvine, CA 92614 Phone: (949) 955-5781 Fax: (949) 955 -25552 26. TERMINATION In the event that either party fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of two (2) calendar days, or if more than two (2) calendar days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within two (2) calendar days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, and thereafter diligently take steps to cure the default, the non - defaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. Notwithstanding the above provisions, City shall have the right, at its sole discretion and without cause, of terminating this Agreement at any time by giving seven (7) calendar days prior written notice to Consultant. In the event of termination under this Section, City shall pay Consultant for services satisfactorily performed and costs incurred up to the effective date of termination for which Consultant has not been previously paid. On the effective date of termination, Consultant shall deliver to City all reports, Documents and other information developed or accumulated in the performance of this Agreement, whether in draft or final form. 27. COMPLIANCE WITH ALL LAWS Consultant shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. In addition, all work prepared by Consultant shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements and be subject to approval of the Project Administrator and City. 28. WAIVER A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 29. INTEGRATED CONTRACT This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 30. CONFLICTS OR INCONSISTENCIES In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern. 31. INTERPRETATION The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. 32. AMENDMENTS This Agreement may be modified or amended only by a written document executed by both Consultant and City and approved as to form by the City Attorney. 33. SEVERABILITY If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 34. CONTROLLING LAW AND VENUE The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. 35. EQUAL OPPORTUNITY EMPLOYMENT Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: . A ,,,C9-0-� Assistant City Attorney for the City of Newport Beach ATTEST: Byi/ /lL 6&PiR. f�7 LaVonne Harkless, City Clerk CITY OF NEWPORT BEACH, A Municipal Corporation By: am R 2 Barbara Ramsey, Human Resources Director for the City of Newport Beach CONSULTANT: 0 r) Print Name: Dhv) b-r-1t 0 (Financial Officer) Title: Print Name: Attachments: Exhibit A — Scope of Services BFSG, LLC ( "Consultant "), will provide investment and compliance consulting services to the City of Newport Beach "Client" with respect to the City of Newport Beach Deferred Compensation Plan (the "Plan') as outlined below: INVESTMENT SERVICES Provide comprehensive quarterly investment analysis review of all Plan investment options, as well as additional options and asset classes to consider Provide a market overview addressing the major markets, indices, sectors and the economic statistics that are affecting them Provide an in -depth portfolio summary, including fund and benchmark returns, style analysis and overall portfolio return Analyze the Plan asset allocation by fund and underlying sector. The fund lineup will also be analyzed to determine the amount of overlap that may be occurring Provide a detailed quantitative and qualitative examination of each mutual fund investment option within the Plan, including performance numbers versus the category and index, manager style drift, risk /return, standard deviation, Sharpe ratio, expense ratio, upside and downside capture and fund allocation (see Attachment A - Investment Consulting Program Features) Annually review Investment Policy Statement to ensure it is meeting the needs of the Client and the defined contribution Plan participants Continually monitor the Plan's investments to ensure they are meeting the Investment Policy Statement parameters as well as the retirement needs of the participants Make recommendations of possible alternatives to funds when, in conjunction with the Investment Committee, it is determined a change in fund line -up is necessary BFSG will be available four times per year, to meet with the Investment Committee, or other people designated by the Client, to present the quarterly reports and findings, make recommendations as to particular investments to be placed in the fund line -up and answer any questions that may arise BFSG will act as co- fiduciary by providing investment advice on a regular basis to the Plan regarding the Plan's assets in accordance with the provisions of this Agreement. COMPLIANCE AND ADMINISTRATION CONSULTING SERVICES Provide consulting assistance on fiduciary best - practices, including the maintenance of the Investment Policy Statement and Fiduciary Education Provide guidance on fidelity bond and fiduciary insurance policy coverage Provide assistance with regulatory (DOL / IRS) audits as needed Provide draft meeting minutes documenting Committee meeting discussions for the Client's use Provide annual benchmarking of Plan costs as compared to industry average Provide compliance- related and legislative updates as applicable VENDOR BENCHMARKING (conducted every 3 - 5 Discovery, which entails gathering data regarding Client's current Plan, including specific needs as it relates to a provider Conduct a review of the universe of vendors in the marketplace to determine which would be appropriate candidates for the Client's Plan Prepare a customized Request for Information (RFI) based on Client's Plan specifics, demographics, and needs. RFI to be sent to a minimum of 8 - 10 providers Compile the responses and prepare a summarized presentation incorporating a review of the vendors' recordkeeping / administration capabilities; investment offerings; education / communication abilities; and costs. The presentation will be presented to Client's retirement plan committee so that the search maybe narrowed to one or two finalists Assist in coordinating in- person interviews with each of Client's chosen finalists so that Client may complete selection Prepare Management Letter to quantify and summarize process findings Document entire evaluation process for client's fiduciary file ADDITIONAL TERMS OF AGREEMENT ERISA Fiduciary Status. BFSG hereby acknowledges and agrees that it will be a fiduciary of the Plan under ERISA and that it will perform its duties under the Agreement (a) in accordance with the provisions of the documents and instruments governing the Plan insofar as such documents and instruments are consistent with ERISA, (b) with the care, skill, prudence and diligence required of a fiduciary of a plan subject to ERISA, and (c) for the exclusive purpose of providing benefits to the Plan participants and beneficiaries and defraying reasonable expenses of administering the Plan. Notwithstanding the foregoing, BFSG shall not be subject to ERISA fiduciary standards with respect to its performance of consulting services for the Client in its settlor capacity. Securities Law Fiduciary Status. BFSG hereby acknowledges and agrees that it is an investment adviser under the Investment Advisers Act of 1940, and that as such, it has a fiduciary duty to provide disinterested advice and disclose any material conflicts of interest to the Client. Adviser Independence. Neither BFSG nor any of its employees has a "material relationship," financial or otherwise, with any mutual fund or manager of any other investment vehicle that BFSG will recommend, consider for recommendation, or otherwise mention to Client for consideration. For this purpose, "material relationship" is any relationship that may affect the objectivity of the advice that BFSG provides under the terms of this Agreement. ANALYSIS OF INVESTMENT ASSET CLASSES AND ON -GOING PERFORMANCE MONITORING: BFSG shall evaluate all Plan investments against appropriate peer groups and index benchmarks using several measures to quantify expenses, returns and risk - adjusted performance. Each Plan investment option will be initially reviewed, and then reviewed quarterly. Both quantitative and qualitative criteria will be evaluated as follows: Evaluation Methodoloev Quantitative Criteria 1. Trailing 3, 5 and 10 year returns - Returns shall be weighted, based on the life of the fund. Recent returns will be more heavily weighted, while older returns, which could have been produced under different conditions, will be less heavily weighted. 2. Rolling 12 -month returns (10 years) - Returns shall be evaluated over a rolling 12 -month period to determine how consistently the fund manager out - performed his peers in a variety of market cycles. 3. Rolling 36 month returns (10 years) - Returns shall also be evaluated over a 36 -month rolling period, thus putting more emphasis on performance across different cycles of the market. 4. Sharpe Ratio (36 months) - Sharpe Ratio shall be evaluated to determine the funds overall efficiency. The Sharpe Ratio is calculated by dividing the annualized return in excess of the risk free Treasury bill by the standard deviation for that same time frame. 5. Information Ratio - The Information Ratio shall be evaluated by taking the excess return over the fund's appropriate index and dividing it by the standard deviation. 6. Up Capture Ratio - The percentage of an index return captured during up market cycles, referred to as Up Capture Ratio, shall be evaluated. 7. Down Capture Ratio - The percentage of an index return captured during down market cycles, referred to as Down Capture Ratio, shall be evaluated. S. Style Consistency to the appropriate category - The use of three, weighted analyses ensures that the funds that are selected for the Plan continue to operate and perform as expected within their appropriate asset class. R- Squared, style return consistency, and holdings consistency shall be evaluated. 9. Expense Ratio - The expense ratio shall be compared as a percentage to the appropriate category average. Each fund shall be benchmarked to a specific market index, and fund performance will be evaluated and compared to a relevant peer group using Morningstar category classifications. Each fund will be given a peer group ranking in each criterion, shown as a percentage. The rankings for all criteria will then be averaged to give a fund its average ranking score. (Each evaluation measure requires a three -year history to ensure an accurate evaluation of the fund; therefore, any fund with less than a three -year history will not be evaluated using this method.) BFSG will then use the overall ranking score to indicate whether a fund is outperforming, performing or under- performing. An overall ranking score between 4.44% (the highest obtainable score) and 29.99% shall indicate a fund that is outperforming. A score between 30 %- 59.99% shall indicate a fund that is performing. A score between 60% and 95.56% (the lowest obtainable score) shall indicate a fund that is under - performing. Qualitative Criteria In addition to the above criteria, additional factors will be monitored to determine a funds potential exposure to risk that may make it unsuitable as a retirement plan investment option. The additional factors to be monitored are: • Change in fund philosophy • Change in fund manager • Individual holding concentrations • Economic sector concentrations • Performance volatility as measured by standard deviation • Attribution analysis Portfolio turnover/ transaction costs • Manager tenure • Asset base • Median market capitalization • Average credit quality for bond funds • Average duration for bond funds