Page 27 - NovDefComp

asset class, option, or style.

Default Investments
The Investment Committee will evaluate and choose an investment or set of investments to serve as the default
investment(s) for the Plan. The default investment(s) will be the designated investment for dollars contributed to the
Plan by participants and/or the employer for which the Plan has not received investment direction.

The default investment will be selected to comply with the concepts of ERISA section 404(c)(5) and the regulations
promulgated thereunder as a qualified default investment alternative (“QDIA”) as a best practice.

After determining the desired asset classes, the Committee will evaluate and choose the desired investment option(s)
for the Plan’s investment menu. If an investment manager (responsible for the management of the underlying
investment vehicle, such as a mutual fund, commingled account or separate account) is chosen as the investment
option, the following minimum criteria should be considered:

1. The investment manager should be a bank, insurance Company, investment management, mutual fund
Company or an investment advisor under the Registered Investment Advisors Act of 1940;
2. The investment manager should operate in good standing with regulators and clients, with no material
pending or concluded legal actions against it; and
3. All relevant quantitative and qualitative information on the fund manager and fund should be made

available by the manager and/or vendor.

In addition to the minimum criteria above, all investments under consideration should meet the following

standards for selection:

1. Investment performance should be competitive with an appropriate style-specific benchmark and the median
return for an appropriate, style-specific peer group (where appropriate and available, long-term performance
of an investment manager may be inferred through the performance of another investment with similar style
attributes managed by such investment manager);
2. Specific risk and risk-adjusted return measures should be reviewed by the Committee and be within a
reasonable range relative to appropriate, style- specific benchmark and peer group;
3. The investment manager should demonstrate adherence to the stated investment objective, without
excess style drift over trailing performance periods;
4. Fees and fee structures should be competitive compared with similar investments reasonably available to the Plan;
5. The investment manager should exhibit attractive qualitative characteristics, including, but not limited to, acceptable
manager tenure; and
6. The investment manager should be able to provide performance, holdings, and other relevant information in a
timely fashion with specified frequency.

Furthermore, investment managers (to be used interchangeably with the term “fund” throughout the Investment Policy
Statement) will be evaluated and selected utilizing an investment manager “score card,” detailed in Part VII
(Investment Monitoring and Reporting). Finally, any fiduciary warranty or guarantee offered by the service provider
will be considered in the investment selection process, but will not supersede the provisions of this Investment Policy
Statement.

Part VII. INVESTMENT MONITORING AND REPORTING
The ongoing monitoring of investments is a regular and disciplined process. NFP and the Committee formally review
investments, via a Fiduciary Investment Review, at least annually. Additionally, the Plan’s recordkeeper leads a review
of the investments in 3 of the 4 quarterly meetings (note: recordkeeper applies its own set of criteria in its analysis,
which is generally meant for review purposes only, and not for fund change recommendations). The Monitoring
confirms that the criteria remain satisfied and that an investment option continues to be appropriate. The process of
monitoring investment performance relative to specified guidelines will be consistently applied. Frequent change of
investments is neither expected nor desired.

The Committee will bear in mind any and all political, social, economic or other changes that may potentially require more
frequent review and consideration of investments. The following are some, but not all, general factors that may be
considered in ongoing monitoring:

• Current regulatory environment,
• Current state of capital markets, 4
• Performance of investment alternatives,