R2016-125 AUTHORIZING CITY MANAGER TO EXECUTE AN EXTENSION TO THE EXISTING AGREEMENT WITH ARTHUR J. GALLAGHER AND CO. FOR RISK MANAGEMENT ADVISORY SERVICES

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• • - � � • • � : � • ' • THIS COMPENSATION AGREEMENT is made and entered into and effective the 1st day of October, 2016 ("Effective Date") by and befinreen CITY OF DECATUR, an Illinois public entity ("Client"), and ARTHUR J. GALLAGHER RISK MANAGEMENT SERVICES, INC., an Illinois corporation ("Gallagher"). I. TERM AND TERMINATION This Agreement shall commence on the Effective Date for a term of one (1) year and shall automatically renew on the first anniversary of the Effective Date and annually thereafter for additional one- (1) year terms but may be terminated by either party at any time upon one hundred twenty (120) days prior written notice. II. OBLIGATIONS OF GALLAGHER Gallagher will provide the services set out on Exhibit A attached hereto (collectively, the "Services") to Client. If the Services include the placement of insurance coverages, Ga�lagher will use its commercial best efforts to secure such insurance coverages on Client's behalf. In the event an insurance company cancels or refuses to place such insurance coverages, Gallagher will use its commercial best efforts to obtain the coverage from another insurance company. III. OBLIGATIONS OF CLIENT Client shall remunerate Gallagher its usual and customary brokerage commission for the Services. In addition to or in lieu of commission, Client shall pay Gallagher an annual fee of$62,000 for the term October 1,2016-2017; $62,000 for the term October 1, 2017- 2018; $62,000 for the term October 1, 2018-2019; $65,000 for the term October 1, 2019- '�, 2020; $67,000 for the term October 1, 2020-2021 for the Services, which such fee may I be revised at the time of renewal of this Agreement by the execution of an amendment to this Agreement signed by the parties hereto. If work is required to be performed in addition to the Services, Client agrees to compensate Gallagher for such additional work at its usual and customary rates. So long as the terms and conditions of the Services are substantially similar and Gallagher's performance is acceptable, in subsequent years the annual fee shall be increased 0% over the prior year, and shall be payable and earned as provided herein. IV. DISCLOSURES A. In addition to such fees and commissions provided herein, Gallagher may also receive investment income on fiduciary funds temporarily held by it, such as premiums or return premiums. Other parties, such as excess and surplus lines brokers, wholesalers, reinsurance intermediaries, underwriting managers, captive managers and similar parties, some of which may be owned in whole or in part by Gallagher's corporate parent, may earn and retain usual and customary commissions and fees in the course of providing insurance products to clients. Gallagher may also participate in contingent and supplemental commission arrangements with insurance companies. Contingent commission arrangements provide fo� additional contingent compensation if underwriting, profitability, volume or retention goals are achieved. Such goals are typically based on the total amount of certain insurance coverages placed by Gallagher with the insurance company, not on an individual policy basis. Supplemental commissions, unlike contingents, are known at the effective date of the policy, Fee Agreement—Illinois.6.1.12 Page 1 of 2