UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

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1 Case 3:12-cv MAS-DEA Document 149 Filed 04/20/16 Page 1 of 8 PageID: UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY THOMAS E. PEREZ, Secretary of Labor, United States Department of Labor v. Plaintiff, FIRST BANKERS TRUST SERVICES, INC., VINCENT DIPANO, and the SJP GROUP, INC. EMPLOYEE STOCK OWNERSHIP PLAN No. 3:12-cv MAS-DEA Defendants PARTIAL CONSENT ORDER AND JUDGMENT AS TO SECRETARY'S CLAIMS AGAINST DEFENDANT DI PANO Plaintiff Thomas E. Perez, Secretary of Labor, United States Department of Labor (the "Secretary") and Defendant Vincent Di Pano ("Mr. Di Pano") agree to the entry of this Partial Consent Order and Judgment as a complete resolution of all issues in contention between them in this matter. This Partial Consent Order and Judgment does not resolve any of the Secretary's claims against Defendant First Bankers Trust Services, Inc. ("FBTS"). This action arises under Title I of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C et seq., as amended, and was brought by the Secretary pursuant to ERISA 502(a)(2) and (5), 29 U.S.C. 1132(a)(2) and 1

2 Case 3:12-cv MAS-DEA Document 149 Filed 04/20/16 Page 2 of 8 PageID: (5), to obtain relief for alleged breaches of fiduciary duty under ERISA 409, 29 U.S.C. 1109, and to enjoin acts and practices which allegedly violate the provisions of Title I of ERISA. The Secretary has authority to enforce the provisions of Title I of ERISA by, among other means, the filing and prosecution of claims against fiduciaries and other parties who are in violation of Title I of ERISA pursuant to ERISA 502(a)(2) and (5), 29 U.S.C. 1132(a)(2) and (5). On April 16, 2007, Mr. Di Pano sold 380,000 shares of stock in the SJP Group, Inc. ("SJP")-representing 3 8% of all outstanding shares of SJP-to the SJP Employee Stock Ownership Plan ("Plan") for $16 million (the "Transaction"). On July 17, 2012, the Secretary filed an action in the United States District Court for the District of New Jersey ("Court"), styled Perez v. First Bankers Trust Services, Inc., No. 3:12-cv-04450, asserting various claims against Mr. Di Pano, First Bankers Trust Services, Inc. ("FBTS"), and the Plan 1 in connection with the Transaction under the Employee Retirement Income Security Act of 1974, 29 U.S.C et seq., as amended ("ERISA"), (the "Lawsuit"). The Lawsuit arises under Title I oferisa, and was brought by the Secretary pursuant to ERISA 502(a)(2) and (5), 29 U.S.C. 1132(a)(2) and (5), to obtain relief for alleged breaches of fiduciary duty under ERISA 409, 29 U.S.C. 1109, 1 The Secretary has named the Plan as a Defendant only for the purpose of ensuring complete relief among the parties under Federal Rule of Civil Procedure 19. See Complaint~ 4, D.E. 1. 2

3 Case 3:12-cv MAS-DEA Document 149 Filed 04/20/16 Page 3 of 8 PageID: and to enjoin acts and practices which allegedly violate the provisions of Title I of ERIS A. The Secretary's complaint alleges that Mr. Di Pano breached his fiduciary duties to the Plan in connection with the Transaction, in violation of ERISA 404(a)(l)(A), (B) and (D), 29 U.S.C. 1104(a)(l)(A), (B) and (D), and/or that Mr. Di Pano knowingly participated in a non-exempt prohibited transaction within the meaning oferisa 406(a)(l)(A) and (D) and 406(b)(l) and (2), 29 U.S.C. 1106(a)(l)(A) and (D) and 29 U.S.C. 1106(b)(l) and (2). Mr. Di Pano waives the notice of assessment and service requirement of 29 C.F.R for all payments required under this Partial Consent Order and Judgment. The Secretary and Mr. Di Pano have agreed to resolve all remaining matters in controversy in this action between them. Mr. Di Pano neither admits nor denies the allegations in the Secretary's complaint. Upon consideration of the record herein, and as agreed to by the Secretary and Mr. Di Pano, the Court finds that it has jurisdiction to enter this Partial Consent Order and Judgment. IT IS THEREFORE ORDERED that: 1. Mr. Di Pano shall pay the total sum of Two Million Forty-Five 3

4 Case 3:12-cv MAS-DEA Document 149 Filed 04/20/16 Page 4 of 8 PageID: Thousand Four Hundred Fifty-Four and 54/100 Dollars ($2,045,454.54) to the Plan (the "Settlement Amount") within thirty (30) days of entry of the Bar Order as described in paragraph 5 below. 2. Mr. Di Pano shall pay the total sum of Two Hundred Four Thousand Five Hundred Forty-Five and 46/100 Dollars ($204,545.46) to the United States Department of Labor pursuant to BRISA section 502(1), 29 U.S.C. section 1132(1) (the "502(1) Penalty") no later than thirty seven (37) days of entry of the Bar Order set forth in paragraph 5 below. The 502(1) Penalty shall be paid by check referencing EBSA Case No ( 48), and the check shall be sent via regular mail to the following address: U.S. Department of Labor BRISA Civil Penalty P.O. Box Philadelphia, PA Mr. Di Pano shall provide the Secretary with proof of payment of the Settlement Amount and its deposit to the Plan within thirty (30) days of making such payment. Such proof will be sent to the Secretary's representative at the following address: Jonathan Kay, Regional Director New York Regional Office Employee Benefits Security Administration U.S. Department of Labor 33 Whitehall Street, Suite 1200 New York, NY

5 Case 3:12-cv MAS-DEA Document 149 Filed 04/20/16 Page 5 of 8 PageID: Mr. Di Pano shall not serve as a fiduciary or service provider to any BRISA-covered Plan in the future. 5. The Court will enter a bar order (the "Bar Order") permanently enjoining FBTS from presenting in this or in any other action, proceeding, administrative agency or any other forum against Mr. Di Pano any claim for contribution or indemnification, however denominated and regardless of the allegations, facts, law, theories, or principles that arise from or relate in any way to the Secretary's claims. The Court will enter the Bar Order on such additional terms as the Court determines are fair to the parties in this action. The Court acknowledges that Mr. Di Pano' s consent and the Secretary's consent to the terms of this Partial Consent Judgment and Order are expressly conditioned on the entry of the Bar Order. 6. All claims that the Secretary has or could have asserted against Mr. Di Pano are hereby dismissed as to Mr. Di Pano only. Such dismissal is without prejudice to the Secretary's right, upon good cause shown, to reassert those claims set forth in his complaint against Mr. Di Pano within sixty (60) days of entry of the Bar Order in the event that Mr. Di Pano fails to comply with paragraphs 1 through 2 of this Partial Consent Order and Judgment. In the event that the Court grants the Secretary's request to reassert his claims against Mr. Di Pano by reason of Mr. Di Pano' s failure to comply with the provisions of this Partial Consent Order and 5

6 Case 3:12-cv MAS-DEA Document 149 Filed 04/20/16 Page 6 of 8 PageID: Judgment, the timeliness of the Secretary's claims for purposes of ERISA 413, 29 U.S.C or any other applicable limitation period shall be tolled as of the filing of the complaint on July 17, It is agreed and understood that, subject to the Bar Order, nothing in this Partial Consent Order and Judgment shall limit or impair the Secretary's rights or claims for recovery and equitable relief against FBTS or its insurers, including rights to attorneys' fees and costs in the Lawsuit. 8. Nothing in this Partial Consent Order and Judgment is binding on any government agency other than the United States Department of Labor. 9. Mr. Di Pano and the Secretary shall each bear his own attorneys' fees and costs in connection with this Partial Consent Order and Judgment, including, but not limited to, attorneys' fees which may be available under the Equal Access to Justice Act, as amended. 10. The Court directs entry of this Partial Consent Order and Judgment, which together with the Bar Order, shall constitute a final order as to Mr. Di Pano. 11. The Court shall retain jurisdiction for the purposes of enforcing this Partial Order and Judgment. 12. This Partial Consent Judgment and Order may be executed in multiple counterparts, each of which shall be treated as an original. 6

7 Case 3:12-cv MAS-DEA Document 149 Filed 04/20/16 Page 7 of 8 PageID: Respectfully submitted, Dated: January 5, 2016 New York, NY M. PATRICIA SMITH Solicitor of Labor JEFFREY S. ROGOFF Regional Solicitor Andrew Karonis Senior Trial Attorney Avibiw ~l, \lt.\-l A.~af<>~ K,d~~;<) u/4~ c.t.~... ~C>~ "\r) Andrew M. Katz Trial Attorney U.S. Department of Labor Attorneys for Plaintiff Thomas E. Perez, Secretary of Labor POST OFFICE ADDRESS: U.S. Department of Labor Office of the Solicitor 20 l Varick Street, Room 983 New York, New York, l 0014 Tel. (646) Fax. (646) Dated: January L, 2016 Parsippany, New Jersey Washington, D.C. KELLEY DRYE & WARREN LLP By: Isl Michael A. Innes Lauri A. Mazzuchetti Michael A. Innes One Jefferson Road, 2nd Floor Parsippany, New Jersey Telephone: (973) GROOM LAW GROUP, CHARTERED Edward A. Scallet, Esq. (pro hac vice) Sean C. Abouchedid, Esq. (pro hac vice) Natasha S. Fedder, Esq. (pro hac vice) 1701 Pennsylvania Ave., NW Washington, DC T: (202) Attorneys for Vincent J. Di Pano 7

8 Case 3:12-cv MAS-DEA Document 149 Filed 04/20/16 Page 8 of 8 PageID: SO ORDERED: HO~~tlcf HAEL A. SHIPP UNITED STATES DISTRICT JUDGE 'b '-~, l.( / 2 (!/I\ (.p 8