ANDREW D. STOLPER (205462) FRANK SIMS & STOLPER LLP...he Request for Proposal result in lower...

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 1

PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

ANDREW D. STOLPER (205462) [email protected] JASON M. FRANK (190957) [email protected] SCOTT H. SIMS (234148) [email protected] FRANK SIMS & STOLPER LLP 19800 MacArthur Blvd., Suite 855 Irvine, CA 92612 Telephone: (949) 201-2400 Facsimile: (949) 201-2405 PAUL R. WOOD (Pro Hac 12578) [email protected] FRANKLIN D. AZAR (Pro Hac 13131) [email protected] FRANKLIN D. AZAR & ASSOCIATES, PC 14426 East Evans Avenue Aurora, CO 80014 Telephone: (303) 757-3300 Facsimile: (303) 759-5203 Attorneys for Plaintiffs

IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA

SOUTHERN DIVISION

FELIPE YBARRA and CESARIO SERRATO, Individually and as representatives of a class consisting of the participants and beneficiaries of the Supplemental Income 401(K) Plan, Plaintiffs, vs. BOARD OF TRUSTEES OF SUPPLEMENTAL INCOME TRUST FUND; RICHARD BARBOUR; ROME A. ALOISE; KEITH FLEMING; CARLOS BORBA; CLARK RITCHEY; and DOES 1 - 10, Defendants.

Case No.: 8:17-cv-02091-JVS-E MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT Date: May 13, 2019 Time: 1:30 p.m. Courtroom: 10C Judge: Hon. James V. Selna

Case 8:17-cv-02091-JVS-E Document 94-1 Filed 04/15/19 of 102 Page ID #:2806

mailto:[email protected]





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2 TABLE OF CONTENTS

TABLE OF CONTENTS I. INTRODUCTION ........................................................................... 6

II. LITIGATION HISTORY AND SETTLEMENT NEGOTIATIONS ............................................................................ 7

III. THE TERMS OF THE SETTLEMENT ....................................... 10

The Settlement Class. .......................................................... 10

Settlement Consideration. ................................................... 10

Payments to Current and Former Participants or Beneficiaries. ............................................................. 11

Injunctive Relief. ....................................................... 12

Attorneys’ Fees, Contribution Awards, and Administration Costs. ................................................ 13

Release. ..................................................................... 13

The Notice Plan. .................................................................. 13

IV. LEGAL STANDARD ................................................................... 14

V. THE COURT SHOULD GRANT PRELIMINARY APPROVAL OF THE PROPOSED SETTLEMENT ......................................... 15

Conditional Certification of the Proposed Settlement Class Is Appropriate. ..................................................................... 15

The Proposed Settlement Class Satisfies the Prerequisites of Rule 23(a). ....................................... 15

a. Numerosity. .......................................... 16

b. Commonality. ....................................... 16

c. Typicality. ............................................. 17

d. Adequacy. ............................................. 18

The Proposed Settlement Class Satisfies Rule 23(b)(1). .................................................................... 18


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 3


The Proposed Settlement Is Fair and Reasonable. .............. 19

The Settlement Is the Product of Serious, Informed, and Non-Collusive Negotiations. .............................. 19

The Settlement Has No Obvious Deficiencies. ........ 20

The Settlement Falls Within the Range of Possible Approval. ................................................................... 21

The Proposed Settlement Treats All Class Members Fairly and Does Not Provide Preferential Treatment. ................................................................................... 25

The Notice Plan Should Be Approved. ............................... 25

VI. PROPOSED TIMELINES FOR NOTICE, OBJECTIONS AND FINAL APPROVAL ..................................................................... 26

VII. CONCLUSION .............................................................................. 27


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4 TABLE OF CONTENTS

TABLE OF AUTHORITIES

Page(s)

Federal Cases

Allen v. Hyland’s Inc., 300 F.R.D. 643 (C.D. Cal. 2014) ............................................................................... 17

Churchill Village, L.L.C. v. General Electric, 361 F.3d 566 (9th Cir. 2004) ......................................................................... 22, 26, 27

Colesberry v. Ruiz Food Products, Inc., 2006 WL 1875444 (E.D. Cal. June 6, 2006) ............................................................. 18

Eddings v. Health Net, Inc., 2013 WL 169895 (C.D. Cal. Jan. 16, 2013) ........................................................ 20, 21

Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 2998) ................................................................. 16, 17, 18, 19

Kanawi v. Bechtel Corp., 254 F.R.D. 102 (N.D. Cal. 2008) ............................................................................... 19

Lilly v. Jamba Juice Co., 2015 WL 1248027 (N.D. Cal. Mar. 18, 2015) .......................................................... 20

McKenzie v. Federal Exp. Corp., 2012 WL 2930201 (C.D. Cal. July 2, 2012) .............................................................. 24

Mehling v. New York Life Ins. Co., 248 F.R.D. 455 (E.D. Pa. 2008) ........................................................................... 12, 13

National Rural Telecommunications Cooperative v. DIRECTV, Inc., 221 F.R.D. 523 (C.D. Cal. 2004) ............................................................................... 24

Officers for Justice v. Civil Service Com’n of City and County of S.F., 688 F.2d 615 (9th Cir. 1982) ..................................................................................... 23

In re Pac. Enterprises Sec. Litig., 47 F.3d 373 (9th Cir. 1995) ................................................................................. 15, 25

Rodriguez v. West Publishing Corp., 563 F.3d 948 (9th Cir. 2009) ............................................................................... 22, 26


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 5


Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) ............................................................................... 16, 26

In re Tableware Antitrust Litig., 2014 WL 360196 (C.D. Cal. Jan. 31, 2014) ........................................................ 20, 21

Tom v. Com Dev USA, LLC, 2017 WL 8236268 (C.D. Cal. Sept. 18, 2017) .................................................... 16, 18

In re Toys R Us-Delaware, Inc.--Fair & Accurate Credit Transactions Act (FACTA) Litig., 295 F.R.D. 438 (C.D. Cal. 2014) ................................................................... 24, 25, 26

True v. Am. Honda Motor Co., 749 F. Supp. 2d 1052 (C.D. Cal. 2010) ..................................................................... 20

Van Bronkhorst v. Safeco Corp., 529 F.2d 943 (9th Cir. 1976) ..................................................................................... 24

Vinh Nguyen v. Radient Pharmaceuticals Corp., 287 F.R.D. 563 (CD. Cal. 2012) ................................................................................ 17

Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) ................................................................................................... 17

Wildman v. Am. Century Servs., LLC, 2017 WL 6045487 (W.D. Mo. Dec. 6, 2017) ............................................................ 20

Federal Statutes

29 U.S.C. § 1109(a) .................................................................................................................... 18

Other Authorities

Fed. R. Civ. P. 23, et seq. ......................................................................................... passim

2 William B Rubenstein, Newberg on Class Actions § 4:7 (5th ed., June 2018 update) ............................................................................................................... 20


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 6

PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

I. INTRODUCTION

Plaintiffs Felipe Ybarra and Cesario Serrato (“Plaintiffs”) hereby move for

preliminary approval of a Class Action Settlement Agreement (the “Settlement”) with

the Defendants Board of Trustees of Supplemental Income Trust Fund; Richard Barbour;

Rome A. Aloise; Keith Fleming; Carlos Borba; and Clark Ritchey (“Defendants”). The

Settlement Class includes all former and current participants in the Supplemental Income

401(k) Plan (the “Plan”) who had account balances between December 1, 2011 and

December 31, 2018. A copy of the Settlement Agreement is attached as Exhibit A.

In this lawsuit, Plaintiffs asserted various claims against Defendants alleging

breach of their fiduciary duties under the Employee Retirement Income Security Act of

1974, as amended (“ERISA”). Plaintiffs allege Defendants caused the Plan to pay

excessive recordkeeping and administrative costs and offered mutual funds with

excessive operating costs when identical lower cost share classes were available.

Plaintiffs allege these breaches cost the Plan participants millions of dollars in excessive

fees, costs, and lost investment opportunity. Defendants have denied and continue to

deny these allegations. Nevertheless, Defendants have agreed to settle Plaintiffs’ claims

rather than incur the risk and expense of further litigation.

The Settlement is an insurance policy limits settlement and includes significant injunctive relief.1 The Settlement creates a non-reversionary common fund of

approximately $8.75 million, which is the full amount remaining under Defendants’

“burning limits” fiduciary liability policy. Defendants have also agreed under the

Settlement to hire an experienced third-party to oversee a Request for Proposal related to

the Plan’s future recordkeeping and administrative services. That is something that

Plaintiffs believe Defendants have not done in over 15 years. Plaintiffs are confident that

1 A “policy limits settlement” is a settlement in which the parties agree that the monetary amount of the settlement will include the full amount of money remaining within the coverage limits of the defendant’s insurance policy that applies to the action. When, as here, the insurance policy is also being used to pay for the defendant’s defense costs, it is described as a “burning limits” policy because the amount available for settlement is being reduced throughout the litigation.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 7


the Request for Proposal will result in lower recordkeeping and administrative fees,

providing significant future savings for the Plan and its participants. The parties reached the Settlement after extensive, arms-length negotiations

between experienced class action counsel and with the assistance of mediator Robert

Meyer of JAMS. Plaintiffs obtained the Settlement after successfully defeating two

motions to dismiss, deposing Defendant Keith Fleming, serving and responding to

written discovery, reviewing over 20,000 pages of documents, and conducting extensive

research and briefing regarding discovery issues, including filing two motions to compel.

In sum, the Settlement is well-informed, fair and reasonable, and an excellent result for

the Class.

Accordingly, Plaintiffs request the Court (1) grant preliminary approval of the

Settlement, (2) certify the proposed Class for settlement purposes only, (3) appoint

Atticus Administration, LLC to serve as the Settlement Administrator, (4) approve the

agreed Notice Plan, and (5) set the relevant deadlines for the Final Approval Hearing.

II. LITIGATION HISTORY AND SETTLEMENT NEGOTIATIONS

In this lawsuit, Plaintiffs claim that Defendants, who are or were trustees of the

Plan, breached their ERISA fiduciary duties to the Plan and its participants. Specifically,

Plaintiffs allege Defendants (1) failed to monitor and control the amount the Plan paid

for administrative and recordkeeping through revenue sharing, (2) failed to determine

whether the Plan’s administrative and recordkeeper expenses were competitive, (3)

failed to solicit competitive bids for administrative and recordkeeping expenses, (4)

failed to adequately leverage the Plan’s size to negotiate lower administrative and

recordkeeping expenses, and (5) allowed administrative and recordkeeping fees to

exceed an average of $150 per Plan participant per year from 2011 to the present, an

amount in excess of what Plaintiffs calculate the Plan would have paid had Defendants

not breached their fiduciary duties. [Doc. No. 46 at 10-11.] In the First Amended

Complaint, Plaintiffs alleged that (1) Defendants’ duty of prudence requires them to

evaluate and monitor the Plan’s investments on an ongoing basis and remove imprudent


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 8


ones based on performance and operating expenses; (2) Defendants breached this duty

by failing to replace the Plan’s existing retail shares with identical institutional shares of

the exact same funds at a lower cost to the Plan’s participants; and (3) a prudent fiduciary

would have investigated the availability of lower cost mutual fund share classes and used

the Plan’s tremendous bargaining power to offer the lower cost share classes available

as Plan investment options to the Plan participants. [Doc. No. 84, pp. 4-5.]

Plaintiffs filed this lawsuit on November 30, 2017. [Doc. No. 1.] Defendants filed

a motion to dismiss on February 20, 2018 (Doc. No. 34), which the Court granted in part

(without leave to amend) but otherwise denied on April 24, 2018. [Doc. No. 46.] Per the

Court’s April 24, 2018 order, Plaintiffs filed a First Amended Complaint on May 14,

2018. [Doc. No. 50.]

The parties thereafter agreed to stay the litigation on the merits so they could

participate in a July 31, 2018 mediation with the Robert Meyer at JAMS. [Doc. No. 54;

Declaration of Jason M. Frank (“Frank Decl.”), ¶ 22.] The mediation and extended follow

up efforts between counsel were unfortunately unsuccessful. [Id.]

After the stay was lifted, Plaintiffs moved aggressively to materially advance the

case towards a successful resolution for the Class. [Frank Decl., ¶ 22.] These efforts

ultimately led to Defendants’ agreement to a “policy limits” settlement. [Id.] These

efforts included, but were not limited to, the following:

• Immediately sent a detailed meet and confer letter to Defendants regarding

deficiencies in Defendants’ responses to Plaintiffs’ Requests for Production

and Plaintiffs’ Interrogatories. [Frank Decl., ¶ 22.] Numerous extensive and

lengthy email exchanges between counsel followed regarding the issues

raised therein, as well as an extended telephonic meet and confer. [Id.]

• Filed a motion to compel when the parties were unable to resolve their

differences related to Defendants’ responses to Plaintiffs’ Requests for

Production. [Doc. Nos. 63-1, 70.]


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 9


• Travelled to the Bay Area to depose Defendant Keith Fleming. [Frank Decl.,

¶ 22.]

• Prepared and served nine (9) third-party subpoenas. [Frank Decl., ¶ 22.]

When the third-parties objected to the subpoenas, lengthy meet and confer

efforts followed, both in writing and by phone. [Id.] Some of those meet

and confer efforts led to document productions and others were ongoing

when the Settlement was reached. [Id.]

• Moved to compel third-party John Hancock Retirement Plan Services (the

Plan’s administrator) to produce its contract with Mon Roc Administrators

(its subcontractor providing services to the Plan). [Doc. Nos. 76-1, 82.]

• Reviewed and analyzed approximately 20,000 pages of documents,

including Defendants’ minutes of quarterly trustee meetings from 2011

through 2017, Form 5500s, quarterly reports prepared by the Plan’s

investment advisor, contracts between the Plan and its various service

providers, and other documents related to the Plan and its administration.

[Frank Decl., ¶ 22.]

Plaintiffs also opposed Defendants’ motion to dismiss the First Amended

Complaint, which Defendants filed shortly after the stay was lifted. [Doc. Nos. 58, 61.]

While Defendants’ motion to dismiss was pending, Plaintiffs sent Defendants a

136-page policy limits demand (including a 14-page letter and over 120 pages of attached

exhibits). [Frank Decl., ¶ 24.] The policy limit demand set out, in detail, the evidence

Plaintiffs had gathered in support of their claims. [Id.] The letter set a November 16,

2018 deadline for Defendants to respond. [Id.]

On November 5, 2018, while Plaintiffs’ policy limits demand was pending, the

Court denied Defendants’ motion to dismiss. [Doc. No. 84.] Two days later, on

November 7, 2018, the Court granted Plaintiffs’ motion to compel production of the John

Hancock/Mon Roc contract related to the Plan. [Doc. No. 86.] Following Plaintiffs’

success on those motions, Defendants accepted Plaintiffs’ settlement demand on


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 10


November 15, 2018, just one day before Plaintiffs’ offer expired. [Frank Decl., ¶ 25.]

Defendants accepted Plaintiffs’ demand notwithstanding their filing of a November 12,

2018 motion for stay pending the Ninth Circuit issuing an opinion in White v. Chevron

Corp. [Doc. No. 88-1.]2

Defendants having agreed to pay the policy limits, the parties then engaged in

extensive and lengthy negotiations to finalize the settlement. [Frank Decl., ¶ 26.] Those

negotiations included negotiations related to injunctive relief and other terms which were

not part of Plaintiffs’ original policy limits demand.3 Through those negotiations,

Plaintiffs obtained Defendants agreement to hire an independent third-party to conduct a

Request for Proposal for Plan administrative and recordkeeping services. [Exh. A at §

10.] The RFP will be conducted prior to year-end 2019. [Id. at § 10.1.] The Parties

executed the Settlement Agreement in April 2019.

III. THE TERMS OF THE SETTLEMENT

The Settlement Class.

The Settlement Class includes: All participants and beneficiaries of the

Supplemental Income 401(k) Plan from December 1, 2011 through December 31, 2018.

The Defendants are excluded from the Settlement Class. Based on information provided

by the Plan’s recordkeeper, this Class covers approximately 40,000 persons. [Settlement

at §§ 2.12, 2.15; Frank Decl., ¶ 11.]

Settlement Consideration.

The Settlement provides significant benefits to the Class.

2 In White, an ERISA case, the plaintiff appealed the district court’s order granting the defendant’s motion to dismiss, which held the plaintiff had not plausibly alleged a claim. [Doc. No. 88-2.] The Defendants here had relied heavily on the district court’s decision in White in their two unsuccessful motions to dismiss. [See Doc. Nos. 34-1, 58-1.] 3 Plaintiffs’ policy limits demand did not include a demand for injunctive relief because the inclusion of injunctive relief in a policy limits demands would give Defendants’ insurance carrier a potential defense to a later bad faith claim if the demand were rejected. Continued on the next page


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 11


Payments to Current and Former Participants or Beneficiaries.

The settlement will result in payments to all Class Members. All Class Members

will receive a settlement payment; this is not a claims made settlement. The exact amount

paid to each Class Member will be determined based on a formula tied to the amount of

money they had invested in the Plan during the Class Period.4 [Settlement § 6.4] The

reason for linking the Settlement payments to the amount invested by each Class Member

is that revenue sharing resulted in Class Members with larger account balances paying

more in administrative and recordkeeping expenses than Class Members with lower

account balances. Under a revenue sharing arrangement, the plan administrator/

recordkeeper is compensated indirectly rather than directly. That occurs because the

plan’s fiduciaries agree to a percentage of the management fees paid by each plan

participant to the mutual fund manager will be shared with the plan administrator/

recordkeeper. Thus, those with higher account balance pay more in management fees

and more to the plan administrator/recordkeeper. Allocating settlement funds based on

the amount invested by a plan participant is common in ERISA settlements. See, e.g.,

Mehling v. New York Life Ins. Co., 248 F.R.D. 455, 463 (E.D. Pa. 2008)

Current Participants will receive their Settlement distribution via a direct deposit

into their Plan account by the Plan’s Recordkeeper. [Settlement § 6.5.] The amounts

deposited will be invested in accordance with and proportionate to each Current

Participant’s investment elections, if available, or to the Plan’s default investment option.

[Id.] Former Participants will receive their Settlement distribution either by (a) a tax-

qualified rollover of his/her Settlement distribution into an individual retirement account,

or (b) by check. [Settlement § 6.6.] To elect the rollover option, Former Participants will

need to submit a claim form specifying the individual retirement account and other

4 More specifically, the Settlement Administrator will calculate the proportion of the Settlement that will be allocated to each Class Member by dividing the sum of the quarter-end account balances for the individual Class Member by the sum of the quarter-end account balances for all Class Members during the Class Period and then multiplying that amount by the Net Settlement Amount (a process more fully described in Settlement § 6.4).


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 12


information regarding where the funds should be deposited. [Id.] Former Participants

who do not submit a claim will receive a check in the mail. [Id.] The Settlement

Administrator will calculate, withhold, and report any applicable taxes when issuing the

check. [Id.]

Plaintiffs estimate the average payment to each Class member, after fees and

Settlement Administration expenses, will be approximately $140.00. [Frank Decl., ¶ 14.] Injunctive Relief.

The Settlement also provides a substantial future benefit for Plan participants. The

Settlement Agreement requires that the Plan’s fiduciaries hire an independent consultant

with the requisite expertise and experience to conduct and complete a Request for

Proposal (“RFP”) for Plan recordkeeping and administrative services. [Settlement, § 10.]

The RFP process must be completed prior to the end of 2019, and Defendants must

provide Plaintiffs’ counsel with the final fees for the service provider selected through

the RFP process. [Id.] This prospective relief will introduce competitive bids into the

Plan’s analysis for the first time in more than 15 years. [Frank Decl., ¶ 15.] The RFP

process is expected to result in substantially lower administrative and recordkeeping fees,

thereby saving Plan participants millions of dollars, collectively. Plaintiffs believe that,

as a result of Defendants’ alleged breaches of their fiduciary duty, the Plan participants

paid approximately $50/year more per Plan participant (totaling more than $1 million

annually) during the Class Period than the participants in the multi-employer plan

sponsored by the International Brotherhood of the Teamsters (“IBT”). [Frank Decl., Exh.

1 at 231:16-232:18.] Defendants previously determined they should benchmark the

Plan’s expenses against the IBT Plan. [Id. at 175:11-16, 177:9-178:4.] Assuming those

savings at a minimum, Plan participants will pay $3 million less in Plan administrative

and recordkeeping expenses in the next three years. [Frank Decl., ¶ 15.] Plaintiffs’

counsel considers those numbers to be a conservative estimate of the savings that will

occur in the first three years. [Id.]


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 13


Attorneys’ Fees, Contribution Awards, and Administration

Costs.

The Settlement provides for payment of any attorneys’ fees and costs awarded by

the Court to Class Counsel, and any class representative incentive award, to be paid from

the Gross Settlement Amount. [Settlement, §§ 7.1, 7.2.] Plaintiffs will file a separate

motion for an award of Attorneys’ Fees and Costs and Class Representatives’ Incentive

Award. [Settlement, § 7.3.] Class Counsel intends to seek thirty percent (30%) of the

Gross Settlement amount, which will be less than 25% of the total benefits obtained in

the Settlement (i.e., the Gross Settlement amount plus the injunctive relief valued at over

$3 million). [Frank Decl., ¶ 16.] Administrative Expenses will be paid from the Gross

Settlement. [Settlement, § 2.2.]

Release.

In exchange for the above-described Settlement benefits, all Class Members and

the Plan will release the Released Parties [Settlement, §2.41] from “any and all actual or

potential claims, actions, demands, rights, obligations, liabilities, damages, attorneys’

fees, expenses, costs, and causes of action, including both known and unknown claims.”

[Settlement, §§ 2.42, 4.1.4, and 4.1.5.] Each Class Member will also release Defendants,

“Defense Counsel, and Class Counsel from any claims, liabilities, and attorneys’ fees and

expenses arising from the allocation of the Gross Settlement Amount or Net Settlement

Amount and for all tax liability and associated penalties and interest as well as related

attorneys’ fees and expenses.” [Settlement, § 4.1.6.]

The Notice Plan.

The proposed Settlement Administrator agreed to by the parties is Atticus

Administration, LLC (“Atticus”). A declaration from Chris Longley, the president of

Atticus, setting forth the company’s experience is filed herewith (the “Longley Decl.”).

The Notice Plan requires direct mail notice to the Class. [Settlement, § 2.48.] The

Settlement Administrator shall be provided Class Member contact information by the


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 14


Plan’s Recordkeeper via Defense Counsel. [Settlement, § 2.48.] The Settlement

Administrator will also post a copy of the Settlement Notice on the Settlement Website.

Pursuant to the [Proposed] Order for Preliminary Approval filed concurrently

herewith (the “Proposed Order”), the Settlement Administrator will mail the Settlement

Notice and Former Participant Claim Forms by the date the Court sets in the Preliminary

Approval Order. [Settlement, §§ 3.3, 3.3.1, 3.3.2.] The Plan’s recordkeeper will provide

the Settlement Administrator with contact information for the Class. [Settlement, § 2.47.]

Class Members who are Former Participants will have until forty-five (45) days before

Final Fairness hearing to submit a claim if they wish to elect the rollover option, rather

than receiving their settlement distribution by check. [Id., §§ 6.6, 6.6.1.] The Settlement

Notice will advise Class Members that they may object to the Settlement by filing an

objection and any supporting documents no later than forty-five (45) days prior to the

date the Court sets the Final Fairness hearing in the Preliminary Approval Order. [Id., §

3.2.8.]

The Settlement Administrator will also establish a Settlement Website

(www.SIP401ksettlement.com), which it will operate. [Settlement, § 12.2.] The

Settlement Website will include copies of “the First Amended Complaint, the Settlement

Agreement and its exhibits, the Settlement Notices to the Current and Former

Participants, Plaintiffs’ Motion for Final Approval, the Class Representative’s Motion for

Attorneys’ Fees and Costs, the Former Participant Claim Form, any Court orders related

to the Settlement Agreement, any amendments or revisions to these documents, and any

other documents or information mutually agreed upon by the Settling Parties.” [Id.]

IV. LEGAL STANDARD

Settlements of class actions are strongly favored. See, e.g., In re Pac. Enterprises

Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995) (“When reviewing complex class action

settlements, we have a strong judicial policy that favors settlements.”). When the named

parties in a class action reach a settlement prior to class certification, the Court has an

obligation to “peruse the proposed compromise to ratify both the propriety of the


http://www.sip401ksettlement.com/

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 15


certification and the fairness of the settlement.” Staton v. Boeing Co., 327 F.3d 938, 952

(9th Cir. 2003).

Generally, this is a two-step process. First, the Court must assess whether the

proposed settlement class meets the certification requirements of Federal Rules of Civil

Procedure Rule 23 (“Rule 23”). Staton, 327 F.3d at 952 (citing Amchem Prods., Inc. v.

Windsor, 521 U.S. 591, 620 (1997)). Second, the Court must “determine whether the

proposed settlement is fundamentally fair, adequate, and reasonable.” Id. (citing Hanlon

v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 2998)). Approval or denial of a proposed

class action settlement is within the Court’s discretion. Hanlon, 150 F.3d at 1026.

V. THE COURT SHOULD GRANT PRELIMINARY APPROVAL OF THE PROPOSED SETTLEMENT

Conditional Certification of the Proposed Settlement Class Is Appropriate.

Plaintiffs seek conditional certification of a settlement class defined as: All

participants and beneficiaries of the Supplemental Income 401(k) Plan from December

1, 2011 through December 31, 2018, excluding Defendants. A party seeking certification

of a settlement class must satisfy Rule 23(a)’s four prerequisites and demonstrate the

action may be maintained under Rule 23(b)(1), (2), or (3). Tom v. Com Dev USA, LLC,

2017 WL 8236268, *2 (C.D. Cal. Sept. 18, 2017) (citing Amchem Prods., Inc., 521 U.S.

at 613-14).

The Proposed Settlement Class Satisfies the Prerequisites of Rule 23(a).

Rule 23(a) provides that a district court may certify a class if: “(1) the class is so

numerous that joinder of all members is impracticable, (2) there are questions of law or

fact common to the class, (3) the named plaintiff’s claims or defenses are typical of the

claims or defenses of the class, and (4) the named plaintiff will fairly and adequately

protect the interests of the class.” Fed. R. Civ. P. 23(a). The proposed Settlement Class

satisfies these requirements.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 16


a. Numerosity.

“The [Rule 23(a)(1)] prerequisite of numerosity is discharged if ‘the class is so

large that joinder of all members is impracticable.’” Hanlon, 150 F.3d at 1019. In the

present case, Defendants have indicated there are approximately 40,000 Class Members.

[Frank Decl., ¶ 11.] Thus, the Class is clearly large enough to satisfy numerosity. See,

e.g., Vinh Nguyen v. Radient Pharmaceuticals Corp., 287 F.R.D. 563, 569 (CD. Cal.

2012) (“[A] proposed class of at least forty members presumptively satisfies the

numerosity requirement.”).

b. Commonality.

Rule 23(a)(2)’s commonality requirement is satisfied if “there are questions of law

or fact common to the class.” Fed. R. Civ. P. 23(a)(2). “[C]ommonality requires that the

class members’ claims depend upon a common contention such that determination of its

truth or falsity will resolve an issue that is central to the validity of each claim in one

stroke.” Allen v. Hyland’s Inc., 300 F.R.D. 643, 660 (C.D. Cal. 2014) (quoting Abdullah

v. U.S. Sec. Assocs., Inc., 731 F.3d 952, 957 (9th Cir. 2013)). “This does not, however,

mean that every question of law or fact must be common to the class; all that Rule 23(a)(2)

requires is a single significant question of law or fact.” Id. “The requirements of Rule

23(a)(2) have been construed permissively, and all questions of fact and law need not be

common to satisfy the rule.” Id. (quoting Ellis v. Costco Wholesale Corp., 657 F.3d 970,

981 (9th Cir.2011)). For the purposes of Rule 23(a)(2), “even a single common question”

satisfies the requirement. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 359 (2011).

In this case, Plaintiffs’ claims are based on the same common theory, and are thus

capable of class-wide resolution. Plaintiffs contend Defendants, through an inadequate

fiduciary process, permitted the Plan and its participants to pay excessive fees for

recordkeeping and Plan administration. Whether Defendants violated ERISA by failing

to follow a proper fiduciary process and whether Defendants permitted the Plan and its

participants to pay excessive fees are questions that apply uniformly to all putative class

members. Here, common questions of law and fact include: which Plan fiduciaries are


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 17


liable for the remedies provided by 29 U.S.C. § 1109(a); whether the Plan fiduciaries

breached their fiduciary duties to the Plan; what losses the Plan suffered as a result of

each breach of fiduciary duty; and what Plan-wide equitable and other relief the Court

should impose in light of Defendants’ alleged breaches.

In such circumstances, courts have found that Rule 23(a)(2)’s commonality

requirements are satisfied for purposes of certifying a nationwide settlement class. See,

e.g., Tom, 2017 WL 8236268 at *3 (finding common questions of law regarding proper

interpretation of an ERISA Plan, specifically whether the defendants violated ERISA

through conduct involving calculation benefit options and failing to provide material

disclosures to the class); Colesberry v. Ruiz Food Products, Inc., 2006 WL 1875444, *2

(E.D. Cal. June 6, 2006) (commonality found when question was whether stock sale

violated ERISA and state law because it applied to all class members).

c. Typicality.

Rule 23(a)(3)’s typicality requirement is satisfied if “the claims or defenses of the

representative parties are typical of the claims or defenses of the class.” Hanlon, 150

F.3d at 1020. “Under the rule’s permissive standards, representative claims are ‘typical’

if they are reasonably co-extensive with those of absent class members; they need not be

substantially identical.” Id.

Plaintiffs’ claims are typical of the Class. Like all of the proposed class members,

Plaintiffs were participants in the Plan during the Class Period. [Doc. No. 50, ¶ 76c.]

Like all of the class members, Plaintiffs were harmed by Defendants’ failure to use the

Plan’s bargaining power to leverage and obtain lower recordkeeping and administrative

fees or take any or adequate action to monitor, evaluate, or reduce such fees. [Doc. No.

50 at ¶¶ 66-67.] As such, because Plaintiffs’ claims are “reasonably co-extensive with

those of absent class members,” Rule 23(a)(3)’s typicality requirement is satisfied.

Hanlon, 150 F.3d at 1020.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 18


d. Adequacy.

The final prerequisite under Rule 23(a)(4) is that “the representative parties will

fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). This

rests on two questions: “(1) do the named plaintiffs and their counsel have any conflicts

of interest with other class members and (2) will the named plaintiffs and their counsel

prosecute the action vigorously on behalf of the class?” Hanlon, 150 F.3d at 1020.

In the present case, there are no conflicts between Plaintiffs and their counsel, on

the one hand, and the Class, on the other. [Declaration of Felipe Ybarra, ¶ 3; Declaration

of Cesario Serrato, ¶ 3.] Plaintiffs have retained highly experienced class counsel, and

both Plaintiffs and their counsel have already vigorously prosecuted these claims on

behalf of the Class, resulting in the proposed Settlement. [Ybarra Decl., ¶ 4; Serrato

Decl., ¶ 4; Frank Decl., ¶¶ 2-8; Declaration of Paul R. Wood, ¶¶ 3-7.]

The Proposed Settlement Class Satisfies Rule 23(b)(1). In addition to satisfying the prerequisites imposed by Rule 23(a), the proposed

Settlement Class is maintainable under Rule 23(b)(1). “Most ERISA class action cases

are certified under Rule 23(b)(1).” Kanawi v. Bechtel Corp., 254 F.R.D. 102, 111 (N.D.

Cal. 2008). Rule 23(b)(1) provides for class treatment where “(1) prosecuting separate

actions by or against individual class members would create a risk of: (A) inconsistent

or varying adjudications with respect to individual class members that would establish

incompatible standards of conduct for the party opposing the class; or (B) adjudications

with respect to individual class members that, as a practical matter, would be dispositive

of the interests of the other members not parties to the individual adjudications or would

substantially impair or impede their ability to protect their interests.” Fed. R. Civ. P.

23(b)(1).

Here, there are approximately 40,000 Class Members who, absent class treatment,

“could individually file suit for damages arising from the same conduct.” Kanawi, 254

F.R.D. at 111. “This would create a risk of ’“inconsistent and varying’ adjudications,

resulting in ‘incompatible standards of conduct’ for Defendants.” Id. Thus, for example,


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 19


Defendants “could face differing adjudications regarding the prudent process for

determining reasonable recordkeeping fees.” Wildman v. Am. Century Servs., LLC,

2017 WL 6045487, at *6 (W.D. Mo. Dec. 6, 2017). Further, because Plaintiffs seek

Plan-wide injunctive relief, “adjudication of Plaintiffs' claims would be dispositive of

the interest of all plan participants.” Id. Consistent with that, “ERISA cases have

become a primary form of Rule 23(b)(1)(A) class actions.” 2 William B Rubenstein,

Newberg on Class Actions § 4:7 (5th ed., June 2018 update).

The Proposed Settlement Is Fair and Reasonable.

“At the preliminary approval stage, a court determines whether a proposed

settlement is within the range of possible approval and whether or not notice should be

sent to class members.” True v. Am. Honda Motor Co., 749 F. Supp. 2d 1052, 1063

(C.D. Cal. 2010). Preliminary approval amounts to a finding that the terms of the

proposed settlement warrant consideration by members of the class and a full

examination at a final approval hearing. Manual for Complex Litigation (Fourth) §

13.14 at 173. Preliminary approval is appropriate if “the proposed settlement appears to

be the product of serious, informed, non-collusive negotiations, has no obvious

deficiencies, does not improperly grant preferential treatment to class representatives or

segments of the class, and falls within the range of possible approval.” In re Tableware

Antitrust Litig., 2014 WL 360196, at *4 (C.D. Cal. Jan. 31, 2014); Lilly v. Jamba Juice

Co., 2015 WL 1248027, at *6 (N.D. Cal. Mar. 18, 2015); Eddings v. Health Net, Inc.,

2013 WL 169895, at *2 (C.D. Cal. Jan. 16, 2013).

The Settlement Is the Product of Serious, Informed, and Non-Collusive Negotiations.

The Court should grant preliminary approval of the Settlement. The proposed

Settlement is the result of serious, informed and non-collusive negotiations between

highly experienced class action litigators. [Frank Decl., ¶¶ 2-8, 21-27; Wood Decl., ¶¶

3-7, 9.] The parties reached the Settlement after engaging in lengthy settlement

discussions. [Frank Decl., ¶ 21-27; Wood Decl., ¶ 9.] That included the unsuccessful


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 20


formal mediation with Mr. Meyer, follow up calls with Mr. Meyer, and direct

negotiations and communications between counsel, including Plaintiffs’ policy limits

demand letter. [Id.] Throughout the process, settlement negotiations progressed in an

adversarial manner with each side vigorously representing their clients’ interests. [Id.]

The Settlement is also well informed. [Frank Decl., ¶ 27; Wood Decl., ¶¶ 9-11.]

For example: (a) Plaintiffs have conducted vigorous and thorough discovery relating to

the claims; (b) both parties invested significant time and efforts into researching and

briefing the validity of the claims; (c) the parties attended the mediation with Mr. Meyer,

and provided strong arguments in favor of their clients to the mediator and to each other;

(d) the parties exchanged and reviewed more than 20,000 pages of documents attained

through discovery; (e) Plaintiffs consulted with ERISA experts on the reasonableness of

recordkeeping and administrative fees for multi-employer 401(k) plans; and (f) Plaintiffs

evaluated potential sources of recovery. [Id.] After analyzing the value of the claims

and concluding that additional material sources of recovery beyond Defendants’

fiduciary insurance policy are unlikely, Plaintiffs were able to obtain a settlement for the

full amount remaining on Defendants’ “burning limits” policy.

Finally, the Settlement is subject to the approval of Newport Trust Company, an

independent fiduciary chosen by Defendants. [Settlement §§ 2.30; 3.1.1-3.1.5.] In sum,

the factual and legal issues in the case are well-known to both sides, and each side is

able to evaluate the benefits and risks of further litigation. The Settlement is the product

of well-informed, arms-length negotiations.

The Settlement Has No Obvious Deficiencies. Preliminary approval should be granted where “the proposed settlement appears

to be the product of serious, informed, non-collusive negotiations, has no obvious

deficiencies, does not improperly grant preferential treatment to class representatives or

segments of the class, and falls within the range of possible approval.” Ma v. Covidien

Holding, Inc., No. SACV 12-2161 DOC, 2014 WL 360196, at *4 (C.D. Cal. Jan. 31,

2014); Eddings v. Health Net, Inc., No. CV 10-1744 JST, 2013 WL 169895, at *2 (C.D.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 21


Cal. Jan 16, 2013).

Here, the proposed Settlement has no obvious deficiencies. The Settlement

maximizes the recovery to the Class. The Settlement obtains the full approximately

$8.75 million remaining under Defendants’ insurance policy. It also does so without the

risk of further litigation. That risk is not limited to the risk that Plaintiffs could lose the

case. It also includes the risk that further litigation would heavily or totally “burn” the

amount remaining under Defendants’ burning limits insurance policy such that Plaintiffs

could win a large judgment but be unable to collect on most or all of it. The Settlement

also includes valuable injunctive relief. Under the Settlement, Defendants must hire an

independent-firm to conduct an RFP for plan recordkeeping and administrative services.

Defendants have not done that since 2003. Based on past amount paid by IBT Plan,

Plaintiffs estimate the RFP process will result in the Plan and its participants saving at

least $3 million in the next three years alone. The fact that Plaintiffs obtained a policy

limits settlement and valuable injunctive relief demonstrates the extraordinary nature of

the Settlement.

The Settlement Falls Within the Range of Possible Approval. In determining whether a settlement agreement is fair, adequate, and reasonable,

the Court may consider some or all of the following factors: (a) the strength of the

plaintiffs’ case; (b) the risk, expense, complexity, and likely duration of further

litigation; (c) the risk of maintaining class action status throughout the trial; (d) the

amount offered in settlement; (e) the extent of discovery completed, and the stage of the

proceedings; (f) the experience and views of counsel; (g) the presence of a governmental

participant; and (h) the reaction of class members to the settlement. See, e.g., Churchill

Village, L.L.C. v. General Electric, 361 F.3d 566, 575 (9th Cir. 2004).

Here, these factors weigh in favor of preliminary approval. First, when evaluating

the strength of a plaintiffs’ case, a court should assess the plaintiff’s likelihood of success

on the merits and the range of possible recovery. See Rodriguez v. West Publishing

Corp., 563 F.3d 948, 964-965 (9th Cir. 2009). The Court is not required to “reach any


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 22


ultimate conclusions on the contested issues of fact and law which underlie the merits of

the dispute, for it is the very uncertainty of the outcome in litigation and avoidance of

wasteful and expensive litigation that induce consensual settlements.” Officers for

Justice v. Civil Service Com'n of City and County of S.F., 688 F.2d 615, 625 (9th Cir.

1982). While Plaintiffs believe in the strength of their case, Defendants vigorously

dispute that they breached their fiduciary duties and vigorously dispute that Plaintiffs

suffered any damage. For example, at the hearing on Defendants’ first motion to dismiss,

Defendants’ counsel argued:

This is the first multi-employer 401(k) litigation … a multi-employer plan

differs in terms of administration from a single-employer plan … this [multi-

employer 401(k) plan] is an amalgamation of what we in the business call

micro plans with all this exhaustive work that has to be done. Remittances

from all these different employers have to be chased down. The delinquencies

have to be collected. In the single-employer world, the Plan administrators

go down the hallway to payroll to make sure the money is available. Here

you have got again 777 separately negotiated Collective Bargaining

Agreements [] each of which has different contribution levels, schemes, and

formulas, all of which has to be painstakingly accounted for and, again,

delinquencies chased down.

[Frank Decl., Exh. 2 at 6:12-8:12.]

In fact, and expert discovery, Defendants would likely seek to develop evidence

establishing that multi-employer 401(k) plans, including the Plan, must pay more in

recordkeeping and administrative fees than the typical single-employer 401(k) plan, so

no breaches of fiduciary duty occurred. Thus, there is far from any guarantee that

Plaintiffs and the Class would ultimately prevail in this case, which favors approving the

Settlement.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 23


Second, the risk, expense, complexity and likely duration of further litigation all

weigh in favor of approving the proposed Settlement. Generally, “unless the settlement

is clearly inadequate, its acceptance and approval are preferable to lengthy and expensive

litigation with uncertain results.” National Rural Telecommunications Cooperative v.

DIRECTV, Inc., 221 F.R.D. 523, 526 (C.D. Cal. 2004). In fact, settlements are

encouraged in class actions where possible. See Van Bronkhorst v. Safeco Corp., 529

F.2d 943, 950 (9th Cir. 1976) (“It hardly seems necessary to point out that there is an

overriding public interest in settling and quieting litigation. This is particularly true in

class action suits which are now an ever-increasing burden to so many federal courts and

which present serious problems of management and expense.”)

Here, as described above, Plaintiffs and the Class risk losing on liability. But even

if they prevail, the sole meaningful source of recovery is the fiduciary liability policy,

which because it is a “burning limits” policy would be continually reduced by defense

costs and fees as litigation progresses. [Frank Decl., ¶ 31(b).] Thus, the longer this case

is litigated, the smaller the monetary recovery available to the class will be. [Id.] Were

Plaintiffs to secure a judgment in excess of the money remaining in the Chubb insurance

policy, they likely would be unable to collect the difference from any other source. [Id.]

In sum, this second factor weighs heavily in favor of preliminary approval.

Third, assuming Plaintiffs were able to obtain certification in the first instance,

the risk of maintaining class action status through trial weighs in favor of approving the

Settlement. See, e.g., In re Toys R Us-Delaware, Inc.--Fair & Accurate Credit

Transactions Act (FACTA) Litig., 295 F.R.D. 438, 452 (C.D. Cal. 2014) (“Avoiding the

risk of decertification, especially where there are doubts concerning the viability of the

class, favors approval of the settlement.”). “[S]ettlement avoids all possible risk [of

decertification]. This factor therefore weighs in favor of final approval of the

settlement.” McKenzie v. Federal Exp. Corp., 2012 WL 2930201, *4 (C.D. Cal. July 2,

2012).


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 24


Fourth, the value attained in the settlement overwhelmingly weighs in favor of

preliminary approval. Plaintiffs obtained the full approximately $8.75 remaining on

Defendants’ insurance policy and injunctive relief requiring an independent third-party

to conduct the first request for proposal for recordkeeping and administrative services

for the Plan in over 15 years. The Settlement Agreement thus confers a substantial

benefit on the Class Members who would otherwise face a significant risk of obtaining

no recovery at all if forced to proceed with litigation.

Fifth, the extent of discovery and the stage of the proceedings are also factors that

weigh in favor of approval. Here, the parties have engaged in significant discovery, and

though class certification has not yet been briefed, the discovery conducted was

sufficient to convince Defendants to settle for the fiduciary liability insurance policy

limits. Every additional hour spent litigating the case erodes the ability of the Class to

recover if successful on the merits.

Sixth, the experience and views of Plaintiffs’ counsel favor approval of the

settlement. Plaintiffs’ counsel are highly experienced in both class action and ERISA

litigation. [Frank Decl., ¶¶ 2-8; Wood Decl., ¶¶ 3-5.] Plaintiffs’ counsel have prosecuted

and defended numerous class actions for both plaintiffs and defendants, so they are

aware of the defenses and risks at issue in this litigation. [Id.] Plaintiffs’ counsel believe

the settlement is fair and reasonable and an excellent result for Plaintiffs and the Class.

[Frank Decl., ¶¶ 28-32; Wood Decl., ¶¶ 10-11.] As the Ninth Circuit observed, “[p]arties

represented by competent counsel are better positioned than courts to produce a

settlement that fairly reflects each party’s expected outcome in litigation.” In re Pacific

Enterprises Securities Litigation, 47 F.3d 373, 378 (9th Cir. 1995). For this reason,

courts find “[t]he recommendations of plaintiffs’ counsel should be given a presumption

of reasonableness.” In re Toys R Us-Delaware, 295 F.R.D. at 455 (quoting Boyd v.

Bechtel Corp., 485 F.Supp. 610, 622 (N.D. Cal. 1979)).


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 25


Seventh, the presence of a governmental participant factor “does not apply

because no government entity participated in the case” to date. In re Toys R Us-

Delaware, 295 F.R.D. at 455.

Eighth, because the Settlement is at the preliminary approval stage, the “presence

of objectors” factor is not applicable at this time.

Accordingly, the Churchill factors demonstrate the proposed Settlement is well

within the range of possible approval.

The Proposed Settlement Treats All Class Members Fairly and Does Not Provide Preferential Treatment.

Finally, the proposed Settlement treats all Class Members fairly and does not offer

preferential treatment to Plaintiffs or segments of the Class. All Class Members,

including Plaintiffs, are entitled to their pro-rata share of the Settlement Funds, based on

their account balances during the Class Period. On average, Plaintiffs expect each

member will receive approximately $140.00 after deductions for fees and administrative

expenses. While Plaintiffs will be seeking $5,000 incentive awards for each the class

representatives, the Ninth Circuit has recognized that such awards are permissible and

do not render a settlement unfair or unreasonable. See Stanton v. Boeing Co., 327 F.3d

938, 977 (9th Cir. 2003); Rodriguez, 563 F.3d at 958–59. Accordingly, this final factor

weighs in favor of granting preliminary approval of the proposed Settlement.

The Notice Plan Should Be Approved.

For any class certified through settlement, “[t]he court must direct notice in a

reasonable manner to all class members who would be bound by the proposal if giving

notice is justified by the parties’ showing that the court will likely be able to: (i) approve

the proposal under Rule 23(e)(2); and (ii) certify the class for purposes of judgment on

the proposal.” Fed. R. Civ. P. 23(e)(1)(B). As the foregoing discussion of the Settlement

demonstrates, the Court will be able to both approve the proposal under Rule 23(e)(2)

and certify this action as a class for purposes of judgment. Thus, it is appropriate that the

Court order Class Notice be sent to the Class.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 26


“Notice is satisfactory if it ‘generally describes the terms of the settlement in

sufficient detail to alert those with adverse viewpoints to investigate and to come forward

and be heard.’” Churchill Vill., LLC v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)

(quoting Mendoza v. Tucson Sch. Dist. No. 1, 623 F.2d 1338, 1352 (9th Cir. 1980)).

The Class Notices to Current and Former Participants (attached as Exhibits 2 and

3 to the Settlement Agreement) set forth in clear language (1) the nature of the action

and the essential terms of the settlement agreement; (2) the meaning and nature of the

Class; (3) Class Counsels’ application for attorney fees and the proposed incentive

payments for Plaintiffs; (4) the calculation and distribution of the Net Settlement Fund;

(5) how to object to the settlement; (6) how to submit a Former Participant claim form;

(7) information concerning the Released Claims and Parties; (8) the Court’s procedure

for final approval of the settlement; and (9) how to obtain additional information

regarding this case and the Settlement Agreement. The Notice is being directly mailed

to all Class Members, which is the best form of notice.

Accordingly, the Notice Plan should be approved.

VI. PROPOSED TIMELINES FOR NOTICE, OBJECTIONS AND FINAL APPROVAL

Pursuant to the Settlement, Plaintiffs propose the following dates and deadlines:

Event Date Preliminary Approval Hearing and Preliminary Approval Order

May 13, 2019

Publication of Class Notice / Start of Claims Period

May 27, 2019

Deadline for Application for Attorneys’ Fees, Costs and Incentive Awards

June 1, 2019

Deadline for Objections June 30, 2019 (45 days prior to Final Fairness Hearing)

Deadline to Submit a Former Participant Claim Form

June 30, 2019 (45 days prior to Final Fairness Hearing)


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 27


Deadline for Plaintiffs to Move for Final Approval

July 15, 2019

Final Approval Hearing August 12, 2019

VII. CONCLUSION

Based on the foregoing, Plaintiffs request the Court (1) grant preliminary approval

of the Settlement, (2) certify the proposed Class for settlement purposes only, (3) appoint

Atticus Administration to serve as the Settlement Administrator, (4) direct that notice be

published to the Class pursuant to the agreed Notice Plan, and (5) set the deadlines

requested in Section VI above.

Dated: April 15, 2019 FRANK SIMS & STOLPER LLP By: /s/ Jason M. Frank Jason M. Frank Scott Sims Andrew Stolper FRANKLIN D. AZAR & ASSOCIATES By: /s/ Paul R. Wood Franklin D. Azar

Paul R. Wood Attorneys for Plaintiff


Exhibit A


1

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

FELIPE YBARRA and CESARIO SERRATO, Individually and as representatives of a class consisting of the participants and beneficiaries of the Supplemental Income 401(K) Plan,

Plaintiffs,

vs.

BOARD OF TRUSTEES OF SUPPLEMENTAL INCOME TRUST FUND; RICHARD BARBOUR; ROME A. ALOISE; KEITH FLEMING; CARLOS BORBA; CLARK RITCHEY; and DOES 1 -10,

Defendants.

Case No.: 8:17-cv-02091-JVS (Ex)

CLASS ACTION SETTLEMENT AGREEMENT

This Class Action Settlement Agreement (“Settlement Agreement”) is entered into between and among the Class Representatives, on behalf of themselves and on behalf of all Class Members, on the one hand, and Defendants on the other, all as defined herein.

1. Article 1 - Recitals

1.1 On November 30, 2017, Felipe Ybarra and Cesario Serrato (the “Class Representatives” or “Plaintiffs”), participants in the defined contribution 401(k) retirement plan known as the Supplemental Income 401(k) Plan (the “Plan”), filed a Complaint against the Board of Trustees of Supplemental Income Trust Fund; Richard Barbour; Rome A. Aloise; Keith Fleming; Carlos Borba; and Clark Ritchey (“Defendants”) in the United States District Court for the Central District of California (the “Action”) as representatives of a putative class (the “Class”) asserting various claims of breaches of fiduciary duty of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

1.2 On February 20, 2018, Defendants moved to dismiss the Complaint, and on April 24, 2018, the district court (the “Court”) granted in part and denied in part Defendants’ motion. On May 14, 2018, Plaintiffs filed the First Amended Complaint, and on September 20, 2018, Defendants moved to dismiss the First Amended Complaint. The Court granted in part and denied in part Defendants’ motion to dismiss the First Amended Complaint on November 5, 2018.


2

1.3 The Class Representatives and Defendants have engaged in discovery and otherwise investigated all claims that were raised or could have been raised in the Action.

1.4 Defendants produced documents and information to the Class Representatives and their counsel (“Class Counsel”). Based on the documents and information produced by Defendants, the deposition of Defendant Keith Fleming, and Class Counsel’s own investigation into the relevant facts, the Class Representatives and Class Counsel believe they had sufficient information to negotiate a fair and reasonable settlement for the Class. After the parties participated in an unsuccessful mediation supervised by Mediator Robert Meyer, the parties continued to engage in extensive arm’s length settlement negotiations, and the parties reached a settlement. The terms of the settlement are memorialized in this Settlement Agreement.

1.5 The parties have agreed to a settlement amount “within insurance policy limits”—that is, they have agreed that the Gross Settlement Amount (as defined below) will reflect the total amount remaining within the policy limits of Defendants’ fiduciary liability insurance policy as related to this Action, less only those reasonable and necessary Defense Costs incurred up to the date the settlement is approved by the Court and any appeals of the Court’s order have been exhausted.

1.6 The Class Representatives and Class Counsel consider it desirable and in the best interests of the Class that the claims against Defendants be settled on behalf of the Class Representatives and the Class upon the terms set forth below, and they have concluded that such terms are fair, reasonable, and adequate and that this settlement will result in significant benefits to the Class.

1.7 Defendants admit no wrongdoing or liability with respect to any of the allegations or claims in the Action. This Settlement Agreement, and the discussions preceding it, shall in no event constitute, be construed as, or be deemed evidence of, an admission or concession of fault or liability of any kind by Defendants.

1.8 Therefore, Defendants and the Class Representatives, on behalf of themselves and on behalf of all Class Members, in consideration of the promises, covenants, and agreements herein described, acknowledged by each of them to be satisfactory and adequate, and intending to be legally bound, do hereby mutually agree to the terms of this Settlement Agreement.

2. Article 2 - Definitions

2.1 “Action” means Felipe Ybarra and Cesario Serrato v. Board of Trustees of Supplemental Income Trust Fund; Richard Barbour; Rome A. Aloise; Keith Fleming; Carlos Borba; and Clark Ritchey, Case No. 8:17-cv-02091-JVS (C.D. Cal).

2.2 “Administrative Expenses” means expenses incurred in the administration of this Settlement Agreement, including: (i) all fees, expenses, and costs associated with providing the Settlement Notice to the Class, (ii) all related tax expenses (including taxes and tax expenses as described in Paragraph 5.3), (iii) all expenses and costs associated with the calculations pursuant to the Plan of Allocation, (iv) all fees and expenses of the


3

Settlement Administrator; (v) all fees and expenses paid to the Plan’s Recordkeeper pursuant to Paragraph 3.1.5; and (vi) all fees and expenses paid to the Independent Fiduciary. Excluded from Administrative Expenses are the Settling Parties’ respective legal expenses. All Administrative Expenses shall be paid from the Gross Settlement Fund.

2.3 “Active Account” means an individual investment account in the Plan with a balance greater than $0.

2.4 “Alternate Payee” means a person other than a participant or Beneficiary in the Plan who is entitled to a benefit under the Plan as a result of a Qualified Domestic Relations Order (“QDRO”), where the QDRO relates to a participant’s balance during the Class Period.

2.5 “Attorneys’ Fees” means the amount awarded by the Court as compensation for the services provided by Class Counsel. The attorneys’ fees for Class Counsel shall be recovered from the Gross Settlement Amount. Class Counsel also will seek reimbursement for all litigation costs and expenses advanced and carried by Class Counsel for the duration of this litigation, which also shall be paid from the Gross Settlement Amount.

2.6 “Beneficiary” means a person who is entitled to receive a benefit under the Plan that is derivative of a deceased Current Participant’s or Former Participant’s interest in the Plan, other than an Alternate Payee. A Beneficiary includes, but is not limited to, a spouse, surviving spouse, domestic partner, child or other individual or trust designated by the Current Participant or Former Participant or determined under the terms of the Plan who currently is entitled to a benefit.

2.7 “CAFA” means the Class Action Fairness Act of 2005, 28 U.S.C. §§ 1711-1715.

2.8 “CAFA Notice” means notice of this proposed Settlement to the appropriate federal and state officials, as provided by CAFA. The cost and expense associated with the CAFA Notice shall be an Administrative Expense.

2.9 “Case Contribution Award” means the amount awarded by the Court as compensation for the services provided by the Class Representatives in the Action and the risks assumed by the Class Representatives in the Action;

2.10 “Chubb” means Chubb Insurance Company, Defendants’ fiduciary liability insurance carrier.

2.11 “Claims” means any and all claims, counterclaims, crossclaims, complaints, charges, demands, actions, causes of action, judgments, debts, expenses, losses, liabilities, forfeitures, damages, promises and obligations, including attorneys’ fees, expenses and costs.

2.12 “Class” means a settlement class certified under Fed. R. Civ. P. 23 for settlement purposes only consisting of persons who participated in the Plan at any time during the Class Period, including any Beneficiary of a deceased person who participated in the Plan


4

at any time during the Class Period, and/or, Alternate Payees, in the case of a person subject to a QDRO who participated in the Plan at any time during the Class Period. Excluded from this Class are Defendants and any other individuals who served during the Class Period as a Plan fiduciary as defined in ERISA, 29 U.S.C. §1002(21). Plaintiffs will seek certification of a settlement class under Fed. R. Civ. P. 23(b)(1). If certification of a settlement class is denied under Fed. R. Civ. P. 23(b)(1), Plaintiffs will file a renewed motion seeking certification of a settlement class under Fed. R. Civ. P. 23(b)(3).

2.13 “Class Counsel” means, collectively, Frank Sims & Stolper LLP and Franklin D. Azar & Associates, P.C.

2.14 “Class Members” means all individuals in the Class, including the Class Representatives.

2.15 “Class Period” means the period from December 1, 2011, through December 31, 2018.

2.16 “Class Representatives” mean Felipe Ybarra and Cesario Serrato.

2.17 “Court” means the United States District Court for the Central District of California.

2.18 “Court of Appeals” means the United States Court of Appeals for the Ninth Circuit.

2.19 “Current Participant” means a person who had an Active Account in the Plan as December 31, 2018.

2.20 “Defendants” mean the Board of Trustees of Supplemental Income Trust Fund; Richard Barbour; Keith Fleming; Carlos Borba; Clark Ritchey; as well as former Trustee Rome A. Aloise.

2.21 “Defense Costs” shall have the same meaning as defined in Defendants’ Chubb fiduciary liability insurance policy as related to this Action, bearing policy number 8137-8628 and covering policy period May 1, 2017 to May 1, 2018.

2.22 “Defense Counsel” means counsel for Defendants, Morgan, Lewis & Bockius LLP.

2.23 “Effective Approval Order” means the Final Approval Order once it becomes Effective.

2.24 “Effective” means the date on which the Final Approval Order entered pursuant to this Settlement Agreement becomes “final.” The Final Order entered pursuant to this Agreement becomes “final” on the day after the period for any motions for reconsideration, motions for rehearing, appeals, petitions for certiorari, or the like (“Review Proceeding”) has expired without the initiation of a Review Proceeding, or, if a Review Proceeding has been timely initiated, that it has been fully and finally resolved, either by court action or by voluntary action of any party, without any possibility of a reversal, vacatur, or modification of any judicial ruling, order, or judgment, including the exhaustion of all proceedings in any remand or subsequent appeal and remand. The parties agree that absent an appeal or other attempted Review Proceeding, the Final Approval Order shall become Effective thirty-one (31) calendar days after its entry.


5

2.25 “Fairness Hearing” means the hearing scheduled by the Court to consider: (i) any objections from Class Members to the Settlement Agreement, (ii) Class Counsel’s request for Attorneys’ Fees and Costs, (iii) Class Counsel’s request for the Case Contribution Award, and (iv) whether to finally approve the Settlement Agreement pursuant to Fed. R. Civ. P. 23.

2.26 “Final Approval Order” means the entry of the order and final judgment approving the Settlement Agreement, implementing the terms of this Settlement Agreement, and dismissing the Action with prejudice.

2.27 “Former Participant” means a Class Member who had an Active Account in the Plan during the Class Period, but who did not have an Active Account in the Plan as of December 31, 2018.

2.28 “Former Participant Claim Form” means the form described generally in Section 6.6.

2.29 “Gross Settlement Amount” means the total amount remaining within the policy limits of Defendants’ fiduciary liability insurance policy as related to this Action less only those reasonable and necessary Defense Costs incurred up to the date of the Settlement Effective Date. Except as provided in Paragraphs 3.1.5, neither Defendants nor any of the other Released Parties as defined in Paragraph 2.41 shall have any obligation other than the Gross Settlement Amount for any payment to or on behalf of any Class Member, Class Counsel, the Class Representatives, the Settlement Administrator, and/or any other person or entity in connection with the settlement effectuated through this Settlement Agreement.

2.30 “Independent Fiduciary” means Newport Trust Company, which is the entity selected by Defendants to serve as an independent fiduciary to the Plan for purposes of reviewing the Settlement Agreement as set forth in Section 3.1.

2.31 “Motion for Final Approval” shall have the meaning set forth in Section 4.1.

2.32 “Motion for Preliminary Approval” shall have the meaning set forth in Section 3.2.

2.33 “Mediator” means Robert Meyer, JAMS, 1925 Century Park East, Suite 1400, Los Angeles, CA 90067.

2.34 “Net Settlement Amount” means the Gross Settlement Amount minus: (i) all Attorneys’ Fees and costs paid to Class Counsel, (ii) any Case Contribution Award to the Class Representatives approved by the Court, and (iii) all Administrative Expenses.

2.35 “Plaintiffs” mean the Class Representatives.

2.36 “Plan” means the Supplemental Income 401(k) Plan.

2.37 “Plan of Allocation” means the methodology for allocating and distributing the Net Settlement Amount pursuant to Article 6, as it may be presented, modified or revised pursuant to the Preliminary Approval Order or the Final Approval Order.


6

2.38 “Plan’s Recordkeeper” means John Hancock Retirement Plan Services.

2.39 “Preliminary Approval Order” means the order proposed by the Settling Parties and approved by the Court in connection with the Motion for Preliminary Approval of Class Action Settlement to be filed by Class Representatives through Class Counsel, as described in Paragraph 3.2. The Settling Parties proposed Preliminary Approval Order is attached as Exhibit 1.

2.40 “Qualified Settlement Fund” or “Settlement Fund” means the interest-bearing, settlement fund account to be established and maintained by the Settlement Administrator pursuant to Article 5 herein as the Qualified Settlement Fund within the meaning of Treas. Reg. § 1.468B-1.

2.41 “Released Parties” means Defendants, Ralph Torrisi and (as applicable) their past, present, and future assigns, consultants, subcontractors, partners, agents, managers, members, independent contractors, representatives, attorneys, insurers, co-insurers, reinsurers, accountants, auditors, advisors, personal representatives, spouses, heirs, executors, associates, immediate family members, employee benefit plan fiduciaries (with the exception of the Independent Fiduciary), employee benefit plan administrators (including but not limited to New York Life Insurance Company, John Hancock Retirement Plan Services, Mon Roc Administrators, and Boston Financial Data Services, Inc.), employee benefit plan service providers, employee benefit plan advisors and employee benefit plan consultants, and all persons acting under, by, through or in concert with any of the foregoing.

2.42 “Released Claims” means any and all actual or potential claims, actions, demands, rights, obligations, liabilities, damages, attorneys’ fees, expenses, costs, and causes of action, including both known and unknown claims against any of the Released Parties:

a. That (i) were asserted or could have been asserted in the Action and (ii) arise out of the conduct alleged in the Complaint dated November 30, 2017, and/or the First Amended Complaint dated May 14, 2018;

b. That relate in any way to: (1) the selection, oversight, retention, or performance of mutual funds or any other investment option in the Plan; (2) recordkeeping fees, costs, or administrative expenses of the Plan, including but not limited to the payment of any fees, costs or expenses to any Plan service provider with respect to any investments offered under the Plan; and (3) distribution, disbursement, allocation, or “sharing” of fees, costs, expenses or revenue arising from the Plan or its offering of mutual fund investment options; and (4) the selection, oversight, or retention of any entity directly or indirectly providing services to the Plan, including but not limited to New York Life Insurance Company, John Hancock Retirement Plan Services, Mon Roc Administrators, and Boston Financial Data Services, Inc., as well as their past, present, and future parent corporations, affiliates, subsidiaries, divisions, joint ventures, predecessors, successors, successors-in-interest, assigns and all related affiliates, subsidiaries, divisions, joint ventures, predecessors, successors, successors-in-interest, assigns, employee


7

benefit plan fiduciaries, administrators, service providers (including their owners and employees), consultants, subcontractors, boards of trustees, boards of directors, officers, trustees, directors, partners, agents, managers, members, employees, independent contractors, representatives, attorneys, administrators, fiduciaries, insurers, co-insurers, reinsurers, accountants, auditors, advisors, consultants, personal representatives, spouses, heirs, executors, administrators, associates, members of their immediate families, and all persons acting under, by, through, or in concert with any of them;

c. That would be barred by res judicata based on entry by the Court of the Final Approval Order; or

d. That relate to the direction to calculate, the calculation of, and/or the method or manner of allocation of the Net Settlement Amount pursuant to the Plan of Allocation, except as to the collection and provision of Class Members' account balances as provided by, though, or at the direction of Defendants or Defense Counsel.

e. That relate to the approval by the Independent Fiduciary of the Settlement Agreement, unless brought against the Independent Fiduciary alone.

The Class Representative, Class Members and the Plan expressly waive and relinquish, to the fullest extent permitted by law, any and all provisions, rights, and benefits conferred by Section 1542 of the California Civil Code, which provides that a “general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party,” and any similar state, federal or other law, rule or regulation or principle of common law of any domestic governmental entity. Provided, however, this Section 1542 waiver relates only to the Released Claims, as set forth in Section 2.42(a) through 2.42(d) and not to any other claims, including but not limited to claims unrelated to the Plan.

2.43 “Settlement Agreement” means the compromise and settlement embodied in this document and its exhibits.

2.44 “Settlement Administrator” means Atticus Administration, LLC.

2.45 “Settlement Agreement Execution Date” means that date on which the final signature is affixed to this Settlement Agreement.

2.46 “Settlement Effective Date” means the date on which the Final Approval Order becomes Effective, provided that by such date the Settlement Agreement has not been terminated pursuant to Article 10.

2.47 “Settlement Notice” means the Notice of Class Action Settlement and Fairness Hearing proposed by the Settling Parties and approved by the Court in connection with the Motion for Preliminary Approval of Class Action Settlement. The Parties proposed Settlement Notice to Current Participants and proposed Settlement Notice to Former Participants are


8

attached hereto as Exhibits 2 and 3, respectively. The Settlement Notice shall inform Class Members of all information required by Rule of Civil Procedure 23 and due process, including the Fairness Hearing to be held before the Court, on a date to be determined by the Court, at which any Class Member satisfying the conditions set forth in the Preliminary Approval Order and the Settlement Notice may be heard regarding: (i) the terms of the Settlement Agreement, (ii) Class Counsel’s request for award of Attorneys’ Fees, (iii) the requested Case Contribution Award to the Class Representatives, and (iv) payment of Administrative Expenses. The Settlement Notice shall be sent by first-class mail, postage prepaid. Last known addresses shall be provided by the Plan’s Recordkeeper (or its designee) through Defense Counsel. Unless an updated address is obtained by the Settlement Administrator through its efforts to verify the last known addresses provided by the Plan’s Recordkeeper (or its designee), notice shall be sent to the last known address provided by the Plan’s Recordkeeper. The Settlement Administrator also shall post a copy of the Settlement Notice on the Settlement Website, in addition to the materials listed herein in Paragraph 11.2 as well as any additional materials later agreed to by Plaintiffs and Defendants. The Settlement Administrator shall use commercially reasonable efforts to locate any Class Member whose Settlement Notice is returned and re-send such documents one additional time.

2.48 “Settlement Period” shall be from the Settlement Effective Date and continuing for a period of one year thereafter.

2.49 “Settlement Website” means the internet website established pursuant to Paragraph 11.2.

2.50 “Settling Parties” means Defendants and the Class Representatives, on behalf of themselves and on behalf of all Class Members and the Plan.

3. Article 3 – Review and Approval by Independent Fiduciary, Preliminary Settlement Approval, and Notice to the Class

3.1 The Independent Fiduciary shall determine whether to approve and authorize the Settlement of the Released Claims on behalf of the Plan. The Independent Fiduciary shall have the following responsibilities in connection with its determination:

3.1.1 The Independent Fiduciary shall comply with all relevant conditions set forth in Prohibited Transaction Class Exemption 2003-39, “Release of Claims and Extensions of Credit in Connection with Litigation,” issued December 31, 2003, by the United States Department of Labor, 68 Fed. Reg. 75,632, as amended (“PTE 2003-39”), in making its determination.

3.1.2 The Independent Fiduciary shall: (i) determine whether to approve the Settlement on behalf of the Plan; (ii) determine whether to authorize the release of the Released Claims on behalf of the Plan; and (iii) either (a) authorize the Settlement in accordance with PTE 2003-39, or (b) find that the Settlement does not constitute a prohibited transaction under ERISA Section 406, 29 U.S.C. § 1106, in each case in a written instrument in a form acceptable to Defendants in their sole discretion.


9

3.1.3 The Settling Parties shall cooperate in providing information to the Independent Fiduciary, as requested. The Settling Parties shall in good faith attempt to obviate any objection or concern with respect to the Settlement raised by the Independent Fiduciary.

3.1.4 The Independent Fiduciary shall notify Defendants of its determination in writing and in accordance with PTE 2003-39, which notification shall be delivered no later than thirty (30) calendar days before the Fairness Hearing. Defense Counsel shall provide Class Counsel with a copy of the Independent Fiduciary’s written determination within five (5) calendar days of receipt.

3.1.5 The actual and reasonable expenses of the Independent Fiduciary will be deemed to be Administrative Expenses and will be paid by the Settlement Administrator from the Gross Settlement Amount.

3.2 Within fourteen (14) calendar days of the Settling Parties’ execution of this Settlement Agreement, the Class Representatives, through Class Counsel, shall file with the Court a motion (the “Motion for Preliminary Approval”) seeking preliminary approval of this Settlement Agreement, for class certification for settlement purposes only, and for entry of the Preliminary Approval Order in substantially the form attached as Exhibit 1. The Preliminary Approval Order to be presented to the Court shall, among other things:

3.2.1 Grant the motion to certify the Class for settlement purposes;

3.2.2 Approve the text of the Settlement Notice for mailing to Class Members;

3.2.3 Cause the Settlement Administrator to mail by first class mail the Settlement Notice to each Class Member;

3.2.4 Determine that pursuant to Fed. R. Civ. P. 23(c)(2) and 23(e), mailing the Settlement Notice and publication of the Settlement Website and its materials constitutes the best notice plan practicable under the circumstances, provides due and sufficient notice of the Fairness Hearing and of the rights of all Class Members, and complies fully with the requirements of Fed. R. Civ. P. 23, the Constitution of the United States, and any other applicable law;

3.2.5 Preliminarily enjoin each Class Member, individually and on behalf of the Plan, and their respective heirs, beneficiaries, executors, administrators, estates, past and present partners, officers, directors, agents, attorneys, predecessors, successors, and assigns, from suing any of the Released Parties in any action or proceeding alleging any of the Released Claims, even if any Class Member may thereafter discover facts in addition to or different from those which the Class Members or Class Counsel now know or believe to be true with respect to the Action and the Released Claims;

3.2.6 Provide that, pending final determination of whether the Settlement Agreement should be approved, no Class Member may directly, through representatives, or in


10

any other capacity commence any action or proceeding in any court or tribunal asserting any of the Released Claims against any of the Released Parties;

3.2.7 Set the Fairness Hearing for no sooner than one-hundred (100) calendar days after the date the motion for entry of the Preliminary Approval Order is filed, to determine whether the Court should: (i) approve the Settlement Agreement as fair, reasonable, and adequate, (ii) enter the Final Approval Order, and (iii) approve the application for Attorneys’ Fees and Administrative Expenses, and the Class Representatives’ Case Contribution Award;

3.2.8 Provide that Class Members may object to any aspect of the Settlement Agreement and that any such objections shall be heard, and any papers submitted in support of said objections shall be considered, by the Court at the Fairness Hearing if they have been filed validly with the Clerk of the Court and copies provided to the Settlement Administrator, who shall provide copies to Class Counsel and Defense Counsel. To be filed validly, the objection and any supporting documents must be filed no later than forty-five days prior to the Fairness Hearing. The objection must be in writing and include: (1) the Class Member’s full name, current address, and telephone number; (2) the Class Members status as a Current Participant or a Former Participant giving rise to standing to make an Objection; (3) a statement that the objector has reviewed the definition of the Class and understands that he/she is a Class Member; (4) a complete statement of all legal and factual bases for any Objection. Any person wishing to speak at the Fairness Hearing shall file and serve a notice of intent to appear within the time limitation set forth above;

3.2.9 Approve a CAFA settlement notice (see 28 U.S.C. § 1715), and order that upon mailing of the CAFA notices, Defendants shall have fulfilled their obligations under CAFA. The Settling Parties proposed CAFA settlement notices are attached as Exhibits 5 and 6.

3.2.10 Provide that any party may file a response to an objection by a Class Member at least fourteen (14) calendar days before the Fairness Hearing;

3.2.11 Approve the form and substance of the Plan of Allocation; and

3.2.12 Provide that the Fairness Hearing may, without further direct notice to the Class Members, other than by notice to Class Counsel, be adjourned or continued by order of the Court.

3.3 By the date and in the manner set by the Court in the Preliminary Approval Order, and unless otherwise set forth below, the Settlement Administrator shall:

3.3.1 Cause to be mailed to each Class Member a Settlement Notice in the form and manner to be approved by the Court; and


11

3.3.2 Cause the Former Participant Claim Form (in substantially the form attached as Exhibit 4) to be included in the Settlement Notice that is sent to Former Participants.

3.4 The actual and reasonable expenses the Plan’s Recordkeeper that are necessary to administer or implement the Settlement Agreement will be deemed to be Administrative Expenses and will to be paid by the Settlement Administrator from the Gross Settlement Amount.

4. Article 4 - Final Settlement Approval

4.1 No later than twenty-eight (28) calendar days before the Fairness Hearing, Class Counsel shall submit to the Court a motion for entry of the Final Approval Order (the “Motion for Final Approval”), which shall request approval by the Court of the terms of this Settlement Agreement and entry of the Final Approval Order in accordance with this Settlement Agreement. The Final Approval Order as proposed by the Settling Parties shall provide for the following, among other things, as is necessary to carry out the terms of the Settlement Agreement consistent with applicable law and governing Plan documents:

4.1.1 For approval of the Settlement of the Released Claims covered by this Settlement Agreement, adjudging the terms of the Settlement Agreement to be fair, reasonable, and adequate to the Plan and the Class Members, and directing the Settling Parties to take the necessary steps to effectuate the terms of the Settlement Agreement;

4.1.2 For a determination pursuant to Fed. R. Civ. P. 23(c)(2) and 23(e) that mailing the Settlement Notice and publication of the Settlement Website and its materials constituted the best notice plan practicable under the circumstances and that due and sufficient notice of the Fairness Hearing and the rights of all Class Members has been provided, consistent with the Federal Rules of Civil Procedure and the requirements of due process under the United States Constitution;

4.1.3 For dismissal with prejudice of the Action and all Released Claims asserted therein whether asserted by the Class Representatives on their own behalf, on behalf of the Class Members, or on behalf of the Plan, without fees or costs to any of the Settling Parties other than as provided for in this Settlement Agreement and approved by the Court;

4.1.4 That each Class Member and their respective heirs, beneficiaries, executors, administrators, estates, past and present partners, officers, directors, agents, attorneys, predecessors, successors, and assigns, shall be: (i) conclusively deemed to have, and by operation of the Effective Approval Order shall have, fully, finally, and forever settled, released, relinquished, waived, and discharged the Released Parties from all Released Claims, and (ii) barred and enjoined from suing any of the Released Parties in any action or proceeding alleging any of the Released Claims, even if any Class Member may thereafter discover facts in


12

addition to or different from those which the Class Member or Class Counsel now know or believe to be true with respect to the Class Action and the Released Claims, whether or not such Class Members have filed an objection to the Settlement Agreement, and whether or not the objections or claims for distribution of such Class Members have been approved or allowed;

4.1.5 That the Plan and each Class Member (and their respective heirs, beneficiaries, executors, administrators, estates, past and present partners, officers, directors, agents, attorneys, predecessors, successors, and assigns) on behalf of the Plan shall be: (i) conclusively deemed to have, and by operation of the Effective Approval Order shall have, fully, finally, and forever settled, released, relinquished, waived, and discharged the Released Parties from all Released Claims, and (ii) barred and enjoined from suing any of the Released Parties in any action or proceeding alleging any of the Released Claims, even if the Plan or any Class Member on behalf of the Plan may thereafter discover facts in addition to or different from those which the Plan or any Class Member now knows or believes to be true with respect to the Action and the Released Claims;

4.1.6 That each Class Member shall release the Released Parties, Defense Counsel, and Class Counsel, from any claims, liabilities, and attorneys’ fees and expenses arising from the allocation of the Gross Settlement Amount or Net Settlement Amount and for all tax liability and associated penalties and interest as well as related attorneys’ fees and expenses;

4.1.7 That all applicable CAFA requirements have been satisfied;

4.1.8 That the Settlement Administrator shall have final authority to determine the share of the Net Settlement Amount to be allocated to each Class Member pursuant to the Plan of Allocation approved by the Court;

4.1.9 That with respect to payments or distributions to Class Members, all questions not resolved by the Settlement Agreement shall be resolved by the Settlement Administrator in its sole and exclusive discretion;

4.1.10 That within twenty-one (21) calendar days following the issuance of all settlement payments to Class Members as provided by the Plan of Allocation, the Settlement Administrator shall prepare and provide to Class Counsel and Defense Counsel a list of each person who received a settlement payment or contribution from the Qualified Settlement Fund and the amount of such payment or contribution; and

4.1.11 The Court shall retain jurisdiction to enforce and interpret the Settlement Agreement.

4.2 The Final Approval Order and judgment entered by the Court approving the Settlement Agreement shall provide that upon becoming Effective, all Settling Parties, the Settlement Class, and the Plan shall be bound by the Settlement Agreement and by the Final Approval Order.


13

5. Article 5 - Establishment of Qualified Settlement Fund

5.1 No later than three (3) calendar days after the entry of the Preliminary Approval Order, the Settlement Administrator shall establish an escrow account. The Settling Parties agree that the escrow account is intended to be, and will be, an interest-bearing Qualified Settlement Fund within the meaning of Treas. Reg. § 1.468B-1. In addition, the Settlement Administrator shall timely make such elections as necessary or advisable to carry out the provisions of this Paragraph 5.1, including the “relation-back election” (as defined in Treas. Reg. § 1.468B-1) back to the earliest permitted date. Such elections shall be made in compliance with the procedures and requirements contained in such regulations. It shall be the responsibility of the Settlement Administrator to prepare and deliver, in a timely and proper manner, the necessary documentation for signature by all necessary parties, and thereafter to cause the appropriate filing to occur.

5.2 For the purpose of § 468B of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, the “administrator” shall be the Settlement Administrator. The Settlement Administrator shall timely and properly cause to be filed all informational and other tax returns necessary or advisable with respect to the Gross Settlement Amount (including without limitation applying for a Taxpayer Identification Number for the Fund and filing the returns described in Treas. Reg. § 1.468B-2(k)). Such returns as well as the election described in Paragraph 5.1 shall be consistent with this Article 5 and, in all events, shall reflect that all taxes (as defined in Paragraph 5.3) (including any estimated taxes, interest, or penalties) on the income earned by the Gross Settlement Amount shall be deducted and paid from the Gross Settlement Amount as provided in Paragraph 5.3.

5.3 Taxes and tax expenses are Administrative Expenses to be deducted and paid from the Gross Settlement Amount, including but not limited to: (i) all taxes (including any estimated taxes, interest, or penalties) arising with respect to the income earned by the Gross Settlement Amount, including any taxes or tax detriments that may be imposed upon Defendants or Defense Counsel with respect to any income earned by the Gross Settlement Amount for any period during which the Gross Settlement Amount does not qualify as a “qualified settlement fund” for federal or state income tax purposes, and (ii) all tax expenses and costs incurred in connection with the operation and implementation of this Article 5 (including, without limitation, expenses of tax attorneys and/or accountants and mailing and distribution costs and expenses relating to filing (or failing to file) the returns described in this Article 5). Such taxes and tax expenses shall be Administrative Expenses and shall be paid timely by the Settlement Administrator out of the Gross Settlement Amount without prior order from the Court. The Settlement Administrator shall be obligated (notwithstanding anything herein to the contrary) to withhold from distribution to any Class Member any funds necessary to pay such amounts, including the establishment of adequate reserves for any taxes and tax expenses (as well as any amounts that may be required to be withheld under Treas. Reg. § 1.468B-2(1)(2)); neither Defendants, Defense Counsel, nor Class Counsel are responsible nor shall they have any liability therefor. The Settling Parties agree to cooperate with the Settlement Administrator, each other, and their tax attorneys and accountants to the extent reasonably necessary to carry out the provisions of this Article 5.


14

5.4 Within ten (10) business days after the Settlement Effective Date Defendants will deposit the Gross Settlement Amount less twelve-thousand, five-hundred dollars ($12,500) into the Qualified Settlement Fund.

5.4.1 The calculation of the Gross Settlement Amount by Defendants will reflect the total amount remaining within the policy limits of Defendants’ fiduciary liability insurance policy as related to this Action as of the date of the Settlement Effective Date, less Defense Counsel’s good faith estimate of their reasonable and necessary Defense Costs incurred up to the date of the Settlement Effective Date.

5.4.2 The twelve-thousand, five-hundred dollars ($12,500) reserved from the Gross Settlement Amount will be used by Defendants to pay any remaining Defense Costs incurred up to the date of the Settlement Effective Date.

5.4.3 No later than ninety (90) days after the Settlement Effective Date, Defendants will transfer into the Qualified Settlement Fund the following amounts (to the extent they exist): (i) any remaining portion of the twelve-thousand, five-hundred dollars ($12,500) reserved from the Gross Settlement Amount not used to pay Defense Costs; and (ii) any additional amount determined by Defendants to remain within the policy limits of Defendants’ insurance policy not already transferred into the Qualified Settlement Fund.

5.4.4 In the event that Defendants subsequently determine that, when payment of all remaining Defense Costs are complete, any additional amounts remain within the policy limits of Defendants’ insurance policy (that have not already been transferred into the Qualified Settlement Fund), those amounts shall be transferred into the Qualified Settlement Fund within thirty (30) days of that determination.

5.5 The Settlement Administrator shall invest the Qualified Settlement Fund in short-term United States Agency or Treasury Securities or other instruments backed by the Full Faith and Credit of the United States Government or an Agency thereof, or fully insured by the United States Government or an Agency thereof, and shall reinvest the proceeds of these investments as they mature in similar instruments at their then-current market rates.

5.6 The Settlement Administrator shall not disburse the Qualified Settlement Fund or any portion except as provided in this Settlement Agreement, in an order of the Court, or in a subsequent written stipulation between Class Counsel and Defense Counsel. Subject to the orders of the Court, the Settlement Administrator is authorized to execute such transactions as are consistent with the terms of this Settlement Agreement.

5.7 At Class Counsel’s direction, all Court approved Attorneys’ Fees and costs shall be paid to Class Counsel out of the Qualified Settlement Fund, and all Court approved Case Contributions Awards shall be paid to the Class Representatives, courtesy of Class Counsel, within seventeen (17) calendar days after the Settlement Effective Date.

5.8 As soon as practicable, but in any event no later than seventy (70) calendar days after the Settlement Effective Date, the following distributions shall be made from the Qualified Settlement Fund:


15

5.8.1 Any Administrative Expenses incurred through the Settlement Effective Date shall be paid;

5.8.2 A contingency reserve not to exceed an amount to be mutually agreed upon by the Settling Parties shall be set aside by the Settlement Administrator for additional Administrative Expenses incurred or anticipated after the Settlement Effective Date; and

5.8.3 The Net Settlement Amount will be distributed pursuant to the Plan of Allocation. Pending final distribution of the Net Settlement Amount in accordance with the Plan of Allocation, the Settlement Administrator will maintain the Qualified Settlement Fund.

5.9 The Settlement Administrator shall be responsible for making provision for the payment from the Qualified Settlement Fund of all taxes and tax expenses, if any, owed with respect to the Qualified Settlement Fund and for all tax reporting, remittance, and/or withholding obligations, if any, for amounts distributed from it. Defendants, Defense Counsel, and/or Class Counsel have no responsibility or any liability for any taxes or tax expenses owed by, or any tax reporting or withholding obligations, if any, of the Qualified Settlement Fund.

5.10 No later than February 15 of the year following the calendar year in which Defendants make a transfer to the Qualified Settlement Fund pursuant to the terms of this Article 5, Defendants shall timely furnish a statement to the Settlement Administrator that complies with Treas. Reg. § 1.468B-3(e)(2), which may be a combined statement under Treas. Reg. § 1.468B3(e)(2)(ii), and shall attach a copy of the statement to their federal income tax returns filed for the taxable year in which Defendants make a transfer to the Qualified Settlement Fund.

6. Article 6 - Plan of Allocation

6.1 After the Settlement Effective Date, the Settlement Administrator shall cause the Net Settlement Amount to be allocated and distributed to the Former Participants as set forth in Paragraph 6.6 and to the Plan for distribution to the accounts of Current Participants as set forth in Paragraph 6.5.

6.2 To be eligible for a distribution from the Net Settlement Amount via the Court approved Plan of Allocation, a person must be: (i) a Current Participant; (ii) a Former Participant; or (iii) a Beneficiary or Alternate Payee of any eligible Class Member.

6.3 Beneficiaries will receive settlement payments as described in this Article 6 in amounts corresponding to their entitlement as beneficiaries of the Class Member with respect to which the payment is made. This includes settlement payments to Beneficiaries determined by the participant’s Plan account during the Class Period and/or by the Beneficiary’s own Plan account during the Class Period if an account was created in the Plan for the Participant’s Beneficiary. Alternate Payees will receive settlement payments if and to the extent they are entitled to receive a portion of a Class Member’s allocation under this Article 6 pursuant to the terms of the applicable QDRO. Beneficiaries and


16

Alternate Payees with Active Accounts as of the date of the Motion for Preliminary Approval will receive payments by the method described in this Article 6 for Current Participants. Beneficiaries and Alternate Payees who do not have Active Accounts as of the date of the Motion for Preliminary Approval will receive payments by the method described in this Article 6 for Former Participants. The Settlement Administrator shall have sole and final discretion to determine the amounts to be paid to Beneficiaries and Alternate Payees in accordance with the Plan of Allocation set forth in this Article 6 and as ordered by the Court.

6.4 The proportion of the settlement allocated to each Class Member shall be calculated, in general, as the sum of quarter-end account balances of a Class Member during the Class Period divided by the sum of the quarter-end annual account balances of all Class Members during the Class Period. The Settlement Administrator shall also obtain, in writing, an agreement between the Settling Parties as to the amount of the Net Settlement Amount. The amounts due to each Class Member shall be calculated by the Settlement Administrator as follows:

STEP 1: The Settlement Administrator shall calculate the sum of each Class Member’s quarter-end account balances for all Active Accounts in which the Class Member had an Active Account during the Class Period (“Total Balance”), and for any Class Member for which that results in a positive sum, shall divide that sum by the sum of all other Class Members’ quarter-end account balances for all Active Accounts in which each other Class Member had an Active Account during the Class Period, with the quotient representing the Entitlement Percentage for each such Class Member. (Total Balance for Each Class Member ÷ Sum of Total Balances for all Class Members = Entitlement Percentage.)

STEP 2: The Settlement Administrator shall next multiply each Class Member’s Entitlement Percentage by the Net Settlement Amount, with the product representing the Entitlement Amount. (Entitlement Percentage x Net Settlement Amount = Entitlement Amount).

STEP 3: The Entitlement Amount for each Current Participant as of the distribution date will be deposited into the Class Member’s Plan account and shall be treated as additional earnings, as further outlined in Paragraph 6.5.

STEP 4: Former Participants shall receive their settlement payments in the form of tax-qualified rollovers to an individual retirement account or other eligible retirement plan or in the form of checks, as provided in Section 6.6.

6.5 Current Participant Allocation.

6.5.1 Within five (5) calendar days after the Settlement Administrator has completed all payment calculations for all Current Participants, the Settlement Administrator will provide Defendants and Class Counsel via Secure File Transfer with an Excel spreadsheet containing the name, last four digits of the individual’s Social Security number (or alternative identifier(s) mutually acceptable to the Settlement


17

Administrator, Defendants and Class Counsel), and amount of the settlement payment to be made into the Active Account(s) for each of the Current Participants. To the extent that the Settlement Administrator identifies any Current Participant as no longer possessing an Active Account at the time that payment calculations are made (based on information provided by the Plan’s Recordkeeper), that Current Participant will be treated as a Former Participant for purposes of receiving a distribution, as described in Paragraph 6.6, and will not be included in the spreadsheet.

6.5.2 Thereafter, within twenty (20) calendar days after the later of (i) the submission to Defendants and Class Counsel described in Paragraph 6.5.1, or (ii) the Settlement Effective Date, the Settlement Administrator shall effect a transfer from the Qualified Settlement Fund to the Plan of the aggregate amount of all settlement payments payable to Current Participants, as reflected in the spreadsheet provided by the Settlement Administrator and less the amounts of any Current Participants no longer possessing an Active Account as identified by the Settlement Administrator. Defendants (or their designee) shall direct the Plan’s Recordkeeper to credit the individual Active Account(s) of each Current Participant in an amount equal to that stated on the spreadsheet provided by the Settlement Administrator in relation to such Current Participant.

6.5.3 The settlement payment for each Current Participant will be invested in accordance with and proportionate to such Current Participant’s investment elections then on file for new contributions. If the Current Participant does not have an investment election on file, then such Current Participant shall be deemed to have directed such payment to be invested in the Plan’s default investment option.

6.5.4 The Plan’s Recordkeeper shall process the allocation of the Net Settlement Amount to the Plan accounts of eligible Class Members within thirty (30) calendar days of the Plan's receipt of the transfer from the Qualified Settlement Fund described in Section 6.5.2 of this Agreement.

6.5.5 The Plan of Allocation may be amended, to the extent necessary, to reflect the settlement allocation to Former Participants and to Current Participants’ Active Account(s) in accordance with this Article 6.

6.5.6 To the extent that the Plan’s Recordkeeper is unable to process the allocation of the Net Settlement Amount to the Plan accounts for any eligible Class Member, the Settlement Administrator will be notified, the Class Member(s) will be identified, and the aggregate amount of those unallocated distributions will be transferred back to the Qualified Settlement Fund. The Settlement Administrator shall then treat those Class Members as Former Participants for purposes of effecting their allocations pursuant to Paragraph 6.6.

6.6 Former Participant Allocation. For each Former Participant, the Former Participant will have the opportunity to elect a tax-qualified rollover of his or her settlement payment to


18

an individual retirement account or other eligible retirement plan, which he or she shall identify on the Former Participant Claim Form (Exhibit 4), provided that the Former Participant supplies adequate information to the Settlement Administrator to enable the rollover. The Former Participant Claim Form must be postmarked no later than forty-five (45) days prior to Fairness Hearing. Otherwise (including if the Former Participant does not submit a Former Participant Claim Form), the Former Participant will receive his or her settlement payment directly by check. The distributions shall be issued as follows:

6.6.1 The Settlement Administrator will either effect the rollover from the Qualified Settlement Fund elected by the Former Participant in the Former Participant Claim Form (if the conditions for such rollover are satisfied) and any associated paperwork necessary to effect these settlement distributions by rollover, or issue a check from the Qualified Settlement Fund to the Former Participant and mail the check to the address of such Former Participant listed in his or her Former Participant Claim Form or, in the case of ambiguity or uncertainty, to the address of such Former Participant as determined by the Settlement Administrator using commercially reasonable means.

6.6.2 For each check issued other than a rollover, the Settlement Administrator shall: (i) calculate and withhold any applicable taxes associated with the payments allocable to the Former Participant; (ii) report such payments and remit such tax withholdings to the Internal Revenue Service and applicable state revenue agents; and (iii) issue appropriate tax forms to the Former Participant.

6.7 This Plan of Allocation is based upon preliminary data regarding the Class Members who may be entitled to settlement payments. If the Settlement Administrator concludes that it is impracticable to implement any provision of this Plan of Allocation, the Settling Parties, if they agree, will modify promptly the terms of this Plan of Allocation and present such modified terms to the Court for its approval. Direct mailed notice to Class Members of such proposed modification of the Plan of Allocation shall not be required. However, notice of such proposed modification shall be posted by the Settlement Administrator on the Settlement Website. The Settlement Administrator shall be solely responsible for performing any calculations required by this Plan of Allocation.

6.8 Within ten (10) calendar days of completing all aspects of this Plan of Allocation, the Settlement Administrator shall send to Class Counsel, Defense Counsel, and Defendants one or more affidavits stating the following: (i) the name of each Class Member to whom the Settlement Administrator sent the Settlement Notice, and the address of such mailing; (ii) the date(s) upon which the Settlement Administrator sent the Settlement Notice; (iii) the name of each Class Member whose Settlement Notice was returned as undeliverable; (iv) the efforts made by the Settlement Administrator to find the correct address and to deliver the Settlement Notice for each such Class Member; and (v) the name of each Class Member to whom the Settlement Administrator made a distribution from the Net Settlement Amount, together with the amount and form of the distribution, the name of the payee, the date of distribution, the amount of tax withholdings, if applicable, and the date of remittance of tax withholdings to the appropriate tax authority, if applicable.


19

6.9 The Settling Parties acknowledge that any payments to Class Members or their attorneys may be subject to applicable tax laws. Defendants, Defense Counsel, Class Counsel, and Class Representatives will provide no tax advice to the Class Members and make no representation regarding the tax consequences of any of the settlement payments described in this Settlement Agreement. To the extent that any portion of any settlement payment is subject to income or other tax, the recipient of the payment shall be responsible for payment of such tax. Deductions will be made, and reporting will be performed by the Settlement Administrator, as required by law in respect of all payments made under the Settlement Agreement. Payments from the Qualified Settlement Fund shall not be treated as wages by the Settling Parties.

6.10 Each Class Member who receives a payment under this Settlement Agreement shall be fully and ultimately responsible for payment of any and all federal, state, or local taxes resulting from or attributable to the payment received by such person. Each Class Member shall hold the Released Parties, Defense Counsel, Class Counsel, and the Settlement Administrator harmless from any tax liability, including penalties and interest, related in any way to payments under the Settlement Agreement, and shall hold the Released Parties, Defense Counsel, Class Counsel, and the Settlement Administrator harmless from the costs (including, for example, attorneys’ fees and disbursements) of any proceedings (including, for example, investigation and suit), related to such tax liability.

6.11 No sooner than twenty-eight (28) calendar days following the end of the Settlement Period, any Net Settlement Amount remaining in the Qualified Settlement Fund after distributions, including costs and taxes, shall be paid to the Plan for the purpose of defraying administrative fees and expenses of the Plan that would otherwise be charged to the Plan’s participants.

7. Article 7 - Attorneys’ Fees and Class Representatives’ Case Contribution Award

7.1 Class Counsel will seek approval from the Court of their attorneys’ fees and litigation costs and expenses advanced and carried by Class Counsel for the duration of this litigation. Defendants will take no position with the Court regarding Class Counsel’s request for Attorneys’ Fees. Any such award shall be paid from the Gross Settlement Amount. Defendants shall have no independent responsibility or liability for any amounts awarded by the Court. The Settlement Administrator shall pay Class Counsel any attorneys’ fees and litigation costs and expenses approved by the Court within seventeen (17) calendar days of the Settlement Effective Date.

7.2 Class Counsel intends to seek a Case Contribution Award not to exceed the amount of $5,000 for each Class Representative. Defendants agree not to oppose the requested Case Contribution Award so long as it does not exceed $5,000 for each Class Representative. The Settlement Administrator shall pay any Case Contribution Award approved by the Court within seventeen (17) calendar days of the Settlement Effective Date. The Case Contribution Award shall be paid by the Settlement Administrator solely out of the Gross Settlement Amount and shall be deducted (to the extent approved by the Court) from the Gross Settlement Amount on or after the date of the Effective Approval Order and prior


20

to the distribution to the Class Members. Defendants shall have no independent responsibility or liability for any amounts awarded by the Court. The Class Representatives shall also be entitled to a distribution under this Settlement Agreement pursuant to the Plan of Allocation as Class Members. Notwithstanding any other provision of this Settlement Agreement to the contrary, the procedure for and the allowance or disallowance (in whole or in part) by the Court of any application for the Case Contribution Award shall be considered by the Court separately from its consideration of the fairness, reasonableness, and adequacy of the Settlement Agreement, and any Order or proceedings relating to the Case Contribution Award, or any appeal of any Order relating thereto, shall not operate to terminate or cancel this Settlement Agreement or be deemed material thereto.

7.3 Class Counsel will file a motion for an award of Attorneys’ Fees and costs and Class Representatives’ Case Contribution Award at least twenty-eight (28) calendar days before the deadline set in the Preliminary Approval Order for objections to the proposed settlement, which may be supplemented thereafter.

8. Article 8 - Release and Covenant Not to Sue

8.1 As of the Settlement Effective Date, the Plan and all Class Members (and their respective heirs, beneficiaries, executors, administrators, estates, past and present partners, officers, directors, agents, attorneys, predecessors, successors, and assigns) shall be deemed to have fully, finally, and forever settled, released, relinquished, waived, and discharged the Released Parties from the Released Claims.

8.2 As of the Settlement Effective Date, all Class Members and the Plan are enjoined from instituting, maintaining, prosecuting, or asserting any cause of action, demand, or claim on the basis of, connected with, or arising out of any of the Released Claims. Nothing herein shall preclude any action to enforce the terms of this Settlement Agreement pursuant to the procedures set forth in this Settlement Agreement.

8.3 Class Counsel and the Class Members may hereafter discover facts in addition to or different from those that they know or believe to be true with respect to the Released Claims. Such facts, if known by them, might have affected the decision to settle with Defendants or the decision to release, relinquish, waive, and discharge the Released Claims, or the decision of a Class Member not to object to the Settlement Agreement. Notwithstanding the foregoing, each Class Member and the Plan shall expressly, upon the Settlement Effective Date, be deemed to have, and by operation of the Final Approval Order, shall have, fully, finally, and forever settled, released, relinquished, waived, and discharged any and all Released Claims. The Class Members and the Plan acknowledge and shall be deemed by operation of the Effective Approval Order to have acknowledged that the foregoing release was bargained for separately and is a key element of the settlement embodied in this Settlement Agreement.

9. Article 9 - Representations and Warranties

9.1 The Settling Parties represent:


21

9.1.1 That they are voluntarily entering into this Settlement Agreement as a result of arm’s length negotiations, and that in executing this Settlement Agreement they are relying solely upon their own judgment, belief, and knowledge, and upon the advice and recommendations of their own counsel, concerning the nature, extent, and duration of their rights and claims hereunder and regarding all matters that relate in any way to the subject matter hereof;

9.1.2 That they assume the risk of mistake as to facts or law;

9.1.3 That they recognize that additional evidence may have come to light, but that they nevertheless desire to avoid the expense and uncertainty of litigation by entering into the Settlement Agreement;

9.1.4 That they have read carefully the contents of this Settlement Agreement, and this Settlement Agreement is signed freely by each individual executing this Settlement Agreement on behalf of each of the Settling Parties; and

9.1.5 That they have made such investigation of the facts pertaining to the Settlement Agreement and all matters pertaining thereto, as they deem necessary.

9.1.6 That (i) other than through the Chubb fiduciary policy from which Gross Settlement Amount is being funded, Defendants have no liability insurance coverage potentially applicable to the Released Claims and (ii) that there are no relevant indemnification agreements from their employers, labor unions or related entities, or any other third-party applicable to the Released Claims.

9.2 Each individual executing this Settlement Agreement on behalf of a Settling Party does hereby personally represent and warrant that he/she has the authority to execute this Settlement Agreement on behalf of, and fully bind, each principal that each such individual represents or purports to represent.

10. Article 10 – Other Terms

10.1 Defendants agree that, within calendar year 2019 (and such additional time as may be reasonably necessary to complete the process below) after the Settlement Effective Date, they will cause the following to occur:

10.1.1 The Plan’s fiduciaries shall engage an independent consultant with expertise and experience conducting requests for proposals ("RFP") for defined contribution plans;

10.1.2 The Plan’s fiduciaries shall cause the independent consultant to conduct an RFP for a service provider to provide recordkeeping and administrative services to the Plan. The current Plan recordkeeper, John Hancock Retirement Plan Services, may participate in the RFP process. The Plan’s fiduciaries shall select the service provider following review of the RFP responses.


22

10.1.3 Within thirty (30) days of selecting the service provider, the Plan’s fiduciaries shall provide to Class Counsel the final fees for the service provider selected through the RFP process. All materials provided to Class Counsel based on this Article shall by treated as confidential pursuant to the Stipulated Protective and Confidential Order entered in this Action (Dkt. 57) notwithstanding the conclusion of this litigation.

10.1.4 The parties agree that the costs of the independent consultant and costs of conducting the RFP are administrative expenses properly paid for by the Plan under applicable law.

11. Article 11 - Termination, Conditions of Settlement Agreement, and Effect of Disapproval, Cancellation, or Termination

11.1 The Settlement Agreement shall automatically terminate, and thereby become null and void with no further force or effect if:

11.1.1 Pursuant to Section 3.1: (i) the Independent Fiduciary does not approve the Plan’s release of Released Claims or the Settlement Agreement, or Defendants reasonably conclude that the Independent Fiduciary’s approval does not include the determinations required by PTE 2003-39; and (ii) the Settling Parties do not mutually agree to modify the terms of this Settlement Agreement to facilitate an approval by the Independent Fiduciary or the Independent Fiduciary’s determinations required by PTE 2003-39;

11.1.2 The Preliminary Approval Order and the Final Approval Order are not entered by the Court in substantially the form submitted by the Settling Parties or in a form which is otherwise agreed to by the Settlement Parties;

11.1.3 The Settlement Class is not certified pursuant to Fed. R. Civ. P. 23(b) as defined herein or in a form which is otherwise agreed to by the Settling Parties;

11.1.4 This Settlement Agreement is disapproved by the Court or fails to become effective for any reason whatsoever; or

11.1.5 The Preliminary Approval Order or Final Approval Order is finally reversed on appeal, or is materially modified on appeal, and the Settling Parties do not mutually agree to any such material modifications.

11.2 In the event that the Court declines to grant final approval of the Settlement Agreement, Defendants agree that the Settlement Agreement is not terminated so long as Plaintiffs timely appeal/petition the appropriate Court of Appeals and/or Supreme Court of the United States for review(s) of such denial(s) of approval. The settlement will remain effective during the pendency of any such appeal, petition, or review. However, should the appropriate Court of Appeals and/or Supreme Court reject the appeal(s), the Settlement Agreement shall be terminated.


23

11.3 If the Settlement Agreement is terminated, deemed null and void, or has no further force or effect, then: (i) the Action and the Released Claims asserted by the Class Representatives shall for all purposes with respect to the Settling Parties revert to their status as though the Settling Parties never executed the Settlement Agreement, (ii) all funds deposited in the Qualified Settlement Fund, and any interest earned thereon, shall be returned to Defendants within thirty (30) calendar days after the Settlement Agreement is finally terminated or deemed null and void, except as provided for in Paragraph 10.4, and (iii) the certification of the Class shall be vacated and the Action shall proceed as though the Class had never been certified.

11.4 It shall not be deemed a failure to approve the Settlement Agreement if the Court denies, in whole or in part, Class Counsel’s request for Attorneys’ Fees and costs.

11.5 In the event that the Settlement Agreement is terminated, Administrative Expenses incurred by the Settlement Administrator and the Plan’s Recordkeeper prior to the termination shall be paid first from the interest earned, if any, on the Qualified Settlement Fund. Administrative Expenses Settlement Administrator and the Plan’s Recordkeeper in excess of the interest earned on the Qualified Settlement Fund shall be borne equally by the Parties. In the event that the Settlement Agreement is terminated, Administrative Expenses incurred by the Independent Fiduciary shall be borne by Defendants and/or Defendants’ fiduciary insurance liability carrier.

12. Article 12 - Public Comments Regarding the Action or Settlement Agreement

12.1 The Class Representatives agree that they will not at any time publicly disparage or encourage or induce others to publicly disparage any of the Released Parties. Furthermore, Class Counsel agrees that, while acting on behalf of Class Representatives and/or the Class, it will not publicly disparage or encourage or induce others to publicly disparage any of the Released Parties in relationship to the Settlement, the allegations in the Action, or the Released Claims.

12.2 The Settlement Administrator will establish a Settlement Website on which it will post the following documents or links to the following documents on or following the date of the Preliminary Order: the First Amended Complaint, the Settlement Agreement and its exhibits, the Settlement Notices to the Current and Former Participants, Plaintiffs’ Motion for Final Approval, the Class Representative’s Motion for Attorneys’ Fees and Costs, the Former Participant Claim Form, any Court orders related to the Settlement Agreement, any amendments or revisions to these documents, and any other documents or information mutually agreed upon by the Settling Parties (“Settlement Website Information”). No other information or documents will be posted on the Settlement Website unless agreed to in advance by the Settling Parties in writing. The Settlement Administrator will take down the Settlement Website ninety (90) calendar days after the receipt of the affidavit(s) referenced in Paragraph 6.8.

12.3 Other than the Settlement Website Information and a description of the Settlement Agreement’s terms and status on Class Counsel’s individual websites and in court filings describing Class Counsel’s qualifications and experience, the Class Representatives and


24

Class Counsel agree that: (i) they will not issue any press release or similar public statement regarding the settlement except for one agreed-upon press release in substantially the form attached as Exhibit 7, and (ii) they will not otherwise publicly describe or disclose this Settlement Agreement or the fact thereof other than in court filings.

13. Article 13 - General Provisions

13.1 This Settlement Agreement, whether or not consummated, and any negotiations or proceedings hereunder are not, and shall not be construed as, deemed to be, or offered or received as evidence of an admission by or on the part of any of the Released Parties of any wrongdoing, fault, or liability whatsoever, or give rise to any inference of any wrongdoing, fault, or liability or admission of any wrongdoing, fault, or liability in the Action or any other proceeding. The Released Parties admit no wrongdoing or liability with respect to any of the allegations or claims in the Action.

13.2 The Class Representatives, Released Parties, Class Counsel, and Defense Counsel shall have no responsibility for or liability whatsoever with respect to: (i) any act, omission, or determination of the Settlement Administrator, or any of its respective designees or agents, in connection with the administration of the Gross Settlement Amount or otherwise, (ii) the determination of the Independent Fiduciary, (iii) the management, investment, or distribution of the Qualified Settlement Fund, (iv) the Plan of Allocation as approved by the Court, (v) the determination, administration, calculation, or payment of any claims asserted against the Qualified Settlement Fund, (vi) any losses suffered by, or fluctuations in the value of, the Qualified Settlement Fund, or (vii) the payment or withholding of any taxes, expenses, and/or costs incurred in connection with the taxation of the Qualified Settlement Fund or tax reporting, or the filing of any returns. Further, neither the Released Parties nor Defense Counsel shall have any responsibility for, or liability whatsoever with respect to, any act, omission, or determination of Class Counsel in connection with the administration of the Gross Settlement Amount or otherwise.

13.3 This Settlement Agreement shall be interpreted, construed, and enforced in accordance with applicable federal law and, to the extent that federal law does not govern, California law.

13.4 Class Counsel, Defense Counsel, and the Settling Parties agree that any and all disputes concerning compliance with the Settlement Agreement, with the exception of any and all disputes concerning compliance with Article 8, shall be exclusively resolved as follows:

13.4.1 If Class Counsel, Defense Counsel, or a Settling Party has reason to believe that a legitimate dispute exists concerning the Settlement Agreement, the party raising the dispute shall first promptly give written notice under the Settlement Agreement to the other party including in such notice (i) a reference to all specific provisions of the Settlement Agreement that are involved, (ii) a statement of the alleged non-compliance, (iii) a statement of the remedial action sought, and (iv) a brief statement of the specific facts, circumstances, and any other arguments supporting the position of the party raising the dispute.


25

13.4.2 Within twenty-one (21) calendar days after the date of the notice described in Paragraph 13.4.1, the receiving party shall respond in writing with its position and the facts and arguments it relies on in support of its position.

13.4.3 For a period of not more than fourteen (14) calendar days following mailing of the response described in Paragraph 13.4.2, the Parties shall undertake good-faith negotiations, which may include meeting in person or conferring by telephone, to attempt to resolve the dispute.

13.4.4 If the dispute is not resolved during the period described in Paragraph 13.4.3, the parties shall conduct a mediation of the dispute with the Mediator on the earliest reasonably practicable date; provided, however, that the scope of such mediation shall be expressly limited to the dispute.

13.4.5 Within twenty-one (21) calendar days after the conclusion of the Mediator’s attempt to resolve the dispute (the date of the conclusion of the mediation shall be determined by agreement of the parties or by the Mediator), if the dispute persists, either party may request that the Court resolve the dispute.

13.4.6 The Settling Parties will attempt to resolve any disputes quickly, expeditiously, inexpensively, and in good faith.

13.4.7 In connection with any disputes concerning compliance with the Settlement Agreement, each party shall bear its own fees and costs unless the Court orders otherwise.

13.5 The Settling Parties agree that the Court has personal jurisdiction over the Class Members and Defendants and shall maintain that jurisdiction for purposes of resolving any disputes between the Settling Parties concerning compliance with the Settlement Agreement.

13.6 The Settlement Agreement may be executed by exchange of executed signature pages, and any signature transmitted by facsimile or e-mail attachment of scanned signature pages for the purpose of executing this Settlement Agreement shall be deemed an original signature for purposes of this Settlement Agreement. The Settlement Agreement may be executed in any number of counterparts, and each of such counterparts shall for all purposes be deemed an original, and all such counterparts shall together constitute the same instrument.

13.7 The Settling Parties hereby acknowledge that they have consulted with and obtained the advice of counsel prior to executing this Settlement Agreement.

13.8 Any headings included in this Settlement Agreement are for convenience only and do not in any way limit, alter, or affect the matters contained in this Settlement Agreement or the Articles or Paragraphs they caption. References to a person are also to the person’s permitted successors and assigns, except as otherwise provided herein. Whenever the words “include,” “includes” or “including” are used in this Settlement Agreement, they


26

shall not be limiting but shall be deemed to be followed by the words “without limitation.”

13.9 This Settlement Agreement may be modified or amended only by written agreement signed by or on behalf of all Settling Parties. Notice will be given to the Court of the agreed modification or amendment.

13.10 This Settlement Agreement and the attached exhibits constitute the entire agreement among the Settling Parties and no representations, warranties, or inducements have been made to any party concerning the Settlement other than those contained in this Settlement Agreement and the attached exhibits.

13.11 The provisions of this Settlement Agreement may be waived only by an instrument in writing executed by the waiving party and specifically waiving such provisions. The waiver of any breach of this Settlement Agreement by any party shall not be deemed to be or construed as a waiver of any other breach or waiver by any other party, whether prior, subsequent, or contemporaneous, of this Settlement Agreement.

13.12 The Settling Parties agree, without further consideration, and as part of finalizing the settlement hereunder, that they will in good faith execute and deliver such other documents and provide such data and information (as noted herein) and take such other actions as may be necessary to consummate and effectuate the subject matter of this Settlement Agreement.

13.13 All of the attached exhibits are incorporated by reference as though fully set forth herein. The exhibits shall be: Exhibit 1 - Preliminary Approval Order; Exhibit 2 - Notice of Class Action Settlement and Fairness Hearing to Current Participants; Exhibit 3 - Notice of Class Action Settlement and Fairness Hearing to Former Participants; Exhibit 4 - Former Participant Claim Form; Exhibit 5 - CAFA Notice to State Officials; Exhibit 6 - CAFA Notice to Federal Officials; and Exhibit 7 – Press Release.

13.14 No provision of the Settlement Agreement or of the attached exhibits shall be construed against or interpreted to the disadvantage of any party to the Settlement Agreement because that party is deemed to have prepared, structured, drafted, or requested the provision.

13.15 To the extent that any deadline in this Settlement Agreement falls on a Saturday, Sunday, or legal holiday, that deadline shall be continued until the following business day.

13.16 Any notice, demand, or other communication under this Settlement Agreement (other than the Settlement Notice, or other notices given at the direction of the Court) shall be in writing and shall be deemed duly given upon receipt if it is addressed to each of the intended recipients as set forth below and personally delivered, sent by registered or certified mail postage prepaid, or delivered by reputable express overnight courier, and further served by email to each of the addresses below:

Plaintiffs: Defendants:


27

Paul R. Wood [email protected] Franklin D. Azar & Associates 14426 East Evans Avenue Aurora, CO 80014

Jason M. Frank Scott H. Sims Andrew D. Stolper [email protected] [email protected] [email protected] Frank Sims & Stolper LLP 19800 MacArthur Blvd., Suite 855 Irvine, CA 92612

Brian T. Ortelere Sean K. McMahan [email protected] [email protected] Morgan, Lewis & Bockius LLP 1701 Market St. Philadelphia, PA 19103-2921

13.17 The undersigned counsel, on behalf of themselves and the Settling Parties, agree to cooperate fully with each other in seeking Court approvals of the Preliminary Approval Order and the Final Approval Order, and to do all things as may reasonably be required to effectuate preliminary and final approval and the implementation of this Settlement Agreement according to its terms.


EXHIBIT 1


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

[PROPOSED] ORDER PRELIMINARILY APPROVING CLASS ACTION SETTLEMENT AGREEMENT

ANDREW D. STOLPER (205462)JASON M. FRANK (190957) SCOTT H. SIMS (234148) FRANK SIMS & STOLPER LLP 19800 MacArthur Blvd., Suite 855 Irvine, CA 92612 Telephone: (949) 201-2400 Facsimile: (949) 201-2405 [email protected]

PAUL R. WOOD (Pro Hac Vice 12578) FRANKLIN D. AZAR (Pro Hac Vice 13131) FRANKLIN D. AZAR & ASSOCIATES 14426 East Evans Avenue Aurora, CO 80014 Telephone: (303) 757-3300 Facsimile: (303) 759-5203 [email protected]

Attorneys for Plaintiffs

IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA

SOUTHERN DIVISION

FELIPE YBARRA and CESARIO SERRATO, individually and as representatives of a class consisting of the participants and beneficiaries of the Supplemental Income 401(K) Plan,

Plaintiffs,

vs.

BOARD OF TRUSTEES OF SUPPLEMENTAL INCOME TRUST FUND; RICHARD BARBOUR; ROME A. ALOISE; KEITH FLEMING; CARLOS BORBA; CLARK RITCHEY; and DOES 1 - 10,

Defendants.

Case No.: 8:17-cv-02091-JVS-E

[PROPOSED] ORDER PRELIMINARILY APPROVING SETTLEMENT AGREEMENT, CERTIFYING SETTLEMENT CLASS, APPOINTING SETTLEMENT CLASS COUNSEL, SETTING HEARING ON FINAL APPROVAL OF SETTLEMENT, AND DIRECTING NOTICE TO THE CLASS

Date: Time: Courtroom: 10C Judge: Hon. James V. Selna


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28Case No. 17-cv-02091-JVS-E



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28-1- Case No. 17-cv-02091-JVS-E


Before the Court is Plaintiffs’ Motion for Preliminary Approval of Class Action Settlement.

This litigation arose out of claims involving alleged breaches of fiduciary duties in violation of the

Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, against Board of

Trustees of Supplemental Income Trust Fund, Richard Barbour, Rome A. Aloise, Keith Fleming,

Carlos Borba, and Clark Ritchey (collectively, “Defendants”).

The Settling Parties entered into the Settlement Agreement by and through their respective

counsel on March ___, 2019 (the “Settlement Agreement”) in the above-captioned action (the

“Lawsuit”). Plaintiffs now move this Court for an order preliminarily approving the Settling Parties’

settlement, certifying a settlement Class, appointing settlement Class Counsel, setting a hearing on the

final approval of the settlement, and directing notice to the Class (the “Motion”). Defendants do not

oppose Plaintiffs’ request for an order preliminarily approving the Settling Parties’ settlement. Except

as otherwise defined herein, all capitalized terms used herein shall have the same meaning as ascribed

to them in the Settlement Agreement.

Upon consideration of the Motion, the Settling Parties’ Class Action Settlement Agreement

and Release and all exhibits thereto (collectively, the “Settlement Agreement” or “Settlement”), the

materials previously submitted in this case, the arguments of counsel, and other materials relevant to

this matter, it is hereby ORDERED that:

1. Preliminary Findings Regarding Proposed Settlement

a. This Court has both subject matter jurisdiction and personal jurisdiction as to

this Action and all Settling Parties before it;

b. The Court has reviewed the Settlement Agreement proposed by the Settling

Parties and finds that it is without obvious deficiencies;

c. The proposed Settlement resulted from arm’s-length negotiations by

experienced and competent counsel;

d. The Settlement was negotiated only after Class Counsel conducted a

presettlement investigation consisting of written discovery, document productions, and a deposition

of Defendant Keith Fleming;


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28-2- Case No. 17-cv-02091-JVS-E


e. Class Counsel and the Class Representatives have concluded that the

Settlement Agreement is fair, reasonable, and adequate;

f. The Settling Parties have provided the Court with information sufficient to

enable it to determine whether to give notice of the proposed Settlement to the Class; and

g. The Settlement is sufficiently fair, reasonable, and adequate to warrant sending

Notice of the Settlement and Settlement Agreement to the Settlement Class.

2. Fairness Hearing: A hearing (the “Fairness Hearing”) is scheduled at the United

States District Court for the Central District of California, Southern Division, Judge James V. Selna

presiding, at _______ .m. on ____________, 2019 ( a date no sooner than one hundred (100) calendar

days after _________, 2019, which is the date on which Plaintiffs’ Motion was filed), to determine,

among other issues:

a. Whether the Settlement Agreement should be approved as fair, reasonable, and

adequate;

b. Whether to finally certify the Settlement Class for settlement purposes only;

c. Whether the notice procedures comply with the federal rules and due process;

d. Whether Settlement Class Members should be bound by the releases set forth

in the Settlement Agreement;

e. Whether the Court should enter the Final Approval Order; and

f. Whether the Court should approve the application for Attorneys’ Fees and

expenses, Class Representatives’ Case Contribution Awards, any Administrative Expenses, and a

reserve for anticipated future Administrative Expenses.

3. Settlement Administrator: The Court approves and orders that Atticus

Administration, LLC shall be the Settlement Administrator responsible for carrying out the

responsibilities set forth herein and in the Settlement Agreement.

4. Class Certification: The motion to certify the Class for settlement purposes only is

preliminarily granted pursuant to Federal Rule of Civil Procedure (“Rule”) 23(b)(1). The Court finds

that, for purposes of settlement, (i) the Settlement Class Members are so numerous that joinder of all


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28-3- Case No. 17-cv-02091-JVS-E


Settlement Class members is impracticable; (ii) there are questions of law and fact common to the

Settlement Class; (iii) the claims of the Plaintiffs are typical of the claims of the Settlement Class

Members; (iv) the Plaintiffs will fairly and adequately represent the interests of the Settlement Class;

and (v) prosecuting separate actions by or against individual Class members would create a risk of

inconsistent or varying adjudications with respect to the individual Class members that would establish

incompatible standards of conduct for the Settling Parties opposing the Class. The Class is defined as

follows: persons who participated in the Supplemental Income 401(k) Plan (the “Plan”) at any time

during the Class Period (December 1, 2011 through December 31, 2018), including any beneficiary

of a deceased person who participated in the Plan at any time during the Class Period, and/or Alternate

Payees, in the case of a person subject to a QDRO who participated in the Plan at any time during the

Class Period. Excluded from this Class are Defendants and any other individuals who served during

the Class Period as a Plan fiduciary as defined in ERISA, 29 U.S.C. § 1002(21).

The Court hereby appoints the following attorneys as counsel for the Settlement Class:

Andrew Stolper, Jason M. Frank, and Scott H. Sims of Frank Sims & Stolper LLP; and Paul R. Wood

of Franklin D. Azar & Associates, P.C., and the successors of these law firms (collectively, “Class

Counsel”). For purposes of these settlement proceedings, the Court finds that Frank Sims & Stolper

and Franklin D. Azar & Associates, P.C. are competent and capable of exercising their responsibility

as Class Counsel.

If, for any reason, the proposed settlement is not approved, any order certifying a settlement

Class shall be vacated ab initio and the Lawsuit shall proceed as though the Settlement Class had never

been certified, without prejudice to the Settling Parties’ rights to either request or oppose Class

certification for purposes of litigation. Preliminary certification of the Settlement Class, appointment

of Class Counsel and of Class Representatives, and all actions associated therewith, are binding only

with respect to the Settlement and are undertaken on the condition that certification and designations

shall be vacated if the Settlement Agreement is terminated or is disapproved in whole or in material

part by the Court, any appellate court, and/or any other court of review, or if the Settlement Agreement

is terminated pursuant to Article 11 in the Settlement Agreement, in which event (i) the Settlement


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28-4- Case No. 17-cv-02091-JVS-E


Agreement and any obligations of Defendants thereunder shall be null and void, except as otherwise

expressly provided in the Settlement Agreement; (ii) the Court shall vacate the preliminary

certification of the Settlement Class; and (iii) the Lawsuit shall proceed as if the Settlement

Agreement had never been entered and the Settlement Class had never been certified, without

prejudice or relevance to the Court’s consideration on the merits of any arguments for or against a

properly submitted motion for Class certification.

5. Class Notice: The Settling Parties have presented the Court with a proposed form of

notice for both Current and Former Participants to be mailed to Class Members (“Settlement Notice”)

pursuant to a notice plan.

a. The Court finds that the proposed form of notice to Current and Former

Participants, and the content in each, fairly and adequately:

i. Describes the terms and effect of the Settlement Agreement and of the

settlement;

ii. Notifies the Settlement Class that Class Counsel will seek compensation

from the Settlement Fund for Attorneys’ Fees and expenses;

iii. Notifies the Settlement Class that Class Counsel will seek compensation

from the Settlement Fund for Class Representatives’ Case Contribution

Awards;

iv. Gives Notice to the Settlement Class of the time and place of the final

Fairness Hearing and Class Members’ right to appear; and

v. Describes how the Class Members may object to the Settlement, or any

requested fees and costs, or Class Representatives’ Case Contribution

Awards.

b. The Settlement Administrator will send by first-class mail the appropriate

Settlement Notice to each Class Member within ____ days of receiving the Class Members’ last

known addresses provided by the Plan’s Recordkeeper and no later than _________, 2019.

c. Pursuant to Rule 23(c)(2) and 23(e), the contents of the Settlement Notice,


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28-5- Case No. 17-cv-02091-JVS-E


mailing of the Settlement Notice, and publication of the Settlement website and its materials

constitute the best notice plan practicable under the circumstances, provide due and sufficient notice

of the Fairness Hearing and of the rights of all Class Members, and comply fully with the

requirements of Rule 23, the Constitution of the United States, and any other applicable law.

6. Preliminary Injunction: Each Class Member, individually and on behalf of the

Plan, and his/her respective heirs, beneficiaries, executors, administrators, estates, past and present

partners, officers, directors, agents, attorneys, predecessors, successors, and assigns are

preliminarily enjoined from suing any of the Released Parties in any action or proceeding alleging

any of the Released Claims, even if any Class Member may thereafter discover facts in addition to

or different from those which the Class Members or Class Counsel now know or believe to be true

with respect to the class action and the Released Claims.

Further, pending final determination of whether the Settlement Agreement should be

approved, no Class Member may directly, through representatives, or in any other capacity,

commence any action or proceeding in any court or tribunal asserting any of the Released Claims

against any of the Released Parties.

7. Objections to Settlement: Any objections to the fairness, reasonableness or

adequacy of the settlement, to any term of the Settlement Agreement, to the proposed award of

Attorneys’ Fees and costs, or to any request for a Case Contribution Award for the Class

Representative shall be considered by the Court at the Fairness Hearing, if those objections have

been filed validly with the Clerk of the Court and copies provided to Class Counsel and Defense

Counsel. To be filed validly, the objection and any supporting documents must be filed at least forty-

five (45) calendar days prior to the scheduled Fairness Hearing. The objection must be in writing

and include: (1) the Class Member’s full name, current address, and telephone number; (2) the Class

Member’s status as a Current Participant or a Former Participant giving rise to standing to make an

objection; (3) a statement that the objector has reviewed the definition of the Class and understands

that he/she is a Class Member; (4) a complete statement of all legal and factual bases for any

objection. Any person wishing to speak at the Fairness Hearing shall file and serve a notice of intent


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28-6- Case No. 17-cv-02091-JVS-E


to appear within the time limitation set forth above.

8. Responses to Objections and Final Approval Motion: Any party may file a

response to an objection by a Class Member at least fourteen (14) calendar days before the Fairness

Hearing, and Plaintiffs shall file their Final Approval Motion at least twenty-eight (28) calendar

days before the Fairness Hearing.

9. CAFA Notices: The form of notice pursuant to the Class Action Fairness Act

(“CAFA”), 28 U.S.C. §¶ 1711 et seq., attached to the Settlement Agreement as Exhibits 5 and 6, is

approved. Upon mailing of the CAFA notices, Defendants shall have fulfilled their obligations under

CAFA.

10. Continuance of Hearing: The Court may adjourn or continue the Fairness Hearing

without further direct notice to the Class Members, other than by notice to Class Counsel.

11. Stay of Proceedings: The Court hereby stays all proceedings in the Action, other than

those proceedings necessary to carry out or enforce the terms and conditions of the Settlement

Agreement, pending the Court’s decision with respect to final approval of the settlement.

12. No Admission: Under no circumstances shall this Order, the Settlement Agreement

and its exhibits, or any of their terms and provisions, the negotiations and proceedings connected

therewith, or any of the documents or statements referred to therein, be construed, deemed or used as

an admission, concession or declaration by or against any of the Defendants or Released Parties of

any fault, wrongdoing, breach or liability.

13. Effectuating the Settlement: Class Counsel and Defense Counsel are authorized to

establish other means necessary to effectuate the terms of the Settlement Agreement.

IT IS SO ORDERED.

DATED:___________________, 2019


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28-7- Case No. 17-cv-02091-JVS-E


________________________________________ HONORABLE JAMES V. SELNA UNITED STATES DISTRICT JUDGE


EXHIBIT 2


1

Questions? Visit www.SIP401kSettlement.com or call 1-888-233-2228. Do not call the Court or any of the Defendants. They cannot answer your questions.

Ybarra v. Board of Trustees of Supplemental Income Trust Fund SIP 401K Settlement c/o Atticus Administration PO Box 1440 Minneapolis, MN 55440

<<refnum barcode>> Class Member ID: <<refnum>>

<<First>> <<Last>> <<Address1>> <<Address 2>> <<City>>, <<State>> <<Zip>>

IN THE UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

If you were a participant in the Supplemental Income Trust Fund

Defined Contribution Retirement Plan (401(k))

at any time from

December 1, 2011 through December 31, 2018 you may benefit

from this class action settlement.

The case is Ybarra and Serrato et al. v. Board of Trustees of Supplemental Income Trust Fund et al., 17-cv-02091-JVS (Ex)

A court authorized this notice. This is not a solicitation from a lawyer.

You are receiving this notice because the records maintained by the Supplemental Income Trust

Fund indicate that you were a participant in the Supplemental Income Trust Fund 401(k) Plan (the

“Plan”) at some time during the period from December 1, 2011 through December 31, 2018 (the

“Class Period”), and continue to be a participant. As such, your rights may be affected by a

proposed class action settlement (the “Settlement”) of the above-captioned federal lawsuit.

Please read the following information carefully to find out what the lawsuit is about, what

the terms of the proposed settlement are, what rights you have to object to the proposed


2


settlement agreement if you disagree with its terms, and what deadlines apply to your right

to object to the proposed settlement.

BASIC INFORMATION

1. What is this Lawsuit about?

A lawsuit was filed in the United States District Court for the Central District of California (the “Court”) against the Plan’s Board of Trustees (“Defendants”). The lawsuit alleges that Defendants violated the federal Employee Retirement Income Security Act of 1974, as amended (“ERISA”), by failing to comply with their fiduciary duties under ERISA to the Plan and participants of the Plan in the management, operation, and administration of the Plan. The individuals who filed the lawsuit (“Plaintiffs”) on behalf of the Plan and its participants claim that Defendants allowed the Plan and its participants to pay excessive recordkeeping fees to the Plan’s recordkeeper, John Hancock Retirement Plan Services.

Defendants deny the allegations in the lawsuit and contend that their conduct was entirely proper. Defendants have asserted, and would assert should the litigation continue, a number of defenses to Plaintiffs’ claims.

2. What is a class action lawsuit?

In a class action lawsuit, one or more people called “class representatives” sue on their own behalf and on behalf of other people who have similar claims. One court resolves all the issues for all class members in a single lawsuit. Two participants in the Plan are the class representatives in this lawsuit.

3. Why is there a Settlement?

The parties have agreed to the Settlement after extensive negotiations. By agreeing to the Settlement, the parties avoid the costs and risks of further litigation, and Plaintiffs and the other members of the settlement class will receive compensation and other benefits. Class Counsel have conducted a review of the evidence in the case and the potential risks and benefits of continued litigation and believe that the Settlement is in the best interest of the class. The Court has not made any finding that Defendants have done anything wrong or violated any law or regulation.

The Plan has retained an independent fiduciary to evaluate the fairness of the Settlement. The independent fiduciary is Newport Trust Company.

4. How do I get more information about the Settlement?

If you would like to find out more information or have questions regarding the Settlement, you can visit www.SIP401kSettlement.com, call 1-888-233-2228; or write to the settlement administrator, Atticus Administration, at SIP 401K Settlement, c/o Atticus Administration, PO Box 1440, Minneapolis, MN 55440. This notice is only a summary of the lawsuit and the proposed Settlement. It is not a complete description of the lawsuit or the proposed Settlement. You may


3


inspect the pleadings and other papers (including the Settlement Agreement) that have been filed in this lawsuit at the office of the Clerk of the United States District Court for the Central District of California, Southern Division, which is located at 411 West 4th Street, Room 1053, Santa Ana, California 92701-4516. You may also review documents electronically through Public Access to Court Records, which is available at www.pacer.gov.

If you have questions about this notice or the proposed Settlement, you may contact Class Counsel (see answer to Question 10 for contact information).

Do not contact the Court, the Plan, or the Defendants for information about the Settlement. The settlement administrator or Class Counsel can answer any questions you may have about the proposed Settlement.

THE SETTLEMENT BENEFITS – WHAT YOU MAY GET

5. What does the Settlement provide?

Plaintiffs and Defendants have agreed to a settlement that involves monetary payments to participants. This and other terms of the Settlement are set forth in the Class Action Settlement Agreement dated March ___, 2019 (“Settlement Agreement”), and described briefly below.

As part of the Settlement, Defendants have agreed to make a one-time payment of $__ million (the “Gross Settlement Amount”). After deduction from the Gross Settlement Amount for any amounts that the Court approves for settlement-related expenses (including a case contribution award to Plaintiffs, attorneys’ fees and expenses to Class Counsel, the cost and expense of sending notices of the proposed Settlement to certain state and federal officials as required under 28 U.S.C. § 1715, the reasonable expenses of the Plan’s recordkeeper incurs in administering the Settlement, and administrative costs, including taxes and tax-related costs), the remaining amount (known as the “Net Settlement Amount”) will be distributed to class members. Class members are participants and beneficiaries of the Plan from December 1, 2011 through December 31, 2018 (“Class Members”).

As part of the Settlement, Defendants have also agreed to engage an independent consultant to conduct a request for proposals related to Plan administration and recordkeeping services. The Plan fiduciaries will then select a plan service provider based on that process (which may be the Plan’s current service provider or a different provider).

6. If I am entitled to a distribution, how will I receive the settlement proceeds?

All Class Members who are current participants in the Plan (“Current Participants”) will receive any settlement proceeds through a deposit into their Plan account. Current Participants do not need to submit anything in order to receive their share of any settlement proceeds. Class Members who no longer have an active Plan account (“Former Participants”) and wish to receive their settlement distribution in the form of a roll-over distribution to an eligible retirement account must complete and submit a Former Participant Claim Form. The Former Participant Claims form is


4


available here: _____. Former Participants who do not submit a claim form will be sent any settlement proceeds by check.

7. How will I benefit from the Settlement?

You may be entitled to receive a portion of the Net Settlement Amount if you participated in the Plan during the period from December 1, 2011 through December 31, 2018. Only Class Members are eligible to receive a portion of the Net Settlement Amount. (See the answer to Question 6 above.) Whether or not a person meets this definition will be based on the Plans’ records. You have received this notice because, based on the Plans’ records, you are believed to be a member of the Class.

The settlement administrator will use the Plan of Allocation included in the Settlement Agreement to determine the amount paid to each Class Member. First, the settlement administrator will calculate the sum of each Class Member’s quarter-end account balance for all active accounts (i.e., accounts with a balance greater than $0) that the Class Member had during the Class Period in order to calculate the Class Member’s total balance. The settlement administrator will then divide that Class Member’s total balance by the sum of all other Class Members’ quarter-end account balances for all of their active accounts during the Class Period, with the result representing the “Entitlement Percentage” for that Class Member. Second, the settlement administrator shall multiply each Class Member’s “Entitlement Percentage” by the Net Settlement Amount, with the product representing the amount of the individual Class Member’s settlement award.

8. What are the class representatives receiving from the Settlement?

The class representatives in this case may seek a case contribution award not to exceed $5,000. Additionally, the class representatives will be entitled to receive benefits of the Settlement because they are Class Members.

THE SETTLEMENT BENEFITS – WHAT YOU GIVE UP

9. What do I give up by participating in the Settlement?

In exchange for Defendants’ payment of the Settlement amount, all Class Members will release any claims they have related to the lawsuit and be prohibited from bringing or pursuing any other lawsuits or other actions based on such claims.

The Court will also be certifying as a class all persons who were participants in the Plan from December 1, 2011, a date that is six years prior to the date the lawsuit was filed, through December 31, 2018, the date the parties agreed to in the Settlement. The release is set forth in full in the Settlement Agreement, which can be viewed online at www.SIP401kSettlement.com, or requested from Class Counsel.

THE LAWYERS REPRESENTING YOU

10. Do I have a lawyer in this case?


5


Yes. In granting preliminary approval of the proposed Settlement, the Court appointed the Plaintiffs’ lawyers to serve as “Class Counsel” for the settlement class. The attorneys for the settlement class are as follows:

Andrew D. Stolper Jason M. Frank Scott H. Sims FRANK SIMS & STOLPER LLP 19800 MacArthur Blvd., Suite 855 Irvine, CA 92612

Paul R. WoodFRANKLIN D. AZAR & ASSOCIATES, PC 14426 East Evans Avenue Aurora, CO 80014

You will not be charged separately for the work of these lawyers; their compensation will come from the settlement amount and will be determined by the Court. If you want to be represented by a different lawyer in this case, you may hire one at your own expense.

11. How will Class Counsel be paid?

Class Counsel will file a motion with the Court seeking approval of their compensation, which will consist of (a) reasonable attorneys’ fees and (b) reimbursement of the expenses they incurred in prosecuting the case. Class Counsel intend to seek attorneys’ fees equal to 30% of the Gross Settlement amount plus litigation expenses. The motion and supporting papers will be filed on or before ___________________, 2019. After that date you may review the motion and supporting papers at www.SIP401kSettlement.com. Any attorneys’ fees, expenses, and case contribution award approved by the Court, in addition to the cost and expense of sending notices of the proposed Settlement to certain state and federal officials pursuant to 28 U.S.C. § 1715, the reasonable expenses of the Plan’s recordkeeper incurs in administering the Settlement, and the fee and the expenses incurred by the settlement administrator in sending this notice and administering the Settlement, will be paid from the Settlement amount. The costs of an independent fiduciary hired to evaluate the Settlement on behalf of the Plan will also be paid from the settlement amount.

OBJECTING TO THE SETTLEMENT

12. What does it mean to object?

Objecting is simply telling the Court that you do not like something about the Settlement. Objecting will not have any bearing on your right to receive the benefits of the Settlement if it is approved by the Court.

13. What is the procedure for objecting to the Settlement?

Prior to the Fairness Hearing, Class Members will have the opportunity to object to approval of the Settlement. Class Members can object to the Settlement and give reasons why they believe that the Court should not approve it. To object, you must send your objection to the Court, at U.S.


6


District Court for the Central District of California, Southern Division, 411 West 4th Street, Room 1053, Santa Ana, California 92701-4516, and to the parties at the following addresses:

To Class Counsel:

Scott H. Sims FRANK SIMS & STOLPER LLP 19800 MacArthur Blvd. Suite 855 Irvine, CA 92612

To Defendant’s Counsel:

Stephen Dixon MORGAN, LEWIS & BOCKIUS LLP 1111 Pennsylvania Avenue, NW Washington, DC 20004-2541

Objections must be filed with the Court Clerk on or before __________, 2019. Objections filed after that date will not be considered. Any Class Member who fails to submit a timely objection will be deemed to have waived any objection he/she might have, and any untimely objection will be barred absent an order from the Court. Objections must include: (1) the case name and number; (2) your full name, current address, telephone number, and signature; (3) a statement that you are a Class Member and an explanation of the basis upon which you claim to be a Class Member; (4) a copy of your Former Participant Claim Form; (5) all grounds for the objection, accompanied by any legal support known to you or your counsel; (6) a statement as to whether you or your counsel intends to personally appear and/or testify at the Fairness Hearing; and (7) a list of any persons you or your counsel may call to testify at the Fairness Hearing in support of your objection.

14. What if I do not want to be part of the lawsuit and want to exclude myself?

The Settlement does not allow any Class Members to exclude themselves from the settlement or decide not to be a part of the Settlement. While some class action settlements allow Class Members to “opt out” of the settlement if they want, because of the nature of the claims Plaintiffs have asserted in this lawsuit, Class Members do not have any right to opt out. Thus, if you dislike some portion of the Settlement, your only recourse is to object to the settlement.

THE COURT’S FAIRNESS HEARING

15. What is a Fairness Hearing?

The Court has granted preliminary approval of the proposed Settlement, finding that it is sufficiently reasonable to warrant such preliminary approval, and has approved delivery of this notice to Class Members. The Settlement will not take effect, however, until it receives final approval from the Court following an opportunity for Class Members to object to the Settlement.


7


Following the deadline for objecting to the Settlement, the Court will hold a Fairness Hearing on _______________, 2019 to consider any objections. The Fairness Hearing will take place at ____a.m/p.m. at the United States District Court for the Central District of California, Southern Division, which is located at 411 West 4th Street, Room 1053, Santa Ana, California 92701-4516. The date and location of the Fairness Hearing is subject to change by Order of the Court, which will appear on the Court’s docket for this case.

16. Can I attend the Fairness Hearing?

Yes, anyone can attend the Fairness Hearing. But the Court will only allow those who file and serve a timely written objection in accordance with this notice to speak at the Fairness Hearing either in person or through counsel retained at his or her own expense. Those persons or their attorneys intending to speak at the Fairness Hearing must serve notice of their intention to appear on Class Counsel and Defendants’ counsel (at the addresses set out above) and file it with the Court Clerk by no later than_____________, 2019. The notice must include (1) the name, address, and telephone number of the Class Member, and (2) if applicable, the name, address, and telephone number of that Class Member’s attorney. Anyone who does not timely file and serve a notice of intention to appear in accordance with this paragraph shall not be permitted to speak at the Fairness Hearing, except by Order of the Court for good cause shown. Any comment or objection that is timely filed will be considered by the Court even in the absence of a personal appearance by the Class Member or that Class Member’s counsel.

The Court will consider Class Member objections in deciding whether to grant final approval. Objectors are not required to attend the Fairness Hearing, but if you intend to appear you must state your intention to do so in the manner described above. Class Members who do not comply with these procedures, or who miss the deadline to file an objection, lose the opportunity to have their objection considered by the Court or to appeal from any order or judgment entered by the Court regarding the Settlement.

17. Where can I get more information?

You can visit the website at www.SIP401kSettlement.com where you will find the full Settlement Agreement, the Court’s order granting preliminary approval, this notice, and other relevant pleadings and documents. If you cannot find the information you need on the website, you may also contact Class Counsel for more information. Do not contact the Court to get additional information.

Dated: _____________, 2019 By Order of the United States District Court District Judge James V. Selna


EXHIBIT 3


1


Ybarra v. Board of Trustees of Supplemental Income Trust Fund SIP 401K Settlement c/o Atticus Administration PO Box 1440 Minneapolis, MN 55440

<<refnum barcode>> Class Member ID: <<refnum>>

<<First>> <<Last>> <<Address1>> <<Address 2>> <<City>>, <<State>> <<Zip>>

IN THE UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

If you were a participant in the Supplemental Income Trust Fund

Defined Contribution Retirement Plan (401(k))

at any time from

December 1, 2011 through December 31, 2018 you may benefit

from this class action settlement.

The case is Ybarra and Serrato et al. v. Board of Trustees of Supplemental Income Trust Fund et al., 17-cv-02091-JVS (Ex)

A court authorized this notice. This is not a solicitation from a lawyer.

You are receiving this notice because the records maintained by the Supplemental Income Trust

Fund indicate that you were a participant in the Supplemental Income Trust Fund 401(k) Plan (the

“Plan”) at some time during the period from December 1, 2011 through December 31, 2018 (the

“Class Period”). As such, your rights may be affected by a proposed class action settlement (the

“Settlement”) of the above-captioned federal lawsuit.

Please read the following information carefully to find out what the lawsuit is about, what

the terms of the proposed settlement are, what rights you have to object to the proposed


2


settlement agreement if you disagree with its terms, and what deadlines apply to your right

to object to the proposed settlement.

Former Participant Claim Form

Settlement class members who are former participants and no longer have an active Plan account

must complete a claim form if they want their settlement proceeds to be rolled over into an eligible

retirement plan, instead of receiving their settlement proceeds by check. If settlement proceeds are

received by check, the proceeds are subject to mandatory federal and applicable state withholding

taxes. A Former Participant Claim Form is enclosed with this notice, along with a prepaid

envelope. If you want your settlement proceeds rolled over into an eligible retirement plan, this

form must be completed, signed and mailed with a postmark on or before __________, __ 2019

(i.e., 45 days before the court hearing that will be scheduled to consider if the Settlement should

be given final court approval (the “Fairness Hearing”)) to the settlement administrator at the

following address:

SIP 401K Settlement

c/o Atticus Administration

PO Box 1440

Minneapolis, MN 55440

Former participants who do not complete and timely return this form will receive their

settlement proceeds by check.

BASIC INFORMATION

1. What is this lawsuit about?

A lawsuit was filed in the United States District Court for the Central District of California (the “Court”) against the Plan’s Board of Trustees (“Defendants”). The lawsuit alleges that Defendants violated the federal Employee Retirement Income Security Act of 1974, as amended (“ERISA”), by failing to comply with their fiduciary duties under ERISA to the Plan and participants of the Plan in the management, operation, and administration of the Plan. The individuals who filed the lawsuit (“Plaintiffs”) on behalf of the Plan and its participants claim that Defendants allowed the Plan and its participants to pay excessive recordkeeping fees to the Plan’s recordkeeper, John Hancock Retirement Plan Services.

Defendants deny the allegations in the lawsuit and contend that their conduct was entirely proper. Defendants have asserted, and would assert should the litigation continue, a number of defenses to Plaintiffs’ claims.


3


2. What is a class action lawsuit?

In a class action lawsuit, one or more people called “class representatives” sue on their own behalf and on behalf of other people who have similar claims. One court resolves all the issues for all class members in a single lawsuit. Two participants in the Plan are the class representatives in this lawsuit.

3. Why is there a Settlement?

The parties have agreed to the Settlement after extensive negotiations. By agreeing to the Settlement, the parties avoid the costs and risks of further litigation, and Plaintiffs and the other members of the settlement class will receive compensation and other benefits. Class counsel have conducted a review of the evidence in the case and the potential risks and benefits of continued litigation and believe that the Settlement is in the best interest of the class. The Court has not made any finding that Defendants have done anything wrong or violated any law or regulation.

The Plan has retained an independent fiduciary to evaluate the fairness of the Settlement. The independent fiduciary is Newport Trust Company.

4. How do I get more information about the Settlement?

If you would like to find out more information or have questions regarding the Settlement, you can visit www.SIP401kSettlement.com, call 1-888-233-2228 or write to the settlement administrator, Atticus Administration, at SIP 401K Settlement, c/o Atticus Administration, PO Box 1440, Minneapolis, MN 55440. This notice is only a summary of the lawsuit and the proposed Settlement. It is not a complete description of the lawsuit or the proposed Settlement. You may inspect the pleadings and other papers (including the settlement agreement) that have been filed in this lawsuit at the office of the Clerk of the United States District Court for the Central District of California, Southern Division, which is located at 411 West 4th Street, Room 1053, Santa Ana, California 92701-4516. You may also review documents electronically through Public Access to Court Records, which is available at www.pacer.gov.

If you have questions about this notice or the proposed Settlement, you may contact Class Counsel (see answer to Question 10 for contact information).

Do not contact the court, the Plan, or the Defendants for information about the Settlement. The settlement administrator or Class Counsel can answer any questions you may have about the proposed Settlement.

THE SETTLEMENT BENEFITS – WHAT YOU MAY GET

5. What does the Settlement provide?


4


Plaintiffs and Defendants have agreed to a settlement that involves monetary payments to participants. This and other terms of the Settlement are set forth in the Class Action Settlement Agreement dated March ___, 2019 (“Settlement Agreement”), and described briefly below.

As part of the Settlement, Defendants have agreed to make a one-time payment of $__ million (the “Gross Settlement Amount”). After deduction from the Gross Settlement Amount for any amounts that the Court approves for settlement-related expenses (including a case contribution award to Plaintiffs, attorneys’ fees and expenses to Class Counsel, the cost and expense of sending notices of the proposed Settlement to certain state and federal officials as required under 28 U.S.C. § 1715, the reasonable expenses of the Plan’s recordkeeper incurs in administering the Settlement, and administrative expenses, including taxes and tax-related costs), the remaining amount (known as the “Net Settlement Amount”) will be distributed to class members. Class members are participants and beneficiaries of the Plan from December 1, 2011 through December 31, 2018 (“Class Members”).

As part of the Settlement, Defendants have also agreed to engage an independent consultant to conduct a request for proposals related to Plan administration and recordkeeping services. The Plan fiduciaries will then select a plan service provider based on that process (which may be the Plan’s current service provider or a different provider).

6. If I am entitled to a distribution, how will I receive the Settlement proceeds?

All class members who are current participants in the Plan will receive any settlement proceeds through a deposit into their Plan account. Class Members who have previously received a total distribution of the Plan account (“Former Participants”) must fill out and return a Former Participant Claim Form in order to receive a roll-over distribution for their allocation of the Net Settlement Amount. To the extent feasible and ascertainable, those settlement proceeds will be invested in accordance with each class member’s instructions for investment of new contributions at the time the distribution is made, or, if no such instructions are in effect, to the applicable qualified default investment option. Otherwise Former Participants will receive their distribution by check. Former Participants should contact the settlement administrator at 1-888-233-2228 to ensure the accuracy of their current mailing address.

7. How will I benefit from the Settlement?

You may be entitled to receive a portion of the Net Settlement Amount if you participated in the Plan during the period from December 1, 2011 through December 31, 2018. Only class members are eligible to receive a portion of the Net Settlement Amount. (See the answer to Question 6 above.) Whether or not a person meets this definition will be based on the Plans’ records. You have received this notice because, based on the Plans’ records, you are believed to be a member of the Class.

The settlement administrator will use the Plan of Allocation included in the Settlement Agreement to determine the amount paid to each Class Member. First, the settlement administrator will calculate the sum of each Class Member’s quarter-end account balance for all active accounts (i.e., accounts with a balance greater than $0) that the Class Member had during the Class Period in order to calculate the Class Member’s total balance. The settlement administrator will then divide


5


that Class Member’s total balance by the sum of all other Class Members’ quarter-end account balances for all of their active accounts during the Class Period, with the result representing the “Entitlement Percentage” for that Class Member. Second, the settlement administrator shall multiply each Class Member’s “Entitlement Percentage” by the Net Settlement Amount, with the product representing the amount of the individual Class Member’s settlement award.

8. What are the class representatives receiving from the Settlement?

The class representatives in this case may seek a case contribution award not to exceed $5,000. Additionally, the class representatives will be entitled to receive benefits of the Settlement because they are class members.

THE SETTLEMENT BENEFITS – WHAT YOU GIVE UP

9. What do I give up by participating in the Settlement?

In exchange for Defendants’ payment of the Settlement amount, all class members will release any claims they have related to the lawsuit and be prohibited from bringing or pursuing any other lawsuits or other actions based on such claims.

The Court will also be certifying as a class all persons who were participants in the Plan from December 1, 2011, a date that is six years prior to the date the lawsuit was filed, through December 31, 2018, the date the parties agreed to in the Settlement. The release is set forth in full in the Settlement Agreement, which can be viewed online at www.SIP401kSettlement.com or requested from Class Counsel.

THE LAWYERS REPRESENTING YOU

10. Do I have a lawyer in this case?

Yes. In granting preliminary approval of the proposed Settlement, the Court appointed the Plaintiffs’ lawyers to serve as “Class Counsel” for the settlement class. The attorneys for the settlement class are as follows:

Andrew D. Stolper Jason M. Frank Scott Sims FRANK SIMS & STOLPER LLP 19800 MacArthur Blvd., Suite 855 Irvine, CA 92612

Paul R. WoodFRANKLIN D. AZAR & ASSOCIATES, PC 14426 East Evans Avenue Aurora, CO 80014


6


You will not be charged separately for the work of these lawyers; their compensation will come from the settlement amount and will be determined by the Court. If you want to be represented by a different lawyer in this case, you may hire one at your own expense.

11. How will Class Counsel be paid?

Class Counsel will file a motion with the Court seeking approval of their compensation, which will consist of (a) reasonable attorneys’ fees and (b) reimbursement of the expenses they incurred in prosecuting the case. Class Counsel intend to seek attorneys’ fees equal to 30% of the Gross Settlement Amount plus litigation expenses. The motion and supporting papers will be filed on or before ___________________, 2019. After that date you may review the motion and supporting papers at www.SIP401kSettlement.com. Any attorneys’ fees, expenses, and case contribution award approved by the court, in addition to the cost and expense of sending notices of the proposed Settlement to certain state and federal officials pursuant to 28 U.S.C. § 1715, the reasonable expenses the Plan’s recordkeeper incurs in administering the Settlement, and the fee and the expenses incurred by the settlement administrator in sending this notice and administering the Settlement, will be paid from the Settlement Amount. The costs of an independent fiduciary hired to evaluate the Settlement on behalf of the Plan will also be paid from the Settlement amount.

OBJECTING TO THE SETTLEMENT

12. What does it mean to object?

Objecting is simply telling the Court that you do not like something about the Settlement. Objecting will not have any bearing on your right to receive the benefits of the Settlement if it is approved by the court.

13. What is the procedure for objecting to the Settlement?

Prior to the Fairness Hearing, Class Members will have the opportunity to object to approval of the Settlement. Class Members can object to the Settlement and give reasons why they believe that the Court should not approve it. To object, you must send your objection to the Court, at U.S. District Court for the Central District of California, Southern Division, 411 West 4th Street, Room 1053, Santa Ana, California 92701-4516, and to the parties at the following addresses:

To Class Counsel:

Scott H. Sims FRANK SIMS & STOLPER LLP 19800 MacArthur Blvd. Suite 855 Irvine, CA 92612

To Defendant’s Counsel:

Stephen Dixon


7


MORGAN, LEWIS & BOCKIUS LLP 1111 Pennsylvania Avenue, NW Washington, DC 20004-2541

Objections must be filed with the Court Clerk on or before __________, 2019. Objections filed after that date will not be considered. Any Class Member who fails to submit a timely objection will be deemed to have waived any objection he/she might have, and any untimely objection will be barred absent an order from the Court. Objections must include (1) the case name and number; (2) your full name, current address, telephone number, and signature; (3) a statement that you are a Class Member and an explanation of the basis upon which you claim to be a Class Member; (4) a copy of your Former Participant Claim Form; (5) all grounds for the objection, accompanied by any legal support known to you or your counsel; (6) a statement as to whether you or your counsel intends to personally appear and/or testify at the Fairness Hearing; and (7) a list of any persons you or your counsel may call to testify at the Fairness Hearing in support of your objection.

14. What if I do not want to be part of the lawsuit and want to exclude myself?

The Settlement does not allow any Class Members to exclude themselves from the settlement or decide not to be a part of the Settlement. While some class action settlements allow Class Members to “opt out” of the settlement if they want, because of the nature of the claims Plaintiffs have asserted in this lawsuit, Class Members do not have any right to opt out. Thus, if you dislike some portion of the Settlement, your only recourse is to object to the settlement.

THE COURT’S FAIRNESS HEARING

15. What is the Fairness Hearing?

The Court has granted preliminary approval of the proposed Settlement, finding that it is sufficiently reasonable to warrant such preliminary approval, and has approved delivery of this notice to Class Members. The Settlement will not take effect, however, until it receives final approval from the Court following an opportunity for Class Members to object to the Settlement. Following the deadline for objecting to the Settlement, the Court will hold a Fairness Hearing on _______________, 2019 to consider any objections. The Fairness Hearing will take place at ____a.m/p.m. at the United States District Court for the Central District of California, Southern Division, which is located at 411 West 4th Street, Room 1053, Santa Ana, California 92701-4516. The date and location of the Fairness hearing is subject to change by Order of the Court, which will appear on the Court’s docket for this case.

16. Can I attend the Fairness Hearing?

Yes, anyone can attend the Fairness Hearing. But the Court will only allow those who file and serve a timely written objection in accordance with this notice to speak at the Fairness Hearing either in person or through counsel retained at his or her own expense. Those persons or their attorneys intending to speak at the Fairness Hearing must serve notice of their intention to appear on Class Counsel and Defendants’ counsel (at the addresses set out above) and file it with the Court Clerk by no later than_____________, 2019. The notice must include (1) the name, address, and telephone number of the Class Member, and (2) if applicable, the name, address, and telephone


8


number of that Class Member’s attorney. Anyone who does not timely file and serve a notice of intention to appear in accordance with this paragraph shall not be permitted to speak at the Fairness Hearing, except by Order of the Court for good cause shown. Any comment or objection that is timely filed will be considered by the Court even in the absence of a personal appearance by the Class Member or that Class Member’s counsel.

The Court will consider Class Member objections in deciding whether to grant final approval. Objectors are not required to attend the Fairness Hearing, but if you intend to appear you must state your intention to do so in the manner described above. Class Members who do not comply with these procedures, or who miss the deadline to file an objection, lose the opportunity to have their objection considered by the Court or to appeal from any order or judgment entered by the Court regarding the Settlement.

17. Where can I get more information?

You can visit the website at www.SIP401kSettlement.com where you will find the full Settlement Agreement, the Court’s order granting preliminary approval, this notice, and other relevant pleadings and documents. If you cannot find the information you need on the website, you may also contact Class Counsel for more information. Do not contact the Court to get additional information.

Dated: _____________, 2019 By Order of the United States District Court District Judge James V. Selna


EXHIBIT 4


Supplemental Income Trust Fund 401(k) Settlement c/o Atticus Administration

PO Box 1440 Minneapolis, MN 55440

www.SIP401kSettlement.com 1-888-233-2228

FORMER PARTICIPANT CLAIM FORM

JOHN Q CLASS MEMBER 123 MAIN ST APT 1 ANYTOWN, ST 12345

Claim Number: 1111111

This Former Participant Claim Form is ONLY for Class Members who are Former Participants who want their settlement proceeds rolled over to an eligible retirement plan. Former Participants include the Beneficiaries or Alternate Payees of Former Participants (all of whom will be treated as Former Participants). A Former Participant is a Class Member who no longer had an Active Account in the Supplemental Income 401(k) Plan (the “Plan”) as of December 31, 2018.

This form must be completed, signed, and mailed with a postmark on or before _________, 20__to the Settlement Administrator in order for you to roll over your share of the Settlement proceeds. Former Participants who do not complete and timely return this form will receive their settlement proceeds by check. Settlement proceeds received by check are subject to mandatory federal and applicable state withholding taxes. Please review the instructions below carefully. If you have questions regarding this Claim Form, you may contact the Settlement Administrator as indicated below.

Part 1: Instructions for Completing the Former Participant Claim Form

1. Complete this claim form and keep a copy of all pages of your Former Participant Claim Form, including the first page with the address label, for your records.

2. Mail your completed Former Participant Claim Form postmarked on or before ___________, 2019 to the Settlement Administrator at the below address:

Supplemental Income Trust Fund 401(k) Settlement


c/o Atticus Administration PO Box 1440

Minneapolis, MN 55440

It is your responsibility to ensure that the Settlement Administrator has timely received your Former Participant Claim Form.

3. Other Reminders:

You must provide date of birth, signature, and a completed Substitute IRS Form W-9, which is attached as Part 5 to this form.

If you desire to do a rollover and you return this form but do not complete in full the rollover information in Part 4, below, payment will be made to you by check.

If you change your address after sending in your Former Participant Claim Form, please provide your new address to the Settlement Administrator.

Timing of Payments to Eligible Class Members. Please note that Settlement payments are subject to the Settlement Agreement receiving final court approval. If the Settlement Agreement is approved and if you are entitled to a Settlement payment under the terms of the Settlement, payments may not be distributed until late 2019 due to the need to process and verify information for all Class Members who are entitled to a payment and to compute the amount of each payment. Payments may be further delayed if any appeals are filed.

4. Questions? If you have any questions about this Former Participant Claim Form, please call the Settlement Administrator at 1-888-233-2228. The Settlement Administrator will provide advice regarding completing this form only and will not provide financial, tax, or other advice concerning the Settlement. You therefore may want to consult with your financial or tax advisor. Information about the status of the approval of the Settlement, the Settlement administration, and claim processing is available on the Settlement website, www.SIP401kSettlement.com.

You are eligible to receive a payment from a class action settlement. The court has preliminarily approved the class settlement of Ybarra et al. v. Board of Trustees of Supplemental Income Trust Fund, et al., Case No. 17-cv-02091-JVS (Ex) (C.D. Cal.). That settlement provides allocation of monies to the individual accounts of persons who participated in the Plan at any time between December 1, 2011, and December 31, 2018 (“Class Members”).

Class Members who are entitled to a distribution but who no longer have active accounts as of December 31, 2018 (“Former Participants”) have the option of receiving their allocations in the form of a check or rollover. However, to receive the allocation by rollover Former Participants must mail a valid Former Participant Claim Form postmarked on or before ____________, 2019 to the Settlement Administrator. For more information about the settlement, please visit www.SIP401kSettlement.com or call 1-888-233-2228. If you do not return this form, your payment will be sent to you directly by check.


Part 2: Participant Information

Please complete the information below as it relates to the participant in the Plan. If you are not the Plan participant, but a beneficiary of or alternate payee for the Plan participant, you will need to (1) complete the information below as it relates to the Plan participant (and not yourself), and (2) complete the information in Part 3 below as it relates to you.

First Name M.I. Last Name

Mailing Address

____________________________________ ____________________ ____________ City State Zip Code

Home Phone Work Phone or Cell Phone

- - - - Participant’s Social Security Number Participant’s Date of Birth

Email Address (optional)

Check here if you are a Former Participant but did not receive this Claim Form in the mail.

Part 3: Beneficiary or Alternate Payee Information (If Applicable)

In addition to completing Part 2 above, if you fall into either of the two categories below, you also need to complete the information in this section.

Check here if you are the surviving spouse or other beneficiary for the Former Participant and the Former Participant is deceased. Documentation must be provided showing current authority of the representative to file on behalf of the deceased. Please complete the information below and then continue on to Parts 4 and 5 on the next page.

Check here if you are an alternate payee under a qualified domestic relations order(“QDRO”). The Settlement Administrator may contact you with further instructions. Please complete the information below and then continue on to Parts 4 and 5 on the next page.

First Name M.I. Last Name

Mailing Address


____________________________________ ____________________ ____________ City State Zip Code

Home Phone Work Phone or Cell Phone

- - - - Your Social Security Number Your Date of Birth

Email Address (optional)

Part 4: Rollover Information

Direct Rollover to an Eligible Plan—Check only one box below and complete the Rollover Information Section below:

Government 457(b) 401(a)/401(k) 403(b)

Direct Rollover to a Traditional IRA Direct Rollover to a Roth IRA (subject to ordinary income tax)

Rollover Information:

Company or Trustee’s Name (to whom the check should be made payable)

Company or Trustee’s Mailing Address 1

Company or Trustee’s Mailing Address 2

Company or Trustee’s City, State, and Zip Code

Your Account Number Company or Trustee’s Phone Number

Part 5: Signature, Consent, and Substitute IRS Form W-9

UNDER PENALTIES OF PERJURY UNDER THE LAWS OF THE UNITED STATES OF AMERICA, I CERTIFY THAT ALL OF THE INFORMATION PROVIDED ON THIS FORMER PARTICIPANT CLAIM FORM IS TRUE, CORRECT, AND COMPLETE AND THAT I SIGNED THIS FORMER PARTICIPANT CLAIM FORM.


1. The Social Security number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and

2. I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (“IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and

3. I am a U.S. person (including a U.S. resident alien).

Signature (Required) Date Signed

Note: If you are subject to backup withholding, you must cross out item 2 above. The IRS does not require your consent to any provision of this document other than this Form W-9 certification to avoid backup withholding.

QUESTIONS? VISIT: WWW.SIP401KSETTLEMENT.COM OR CALL 1-888-233-2228 OR CALL CLASS COUNSEL AT 303-757-33--


EXHIBIT 5


Christopher Diffee Senior Attorney +1.215.963.4687 [email protected]

_________, 2019

VIA FEDEX

[Name] [Department] [Address]

Re: Ybarra et al. v. Board of Trustees of the Supplemental Income Trust Fund, et al., No. 8:17-cv-2091 JVS (C.D. Cal.) - Notice Pursuant to 28 U.S.C. § 1715

Dear Sir or Madam:

Defendants Board of Trustees of the Supplemental Income Trust Fund, Richard Barbour, Rome Aloise, Keith Fleming, Carlos Borba, and Clark Ritchey (collectively, “Defendants”) hereby provide this Notice of a Proposed Class Action Settlement in the above-referenced class action pursuant to the Class Action Fairness Act of 2005 (“CAFA”).

In accordance with their obligations under CAFA, Defendants enclose the following:

(1) The Complaint, any materials filed with the Complaint, and any Amended Complaints.

Plaintiffs’ Class Action Complaint and First Amended Complaint can be found on the enclosed CD as “Exhibit 1 – Complaints.”

(2) Notice of any scheduled judicial hearing in the class action.

The Court has not yet scheduled a fairness hearing regarding the settlement. Once the Court sets a hearing date, such date can be found on PACER as follows: (1) enter PACER through https://ecf.cacd.uscourts.gov/cgi-bin/login.pl, (2) click on “Query,” (3) enter the civil case number, 8:17-cv-2091, (4) click on “Run Query,” and (5) click on the link “Docket Report.” The order(s) scheduling the hearing(s) will be found on the docket entry sheet.

(3) Any proposed or final notification to class members.

The proposed Notices of Class Action Settlement as submitted to the Court can be found on the enclosed CD as “Exhibit 2 – Notice of Class Action Settlement.”


Addressee _________, 2019

Page 2

(4) Any proposed or final class action settlement.

The Settlement Agreement entered into by the parties and as submitted to the Court can be found on the enclosed CD as “Exhibit 3 – Settlement Agreement.” There are no other agreements contemporaneously made between the parties.

(5) A final judgment or notice of dismissal.

Final judgment has not yet been entered. Upon entry, a copy of the Final Order and Judgment will be available through PACER and can be accessed online as follows: (1) enter PACER through https://ecf.cacd.uscourts.gov/cgi-bin/login.pl, (2) click on “Query,” (3) enter the civil case number, 8:17-cv-2091, (4) click on “Run Query,” and (5) click on the link “Docket Report.” The order(s) entering final judgment will be found on the docket entry sheet.

(6) Names of class members who reside in each state and the estimated proportionate share of the claims of such members to the entire settlement.

Included with this Notice as Attachment A is a list of the names of class members who reside in your state or U.S. territory. The specific settlement allocation to each Settlement Class Member will be determined by a Settlement Administrator appointed by the Court. As a result, we do not yet know which Settlement Class Members will receive settlement proceeds or how much each Settlement Class Member will receive, and it is not feasible to determine the estimated proportionate share of the claims of the Settlement Class Members who reside in each state (or U.S. territory) to the entire settlement. Included on the enclosed CD as “Exhibit 4 – Estimated Distribution” is a table showing the percentage of the total Settlement Class that the Settlement Class Members from each state or U.S. territory comprise.

(7) Any written judicial opinion relating to the materials described in (3) through (5).

The Court has not yet entered a Preliminary Approval Order or any opinions relating to the materials described in sections (3) through (5). Upon entry, a copy of said order or opinion can be found online through the process described in section (5) above.

Final judgment has also not yet been entered. Upon entry, a copy of said order can also be found online through the process described in section (5) above.

If you have questions about this notice, the lawsuit, or the enclosed materials, please contact me.


Addressee _________, 2019

Page 3

Regards,

/s/ Christopher Diffee

Enclosures


Attachment A – List of Class Members in State

[Names of each class member in state will be inserted here.]


EXHIBIT 6


Christopher Diffee Senior Attorney +1.215.963.4687 [email protected]

Morgan, Lewis & Bockius LLP

1111 Pennsylvania Avenue, NW

Washington, DC 20004-2541 +1.202.739.3000

United States +1.202.739.3001

March __, 2019

VIA FEDEX

The Honorable William Barr United States Attorney General 950 Pennsylvania Avenue, N.W. Washington, DC 20530-0001

Re: Ybarra et al. v. Board of Trustees of the Supplemental Income Trust Fund, et al., No. 8:17-cv-2091 JVS (C.D. Cal.) - Notice Pursuant to 28 U.S.C. § 1715

Dear Sir:

Defendants Board of Trustees of the Supplemental Income Trust Fund, Richard Barbour, Rome Aloise, Keith Fleming, Carlos Borba, and Clark Ritchey (collectively, “Defendants”) hereby provide this Notice of a Proposed Class Action Settlement in the above-referenced class action pursuant to the Class Action Fairness Act of 2005 (“CAFA”).

In accordance with their obligations under CAFA, Defendants enclose the following:

(1) The Complaint, any materials filed with the Complaint, and any Amended Complaints.

Plaintiffs’ Class Action Complaint and First Amended Complaint can be found on the enclosed CD as “Exhibit 1 – Complaints.”

(2) Notice of any scheduled judicial hearing in the class action.

The Court has not yet scheduled a fairness hearing regarding the settlement. Once the Court sets a hearing date, such date can be found on PACER as follows: (1) enter PACER through https://ecf.cacd.uscourts.gov/cgi-bin/login.pl, (2) click on “Query,” (3) enter the civil case number, 8:17-cv-2091, (4) click on “Run Query,” and (5) click on the link “Docket Report.” The order(s) scheduling the hearing(s) will be found on the docket entry


The Honorable William Barr March __, 2019 Page 2

sheet.

(3) Any proposed or final notification to class members.

The proposed Notices of Class Action Settlement as submitted to the Court can be found on the enclosed CD as “Exhibit 2 – Notices of Class Action Settlement.”

(4) Any proposed or final class action settlement.

The Settlement Agreement entered into by the parties and as submitted to the Court can be found on the enclosed CD as “Exhibit 3 – Settlement Agreement.” There are no other agreements contemporaneously made between the parties.

(5) A final judgment or notice of dismissal.

Final judgment has not yet been entered. Upon entry, a copy of the Final Order and Judgment will be available through PACER and can be accessed online as follows: (1) enter PACER through https://ecf.cacd.uscourts.gov/cgi-bin/login.pl, (2) click on “Query,” (3) enter the civil case number, 8:17-cv-2091, (4) click on “Run Query,” and (5) click on the link “Docket Report.” The order(s) entering final judgment will be found on the docket entry sheet.

(6) Names of class members who reside in each state and the estimated proportionate share of the claims of such members to the entire settlement.

The specific settlement allocation to each Settlement Class Member will be determined by a Settlement Administrator appointed by the Court. As a result, we do not yet know which Settlement Class Members will receive settlement proceeds or how much each Settlement Class Member will receive, and it is not feasible to determine the estimated proportionate share of the claims of the Settlement Class Members who reside in each state or U.S. territory to the entire settlement. Included on the enclosed CD as “Exhibit 4 – Estimated Distribution” is a table showing the percentage of the total Settlement Class that the Settlement Class Members from each state or U.S. territory comprise.

In addition, enclosed on the CD as “Exhibit 5 – Complete List of Class Members by State” is a spreadsheet containing the names of Settlement Class Members and the states or U.S. territories in which they reside.

(7) Any written judicial opinion relating to the materials described in (3) through (5).

The Court has not yet entered a Preliminary Approval Order or any opinions relating to the materials described in sections (3) through (5). Upon entry, a copy of said order or opinion can be found online through the process described in section (5) above.


The Honorable William Barr March __, 2019 Page 3

Final judgment has also not yet been entered. Upon entry, a copy of said order can also found online through the process described in section (5) above.

If you have questions about this notice, the lawsuit, or the enclosed materials, please contact me.

Regards,

/s/ Christopher Diffee

Enclosures


EXHIBIT 7


Exhibit 7 - Settlement Press Release

On [DATE], the U.S. District Court for the Central District of California granted final approval to the settlement of a lawsuit brought on behalf of Supplemental Income 401(k) Plan participants against the Plan’s Board of Trustees. The settlement provides for the creation of an approximately $8 million settlement fund for the plaintiffs. It also includes the Board’s agreement to hire an independent consultant to conduct a request for proposal for a service provider to provide administrative and recordkeeping services to the Plan.

In the case, Felipe Ybarra et al v. Board of Trustees of Supplemental Income Trust Fund et al., participants and beneficiaries of the plan, who were represented by law firms Frank Sims & Stolper LLP and Franklin D. Azar & Associates, P.C., sued for alleged breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA).

“We are pleased to have achieved this important settlement on behalf of the participants in the Supplemental Income 401(k) Plan,” said Franklin D. Azar, one of the attorneys for the plaintiffs.

In the lawsuit, plaintiffs claimed that the plan’s fiduciaries breached their duties of loyalty and prudence under ERISA in their selection and retention of mutual fund investments and in the payment of administrative expenses. Defendants have denied plaintiffs’ claims and denied the assertion that any fiduciary breach occurred in the investments, operations, or oversight of the plan.

Frank Sims & Stolper LLP, is an Orange County based law-firm specializing in high-stakes business, class action and white-collar litigation.

Franklin D. Azar & Associates, P.C.is one of the largest plaintiff law firms in Colorado, and has successfully litigated securities, product liability, and wage and hour class actions nationwide.


ANDREW D. STOLPER (205462) FRANK SIMS & STOLPER LLP...he Request for Proposal result in lower...

Documents

Transcript of ANDREW D. STOLPER (205462) FRANK SIMS & STOLPER LLP...he Request for Proposal result in lower...