SETTLEMENT AGREEMENT
This
SETTLEMENT AGREEMENT (“Agreement”) is entered into by and between
the Attorney-General of the State of California and plaintiff/relator Carol
Spooner (“Spooner”), plaintiffs in the People ex rel. Spooner
action; Rob Robinson (“Robinson”) and Aaron Kriegel (“Kriegel”),
plaintiffs in the Robinson action;
cross-complainants Tomas Moran (“Moran”), Pete Bramson (“Bramson”)
and Leslie Cagan (“Cagan”), plaintiffs in the Moran
action; and Dave Adelson (“Adelson”), Sherry Gendleman (“Gendleman”)
and Miguel Maldonado (“Maldanado”), plaintiffs in the Adelson
action (the lawsuits are referred to collectively as the “Actions,”
and the plaintiffs and cross-complainants are referred to collectively as
“Plaintiffs”); and Robert Farrell (“Farrell”), Wendell
Johns (“Johns”), Bertram Lee (“Lee”), John Murdock
(“Murdock”), Valrie Chambers (“Chambers”), Marion
Barry (“Barry”), James Ferguson (“Ferguson”), George
Barnstone (“Barnstone”), Dick Gregory (“Gregory”),
and Krishna Roy (“Roy”), defendants or potential defendants in
the Actions, and nominal defendant Pacifica Foundation (collectively, “Defendants”),
concerning the settlement of all pending actions between the parties.
WHEREAS,
Spooner is the lead plaintiff/relator in the lawsuit entitled People of
the State of California ex rel. Carol Spooner v. Pacifica Foundation,
Case No. 831252-3 (Alameda Co. Superior Ct.) (the “People ex rel. Spooner
Action);
WHEREAS,
Robinson and Kriegel are plaintiffs in the lawsuit entitled Robinson v.
Pacifica Foundation, Case No. 831286-0 (Alameda Co. Superior Ct.) (the
“Robinson Action”), and Moran, Bramson and Cagan are cross-complainants
in a lawsuit entitled Moran v. Pacifica Foundation (Alameda Co. Superior
Ct.) (the “Moran Action”), and Robinson, Kriegel, Moran, Bramson
and Cagan are all members of the current board of directors of Pacifica (collectively,
the “Minority Members”);
WHEREAS,
Adelson, Gendleman and Maldonado are plaintiffs in the lawsuit entitled Adelson
v. Pacifica Foundation, Case No.: 814461-0 (Alameda Co. Superior Ct.)
(the “Adelson Action”);
WHEREAS,
Farrell, Johns, Lee, Murdock, and Chambers are named as defendants in some
or all of the Actions, and Barry, Ferguson, Barnstone, Gregory and Roy are
potential defendants in the Actions and are named as defendants in the proposed
Second Amended Complaint in the People ex rel. Spooner Action, and all these
ten individuals are current members of Pacifica’s board of directors
(collectively, the “Majority Members”), and Pacifica Foundation
is a nominal defendant in all of the Actions;
WHEREAS,
David Acosta (“Acosta”), Mary Frances Berry (“Berry”),
Ken Ford (“Ford”), June Makela (“Makela”), Frank Millspaugh
(“Millspaugh”), Michael Palmer (“Palmer”) and Karolyn
Van Putten (“Van Putten”) are named as defendants in some or all
of the actions, and were former members of Pacifica’s board of directors
(collectively, with the Majority Members, the “Individual Director Defendants”);
WHEREAS,
all parties to this Agreement desire to settle and finally resolve the Actions,
and wish to enter into a settlement agreement which provides for the dismissal
of all of the Actions and the appointment of an interim board of directors
with a mandate to amend Pacifica’s bylaws providing for changes in the
corporate governance of Pacifica Foundation;
NOW,
THEREFORE, in consideration of the following covenants and agreements,
the Parties agree as follows:
1.
Appointment of Interim Board of Directors.
a.
An interim board of directors of Pacifica Foundation (the “Interim
Board”) with a total of fifteen (15) directors shall be appointed in
the following manner:
i.
The Majority Members of the current board as a group shall
select five (5) directors;
ii.
The Minority Members of the current board as a group shall
select five (5) directors; and
iii.
The Chair of each of the five LABs each shall select one
director, for a total of five (5) directors selected by the LAB Chairs.
Appointees cannot be the current LAB Chair as of September 30, 2001,
and must be a member of the LAB as of September 30, 2001.
b.
The group or person that selected any director has the right to appoint
a successor in the event of resignation, death or disability of the director,
and any such action by the selecting group or person shall be effective immediately
upon notice to the chair of the Interim Board.
Any such notice may be given by personal delivery, overnight courier
or facsimile.
c.
All current members of Pacifica’s board of directors who will
not be serving on the Interim Board will resign as directors, effective upon
the convening of the first meeting of the Interim Board.
Within forty-eight hours of the execution of this agreement, each appointing
group or individual shall give notice of the names of their appointees to
the Interim Board. The signatures
to this Agreement of the current members of the board who will not be serving
on the Interim Board shall constitute their notice of resignation.
2.
Term of Interim Board.
The Interim Board will serve for a term of fifteen (15) months from
the date of the first meeting of the Interim Board, at the end of which time
all directors will resign in favor of directors to be elected pursuant to
new bylaws, as described in Paragraphs 3(b), 3(c), 4.
LAB elections pursuant to new bylaws will be held one year from the
date of the first meeting of the Interim Board, and within three months after
the LAB elections the election of a new national board will take place.
An application may be made to the Court to extend the term of the Interim
Board, by two-thirds of the Interim Board, a “balanced majority”
of the Interim Board (i.e, with at
least one person from each of the three groups that designated Interim Board
members (Majority Members, Minority Members and LAB Chairs)), or a majority
of three (3) of the five (5) LABs, on the ground that there is a reasonable
probability that an extension is necessary to complete the revision and adoption
of bylaws and the holding of elections.
3.
Work of the Interim Board.
a.
Oversee the ongoing operations of Pacifica Foundation.
b.
Amendment of Bylaws. The
Interim Board will fully review and revise the Pacifica Foundation bylaws
to conform with legal requirements.
This review will be done in consultation with the LABs and the listening
community in all five station areas. Any bylaws concerning the number or manner
of election of directors and/or LAB members must be approved by majority vote
of three (3) of the five (5) LABs. In
the event that the Interim Board and three (3) of the five (5) LABs cannot
agree on the number or manner of election of directors or LAB members within
the 1-year time limit, or any extensions of that limit, then the dismissals
of the Adelson and/or People
ex rel. Spooner actions may be vacated
against the Foundation for the purposes of obtaining a judicial determination
of the issues raised in those actions concerning the membership of the Foundation
and the validity of the bylaws and Articles relating to the number and election
of directors and/or LAB members, as described in Paragraph 5.
c.
Develop a comprehensive plan for, and oversee, elections of members
of the LABs, pursuant to new bylaws, which elections will be held at the end
of one year following the first meeting at which the Interim Board is seated
and conducts business. The KPFA model will be the starting point for the new
bylaws concerning election of LAB members, and will be modified as needed.
Guidelines will be issued to ensure access to air and to avoid any abuses
that would prevent fair elections.
d.
Address what has been identified as Hot Issues:
(1)
Democracy Now!
(2)
The PNN stringers strike
(3)
Audit and Accounting process
(4)
New Executive Director
(5)
National Program Director
(6)
Hire a comptroller
(7)
Issues related to the Outgoing Executive Director and other outgoing
staff
(8)
Establish a committee to address the WBAI issues
(9)
End the gag rule
(10)
Help drop any non-assault charges against people in NYC and Houston
(related to protests during this struggle)
e.
Address all governance issues, and review and revise policies of the
Foundation.
f.
The Administrative Council (station managers, national program director
and executive director) will give input to the Interim Board. The LABs through
the Council of Chairs will give input to the Interim Board.
g.
The Interim Board shall exercise its powers with the following caveats:
(1)
use restraint in terminating other employees
(2)
use restraint on major contracts or other financial commitments
(3)
there will be no executive committee, only a chair, a treasurer and
a secretary
(4)
there can be no sale or lease of any of the five stations
or licenses.
h.
The following suggestions are made for the Interim Board:
(1)
broadcast Interim Board meetings
(2)
members of the Interim Board will report back to listeners in their
areas
(3)
there will be public comment at the meetings of the Interim Board (including
the possibility for call-ins)
(4)
Interim Board meetings will be rotate amongst the five listening areas
(5)
the Interim Board will issue a public report at least every 2 months
(on air, in print)
(6)
use the web for communication and information sharing
(7)
rebuild relationships with the affiliates
(8)
affirm that station managers are responsible for the physical space
and the air at the five stations, subject to Board policy and FCC requirements
that Pacifica’s board of directors has ultimate responsibility for the
air.
i.
(1) Amendments
to bylaws, to be adopted, must receive the vote of two-thirds of all the members
of the Interim Board present and voting, subject to the provisions of Paragraph
3(b).
(2)
Resolutions concerning election of officers must receive the vote of
a majority of all the members of the Interim Board present and voting.
(3)
Resolutions concerning all other issues may be adopted and made immediately
effective by the vote of a majority of all the members of the Interim Board
present and voting that includes the “aye” vote of at least one
person from each of the three groups that designated Interim Board members
(majority, minority and LAB appointees), or the vote of two-thirds of all
the members of the Interim Board present and voting.
Any such resolution that receives the vote of a majority of all the
members of the Interim Board present and voting, but without securing either
the “aye” vote of at least one person from each of the three groups
that designated Interim Board members or the vote of two-thirds of all the
members of the Interim Board present and voting shall automatically be referred
to Judge Sabraw. Within two (2)
days of the vote on such resolution, letter briefs of no more than three (3)
pages on behalf of the majority who voted to pass the resolution and of the
group for which no members voted to pass the resolution shall be filed with
Judge Sabraw and exchanged among the parties. Within two (2) days thereafter, or as soon thereafter as the
matter may be heard and decided, Judge Sabraw shall either affirm the resolution
as submitted, or reject the resolution and remand the issue to the Interim
Board. In support of their letter
briefs, the parties may submit and exchange documentary evidence, but no other
evidence will be presented or considered by the Judge.
Oral argument will be heard if requested by either side.
4.
Dissolution of Interim Board.
Subject to the provisions of Paragraphs 2, 3(b) and 6, based on revisions
in the bylaws and completion of the LAB elections, as described in Paragraphs
2 and 3(b)-(c), a new board of directors will be elected within fifteen months
of the first meeting of the Interim Board, and the Interim Board will be dissolved.
5.
Settlement of Lawsuits and Judicial Supervision.
Within five days of the execution of this Agreement, the Plaintiffs
and Defendants shall take all necessary actions to resolve the pending lawsuits
in the form of a stipulated judgment, that dismisses all complaints and cross-complaints
against the Individual Director Defendants with prejudice, the causes of action
against Pacifica Foundation in the complaints that seek declaratory relief
or similar relief from the Foundation (such as the Seventh, Eighth and Ninth
Causes of Action in the Second Amended Complaint in People ex rel. Spooner
action and similar causes of action in
the other complaints) without prejudice, and all other causes of action against
Pacifica Foundation in the complaints with prejudice, and that provides that
the dismissals shall be vacated upon motion by any party or director upon
a showing that the Interim Board and three (3) of the five (5) LABs cannot
agree on the number or manner of election of directors or LAB members within
one year from the date of the first meeting of the Interim Board, or any extensions
of that limit, with a request to the Court that any trial of those actions
shall be expedited. The
stipulated judgment shall also provide that the Court maintains jurisdiction
to enforce the terms of this settlement agreement, with any party or director
having standing to apply to the Court for enforcement. In the event that a motion is made to vacate the dismissal
of the People ex rel. Spooner
Action, the current relators to that action will retain relator status and
do not need to reapply to the Attorney General for such status, unless the
Attorney General has withdrawn relator status in writing.
6.
Term of this Agreement.
This Agreement shall expire upon the election of a new board of directors
after enactment of revised bylaws, as described in Paragraph 4, or as ordered
by the Court.
7.
Operative Bylaws.
During the term of this Agreement, its provisions regarding the establishment
of and voting by the Interim Board shall prevail over all bylaws that address
the number and manner of election of directors and voting by the board, which
bylaw provisions shall not be operative, and to this extent this Agreement
shall serve as the board's Action by Unanimous Written Consent pursuant to
Bylaw Section 4.6 and Corp. Code § 5211(b).
8.
Payment. The
insurance company for the Individual Director Defendants shall pay to Pacifica
Foundation on behalf of the Individual Director Defendants the sum of $400,000.
9.
Mutual Releases.
a.
The parties, for themselves and on behalf of their respective heirs,
successors and assigns, fully and forever release and discharge the other
and their respective successors, agents, employees, affiliates, attorneys,
accountants, insurers, partners and joint ventures, and each of them, of and
from any and all liability, claims, demands, damages, punitive damages, choses
in action, disputes, suits, actions, claims for relief and causes of action,
whether known or unknown, arising out of or relating to facts and circumstances
arising out of the issues alleged in the complaints and cross-complaints in
the Actions, whether based in tort, contract, statute, equity, or other legal
theory.
b.
The parties hereto certify that they have read the provisions of California
Civil Code § 1542. The Parties
hereto waive any and all rights under California Civil Code § 1542, which
states:
“A general release
does not extend to claims which the creditor does not know or suspect to exist
in his favor at the time of executing the release, which if known by him must
have materially affected his settlement with the debtor.”
10.
Further Assurances.
The parties agree to perform in good faith such acts and to prepare
and execute such documents and stipulations as are reasonably required to
perform the covenants and satisfy the provisions of this Agreement.
11.
No Admission of Liability.
This Agreement constitutes a settlement and compromise of various disputed
claims and is made solely to avoid expensive and time-consuming litigation.
Neither the offer nor acceptance of the terms and conditions of the
Agreement represent an admission of liability or fault on the part of any
party, but instead represents a resolution of the parties claims deemed by
the parties to be mutually favorable and made by mutual agreement.
12.
Governing Law and Integration.
This is a fully integrated Agreement, made and entered into in the
State of California and shall in all respects be interpreted, enforced and
governed under the laws of California, except that parole evidence shall not
be admissible to interpret, vary or modify any of the terms of this Agreement.
The language of all parts of this Agreement shall in all cases be construed
as a whole, according to its fair meaning, and not strictly for or against
any of the parties. This Agreement
sets forth the entire agreement between the parties with regard to the subject
matter hereof. All agreements,
covenants, representations and warranties, express or implied, oral or written,
of the parties with regard to the subject matter hereof are contained herein,
and the documents referred to herein or implementing the provisions hereof.
No other agreements, covenants, representations or warranties, express
or implied, oral or written, have been made by either party to the other with
respect to the subject matter of the Agreement.
All prior and contemporaneous conversations, negotiations, possible
and alleged agreements and representations, covenants, and warranties with
respect to the subject matter hereof are waived, merged herein and superseded
hereby.
13.
Severability. Should
any covenant, condition or other provision contained herein be held invalid,
void or illegal by any court of competent jurisdiction, it shall be deemed
severable from the remainder of the Agreement and shall in no way affect,
impair or invalidate any other covenant, condition or other provision herein
contained. If such condition,
covenant or other provision shall be deemed invalid due to its scope or breadth,
it shall be deemed valid to the extent of the scope or breadth permitted by
law.
14.
Notices. All
notices, requests, demands and other communications under the Agreement shall
be in writing and by personal delivery or overnight courier, and shall be
deemed having been duly given on the date of receipt (receipt shall also include
communications that are delivered to the designated address and left at the
premises if no one is at the premises).
Notices shall be addressed as follows, or as the parties may subsequently
designate by written notice:
To plaintiffs in the People
ex rel. Spooner action:
Carol Spooner
1136 Wild Rose Drive
Santa Rosa, California 95401
With a copy to:
Bill Lockyer, State Attorney General
Taylor S. Carey, Special Assistant Attorney General
P.O. Box 944255
1300 I Street, 11th Floor
Sacramento, California 94244-2550
Terry Gross, Esq.
Gross & Belsky LLP
One Maritime Plaza, Suite 1040
San Francisco, California 94111
To the cross-complainants
in the Moran action:
Leslie Cagan
550 Fort Washington Avenue #3E
New York, New York 10033
With a copy to:
James Wagstaffe
Timothy Fox
KERR & WAGSTAFFE, LLP
100 Spear Street, Suite 1800
San Francisco, CA 94105
Eugene Majeski
C. Alexander Teu
ROPERS, MAJESKI, KOHN & BENTLEY, P.C.
1001 Marshall Street
Redwood City, CA 94603
To the plaintiffs in the
Adelson action:
Sherry Gendelman
338 Vallejo Street
San Francisco, California 94133
With a copy to:
Dan Siegel
Hunter Pyle
SIEGEL & YEE
499 14th Street, Suite 220
Oakland, CA 94612
To the plaintiffs in the
Robinson action:
Rob Robinson
522 14th Street, S.E.
Washington, D.C. 20003
With a copy to:
Kenneth Frucht
Law Offices of Kenneth Frucht
660 Market Street, Suite 300
San Francisco, CA 94104
To defendants:
Robert E. Darby
Gregory B. Craig
Fulbright & Jaworski LLP
Williams & Connolly LLP
865 South Figueroa Street, 29th Floor
725 Twelfth Street, NW
Los Angeles, California 90017-2576
Washington, DC 20005-5901
15.
Miscellaneous.
a.
This Agreement cannot be amended, altered, modified, waived or superseded,
in the whole or in part, except by a written agreement so stating which is
signed by all parties to this Agreement.
No delay or omissions on the part of any party to this Agreement shall
operate as a waiver of any such right or any other right. Waiver of any one breach of any provision hereof shall not
be deemed to be a waiver of any other breach of the same or any other provision
hereof.
b.
This Agreement shall inure to the benefit of and be binding on each
party, as well as its or her respective successors or assigns.
c.
Each of the parties to this Agreement warrants that it or she has not
assigned or transferred any cause of action, claim for relief, or other matter
released under the Agreement.
d.
Section headings are for convenience only and are not part of the Agreement.
e.
The parties hereby agree that faxed signatures of the parties to this
Agreement shall be as binding and enforceable as original signatures; and
that this Agreement may be executed in multiple counterparts with the counterparts
together being deemed to constitute the complete agreement of the parties.
f.
Each person who executes this Agreement on behalf of any party to the
Agreement represents and warrants that he or she has been duly authorized
by such party to execute the Agreement.
IN
WITNESS WHEREOF, the parties have executed this Agreement in counterparts,
to be effective on the last date executed below.
Dated: December 12, 2001
PLAINTIFFS:
_____________________________
CAROL SPOONER
AARON KRIEGEL
_____________________________
ROB ROBINSON
LESLIE CAGAN
_____________________________
TOMAS MORAN
PETE BRAMSON
_____________________________
DAVE ADELSON
SHERRY GENDLEMAN
_____________________________
MIGUEL
MALDONADO
ATTORNEY-GENERAL OF THE STATE
OF CALIFORNIA
By:____________________________________________
Taylor
Carey, Special Assistant Attorney General
DEFENDANTS:
____________________________
ROBERT FARRELL
BERTRAM LEE
____________________________
JOHN
MURDOCK
VALRIE CHAMBERS
____________________________
WENDELL JOHNS
JAMES FERGUSON
____________________________
GEORGE BARNSTONE
DICK GREGORY
____________________________
______________________________
KRISHNA ROY
MARION BARRY
PACIFICA FOUNDATION
By:_____________________
_______________