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 refer ("Chambers"), Marion
Barry ("Barry"), James Ferguson ("Ferguson"),
George Barnstone ("Barnstone"), Dick Gregory ("Gregory"),
and Krishna Roy ("Roy"), defendantsred to collectively
as ("Plaintiffs"); and Robert Farrell ("Farrell"),
Wendell Johns ("Johns"), Bertram Lee ("Lee"),
John Murdock ("Murdock"), Valrie Chambers 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
Fulbright & Jaworski LLP
865 South Figueroa Street, 29th Floor
Los Angeles, California 90017-2576
Gregory B. Craig
Williams & Connolly LLP
725 Twelfth Street, NW
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:_____________________
|
