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. i. The Majority Members of the current board as a group shall select five (5) directors;
ii. ii. The Minority Members of the current board as a group shall select five (5) directors; and
iii. 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:
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:
550 Fort Washington Avenue #3E
New York, New York 10033
With a copy to:
KERR & WAGSTAFFE, LLP
100 Spear Street, Suite 1800
San Francisco, CA 94105
C. Alexander Teu
ROPERS, MAJESKI, KOHN & BENTLEY, P.C.
1001 Marshall Street
Redwood City, CA 94603
To the plaintiffs in the Adelson action:
338 Vallejo Street
San Francisco, California 94133
With a copy to:
SIEGEL & YEE
499 14th Street, Suite 220
Oakland, CA 94612
To the plaintiffs in the Robinson action:
522 14th Street, S.E.
Washington, D.C. 20003
With a copy to:
Law Offices of Kenneth Frucht
660 Market Street, Suite 300
San Francisco, CA 94104
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
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
CAROL SPOONER AARON KRIEGEL
ROB ROBINSON LESLIE CAGAN
TOMAS MORAN PETE BRAMSON
DAVE ADELSON SHERRY GENDLEMAN
ATTORNEY-GENERAL OF THE STATE OF CALIFORNIA
Taylor Carey, Special Assistant Attorney General
ROBERT FARRELL BERTRAM LEE
JOHN MURDOCK VALRIE CHAMBERS
WENDELL JOHNS JAMES FERGUSON
GEORGE BARNSTONE DICK GREGORY
KRISHNA ROY MARION BARRY