HomeMy WebLinkAbout04-0312IBENNLAWFIRM
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and
P.J. BROWNING, Publisher of THE
SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
VS.
Plaintiffs
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION and
THE BOARD OF GOVERNORS OF
THE DICIC1NSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
COMPLAINT IN EQUITY
UNDER THE SUNSHINE
ACT
103-107 E. MARKET ST.
F~O. BOX 5185
'/ORKi PA 17405-5185
NOTICE.
You have been sued in Court. If you wish to defend against the claims set forth in
the following pages, you must take action within twenty (20) days after this Complaint and
Notice are served, by entering a written appearance personally or by attorney and filing in
writing with the Court your defenses or objections to the claims set forth against you. You
are warned that if you fail to do so the case may proceed without you and a judgment may
be entered against you by the Court without further notice for any money claimed in the
Complaint or for any other claim or relief requested by the Plaintiff. You may lose money
or property or other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF
YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR
TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU
CAN GET LEGAL HELP.
Cumberland County Bar Association
2 Liberty Avenue
Carlisle, Pennsylvania 17401
(717) 249-3166
~BEN #ILAWFIRM
103-107 E, MARKET ST,
RO. BOX 5185
YORK, PA 17405-5185
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and
P.J. BROWNING, Publisher of THE
SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
VS.
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
COMPLAINT IN EQUITY
UNDER THE SUNSHINE
ACT
AVISO
USTED HA SI_DO DEMANDADO EN LA CORTE. Si usted desea defenderse de
las quejas expuestas en las paginas siguientes, debe romar action dentro de veinte (20) dias a
partir de la fencha en que recibio la demanda y el aviso. Usted debe presentar
comparecencia esfita en persona o pot abogado y presentar en la Corte por escrito sus
defensas o sus objeciones a las demandas en su contra.
Se le avisa que si no se defiende, el caso puede proceder sin ustcd y la Corte puede
decidir en su contra sin mas aviso o notification pot cualquier dinero reclamado en la
demanda o pot cualquier otra queja o compensacion reclamados pot el Demandante.
USTED PUEDE PERDER DINERO, O PROPIEDADES U OTROS DERECHOS
1MPORTANTES PARA USTED,
LLEVE ESTA DEMANDA A UN ABOGADO IMMEDIATAMENTE. SI
USTED NO TIENE O NO CONOCE UN ABOGADO, VAYA O LLAME A LA
OFICINA EN LA DIRECCION ESCRITA ABA JO PARA AVERIGUAR DONDE
PUEDE OBTENER ASISTENCIA LEGAL.
Cumberland County Bar Association
2 Liberty Avenue
Carlisle, Pennsylvania 17401
(717) 249-3166
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
~IBENNLAWFIRM
103-107 E. MARKET ST
P.O. BOX 5185
YORK, PA 17405-5185
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and
P.J. BROWNING, Publisher of THE
SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
VS.
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
COMPLAINT
AND NOW, this ~ ~day of January, 2004, come Plaintiffs, Lee Publications, Inc.,
Publisher of The Sentinel, and P.J. Browning, Publisher of The Sentinel, by and through their
attorneys, the BENNLAWFIRM, and The Patriot-News and Cate'Barron, by and through their
attorneys, the law firm of NAUMAN, SMITH, SHISSLER & HALL, LLP, and file the
within Complaint, and aver as follows:
1. Plaintiff, Lee Publications, Inc., is a Delaware Corporation and Publisher of The
Sentinel, a newspaper of general circulation in and around Cumberland County,
Pennsylvania, with an address at 457 E. North Street, P.O. Box 130, Carlisle,
Cumberland County, Pennsylvania 17013.
Plaintiff, P.J. Browning, is an adult individual, Publisher of The Sentinel, with a
business address at 457 E. North Street, P.O. Box 130, Carlisle, Cumberland County,
Pennsylvania 17013.
The Patriot-News ("Patriot-News") is a newspaper of general circulation in and around
Dauphin County, Pennsylvania, with its principal offices located at 812 Market Street,
Harrisburg, Dauphin County, Pennsylvania 17101.
Cate Barton ("Barron") is the Managing Editor of The Patriot-News and an adult
individual, a citizen of the Commonwealth of Pennsylvania, with a business address of
812 Market Street, Harrisburg, Dauphin County, Pennsylvania 17101.
Defendant, The Dickinson School of Law of The Pennsylvania State University
Association (the "Association"), is on information and belief a non-profit Corporation
organized and existing under the laws of the Commonwealth of Pennsylvania with its
registered office located at 150 South College Street, Carlisle, Cumberland County,
Pennsylvania 17013.
Defendant, the Board of Governors of The Dickinson School of Law of The
Pennsylvania State University Association (the "Board"), is on information and belief
the duly appointed governing body of the Association with an address at 150 South
College Street, Carlisle, Cumberland County, Pennsylvania 17013.
The Defendants are "agencies" as that term is defined and used under the Sunshine Act
of the Commonwealth of Pennsylvania, P.L. 729, No. 93, §1 et. seq., 65 Pa. C.S.A. §
701,703.
103-107 E. MARKET ST.
P.O. BOX 5185
YORK, PA 17405-5185
2
103-107 E MARKET ST
PO BOX 5185
YORK, PA 17405-5185
10.
11.
12.
13.
This Honorable Court has original jurisdiction over this matter pursuant to 65 Pa.
C.S.A. § 715.
The Dickinson School of Law merged into The Pennsylvania State University ("Penn
State" herein) pursuant to an Affiliation Agreement and Plan of Merger (the
"Agreement") dated January I7, 1997, effective July 1, 2000. A true and correct copy of
the Agreement is attached hereto and made a part hereof as Exhibit "A" and
incorporated herein by reference as if fully set forth.
The Cumberland County Court of Common Pleas authorized the merger between The
Dickinson School of Law and The Pennsylvania State University by Court Order dated
May 24, 2000. A true and correct copy of the Order is attached hereto and made a part
hereof as Exhibit "B" and incorporated herein by reference as if fully set forth.
The Dickinson School of Law became known as The Dickinson School of Law of The
Pennsylvania State University on the effective date of the merger, July 1, 2000.
The Dickinson School of Law of The Pennsylvania State University (the "Law School")
is a duly accredited law school in the Commonwealth of Pennsylvania and is, on
information and belief, an academic nnit of The Pennsylvania State University, under
and subject to ultimate governance by The Pennsylvania State University's Board of
Trustees.
Defendant, The Dickinson School of Law of The Pennsylvania State University
Association, was created as of the date of the merger in order to provide counsel and
guidance to The Pennsylvania State University with respect to the academic mission of
the Law School and to enforce Penn State's compliance with certain provisions of the
3
103-107 E MARKET ST.
P.O, BOX 5185
YORK, PA 17405-5185
14.
15.
16.
17.
18.
Merger Agreement. A true and correct copy of the Articles of Incorporation of the
Association is attached hereto and made a part hereof as Exhibit "C" and incorporated
herein by reference as if fully set forth,
Among its exclusive powers, the Association can confer honorary degrees (in
consultation with Penn State's President), control the primary location and campus of
the Law School by vetoing any proposed move of the Law School from Carlisle,
Pennsylvania and enforce Penn State's continuing covenants under and pursuant to the
Agreement by specific performance and other methods. See Sections 4.06 and 8.09 of
the Agreement attached hereto and made a part hereof as Exhibit "A".
The Agreement provided that the Association was to be governed by a self-perpetuating
Board of Governors, the Defendant Board herein. See Section 1.02(E) of the Agreement
attached hereto and made a part hereof as Exhibit "A".
Section 4.06 of the Agreement provides that the primary location and campus of the
School shall be Carlisle, Pennsylvania "unless otherwise agreed by .... the
Association's Board of Governors." (emphasis added). See Section 4.06 on page 22 of
the Agreement attached hereto and made a part hereof as Exhibit "A".
The covenants contained in Section 4 of the Agreement, including, without limitation,
Section 4.06, survived the merger and remain in full fome and effect. See Section 8.01
on page 39 of the Agreement attached hereto and made a part hereof as Exhibit "A".
On information and belief, the Board conducted meetings, entertained discussion among
its members and heard presentations on November 21, 2003 and November 22, 2003
relative to the issues of the renovation or rebuilding and expansion of the cttrrent Law
4
~BENNLAWFIRM
19.
20.
21.
22.
23.
24.
School facility and the relocation of the Law School's primary location and campus
from Carlisle, Pennsylvania to University Park, Pennsylvania.
The meetings held in Carlisle, Pennsylvania on November 21, 2003 and November 22,
2003 were closed to the public.
The Board is, on information and belief, scheduled to meet again in Carlisle,
Pennsylvania on February 7, 2004 (the "Meeting").
It is believed and therefore averred that one of the purposes of the Meeting is to further
discuss and deliberate relative to a relocation of the Law School's primary location and
campus from Carlisle, Pennsylvania to University Park, Pennsylvania.
In adopting the Sunshine Act, the General Assembly stated that:
The General Assembly finds that the right of the public to be present
at all meetings of agencies and to witness the deliberation, policy
formulation and decisionmaking of agencies is vital to the
enhancement and proper functioning of the democratic process
and that secrecy in public affairs undermines the faith of the
public in government and the public's effectiveness in
fulfilling its role in a democratic society. 65 Pa. C.S.A. §702.
The Sunshine Act requires that "[o]fficial action and deliberations by a quorum of the
members of an agency shall take place at a meeting open to the public... "65 Pa.
C.S.A. §704.
The Sunshine Act vests in this Honorable Court the power to enforce the provisions of
the Act by injunction or other remedy deemed appropriate by the Court. 65 Pa. C.S.A.
§715.
103-107 E MARKET ST,
PO BOX 5185
YORK, PA 17405-5185
?~BENNI_^WFIRM
25.
26.
27.
28.
29.
The Association and the Board through which it acts are "agencies" as that term is
defined and used under the Stmshine Act and are subject to the provisions of the
Sunshine Act.
The Sunshine Act allows an "agency" to close certain types of meetings to the public.
The meetings allowed to be closed include "executive session" meetings conducted for
one or more of six limited purposes specified in the Sunshine Act; "conferences", but
only where deliberation of agency business will not occur; and "working sessions"
involving Boards of Auditors. 65 Pa. C.S.A. {}707, 708.
It is believed and therefore averred that one of the purposes of the Meeting to be held on
February 7, 2004 is to discuss and deliberate relative to a relocation of the Law School's
primary location and campus from Carlisle, Pennsylvania to University Park,
Pennsylvania.
The Association, acting through the Board, has the sole and exclusive authority, under
and pursuant to Sections 4.06 and 8.09 of the Agreement, to authorize or block a
relocation of the Law School's primary location and campus from Carlisle,
Pennsylvania. See Section 4.06 on page 22 and Section 8.09 on page 42 of the
Agreement attached hereto and made a part hereof as Exhibit "A".
Pursuant to the Sunshine Act, it is averred that any official action and deliberations by a
quorum of the Board shall take place at a meeting open to the public. 65 Pa. C.S.A.
§704.
103-107 E. MARKET ST,
RO. BOX 5185
YORK, PA 17405-5185
6
?~IBENNLAWFIRM
103-107 E MARKET ST,
90. BOX 5185
r'ORK, PA 17405-5185
30. It is believed and therefore averred that the Association, acting through a quorum of the
Board, will be tmdertaking official action and/or deliberations relative to the issue of
relocation of the Law School's primary location and campus on February 7, 2004.
31. It is believed and therefore averred that none of the exceptions to the general rule of
open meetings contained in the Sunshine Act and referenced in Paragraph 26 herein
apply to the Meeting scheduled to occur on February 7, 2004.
32. Plaintiffs have requested that Defendants hold the scheduled Meetings in public.
33. The requests of Plaintiffs have been denied by Defendants.
34. It is believed and therefore averred that the Association and the Board will violate the
Sunshine Act by closing the Meeting scheduled for February 7, 2004 to the public.
35. To the extent that the Meeting is closed to the public, the public will be harmed by a
denial of the opportunity to witness the deliberations, and/or decisions being rnade,
and/or the official action being taken, by the Association and the Board.
36. The harm referenced in Paragraph 35 herein cannot be compensated by damages.
37. It is believed and therefore averred that immediate and irreparable harm will result to
the public in denying the public access to the Meeting scheduled for February 7, 2004.
38. Based on the foregoing, it is averred that the Plaintiffs' right to relief is clear.
39. This Honorable Court has the authority to enfome the Sunshine Act by injunction or
other remedy deemed appropriate by this Court. 65 Pa. C.S.A. §715.
WHEREFORE, Plaintiffs respectfully request this Honorable Court to:
a. declare and order that the Meeting to be held by the Board of Governors of The
Dickinson School of Law of The Pennsylvania State University Association on
February 7, 2004, and all future meetings of the Board of Governors of The
Dickinson School of Law of The Pennsylvania State University Association,
shall be open to the public; or, in the alternative,
to enjoin the Association and the Board from conducting the Meeting on
February 7, 2004 until such time as proper public notice can be given pursuant
to the requirements of the Sunshine Act and the Meeting rescheduled as a public
meeting in accordance with the said Act.
In the event that a quorum of the Board conducts a closed meeting on February
7, 2004, or on any other date, in order to take official action and/or conduct
deliberations relative to the issue of relocation of the Law School, Plaintiffs
respectfully request that this Honorable Court enjoin the Association from
taking any official action or making any recommendation for official action on
the issue of relocation of the Law School until a judicial determination of the
legality of the meeting at which any such adopted action or recommendation
was reached, and to make a finding that any or all official action taken at the
meeting, or any or all deliberations conducted at the meeting, were invalid.
Plaintiffs further requests that this Honorable Court award Plaintiffs reasonable
attorneys' fees and costs of litigation, along with any other relief this Court
deems just and proper.
103-107 E, MARKET ST.
P.O. BOX 5185
YORK, PA 17405-5185
~BI~NNLAWFIRM
Respectfully submitted,
BENNLAWFIRM
'les S. Benn, ~squire
Attomey I.D. #16284
Terence J. Bama, Esquire
Attorney I.D. #74410
Peter R. Wilson, Esquire
Attorney I.D. #87655
P.O. Box 5185
103 East Market Street
York, Pennsylvania 17405~5185
(717) 852-7020
Counsel to Lee Publications, Inc. and
P.J. Browning
Respectfully submitted,
NAUMAN, SMITH, SHISSLER & HALL, LLP
Craig J~Staudenmaier, Esquire
Attorney I.D. #34996
200 North Third Street
P.O. Box 840
Harrisburg, Permsylvania 17108-0840
(717) 236-3010
Counsel for The Patriot-News and
Cate Ban'on
103-107 E. MARKET ST.
RO. BOX 5185
YORK, PA 17405-5185
9
VERIFICATION
I, TERENCE J. BARNA, ESQUIRE, of the BENN LAW FIRM, attorneys for Lee
Publications, Inc. and P.J. Browning, in the foregoing proceeding, make this verification on
behalf of Lee Publications, Inc. and P,J. Browning and do state that as an attorney for Lee
Publications, Inc. and P.J. Browning, I am authorized to make this Verification on behalf of
Lee Publications, Inc. and P.J. Browning, and further state that, based on information
provided to me by Lee Publications, Inc. and P.J. Browning, the facts set forth in the
foregoing Complaint are tree and correct to the best of my knowledge, information and
belief. I understand that my statements are made subject to 18 Pa. C.S. § 4904 providing for
criminal penalties for unsworn falsification to authorities.
Terence J. Bbfiaa, Esquire
Date: January 23, 2004
VERIFICATIO}~
1, CRAIG L STAUDENMAI~R, ESQUIRE, of the firm of Nauman, Smith, Shissler &
Hall, LLP, attorneys for The Patriot-News Company and Cate Barren, in the foregoing
p~ce~ding, make this v~ification on behalf of The Patriot-News Company and Cate Barren and
do state that as attorney for The Patriot. News Company :md Cat~ Barren, I am authorized to
make this Verification on behalf of Tbe Patriot-News Company and Cate Barren, and further
state that, based on information provided to me by The Patriot-News Company and Cate Barton,
the facts set forth in lhe foregoing Complaint are true and correct to th~ best of my knowledge,
information and belief. I understand that my statements are made subject to 18 Pa. C.S. § 4904
providing for criminal p~nalties for unswom falsification to authorities.
Craig . a mmai r, l .muire
Date: January 23, 2004
~BENNLAWFIRM
103 107 E, MARKET ST,
P.O, BOX 5185
YORK, PA 17405-5185
EXHIBIT "A'
~FFILIATION AGREE1MENT ~ AGREEMENT AND PLAN OF MERGER
dated as of January 17, 1997
by and between
THE DICKINSON SCHOOL OF LAW
and
THE PENNSYLVANIA STATE UNIVERSITY
TABLE OF CONTENTS
RECITALS ......................... !
TH~ AFFILIATION; THE MERGE~; EFFECTS OF THE AFFILIATION
AND OF THE M~RGER · ........... 1
1.01. The Affiliation ...... 1
1.02. The Merger ...... 3
II.
ACTIONS PRECLUDED PENDING AFFILIATION;
PRECLUDED PENDING I~ERGER
2.01.
2.02.
2.03.
2.04.
2.05.
2.06.
2.07.
2.08.
2.09.
2.10.
2.i1. A~reements
ACTIONS
5
Ordinary Course ...... 5
Compensation; Employment A=ree~e~ts: Etc. 5
Benefit Plans ............. 5
Accruisltions and'Dispositions .... 6
Amendment ....... 6
Single Member . , 6
Accountin~ Methods 6
Adverse Actions . 7
Indebtedness - - ~ · · 7
Non-Solicitation 7
· 7
III. REPRESENTATIONS AND wAR/~tNTIES ............ 7
3.01. Disclosure Letters ............. 7
3.02. Standard ............... ~ . . 7
' 3.03. Representations and Warranties ........ 8
ADDITIONAL COVENANTS
4.01.
4.02.
4.03.
4.04.
4.05~
4.06.
4.07.
4.08.
4.09.
4.10.
4.11.
4.12.
4.13.
4.14,
4.15.
4.16,
4.17,
~., ............ 19
ReasOnable Best Effort .... ......... 19
'Press Releases and Public Announcements . . .
Access: Information - ,' ............ 19
Other Affiliation or Merger Proposals . ..... 20
Recrulatory'and AccreditationADDrovals,
Acquiescence and Related ADDlications ...... 21
Dickinson Name, Location, A~reement to
Encase in J~D. Based Legal Education;
Exclusivity; Alumni Status; Degrees · . . . . 22
Limitations on Dickinson Class Size ...... 23
ODeratin~ Buduet ..... ......... 24
Maintenance, Capital Improvements and Technoloc~v'
Commitments ....... 26
Dickinson Endowment .......... 26
Student Tuition Subsidy Policy ...... 28
Affirmation of Dickinson Rural and Public
Interest Law Commitment; Loan Repayment Fund 29
Board Matters ........... 29
Dickinson Dean ............... 32
Dickinson Faculty ........ 33
Dickinson Non-Faculty ~m~loyees . . ~ ..... 34
Benefit Plans ............. 35
4.18. Indemnification of Dickinson Trustees;
Covenant Not to Sue Penn State and Class III
Trustees .......... 36
4.19. Notification of C~rtain Matters . . 37
CONDITIONS TO COMPLETION OF ThE AFFILIATION 37
5.01. Regulatory and Acquiescence Approvals 37
5.02. No In4unction, Etc ..... 37
5.03. Representations, Warranties and Covenants of
Penn State ..... 37
5.04. Representations, War~antles an~ Covenants of
Dickinson ....... 38
5.05. Opinions ............... 38
VI. CONDITIONS TO COMPLETION OF MERGER .......
VII.
38
7.01. .Termination ....
7.02. Effect of Termination and Abandonment
VIII.O~HER
8.01.
8.02.
8.03.
8.04.
8.05.
8.06.
8.07.
8.08.
8.09.
8.10.
8.11.
39
...... 39
A
B
C
D
E
F
MATTERS ............
Survival .
Waiver: Amendment . . . .......
Counterparts ............
Governing Law ............
Expenses ....... ~ ..... .
39
..... 39
..... 40.
..... 40
..... 40
4O
Confidentiality ........... 40
Notices ..................... 40
Definitions ...... 41
Specific Performance ........... 42
Entire Understandin=: Third Party Beneficiaries . 42
Headings ................. 42
LIST OF EXHIBITS
Form of Amended and Restated Dickinson Articles of
Incorporation as of the Affiliation Date
Form of Amended and Restated Dickinson Bylaws as of the
Affiliation Date
Form of Articles of Merger
Form of Articles of Incorporation of The Dickinson School of
Law of The Pennsylvania State University Association
Form of Bylaws of The Dickinson School of Law of The
Pennsylvania State University Association
Forms of Legal Opinions
List of The Pennsylvania State University Capital
Improvements, Major Maintenance, and Technolog/; Commitments
(ii)
AFFILIATION AGREEMENT AND AGREEMENT AND PLAN OF MERGER
THIS AFFILIATION AGREEMENT AND AGREEMENT AND PLAN 0FMERGER
is dated as of this 17th day of January, 1997 (this "Plan") and
is by and between THE DICKINSON SCHOOL OF LAW ("Dickinson") and
THE PENNSYLVANIA STATE UNIVERSITY ("Penn State").
RECITALS:
A. Dickinson. Dickinson is an institution of higher
education dulyorganized and existing and in good standing under
the non-profit corporation laws of the Commonwealth of
Pennsylvania. Dickinson's principal place for conducting its
affairs is located in Carlisle, Pennsylvania. Dickinson has no
shares Of capital stock authorized, issued or outstanding. It
has no members, and its Board of Trustees is self-perpetuating.
B. Penn State. Penn State is an institution Of higher
education du%y organized and existing in good standing under the
laws of the Commonwealth of Pennsylvania. Penn State's principal
place for conducting its affairs is located in Centre County,
Pennsylvania. Penn State'has no shares of capital stock
authorized, issued or outstanding. It has no members, and its
Board of Trustees is elected pursuant to various acts of the
General Assembly of the Commonwealth of Pennsylvania.
'C. Board ApDroval. The Board of Trustees of each of
Dickinson and Penn State has (i) determined that this Plan, the
Affiliation, the Mer~er, and the other transactions contemplated
hereby are consistent with, and in furtherance of, their
respective strategies, and (ii) approved this Plan by the
requisite vote', at meetings of each of such Boards of Trustees,
duly noticed and held at which the requisite quorum for the
transaction of business was present in person.'
NOW, THEREFORE, in consideration of their mutual promises
and obligations, Penn State and Dickinson, intending to be
legally bound, hereby approve, adopt and make this Plan .and
prescribe the terms and conditions hereof and the manner and
basis of carrying it into'effect, which shall be as follows:
T~ AFFILIATION; ITHE-- MERGER; EFFECTS OF TaU AFFILIATION AND'
OF 'rn~MERGER.
1.01. The Affiliation. Effective as of the Closing of the
Affiliation (as defined in Section 1.01(C)):
(A) Conversion. Dickinson shall (i) amend its
articles of incorporation to change, its .structure from a non-
stock, non-membership, non-profit Pennsylvania corporation to
non~stock, single member~ non-profit Pennsylvania corporation,
(ii) irrevocably designate. Penn State as such single member, and
(iii) change its corporate name to "The Dickinson School of Law
of The Pennsylvania State University."
(B) Single Membership. Penn State shall accept such
single membership irrevocably, and agree not to sell, transfer,
exchange or otherwise, relinquish or terminate-its membership
prior to the Merger. Penn State shall not, by reason of such
membership, assume any liabilities or obligations of Dickinson.
(C) Closin~ of Affiliation. Subject to the provisions
of Article VII relating to termination of this Plan, the closing
of the transaction whereby Penn~ State shall become Dickinson's
single member (the ,Affiliation") shall take place on a date to
be specified by the parties, which date shall be the later of
(i) the first day which is at least two business days after
satisfaction or waiver of the conditions set forth in Article V,
(ii) July l, 1997,, or (iii) such other date as shall be agreed
upon in writing by ghe parties hereto. The Closing of the
Affiliation shall be held at such time and location as tke
parties may agree to in writing. The date of the closin? of the
Affiliation Shall be referred to in this Plan as the "Affiliation
Date."
(D) Faculty and Non-Faculty Staff. At the closing of
the Affiiiation (i) in accordance with Section 4.15, Dickinson's
faculty, including Dickinson's Dean, shall be offered e-~ployment
with Penn State.at their then current rank, tenure status and
salaries and with Penn State's then current benefits, a_nd (ii) in
accordance with Section 4.16, certain of Dickinson's non-faculty
employees shall be offered employment with Penn State at their
then current salaries and with Penn State's then current
benefits. During the period beginning with the Affiliation Date.
and ending on the Merger Date, all such personnel shat! be made
available to Dickinson ag Dickinson's Carlisle, Pennsylvania
campus, by Penn State at Penn State's cost for suck personnel
(including Penn State's cost for the benefits provided to such
~personnel) which cost shall not nsaterial!y exceed Dickinson's
then current cost (plus the cost to Penn State Of incremental
increases in compensation plus incremental benefit cost), without
mark-up. Except as otherwise provided in this Plan, all such
Dickinson employees hired by Penn State, shall, upon hire, be
subject to all applicable Penn State policies, procedures, rules
and practices, then in effect and as the sa/ne may be modified
from time to time.
(E) Dickinson and Penn State Board Seats. From the
Affiliation Date through the Merger Date (as defined in
Section 1.02) as more fully set forth in Section 4.13,
(i) Dickinson shall cause the Senior Vice President for Finance
and Business/Treasurer, the Executive Vice President and Provost
and the Chairperson of the Board of Trustees of Penn 'State to be
e%ected as Class III Trust~es of Dickinson, (ii) Penn State shall
invite and permit five members of Dickinson's Board of Trustees
to attend public meetings of Penn State's Board of Trustees and
~ ~/~?04~/02722.0oI 2
Committees of the Board of Trustees, (iii) Penn State shall cause
one member of Dickinson's Board of Trustees to sit as a Trustee
Emeritus of Penn State's Board of Trustees as more fully set
forth in Section 4.13(B) (2).
(F) Dean. In accordance with Section 4.14, at the
Affiliation Date, Penn State's Board of Trustees shall elect or
appoint Peter G. Glenn as Dean of.Dickinson. During the period
between the Affiliation Date and the Merger Date (i) Penn State
shall not terminate Dean Glenn without the prior consent of
Dickinson's Board of Trustees, (ii) Dickinson shall not terminate
Dean Glenn without the prior consent of Penn State's President,
nad (iii) the Dean shall report at least annually to Penn State's
Board on the state of the law school.
(G) Articles of Incorporation and Bylaws. The
Articles of Incorporation and the Bylaws of Dickinson, effective
as of the Affiliation Date, shall be azaended and restated in
substantially the form of Articles of Incorporation and the form
of Bylaws, attached to the Plan as Exhibit "A" and Exhibit ~B,"
respectively, with only such changes, if any, as may be required
by the Department of Education Of the Commonwealth of
Perinsylvania to secure the approval of the Department of
Education of such Articles and Bylaws. By execution of this
Plan, Penn State shall be deemed to have consented to, aPProved
and adopted such Articles of Incorporation and Bylaws effective
as of the Affiliation Date.
1.02. The Mercer. At the Effective Time of the.Merger (as
defined in Section 1.02{B)):
(A) The Continuing Corporation. Dickinson shall merge
with and into Penn State, subject tO Penn State's Charter,'
Bylaws, Standing Orders, Policies and Procedures then in effect
as the same may be amended from 'time to time (the "Merger"),. the
separate existence of Dickinson' shall cease, Perin'State shall
survive and continue to exist as a Pennsylvania corporation and
Penn State's Board of Tr%istees shall continue unchanged (the
"Merger") (Penn State is sometimes referred to in this Plan as
the "Continuing Corporation" after the Merger Date). The college
or other unit of Penn State which engages in providing the J~D.
and/or LL.M degree based legal education required to be provided
in Section 4.06(A) of this Plan is referred to in this Plan after
the Merger.Date as "Dickinson").
(B) Effective Time of the Merqer. Subject to the
provisions of this Plan, articles of merger (the "Articles of
Merger") shall be duly (i) adopted by penn State's Board of
Trustees and Dickinson's Board of Trustees, (ii) executed and
acknowledged by Dickinson and Penn State, (iii) approved by'Penn
State as Dickinson's single member, and (iv) filed with the
office of the. Secretary Of the Commonwealth of Pennsylvania, on
the Merger Date (as defined in section 1.02(c)). The Merger
shall become effective upon the filing of the Articles of Merger
O R~G/37048/0 ~722.001 3
with the Secretary of the Commonwealth of Pennsylvania or at such
time thereafter as is provided in the Articles of Merger (the
',Effective Time"). The Articles of Merger shall be substantially
in the form of form attached to the Plan as Exhibit "C."
(C) Closing. The closing of the Merger (the "Merger
Closing") will take place on the later of (i) a date to be
specified by the parties, which shall be the first day which is
at least two business days after satisfaction or waiver (subject
to applicable law) of the conditions set forth in Article VI (the
"Merger Date"), (ii) guly 1, 2000, or (iii) such other time or
date as is agreed to in writing by the parties hereto. The
Merger Closing shall be held at such time and location as may be '
agreed ~o in writing by the parties hereto.
(D) Charter and Bylaws. The Cha~ter and Bylaws of the
Continuing Corporation shall be those of Penn State, as in effect
irmnediately prior to the Effective Time.
(E) The Dickinson School of Law of The Pennsylvania
State University Association. Effective as of the Merger Date,
the Board'of Trustees of Dickinson shall cause to be formed a. new
non-stock,, non-membership Pennsylvania non-profit corporation to
be named' "The Dickinson School of Law of The Pennsylvania State
University Association" (the "Association,). The term of its
existence shall be perpetual. In accordance with
Section 4.13(C), the Association shall be governed by a self-
perpetuatingBoard of Governors. Such' Board of Governors shall
provide counsel and guidance to Penn State With respect to the
academic mission of Ehe law school and have the responsibilities
and duties set forth in Section 4.13(C) and Section 8.09 of this
Plan. The Dean of The Dickinson School of Law of the
Pennsylvania State University shall serve as liaison between Penn
State and the Association and el=her the Dean (or in his absence
the Chairperson of the Board of Trustees of Penn State, the
· President of Penn State or any Executive or Senior Vice President
of Penn State) shall attend all meetings of =he Association's
Board on an ex-officio nonvoting basis. The form of Articles of
the Association is set forth as Exhibit "D" of this Plan. The
form.of Bylaws of the Association is set forth as Exhibit "E" of
this Plan.
(F) Penn State Board Seats. On and after the Merger
Date, Penn State'shall, in accordance with Section 4.13(B) (2),
(i) cause a member of the Board of Governors of the Association
to serve as Trustee Emeritus of Penn State, and (ii) continue to
Use its reasonable best efforts to secure full voting membership
on Penn State's Board of Trustees for a member of the Board of
Governors of the Association, in accordance with
Section 4.13(B) (3).
II. ACTIONS PRECLUDED PENDING AFFILIATION: ACTIONS PRECLUDED
PENDING ~ERGER.
Except as expressly contemplated in this Plan, (i)'without
the prior written consent of Penn State (which consent shall not
be unreasonably withheld or delayed) Dickinson, as applicable,
will not, and (ii) without the prior written consent of Dickinson
(which consent shall not be unreasonably witkheldor delayed)
Penn State, as apPlicable, will not:
2.01. Ordinary Course. From the date of this Plan until
the Affiliation Date and from the Affiliation Date until the
Merger Date, conduct its affairs other than in the ordinary and
usual course or fail to'use reasonable efforts to Preserve intact
its administration, faculty, and organization and assets and
maintain its rights, franchises a_nd existing relations with
students and alununi, or knowingly take any action which m/ght
reasonably be expected to (i) adversely affect the ability.of any
party to obtain any necessary Regulatory Approva!s and
Acquiescence (as defined in Section 4~05) required for the
transactions contemplated hereby or {ii) adversely affect its
ability to effect the Affiliation or the Merger or perform any of
its material obligations under this Plan. Nothing in this
Section 2.01 shall be deemed to restrict Dickinson's ability to
negotiate and enter into an agreement with Shippensburg
University relating.to pro~idlng a joint degree in .counselling
and .law; provided, however, that Dickinson, through its Dean
shall consult with the Executive Vice President and Provost of
Penn State with respect .to such negotiation and agreement.
2.02. Compensation; Employment Acreements; Etc. In the
case of Dickinson, from the date of this Plan until the
Affiliation Date and from the Affiliation Date until, the Merger
Date, except as permitted by Section 4.15 and Section ~.16, enter
into or amend any employment, severance or similar agreements or
arrangements (whether written or oral) with any of its trustees,
officers or other employees, 'or grant any salary or wage increase
or increase any employee benefit (including incentive or bonus
payments), except for (i) normal individual increases in
compensation to employees in the ordinary course of business
consistent with past practice or (ii) other changes as may be
required by law or to~.satisfy contractual obligations existing as
of the date hereof consistent with past practice, which have been
disclosed by Dickinson to Penn State in Dickinson's Disclosure
Letter.
2.03. Benefit Plans. In the case of Dickinson, from the
date hereof until the Affiliation Date and from the Affiliation
Date until the Merger Da~e, enter into or modify (except as may
be required by applicable law or to satisfy contractual
obligations existing as of the date hereof, which have been
disclosed in its Disclosure Letter) any pension, annuity,
retirement, savings, profit sharing, deferred compensation,
consulting, group insurance or other employee benefit, incentive
5
or welfare contract, plan or arrangement, or any trust agreement
related thereto, in respect of any of its trustees, officers,
faculty or other employees, including without limitation taking
any action which accelerates the vesting or exercise of any
benefits payable thereunder.
2.04. Acquisitions and Dispositions. In the case of
Dickinson, from the date hereof until the Affiliation Date and
from the Affiliation Date until the Merger Date, except as
disclosed in its Disclosure Letter, purchase, exchange or di'spose
of any portion of its assets, which is material to it, or merge
or consolidate with, or acquire all or any portion of, the
business of any other entity (any of the foregoing, a "Business
Combination ·Transaction"). For purpose of this Section 2.04, a
purchase; exchange or disposition of assets having a fair market
value of $100,000 or more in the aggregate shall be considered
material.
2.05. Amendment. In the case of Dickinson, from the date
hereof until the Affiliation Date and from the Affiliation Date
until the Merger Date, a~nend, its Articles of Incorporation or
Bylaws (or similar constitutive documents) except that Dickinson
may amend its Articles of. Incorporation and Bylaws prior to the
date of the Affiliation Closing so ·that such Articles of
Incorporation and Bylaws are substantially identical to the form
of Articles of Incorporation and Bylaws attached to this Plan as
Exhibit A and Exhibit B, respectively.
2.06. Sin~te Member. In the case of Penn State, from the
Affiliation Date through the Merger Date: (i) sell, exchange,
transfer, relinquish or terminate its single member status,
(ii) amend, repeal or restate Dickinson's Articles of
Incorporation or Bylaws, (iii) merge Dickinson With.any party
other than Penn State, (iv) sell substantially all of Dickinson's
assets or liquidate Dickinson, (v) use Dickinson's endowment and
.the additions thereto and income thereon (the "Endowment") for
other than the exclusive benefit of Dickinson, (vi) use
Dickinson's Endowment or other charitable assets in a manner or
for purposes not in accordance with the terms of any instruments
which donated, contributed or otherwise transferred such ~ssets,
or (Vii) remove members of Dickinson's Board of Trustees or
otherwise alter the composition, terms,, mission, responsibilities
or duties of such·Board of Trustees.
The term "Endowment," as used in this Section 2.06, shall
mean the (i) endowment and similar funds of the types referred to
in Note 3 to "Notes to Dickinson's Financial Statements" at
June 30, 1995 and for the periods then ended (including
restricted funds, designated funds, and quasi endowment), and
(ii)' annual giving of the type referred to in Note 4 to such
financial statements (including.private gifts and grants).
2.07. Accounting Methods~ In the case of Dickinson,
implement or adopt any change in its accounting principles,
RDG/370%~/O1722.001
6
practices or methods, other than as may be required by generally
accepted accounting principles.
2.08. Adverse Actions. (1) Knowingly take any action which
is reasonably likely to, (i) prevent or impede the Merger from
qualifying for pooling-of-interests accounting treatment or
(ii) result in Dickinson or Penn State realizing and recognizing
income, gain or loss as a result of the Affiliation or the
Merger, respectively; or (2} knowingly take any action which is
intended or is reasonably likely to result in (x). any of its
representations and warranties set forth in this Plan becoming
untrue in any material respect at any time prior to either the
Affiliation Date or the Merger Da=e, (y) any of the conditions to
the Affiliation or Merger set forth in Article V and Article VI,
respectively, not being satisfied, or (z) a material violation or
breach of any provision of this Plan except, in every case, as
may be required by applicable law.
2.09. Indebtedness. In the case of Dickinson,' from the
date hereof until the Affiliation Date and from the Affiliation
Date until the Merger Date, incur any long-term indebtedness for
borrowed money or guarantee any such lon~-term indebtedness or
issue or sell any long-term debt securities or wamrants or rights
to acquire any long-term debt securities.
2.10. Non-Solicitation. In the case of Penn State,. from
the date hereof until the Affiliation Date, not solicit or hire
any member of Dickinson's faculty, the Dean, or Dickinson's non-
faculty employees, to the extent set forth in Sections 4.14 to
4.16.
2.11. A~reements. Agree or commit to do anything
prohibited, by Sections 2.01 through 2.10.
III. REPRESENTATIOKS AND WARRANTIES.
3.01. Disclosure Letters. Concurrently herewith, Penn
State has delivered to Dickinson and'Dickinson has delivered to
Penn State, a letter (the "Disclosure Letter") setting forth
certain items of disclosure with respect to the representations
and warranties set forth below. The inclusion of an item in'a
Disclosure Letter by ~ party shall not be deemed an admission; by
such party, that such item represents a material exception or
fact, event or circumstance or. that such item is reasonably
likely to result in a Material Adverse Effect (as defined in
Section 8.08).
3.02. Standard, No representation or warranty of Penn
State or Dickinson set forth in Section 3.03 shall be deemed
untrue or incorrect, and no party hereto shall be deemed to have
breached a representation or warranty, as a consequence of the
existence or absence of any fact, circumstance or event if such
fact, circumstance or event, individually or taken together with
all other facts, circumstances or events inconsistent with any
RDG/37048/02 722. 001 7
paragraph of Section 3.03 is not reasonably likely to have a
Material Adverse Effect.
3.03. Representations and Warranties. Subject to
Sections 3.01 and 3.02, Dickinson, as applicable, hereby
'represents and warrants to Penn State, and Penn State, as
applicable; hereby represents and warrants to Dickinson, as
follows:
(A) Recitals. In the case of the rePresentations and
warranties of Dickinson, the facts set forth in Recitals A and C
of this Plan with respect to it are true and correct. In the
case of the representations and warranties of Penn State, the
facts set forth in Recitals B and C of this Plan with respect to
it are true and correct.
(B) Organization, Standing, and Authority. In the
case of each of Dickinson and Penn State, it has in effect all
authorizations, licenses, and approvals necessary for it to own
or tease its'properties and assets and to carry on its affairs as
they are now conducted. The Articles. of Incorporation (in the
case of Dickinson) and the Charter {in the case of Penn State),
the Bylaws .(in the case of both Penn State and Dickinson) and the
Standing Orders of the Board of Trustees (in the case of Penn
State), copies of which were furnished to (i) Penn State, in the
case of Dickinson, and (ii) Dickinson, in the case of Penn State,
are true, correct and complete copies of such documents as in
effect on the date of this Plan. Dickinson does not have any
parents or subsidiaries and is not under common control with any
corporation, partnership or other person, except as set forth in
Dickinson's Disclosure Letter. ~Dickinson'does not transact
business outside of the United States, except as set forth in
Dickinson's Disclosure Letter.
(C) Tax ExemDtion. In the case of Dickinson, it is an
.organization exempt generally from federal income taxes under
Section 501(c) (3) of the Internal Revenue Code of 1986, as
amended (the "Code"). It has received and has outstanding a
determination letter from the Internal Revenue Service of such
tax exempt status. In the case of Penn State, it is an
organization.exempt generally from federal income taxes under
Section 115 of the Code.
(D) Corporate Power. In the case of each of Dickinson
and Penn State, it has the corporate power and authority to carry
on its affairs as'they are now being conducted and to own all its
properties and assets; and it has the corporate power and
authority to execute, deliver and perform its obligations under
this Plan.
(E) Corporate Authority. In the case of each of
Dickinson and Penn State, the execution and delivery of this Plan
and the consummation of the transactions contemplated hereby and
thereby have been authorized by a!l necessary corporate action on
its part, and this Plan has been duly executed and delivered by
it, and each is a valid and binding agreement of it, enforceable
in accordance with its terms (except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability
relating to or affecting creditors rights or by general equity
principles).
(F) Approvals and Acquiescences. In the case of each
of Dickinson and Penn State, there are no approvals'
authorizations, consents, filings, licenses, orders,
certifications, permits or academic accreditation acquiescences
of any kind required for either party to enter into this Plan and
to proceed with and consummate the Affiliation, the Merger and
the other transactions contemplated hereby, except (i) in the
case of Dickinson, notification to and academic accreditation
acquiescences by the American Bar Association acting through its
Secretary of Legal Education and Admissions to the Bar (the
"ABA") and the American Association of Law Schools (the "AALS.),
(ii) in the case of Perin State, notification to and academic
accreditation acquiescences by the Middle States Association of
Colleges and Universities, (iii) in the case of both Per~n State
and Dickinson, notification to and the approval or consent by the
Secretary of Education of the CommonWealth' of Pennsylvania,
(iv) in the case of both Penn-State and Dickinson, a filing with
the Federal Trade Commission.{"FTC") under the Hart Scott Rodino
AntiTrust Improvements Act 'and non-objection by such a~e~cy
during the period prescribed by statute, and (v) i~ the case of
the Association, notification to and approval by the Secretary of
Education of the Commonwealth of Pennsylvania of the formation of
the Association and of its Articles of Incorporation and Bylaws.
Neither party, knows of any reason why such acquiescence,
approvals, consents will not be obtained or of any reason why the
FTC would object to the Affiliation or the Merger.
(G) No'Defaults. In the case of each of Dickinson and
Penn State, except as disclosed in its Disclosure Lette~, subject
to receipt of the Regulatory Approvals and Acquiescence, and
expiration of the waiting periods, referred to in
Section 3.03(F), the execution, delivery and performance of this
Plan and the completion Of the transactions contemplated hereby
and thereby by it, dolnot and will not (i) constitute a breach or
violation of, or a default under, any law, rule or regulation or
any judgment, decree, order, or agreement, indenture or
instrument of it or to which it or any of its properties is
subject or bound, (ii) constitute a breach Or violation of, or a
default under, its Articles of Incorporation or Bylaws, or
(iii) require any consent or approval under any such law, rule,
regulation, judgment, decree, order, indenture or instrument.
(H) Financial Statements. Its.Consolidated Statement
of Financial. Condition at June 30, 1996 (including related notes
and schedules thereto) fairly presents the financial position of
the entity or entities to which it relates as of such date. Its.
Consolidated Statements of Activities and of Cash Flow for the
period then ended, including related notes and schedules thereto,
fairly presents the results of activities, operations, changes in
fund balance and changes in cash flows, as the case may be, of
the entity or entities to which such statement relates for the
period then ended, in each case in accordance with generally
accepted accounting principles consistently applied during the
period then ended, except, in each case, as may be noted therein.
Except as set forth in its Disclosure Letter, in the
case of each of Dickinson and Penn State, it did not have, as at
June 30, 1996, any liabilities or "loss contingencies" (as that
term is used in SFAS No. 5) required to be reflected, reserved
against or accrued on its Consolidated Statement of Financial
Condition or disclosed in the Notes and Schedules thereto, which
have not been so reflected, reserved against, accrued or
disclosed. Since June 30, 1996, except as set forth in its
DiSclosure Letter, it has not:
(1) suffered any change (nor has there been any
other occurrence or circumstance that with the passage of
time could reasonably be expected to result in such change)
(i) in its assets, liabilities, endowment, results of
operation, (ii) otherwise in its affairs or' prospects, which
has had or can reasonably be expected to have a Material
Adverse Effect;
(2) suffered any loss, damage, destruction or
other casualty affecting any of the properties or assets
(whether or not covered by insurance) in an amount involving
$25,000 or more in any single incident or more than $100,000
in the aggregate (in the case of Dickinson) or involving
$3,300,000 or more'in any single incident or more than
$13,200,000 in the aggregate (in the case of Penn State);
(3) incurred any liability or loss contingency
required to be reflected, reserved against, accrued or
disclosed in the notes to its financial statements under
SFAS No. 5 except liabilities or loss contingencies incurred
in' the ordinary course'of business and consistent with past
practice and, which in the case of Penn State, has had or
can be reasonably expected to have a Material Adverse
Effect;
(4) paid, discharged or satisfied any claim,
liability or obligation, other than any payment, discharge
or satisfaction in the ordinary course of business and
consistent with past practice and, whichin the case of Penn
State, has had or can be reasonably expected to have a
Material Adverse Effect;
(5) permitted or allowed any of its property or
assets (real, personal or ~ixed, tangible or intangible) to
become subjected to any mortgage, pledge, lien, security
RDG/3704S/02722.
10
interest, encumbrance, restriction or charge of any kind
and, which, in the case of Penn State, has had or can be
reasonably expected to have a Mater~al Adverse Effect;
(6) written off as uncollectible any notes or
accounts receivable, other than for write-downs, write-ups
and write-offs in the ordinary course of business and
consistent with past practice and, which in the case of Penn
State, has had or can be reasonably expected to have a
Material Adverse Effect;
(7) cancelled any obligations owed to it or
waived any claims or rights of substantial value, or sold,
transferred, or otherwise disposed of any of its properties
or assets (real, personal or mixed, tangible or intangible),
except in the ordinary course of business and consistent
with past practice and which, in the case of Penn State has
had o~ can be'reasonably expected to have a Material Adverse
Effect;
(8) licensed, sold, transferred, pledged,
modified, disclosed, disposed of or permitted to lapse any
right to the use of any of its intellectual property right,
except in the ordinary course of business and consistent
with past practice and, which in the case of Penn State, has
had or can be reasonably expected to have a Material Adverse
Effect;
(9) granted any general increase in the
compensation of officers or employees (including any such
increase pursuant to any pension, profit-sharing or other
employee benefit plan or conamitment) or any increase in the
compensation payable or to become payable to any officer,
employee, consultant or agent, except for normal increases
made in the ordinary course of business consistent with past
practice and, which in the case of Penn State,' has had or
can be reasonably expected to have a Material Adverse
Effect;
(10) made any capital expenditure or commitment in
excess of $10,000 individually or in excess of $50,000 in
the aggregate (in the case of Dickinson) or $1,300;000
individually or in excess of $6,600,000 in the aggregate in
.'the case of Penn State;
(11) made any change in any method of accounting
or accounting practice or any change in depreciation or
amortization policies or rates theretofore adopted, in the
case of Dickinson, but not Penn State;
(12) paid, lent or advanced any amount to, or
sold, transferred or leased any properties or assets (real,
personal or mixed, tangible or intangible) to, any of its
officers or trustees or any affiliate of any of its officers
11
or trustees except for trustee fees, and employment
compensation to officers, or entered into any agreement or
other arrangement with any of its officers or trustees or
any affiliate of any of its officers or trustees, in the
case of Dickinson, but not Penn State;
(13) entered into any other transaction, contract
or commitment other than in the ordinary course of business
and which, in the case of Penn State, has had or can be
reasonably expected to have a Material Adverse Effect; or
(14) agreed,.whe.ther in writing or otherwise, to
take any act/on described in this Section 3.03(~).
(I) LitiGation: Regulatory Action. Except as
disclosed in Dickinson's or Pen~ State's Disclosure Letter or,
the case of Penn State, to the extent it has had or can be
reasonably expected to have a Material Adverse Effect:
in
(1) no litigation or proceeding before any court
or governmental agency is pending against it and, to the best of
i~s knowledge, no such litigation, proceeding 'or controversy has
been threatened;
(2) neither it nor any of its properties is a
party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with,'ora
commitment letter or similar submission to, or has adopted any
board resolution at the request of, any state governmental agency
or other authority charged with the Supervision, regulation or
accreditation of institutions of higher education (including,
without limitation, the Secretary of Education of the
Commonwealth of Pennsylvania, the A~A, the AALS (collectively,
the "Regulatory and Accreditation Authorities"); and
(3) neither it nor any of its subsidiaries has
been advised by any Regulatory or Accreditation Authority that
such Regulatory or Accreditation Authority is contemplating
issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement,
memorandum of understanding, commitment, letter or similar
submission or any such resolutions.
(J) Compliance With Laws. Except as disclosed in its
Disclosure Letter, it:
(1) is in substantial compliance, in the conduct
of its affairs, with all applicable federal, state and local
statutes, laws, regulations, ordinances, rules, judgments, orders
or decrees applicable thereto or to its employees;
(2) possesses all permits, licenses,
authorizations, orders and accreditation approvals of, and has
made all filings, applications and registrations with, all
F,D~ / 3 704S/02722,001
12
Regulatory and Accreditation Authorities which are required to
permit it to conduct its affairs substantially as presently
conducted; all Such permits, licenses, certificates of authority,
orders and approvals are in full force and effect and, to the
best of its knowledge, no suspension or cancellation of any of
them is threatened; and -
(3) has received, since June 30, 1996, no
'notification or communication from any Regulatory and
Accreditation Authority (i) asserting, in the case of Dickinson,
that it is not in compliance with any of the statutes,
regulations, or ordinances which such Regulatory and
Accreditation Authority enforces or (ii) threatening or
contemplating revocation or limitation of, or which would have
the effect of revoking or limiting, accreditation (nor, to its.
- knowledge, .do any grounds for any of the foregoing exist).
(K) Defaults; Properties: Contracts; Insurance.
(1) In the case of Dickinson, except as disclosed
in its Disclosure Letter, it is not in default under any
contract, agreement, commitment, arrangement, lease, insurance
policy, or other instrument to which it is a party, by which its
respective assets, affairs, or operations may be bound or
affected, or under Which it or its respective assets, affairs, or
operations receives benefits, and there has not occurred any..
event that, with the lapse of.time Or the giving of notice or
both, would constitute such a default.
(2) In the case of Dickinson, except as set forth
in its Disclosure Letter or as reflected or reserved against or
accrued on its Consolidated Statement of Financial Position, or
disclosed in the notes and schedules thereto, it has good and
marketable title, free and clear Of all Liens (other than Liens
for current taxes not yet delinquent) to all of the properties
and assets, tangible or intangible, reflected on such
Consolidated Statement of Financial Position as being owned by it
as of the dates thereof and all properties and assets acquired by
i~ since the date of such financial statement. To its knowledge,
except as set forth in its Disclosure LRtter, all buildings'and
all fixtures, equipment and other property and assets are held
under valid leases or subleases by it, enforceable in accordance
with their respective terms (except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and slm/lar laws of general applicability
affecting creditors' rights or by general equity principles).
(3) In the case of Dickinson, its Disclosure
Letter contains (i) an accurate and complete list of all real
property owned or leased by Dickinson, as well as all buildings
and other structures and material improvements located on such
real propertY (including a brief description of the qse currently
being made. of such property and the prior uses of such property
that are known to Dickinson, including for each lease a brief
13
description of Dickinson's rental obligations under such lease,
its expiration date and renewal terms, and whether there is a
requirement of consent by the lessor thereunder to the
Affiliation and the Merger, and (ii) a complete list and
description by generic category of all leases pursuant to which
Dickinson.leases personal property. All such leases are valid,
binding and enforceable against Dickinson and to the reasonable
best knowledge of Dickinson against the other par~y or parties
thereto in accordance with their terms, and are in full force and
effect; except as sec forth in such Disclosure Letter, there are
no existing material defaults by Dickinson or, to the reasonable
best knowledge of Dickinson, of the other party thereunder; no
event of default with respect to Dickinson or, to the reasonable
best knowledge of Dickinson with respect to the other party
thereto, has occurred which (whether'with or without notice,
lapse of time or the happening or occurrence of any other event)
would constitute a default thereunder. Dickinson has made
available to Penn State true and correct copies of all leases
referred to in the Disclosure Letter. Except as set'forth on the
Disclosure Letter, none of the buildings and structures located
on real propert~ leased by Dickinson, or any appurtenances
thereto or equipment therein, or the operation' or maintenance
thereof~ violates in. any manner any restrictive covenants or'
encroaches on any property owned by others nor does any building
or structure of third parties encroach upon the Droperty leased
by Dickinson~ Except as set forth in the Disclosure Letter, no
condemnation proceeding is Pending or threatened, which Would
preclude or materially impair the use of any such property owned
or leased by Dickinson for the uses currently being made of such
property. Dickinson's Disclosure Letter contains an accurate and
complete summary Of all policies of fire, general liabi!ity,
theft, life, worker's compensation, health, directors and
officers, and other forms of insurance presently owned or held by
Dickinson, specifying'the insurer, amount of coverage, tYPe of
insurance, policy number and any pendingclaims thereunder of
which Dickinson has actual knowledge. Ail such policies are in
full force and effect and all premiums with respect thereto are
currently paid; are sufficient for compliance with all
requirements of law and Of all agreements to which Dickinson is a
party; provide adequate insurance coverage for the assets and
operations of Dickinson; and will not terminate or lapse by
reason of the Affiliation or the Merger or other transactions
which are contemplated by this Plan.
(4) In the case of Dickinson., except as set forth
in Dickinson's Disclosure Letter, there are no executory
contracts to which it is bound after the Merger Date other than
contracts entered into in the ordinary course of business, which
are not material in amount.
(5) In the case of Dickinson, except as set forth
in Dickinson's Disclosure Letter:
14
{i) Dickinson is not restricted by any
agreement from carrying on its affairs or activities or any
part thereof anywhere in the world or from competing in any
line of business with any person or entity;
(ii) Dickinson has no outstanding loan to
any person or entity, except loans made to students in the
ordinary course of business;
(iii) Dickinson is not subject to any
obligation or requirement to provide funds to or make any
investment (in the fol~n of a loan, capital contribution or
otherwise) in any person or entity);
(iv) There are no outstanding sales or~
purchase orders or other commigments of Dickinson which will
result in an expenditures of more than $200,000 in the
aggregate;.
(v) Dickinson is not a party to any purchase
or sale contract or agreement which calls for aggregate
purchases or sales in excess over the course of such
contract or agreement of $50,000 or which continues for a
period of more than twelve months (including periods covered
by any option to renew by either party) which is not
terminable on 60 days' or less notice without cost or other.
liability at or at any time after the date of this Plan;
(vi) Dickinson has no agreement or
arrangement for the license or sale of any assets,
properties or rights (including intellectual property
rights) -requiring the consent of any party to the transfer
of such agreement or arrangement to the Affiliation and the
Merger herein contemplated;
(vii) Dickinson is not party to any contract
or agreement to make any capital expenditure or commitment
therefor for additions to property,' plant, or equipment for
an araount in excess of $100,000;
(viii) Dickinson has no agreements,
contracts or commitments which are material to its affairs,
business, operations or prospects Other than are reflected
'in Dickinson's Financial Statements or the notes thereto;
(ix) Other than this Plan, Dickinson has no
pending plan, agreement, or intention to (a) consolidate
with, (b) merge with or into, or (c) sell or transfer to, in
one or more transactions, a substantial portion of the
assets of Dickinson, any other person.
(6) In the 'case of Penn State, except, as set
~orth in Penn State's Disclosure Letter, Penn State has no
(i) agreement for the license or sale of any assets, properties
or rights (including intellectual property rights) requiring the
consent of any party to the transfer of such agreement or
arrangement to the Affiliation and the Merger, and
(ii) agreement, plan or intention to consolidate with, merge into
or sell or transfer in one or more transactions, a substantial
portion of the assets of Penn State to any other person.
(L) No Brokers, Ail negotiations relating to this
Plan, the Affiliation and the Merger, and the transactions
contemplated hereby have been carried on by each of Dickinson and
Penn State directly with the other party, and no action has been
taken by it which would give rise to any valid claim against it
or the other party hereto for an investment banking, financial
advisory, brokerage commission, finder's fee or other like
paYment.
(M) Employee Compensation and Benefit Plans.
(1) In the case of Dickinson, its Disclosure
Letter contains a complete list of salary levels for all faculty
and non-faculty employees of Dickinson. Such Disclosur~ Letter
also contains (i) a description of all vacation, deferred
compensation, pension, retirement, annuity, thrift and savings
plans, (ii) a list of all existing and proposed employment or
severance contracts, (iii) a description of all medical, dental,
disability, health and life insurance plans, and (iv) a
description of all other employee benefit and fringe benefit
plans and contracts or arrangements for the benefit of officers,
former officers, faculty members, former faculty members,
employees, former employees,, trustees, former trustees, or the
beneficiaries of any of the foregoing ("Compensation and Benefit
Plans").
(2) True and complete copies of the Compensation
and Benefit Plans of each of Penn State and Dickinson, including,
but not limited to, any insurance policies, trust instruments
and/or insurance or annuity contracts, if any, forming a part
thereof, and all amendments thereto have been. supplied to the
other, party.
(3) The Compensation and Benefit Plans of each of
Penn State and Dickinson have been administered in compliance
with. the terms thereo~. To the extent any such plan is subject
to.one or more of the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), Ehe Code, the
Age Discrimination in Employment Act, the Social Security Act, or
any other state or federal statute, it has been administered in
compliance with each relevant provision thereof and has incurred
no material liability thereunder. .Any such plan that is required
by law to be funded on an actuarial basis has been so funded in
all material respects.
(4) Except as set forth in its Disclosure Letter,
(i) Dickinson does not maintain or contribute to any "employee
~LDG/37048 / 02722. 001
16
pension benefit plan" ("Pension Plan") as such term is defined in
Section 3 (2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), including, solely for the purpose of
this subsection, a plan excluded from coverage by Section 4(h)(4)
or Section 4(b) (5) of ERISA~ and except with respect to any such
Pension Plan which is a "multiemployer Plan" within the meaning
of Section 3(37) of ERISA, each such Pension Plan is in
compliance with the provisions of ERISA (if applicable), the
applicable provisions of the Code, and all other applicable
federal law, (ii) neither any Pension Plan nor any tz~/st created
thereunder nor any trustee or administrator thereof (other than
any Multiemployer plan, any trust created thereunder and any
trustee or administrator thereof) has engaged in a transaction
which will subject any Pension Plans, any such trust, or any
trustee or administrator thereof, to the tax or penalty on
prohibited transactions imposed by Section 4975 of the Code or to
a civil penalty imposed by Section $02(i).of ERISA and there has
been no unreported "reportable event" as defined in
Section 4043(b) of ERISA with respect to a Pension Plan, and
(iii) Dickinson neither maintains nor contributes to any
"employee welfare benefit plan" ("Welfare Plan,), as such term is
defined in Section 3(1) of ERISA (including a plan excluded from
coverage by Section 4(b) (4) of ERISA), whether insured or
otherwise, and any such Welfare Plan maintained by Dickinson is
in material compliance with the provisions of ERISA. Dickinson
has not established or contributed to any "voluntary employees'
beneficiary association" within the meaning of Section 501(d) (9)
of the Code.
(N) Labor Matters. In the case of Dickinson, except
as set forth in its Disclosure Letter, it 'is not a party to, or
is bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor
organization, nor is it the subject of a proceeding asserting
that it has committed an unfair labor practice (within the
meaning of the National Labor Relations Act or the Public
Employee Relations Act, as applicable) or seeking to compel it to
bargain with any labor organization as to wages and conditions cf
employment, nor is there any strike or other labor dispute
involving it, pending or, to the best of its knowledge,
threatened, nor is it aware of any activity involving any of its
eraployees seeking to certify a collective bargaining unit or ·
engaging in any other organization activity.
(0) Environmental Matters. In the'case of Dickinson,
other than as set forth in its DisclosureLetter, there are no
proceedings, claims, actions, or investigations of any kind,
pending or threatened, in any court, agency, or o=herwise arising
under any Environmental Law; there are no agreements, orders,
judgments, or decrees, by or wit~ any court, regulatory agency or
other governmental authority, imposing any liability or
obligation; there are and have been no Materials of Environmental
Concern or other conditions at any property (whether or not
owned, operated, or otherwise used by~ on behalf of, it).
"Environmental Laws" means the statutes, rules, regulations,
ordinances, codes, orders, decrees, and any other laws of any
federal, state, local governmental authority, regulating,
relating to or imposing liability or standards of comduct
concerning pollution, or protection of human health-and-safety or
of the environment, as in effect on or prior to the date of this
Agreement. "Materials of Environmental Concern, means any
hazardous or toxic substances, materials, wastes, pollutants, or
contaminants, and any other 'substance the presence of which may
give rise to liability under any Environmental Law.
(P) Taxation: Tax Returns. As of the date hereof,
neither Penn State nor Dickinson is.aware of any reason why the
Affiliation or the Mergerwill result in the realization and
reco~nition of income, gain or toss to Dickinson or Penn State
for federal or state income tax purposes. Except as disclosed in
Dickinson's Disclosure Letter: (i) all reports and returns with
respect to Taxes (as defined below) which are required to be
filed by itt including, without lSmitation, federal income tax
returns or federal annual infdrrnation returns (on IRS Form 990)
(collectively, the "Tax Returns"), have bean timely filed, or
requests for extensions have been tJJnely filed and have not
expired, and such Tax Returns were true, complete and accurate;
(ii) taxes (which shall include federal, state, local or ·foreign
income, gross receipts, windfall profits, severance, property,
production, sales, use, license, excise, franchise, employment,
withholding or similar taxes imposed on the income, properties or
operations of it or its subsidiaries, together with any interest,
additions, or penalties with respect thereto and any interest:in
respect of such addStions or penalties, collectively, the
· Taxes"), if any, shown to be due on such Tax Returns have been
paid in.full; (iii) any Taxes due with respect to completed and
settled examinations have been paid in full; (iv) no issues have
been·raised by the relevant tamping authority in connection with
the examination of any of such Tame Returns; and (v) no waivers of
. statutes of ~imitations (excluding such statutes that relate to
.years currently under examination by the·Internal Revenue
Service} have been given by or requested with respect to any
Taxes.
(Q) Continuinq Accreditation of Law School. Penn
State intends that Dickinson remain a fully accredited law school
'and member in good standingof the Association of American Law
Schoois. Penn State intends to encourage and support reasonable
efforts to maintain full accreditation status and membership in
.the Association of American Law Schools.
(R) No Material Adverse Effect. Since June 30, 1996,
except as previously set forth im its Disclosure Letter, (i) it
has Conducted its affairs and activities in the ordinary and
usual course (excluding the incurrence of expenses related to
this Plan and the transactions contemplated hereby) an~ (ii) no
event has occurred or circumstance arisen that, individually or
taken together with all other facts, circumstances and events is
reasonably likely to have a Material Adverse Effect with respect
to it.
IV. ADDITIONAL C O%~ENANTS ·
Dickinson hereby covenants to and agree~-with Penn State,
and Penn State hereby covenants to and agrees with Dickinson,
that:
4.01. Reasonable Best Efforts. Subject to the terms and
conditions of this Plan, from the Date of this Plan until the
Date of the Merger, it shall use its reasonable best efforts in
good faith to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or desirable,
or advisable under applicable laws, so as to permit consummation
of the Affiliation and the Merger as promptly as reasonably
practicable and to otherwise enable consummation of the
transactions contemplated hereby. During the period between the
Date of this Plan and the Merger Date, each of Dickinson and Penn
State, shall, and shall cause its administration, faculty and
other employees to cooperate with and. assist each other in the
fo~L~lation of plans to (i) integrate the operations and
activities of Dickinson with those of Penn State, (ii) identify
cost savings and revenue enhancement opportunities for both
parties, (iii) enhance the applicant pool for matriculation to
Dickinson for the !997-1998 class year and beyond, and
(iv) .maximize the results of the Dickinson component of Penn
State's 1996-2003 capital campaign.
4.02. Press Releases and Public Announcements. Except as
otherwise required by applicable law, during the period between
the date of the execution of this Plan and the Affiliation Date
neither Penn State nor Dickinson shall issue or cause the
publication of any press release or other public announcement
with respect to, or otherwise make any public statement
concerning, the transactions contemplated by this Plan without
the consent of the other party, which consent shall not be
unreasonably withheld.
4.03. Access: Information.
(A) Access.I Upon reasonable notice, it shall afford
the other party and its administration, faculty, other employees,
counsel, accountants and other authorized representatives
("Representatives"}, reasonable access, during normal business
hours.and with prior notice, throughout the period'between the
Date of this Plan and the Date of Affiliation (and in the case of
Dickinson, from the Date of Affiliation through the Merger Date)~
to (i) all of its p~operties, books, contracts, commitments and
records and laws, and (ii) all other information concerning the
affairs, activities and personnel of it as the other may
reasonably request;
(B) Information. It will not use any information
obtained pursuant to this Section 4.03 for any purpose unrelated
to the consummation of the transactions contemplated by this
Plan, will hold all information and documents obtained pursuant
to this paragraph in confidence (as provided in Section 8.06)
unless and until such 'time as such information or documents
become publicly available other than by reason of any action or
failure to act by it or as it is advised by counsel that any such
infol~ation or document is required by law to be disclosed. No
investigation by either party of the.business and affairs of
another shall affect or be deemed to modify or waive any
representation, warranty, covenant or a~r~ement in this Plan, or
the conditions to either party's obligation to complete the
transactions contemplated by this Plan.
4.04. Other Affiliation or MerGer ProDosals.
· (A) Dickinson. During the period between the date of
this Plan and the Affiliation Date, Dickinson, wiChout the prior
wriCten consent of Penn State, shall not~ and Dickinson shall
direct its Representatives not to, solicit or encourage
inqUiries or proposals with respect to, or engage in any
negotiations concerning, or provide any confidential information
to, or have any discussions with, any person {other than the
other party hereto) relating to an Affiliation Proposal, or enter
into any agreement with respect to or take any action to endorse
or recommend an Affiliation PrOposal. As used in this Plan, the
jterm "Affiliation Proposal" shall mean any proposal for a merger,
consolidation or other similar affiliation involving Dickinson or
any offer to become a single member of, such par~y, other than
pursuant to the transactions contemplated by this Plan and the
proposed.transaction between Dickinson and Shippensburg
University referred to in Section 2%01.
(B) Penn State. From the date of this Plan through
· the Affiliation Date, Penn State, without the prior written
consent of Dickinson, shall not, and Perm. State shall direct its
Representatives not to, solicit or encourage inqUiries or
proposals with. respect to, or engage in any negotiations
concerning, or provide any confidential information to, or have
any discussions with, any person .(other than the other party
hereto) relating to an Affiliation Proposal involving a law
school, or other provider of legal education, or enter into any'
agreement with respect to or take any action to either endorse or
recommend an Affiliation Proposal, establish, de toro, an
affiliate, unit or college of Per~n State which offers J.D. degree
based legal education. From the date of this Plan through the
Affiliation Date, Penn State, without the prior written consent
of Dickinson, shall not take steps to create a new law school or
other provider of J.D. or LL.M. degree based legal education,
with or without any person or entity other than Dickinson.
· (C) Notice. From the date of this Plan through the
Affiliation Date, each of Penn State and Dickinson shall advise
the other orally (within one business day) and in writing (as
promptly as practicable), in reasonable detail, of any such
inquiry or proposal which it or any Representative may receive
and if such inquiry or proposal is in writing, then Penn State or
Dickinson, as the case may be, shall deliver to the other a copy
of such i~quiry or proposal as promptly as practicable after the
receipt thereof.
4.05. Rec~ulatorY and Accreditation Aoprovals, Acquiescence
and Related Applications.
(A} General. Each of Penn State and Dickinson shall,
as soon as practicable after the date of execution of this Plan,
(i) prepare and submit applications and notices to, and filings
with, the appropriate RegUlatory and Accreditation AuChorities,
and (ii) make all other appropriate notices and filings, to
secure all other approvals, consents, acquiescences, indications
of non-objection and rulings, which are necessary for it to
complete the Affiliation and the' Merger and the other
transactions contemplated by this Plan,
(B) Applicatioq Process. Each of Penn state and
Dickinson shall, during the period between the date of execution
of this Plan and the Date of the Affiliation, cooperate with the
other and, subject to the terms and conditions set forth in this
Plan, use its reasonable best efforts, to prepare and file all
necessary applications, notices, petitions, filings and other
documents, and tO obtain all necessary permits, consents, orders,
approvals, authorizations and non-objection of, or any exemption
by, all Regulatory and Accreditation Authorities and other third
parties necessary or advisable to complete the Affiliation and
the Merger, including without limitation (i) in the case of both
Penn Stat'e and Dickinson, the approval of the Secretary of
Education of the Commonwealth of Pennsylvania, (ii) in the case
of Dickinson, the acquiescence of the ABA and the AALS, and
(iii) in the case of both Dickinson and Penn Stat~, the non-
objection of the Federal Trade Commission under the Hart Scott
Rodino Antitrust Improvements Act, and (iv) in the case of Penn
State, the acquiescence of Middle States Association of Colleges
and Universities. (Theseapprovals, acquiescences and non-
objections are referred to in this Plan as "Regulatory Approvals
and Acquiescences.") leach of Pernl State and Dickinson shall have
the right to review in advance, and, Co the extent practicable,
each will consult with the other, in each case subject to
applicable laws relating to the exchange of information, with
respect to all material written imformation submitted to, any
third party or any Regulatory and Accreditation Authorities in
connection with the transactions contemplated by this Plan. In
exercising the foregoing right, each of the parties shall act
reasonably and as promptly as practicable. Each party shall
consult with the other Party hereto with respect to'the obtaining
of all permits, consents, approvals and authorizations and the
non-objection of all third' parties and Regulatory and
Accreditation Authorities necessary or advisable to complete the
Affiliation, the Merger and the other transactions contemplated
by this Plan, and each party will keep the other party advised of
the status of material matters relating to completion of the
Affiliation and the Merger.
(C) Information. During the period between the date
of execution of this Plan and the Affiliation Date, each party
shall, upon request, furnish the other party with all information
concerning its affairs, its financial condition and results of
operation, its Trustees, Faculty~ Administration and student body
and such other matters as may be reasonably necessary or
advisable in connection with any filing, notice or application
made by or on behalf of such other party or any of its
subsidiaries to any Regulatory and Accreditation Authority.
4.06. Dickinson Name. Location, A~reement to Encace in J.D.
Based Legal Education: Exclusivity: Alumni Status; De~ress. From
the Affiliation Date and thereafter into perpetuity, unless
otherwise agreed by (i) a majority of Dickinson's Board of
Tru'stees, during the period from the Affiliation Date through the
Merger Date, or (ii) the Association's Board of Governors, during
the period from the Merger Date and thereafter into perpetuity:
· (A) J.D. Based Education: Exclusivity. Penn State
shall continuously engage in fully accredited J.D. based legal
education. In addition, Penn State shall engage in J.D and LL.M
based legal education, continuing legal education and J.D. or
LLoM based joint degree programs only by and through Dickinson
and no other entity, affiliate, college or unit of Penn State~
provided, however, that the foregoing shall not' be construed to
preclude'Penn State from continuing existing courses or programs
having legal components.
(B) Name, Location and De,tees. The name of the unit
of Penn State which offers Penn State's J.D. or LL.M programs,
.joint degree programs with a J.D. or LL.M components shall be
"The Dickinson School of Law of The Pennsylvania State
University," and its Primary location and Campus shall be
Carlisle, Pennsylvania. Effective as of the Affiliation Date and
thereafter into perpetuity, degrees conferred shall be conferred
under such name and diplomas evidencing such degrees shall so.
state.
(C) Alumni Status. At the Affiliation Date, Dickinson
graduates shall become Penn State alumni, with all rights and
privileges associated therewith, with the exception of
eligibility to vote for Penn State atu/nni trustees or eligibility
to be elected as Penn State alumni trustees. This exception
shall expire upon the Merger Date. This exception shall not
apDly to studRnts who graduate from Dickinson during the period
between ~he Affiliation Date and the Merger Date.
(D) Degrees. Dickinson's Board shall have continued
authority to confer honorary degrees, following consultation with
Penn State's President. In addition, from the Affiliation Date
through the Merger Date, Dickinson's Board shall have the
authority to confer academic degrees without veto power on the
part of Penn State or without consulting with Penn State's
President. Both academic and honorary degrees shall be from The
Dickinson School of Law of The Pennsylvania State University and
the diplomas evidencing such de~rees-shall so state in
perpetuity;
4.07. Limitations on Dickinson Class Size. From the date
of execution of the Plan through the Merger Date, Penn State and
Dickinson shall participate in a collaborative, effort to recruit
students for Dickinson with a special emphasis on the advantages
and opportunities associated with the Affiliation and with the
Merger. Further:
(A) 1997~98 Academic Year. For the 1997-1998 academic
year, Dickinson shall use its reasonable best efforts in its
admissions process to enroll a class of between 160 and 175
students with a median LSAT score of 156 or better. After
judicious management of the admissions process by Dickinson, if
Dickinson is unable enroll a class of 175 with a median LSAT
score of 156 or better for the 1997-1998 academic year, Penn
State shall subsidize Dickinson's operating budget to the extent
of the tuition shortfall resulting from the decrease in the size
of this class from 175 to 160 for each of Dickinson's 199'7-1998,
1998-1999 and 199.9-2000 academic years, with the subsidy capped
at 15 tuitions in each of such three (3) academic years. The
ma~ximum size of the Class shall be no more than 180 and the
minimum size of the class shall be no less than i60, unless
otherwise agreed to by'Dickinson and Penn State.
(B) 1998-99 Academic Year. For the 1998-1999 academic
year, Dickinson shall use its reasonable best efforts in its
admissions process.to enroll a Class of between 165 and 175
students, with a median LSAT score at the 70th percentile of the
nationwide test taker population for the October 1997, LSAT
administration. After judicious management of the admissions
process.by Dickinson, if Dickinson is unable to enroll a class of
175 with such a median LSAT score at such 70th percentile or
better for the 1998-1999 academic, year, Penn State shall
subsidize Dickinson's ~perating budget to the extent of the
tuition shortfall resulting from a decrease in the size of this
class from !75 to 165 for each of Dickinson's 1998-1999.
1999-2000 and 2000-2001 academic years, with the subsidy capped
at 10 tuitions in each of such three (3] academic years. The
maximura size of the class shall be no more than 180 and the
minimura size of the class shall be no less than 165, unless
otherwise agreed toby Dickinson and Penn State.
(C) 1999-2000 Academic Year through Mercer. For the
1999 academic year and for each academic year through ~he
academic year in which the'Merger is effected, Dickinson shall
use its reasonable best efforts in its admissions process to
enroll a class of between 175 and 180 with a median LSAT score at
the level of the 73rd percentile among nationwide test takers.
After judicious management of its admissions process by
Dickinson, if Dickinson is unable to enroll a class of 180 with
such a median LSAT score at such 73rd percentile or better, Penn
State will subsidize Dickinson's operating budget for each
academic year during this period to the extent of 'the tuition
shortfall resulting from the decrease in the class size from 180
to 195 with the subsidy capped at 5 tuitions in each of these
years for the class graduating three years from the beginning of
the academic year in which the Merger is effected. The maximum
size of the class shall be no more than 180.and the minimum size
of the class 'shall be 175, unless Otherwise agreed by Dickinson.
(D) Overridinq Limitation. Notwithstanding anything
set forth above in this Section 4.07, during, the period between
the Affiliation Date and the Merger Date and for a period of five
(5) years from the Merger Date, unless otherwise agreed by the
Association's Board of Governors, and Penn State's Board of
Trustees, the size of Dickinson's entry level J.D. class shall
not exceed 180' students.
4.08. ODeratinc Budget. During the period between the
Affiliation Date and the Merger Date:
(A) Budcet Process. Dickinson's budget shall be
formulated by the budget committee of Dickinson's Board of
Trustees chaired by the Senior Vice President for Finance and
Business/Treasurer of Penn State, and further consisting of .~
(i) two members of Dickinson's Board of Trustees selected by
Dickinson's Board of Trustees, (ii) the Dean in an ex officio
nonvoting capacity, and (ii/) both of the remaining Class III
Board members. The committee's budget recommendations will be
submitted to Dickinson's Board for consideration and approval and
then 'to Penn State for consideration and apprOVal..
Overhead Char~es; Direct Cost Reimbursement.
(1) Penn State intends to allocate some portion
of its general and administrative overhead expense (e.g., human
resource, payroll, executive, legal and accounting expense, etc.)
to Dickinson periodically after the Affiliation Date in the form
of a g~neral overhead charge. Such general overhead charge shall
bear, 'in all cases, a reasonable relationship to the cost
incurred by Penn State in providing services actually used by
Dickinson and in no event shall such general overhead charge
exceed either three percent (3%) of Dickinson's operating
revenues from all sources or the prices, in the aggregate, at
which Dickinson could obtain such bundle of services from one or
more.third parties on an arms length, negotiated basis. A
schedule of the services of a general and administrative nature
which Penn S~ate projects that it will provide to Dickinson in
exchange for its overhead charge{ and the method Penn State
intends to use to fix such charge are set forth in Penn State's
Disclosure Letter.
(2) Goods and services not of a genera/ and
administrative nature (e.g., motor vehicle fleet rental,
printing,.normal insurance premiums, etc.) p~rchased by Dickinson
from Penn State shall be purchased on a direct charge basis, at
Penn State's usual and standard rates. Such rates shall not be
in excess of the rates at which Dickinson could obtain the same
or similar goods or services from third parties on an arms.length
negotiated basis. Such goods and services may be purchased by
Dickinson from Penn State or from third parties except as set
forth in Penn State's Disclosure Letter.
(C) Development and Capital CamPaign. The schedule
referred to in Section 4.08(B) shall not include, and Penn~ State
shall not, under Sectio~s'4.08(A)' or 4.08(B), charge Dickinson
for any services which Penn State provides which, directly or
indirectly, are related to development or capital c~mpai~n
efforts or for the management or custody of Dickinson's
endowment. The intent of the parties is, as between Dickinson
and Penn State, that all fees, cost and eXpense associated with
such development or capital campaign effort be borne by Penn
'State in exchange for the fees ~d Char~es referred to in
S~ctions 4.t0(A) and 4.10(B). Moreover, the budget referred to
in Section 4.08(A) shall not include any expense relating to such
development and capital campaign effort, except as set forth in
Sections 4.10(A) and 4.10(B), and Penn State shall reimburse
Dickinson for any other cost or expense Dickinson incurs as a
.result of such development and capital campaign effort.
(D) Se!f-Sustainin~ Budget. Dickinson and Penn State
intend that Dickinson's annual budget be self-sustainin9 so that
Dicklnson~s budgeted operating revenues equal Dickinson's
budgeted expenses, without subsidy from Penn State (except as
otherwise provided .in Sections 4.07, 4.09 and 4.10 of this Plan!,
and with due regard to the requirements of. Section 4.11 of this
Plan. For budgetary purposes Dickinson's revenues shall be
credited with revenues from all sources, including 100% of its
tuition and unrestricted annual giving revenues and five percent
(5~) of the value of i~s endowment, not including unrestricted
annual giving revenues for such year (principal plus accumulated
earnings) measured annually on a rolling three year basis.
4.09. Maintenance, Capital Improvements and Technolo~f
Commitments.
(A) Technology. During the period from the
Affiliation Date through the Merger Date, Penn State shall make
contributions of goods and services to Dickinson for projects
relating to technology and financial and operational integration,
identified with more particularity in Exhibit "G" to this Plan.
Dickinson and Penn State estimate that the fair market value of
such goods and services is approximately $1.1 million.
(B) Other Capital Improvements. During the period
from the Affiliation Date through the Merger Date, Penn State
shall fund those additional capital ia~rovements projects
identified with more particularityin Exhibit "F" to this Plan.
Dickinson and Penn State estimate that the cost of providing such
additional capital improvements will be approximately $525,000.
Penn State's commitment shall not exceed this amount.
(C) Major Maintenance. During the period from the
Affiliation Date through the Merger Date, Penn State shall fund
the costs of the major maintenance projects identified with more
particularity in Exhibit "G" to this Plan. Penn State and
Dickinson estimate that the cos~ of providing such additional
capital improvements shall be approximately $100,000. Penn
State's commitment shall not exceed this amount.
4.10. Dickinson Endowment.
{A) Ownership and Mana=ement During Transition Period.
During the period between the Affiliation Date and the Merger
Date, Diokinson shall retain oWrZership of its endowment. With a
view to decreasing Dickinson's investment management fees, Penn
State will assume management, as Dickinson's agent, of
Dickinson's endowment through the Merger Date, withouZ cost to
Dickinson, except for Dickinson's proportionate share of the
fe~s, cost and expense charged by third parties to Penn State for
managing Such .endowment,.without markup. Penn State represents
that if it had managed Dickinson's endowment for the fiscal
quarter ended December 31, 1996, Dickinson's proportionate share
of such fees, cost and expenses would not have been in excess of
.45% of the value of such endowment on Such date. Penn State
shall.provide reports to Dickinson's Board' of Trustees (prior to
the Merger) and the Association's Board of Governors (after the
Merger) with respect to the investment performance of Dickinson's
Endowment on a regular basis.
(B) 1997-2003 Capital Campaiqn Effort and Goal. From
the Affiliation Date through June 30, 2003, members of
Dickinson's Board of Trustees (and after the Merger Date members
of the Association's Board of Governors) together with.
Di'ckinson's faculty and administrators, shall participate
actively together with Penn State representatives, in a joint
capital campaign effort which will emphasize the Affiliation and
Merger. Penn State's President and development staff shall
actively participate in fund raising and related development
efforts on behalf of Dickinson. Two members of Dickinson's Board
of Trustees shall become members of Penn State's Capital Campaign
Executive Co~m~ittee. The fund raising goal for Dickinson during
this joint capital campaign will be the greater of (i) the amount
determined by a feasibility study to be jointly undertaken by
Dickinson and Penn State (with all costs and expenses associated
therewith to be borne by Penn State), or (ii) Sixteen Million
Dollars ($16,000,000). During this joint capital campaign,
currentand deferred contributions (including annual giving)
shall be credited toward the achievement of the campaign goal for
Dickinson, using Penn State's standard and then-applicable
conventions for crediting such contributions, except as otherwise
set forth in this Sect/on 4..10. Between the Affiliation Date and
June 30, 2003, Penn State shall charge Dickinson for each
academic/fiscal year, an annual fee for development and capital
campaign efforts equal to .50% of the value, determined in
accordance with GAAP, of the investments in Dickinson's
unrestricted, temporarily restricted, and restricted endowment as
at the end of that academic/fiscal.year. Penn State reuresents
that if this fee would have been charged to Dickinson f~r the
fiscal year ended June 30, 1995, the fee would not have exceeded
$60,000 (e.g., .50% of $11,834,000).
(C) Guaranteed Increase in Endowment. If the'joint
capital campaign effort described in Section 4.10 (B) (without
regard to Penn State's standard and then-applicable conventions
or crediting contributions), does not,result in $16,000,000 in -
cash contributions by June 30, 2003 (including cash from annual
giving, but excluding cash from .gi.ft.s .a~.d bequests where the
instruraent is dated before the Affl!latlon Date or after June 30,"'
2003), Penn State shall contribute to Dickinson's temporarily
restricted endowment, in cash,·tlle difference between the actual
amount of such cash contribution and $16,000,000; provided,
however, that cash received after June 30, 2003 from deferred
contributions pledged between the Affiliation 'Date and June 30,.
2003, shall upon receipt be transferred to Penn State as
reimbursement for its cash contribution, up 'to the amount
actually contributed by Penn State to fund such difference. FOr
example, if $11,000,000 in cash contributions are received and
$8,000,000 in deferredI contributions are pledged during the
period from the Affiliation .Date through June 30, 2003, Penn
State will contribute to Uickinson's temporarily restricted
endowment $5,000,000, in cash, on June 30, 2003. As deferred
contributions (whether annual giving, restricted funds,
designated funds or quasi endowment} pledged to Dickinson between
the Affiliation Date and June 30, 2003, are received subsequent
to June 30, 2003, funds equal in amount to such contributions (up
to a maximum of $5,000,000 in the aggregate) shall be remitted to
Penn State as reimbursement for amounts contributed to
Dickinson's temporarily restricted endowment on June 30, 2003.
Funds remaining in the temporarily restricted endowment fund
shall be transferred to Dickinson's permanent restricted
RDa/3704a/0: 72~. 00s 2 7
endowment on July 1, 2028 or on the date Penn State is fully
reimbursed for amounts contributed by Penn State, whichever
occurs first. Current and deferred contributions made to, for or
on behalf of Dickinson during the campaign shall be used for the
exclusive benefit of Dickinson, except for amounts required to be
reimbursed to Penn State under this Section 4.10(C). Cash
receipts from gifts and bequests with respect to which the
governing instrument is dated prior to the Affiliation Date or
after June 30, 2003 shall not be credited toward the $16,000,000
referred to in this Section 4.10(C) and shall not be considered
cash receipts from deferred contributions from which
reimbursement may be made to Penn State under this Section 4.10.
(D) Endowment Milestones and 0peratin~ Budget Subsidy.
Beginning with the fiscal year commencing on July 1, 1997 and
continuing each fiscal year through June 30, 2003 and subject to
the $16,000;000 threshold set forth above in Section 4.lO(A), if
Dickinson's capital campaign has not resulted in at least
$2,000,000 in cash contributions (including annual giving) by
June 30. of each fiscal year on a cumulative basis, Penn State
shall contribute to Dickinson, for use in its ensuing fiscal
year, 5% of the difference between actual cash received and
$2,000,000 per year on a cumulative basis. For example, if
$1,000,000 in cash is received-by June 30 of the 1997-1998 fiscal
year, the sum of $50,000 (5% of $1,000,000) would be contributed
to Dickinson for the 1998-t999 fiscal year. If an additional
$1,000,000 in cash is received by June 30 of'the 1998-1999 fiscal
year, the sum of $100,000 (5% of $4,000,000 cumulative target.
less the $2,000,000 in current contributions received) would be
contributed to Dickinson for the 1999-2000 fiscal year. By way
of further example, if $4,000,000 is received by June 30 of the
1997-1998 fiscal year and $0 was received by June 30 of the 1998-
1999 fiscal year, the $4,000,000 cumulative target for both
fiscal years would be satisfied without any contribution by Penn
State. Gifts and. bequests with respect to which the governing
.instrument is dated prior to the Affiliation Date shall not be
credited toward the $2,000,000 referred to above.
(E) Sole and Exclusive Benefit. Penn State shall, at
all times, manage Dickinson's Endowmen~ for the sole and
exclusive benefit of Dickinson and its educational mission and on
the same basis and ~ith at least the same degree of care, skill,
diligeDce and prudence as it manages Penn State's endowment.
Penn State shall use such Endowment and all of Dickinson's
charitable assets only in accordance with any applicable donative
instruments and shall not divert such Endowment or such assets
for any other purpose.
4.11. Student Tuition Subsidy Policy. On and after the
Affiliation Date, unless agreed by (i) Dickinson's Board of
Trustees (prior to the Merger Date) or the Board of Governors of
'the Association (after the Merger Date), and (ii) Penn State's
Board of Trustees, Penn State will maintain Dickinson's long
standing policy of assuring that no student pay tuition in an
28
Penn State and Dickinson that the purpose of the Class Iii
membership structure is to facilitate the mutual dissemination of
inforraation, academic philosophies and operating principles
regarding Penn State and Dickinson.
(B) Dickinson on'Penn State Board. From the
Affiliation Date (as defined in Section 1.02):
(1) Through the Merger Date, Penn State shall
invite and permit five members of Dickinson's Board of Trustees,
designated by such Board, to attend public meetings of Penn
State's Board of Trustees, including conmuittee meetings, ~o
facilitate the mutual dissem_inationof information, academic
philosophies, operating principles and integration regarding
Dickinson and'Penn State. Such members of Dickinson's Board, and
~estS, shall be invited to attend all functions ancillary to
such Board and committee Meetings, including receptions, dinners,
tours, athletic events and other related functions.
(2) Through the Merger Date and for a period of
at least ten (10) years thereafter, Penn State shall cause,
without interruption, a member of Dickinson's Board of Trustees,
selected by Penn State from a list of those members who have
served on Dickinson's Board for at least twelve years, to sit as
a Trustee Emeritus of Penn State's Board of Trustees. The term
of any such Trustee Emeritus shall be for life. Such Trustee
Emeritus shall possess all of the rights and privileges of
Trustee Emeritus men%bership on Penn State's Board of Trustees~
Such TruStee Emeritus shall be entitled to all of the privileges
of membership on Penn State's Board of Trustees, except those of
making motions, of voting, and of holding office. In the event
any .such Trustee Emeritus resigns, dies, becomes permanently
disabled, or otherwise terminates as a Trustee Emeritus, prior to
the Merger Date or during the ten (10) year period immediately
thereafter, Penn State shall select a replacement Trustee
'Emeritus from a.list of those merabers who have served on
Dickinson's Board for at least twelve years prior to such
resignation, 'death or disability of such Trustee Emeritus, which
Trustee Emeritus shall also serve for life.
(3) Through the ~er~er Date and in perpetuity
thereafter, Penn State shall use its reasonable best efforts to
secure..full voting membership on Penn State's Board of Trustees
by a member of Dickinson's Board of Trustees or a member of the
Association's Board of Governors who qualifies for appointment by
the Governor of the Commonwealth of Pennsylvania or for election
by Agricultural Societies, Industrial Organizations or Penn
State's General Alumni Association,. in accordance with the
provisions of Penn State's Charte~.
(C) Association Governance. Effective as of' the
Me~ger Date, Dickinson's Board of Trustees will be irrevocably
appointed as a self-perpetuating Board of Governors of a newly-
created non-stock, non'membership, nonprofit corporation, The
Dickinson School of Law of The Pennsylvania State University
Association (the "Association"). The Association will be
governed by then-existing Class I and Class II Trustees of
Dickinson as a self-perpetuating Board'of Governors. The Board
of Governors shall provide counsel and ~uidance to Penn State
with respect to the operation and academic mission of The
Dickinson School of Law of The Pennsylvania State University.
More specifically, the BOard of Governors will have the following
mission, responsibilities and authority:
(1) review and make recon~aendations on the
mission of Dickinson;
(7) review and make recommendations regarding the
strategic and long term capital plans for Dickinson;
(3). provide input and ~Uidahce on Dickinson's
annual giving and capital campaign efforts and endowment
enhancement;
(4)
the practice of the
school curriculum;
provide advice, based on their experience in
law regarding the nature and scope of the law
(5) provide input regarding the means bY which to
maintain and enhance Dickinson's reputation for academic'
excellence including input on class size, tuition and'admissions
criteria;
(6] provide input into the.selection of a
successor Dean;
budgets;
(7) provide input into operating and capital
(8) possess authority to confer honorary de~rees,
in consultation with Penn State's President;
(9) possess authority to enforce by specific
performance in accordance with Section 8.09 of this Plan, Penn
State's continuing covenants which survive the Merger; and
(10) provide guidance on matters relating to the
Loan Repayment Fund referred to in Section 4.12(B) of the Plan.
The Dean shall serve as liaison between Penn State and
the Association. The Dean (or in his absence, the Chairperson of
The Board of Trustees. of Penn State, the President of Penn $~ate
or any Executive or Senior Vice President of Penn State) shall
attend each meeting of the Association's Board on an ex officio;
nonvoting basis. Penn S~ate, on a no cost basis, shall make law
school facilities and law'school personnel available to the
Association's Board of Governors to. the extent reasonably
necessary to permit it to hold meetings and accomplish its
mission, including making an employee available to serve as
treasurer of the Association. .
Penn s~ate shall make available, upon demand~ up to
$250,000 of DicklnSon~s unrestricted endowment to permit the
Association to speclflcally enforce Penn State's continuing 4//
obligations under Section 8.09 of this Plan.
In addition, two members of the Board of Governors will
at all times be members of Penn State's Executive Committee of
the Capital Campaign.
4.14. Dickinson Dean.
(A) E~L~loyment and Compensation. At the Affiliation
Date, Penn State shall offer employment to Dickinson's Dean at
his then current salary level. The Dean shall, also be entitled
to Penn State's benefit package and perquisites in accordance
with the provisions of Section 4.17 of this Plan. During the
period from the Affiliation Date to the Merger Date, Dickinson's
Board shall fix the then incumbent Dean's salary level, subject
to approval by Penn State's President. After the Merger date,
they shall be fixed by Penn State in accordance with Pern~ State's
then existing usual and ordinary procedures and processes.
(B) Reportin~ Lines. During the period from the
Affiliation Da~e to the Merger Date, the Dean shall report
primarily to Penn State's Provost and also to Dickinson's Board
of Trustees. After the Merger Date, Dickinson's Dean shall
report solely to Penn State's Executive Vice President and
Provost and President.
(C) Removal and Termination. During the period
between the Affiliation Date and the Merger Date, the Dean may
not be removed' or otherwise terminated from Penn State's
.employment, except by a majority vote of Dickinson's Board and
the consent of Penn State's President. After the Merger Date,
the Dean may be removed and/or his employment terminated in
accordance with Penn State's then existing usual and ordinary
processes and procedures.
(D) Successor Deans. If during the period from the
Affiliation Date to the'Merger Date, Dickinson's Dean resigns,
retires, dies, or is removed, Dickinson's Board of Trustees may
interview, select and recommend a successor Dean candidate to
Penn State's President, who, in bls sole discretion, may accept
or reject such recommendation. If a recommendation is rejected,
Dickinson's Board of Trustees may again interview, select and
recommend another successor Dean candidate for consideration and
acceptance or rejection by Penn State's President and. Board of.
Trustees, in .their sole discretion. After the Merger Date,
successor Deans shall be selected by Penn State with input from
the Board of GOVernors of the Association.'
(E) Council of Academic Deans. From the Affiliation
Date and thereafter in perpetuity, the Dean shall si~ on Penn
State's Council of Academic Deans.
(F) Non-Solicitation. If, for any reason, the
Affiliation does not occur, Penn State, for a period of three (3)
years from the date of this Plan, will neither solicit nor hire
Peter G. Glenn for any position related directly or indirectly to
legal education.
4.15. Dickinson Faculty.
(A) Employment. At the Affiliation Date; Penn State
shall offer employment to each member of Dickinson's faculty at
his or her then current rank., tenure and salaries and .with Penn
State's then existing benefit package and perquisites, in
accordance with the.provisions of Section 4.17 of this Plan.
Penn State shall assume Dickinson's contractual obligation to
those members of Dickinson's faculty identified in Dickinson's
Disclosure.Schedule.
(B) Promotion and Tenure.
(1) Tenured members of Dickinson's faculty~ ae of
the Affiliation Date, shall be accorded tenure with.Penn State
for all purposes effective as of the Affiliation Date.
(2) Non-tenured, tenure eligible members of
Dickinson's faculty on the Affiliation Date, who were non-
tenured, tenure eligible members of Dickinson's faculty on the
date of this Plan, thereafter shall be considered for promotion
.and tenure in accordance with the rules .in effect on his or her
date of hire by Dickinson and shall be promoted and accorded
tenure with Penn State if (i) Dickinson's faculty and. Dean
recommend that tenure be granted, (ii~ Dickinson'.s Board Of
Trustees (if evaluated for tenure during the period between the
Affiliation Date and the Merger Date) or the Association's Board
of Governors (if evaluated for tenure after the Merger Date)
recommends that promotion and tenure be granted, and (iii) Penn
State's President awards tenure, which shall not unreasonably.be
withheld.
(3) Members of Dickinson's faculty hired by Penn
State after.the Affiliation Date ehall be considered for
promotion and tenure in accordance with Penn State's promotion
and tenure procedures.
(C) Termination. If Dickinson's faculty and Board of
Trustees fail to recommend that promotion and tenure be awarded
to a faculty member referred to in Section 4.15(B) (2}, Penn State
shall have the right to terminate the employment of such faculty
member because of such failure to be awarded promotion or tenure
in accordance with Dicklnsoh's.usual and customary processes and
procedures.
(D) Academic Governance. Beginning at the Affiliation
Date, Dickinson's faculty shall be involved in the academic
governance of Penn State as follows:
Faculty Senate - During the period beginning
on the Affiliation Date and ending on the
Merger Date two members of Dickinson's
faculty shall be members of Penn State's
faculty senate. Thereafter, membership shall
be based on Penn State's then-existing
membership formula.
(ii)
Graduate Council - During the period
beginning on the'Affiliation Date and ending
on the Merger Date one member of Dickinson's
faculty shall be members of Penn State's
graduate council. Thereafter, membership
shall be based on Penn State's then-existing
membership formula.
(iii)
Beginning on the Affiliation Date a~d
thereafter full authority with respect to
J.D. and LL.M. curricula and related matters
will be delegated by Penn State's faculty
senate to Dickinson's faculty.
(E) Non-Solicitation. If, for any reason, the
Affiliation does not occur, Penn State, for a period of three
years after the date of this Plan will neither solicit nor hire
any person who was a faculty member of Dickinson on the date of
this Ptan for a position relating directly or indirectly to legal
education; unless such person's employment was t.erminated by
Dickinson for reasons unrelated to his or her performance or
demeanor.
4~16. Dickinson Non-Faculty Employees.
(A) EmDlovment and Compensation. At the Affiliation
Date, Penn State shall offer employment to the three non-faculty
.Dickinson employees idsnt~fied in Dickinson's Disclosure Letter
at the salary levels identified in such Disclosure Letter. At the
Affiliation Date, Penn State shall offer employment to those
additional Dickinson non-faculty employees as are identified
jointl~ by Dickinson's Dean and Penn State's Provost at the
salary levels agreed to by them. Non-faculty employees who
accept offered employment shall be entitled to the Penn State.
benefit package and Penn State perquisites in accordance with the
provisions of Section 4.16 of'thLs Plan. In additioa, Penn State
shall assume'Dickinson's contractual obligations.with respect to
payments to the non-faculty employees identified in Dickinson's
Disclosure Letter.
(B) Severance. Dickinson shall have the right to pay
severance to no more than ten (10) non-faculty employees who are
in the Dickinson Disclosure Letter, between Dickinson and any
current or former member of the faculty or other employee
thereof. The parties will work in good faith to treat affected
employees in an equitable manner under all supplemental plans,
.policies or arrangements, if any.
4.18. Inderanification of Dickinson Trustees: Covenant Not
to Sue Penn State a~d Class III Trustees.
(A) Gener.al. ~or a period of six years after the
Merger Date, PennState shall indemnify, defend and hold harmless
now and then present and former trustees, officers, faculty and
other employees of Dickinson (each, an "Indemnified Party")
against all costs or expenses ¢includin~ reasonable attorneys'
fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim,
action, s~it, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out ofactions
or Omissions occurring at or prior to the Merger Date (including,
without limitation and without regard to the six year time limit
otherwise imposed by this Section 4.18(A), the transactions
contemplated by this Plan to the fullest extent that such persons
are indemnified under Dickinson's Articles of Incorporation and
Bylaws as in effect on the date hereof (and during.such period
Penn State shall also advance expenses (including expenses
described in Section 4.18(C)) as incurred to the fullest extent
permitted under'Dickinson's Articles of Incorporation and Bylaws
as in effect on the date of the Merger, provided that the person
to whom expenses are advanced provides an undertaking to repay
such advances if it is ultimately determined that such personals
not entitled to indemnification with no bond or security to be
required!.. Notwithstanding the foregoing or anything to the
contrary contained elsewhere herein, Penn Stage's agreement set
forth above shall be limited to cover claims only to the extent
that Such claims are not paidunder any directors' and officers'
liability insurance policies maintained by Penn state or,
Dickinson.
not offered employment by Penn State, on the basis of no more
than one week of salary for each year of service with Dickinson,
payable over no more than one year period of time. Penn State
shall assume Dickinson's contractual obligations with respect to
severance to those non-faculty employees, identified in
Dickinson's Disclosure Letter. Severance paid'by Penn State with
respect to such non-faculty employees shall be reimbursed to Penn
State by Dickinson, and severance paid by Dickinson pursuant to
this Section 4.16 shall not be reimbursable to Dickinson by Penn
State.
4.17. Benefit Plans. As soon as practicable after the
Affiliation Date with respect to members of Dickinson's faculty
and non-faculty employees who accept employment from Pen~ State,
Penn State shall take all reasonable action so ~hat employees of.
Dickinson shall be generally entitled to. participate, as
applicable under the terms of the respective plans and as
provided by law, in the pension, annuity, medical benefit, life
insurance, vacation, sick pay and s/milar plans on substantially
the same terms and conditions as the faculty and non-faculty
employees of Penn State, and until such time, the plans of
Dickinson shall remain in effect; provided, that no employee of
Dickinson who becomes an employee of Penn Stat~ and Who elects
coverage by Penn State's medical insurance plans shall be
excluded from coverage thereunder (for such employee or asy other
covered'person) on the basis of a preexisting condition that was
not also excluded under Dickinson's medical insurance plans, but
to the extent such preexisting condition was excluded from
coverage under Dickinson's medical insurance plans, this proviso
shall not require coverage for such preexisting condition. Penn
State will take such action as may be necessary to-permit
Dickinson employees to transfer their tax-deferred annuity
prograxn balances to the tax-deferred annuity program of Penn
State. Dickinson employees who become Penn State employees On or
about the Affiliation Date will become entitled to
(i) participate immediately, on a fully-vested basis, in the Penn
State tax-deferred annuity prograra, and (ii) have periodically'
contributed tO the program on their behalf by Penn State such
percentage of salary as it contributes on behalf of its other
participating employees. In this regard, Dickinson has been
advised that Penn State presently makes periodic contributions.
under the program equal to 9% of a participating employee's
salary, subject to the employee making a periodic contribution to
the'program of 5% of salary. In addition, all prior full-time
service with Dickinson will be counted as though it'were
comparable Penn State service in meeting the Penn State
provisions for: ('a) continuation of health care benefits into
retirement; (b) the two year waiting period for grant in aid for
spouse; and (c) eligibility for sickness and accident supplement..
Penn'State also shall continue to honor, to the extent
required by law, in accordance with 'their terms, all employment,
severance, consulting and other compensation contracts, disclosed
in the Dickinson Disclosure Letter, between Dickinson and any
current or former member of the faculty or other employee
thereof. The parties will work in good faith to treat affected
employees in an equitable manner under all supplemental plans,
.policies or arrangements, if any.
4.18. Indemnification of Dickinson Trustees; Covenant Not
to Sue Penn State and Class II/ Trustees.
(A) General. For a Period of six years after the.
Merger Date, PennState shall indemnify, defend and hold harmless
now and then present and former trustees, officers,.faculty and
other employees of Dickinson (each, an ~Indenu/ified Party")
against all costs or expenses (including reasonable attorneys'
fees), judgments, fines, losses, claims, .damages or liabilities
(collectively, "Costs") incurred in connection with any claim,
action, slit, proceeding or investigation, whether civil,
crim/nal, administrative or investigative, arising out of actions
or omissions occurring at or prior to the Merger Date (including,
without limitation and without regard to the six year time limit
otherwise imposed by this Section 4.18(A), the transactions
contemplated by this Plan to the fullest extent that such persons
are indemnified under Dickinson's Articles of Incorporation and
Bylaws as in effect on the date hereof (and during such period
Penn State shall also advance expenses (including expenses
described in Section 4.18(C)) as incurred to the fullest extent
permitted under Dickinson's Articles of Incorporation and Bylaws
as in effect on the date of the Merger, provided that the person
to whom expenses are advanced provides an undertaking to repay
such advances if it is ultimately determined that such person'is
not entitled to indemnification with no bond or security to be
required). Notwithstanding the foregoing or anything to the
contrary contained elsewhere herein, Penn State's agreement set
forth above shall be limited to cover claims only to the extent
that Such claims are not paid under any directors' and officers'
liability insurance policies maimtained by Penn Stat~ or
Dickinson.
.(B) Notice. Any Indermnified Party desiring to claim
indemnification under Section 4.~8(A), upon learning of any
claim, action, suit, proceeding or investigation described above,
shall promptly notify Penn State thereof; provided that the
failure so to .notify shall not affect the obligations of Penn
State.under Section 4.18(A) unless and to the extent Penn State
has no actual knowledge of such claim, act/on, suit, proceeding
or investigation and such failure so to notify materially
increases Penn State's liability under such Section 4.18(A).
(C) Cost and Exoenses. Penn State shall pay all
reasonable costs, including attorneys' fees, that may .be incurred
by any Indemnified Party in enforcing the indemnity and. other
obl.igations provided for in this Section 4.18. The rights of
each Indemnified ParTy hereunder shall be in addition' to any
~ RDG/37045/02 722. 003.
other rigkts such Indemnified Party may have under applicable
law.
(D) Covenant Not to Sue. Dickinson shall not brin~ an
action against Penn State or Class III Trustees of Dickinson's
Board arising out of their membership as such and their positions
with Penn S~ate during the period between the Affiliation Date
and the Merger Date for breach of fiduciary duty or similar
claim.
4.19. Notification of Certain ~4atters. Each of Dickinson
and Penn State shall give prompt notice, to the other of any fact,
event or circumstance known to it that (i) is reasonably likely,
individually or taken together with all other facts,, events and
circumstances known to it,' to result in any Material Adverse
Effect with respect to it or (ii} would cause or constitute a
material breach of any of its representations, warranties,
covenants or agreements set forth in this Plan.
v. CONDITIONS TO COMPLETION OF -~m AFFILIATION.
The obligations of each of the parties to complete the
Affiliation is conditioned upon the satisfaction at .or prior to
the Affiliation Date of each of the following:
5.01. Regulatory and Acquiescence Approvals. Procurement
by Penn State and Dickinson of all Regulatory and Accreditation
approvals and consents and the expiration of the' statutory
waiting period under the Kart Scott Rodino Antitrust Improvements
Act, without objection by the FTC.
5.02. No Injunction. Etc. NO order, decree or injunction
of any court or agency of competent jurisdiction shall be in
effect, and no law, sta~u.te or regulation shall have been enacted
or adopted,' which enjoins, prohibits or makes illegal
consummation of the Affiliation or any of the other transactions
contemplated hereby;
5.03. Representations, Warranties and Covenants of Penn
State. '(i) Each of the representations and warranties of Penn
State set forth herein shall be true and correct as of zhe date
of this Plan and upon ~he Date of the Affiliation with the same
effect.as though all such representations and warranties had been
made. on the date of the Affiiia=ion (except for any such
representations and warranties made as of a specified date, which
shall be true and correct as of such date)and, in any case,
subject to the standards established by Section 3.02, (ii) each
and all of the agreements, covenants and commitments of Penn
State to be performed and complied with pursuant to this Plan on
or prior to the Date of Affiliation shall have been duly
performed and complied with in all material respects, and
(iii) Dickinson shall have received a certificate signed by each
of the President and Executive. Vice. President and Provost of Penn
~G/~7048/02722,00~ 37 /
State, dated the Date of the Affiliation, to the effect set forth
in clauses (i) and (ii);
5.04. Representations, Warranties and Covenants of
Dickinson. (i) Each of the representations and warranties of
Dickinson shall be true and correct as of the date of this Plan
and upon the Affiliation Date with the same effect as though ail
such representations and warranties had been made on the Date of
the Affiliation, except for any such representations and
warranties made as of a specified date, which shall be true and
correct as of such date, in any case subject to the standards
established by Section 3.02, (ii) each and all of the agreements
and covenants of Dickinson to be performed and complied with
· pursuant to this Plan on or prior to the Date of the Affiliation
shall havebeen duly performed and complied with in all material
respects, and (iii) Penn State shall have received a certificate
signed by each of the President and Dean of Dickinson, dated the
Date of the Affiliation, to the effect set forth in clauses
and (ii);
5.05. Opinions. Penn Sta~e shall have received an opinion
from McQuaide, Blasko, Schwartz, Fleming & Faulkner, Inc.
("McQuaide Blasko"), and Dickinson shall have received an opinion
from Stevens & Lee, to the effect that no gain or loss will be
recognized, for federal income tax purposes, by Dickinson or Penn
State as a result of the Affiliation and the Merger. Dickinson
also shall have received the opinion of McQuaide Blasko,
reasonably satisfactory to Dickinson, to the effect set forth in
Exahlbit "F" to the Plan. Penn State also shall have received the
opinion of Stevens & Lee to the effect set forth in Exhibit
to the Plan. In providing their respective opinions, each such
counsel may require and rely upon representations and agreements
contained in certificates of officers of Penn State and
DiCkinson.
'VI. CONDITIONS TO COM/:LETION OF ~/ERGER.
Penn Stat~ shall have the right to cause Dickinson to be
merged imto and with Penn State effective as of the later of
July-l, 2000, or the date upon which Penn State shall have
satisfied its commitments to Dickinson set forth in
Section~ 1.01, 4.09, 4.10(D) and 4.12(B), and'shall not then be
in nmaterial breach of'its covenants under Sections 2~06, 4.06,
4.07, 4.08, 4.10(A) (B) (C), 4.11, 4~12(A), 4.13(B), 4.14, 4.15,
4.!6, 4.17, and 4.18 hereof, unless the Board of Trustees of
Dickinson shall have waived compliance with such commitments or
covenangs in which case the Merger may occur a~ a sooner date.
Penn State shall be deemed to have satisfied the com~titment and
not t0 be in material breach of the covenants set forth above if
it provides Dickinson with a certificate, dated as of 'the date of
Merger, signed, in good faith, by the Chairperson of the Board of
Trustees of Penn State, its President and its Senior vice
President for Finance and Business/Treasurer to such effect.
VII.
7.01.
Affiliation
Affiliation
Termination. This Plan may be terminated, and the
and Merger may be abandoned at any time prior to the
Date:
(A) Mutual Consent. At any time prior to the Date of
Affiliation, by the mutual consent of Dickinson and Penn Sta~e,
if the Board of Trustees of each so determines by vote of a
majority of the members of its entire Board.
(B)~ Delay. At any time prior to the Date of
Affiliation, by Dickinson Or Penn State, if its Board of Trustees
so determines by vote of a mai ority of the members of its entire
Board, in the event that the. Affiliation is not consummated by
June 30, 1998, except to the extent that the failure of the
Affiliation then to be cons~%kL~ted arises out of or results from
the knowing action or inaction of the'party seeking to terminate
pursuant to this Section
(C) No Aoproval. By Dickinson or Penn State, if its
Board of Trustees so determines by a vote of a majority of the
members of its entire Board, in the event that the consent of the
Department of Education of the Commonwealth of Pennsylvania for
consun~nation of the Affiliation and 'the Merger contemplated by
this Plan shall have been denied by final action of the Secretary
of Education and the time for appeal shall have expired.
7.02. Effect of Termination and Abandonment. In the event
of termination of this Plan and the abandornnent of the
Affiliation pursu.ant to this Article VII, 'no party to this Plan
shall have any liability or further obligation to any other
party.
VIII.OTHER MATTERS.
8.01. SD~vival. The representations, warranties and
covenants set forth in this Plan shall not survive:
(A) the Affiliation Closing, except the covenants set
forth in Sections 1.01 and 1.02; Sections 2.01-2.11;
Sections 4.01-4.03; Sections 4.05-4.06; Section 4.07(A) (B) (C) (D);
Sections 4.08-4.09; Section 4.10; Sections 4.11-4.15;
Sections 4.18 and 4.19 which shall survive through the Merger
Date and, to the extent provided in Section 8.01(B) thereafter.
(B) the Merger Closing, except the 'covenants set forth
in Sections 4.06 and 4.07(C)(D); Section 4.10(A) (last sentence);
Section 4.10(B) (C).(D) (E); Section 4.11', Section 4.12 (A);
Section 4.13(B) (2); Section 4.13 (B) {3); Section 4.13 (C);
Section 4.14(A) (last sentence); Section 4.14(B) (last sentence);
Section 4~14(C) (last sentence) ; Section 4.14(D) (last Sentence);
Section 4.14(E); Section 4.15(D) (last sentence); and
Section 4.18, each of which shall survive in perpetuity, except
to the extent such Section (or sentence) specifies a shorter
period.
8.02. Waiver: Amendment. Any provision of this Plan may be
waived, amended or modified by agreement, in writing, of both
Penn State (by action of its ~oard of Trustees), and, as
applicable (i) Dickinson prior to the Merger, by action of its
Board of Trustees, or (iii) the 3L~sociatlon, after the Merger, by
action of its Board of Governors.
8.03. Counte~arts. This Plan may be executed in one or
more counterparts, each of which shall be deemed to constitute an
original.
8.04. Governing Law. This Plan shall be governed by, and
interpreted in accordance with,' the laws of the Co~znonweaith of
Pennsylvania, without regard to the conflict of law.principles
thereof.
8.05. Expenses. Each party hereto will bear all expenses
incurred by it in connection with =his Plan and the tr~9~actions
contemplated hereby, except that the expense of filing under the
Hart Scott Rodino A~tltrust Irmprovements Act shall be shared
equally between Dickinson and Penn State.
8.06. Confidentiality. Except as otherwise provided in
Section 5.05, each of the parties hereto and their respective
Representatives will maintain the confidentiality of all
informa=ion provided in connection herewith which has not been
publicly disclosed, unless it is advised by counsel that any such
information or document is required by law to be disclosed.
8.'07. Notices. Ail notices, requests and other
co~,~unications hereunder to a party shall be in writing and shall
be deemed given if personally delivered, telecopied (with
confirmation) or mailed by registered or certified mail (return
receipt reqUested) to such party at its address set forth below
or such other address as such party may specify by.notice to the
parties hereto.
· If to Penn State, to:
The Pennsylvania State University
Office of the President
201 Old I4ain
University Park, PA 16802-280.1
Attention:
Dr. Graham B. Spanier
President of the
University
With copies tO:
office of the Senior vice President
for Finance and Bus/ness/Treasurer
10e old Main
UniversiUy Park, PA 16802-~801
Attention: Mr. Gary C. Schultz
Senior Vice President
for Finance ~d
Busin~ss/Treasurer
HcQuaide, Blksko, Schwar=z,
Fleming & Faulkner, Inc.
· 81i University Drive
State College, PA 16801-6699
Attention: Wendell V. Courtney, Esq.
If to Dick/neon or
the A~sociation, to:
T~e Dickinson School of Law
150 South College Street
Carlisle, PA .17013-2899
Attention: Dr. Robert Fray, Presidenu
Peter ~. Glenn, Dean
With a copy to:
Stevens & Lee
111 North Sixth Street
P.o. Box 6?9
Reading, PA 19~03
Attention: Joseph M. ~arenza, Esq.
8.08. Definitions. Any term define~ anYwhere in this Plan
shall have the meaning ascribed to it for all purposes of =his Plan
(unleqs expressly noted to the contrary). Inaddition:
(A) ~he term "Material Adverse Effect' shall mean, wi~h
respect ~o Dickinson or Penn Stat~, respectively, any effec% tha~
(i) is material and adverse to the finan~ial position, results of
operanions or a~fairs of Dickinson or ~enn State, respectivsly, or
(ii) materially imp. airs ~he ability of Dtckin~on or Penn S~ate,
respecnively, to perform its obligations under this ~lan or ~he
consummation of r_he Affilia~ion or Mer~er and the o:her ~ransactions
contemplated by this Plan; provided, however, that Material Adverse
Effect shall not be deemed to include the impact of actions or
om/ssions of Dickinson or Penn State take~ with the prior informed
con~ent of Diokinson or Penn SUe=e, as applicable, in contemplation
of the Affiliation or the Mer~er conte/~lated hereby;
(B) the term "person' shall mean any individual,
cor~0ra=ion, par~nsrship, association, jo/nt-e~ock corapany,
trust or u~incorporated or~anization;
business
(C) the term "Code" shall mean the Internal Revenue Code
of t986, as aznended.
8.09. Specific Performance. The parties hereto acknowledge
and agree that remedies at law for breach or threatened breach of
any provision of this Plan would be inadequate. In recognition of
this fact, the parties hereto agree that the covenants and
agreements set forth in this Plan shall be enforceable by either
party (and, after the Merger Date, by the Dickinson School Of Law of
The Pennsylvania State University Association actingthrou~h its
Board of Governors) through specific performance, temporary or
permanent injunctive relief and other equitable relief. Both
parties further .agree to w~ive any requirement for the securing or
postin9 of any bond or proving potential damages in connection with'
the obtainin9 of any'such equitable relief and that this provision
is without prejudice to any other rights that the parties hereto
(and, after the Merger Date, by the Dickinson School of Law of The
Pennsylvania State UniversltyAssociation acting through its Board
of Governors) may have for any failure to perform the covenants and
agreements set forth in'this Plan.
8.10. Entire Understanding: Third Party Beneficiaries. This
Plan (including its Exhibits and the.information.set forth in each
of Dickinson's and penn State's 'Disclosure Letters) represents the
entire understanding of the parties hereto with reference to the
t~ansactions contemplated hereby and thereby and supersedes a~y and
all ~other oral or written agreements heretofore made. Nothin~ in
this Plan, expressed or implied, is intended to confer upon any
person, other than (-i) the parties hereto and their respective
successors, (ii) The Dickinson School of Law of The Penn State
University Association, acting through its Board of Governors or
other entity formed pursuant to the provisions of Section l~01 of
this Plan, and (iii) the Dean, with respect to the provisions of.
Section 4.14 of the Plan and any tenured member of the faculty w±th
respect to the provisions of Section 4.15(D) of the Plan, any
rights, remedies, obligations or liabilities under or by reason of
this Plan.
8.11. Headincs. The headings contained in this Plan are for
reference purposes only and are not part of this Plan.
IN WITNRS~ WHEREOF, t. he par=les he~e=o ~ave caused =his.
instrument =o be executed in coun~erpar=s by =heir duly authorized
officers, all as of =he day and year firs= above wri==en.
TH~ DICKINSON SCHOOL OF LAW
H. J~e'Arnelle, Cha~.rperson
BY ~B.~Presiden~
42.
103-107 E, MARKET ST
P,O, BOX 5185
YORK, PA 17405-5185
EXHIBIT "B"
IN RE: THE DICKINSON
SCHOOL OF LAW OF
THE PENNSYLVANIA
STATE UNIVERSITY.
a Pennsylvania
non-profit
corporation
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY PENNSYLVANIA
· ORPHANS' COURT DIVISION
*No. ~/- OZ)-- Y--/~O'~
L ORDER
AND NOW, thru day of
annexed petition and all other relevant matt~.8
,2000, upon consideration of the
of record, it is hereby ORDERED that:
The merger among The Dickinson School of Law of The Pennsylvania
State University and The Pennsylvania State University pursuant to an Affiliation
Agreement and Plan of Merger on the terms described in Exhibit "A" to the Petition will
not cause a diversion of charitable assets within the meaning of 15 Pa.C,S,A. §5547(b).
8. The Resolutions of The Dickinson School of taw's Trustees dated
January 11, 1997, copies of which are attached to the Petition as Exhibit "B",
effectuating the approval of the Agreement and Plan of Merger between The Dickinson
School of Law and The Pennsylvania State University attached to the Petition as Exhibit
'A", are hereby approved.
C. The Dickinson School of Law is authorized to merge into The
Pennsylvania State University on the terms reflected in the Affiliation Agreement and
Plan of Merger attached to the Petition as Exhibit "A', effective July 1, 2000,
By the Court,
9th Judicial Di~tdct
~IBENNLAWFIRM
103-107 E. MARKET ST.
P.O. BOX 5185
YORK, PA 17405-5185
EXHIBIT "C"
/ii '~5. ~-', ~i'l~ ' merit of
TIlE DIC~NS~N SCHOOL O~ LA~ O~
THE PENNSYLVANIA STATE UNIVEgS~ ASSOCIATION
ARTICLE l. The name of the Corporation is THE DICKINSON SCHOOL
OF LAW OF TFIE PENNSYLVANIA STATE UNIVERSITY ASSOCIATION
ARTICLE 2. The location and post office address of the initial registered
office of the Corporation in the Commonwealth of Permsylvama is 150 South
College Street, Carlisle, Pennsylvania 17013.
ARTICLE 3. The Corporation is incorporated under the Nonprofit
Corporation Law of 1988 of the Commonwealth of Pennsylvania to engage
exclusively in charitable, scientific, literary and educational activities within the
meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
(or the corresponding provision of any successor United States Internal Re,;~nue
law) (the "Code"). These activities include reviewing and making
recommendations to The Pem~sylvania State University on the mission, strategic
plan, curriculum, and budgets of The Dickinson School of Lax,,' of The
Pennsylvania State UnNersity ("Dickinson"); enhancing the educational
opportunities for students of Dickinson; awarding honorax'y degrees for Dickinson;
managing the Public Interest and Rural Area Service Loma Repayment ?rogam for
Dickinsom promoting support, in the form of annual giving and capital campaign
g~ving, for Dickinson; and enforcing sections of the pro~qsions of the Affiliation
Agreement and Agreement and Plan of Merger between The Dickinson School of
La~ and The ?ennsylvama State Universib'.
Mq. TICLE 4. All activities of the Corporation shall be subject to the
following restrictions:
A. No substantial part of the activities of the Corporation shall be
the ~;a~'ing on of propaganda or attempting to influence le~slation.
B. The Corporation shall not participate in, or intervene in
t inctuding the publishing ox' distributing of statements), any political campaign on
behalf of any candidates for public o~ce.
C. '['he Corporation shall neither have nor exercise a~y power, nor
shall it eu.~age dh'ec£ly or indixectly in any activity that would invalidate its stalus
as a corporation which is exempt from federal income taxation.
200041' 127
D. The Corporation does not contemplate pecuniary gain or profit,
incidental or otherwise, to its directors, officers or other private persons, and no
pm't of the net earnings of the Corporation shall inure to the benefit of, or be
distributed to, any such person, except that the Corporation shall be authorized and
empowered to pay reasonable compensation for services rendered and make
payments and distributions in furtherance of the purposes set forth in Article 3
hereot:
E, It is intended that this Corporation shall have and continue to
have the status of an organization which is exempt from federal income tax. All
terms and provisions of these Articles of Incorporation and the Bylaws of the
Corporation, and all operations of the Corporation, shall be construed, applied and
c,'m'ied out in accordance with this intent.
ARTICLE 5. The term for which the Corporation is to exist is perpetual.
ARTICLE 6. The Corporation is organized upon a nonstock basis.
.adtTICLE 7. The Corporation shall have no members. Members of the
Board of Governors of the Corporation shall be elected on a self perpetuating
basis.
ARTICLE 8. Upon the dissolution of the Corporation, the Boa~'d of
Governors shall, after paying and making a provision for the payment of all of the
habilities aa~d obligations of the Corporation, pay over and transfer all of the assets
of the Corporation to another organization or organizations organized and operated
exclusively for charitable, scientific or educational purposes, provided that at such
t/me thc recipient qualifies as an organization exempt from federal income taxation
under Section 501(c)(3) of the Code. No portion of the assets shall inure to the
bt'ncfit of any governor or officer of the Corporation, any other private person, or
;my enterprise organized tbr profit. The use of any surplus funds by or private
inurement to any person in the event of sale or dissolution of the Corporation is
exprexsly prohibited, as required by Section 5 of Pemlsylvania Act No. 55 of 1997.
as amended and in effect from lime to time
,~TICLE 9. The name and post office address of the incorporator of the
Corporat/on is:
l~allle
Joanne M. Judge
Post Office Address
111 North Sixth Street
P.O. Box 679
Read/rig, Pennsylvania 19603-0679
IN' TESTIMONY W~-rER.EOF, the Incorporator has signed these Articles of
Incorporation this i ,t. day of June, 2000.
Infforporator
103-107 E, MARKET ST,
P,O BOX 5185
YORK, PA 17405-5185
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and
P.J. BROWNING, Publisher of THE
SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
VS.
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
NO.
:
..
:
:
..
:
:
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
CERTIFICATE OF SERVICE
I hereby certify that I have this date served a copy of the foregoingS'Complaint"
upon the following, counsel to Defendants, as set forth herein, on this 23 day of
January, 2004:
Jack M. Stover, Esquire
Buchanan Ingersoll
One South Market Square
213 Market Street, 3rd Floor
Harrisburg, Pennsylvania 17101
(VIA HAND DELIVERY)
Respec~tt~y_,submitted,
Terence JB~ma, Esquire
Attorney I.D. #74410
10
M07 E MARKET S~
BOX 5185
IK, PA 17405-5385
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS,/NC., Publisher of
THE SENTINEL, and
P.J. BROWNING, Publisher of THE
SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
COMPLAINT 1N EQUITY
UNDER THE SUNSHINE
ACT
ORDER
AND NOW, TO WIT, this ~9 ~ ~ day of (I ~ ,2004,
upon
consideration of the within Motion for a Preliminary Injunction, it is hereby ORDERED
n February 7,
2004~~f Governors of The Dickinson
~e '~n, shall be
~BENNLAWFIRM
E, MARKET ST
(5185
~17405-5185
School of Law of The
l the Board
University are hereb~
conducting the Meetin
notice can be
Commonwealth ot
g in accordance with the said Act;
of Law of
· ined from
such time as proper public
of the Sunshine Act of the
rescheduled as a
Dickinson
official
Act; and
State University
enjoined from taking action or making any
issue of relocation of The
~,,~ylvania State University until a
~gality o~ fat 7hich anY such
~ was adopted or recommendation rea~fficial
adopted at any s~ny deliberat~ducted
are invalid unless done in accordance with the Sunshine
Plaintiff~ ,urn awarded tc~un,~b'l~ dtum,~y~' l'e,~ ,~d costs oi nugat~on.
It ia further OIID~/~ED cha[ ,a h~mi,,~ L,~ h,~M on the _l~~/I~day of
,2004, at ~JOO o'clock~¥/p.m, in Courtroom #~'-of
37 E MARKET ST
OX 5188
PA 17405-5188
the Cumberland County Courthouse, to determine the fights of the parties involved,
and whether Plaintiffs' application for a Preliminary Injunction shall be granted.
Thio Ord~ 0hall remain in ,~ff,,,X u~;il thy above ~ate mid tlin~ b~t $ora
Notice of thc entry of this Order shall be given to all panics as prescribed by
law.
E. MARKET ST.
5185
PA 17405-5185
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and
P.J. BROWNING, Publisher of THE
SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
VS.
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
NO.
COMPLAINT IN EQUITY
UNDER THE SUNSHINE
ACT
MOTION FOR A PRELIMINARY INJUNCTION
AND NOW, this 'Z~day of January, 2004, come Plaintiffs, Lee Publications, Inc,,
Publisher of The Sentinel, and P.J. Browning, Publisher of The Sentinel, by and through
their attorneys, the BENNLAWFIRM, and The Patriot-News and Cate Barron, by and
through their attorneys, the law firm of NAUMAN, SMITH, SHISSLER & HALL, LLP,
and file the within Motion for a Preliminary Injunction, and aver as follows:
1. Simultaneously with the filing of the within Motion, Plaintiffs have filed a
Complaint in Equity with this Honorable Court.
Plaintiff, Lee Publications, Inc., is a Delaware Corporation and Publisher of The
Sentinel, a newspaper of general circulation in and around Cumberland County,
13-107 E. MARKET
BOX 5185
)RK, PA 17405-5185
Pennsylvania, with an address at 457 E. North Street, P.O. Box 130, Carlisle,
Cumberland County, Pennsylvania 17013.
Plaintiff, P.J. Browning, is an adult individual, Publisher of The Sentinel, with a
business address at 457 E. North Street, P.O. Box 130, Carlisle, Cumberland County,
Pennsylvania 17013,
The Patriot-News ("Patriot~News") is a newspaper of general circulation in and
around Dauphin County, Pennsylvania, with its pr/nc/pal offices located at 812
Market Street, Harrisburg, Dauphin County, Pennsylvania 17101.
Cate Barron ("Barron") is the Managing Editor of The Patriot-News and an adult
individual, a citizen of the Commonwealth of Pennsylvania, with a business address
of 812 Market Street, Hamsburg, Dauphin County, Pennsylvania 17101.
Defendant, The Dickinson School of Law of The Pennsylvania State University
Association (the "Association"), is on information and belief a non-profit
Corporation organized and existing under the laws of the Conunonwealth of
Pennsylvania with its registered office located at 150 South College Street, Carlisle,
Cumberhmd County, Pennsylvania 17013.
Defendant, the Board of Governors of The Dickinson School of Law of The
Pennsylvania State University Association (the "Board"), is on information and
belief the duly appointed governing body of the Association with an address at 150
South College Street, Carlisle, Cumberland County, Pennsylvania 17013.
The Defendants are "agencies" as that term is defined and used under the Sunshine
Act of the Commonwealth of Pennsylvania, P.L. 729, No. 93, §1 et. seq., 65 Pa.
C.S.A. § 701,703.
2
103-107 E MARKET ST.
RO. BOX 5185
YORK, PA 17405-5185
10,
11.
12.
13.
14.
This Honorable Court has original jurisdiction over this matter pursuant to 65 Pa.
C.S.A. § 715.
The Dickinson School of Law merged into The Pennsylvania State University
("Penn State" herein) pursuant to an Affiliation Agreement and Plan of Merger (the
"Agreement") dated January 17, 1997, effective July 1, 2000. A true and correct
copy of the Agreement is attached hereto and made a part hereof as Exhibit "A" and
incorporated herein by reference as if fully set forth.
The Cumberland County Court of Common Pleas authorized the merger between
The Dickinson School of Law and The Pennsylvania State University by Court
Order dated May 24, 2000. A true and correct copy of the Order is attached hereto
and made a part hereof as Exhibit "B" and incorporated herein by reference as if
fully set forth.
The Dickinson School of Law became known as The Dickinson School of Law of
The Pennsylvania State University on the effective date of the merger, July 1, 2000.
The Dickinson School of Law of The Pennsylvania State University (the "Law
School") is a duly accredited law school in the Commonwealth of Pennsylvania and
is, on information and belief, an academic unit of The Pennsylvania State University,
under mad subject to ultimate governance by The Pennsylvania State University's
Board of Trustees.
Defendant, The Dickinson School of Law of The Pennsylvania State University
Association, was created as of the date of the merger in order to provide counsel and
guidance to The Pennsylvania State University with respect to the academic mission
of the Law School and to enforce Penn State's compliance with certain provisions of
3
~BENNLAWFIRM
103-107' E. MARKET ST.
RO, BOX 5185
YORK, PA 17408-5185
the Merger Agreement. A tree and correct copy of the Articles of Incorporation of
the Association is attached hereto and made a part hereof as Exhibit "C" and
incorporated herein by reference as if fully set forth.
15. Among its exclusive powers, the Association can confer honorary degrees (in
consultation with Penn State's President), control the primary location and campus
of the Law School by vetoing any proposed move of the Law School from Carlisle,
Pennsylvania and enforce Penn State's continuing covenants under and pursuant to
the Agreement by specific performance and other methods. See Sections 4.06 and
8,09 of the Agreement attached hereto and made a part hereof as Exhibit "A".
16. The Agreement provided that the Association was to be governed by a self-
perpetuating Board of Governors, the Defendant Board herein. See Section 1.02(E)
of the Agreement attached hereto and made a part hereof as Exhibit "A",
17. Section 4.06 of the Agreement provides that the primary location and campus of the
School shall be Carlisle, Pennsylvania "unless otherwise a~reed by .... the
Association's Board of Governors." (emphasis added). See Section 4.06 on page 22
of the Agreement attached hereto and made a part hereof as Exhibit "A".
18. The covenants contained in Section 4 of the Agreement, including, without
limitation, Section 4.06, survived the merger and remain in full force and effect. See
Section 8.01 on page 39 of the Agreement attached hereto and made a part hereof as
Exhibit "A".
19. On information and belief, the Board conducted meetings, entertained discussion
among its members and heard presentations on November 21, 2003 and November
22, 2003 relative to the issues of the renovation or rebuilding and expansion of the
4
103-107 E. MARKET ST
RO I~OX 5185
YORK, PA 17405-5185
current Law School facility and the relocation of the Law School's primary location
and campus from Carlisle, Pennsylvania to University Park, Pennsylvania.
20. The meetings held in Carlisle, Pennsylvania on November 21,2003 and November
22, 2003 were closed to the public.
21. The Board is, on information and belief, scheduled to meet again in Carlisle,
Pennsylvania on February 7, 2004 (the "Meeting").
22. It is believed and therefore averred that one of the purposes of the Meeting is to
further discuss and deliberate relative to a relocation of the Law School's primary
location and campus from Carlisle, Pennsylvania to University Park, Pennsylvania.
23. In adopting the Sunshine Act, the General Assembly stated that:
The General Assembly finds that the right of the public to be present
at all meetings of agencies and to witness the deliberation, policy
formulation and decisionmaking of agencies is vital to the
et~ancement and proper functioning of the democratic process
and that secrecy in public affairs undermines the faith of the
public in government and the public's effectiveness in
fulfilling its role in a democratic society. 65 Pa. C.S.A. §702.
24. The Sunshine Act requires that "[o]fficial action and deliberations by a quorum of
the members of an agency shall take place at a meeting open to the public... "65
Pa. C.S.A. §704.
25. The Sunshine Act vests in this Honorable Court the power to enfome the provisions
of the Act by injunction or other remedy deemed appropriate by the Court. 65 Pa.
C.S.A. §715.
26. The Association and the Board through which it acts are "agencies" as that tenu is
defined and used under the Sunshine Act and are subject to the provisions of the
Sunshine Act.
5
~B ENN LAWFIFII4
27.
28.
29.
30.
31.
The Sunshine Act allows an "agency" to close certain types of meetings to the
public. The meetings allowed to be closed include "executive session" meetings
conducted for one or more of six limited purposes specified in the Sunshine Act;
"conferences", but only where deliberation of agency business will not occur; and
"working sessions" involving Boards of Auditors. 65 Pa. C.S.A. {}707, 708.
It is believed and therefore averred that one of the purposes of the Meeting to be held
on February 7, 2004 is to discuss and deliberate relative to a relocation of the Law
School's primary location and campus from Carlisle, Pennsylvania to University
Park, Pennsylvania.
The Association, acting through the Board, has the sole and exclusive authority,
under and pursuant to Sections 4.06 and 8.09 of the Agreement, to authorize or block
a relocation of the Law School's primary location and campus from Carlisle,
Pennsylvania. See Section 4.06 on page 22 and Section 8.09 on page 42 of the
Agreement attached hereto and made a part hereof as Exhibit "A".
Pursuant to the Sunshine Act, it is averred that any official action and deliberations
by a quorum of the Board shall take place at a meeting open to the public. 65 Pa.
C.S.A. {}704.
It is believed and therefore averred that the Association, acting through a quorum of
the Board, will be undertaking official action and/or deliberations relative to the
issue of relocation of the Law School's primary location and campus on February 7,
2004.
103-107 E MARKET ST.
P.O. BOX 5185
YORK, PA 17405-8185
?r:~B ENH LAWFiRM
103-107 E MARKET ST
~.O. BOX 5185
fORK, PA 17405-5185
32.
33.
34.
35.
36.
37.
38.
39.
40.
It is believed and therefore averred that none of the exceptions to the general role of
open meetings contained in the Sunshine Act and referenced in Paragraph 27 herein
apply to the Meeting scheduled to occur on February 7, 2004.
Plaintiff has requested that Defendants hold the scheduled Meetings in public.
The requests of Plaintiff have been denied by Defendants.
It is believed and therefore averred that the Association and the Board will violate
the Sunshine Act by closing the Meeting scheduled for February 7, 2004 to the
public.
To the extent that the Meeting is closed to the public, the public will be harmed by a
denial of the opportunity to witness the deliberations, and/or decisions being made,
and/or the official action being taken, by the Association and the Board.
The harm referenced in Paragraph 36 herein cannot be compensated by damages.
It is believed and therefore averred that immediate and irreparable harm will result to
the public in denying the public access to the Meeting scheduled for February 7,
2004.
Based on the foregoing, it is averred that the Plaintiffs' right to relief is clear.
This Honorable Court has the authority to enforce the Sunshine Act by injunction or
other remedy deemed appropriate by this Court. 65 Pa. C.S.A. §715.
WHEREFORE, Plaintiffs respectfully request this Honorable Court to:
a. declare and order that the Meeting to be held by the Board of Governors of
The Dickinson School of Law of The Pennsylvania State University
Association on February 7, 2004, and all future meetings of the Board of
~EIENNLAWFIRM
Governors of The Dickinson School of Law of The Pennsylvania State
University Association, shall be open to the public; or, in the alternative,
to enjoin the Association and the Board from conducting the Meeting on
February 7, 2004 until such time as proper public notice can be given
pursuant to the requirements of the Sunshine Act and the Meeting
rescheduled as a public meeting in accordance with the said Act.
In the event that a quorum of the Board conducts a closed meeting on
February 7, 2004, or on any other date, in order to take official action and/or
conduct deliberations relative to the issue of relocation of the Law School,
Plaintiffs respectfully request that this Honorable Court enjoin the
Association from taking any official action or making any recommendation
for official action on the issue of relocation of the Law School until a judicial
determination of the legality of the meeting at which any such adopted action
or recommendation was reached, and to make a finding that any or all official
action taken at the meeting, or any or all deliberations conducted at the
meeting, were invalid.
Plaintiffs further requests that this Honorable Court award Plaintiffs
reasonable attorneys' fees and costs of litigation, along with any other relief
this Court deems just and proper.
103-107 E. MARKET ST,
PO. BOX 5185
YORK, PA 17405-5185
3-107 E MARKET ST.
~. BOX 5185
RK, PA17405-5185
Respectfully submitted,
BENNLAWFIRM
By:
Niles S. Benn, esquire
Attorney I.D. # 16284
Terence J. Bama, Esquire
Attorney LD. #74410
Peter R. Wilson, Esquire
Attorney I.D. #87655
P.O. Box 5185
103 East Market Street
York, Pennsylvania 17405-5185
(717) 852-7020
Counsel to Lee Publications, Inc. and
P.J. Browning
Respectfully submitted,
NAUMAN, SMITH, SHISSLER & HALL, LLP
By: [' ;'2~
Craig J. ~andenmaier, Esquire
Attorney I.D. #34996
200 North Third Street
P.O. Box 840
Harrisburg, Pennsylvania 17108-0840
(717) 236-3010
Counsel for The Patriot-News and
Cate Barron
9
~BENNLAWFIRM
103-107 E, MARKET ST~
P,O, BOX 5185
YORK, PA 17405-5185
EXHIBIT "A"
AFFILIATION AGREEi~ENT ~ 2~GREEbIENT AND PL~AN OF I~ERGER
dated as of January 17, 1997
by and between
THE DICKINSON SCHOOL OF LAW
and
THE PENlgSYLVAN/3~ STATE UNIVERSITY
R.DG/37048/02722.00~
TABLE OP CONTENTS
RECITALS
1
THE AFFILIATION; THE ]6ERGER: EFFECTS' OF '~ AFFILIATION
AND OF T~ ~RGER
1.01. The Affiliation
1.02. The Merger ......
1
1
3
II.
ACTIONS PRECLUDED pENDING AFFILIATION; ACTIONS
pRECLUDED PENDING~£ERGER .
2.01. 0rdinarv Course .
2.02. Compensation; Employment A=reements: Etc.
2.03. Benefit Plans . .
2.04. Acquisitions and'DisPositions
2.05. Amendment .......
2.06. Single Member .... '. . .
2.07. Accountin~ Methods ....... ..
2.08. Adverse Actions ._,
2.09. Indebtedness . · ~ .........
2,10. Non-Solicitation ............
2.11. , A~reements
5
5
5
5
6
6
6
6
7
7
7
7
III.
REPRESEI~TATIONS AND WARRANTIES ............. 7
3.01, Disclosure Letters ~ 7
3.02. Standard .. · . ; 7
' 3.03. Representations and Warranties ........ 8
ADDITIONAL COVENANTS
4.01
4.02
4.03,
4.04·
4.05,
4.06,
4.07.
4.08.
4.09.
......... 19
. Reasonable Best Efforts 19
· Press Releases and Public Announcements 19
Access: Information · . . ...... 19
Other Affiliation or Mer~er Proposals . 20
Rec~ulatory'and Accreditation Approvals,
Acquiescence and Related Applications . . . 21
Dickinson Name, Location, Agreement to
En~age in J~D. Based Legal Education;
~xclusivity; Altmuli Status: De,tees .... . . '22
Limitations on Dickinson Class'Size 23
Operatin~ Budcet ...... 24
Maintenance, Capital IrmOrovements and Technology
C~aaltmenks . 0 i . . . 26
4.10.
4
4.12.
4.13.
4.14.
4.15.
4.16.
4 .!7.
Dickinson EndoWment · · ·
Student Tuition Subsidy Policy
Affirmation of Dickinson Rural and Public
Interest Law Commitment: Loan Repayment Fund
Board Matters ~ -
Dickinson Dean ......
Dickinson Faculty ...........
Dickinson Non-Faculty Employees . : . .
Benefit Plans . ·
26
28
29
29
32.
33
34
35
· V.
A
B
C
D
F
G
4.18.
4.19.
Indemnification of Dickinson Trustees;
Covenant Not to Sue Penn State and Class
Trustees .......
Notification of certain Ma~ters
. 36
37
CONDITIONS
5.01.
5.02.
5.03.
5.04.
5.05.
TO COMPLETION OF 'x~ AFFILIATION 37
Recrulatory and Acouiescence Approvals . 37
No Injunction, Etc. 37
RePresentations, Warranties and Covenants of
Penn StaTe ...... 37
Representations, Warranties and Covenants of
Dickinson .......... 38
Opinions .............. 38
VI. CONDITIONS TO COMPLETION OF MER~ER
38
TEPJ~I!qATION ...... 39
7.01. Termination . . 39
7.02. Effec~ of Termination and Abandonment ...... 39
VIII. OTHER
8.01.
8.02.
8.03,
8.04.
8.05.
8.06.
8.07.
8.08.
8.09.
8,10.
8.11.
lV/ATTERS ............. 39
Survival ................. 39
Waiver; Amendmenu .......... 40
Counterparts .................. 40
Governinc Law ................. 40
Expenses ............. 40
Confidentiality .............. 40
Notices ..................... 40
Definitions ............ 41
Specific Performance ......... 42
Entire Understanding; Third Par~y Seneficiaries 42
Headings .................... 42
LIST OF E~I~IBITS
Form of Amended and Restated Dickinson Articles of
Incorporation as of the Affiliation Date
Form of Amended and Restated Dickinson Bylaws as of the
Affiliation Date
Form of Articles of Merger
Form of Articles of Incorporaulon of The Dickinson School of
Law of The Pennsylvania state University Association
Form of Bylaws of The Dickinson School of Law of The
Pennsylvania State UniversityAssociation
Forms of Legal Opinions
List of The Pennsylvania State University Capital
Improvements, Major Maintenance, and Technology Commitments
(ii)
AFFILIATION AGREE~fENT AND AGREEMENT AND PLAN OF MERGER
THIS AFFILIATION AGREEI~ENT AND AGREEMENT AND PLAN OF ~4~RGER
is dated as of this 17th day of January, 1997 (this "Plan,) and
is by and between THE DICKINSON SCHOOL OF LAW ("Dickinson,) and
THE PE~/~sYLVANIA STATE UI~IVERSITY (,Perm State").
RECITALS
A. Dickinson. Dickinson is an institution of higher
education duly.organized and existing and in ~ood standing under
the non-profit corporation laws of the Commonwealth of
Pennsylvania. Dickinson's principal place for conducting its
affairs is located in Carlisle, Pennsylvania. Dickinson has no
shares of capital Stock authorized, issued or outstanding. It
has no members, and its Board of Trustees is self-perpetuating.
B. Penn State. Penn State is an institution of hi~her
education duly organ/zed and existing %n good standing under the
laws of the Commonwealth of Pennsylvania. Penn State's principal
place for conducting its affairs is located in Centre County,
Pennsylvania. Pe~Lu State has no shares of capital stock
authorized, issued or outstanding. It has no members, and its
Board of Trustees is elected pursuant to various acts of the
General Assembly of the Con%monwealth of Pennsylvania.
'C. Board Aporoval. The Board of Trustees of each of
Dickinson and Penn State has (i) determined that this Plan, the
Affiliation, the Merger, and the other transactions contemplated
hereby are consistent with, and in furtherance of, their
respective strategies, and (ii) 'approved this Plan by the
requisite vote', at meetings of each of such Boards of Trustees,
duly noticed and held at which the requisite quorum for the
transaction of business was present in person.
NOW, THEREFORE, in consideration of their mutual promises
and obligations, Penn State and Dickinson, in~ending to be
legally bound, hereby approve, adopt and make this Plan and
prescribe the terms and conditions hereof and the m~er and
basis of carryin~ it into'effect, which shall be as follows:
I. T~ AFFILIATION; THE ~[ERGER; EFFECTS OF THE A/~FILIATIONAND
, OF TS~ M~RGER.
1.01. The Affiliation. Effective as of the Closing of the
Affiliation (as defined in Section 1.01(C)):
(A) Conversion. Dickinson shall (i) amend its
articles of incorporation to chamge its .structure from a non-
stock, non-membership, non-profit Pennsylvania corporation to a
non-stock, single member~ non-profit Pennsylvania corporation,
(ii) irrevocably designate. Penn S~ate as such single member, and
(iii) change its corporate name to "The Dickinson School of Law
of The Pennsylvania State University."
(B) Sin~ie Membership. Penn State shall accept such
single m~nbership irrevocably, and agree not to sell, transfer,
exchange or otherwise relinquish or terminate-its membership
prior to the Merger. Penn State shall not, by reason of such
membership, assume any liabilities or obligations of Dickinson.
(C) Closin~ of Affiliation. Subject to the provisions
of Article VII relatin9 to termination of this Plan, the closin~
of the transaction whereby Penn State shall become Dickinson's
single member (the "~ffiliation,) shall take. place on a date to
be specified by the parties, which date shall be the later of
(i) the first day which is at least two business days after
satisfaction or waiver of the conditions set forth in Article V,
(ii) July 1, 1997, or (iii) such other date as shall be ag~reed
upon in writin~ by'the parties hereto° The Closing of the
Affiliation shall be held at such time and location as the
parties may a~ree to in writin~o The date of the closing of the
Affiliation Shall be referred to in this Plan as the "~filiation
Date."
(D) Faculty and Non-Faculty Staff. At the c!osin~ of
the Affiiiation (i) in accordance with Section 4.1S, Dickinson's
faculty, includin~ Dickinson's Dean, shall be offered employment
with Penn State.at their then current rank, tenure status and
salaries and with Penn State's then current benefits, and (ii) in
accordance with Section 4.16, certain of Dickinson's non-faculty
employees shall be offered employment with Penn State at their
then 'current salaries and with penn state's then current
benefits. During the period be~innin9 with the Affiliauion Date.
and endin~ on the Mer~er Date, all such personnel shall be made
available to Dickinson at Dickinson's Carlisle, Pennsylvania
cat, pus, by Penn State at Penn State's cost for such personnel
(includin~ Penn State's cost for the benefits provided to such
'personnel) which cost shall not r~aterially exceed Dickimson's
then current cost (plus the cost to Penn State Of incremental
increases in compensation plus incremental benefit cost), without
mark-up. Except as otherwise provided in this Plan, a!! such
Dickinson employees hired by Penn State, shall, upon hire, be
subject to all applicable Penn State policies, procedures, rules
and practices, then in effect and as the same may be modified
from time to time.
(E) Dickinson and Penn State Board Seats. Prom the
Affiliation Date through the Mer~er Date (as defined in
Section 1.02) as more fully set forth in Section 4.13,
(i) Dickinson shall cause the Senior Vice President for Finance
and Business/Treasurer, the Executive Vice President and Provost
and the Chairperson of. the Board of Trustees of Penn'State to be
elected as Class III Trustees of Dickinson, (ii) Penn State shall
invite and permit five members of Dickinson's Board of Trustees
to attend public meetings of Penn State's Board of Trustees and
C~a~ittees of the Board of Trustees, (iii) Penn State shall cause
one member of Dickinson's Board of Trustees to sit as a Trustee
Emeritus of Penn State's Board of Trustees as more fully set
forth in Section
(F) ~ea~o In accordance with Section 4.14, at the
Affiliation Date, Penn State's Board of Trustees shall elect or
appoint Peter G. Glenn as Dean of Dickinson. During the period
between the Affiliation Date and the Merger Date (i) Penn State
shall not terminate Dean Glenn without the prior consent of
Dickinson's Board of Trustees, (ii) Dickinson shall not term/hate
Dean Glenn without the prior consent of Penn State's President,
and {iii) the Dean shall report at least annually to Penn State's
Board on the state of the law school.
(G) Articles of Incorporation and Bylaws. The
Articles of Incorporation and the Bylaws of Dickinson, effective
as of the Affiliation Date, shall be amended and restated in
substantially the form of Articles of Incorporation and the form
of Bylaws, attached to the Plan as Exhibit "A" and Exhibit ~B,"
respectively, with only such changes, if any, as may be required
by the Department of Education Of the Commonwealth of
Pennsylvania to secure the approval of the Department of
Education of such Articles and Bylaws· By execution of this
Plan, Penn State shall be deemed to have consented to, aPProved
and adopted such Articles of Incorporation and Bylaws effective
as of the Affiliation Date.
1.02. The Mercer. At the Effective Time of the.Merger (as
defined in Section 1.02(B)):
(A} The Continuin~ Corporation. Dickinson shall merge
with and into Penn State, subject tO Penn State's Charter,'
Bylaws, Standing Orders', Policies and Procedures then in effect
as the sm-me may bm amended from. time to time (the "Merger"), the
separate existence of Dickinson shall cease, Penn State shall
survive and continue to exist as a Pennsylvania corporation and
Penn State's Board of Trustees shall 'continue.unchanged (the
"Merger,) {Penn State is sometimes referred to in this Plan as
.the .Continuing Corporation" after the Merger Date). The college
or other unit of Penn State which engages in providing the J~D.
and/or LL.M degree based legal education required to be provided
in Section 4.06(A) of this Plan is referred to in this Plan after
the Merger Date as "Dickinson").
(B) Effective Time of the Mercer. Subject to the
provisions of this Plan, articles of merger (the "Articles of
Merger") shall be duly (i) adopted by Penn State's Board of
Trustees and Dickinson's Board of Trustees, (ii) executed and
acknowledged by Dickinson and pez~n State, (iii) approved by'Penn
State as Dickinson's single member, and (iv) filed with the
office of the Secretary Of the Commonwealth of Pennsylvania, on
the Merger Date (as defined in Section 1.02(C)). The Merger
shall become effective upon the filing of the Articles of Merger
with the Secretary of the C~u~,onwealth of Permsylvania or at such
time thereafter as is provided in the Articles of Merger (the
· Effective Time"). The Articles of Merger shall be substantially
in the form of form attached to the Plan as Exhibit "C."
(C) Closing. The closing of the Merger (the "Merger
Closing") will take place on the later of (i) a date to be
specified by the parties, which shall be the first day which is
at least two business days after satisfaction or waiver (subject
to applicable law) of the conditions, set forth in Article VI (the
· Merger Date"), (ii) July 1, 2000, or (iii) such other time or
date as is agreed to in writing by the parties hereto~ The
Merger Closing shall be held at such time and location as may be ·
agreed to in writing by the parties hereto.
(D) Charter and Bylaws. The charter and Bylaws of the
COntinuing Corporation shall be those of Penn State, as in effect
immediately'prior to the Effective Time.
(B) The DiCkinson School of Law of The Pennsylvania
State University Association. Effective as of the Merger Date,
the Board of Trustees of Dickinson shall cause to be formed a new
non-stock, non~membership. Pennsyl~rania non-profit corporation to
be named'"The Dickinson School of Law of The Pennsylvania State
University Association" (the "Association"). The term of its
existence shall be perpetual. In accordance with
Section 4.13(C), the Associati0n shall be governed by a self~
perpetuatingBoard of Governors. Such' Board of Governors shall
provide counsel and 9~/idance to penn State With respect to the
academic mission of the law school and have the responsibilities
and duties set forth in Section 4.13(C) and Section 8.09 of this
Plan. The Dean of The Dickinson School of Law of the
Pennsylvania State University shall ser~e as liaison between Penn
State and the Association and either the Dean (or in his absence
the Chairperson of the Board of Trustees of Penn State, the
President of Penn S~ate or any Executive or Senior Vice President
of Penn State) shall attend all meetings of the Association's
Board on an ex~officio nonvoting basis. The form of Articles of
the ASsociation is set forth as Exhibit "D" of this Plan. The
form of Bylaws of the Association is set forth as Exhibit "E" of
this Plan.
(F) Penn State Board Seats. On and after the Merger
Date, 'Penn State'shall, in accordance with Section 4.13(B) (2),
(i) cause a member of the Board of Governors Of the Association
-to serve as Trustee Emeritus of Penn State, and (ii) continue to
use its reasonable best efforts to secure full voting membership
on Penn state's Board of Trustees for a member of the Board of
Governors of the Association, in accordance with
Section 4.13(B) (3).
4
II. ACTIONS PRECLUDED PENDING AFFILIATION; ACTIONS PRECLUDED
PENDING ~GER.
Except as expressly contemplated in this Plan, (i)'without
the prior written consent of Penn State (which consent shall not
be unreasonably withheld or delayed) Dickinson, as applicable,
will not, and (ii) without the prior written consent of Dickinson
(which consent shall not be unreasonably withheld or delayed)
Pen/% State, as applicable, will not:
2.01. Ordinar%, Course. From the date of this Plan until
the Affiliation Date and from the Affiliation Date until the
Merger Date, conduct its affairs other than in the .ordinary and'
usual course or fail to use reasonable efforts to preserve intact
its administration, faculty, and organization and assets aald
mainta/n its rights, franchises and existing relations with
students and alumni, or knowingly take any action whichndght
reasonably be expected to (i) adversely affect the ability.of any
party to obtain any necessary Regulatory Approvals and
Acquiescence (as defined in Section 4.05) required for the
transactions contemplated hereby or (ii) adversely affect its
ability to effect the Affiliation or the Merger or perform any of
its material obligations under this Plan. Nothing in this
Section 2.01 shall be deemed ~o restrict Dickinson's ability to
negotiate and enter into an agreement with Shippensburg
University relating.to providing a joint degree incounselling
a/id .law; provided, however, that Dickinson, through its Dean
shall consult with the Executive Vice President and Provost of
Penn State with respect.to such negotiation and a~reement.
2.02. Compensation: Employment'Agreements; Etc. In the
case of Dickinson, from the date of this Plan until the
Affiliation Date and from the Affiliation Date until the Merger
Date, except as permitted by Section 4.15 and Section 4.26, enter
into or amend any employment, severance or similar agreements or'
arrangements (whether written or oral) with any of its trUstees,
officers or other employees, or grant any salary or wage increase
or increase any employeebenefit (including incentive or bonus
payments), except for (i) normal individual increases in
compensation to employees in the ordinary course of business
consistent with past practice or (ii) other changes as may be
required by law or to, satisfy contractual obligations existing, as
of the date hereof consistent with past practice, which have been
disclosed by Dickinson to. Penn State in Dickinson's Disclosure
Letter.
2.03. Benefit Plans. In the case of Dickinson, from the
date hereof until the Affiliation Date and from the Affiliation
Date until the Merger Date, enter into or modify (except as may
be required by applicable law or to satisfy contractual
obligations existing as of the date hereof, which have been
disclosed in. its Disclosure Letter) any pension, annuity,
retirement, savings, profit sharing, deferred compensation,
consulting, ~roup insurance or other employee benefit, incentive.
or welfare contract, plan or arrangement, or any trust agreement
related thereto, in respect of any of its trustees, officers,
faculty or other employees, including without limitation taking
any action which accelerates the vesting or exercise of any
benefits payable thereunder.
2.04. Acquisitions and Dispositions. In the case of
Dickinson, from the date hereof until the Affiliation Date and
from the Affiliation Date until the Merger Date, except as
disclosed in its Disclosure Letter, purchase, exchange or dispose
of any portion of its assets, which is ~aterial to it, or merge
or consolidate with, or acquire all or any portion of, the
business of any other entity (any of the foregoing, a 'Business
Combination .Transaction"). For purpose of this Section 2.04, a
purchase, exchange or disposition of assets having a fair market
value of $100,000 or more in the aggregate shall be considered
material.
2.05. Amendment. In the case of Dickinson, from the date
hereof until the Jkffiliation Date and from the Affiliation Date
until the Merger Date, amend its Articles of Incorporation or
Bylaws (or similar constitutive documents) except that Dickinson
may amsn~ its Articles of Incorporation and Bylaws prior to the
da~e of the Affiliation Closing so that such Articles of
Incorporation and Bylaws are substantially identical to the form
of Articles of Incorporation and Bylaws attached to this Plan'as
ExhibitA and Exhibi~ B, respectively.
2.06. Sincte Member. In the case of Penn State, from the
Affiliation Date through the Merger Date: (i) sell, exchange,
transfer, relinquish or terminate its single member status,
(ii) amend, repeal or restate Dickinson's Articles of
Incorporation or Bylaws, (iii) merge Dickinson with.any party
other than Penn State, (iv) sell substantially all of Dickinson's
assets or liqUidate Dickinson, (v) use Dickinson's endowraent and
.the additions thereto and income thereon{the "Endowment") for
other than the exclusive benefit of Dickinson, (vi) use
Dickinson's Endowment or other charitable assets in a manner or
for purposes not in accordance with the terms of any instruments
which donated, contributed or otherwise transferred such assets,
or (Vii) remove members of Dickinson's Board of Trustees Or
otherwise alter the composition, terms,, mission, responsibilities
or duties of such'Board of Trustees.
The term "Endowment," as used in this Section 2.06, shall
mean the (i) endowment and similar funds of the types referred to
in Note 3 to "Notes to Dickinson's Financial Statements, at
June 30, 1995 and for the periods then ended (including
restricted funds, designated funds, and quasi endowment), and
(ii)"annual giving of the type referred to in Note 4 to such
financial statements (including private gifts and grants).
2.07.. Accountin? Methods. Zn the case of Dickinson,
implement or adopt an}' change'in its accounting principles,
practices or methods, other than as may be required by generally
accepted accounting principles.
2.08. Adverse Actions. (1) Knowingly take any action which
is reasonably likely to, (i) prevent or impede the Merger from
qualifying for pooling-of-interests account'ir~ treatment or
(ii) result in Dickinson or Penn State realizing and recognizing
income, gain or loss as a result of the Affiliation or the
Merger, respectively~ or (2) knowingly take any action which is
intended or is reasonably likely to result in (x). any of its
representations and warranties set forth in this Plan becoming
untrue in any material respect at any time prior to either the
Affiliation Date or the Merger Date, (y) any of the conditions to
the Affiliation or Merger set forth in Article V and Article VI,
respectively, not being satisfied, or (z) a material violation or
breach of any provision of this Plan except, in every case, as
may be required by applicable law.
2.09. Indebtedness. In the case of Dickinson,' from the
date hereof until the Affiliation Date and from the Affiliation
Date until the Merger Date, incur any long-term indebtedness for
borrowed money or guarantee any such long-term indebtedness or
issue or sell any long-term deb~ securities or warrants or rights
to acquire any long-term debt securities.
2.10. Non-Solicitation. In the case of Penn State,~ from
the date hereof until the Affiliation Date, not solicit or hire
any member of Dickinson's faculty, the Dean, or Dickinson's non-
faculty employees, to the extent set forth in Sections 4.14 to
4.t6.
2.11. AGreements. Agree or co~m~it to do anything
prohibited by Sections 2.01 through 2.10.
III. REPRESENTATIOKS AND WARRAR~IES.
3.01. Disclosure Letters. Concurrently herewith~ Penn
State has delivered to Dickinson andDickinson has delivered to
Penn State, a letter (the "Disclosure Letter") setting forth
certain items of disclosure with respect to the representations
and warranties set forth below. The inclusion of an item in'a
Disclosure Letter by ~ party shall not be deemed an adm/ssion; by
such party, that such item represents a material exception or
fact, event or circumstance or that such item is reasonably
likely to result in a Material'Adverse Effect (as defined in
Section 8.08).
3.02. Standard~ No representation or warranty of Penn
State or Dickinson set forth in Section 3.03 shall be deemed
untrue or incorrect, and no party hereto shall be deemed to have
breached a representation or warranty, as a consequence of the
existence or absence of any fact, circumstance or event if such
fact, circumstance or event, individually or taken together with
alt other facts, circumstances or events inconsistent with any
paragraph of Section 3.03 is not reasonably likely to have a
Material Adverse Effect.
3.03. Representations and Warranties. Subject to
Sections 3.01 and 3.02, Dickinson, as applicable, hereby
represents and warrants to Penn State, and Penn State, as
applicable; hereby represents and warrants to Dickinson, as
follows:
(A) Recitals. In the case of the representations and
warranties of Dickinson, the facts set forth in Recitals A and C
of this Plan with respect to it are true and correct. In the
case of the representations and warranties of Penn State, the
facts set forth in Recitals B and C of this Plan with respect to
it are true and correct.
(B) Organization, Standing, and Authority. In the
case of each of Dickinson and Penn State, it has in effect all
authorizations, licenses, and approvals necessary for it to own
or lease its~ properties and assets and to carry on its affairs as
they are now conducted. The Articles. of Incorporation (in the
case of Dickinson) and the Charter (.in the case of Penn State),
the Bylaws (in the case of both Penn State and Dickinson) and the
Standing Orders of the Board of Trustees (in the case of PeD_n
state), copies of which were furnished to (i) Penn State, in the
case of Dickinson, and (ii)Dickinson, in the case of Penn State,
are true, correct and complete copies of such documents as in
effect on the date of this Plan. Dickinson does not have any
· parents or subsidiaries and is not under common control with any
corporation, partnership or other person, except as set forth in
Dickinson's Disclosure Letter. Dickinson does not transact
business.outside of the United States, except as set forth in
Dickinson's Disclosure Letter.
(C) Tax Exemption. In the case of Dickinson, it is an
.organization exempt generally from federal income taxes under
Section 501(c) (3) of the Internal Revenue Code of 1986, as
amended (the "Code"). It has received and has outstanding a
dete~-mination letter from the Internal Revenue Service of such
tax exempt status. In the case of Penn State, it is an
organization exempt generally from federal income taxes under
Section 115 of the Code.
(D) Corporate Power. In the ease of each of. Dickinson
and Penn State, it has the corporate power and authority to carry
on its affairs as they are now being conducted and to own all its
properties and assets; and it has the corporate power and
authority to execute, deliver and perform its ob!i~ations under
this Plan.
(E) CorPorate Authority. In the case of each of
Dickinson and Penn State, the execution and delivery of this Plan
and the consummation of the transactions contemplated hereby and
thereby have been authorized by all necessary corporate action on
its part, and this Plan has been duly executed and delivered by
it, and each is a valid and binding agreement of it, enforceable
in accordance with its terms (except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability
relating .to or affecting creditors rights or by general equity
principles).
(F) Approvals and Accruiescences. In the case of each
of Dickinson and Penn State, there are no approvals,
authorizations, consents, filings, licenses, orders,
certifications, permits or academic accreditation acquiescences
of any kind required for either party to enter into this Plan and
to proceed with and cons~L=L~te the Affiliation, the Merger and
the other transactions contemplated hereby, except (i) in the
case of Dickinson, notification to and academic accreditation
acquiescences by the American Bar Association acting through its
Se'cretary of Legal.Education and Admissions to the Bar (the
"ABA") and the American Association of Law Schools (the "AALS"),
(ii) in the case of Penn State, notification to and academic
accreditation acquiescences by the Middle States Association of
Colleges and Universities, (iii) in the case of both Penn State
and Dickinson, notification to and the approval or consent by the
Secretary of Education of the Co~m%onwealth of Pennsylvania,
(iv) in the case of both Penn State and Dickinson, a filing With
the Federal Trade Commission.("FTC") under the Hart Scott Rodino
AntiTrust Improvements Act and non-objection by such a~ency
during the period prescribed.by statute, and (v) i~ the case of
the Association, notification to and approval by the Secretary of.
Education of the Coranonweal~h of Pennsylvania of the formation of
the Association and of its Articles of Incorporation and Bylaws.
Neither party, knows of any reason why such acquiescence,
approvals, consents will not be obtained or of any reason why the
FTC would object to the Affiliation or the Merger.
(G) No Defaults. In the case of each of Dickinson and
Penn State, except as disclosed in its Disclosure Letter, subject
to receipt of the Regulatory Approvals and Acquiescence, and
e~cpiration of the waiting periods, referred to in
Section 3.03(F), the execution, delivery and performance of this
Plan and the completion Of the transactions contemplated hereby
and thereby by it, dolnot and will not (i) constitute a breach or
violation of, or a default under, any law, rule or regulation or
any judgment, decree, order, or agreement, indenture or
instrument of it or to which it or any of its properties is
subject or bound, (ii) constitute a breach Or violation of, or a
default under, its Articles of Incorporation or Bylaws, or
(iii) require any consent or approval under any such law, rule,
regulation, judgment, decree, order, indenture or instrument.
(H) Financial Statements. Its Consolidated Statement
of Financial. Condition at June 30, 1996 (including related notes
and schedules thereto) fairly p~esents the financial position of
the entity or entities to which it relates as of such date. Its
Consolidated Statements of Activities and of Cash Flow for the
period then ended, including related notes and schedules thereto,
fairly presents the results of activities, operations, changes in
fund balance and changes in cash flows, as the case may be, of
the entity or entities to which such statement relates for the
period then ended, in each case in accordance with generally
accepted accounting principles consistently applied during the
period then ended, except, in each case, as may be noted therein.
Except as set forth in its Disclosure Letter, in the
case of each of Dickinson and Penn State, it did not have, as at
June 30, 1996, any liabilities or "loss contingencies, (as that
term is used in SFAS No. 5) required to be reflected, reserved
against or accrued on its Consolidated Statement of Financia!
Condition or disclosed in the Notes and Schedules thereto, which
have not been so reflected, reserved against, accrued or
disclosed. Since June 30, 1996, except as set forth in its
DiSclosure Letter, it has not:
(!) suffered any change (nor has there been any
other occurrence or circumstance that with the passage of
time could reasonably be exlDected to result in such change)
(i) in its assets, liabilities, endowment, results of
operation, (ii) otherwise in its affairs or'prospects, which
has had or can reasonably be. expected to have a Material
Adverse Effect;
(2) suffered any loss, damage, destruction or
other casualty affecting an~ of the properties or assets
(whether or not ~overed ~y insurance) in an amount involving
$25,000 or more mn any single incident or more than $100,006
in the aggregate (in the case of Dickinson) or involving
$3,300,000 or more in any single'incident or more than'
$13,200,000 in the aggregate (in the case of Penn State);
(3) incurred any liability or loss contingency
required to be reflected, reserved against, accrued or
disclosed in the notes to its financial statements under
SFAS No. 5 except liabilities or loss contingencies incurred
in the ordinary course of business and consistent with Past
practice and, which in the case of Penn State, has had er
can be reasonably expected to have a Material Adverse
Effect;
(4) paid, discharged or satisfied any claim,
liability or obligation, other than any payment, discharge
or satisfaction in the ordinary course of business and
consistent with past practice and, which in the case of Penn
State, has had or can be reasonably expected to have a
~terial Adverse Effect;
(5) permitted or allowed any of its property or
assets (real, personal or ~ixed, tangible or intangible) to
become subjected to any mortgage, pledge, lien, security
10
interest, encumbrance, restriction or charge of any kind
and, which, in the case of Penn State, has had or can be
reasonnbly expected to have a Material Adverse Effect;
(6) written off as uncollectible any notes or
accounts receivable, other than for write-downs, write-ups
and write-offs in the ordinary course of business and
consistent with past practice and, which in.the case of Penn
State, has had or can be reasonably expected to have a
Material Adverse Effect;
(7) cancelled any obligations owed to it or
waived any claims or rights of substantial value, or sold,
transferred, or otherwise disposed of any of its properties
or assets (real, personal or mixed, tangible or intangible),
except in the ordinary course of business and consistent
with past practice and which, in the case of Penn State has
had or can be'reasonably expected to have a Material Adverse
Effect;
(8) licensed, sold, transferred, pledged,
modified, disclosed, disposed of or permitted to lapse any
right to the use of any of its intellectual property right,
except in the ordinary course of business and consistent
with past practice and, which in the case of Penn State, has
had or can be reasonably expected to have a Material Adverse
Effect;
(9) granted any general increase in the
compensation of officers or employees (including any such
increase pursuant to any pension, profit-sharing or other
employee benefit plan or conmLitment) or any increase in the
· compensation payable or to become payable to any officer,
employee, consultant or agent, except for normal increases
made in the ordinary course of business consistent with past
practice and, which in the case of Penn State,' has had or
can be reasonably expected to have a Material Adverse
Effect;
(10) made any capital expenditure or commitment in
excess of $10,000 individually or in excess of $50,000 in
the aggregate (in the case of Dickinson) or $1,3007000
individually or in excess of $6,600,000 in the aggregate in
'the case of Penn State;
(!1) made any change in any method of accounting
or accounting practice or any change in depreciation or
amortization policies or rates theretofore adopted, in the
case of Dickinson, but not Penn State;
(12) paid, lent or advanced any amount to, or
sold, transferred or leased any properties or assets (real,
personal or mixed, tangible or intangible) to, any of its
officers or trustees or any affiliate of any of its officers
or trustees except for trustee fees, and employment
compensation to officers, or entered into any agreement or
other arrangement with any of its officers or trustees or
any affiliate of any of its officers or trustees, in the
case of Dickinson, but not Penn State;
(13) entered into any other transaction, contract
or commitment other than in the ordinary course of business
and which, in the case of Penn State, has had or can be
reasonably expected to have a Material Adverse Effect; or
(14) agreed,.whether in writing or otherwise, to
· take any action described in this Section 3.03(H).
(I) Litigation: Reculatory Action. Except as
disclosed in Dickinson's or Penn State's Disclosure Letter or, in
the case of Penn State, to the extent it has had or can be
reasonably expected to have a Material Adverse Effect:
(1) no litigation or proceeding before any court
or governmental agency is pending against it and, to the best of
its knowledge, no such litigation, proceeding or controversy has
been threatened;
(2)' neither it nor any of its properties is a
party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with,'or a
commitment letter or similar submission to, or has adopted any
board resolution at the request of, any state governmental agenc~
or other authority charged with the supervision, regulation or
accreditation of institutions of higher education (including,
without limitation, the Secretary of Education of the
Corm~onwealth of Pennsylvania, the ABA, the AALS (collectively,
the "Regulatory and Accreditation Authorities"); and
(3) neither it nor any of its .subsidiaries has
been advised by any Regulatory or Accreditation Authority tha~
such Regulatory or Accreditation Authority is contemplating
issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement,
memorandum of understanding, commitment letter or similar
submission or any such resolutions. .
' ' (J) Compliance With Laws. Except as disclosed in its
Disclosure Letter, it:
(1) iS in substantial compliance, in the conduct
of its affairs, with all applicable federal, state and local
statutes, laws, regulations, ordinances, rules, judgments, orders
or decrees applicable thereto or to its employees;
(2) possesses all permits, licenses,
authorizations, orders and accreditation approvals of, and has
made all filings, applications and registrations with, all
12
Regulatory and Accreditation Authorities which are required to
permit it to conduct its affairs substantially as presently
conducted; all Such permits, licenses, certificates of authority,
orders and approvals are in full force and effect and, to the
best of its knowledge, no suspension or cancellation of any of
them is threatened; and -
(3) has received, since June 30, 1996, no
notification or communication from any Regulatory and
Accreditation Authority (i) asserting, in the case of Dickinson,
that it is not in compliance with any of the statutes,
regulations, or ordinances which such Regulatory and
Accreditation Authority enforces or (ii) threatening or
contemplating revocation or limitation of, or which would have
the effect of revoking or limiting, accreditation (nor, to its.
knowledge, .do any grounds for any of the foregoing exist).
(K) Defaults; Properties; Contracts: Insurance.
(1) In the case of Dickinson, except as disclosed
in its Disclosure Letter, it is not in default under any
contract, agreement, cou~itment, arrangement, lease, insurance
policy, or other instrument to which it is a party, by which its
respective assets, affairs, or operations may be bound or
affected, or under which it or its respective assets, affairs, or
operations receives benefits, and there has not occurred any
event that, with the lapse of time Or the giving of notice or
both, would constitute such a default.
(2) In the case of Dickinson, except as set forth
in its Disclosure Letter or as reflected or reserved against or
accrued on its Consolidated Statement of Financial Position, or
disclosed in the notes and schedules thereto, it has good and
marketable title, free and clear Of all Liens (other than Liens
for current taxes not yet delinquent) to all of the properties
and assets, tangible or intangible, reflected on such
Consolidated Statement Of Financial Position as being owned by it
as of the dates.thereof and all properties and assets acquired by
it since the date of Such financial statement. To its knowledge,
except as set forth in its Disclosure Latter, all buildings'and
all fixtures, equipment and other property and assets are held
under valid leases or subleases by it, enforceable in accordance
with their respective terms (except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability
affecting creditors' rights or by general equity principles).
(3) In the case of Dickinson, its Disclosure
Letter contains (i) an accurate and complete list of all real
property owned or leased by Dickinson, as well as all buildings
and other structures and material improvements located on such
real property (including a brief description of the use currently
being made. of such property and the prior uses of such property
that are .known to Dickinson, including for each lease a brief
description of Dickinson's rental obligations under such lease,
its expiration date and renewal terms, and whether there is a
requirement of consent by the lessor thereunder to the
Affiliation and the Merger, and (ii) a complete llst and
description by generic category of all leases pursuant to which
Dickinson leases personal property. Ail such leases are valid,
binding and enforceable against Dickinson and to the reasonable
best knowledge of Dickinson against the other party or parties
thereto in accordance with their terms, and are in full force and
effect; except as set forth in such Disclosure Letter, there are
no existing.material defaults by Dickinson or, to the reasonable
best knowledge of Dickinson, of the other party thereunder; no
event of default with respect to Dickinson or, to the reasonable
best knowledge of Dickinson with respect to the other party
thereto, has occurred which (whether'with or without notice,
lapse of time or the happening or occurrence of any other event)
would constitute a default thereunder. Dickinson has made
available to Penn State true and correct copies of all leases
referred to in the Disclosure Letter. Except as set forth on the
Disclosure Letter, none of the buildings and str~ctures located
on real property leased by Dickinson, or any appurtenances
thereto or equipment therein' or the operation or rm~intenance
thereof, violates in any manner any restrictive covenants or'
encroaches on any property owned by others nor does any building
or structure of third parties encroach upon the property leased
by Dickinson~ Except as set forth in the Disclosure Letter, no
condemnation proceeding is pending or threatened, which Would
preclude or materially impair the use of any such property owned
or leased by Dickinson for ~he uses currently being made of such
property. Dickinson's Disclosure Letter contains an accurate and
complete summary of all policies of fire, general liability,
theft, life, worker's compensation, health, directors and
officers, and other forms of insurance presently owned or held by
Dickinson, specifying the insurer, amount of coverage, tYPe of
insurance, policy number and any pendingclaims thereunder of
which Dickinson has actual knowledge. Ail such policies are in
full force and effect and all premiums with respect thereto are
currently paid; are sufficient for compliance with all
requirements of law and Of all agreements to which Dickinson is a
party; provide adequate insurance coverage for the assets and
operations of Dickinson; and will not terminate or lapse by
reason of the Affiliation or the Merger or other transactions..
which are contemplated by this Plan.
(4) In the case of Dickinson, except as set forth
in Dickinson's Disclosure Lette=, there are no executory
contracts to which it is bound after the Merger Date other than
contracts entered into in the ordinary course of business, which
are not material in amount.
(5) In the case of Dickinson, except as set forth
in DickinSon'.s Disclosure Letter:
~DG/370%~/0172~. 001
(i) Dickinson is not restricted by any
agreement from carryin~ on its affairs or activities or any
part thereof anywhere in the world or from competing in any
line of business with any person or entity;
(ii) Dickinson has no outstandin9 loan to
any person or entity, except loans made to students in the
ordinary course of business;
(iii) Dickinson is not subject to any
obligation or requirement to provide funds uo or make any
investment (in the form of a loan, capital contribution or
otherwise) in any person or entity);
(iv) There are no outsuanding sales or.
purchase orders or other coramitments of Dickinson which will
result an an expenditures of more than $200,000 in the
aggregate;
(v) Dickinson is not a party to any purchase
or sale contract or agreement which calls for aggregate
purchases or sales in excess over the course of such
contract or agreement of $50,000 or which continues for a
period of more than twelve months (including periods covered
by any option to renew by either party) which is not
terminable on 60 days' or less notice without cost or other
liability at or at any time after the date of this Plan;
(vi) Dickinson has no agreement or
arrangemenc for the license or sale of any assets,
properties or rights (including intellectual property
rights) requzring the consent of any pa~ty to the transfer
of such agreement or arrangement to the Affiliation and the
Merger herein contemplated;
(vii) Dickinson is not party to any contract
or agreement to make any capital expenditure or commitment
therefor for additions to property, plant, or equipment for
an araount in excess of $100,000;
(viii) Dickinson has no agreements,
contracts or commitments which are material to its affairs,
business, operations or prospects other than are reflected
in Dickinson's Financial Statements or the notes thereto;
(ix) Other than this Plan, Dickinson has no
pending plan, agreement, or intention to (a) consolidate
with, (b) merge with or into, or (c) sell or transfer to, in
one or more transactions, a substantial portion of the
assets of Dickinson, any other person.
.~ (6) In the 'case of Penn State, except, as set
forth in Penn State's Disclosure Letter, Penn State has no
(i) agreement for the license or sale of any assets, properties
~ ~DG/~7048/02722. 001
or rights (including intellectual property rights) requiring the
consent of any party to the transfer of such agreement or
arrangement to the Affiliation and the Merger, and
(ii) agreement, plan or intention to consolidate with, merge into
or sell or transfer in one or more transactions, a substantial
portion of the assets of Penn State to any other person.
(L) No Brokers. Ail negotiations relating to this
Plan, the Affiliation. and the Merger, and the transactions
contemplated hereby have been carried on by each of Dickinson and
Penn State directly with the other party, and no action has been
taken by it which would give rise to any valid claim against it
or the other party hereto for an investment banking, financial
advisory, brokerage commission, finder's fee or other like
payment.
(M) Employee Compensation and Benefit Plans.
(1) In the case of Dickinson, its Disclosure
Letter contains a complete list of salary levels for all faculty'
and non-faculty employees of Dickinson. Such Disclosur~ Letter
also contains (i) a description of all vacation, deferred
compensation, pension, retirement, annuity, thrift and 'savings
plans, (ii) a list of all existing and proposed employment or
severance contracts, (iii) a description of all medical, dental,
disability,, health and life insurance plans, and (iv) a
description of all other employee benefit and fringe benefit
plans and contracts or arrangements for the benefit of officers,
former officers, faculty members, former faculty members,
employees, former employees, trustees, former trustees, or the
beneficiaries of any of the foregoing ("Compensation and Benefit
Plans").
(2) True and complete copies of the Compensation
and Benefit Plans of each of Penn State and Dickinson, including,
but not limited to, any insurance policies, trust instruments
and/or insurance or annuity contracts, if any, forming a part
thereof, and all amendments thereto have been supplied to the
other party.
(3) The Compensation and Benefit Plans of each of
Penn State and Dickinson have been administered in compliance
with the terms thereof. To the extent any such plan is subject
to one or more of ths provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), the Code, the
Age Discrimination in Employment Act, the Social Security Act, or
any other state or federal statute, it has been administered in
compliance with each relevant provision thereof and has incurred
no material liability thereunder. .Any such plan that is required
by law to be funded on an actuarial basis has been so funded in'
all material respects.
(4) Except as set forth in its Disclosure Letter,
(i) Dickinson does not maintain or contribute to any "employee
pension benefit plan" ("Pension Plan") as such term is defined in
Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), including, solely for the purpose of
this subsection, a plan excluded from coverage by Section 4(b)(4)
or Section 4(b) (5) of ERISA~ and except with respect to any such
Pension Plan which is a "multlemployer Plan" within the meaning
of Section 3(37) of ERISA, each such Pension Plan is in
compliance with the provisions of ERISA (if applicable), the
applicable provisions of the code, and all other applicable
federal law, (ii) neither any Pension Plan nor any trust created
thereunder nor any trustee or administrator thereof (other than
any Multiemployer Plan, any trust created thereunder and any
trustee or administrator thereof) has engaged in a transaction
which will subject any Pension Plans, any such trust, or any
trustee or administrator thereof, to =he tax or penalty on
prohibited transactions imposed by Section 4975 of the Code or to
a civil penalty imposed by Section 502(i).of ERISA and there has
b~en no unreported "reportable event" as defined in
Section 4043(b) of ERISA with respect to a Pension Plan, and
(iii) Dickinson neither maintains nor contributes to any
"employee welfare benefit plan" ("Welfare Plan,), as such term is
defined in Section 3(1) of ERISA (including a plan excluded from
coverage by Section 4(b) (4) of ERISA), whether insured or
otherwise, and any such Welfare Plan maintained by Dickinson is
in material compliance with the provisions of ERISA. Dickinson
has not ests3olished or contributed to any "voluntary employees,
beneficiary association" within the meaning of Section 501(c) (9)
of the Code.
(N) Labor Matters. In the case of Dickinson, except
as set forth in its Disclosure Letter, it is not a party to, or
is bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor
organization, nor is it the subject of a proceeding asserting
that it has committed an unfair labor practice (within the
meaning of the National Labor Relations Act or the Public
Employee Relations Act, as applicable) or seeking to compel it tO
bargain with any labor organization as to wages and conditions cf
employment, nor is there any strike or other labor dispute
involving it, pending or,. to the best of its knowledge,
threatened, nor is it aware of any activity involving any of its
employees seeking to certify a collective bargaining unit or
engaging in any other organization activity.
(O) Environmental Matters. In the case of Dickinson,
other than as set forth in its Disclosure Letter, there are no
proceedings, claims, actions, or investigations of any kind,
pending or threatened, in any court, agency, or otherwise arising
under any Environmental Law; there are no agreements, orders,
judgments, or decreesj by or with any court, regulatory agency or
other governmental authority, imposing any liability or
obligation; there are and have been no Materials of Enviromnental
Concern or other conditions at any property (whether or not
ow-ned, operated, or otherwise used by, on behalf of, it).
"Environmental Laws" means the statutes, rules, regulations,
ordinances, codes, orders, decrees, and any other laws of any
federal, state, local governmental authority, regulating,
relating to or imposing liability or standards of conduct
concerning pollution, or protection of human health-and-safety or
of the environment, as in effect on or prior to the date of this
Agreement. "Materials of Environmental Concern" means any
hazardous or toxic substances, materials, wastes, pollutants, or
contaminants, and any other substance the presence of which may
give rise to liability under any Environmental Law.
(P) Taxation: Tax Returns. As of the date hereof,
neither Penn State nor Dickinson is.aware of any reason why the
Affiliation or the Merger will result in the realization and
recognition of income, gain or loss to Dickinson or Penn State
for federal or state income tax purposes. Except as disclosed in
Dicklnson's Disclosure Letter: (i) all reports and returns with
respect to Taxes (as defined below) which are required to be
filed by it., including, without lSmitation, federal income tax
returns or federal annual infdrrmation returns (on IRS Form 990)
(collectively, the "Tax Returns"), have been timely filed, or
reqUests for extensions have been timely filed and have not
expired, and such Tax Returns were true, complete and accurate;
(ii) taxes(which shall include federal, state, local or .foreign
income, gross receipts, windfall profits, severance, property,
production, sales, use, license, excise, franchise, employment,
withholding or similar taxes imposed on the income, properties or
operations of it or its subsidiaries, together with any interest,
additions, or penalties with respect thereto and any interest in
respect of such addStions or penalties, collectively, the
"Taxes"), if any, shown to be due on such Tax Returns have been
paid in full; (iii)' any Taxes due with respect to completed and
settled exa/ninations have been paid in full; (iv) no issues have
been raised by the relevant taxing authority in connection with
the examination of any of such Tax Returns; and (v) no waivers of
statutes of limitations (excluding such statutes that relate to
years currently under examination by the Internal Revenue
Service) have been given by or requested with respect to any
Taxes.
(Q) Continuinc Accreditation of Law School. Penn
State intends that Dickinson remain a fully accredited law school
and member in good standing of the Association of American Law
Schoois. Penn State intends to encourage and support reasonable
efforts to maintain full accreditation status and membership in
-.the Association of American Law Schools.
(R) No Material Adverse Effect. Since June 30, 1996,
except as previously set forth in its Disclosure Letter, (i) it
has conducted its affairs and activities in the ordinary and
usual course (excluding the incurrence of expenses related to
this Plan and the transactions contemplated hereby) and (ii) no
event has occurred or circumstance arisen that, individually or
taken together with all other facts, circumstances and events is
reasonably likely to have a Material Adverse Effect with respect
to it.
IV. ADDITIONAL C0"~-ENANTS.
Dickinson hereby covenants to and agrees-with Penn State,
and Penn State hereby covenants to and agrees with Dickinson,
that:
4.01. Reasonable Best Efforts. Subject to the terms and
conditions of this Plan, from the Date of this Plan until the
Date of the Merger, it shall use its reasonable best efforts in
good faith to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or desirable,
or advisable under applicable laws, so as to permit consummation
of the Affiliation and the Merger as promptly as reasonably
practicable and to otherwise enable consummation of the
transactions contemplated hereby. During the periodbetween the
Date of this Plan and the Merger Date, each of Dickinson and Penn
State, shall, and shall cause its administration, faculty and
other employees to cooperate with and assist each other in the
formulation of plans to (i) integrate the operations and
activities of Dickinson with those of Penn State, (ii) identify
cost savings and revenue enhancement opportunities for both
parties, (iii) enhance the applicant pool for matriculation to
Dickinson for the 1997-1998.class year and beyond, and
(iv) .m~ximize the results of the Dickinson component of Penn
State's 1996-2003 capital campaign.
4.02. Press Releases and Public Announcements. Except as
otherwise required by applicable law, during the period between
the date of the execution of this Plan and the Affiliation Date
neither Penn State nor Dickinson shall issue or cause the
publication of any press release or other public announcement
with. respect to, or otherwise make any public statement
concerning, the transactions contemplated by this Plan without
the consent of the other party, which consent shall not be
unreasonably withheld.
4.03. Access; Information.
(A) Access. I Upon reasonable notice, it shall afford
the other party and its administration, faculty, other employees,
counsel, accountants and other authorized representatives
("Representatives"), reasonable access, during normal business
hours and with prior notice, throughout the period'between the
Date of this Plan and the Date of Affiliation (and in the case of
Dickinson, from the Date of Affiliation through the Merger Date),
to (i) all of its properties, books, contracts, commitments and
records and laws, and (ii) all other information concerning the
affairs, activities and personnel of it as the other may
reasonably'request;
(B) Information. It will not use any information
obtained pursuant to this Section 4.03 for any'purpose unrelated
to the consummation of the transactions contemplated by this
Plan, will hold all information and documents obtained pursuant
to this paragraph in confidence (as provided in Section 8.06)
'unless and until such time as such information or documents
become publicly available other than by reason of any action or
failure to act by it or as it is advised by counsel that any such
information or document is required by law to be disclosed. No
investigation by either party of thebusiness and affairs of
another shall affect or be deemed to modify or waive any
representation, warranty, covenant or agreement in this Plan, or
the conditions to either party's obligation to complete the
transactions contemplated by this Plan.
4.04. Other Affiliation or Mer~er Proposals.
(A) Dickinson. During the period between the date of
this Plan and the Affiliation Date, Dickinson, without the prior
written consent of Penn State, s~all not~ and Dickinson shall
direct its Representatives not to, solicit or encourage
inquiries or proposals with respect to, or engage in any
negotiations concerning, or provide any confidential information
to,. or haveany discussioms with, any person (other than the
other party hereto) relating to an Affiliation Proposal, or enter
into any agreement with respect to or take any action to endorse
or recommend an Affiliation PrOposal. As used in this Plan, the
~term "Affiliation Proposal" shall mean any proposal for a merger,
consolidation or other similar affiliation involving Dickinson or
any offer to become a single member of, such party, other than
pursuant to the transactions contemplated by this Plan and the
proposed.transaction between Dickinson and Shippensburg
University referred to in Section 2.01.
(B) Penn State. From the date of this Plan through
.the Affiliation Date, Penn State, without the prior written
consent of Dickinson, shall not, and Perm. State shall direct its
Representatives not to, solicit or encourage inquiries or
proposals with-respect to, or engage in any negotiations
concerning, or provide any confidential information to, or have
any discussions with, any person .(other than the other party
hereto) relating to an Affiliation Proposal involving a law
school, or other provider of legal education, or enter into any'
agreement with respect to or take any action to either endorse or
recommend an Affiliation Proposal, establish, de novo, an
affiliate, unit or college of Perln State which offers J.D. degree
based legal education. From the date of this Plan through the
Affiliation Date, Penn State, without the prior written consent
of Dickinson, shall not take steps to create a new law school or
other provider of J.D. or LL.M. degree based legal education,
with or without any person or entity other than Dickinson.
(C) Notice. From the date of this Plan through the
Affiliation Date, each of Penn State and Dickinson shall advise
the other orally (within one business day) and in writing (as
promptly as practicable), in reasonable detail, of any such
inquiry or proposal which it or any Representative may receive
and if such inquiry or proposal is in writing, then Penn State or
Dickinson, as the case may be, shall deliver to the other a copy
of such inquiry or proposal as promptly as practicable after the
receipt thereof.
4.05. Regulatory and Accreditation Approvals, Accruiescence
and Related Applications.
(A) General. Each of Penn State and Dickinson shall,
as soon as practicable after the date of execution of this Plan,
(i) prepare and submit applications and notices to, and filings
with, the appropriate RegUlatory and Accreditation Authorities,
and (ii) make all other appropriate notices and filings, to
secure all other apProvals, consents, acquiescences, indications
of non-objection and rulings, which are necessary for it to
complete the Affiliation and the' Merger and the other
transactions contemplated by this Plan=
(B) Applicatioq Process. Each of Penn State and
Dickinson shall, during the period between the date of execution
of this Plan and the Date cf the Affiliation, cooperate with the
other and, subject to the terms and conditions set forth in this
Plan, use its reasonable best efforts, to prepare and file all
necessary applications, notices, petitions, filings and other
documents, and tO obtain all necessary permits, consents, orders,
approvals, authorizations and non-obi ection of, or any exemption
by, all RegUlatory and Accredltation Authorities and other third
parties necessary or advisable to complete the Affiliation and
the Merger, including without limitation (i) in the case of both
Penn State and Dickinson, the approval of the Secretary of
Education of the Commonwealth of Pennsylvania, (ii) in the case
of Dickinson, the acquiescence of the ABA and the AALS, and
(iii) in the case of both Dickinson and Penn State, the non-
objection of the Federal Trade Commission under the Hart Scott
Rodino Antitrust Improvements Act, and (iv) in the case of Penn
State~ the acquiescence of Middle States Association of Colleges
and Universities. (These. approvals, acquiescences and non-
objections are referred to in this Plan as "RegUlatory Approvals
and Acquiescences.") %Each of Perkn State and Dickinson shall have
the right to review in advance, and, to the extent practicable,
each will consult with the other, in each case subjeCt to
applicable laws relating to the e~change of information, with
respect to all material written information submitted to, any
third party or any Regulatory and ~ccreditation Authorities in
connection with the transactions contemplated by this Plan. In
exercising the foregoing right, each of the parties shall act
reasonably and as promptly as practicable. Each party shall
consult with the other Party hereto with respect to'the obtaining
of all permits, consents, approvals and authorizations and the
non-objection of all third' parties and Regulatory and
Accreditation Authorities necessary or advisable to complete the
Affiliation, the Merger and the other transactions contemplated
by this Plan, and each party will keep the other party advised of
the status of material matters relating to completion of the
Affiliation and the Merger.
(C) Information. During the period between the date
of execution of this Plan and the Affiliation Date, each par~y
shall, upon request, furnish the other party with all information
concerning its affairs, its financial condition and results of
operation, its. Trustees, Faculty; Administration and student body
and such other matters as may be reasonably necessary or
advisable in con~ection with any filing, notice or application
made by or on behalf of such other party, or any of its
subsidiaries to any Regulatory and Accreditation Authority.
4.06. Dickinson Na~e, Location, Aqreement to En~ace in J.D.
Based Legal Education; Exctusiv±tv; Alumni Status: DeGrees° From
the Affiliation Date and thereafter into perpetuity, unless
otherwise agreed by' (i) a majority of Dicklnsom's Board of
Trustees, during the period from the Affiliation Date through the
Merger Date, or (ii) the Association's Board of Governors, during
the period from the Merger Date and thereafter into perpetuity:
· (A) J.D. Based Education; Exclusivity Penn State
shall ~ontinuously.e~gage in fully accredited Jj~. ~ased legal
educatzon. In addition, penn State shall engage in J.D and LL.M
based legal education, continuing legal education and J.D. or
LL.M based joint degree programs only by and through Dickinson
and no other entity, affiliate, college or unit of Penn State~
provided, however, that the foregoing shall not' be construed to
preclude Penn State from continuing existing courses or programs
having legal components.
(B) Name, Location and De~rees. The name of the unit
of Penn State which offers Penn State's J.D. or LL.M progrs_~s,
.joint degree progr~_~s with a J.D. or LL.M components shall be
"The Dickinson School of Law of The Pennsylvania State
University," and its Primary location and Campus shall be
Carlisle, Pennsylvania. Effective as of the Affiliation Date and
thereafter into perpetuity, degrees conferred shall be conferred
under such name and diplomas evidencing such degrees shall so.
state.
(C) Alumni Status. At the Affiliation Date, Dickinson
graduates shall become Penn Stat~ alumni, with all rights and
privileges associated therewith, with the exception of
eligibility to vote for Penn State alumni trustees or eligibility
to be elected as Penn State alumni trustees. This exception
shall expire upon the Merger Data. This exception shall not
apply to students who graduate from Dickinson during the period
between the Affiliation Date and the Merger Date.
.(D) Deqrees. Dickinson's Board shall have continued
authority to confer honorary degrees, following consultation with
Penn State's President. In addition, from the Affiliation Date
through the Merger Date, Dickinson's Board shall have the
authority to confer academic degrees without veto power on the
part of Penn State or without consulting with penn State's
President. Both academic and honorary degrees shall be from The
Dickinson School of Law of The Pennsylvania State University and
the diplomas evidencing such degrees-shall so state in
perpetuity2
4.07. Limitations on Dickinson Class Size. From the date
of execution of the Plan through the Merger Date, Penn State and
Dickinson shall participate in a collaborative, effort to recruit
students for Dickinson with a special emphasis on the advantages
and opportunities associated with the Affiliation and with the
Merger. Further:
(A) 1997~98 Academic Year. For the 1997-1998 academic
year, Dickinson shall use its reasonable best efforts in its
admissions process to enroll a class of between 160 and 175
students with a median LSAT score of 156 or better. After
judicious management of the admissions process by Dickinson, if
Dickinson is unable enroll a class of 175 with a median LSAT
score of 156 or better for the 1997-1998 academic year, Penn
State shall subsidize Dickinson's operating budget to the extent
of the tuition shortfall resulting from the decreas~ in the size
of this class from 175 to 160 for each of Dickinson's 199'7-1998,
1998-1999 and 1999-2000 academic years, with the subsidy capped
at 15 tuitions in each of such three (3) academic years. The
maximum size of the Class shall be no more than 180 and the
mlnimura size of the class shall be no less than i60, unless
otherwise agreed to by Dickinson and Penn State.
(B) 1998-99 Academic Year. For the 1998-1999 academic
year, Dickinson shall use its reasonable best efforts in its
admissions process.to enroll a Class of between 165 and I75
students, with a median LSAT score at the 70th percentile of the.
nationwide test taker population for the October 1997, LSAT
administration. After judicious management of the admissions
process by Dickinson, if Dickinson is unable to enroll a class of
175with such a median LSAT score at such 70th percentile or
better for the 1998-1999 academic, year, Penn State shall
subsidize Dickinson's bperating budget to the extent of the
tuition shortfall resulting from a decrease in the size of this
class from 175 to 165 for each of Dickinson's 1998-1999.
1999-2000 and 2000-2001 academic years, with the subsidy capped
at 10'tuitions in each of such three (3) academic years. The
maximum size of the class shall be no more than 180 and the
minimum size of the class shall be no less than 165, unless
otherwise agreed to by Dickinson and Penn State.
(C) 1999-2000 Academic Year through Merqer. For the
1999 academic year and for each academic year through the
academic year in which the'Merger is effected, Dickinson shall
use its reasonable best efforts in its admissions process to
~ ~/37048/02722. 801 23
enroll a class of between 175 and 180 with a median LSAT score at
the level of the 73rd percentile among nationwide test takers.
After judicious management of its admissions process by
Dickinson, if Dickinson is unable to enroll a class of 180 with
such a median LSAT score at such 73rd percentile or better, Penn
State will subsidize'Dickinson's operating budget for each
academic year during this period to the extent of the tuition
shortfall resulting from the decrease in the class size from 180
to 175 with the subsidy capped at 5 tuitions in each of these
years for the class graduating three years from the beginning of
the academic year in which the Merger is effected. The maximum
size of the class shall be no more than 180 and the minimum size
of the class Shall be 175, unless otherwise agreed by Dickinson.
(D) Overriding Limitation. Notwithstanding anything
set forth above in this Section 4.07, during the period between
the Affiliation Date and the Merger Date and for a period of five
(5) years from the Merger Date, unless otherwise agreed by the
Association's Board of Governors, and Perzn State's Board of
Trustees, the size of Dickinson's entry level J.D. class shall
not exceed 180 students.
4.08. Operatinc BudGet. During the period between the
Affiliation Date and the Merger Date:
(A) Budget Process. Dickinson's budget shall be
formulated by the budget committee of Dickinson's Board of
Trustees chaired by the Senior Vice President for Finance and
Business/Treasurer of Penn State, and further consisting of
(i) two m~mbers of Dickinson's Board of Trustees selected by
Dickinson's Board of Trustees, (ii) the Dean in an ex officio
nonvoting capacity, and (iii) both of the remaining Class III
Board'members. The committee's budget recommendations will be
submitted to Dickinson's Board for consideration and approval and
then to Pernl State for consideration and approval.
(B) Overhead CharGes: Direct Cost Reimbursement.
(1) Penn State intends to allocate some portion
of its general and administrative overhead expense (e.g., human
resource, payroll, executive, legal and accounting expense, etc.)
to Dickinson periodically after the Affiliation Date in the form
of a g~neral overhead charge. Such general overhead charge shall
bear, '~n all cases, a reasonable relationship to the cost
incurred by Penn State in providing services actually used by
Dickinson and in no event shall such general overhead charge
exceed either three percent (3%) of Dickinson's operating
revenues from all sources or the prices, in the aggregate, at
which Dickinson could obtain such bundle of services from one or
more third parties on an arms length, negotiated basis. A
schedule of the services of a general and administrative nature
which Penn State projects that it will provide to Dickinson in
exchange for its overhead charge, and the method Penn State
intends to use to fix such charge are set fort~
Disclosure Letter.
(2) Goods and services not of ~
administrative nature (e.g., motor vehicle flee
printing, normal insurance premiums, etc.) p~rc
from Penn State shall be purchased on a direct
Penn State's usual and standard rates. Such ra
in excess of the rates at which Dickinson could
or similar goods or services from third parties
negotiated basis. Such goods and services may k
Dickinson from Penn State or from third parties
forth in Penn State's Disclosure Letter.
(C) DeveloDment and Capital campaign_
referred to in Section 4.08(B) shall not include
shall not, under SectioDs'4.08(A) or 4.08(B), c~
for any services which Penn State provides which_
indirectly, are related to development.or'capita_
efforts or for the management or custody of Dick
endowment. The intent of the parties is, as bet-
and Penn State, that all fees, cost and expense ~
such development or capital campaign effort be'bm
'State in exchange for the fees and Charges refer2
Sections 4.t0(A) and 4.10(B). Moreover, the budc
in Section 4.08(A) shall not include any expense--
development and capital campaign effort, except ~
Sections 4.10(A) and 4.10(B), and Penn State sha~
Dickinson fo~ an~t~ cost ~r e~nse~D~kins~
.result of such development and capital campaign ~
(D) Se!f-Sustainin~ BudGet. Dickinsor~
intend that Dickinson's annual budget be self-sus
Dickinson's budgeted operating revenues equal Dic~
budgeted expenses, without subsidy from Penn Stat
otherwise provided .in Sections 4.07, 4.09 and 4.1
and with due regard to the requirements of Sectiom
Plan. For budgetary purposes Dickinson's revenuem
credited with revenues from all sources, includin~
tuition and unrestricted annual giving revenues a~
(5%) of the value of i~s endowment, not including
annual giving revenues for such year (principal p~
earnings) measured annually on a rolling three ye~
4.09. Maintenance, Capital Improvements and Technology
Commitments.
(A) Technology. Durin9 the periodfrom the
Affiliation Date through the Mer~er Date, Penn State shall make
contributions of goods and services to Dickinson for projects
relatin~ to technolo~qz and financial and operational integration,
identified with more particularity in Exhibig "G" to this Plan.
Dickinson and Penn State estimate that the fair market xralue of
such.goods and services is approximately $1.1 million.
(B) Other Capital Improvements. Durin~the period
from the Affiliation Date through the Mer~er DaZe, Penn State
shall fund those additional capltal~improvements projects
identified with more particularityin Exhibit "F" to this Plan.
Dickinson and Penn State estimate that the cost of providing such
additional.capital improvements will be approximately $525,000.
Penn State's c~%~tment shall not exceed this amount.
(C) Major Maintenance.' During the period from the
Affiliation Date through the Merger bate, Penn State shall fund
the costs of the major maintenance projects identified with more
particularity in Exhibit "G" to this Plan. Penn State and
Dicklnsdn estimate that the cost of providing such additional
capital improvements shall be approximately $100,000. Penn
State's cor~nitment shall not exceed ithis amount.
4.10. Dickinson Endowment.
(A) Ow-nershiD and Management Durin~ Transition Period.
During the period between the Affiliation Date and the Mer~er
Date,. DiCkinson shall regain owzzership of its endowment. With a
view to decreasing Dickinson's investment management fees, Penn
State will assume management, as Dickinson's agent, of
Dickinson's endowment through the Merger Date, without cost to
.Dickinson, except for Dickinson's proportionate share of the
fees, cost and expense charged by third parties to Penn State for
managing such 'endowmenZ, without markup. Penn State represents
that if it had managed Dickinson's endowment for the fiscal
quarter ended December 31, 1996, Dickinson's proportionate share
of such fees, cost and expenses would not have been in excess of
.45% of the value of such endowment on Such date. Penn State
shall.provide reports to Dickinson's Board of Trustees (prior to
the Merger) and the Association's Board of Governors (after the
Merger) with respect to 'the investment performance of Dickinson's
· Endowment on a regular basis.
(B) 1997-2003 Caoital Campaign Effort and Goal. From
the Affiliation Date through June 30, 2003, members of
Dickinson's Board of Trustees (a~d after the Merger Date members
of the Association's Board of Governors) to~ether with.
Di'ckinson's faculty and administrators, shall participate
actively together with Penn State representatives, in a joint
capital campaign effort which will emphasize the Affiliation and
Merger. Penn State's President and development staff shall
actively participate in fund raising and related development
efforts on behalf of Dickinson. Two members of Dickinson's Board
of Trustees shall become members of Penn State's Capital Campaign
Executive Committee. The fund raising goal for Dickinson during
this' joint capital campaign will be the greater of (i) the'amount
determined by a feasibility study to be jointly undert83cen by
Dickinson and Penn State (with all costs and expenses associated
therewith to be borne by Penn State), or (ii) Sixteen Million
Dollars ($16,000,000). During this joint capital campaign,
current and deferred contributions (including annual giving)
shall be credited toward the achievement of the campaign goal for
Dickinson, using Pen/~ State's standard and then-applicable
conventions for crediting such contributions, except as otherwise
set forth in this Section 4..10. Between the Affiliation Date and
June 30, 2003, Penn State shall charge Dickinson for each
academic/fiscal year, an annual fee for development and capital
campaign efforts equal to .50% of the value, determined in
accordance with GAAP, of the investments in Dickinson's
unrestricted, temporarily restricted, and restricted endowment as
at the end of that academic/fiscal year. Penn State represents
that if this fee would have been charged to Dickinson for the
fiscal year ended June 30, 1995, the fee would not have exceeded
$60,000 (e.g., .50% of $11,834,000).
(C) Guaranteed Increase in Endowment. If the'joint
capital campaign effort described in Section 4.10(B) (without
regard tO Penn State's standard and then-applicable conventions
for crediting contributions) does not result in $16,000,000 in
cas~ contributions by June 30, 2093 (including cash from annual
giving, but excluding cash from gl{t~ .a~.d bequests where the
instrument is dated befbre the Affl!latlon Date or after June 30,
2003), Penn State shall contribute to Dickinson's temporarily
restricted endowment, in cash,' the difference between the actual
amount of such cash contribution and $16,000,000; provided,
however, that cash received after June 30, 2003 from deferred
contributions pledged between the AffiliationDate and June 30,.
2003, shall upon receipt be transferred to Penn State as
reimbursement for its cash contribution, up 'to the amount
actually contributed by Penn State to fund such difference. For
example, if $11,000,000 in cash. contributions are received and
$8,000,000 in deferre~'contributions are pledged during the
period from the Affiliation Date through June 30, 2003, Penn
State will contribute to Dickinson's temporarily restricted
endowment $5,000,000, in cash, on June 30, 2003. As deferred
contributions (whether annual giving, restricted funds,
designated funds or quasi endowment) pledged to Dickinson between
the Affiliation Date'and June 30, 2003, are received subsequent
to June 30, 2003, funds equal in amount to such contributions (.up
to a maximum of $5,000,000 in the aggregate) shall be remitted to
Penn State as reimbursement for a~uounts contributed to
Dickinson's temporarily restricted endowment on June 30, 2003.
Funds remaining in the temporarily restricted endowment fund
shall be transferred to Dickinson's permanent restricted
endowment on July 1, 2028 or on the date Penn State is fully
reimbursed for amounts contributed by Penn State, whichever
occurs first. Current and deferred contributions made to, for or
on behalf of Dickinson during the campaign shall be used for the
exclusive benefit of Dickinson, except for amounts required to be
reimbursed to Penn State under this Section 4.10(C). Cash
receipts from gifts and bequests with respect to which the
~overning instrument is dated prior to the Affiliation Date or
after June 30, 2003 shall not be credited toward the $16,000,000
referred to in this Section 4.10(C) and shall not be considered
cash receipts from deferred contributions from which
reimbursement may be.made to Penn State under this Section 4.10.
(D) Endowraent Milestones and Operatlnc Budget Subsidy.
Beginning with the fiscal year co,~m~nc~ng on July 1, 1997 and
continuing each fiscal year through June 30, 2003 and subject to
the $16,000,000 threshold set forth above in Section 4.10(A), if
Dickinson's capltal campaign has not resulted in at least
$2,000,000 in cash contributions (including annual giving) by
June 30. of each fiscal year on a cumulative basis, Penn State
shall contribute to Dickinson, for use in its ensuing f~scal
year, 5% of the difference between actual cash received and
$2,000,000 per year on a cumulative basis. For example, if
$1,000,000 in cash is received-by June 30 of the 1997-1998 fiscal
year, the sum of $50,000 (5% of $1,000,000) would be contributed
to Dickinson for the 1998-t999 fiscal year. If an additional
$1,000,000 in cash is received by June 30 of'the 1998-1999 fiscal
year, the sum of $100,000 (5% of $4,000,000 cumulative target
less the $2,000,000 in current contributions received) would be
contributed to Dickinson for the 1999-2000 fiscal year. By way
of further example, if $4,000,000 is received by June 30 of the.
1997-1998 fiscal year and $0 was'received by June 30 of the 1998-
1999 fiscal year, the $4,000,000 cumulative target for both
fiscal years would be satisfied without any contribution by Penn
State. Gifts and bequests with respect to which the governing
· instrument is dated prior to the Affiliation Date shall not be
credited toward the $2,000,000 referred to above.
(E) Sole and Exclusive Benefit. Penn State shall, at
all times, manage'Dickinson's Endowment for the sole and
exclusive benefit of Dickinson and its educational mission and on
the same basis and with at least the same degree of care, skill,
diligeDce and prudence as it manages Penn State's endowment.
Penn State shall use such Endowment and all of Dickinson's
charitable assets only in accordance with any applicable donative
instruments and shall not divert such Endowment or such assets
for any ot~er purpose.
4.11. Student Tuition Subsidy Policy. On and after the
Affiliation Date, unless agreed by (i) Dickinson's Board of
Trustees '(prior to the Merger Date) or the Board of Goyernors of
the Association (after the Merger Date), and (ii) Penn State's
Board of Trustees, Penn State will maintain Dickinson's long
standing policy of assuring that no student pay tuition in an
~/~?o48/0=~. 00~ 28
amount exceeding the total expense of providinglegal education
(less student aid), divided by the number of students, such that
current tuition revenues of Dickinson received from one category
of Dickinson student shall not be used to subsidize lower tuition
rates paid by other categories of Dickinson students. The intent
of this Section 4.11 is to ensure that Penn State· does not use
tuition revenues from Dickinson students to fund other operations
of Penn State or to subsidize reduced tuition for one or more
categories of Dickinson students. Nothing set forth in this
Section 4.11 shall be construed to restrict revenue from sources
other than tuition and fees paid by Dickinson students
(including, without limitation, grants, gifts, annual giving,
endowment income and appropriations) to be used to subsidize
tuition paid by some Dickinson students which is lower than the
per student cost of providing student legal education.
4.12. Affirmation of Dickinson Rural and Public Interest
Law Commitment; Loan Repagrment Fund.
(A) Affirmation of Practice. Penn State agrees, after
the Merger Date, to permit Dickinson to continue its practice of
encouraging graduates to practice in (i) Pennsylvania'S non-urban
areas, (ii) public interest law, and (iii) in government, by
permitting Dickinson to reserve up to. 10 seats in each entry
level class for persons who have evidenced an intent to practice
in such areas..
(B) Loan Repayment Fund. At the Affiliation Date,
Penn State shall contribute $250,000 to Dickinson to establish a
restricted fund, the income from which shall be used to assist
Dickinson graduates who elect to practice in non-urban areas, in
public interest law or in government ih repa¥ingloans incurred
in connection with attending Dickinson. Such assistance shall
take such form and shall be provided pursuant to such rules as
Penn State's President and Dickinson's Dean, in consultation with
Dickinson's Board of Trustees (before the Merger Date) or the
Board of Governors of the Association (after the Merger Date)
shall, from time to time, prescribe~
4.13. Board Matters.
(A) Penn State on Dickinson Board. From the
Affiliation Date through the Merger Date (as defined in Sectio~
1.02), Dickinson shall cause the Executive Vice President and
Provost, the Senior Vice President for Finance and Business/
Treasurer, and the Chairperson of the Board of Trustees of Penn
State to be elected as Class III Trustees of Dickinson.
Dickinson acknowledges that in their capacities as Trustees or
officers of Penn State, the representatives of Penn State may, in
their capacities as members of Dickinson's Board, have a conflict
of interest on issues pertaining to Dickinsonis relationship with
Penn State. Further, as set forth in Section 4.18, Dickinson
covenants not to sue Penn State or the Class III Trustees to the
extent set forth in Section 4.18. It is further acknowledged by
Penn State and Dickinson that the purpose of the Class iii
membership structure is to facilitate the mutual dissemination of
information, acaderaic philosophies and operating principles
regarding Penn State and Dickinson.
(B) Dickinson on Penn State Board. From the
Affiliation Date (as defined in Section 1.02):
(t) Through the. Merger Date, Penn State shall
invite and permit five members of Dickinson's Board of Trustees,
designated by such Board, to attend public meetings of Penn
State's Board of Trustees,.includin9 co.~ittee meetings, to
facilitate the mutual dissemination of informat'ion, academic
philosophies, operating principles and integration re~ardin9
Dickinson and Penn State. Such members of Dickinson's Board, and
guests, shall be invited to attend all functions ancillary to
such Board and committee Meetings, including receptions, dinners,
tours, athletic events and other related functions.
(2) Through the Merger Date and for a period of
at least ten (10) years thereafter, Penn State shall cause,
without interruption, a mentber of Dickinson,s Board of Trustees,
selected by Penn State from a list of those mer~ers who have
served on Dickinson's Board for at least twelve years, to sit as
a Trustee Emeritus of Penn State's Board of Trustees. The term
of any such Trustee Emeritus shall be for life. Such Trustee
Emeritus shall possess all of the rights and privileges of
Trustee Emeritus membership on Penn State's Board of Trustees.
Such Trustee Emeritus shall be entitled to all of the privileges
of membership on Penn State's Board of Trustees, except those of
making motions, of voting, and of holding office. In the event
any.such Trustee Emeritus resigns, dies, becomes permanently
disabled, or otherwise terminates as a Trustee Emeritus, prior to
the Merger Date or during the ten (10) year period immediately
thereafter, Penn State shall select a replacement Trustee
.Emeritus from a.list of those members who have served on
Dickinson's Board for at least twelve years prior to such
resignation, 'death or disability of such Trustee Emeritus, which
Trustee Emeritus shall also serve for life.
(3) Through the Merger Date and in perpetuity
thereafter, Penn State shall use its reasonable best efforts to
secure.full voting membership on Penn State's Board of Trustees
by a member Of Dickinson's Board of Trustees or a member of the
Association's Board of Governors who'qualifies for appointment by
the Governor of the Commonwealth of Pennsylvania or for election
by Agricultural Societies, Industrial Organizations or Penn
State's General Alumni Association, in accordance with the
provisions of Penn State's Charter.
(C) Association Governance. Effective as of the
Me~ger Date, Dickinson's Board of Trustees will be irrevocably
appointed as a self-perpetuating Board of Governors of a newly-
created non-stock, non-membership, nonprofit corporation, The
Dickinson School of Law of The Pennsylvania State University
Association (the "Association"). The Association will be
governed by then-existing Class I and Class II Trustees of
Dickinson as a self-perpetuating Board of Governors. The Board
of Governors shall provide counsel and guidance to Penn State
with respect to the operation and academic mission of The
Dickinson School of Law of The Pennsylvania State University..
More specifically, the BOard of Governors will have the following
mission, responsibilities and authority:
(1) review and make reco~aendations on the
mission of Dickinson;
(~) review and make recon=aendations regarding the
strategic and long tez~ capital plans for Dickinson;
(3). provide input and gUidance on Dickinson's
annual giving and capital campaign efforts and endowment
enhancement;
(4) provide advice, based on their experience in
the practice of the law re~arding the nature and scope of the law
school curriculum;
(5) provide input regarding the means by which to
maintain and enhance. Dickinson's reputation for academic'
excellence including input on class size, tuition and'admissions
criteria;
(6) provide input into the selection of a
successor Dean;
(7) provide input into operating and capital
budgets;
(8) possess authority to confer honora_~6 degrees,
in consultation with Penn State's President;
(9) possess authority to enforce by specific
performance in accordance with Section 8.09 of this Plan, Penn.
State's continuing covenants which survive the Merger; and
(10) provide guidance on matters relating ~o the
Loa.n Repayment Fund referred to in Section 4.12 (B) of the Plan.
The Dean shall serve as liaison between Penn State and
the Association. The Dean (or in his absence, the Chairperson of
'The Board of Trustees. of Penn State,.the President of Penn State
or any Executive or Senior Vice President of Penn State) shall
attend each meeting of the Association's Board on an ex officiol
nonvoting basis. Penn State, on.a no cost basis, shall make law
school facilities and law'school personnel available to the
Association's Board of Governors to. the extent reasonably
necessary to permit it to hold meetings and accomplish its
mission, including making an employee available to serve as
~reasurer of the Association. .
Penn State shall make available, upon demand, up to
$250,000 of Dickins?n's unrestricted endowment to pe.r~.it the
Association to specifically enforce ~enn State's continuing
obligations under Section 8.09 of this Plan.
In addition, two members of the Board of Governors will
at all times be members of Penn State's Executive Committee of
the Capital Campaign.
4.14. Dickinson Dean.
(A) Employment and Compensation. At the Affiliation
Date, Penn State shall offer employment to Dickinson's Dean at
his then current salary level. The Dean shall also be entitled
to Penn State's benefit package and perquisites in accordance
with the provisions of Section 4.17 of this Plan. During the
period from the Affiliation Date to the Merger Date, Dickinson's
Board shall fix the then incumbent Dean's salary level, subject
to approval by Penn State's President. After the Merger date,
they shall be fixed by Penn State in accordance with Penn State's
then existing usual and ordinary procedures and processes.
{B) Reporting Lines. During the period from the
Affiliation Date to the Merger Date, the Dean shall report
primarily to Penn State's Provos~ and also to Dickinson's Board
of Trustees. After the Merger Date, Dickinson's Dean shall
report solely to Penn State's Executive Vice President and
Provost and President.
(C) Removal and Termination. During the period
bezween the Affiliation Date and the Merger Date, the Dean may
not be removed' or otherwise terminated from Penn State's
.emPloyment, except by a majority vote of Dickinson's Board and
the consent of Penn State's President. ~fter the Merger Date,
the Dean may be removed and/or his employment terminated in
accordance with Penn State's then existing usual and ordinary
processes and procedures.
(D) Successor Deans. If during the period from the
Affiliation Date to the Merger Date, Dickinson's Dean resigns,
retires, dies, or is removed, Dickinson's Board of Trustees may
interview, select and reco~,~end a successor Dean candidate to
Penn State's President, who, in his sole discretion, may accept
or reject such recommendation. If a recommendation is rejected,
Dickinson's Board of Trustees may again interview, selec~ and
recommend another successor Dean candidate for consideration and
acceptance or rejection by Penn State's President and. Board of-
Trustees, in their sole discretion. After the Merger ~ate,
successor Deans shall be selected, by Penn State with input from
~he Board of Governors of the Association.
(E) Council of Academic Deans. From the Affiliation
Date and thereafter in perpetuity, the Dean shall sit on Penn
State's Council of Academic Deans.
(F) Non-Solicitation. If, for any reason, the
Affiliation does not occur, Penn State, for a period of three (3)
years from the date of this Plan, will neither solicit nor hire
Peter G. Glenn for any position related directly or indirectly to
legal education.
4.15. Dickinson Faculty.
(A) Employment. At the Affiliation Date, Penn State
shall offer employment to each member of Dickinson's faculty at
his or her then current rank~ tenure and salaries and with Penn
State's then existing benefit package and perquisites, in
accordance with the provisions of Section 4.17 of this Plan.
Penn State shall assume Dickinson's contractual obligation to
those members, of Dickinson's faculty identified in Dickinson's
Disclosure.Schedule.
(B) Promotion and Tenure.
(1) Tenured members of Dickinson, s faculty~ as of
the Affiliation Date, shall be accorded tenure with Penn State
for all purposes effective as of the Affiliation Date.
(2) Non-tenured, tenure eligible members of
Dickinson's faculty on the Affiliation Date, who were non-
tenured, tenure eligible members of Dickinson's faculty on the
date of this Plan, thereafter shall be Considered for promotion
and tenure in accordance with the rules in effect on his or her
date of hire by Dickinson and shall be promoted and accorded
tenure with Penn State if (i) Dickinson's faculty and. Dean
recommend that tenure be granted, (ii~ Dickinson's. Board Of
Trustees (if evaluated for tenure during the period between the
Affiliation Date and the Merger Date) or the Association's Board
of Governors (if evaluated for tenure after the Merger Date)
recommends that promotion and tenure be granted, and (iii) Penn
State's President awards tenure, which shall not unreasonab!y be
withheld.
(3) Members of Dickinson's faculty hired by Penn
State after.the Affiliation Date shall be considered for
promotion and tenure in accordance with Penn State's promotion
and tenure procedures.
(C) Termination. If Dickinson's faculty and Board of
Trustees fail to recormmend that promotion and tenure be awarded
to a faculty member referred to in Section 4.15(B) (2), Penn State
shall have the right to terminate the employment of such faculty
member because'of such failure to be awarded promotion or tenure
in accordance with Dickinsoh's.usual and customary processes and
procedures.
m~/37o~s/o272~, ool 3 3
(D) Academic Governance. Beginning at the Affiliation
Date, Dickinson's faculty shall be involved in the academic
governance of Penn State as follows:
Faculty Senate - During the period beginning
On the Affiliation Date and ending on the
Merger Date two members of Dickinson's
faculty shall be members of Penn State's
faculty senate. Thereafter, membership shall
be based on Penn. State's then-existing.
membership formula.
(ii)
Graduate Council During the period
beginning on the Affiliation Date and ending
on the Merger Date one member of Dickinson's
faculty shall be members of Penn State's
graduate council. Thereafter, membership
shall be based on Penn State's then-e_xisting
membership fox'mula.
(iii)
Beginning on the Affiliation Date a~d
thereafter full authority with respect to
J.D. and LL.M. curricula and related matters
will be delegated by Penn State's faculty
senate to Dickinson's faculty.
(E) Non-Solicitation. If, for any reason, the
Affiliation does not occur, Penn State, for a period of three
years after the date of this Plan will neither solicit nor hire
any person who was a faculty member of Dickinson on the date of
this Plan for a position relating directly or indirectly to legal
education; unless such person's employment was terminated by
Dickinson for reasons unrelated to his or her performance or
demeanor.
4.16. Dickinson Non-Faculty Employees.
(A) Employment and Compensation. At the Affiliation
Date, Penn State shall offer employment to the three non-faculty
Dickinson employees ident'ified im Dickinson's Disclosure Letter
at the salary levels identified in such Disclosure Letter. At the
Affiliation Date, Pen~ State shall offer employment to those
additional Dickinson non-faculty employees as are identified
jointl~ by Dickinson's Dean and Penn State's Provost at the
salary levels agreed to by them. Non-faculty employees who
accept offered employment shall be entitled to the Penn State
benefit package and Penn State perquisites in accordance with the
provisions of Section 4.16 of'this Plan. In addition, Penn State
shall assume Dickinson's contractuaI obligations.with respect to
payments to the non-faculty employees identified in Dickinson's
Disclosure Letter.
(B) Severance. Dickinson shall have the right to pay
severance to no more than ten (i0) non-faculty employees who are
~ RD~/370~S/02722. 001 34
not offered employment by Penn State, on the basis of no more
than one week of salary for each year of service with Dickinson,
payable over no more than one year period of time. Penn State
shall assume DiCkinson's contractual obligatlons with respect to
severance to those non-faculty ~ployees, identified in
Dickinson's Disclosure Letter. Severance paid by Penn State with
respect to such non-faculty employees shall be reimbursed to Penn
State by Dickinson, and severance paid by Dickinson pursuant to
this Section 4.16 shall not be reimbursable to Dickinson by Penn
State.
4.17. Benefit Plans. As soon as practicable after the
Affiliation Date with respect to members of Dickinson's faculty
and non-faculty employees who accept employment from Penn Stats,
Penn State shall take all reasonable action so that employees of.
Dickinson shall be generally entitled to participate, as
applicable under the terms of the respective plans and as
provided by law, in the pension, annuity, medical benefit, life
insurance, vacation, sick pay and similar plans on substantially
the same terms and conditions as the faculty and non-faculty
employees of Penn State, and until such time, the plans of
Dickinson shall remain in effect; provided, that no employee of
Dickinson who becomes an employee of Penn State and Who elects
coverage by Penn State's medical insurance plans shall be
excluded from coverage thereunder (for such employee or any other
covered person) on the basis of a preexisting condition that was
not also excluded.under Dickinson's medical insurance plans, but
to the extent such preexisting condition was excluded from
coverage under Dickinson's medical insurance plans, this proviso
shall not require coverage for such preexisting condition. Penn
State will take such action as m~y be necessary to permit
Dickinson employees to transfer their tax-deferred annuity
program balances to the tax-deferred annuity progr~n of Penn
State. Dickinson employees who become Penn state employees on or
about the Affiliation Date will become entitled to.
{i) participate immediately, on a fully-vested basis, in the Penn
State tax-deferred annuity prograx~, and (ii) have periodically'
contributed tO the program on their behalf by Penn State such
percentage of salary as it contributes on behalf of its other
participating employees. In this regard, Dickinson has been
advised that Penn State presently rmakes periodic contributions.
under the program equallto 9% of a participating employee's
salary, subject to the employee making a periodic contribution to
the'program of 5% of salary. In addition, all prior full-time
service with Dickinson will be counted as though it 'were
comparable Penn State service in meeting the Penn State
provisions for: (a) continuation of health care benefits into
retirement; (b) the two year waiting period for grant in aid for
spouse; and (c) eligibility for sickness and accident supplement..
Penn State also shall continue to honor, to the extent
required by law, in accordaHce with their terms, all employment,
severance, consulting and other compensation contracts, disclosed
m~/~?o.~a/oe?2e .ool 3 5
in the Dickinson Disclosure Letter, between Dickinson and any
current or former member of the faculty or other employee
thereof. The parties will work in good faith to treat affected
employees in an equitable manner under all supplemental plans,
policies or arrangements, if any.
4.18. Indemnification of Dickinson Trustees; Covenant Not
to Sue Penn State and Class III Trustees.
(A) General. For a Period of six years after the.
Merger Date, PennState shall indemnify, defend and hold harmless
now and then present and former trustees, officers, faculty and
other employees of Dickinson (each, an "Indemnified Party")
against all costs or expenses (including reasonable attorneys'
fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any cla/m,
action, s~it, proceeding or investigation, whether civil,
crim/nal, administrative or investigative, arising out of actions
or Omissions occurring at or prior to the Merger Date (including,
without limitation and without regard to the six year time limit
otherwise imposed by this Section 4.18(A), the transactions
contemplated by this Plan to the fullest extent that such persons
are indemnified under Dickinson's Articles of Incorporation and
Bylaws as in effect on the date hereof (and during such period
Penn State shall also advance expenses (including expenses
described in Section 4.18(C)) as incurred to the fullest extent
permitted under Dickinson's Articles of Incorporation and Bylaws
as in effect on the date of the Merger, provided that the person
to whom expenses are advanced provides an undertaking to repay
such advances if it is ultimately determined that such person is
not entitled to indemnification with no bond or security to be
required!. Notwithstanding the foregoing or anything to the
contrary contained elsewhere her~in, Penn State's agreement set
forth above shall be limited to cover claims only to the extent
that such claims are not paid under any directors' and officers'
liability insurance policies maimtained by Penn State or
Dickinson.
.(B) Notice. Any Indemnified Party desiring to claim
indemnification under Section 4.18(A), upon learning of any
claim, action, suit, Proceeding or investigation described above,
shall promptly notify Penn State thereof; provided that the
failure so to .notify shall not affect the obligations of Penn
State ~nder Section 4.18(A) unless and to the extent Penn State
has no actual knowledge of such claim, action, suit, proceeding
or investigation and such failure so to notify mater!ally
increases Penn State's liability under such Section
(C) Cost and Expenses. Penn State shall pay all
reasonable costs, including attorneys' fees, that may.be incurred
by any Indemnified Party in enforcing the indemnity and. other
obl.igations provided for in this Section 4.18. The rights of
each Indemnified Party hereunder shall be in addition'to any
other rights such Indemnified Party may have under applicable
law.
(D) Covenant Not to Sue. Dickinson shall not bring an
action against Penn State or ClaMs III Trustees of Dickinson's
Board arising out of their membership as suc~and their positions
with Penn S.tate during the period between the Affiliation Date
and the Merger Date for breach of fiduciary duty or similar
claim.
4.19. Notification of Certain Matters. Each of Dickinson
and Penn State shall give prompt notice to the other of any fact,
event or circumstance known to it that (i) is reasonably likely,
individually or taken together with all other facts, events and
circumstances known to it, to result in any Material Adverse
Effect with respect to it or (ii) would cause or constitute a
material breach of any of its representations, warranties,
covenants or agreements set forth in this Plan.
V. CONDITIONS TO C02~PLETION 0~ k'h~ A~FILIATION.
The obligations of each of
Affiliation is conditioned upon
the Affiliation Date of each of
the parties to complete the
the satisfaction at or prior to
the following:
5.01. Reculatorv and Accruiescence Approvals. Procurement
by Penn State and Dickinson of all Regulatory and Accreditation
approvals and consents and the expiration of the' statutory
waiting period under the Hart Scott Rod/no AntitI-ust 'Improvements
Act, without objection by the FTC.
5.02. No In~unction, Etc. No order, decree or injunction
of any court or agency of competent jurisdiction shall be in
effect, and no law, statu.te or regulation shall, have been enacted
or adopted, which enjoins, prohibits or makes illegal
consideration of the Affiliation Or any of the other transactions
contemplated hereby;
5.03. Representations, Warranties and Covenants of Penn
State. '(i) Each of the representations and warranties of Penn
State set forth herein shall be true and correct as of the date
of this Plan and upon ~he Date of the Affiliation with the same
effect as though all such representations and warranties had been
made. on the date of the Affiliation (except for any such
representations and warranties m~de as of a specified date, which
shall be true and correct as of such date) and, in any case,
subject to the standards established by Section 3.02, (ii) each
and all of the agreements, covenants and commitments of Penn
State to be performed and complied with pursuant to this Plan on
or prior to the Date of Affiliation shall have been duly
performed and complied with in all material respects, and
(iii) Dickinson shall have received a certificate signed by each
of the President and Executive Vice. President and Provost of Penn
State, dated the Date of the Affiliation; to the effect set forth
in clauses {i) and (ii);
5.04. Representations, Warranties and Covenants of
Dickinson. (i) Each of the representations and warranties of
Dickinson shall be true and correct as of the date of this Plan
and upon the Affiliation Date with the same effect as though ail
such representations and warranties had been made on the Date of
the Affiliation, except for any such representations and
warranties made as of a specified date, which shall be true and
correct as of such date, in any case subject to the standards
established by Section 3.02, (ii) each and all of the agreements
and covenants of Dickinson to be performed and complied with
pursuant to this Plan on or prior to'the Date of the Affiliation
shall have.been duly performed and complied with in all material
respects, and (iii} Penn State shall have received a certificate
signed by each of the President and Dean of Dickinson, dated the
Date of the Affiliation, to the effect set forth in clauses
and (ii);
5.05. Opinions. Penn State shall have received an opinion
from McQuaide, Blasko, schwartz, Fleming & Faulkner, Inc.
("McQuaide Blasko"), and Dickinson shall have received mn opinion
from Stevens & Lee, to the effect that no gain or loss will be
recognized, for federal income tax purposes; by Dickinson or Penn
State as a result of the Affiliation and the Merger. Dickinson
also shall have received the opinion of McQuaide Blasko,
reasonably satisfactory to Dickinson, to the effect set forth in
Exhibit "F" to the Plan. Penn State also shall have received the
opinion of Stevens & Lee to the effect set forth in Exhibit "F"
to the Plan. In providing their respedtive opinions, each such
counsel may require and rely upon' representations and agreements
contained in certificates of officers of Penn State and
Dickinson.
VI. CONDITIONS TO COMPLETION OF i~ERGER.
Penn Stat~ shall have the right to cause Dickinson to be
merged in. to and with pern~ State effective as of the later of
July.l, 2000, or the date upon which Penn State shall have
satisfied its commitments to Dickinson set forth in
Section~ 1.01, 4.09, 4.10(P) and 4.12{B), and shall not then be
in material breach Of'its covenants under sections 2206, 4.06,
4.07, 4.08, 4.10(A) (B) (C), 4.11, 4.12(~), 4.13(B), 4.14, 4.15,
4.16, 4.17, and 4.18 hereof, unless the Board of Trustees of
Dickinson shall have waived compliance with such commitments or
covenants in which case the Merger may occur at a sooner date.
Penn State shall be deemed to have satisfied the commitment and
not to be in material breach of the covenants set forth above if
it provides Dickinson with a certificate, dated as of the date of
Merger, signed, in good'faith, by ~he Chairperson of the Board of
TruStees of Penn State, its President and its Senior Vice
Presiden~ for Finance and Business/Treasurer to such effect.
VII. TERMINATION.
7.01. Termination. This Plan may be term/hated, and the
Affiliation and Merger may be abandoned at any time prior to the
Affiliation Date:
(A) Mutual Consent. At any t/me prior to the Date of
Affiliation, by the mutual consent of Dickinson and Penn Sta~e,
if.the Board of Trustees of each so determines by vote of a
majority of the members of its entire Board.
(B) : Delay. At any time prior to the Date of
Affiliation, by Dickinson or Penn State, if its Board of Trustees
so determines by vote of a mai ority of the members of /ts entire
Board, in the event that the Affiliation is not consummated by
June 30, 1998, except to the.extent that the failure of the
Affiliation then'to be cons~ted arises out of or results from
the knowing action or inaction of the'party seeking to terminate
pursuant to this Section 7.01(B).
(C) NO Approval. By Dickinson or Penn State, if its
Board of Trustees so determines by a vote of a majority of the
members of its entire Board, in the event that the consent of the
Department of Education of the Co~mnonwealth of Pennsylvania for
consummation of the Affiliation and the Merger contemplated bY
this Plan shall have been denied by final action of the Secretary
of Education and the time for appeal shall have expired.
7.02. Effect of Termination and Abandonment. In the event
of termination of this Plan and the abandonment of the
Affiliation pursuant to this Article VII, 'no party to this Plan
shall have any liability or further obligation to any other
party.
VIII.OT~ER iW_ATTERS.
8.01. Survival. The representations, warranties and
covenants set forth in this Plan shall not survive:
(A) the Affiliation Closing, except the covenants set
forth in Sections 1.01 and 1.02; Sections 2.01-2.11;
Sections 4.01-4.03; Sections 4.05-4.06; Section 4.07(A) (B) (C) (D);
Sections 4.08-4.09; Section 4.10; Sections 4.11-4.15;
SectiOns 4.18 and 4.19 which shall survive through the Merger'
Date and, to the extent provided in Section 8.01(B) thereafter.
(B) the Mer~er C!osirlg, except the 'covenants set forth
in Sections 4.06 and 4.07(C)(D); Section 4.10(A) (last sentence);
Section 4.10(B) (C)(D) (E); Section 4.11', Section 4.12 (A);
Section 4.13(B) (2); Section 4.13 (B) (3); Section 4.13 (C);
Section 4.14(A) (last sentence); Section 4.14tB) (last sentence);
Section 4~14(C) (last sentence}; Section 4.14(D) (last Sentence);
Section 4.14(E); Sect/on 4.15(D) (last sentence); and
Section 4.18, each of which shall survive in perpetuity, except
to the extent such Section (or sentence) specifies a shorter
period.
8.02. Waiver; Amendment. Any provision of this Plan may he
waived, amended or modified by agreement, in writing, of both
Penn State (by action of its Board of Trustees), and, as
applicable (i) Dickinson prior to the Merger, by action of its
Board of Trustees, or (iii) the Association, after the Merger, by
action of it's Board of Governors.
8.03.. Counterparts. This Plan may be executed in one or
more counterparts, each of which shall be deemed to constitute an
original.
8.04. Governing Law. This Plan shall be governed by, and
interpreted in accordance with,' the laws of the Com~onweaith of
Pennsylvania, without regard to the conflict of law principles
thereof.
8.05. Expenses. Each party hereto will hear all expenses
incurred by it in connection with this Plan and the tr~actions
contemplated hereby, except that the expense of filing under the
Hart Scott Rodino Antitrust Improvements Act shall be shared'
equally between Dickinson and Penn State.
8.06. Confidentiality. Except as otherwise provided in
Section 5.05, each of the parties hereto and their respective
Representatives will maintain the confidentiality of all
information provided in connection herewith which has not been
publicly disclosed, unless it is advised by counsel that any such
information or document is required by law to be disclosed.
8.07. Notices. All notlces~ requests and other
communications hereunder to a party shall be in writin~ and shall
be deemed given if personally delivered, telecopied (with
confirmation) or mailed by registered or certified mail (return
receipt requested) to such party at its address set forth below
or such other address as such party may specify by.notice to the
parties hereto.
If to Penn State, to:
The Pennsylvania State University
Office of the President
201 Old 14ain
University Park, PA 16802-2801
Attention:
Dr. Graham B. Spanier
President of the
University
Office of the Senior Vice Presiden~
for Finance and Business/Treasurer
University Park, PA 16S02-gS01
Attention: F,r. Gary C. Schul=z
for Finance and
Busin~ss/Treasurer
McQuaide, Blksko, Schwartz,
Flem/ng & Faulkner, !nc.
· 811 University Drive
Staze College, PA 16501-6699
Attention: Wendell v. Court=ay, Esq.
If to Dickinson or
The Dickinson School of Law
150 South College Street
Carlisle, PA .17013-2899
Attention: Dr. Rober= ~rey, Presidenz
Peter ~. Glenn, Dean
With a copy to:
Stevens & Lee
111 North Sixth
P.O. Box 6?9
Reading, PA 19603
Attention: Joseph M. Harenza, Esq.
8.08. Definitions. Any term defined anywhere in this Plan
shall have the meaning ascribed =o it for all purposes of =his Plan
(unless expressly noted to ~he contrary). In addition:
(A) the term "Material Adverse ~ffec=· shall mean,'with
respect to Dickinson or Penn State, respectively, any effec~ =hat
· (i) is material and adversa =o the financial position, resulzs of
opera=ions or a~fatrs of Dick/neon or Penn State, respecnively, or
(ii) materiaily impairs the ability of Dickinson or Penn State,
respectively, to perform its obligations under this Plan or the
cons~mmation of the Affiliation or Merger and the other transactions
connempla=ed by this Plan; provided, however, =ha= Material Adverse
Effect shall not be deemed to include the impact of actions or
omissions of Dickinson or Penn $=a~e taken w/=~ the prior inform=ed
consent of D~okinson or Penn State, as apD!icable, in contemplation
of the Affiliation or =he MeZ~er contemplated hereby;
(B) ~he term "person" shall mean any individual,
corp0ration~ partnership, association, joint-stock company,
true: or u~incorpora=ed organization; and
business
(C) the term "Code" shall mean the Internal Revenue Code
of 1986, as amended.
8.09. Specific Performance. The parties hereto acknowledge
and agree that remedies at law for breach or threatened breach of
any provision of this Plan would be inadequate. In recognition of
this fact, the parties hereto agree that the covenants and
agreements set forth in this Plan shall be enforceable by either
party (and, after the .Merger Date, by the Dickinson School of Law of
The Pennsylvania State UniversityAssociation acting through its
Board of Governors) through specific performance, temporary or
permanent injunctive relief and other equitable relief. Both
parties further .agree to waive any requirement for the securing or
posting of any bond or proving potential M~mages in connection with
the obtaining of any such equitable relief and that this provision
is without prejudice to any other rights that the parties hereto
(and, after the Merger Date, by the Dickinson School of Law of The
Pennsylvania State University Association acting through its Board
of Governors) may have for any failure to perform the covenants and
agreements set forth in this Plan.
8.10. Entire UnderStanding: Third Party Beneficiaries. This
Plan (including its. Fochibits and the information set forth in each
of Dickinson's and Penn State's Disclosure Letters) represents the
entire understanding of the parties hereto with reference to the
tr~nsactions contemplated hereby and thereby and supersedes any and
allother oral or written agreements heretofore made. Nothing in
this Plan, expressed or implied, is intended ~o confer upon any
person, other than (i) the parties hereto and their respective
successors, (ii) The Dickinson School of Law .of The Penn State
University Association, acting through its Board of Governors or
other entity formed pursuant to the provisions of Section 1~01 of
this Plan, and (iii) the Dean, with respect to the provisions of.
Section 4.14 of the Plan and any tenured member of the faculty with
respect to the provisions of Section 4.1S(D) of the Plan, any
rights, remedies, obligations or liabilities under or by reason of
this Plan.
8.11. Headings. The headings contained in this Plan are for
reference purposes only and are not part of this Plan.
IN WITR~ WHE~.0F, ~/~e par~es he~e=o ~ave caused
in~t~en~ =o be execu=ed in coun=e~ar=s by =heir duly au=hot, zed
o~f~cers, all a~ of =he day and year f~rs= ~ove
D~ober= ~rey, ~r~lden=
~.' J~e'Arnelle, Cha/.rgerson
Dr. Gr~.. m ~. ?Spanier, ?resident
42.
)3-~07 E MARKET
3. BOX 5185
)RK, PA17405-5185
EXHIBIT "B"
IN RE: THE DICKINSON
SCHOOL OF LAW OF
THE PENNSYLVANIA
STATE UNIVERSITY.
a Pennsylvania
non-profit
c~rporation
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY PENNSYLVANIA
· ORPHANS' COURT DIVISION
AND NOW, this"~.~' . day of,1~ , 20~, up~ ~nsideration of ~e
relevant ma~
ann~ed pe~tion ~d afl o~ef of re~, it is hereby ORDERED ~at:
A. The merger among The Di~nson S~I ¢ L~ of The PennsHvania
State University and The Pennsylvania State University pursuant to an Affiliation
Agreement and Plan of Merger on the terms described in Exhibit "A' to the Petition will
not cause a diversion of charitable assets within the meaning of 15 Pa.C.S,A. §5547(b).
The Resolutions of The Dickinson SchOol of Law's Trustees dated
January 11, 1997, c~ples of which are attached to the Petition as Exhibit "B".
effectuating the approval of the Agreement and Plan of Merger between The Dick/nson
School of Law and The Pennsylvania State University attached to the Petition as Exhibit
"A", are hereby approved·
C. The Dickinson School of Law is authorized to merge into The
Pennsylvania State University on the terms reflected in the Affiliation Agreement and
Plan of Merger attached to the Petition as Exhibit "A", effective July 1, 2000,
By the Court,
99 Judicial Di?tdct
?~B EN,N LAWFIRA!
03-107 E MARKET
O. BOX 5185
ORK, PA 17405-5185
EXHIBIT "C"
~~ ~g~rtt~te~Dal~artment of
.
/-
THE DIC~NSON SCHOOL OF LA~ OF
THE PENNSYLVANIA STATE U.NIVE~Y ASSOCIATION
ARTICLE 1. The name of the Corporation is THE DICKINSON SCHOOL
OF LAW OF THE PENNSYLVANIA STATE UNIVERSITY ASSOCIATION
ARTICLE 2. The location and post office address of the initial registered
office of the Corporation in the CommomYealth of Pennsylvania is 150 South
College Street, Carlisle, Pennsylvania 17013.
ARTICLE 3. The Corporation is incorporated under the Nonprofit
Corporation Law of 1988 of the Commonwealth of Pennsylvania to engage
exclusively in char/table, scientific, literary and educational activ/fies within the
meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as mnended
(or the corresponding provision of any successor United States Internal Revenue
law) I. the "Code"). These activities include reviewing and making
recommendations to The Pem~sylvania State University on the mission, su'ategic
plan, curriculum, and budgets of The Dickinson School of Law of The
P~nnsylvania State University ("Dickinson"); enhancing the educational
opporturfities for students of Dickinson; awarding honorary degrees for Dickinson;
managing the Public Interest and Rural Area Service Loan Repayment Program for
Dickinson; promoting support, in the form of annual giving and capital campaign
giving, for Dickinson; and enforcing sections of the provisions of the Affiliation
Atyeement and ^.~eement and Plan of Merger bem,'een The Dicldnson School of
I.a~ and The Pennsylvania State UniversiB'.
ARTICI,E 4. All activities of the Corporation shall be subject to the
following restrict/ohs:
A. No substantial pm't of the activities of the Corporation shall be
tine carrying on of propaganda or attempting to influence legislation.
B. The Corporation shall not participate in, or intervene in
t including the publishing or distributing of statements), any political campaign or~
behalf o1' any candidates for public office.
C. The Corporation shall neither have nor exercise any power, nor
shall it eugage directly or indirectly in any activity that would invalidate its status
as a corporation which is exempt from federal income taxation.
D, The Corporation does not contemplate pecuniary gain or profit,
incidental or otherwise, to its directors, offcers or other private persons, and no
pm't of the net earnings of the Corporation shall inure to the benefit of, or be
distributed to, any such person, except that the Corporation shall be author/zed and
empowered to pay reasonable compensation for services rendered and make
payments and distributions in furtherance of the purposes set forth in Article 3
hereol:
E. It is intended that this Corporation shall have and continue to
have the status of an organization which is exempt from federal income tax. All
terms and provisions of these Articles of Incorporation and the Bylaws of the
Corporation, and all operations of the Corporation, shall be construed, applied and
c,'u'ried out in accordance with dais intent.
/~RTICLE 5. The term for which the Corporation is to e~st is perpetual.
ARTICLE 6. The Corporation is organized upon a nonstock basis,
Pd~TICLE 7. The Corporation shall have no members. Members of the
Board of Governors of the Corporation shall be elected on a selfperpetuat/ng
basis.
ARTICLE 8. Upon tile dissolution of the Corporation, the Board of
Govenmrs shall, after paying and making a provision for the payment of all of the
habilities and obligations of the Corporation, pay over and transfer all of the assets
of the Corporation to another organization or organizations organ/zed and operated
exclusively for charitable, scientific or educational purposes, provided that at such
time the recipient qualifies as an organization exempt from federal income taxation
under Section 501(c)(3) of the Code. No port/on of the assets shall inure to the
bent.fit of any governor or officer of the Corporation, any other private person, or
mLv enterprise organized lbr profit. The use of any surplus funds by or pr/rate
inurement to au)' person in the event of sale or dissolution of the Corporation is
expressly prohibited, as required by Section 5 of Permsylvania Act No. 55 of 1997.
as amended and in effect from lime to time
ARTICLE 9. The name and post office address of the incorporator of the
Corporation. is:
Name
Joanne M. Judge
Post Office Address
111 North Sixth Street
P.O. Box 679
Read/rig, Pennsyh,ania 19603-0679
IN' TESTIMONY WHEREOF, the Incorporator has signed these Articles of
Incorporation this 1'~ day of Jtme, 2000.
Infforporator
103-107 E. MARKET ST
RO. BOX 5185
YORK, PA 17405-5185
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and
P.J. BROWNING, Publisher of THE
SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
VS.
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants :
NO.
COMPLAINT IN EQUITY
UNDER THE SUNSHINE
ACT
CERTIFICATE OF SERVICE
I hereby certify that I have this date served a copy of the foregoing "Motion for a
Preliminary Injunction" upon the following, counsel to Defendants, as set forth herein, on
this2~3/~day of January, 2004:
Jack M. Stover, Esquire
Buchanan Ingersoll
One South Market Square
213 Market Street, 3rd Floor
Harrisburg, Pennsylvania 17101
(VIA HAND DELIVERY)
Respectfully submitted,
By: '" ~' squire
Attorney I.D. #74410
10
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and P. J. BROWNING,
Publisher of THE SENTINEL, and THE
PATRIOT-NEWS
Plaintiffs
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITy ASSOCIATION, and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW
OF THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
No. 04-312 Equity Term
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
CERTIFICATE OF SERVICE
AND NOW, on the date stated below, I, CRAIG J. STAUDENMAIER, ESQUIRE, of
the firm of Nauman, Smith, Shissler & Hall, LLP, hereby certify that I this day served the
foregoing Memorandum of Law, by hand delivery to the following:
Jack M. Stover, Esquire
Buchanan Ingersoll
One South Market Square
213 Market Street, 3~a Floor
Harrisburg, PA 17101
Date: January 26, 2004
NAUMAN, SMITH, SHISSLER & HALL, LLP
Craig J.~taudenmaier, Esquire
Suprem6 Court ID #34996
200 North Third Street, P. O. Box 840
Harrisburg, PA 17108-0840
Telephone: (717) 236-3010
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and P. J. BROWNING,
Publisher of THE SENTINEL, and THE
PATRIOT-NEWS
Plaintiffs
No. 04-312 Equity Term
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION, and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW
OF THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
CERTIFICATE OF SERVICE
AND NOW, on the date stated below, I, CRAIG J. STAUDENMAIER, ESQUIRE, of
the firm of Nauman, Smith, Shissler & Hall, LLP, hereby certify that I this day served the
foregoing Complaint by hand delivery to the following:
Jack M. Stover, Esquire
Buchanan Ingersoll
One South Market Square
213 Market Street, 3ra Floor
Harrisburg, PA 17101
Date: January 26, 2004
NAUMAN, SMITH, SHISSLER & HALL, LLP
Craig J~Staudenmaier, Esqmre
Suprelde Court ID #34996
200 North Third Street, P. O. Box 840
Harrisburg, PA 17108-0840
Telephone: (717) 236-3010
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and P. J. BROWNING,
Publisher of THE SENTINEL, and THE
PATRIOT-NEWS
Plaintiffs
No. 04-312 Equity Term
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION, and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW
OF THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
CERTIFICATE OF SERVICE
AND NOW, on the date stated below, I, CRAIG J. STAUDENMAIER, ESQUIRE, of
the firm of Nauman, Smith, Shissler & Hall, LLP, hereby certify that I this day served the
foregoing Motion for a Preliminary Injunction and proposed Order by hand delive~ to the
following:
Jack M. Stover, Esquire
Buchanan Ingersoll
One South Market Square
213 Market Street, 3rd Floor
Harrisburg, PA 17101
NAUMAN, SMITH, SHISSLER & HALL, LLP
By:
Craig~J.~~quireli
Suprem~ Court ID #34996
200 North Third Street, P. O. Box 840
Harrisburg, PA 17108-0840
Telephone: (717) 236-3010
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and P. J. BROWNING,
Publisher of THE SENTINEL, and THE
PATRIOT-NEWS
Plaintiffs
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION, and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW
OF THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
No. 04-312 Equity Term
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
AFFIDAVIT OF SERVICE
COMMONWEALTH OF PENNSYLVANIA:
SS:
COUNTY OF DAUPHIN:
I, CRAIG J. STAUDENMAIER, ESQUIRE, attorney with the firm of Nauman, Smith,
Shissler & Hall, LLP, being duly sworn according to law, depose and say the following:
On January 23, 2004, I hand delivered to Colleen Leiberman, Chief Counsel to the Dean
of the Dickinson School of Law of the Pennsylvania State University Association, a copy of the
Complaint in Equity under the Sunshine Act, Motion for a Preliminary Injunction and Order,
Memorandum of Law and Order dated January 23, 2004 issued by Judge Guido of the Court of
Common Pleas of Cumberland County filed on behalf of Lee Publications, Inc., Publisher of The
Sentinel and P. J. Browning, Publisher of The Sentinel, and The Patriot-News and Cate Barron,
Plaintiffs.
NAUMAN, SMITH, SHISSLER & HALL, LLP
Craig J. S/laudenmaier, Esquire
Supreme/Court ID#34996
200 North Third Street
P. O. Box 840
Harrisburg, PA 17108-0840
Telephone: (717) 236-3010
Swom and subscribed to before
me this ~/~ dayof
,,~,q~,q~o' .2004.
!
..r Not~ ~blic
~" My Co~ssion Expires: I NOTARIAL SEAL
I
Jeann~o Cheigren, No~ Public
C~ of Harrisburg, P~un~ of Dauphin
ay ~mm~,~o, E27~ ~,b. ~S. ~S
LEE PUBLICATIONS, 1NC., Publisher
of THE SENTINEL, and P.J.
BROWNING, Publisher of THE
SENTINEL, and THE PATRIOT-NEWS
and CATE BARRON,
Plaintiffs
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
NO. 04-312 EQUITY TERM
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
TO:
ENTRY OF APPEARANCE
Prothonotary
Kindly enter our appearance as counsel for Defendants in the above-referenced matter.
DATE: January 27, 2004
BUCHANAN INGERSOLL P.C.
Jack ~vl' tSt°ver' Esq~~) b
I.D. #18051
Jayson R. Wolfgang, Esquire
I.D. #62076
213 Market Street, 3rd Floor
Harrisburg, PA 17101
(717)237-4800
CERTIFICATE OF SERVICE
I, Jayson R. Wolfgang, Esquire, hereby certify that I am this day serving a copy of the
foregoing document upon the individual and at the address set forth below by United States mail,
first class, postage prepaid and facsimile, which service satisfies the requirements of the
Pennsylvania Rules of Civil Procedure:
Niles S. Benn, Esquire
Terence J. Barna, Esquire
Peter R. Wilson, Esquire
BennLawFirm
103 East Market Street
York, PA 17405
Craig J. Staudenmaier, Esquire
Nauman, Smith, Shissler & Hall, LLP
200 North Third Street
Harrisburg, PA 17101
BUCHANAN INGERSOLL PC
DATE: January 27, 2004
JaysontR. Wolfgang, E~!~jh~ 0
LEE PUBLICATIONS, INC.,
Publisher of THE SENTINEL,
And P.J. BROWNING, Publisher of
THE SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
lin THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
NO. 2004-0312 EQUITY TERM
THE DICKINSON SCHOOL OF :
LAW OF THE PENNSYLVANIA :
STATE UNIVERSITY :
ASSOCIATION and THE BOARD :
OF GOVERNORS OF THE :
DICKINSON SCHOOL OF LAW :
OF THE PENNSYLVANIA STATE:
UNIVERSITY ASSOCIATION, :
Defendants :
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION
BEFORE GUIDO, J.
ORDER OF COURT
AND NOW, this ~[ t~ day of FEBRUARY, 2004, having determined that
the Defendant The Board of Governors of the Dickinson School of Law of the
Pennsylvania State University Association is an "Agency" as that term is defined in the
Sunshine Act (65 Pa. C.S.A. § 701, et seq) it is hereby ordered and directed as follows:
1.) Defendant The Board of Governors of the Dickinson School of Law of the
Pennsylvania State University Association is directed to comply with the
provision of the aforementioned Sunshine Act; and
2.) Defendant The Board of Governors of the Dickinson School of Law of the
Pennsylvania State University Association is enjoined from conducting any
future meetings except in accordance with the provisions of the Sunshine Act.
The above provisions shall become effective upon Plaintiffs posting bond or cash
in the amount of $1000 in accordance with Pa. R.C.P. 1531(b) and shall remain in
effect until a full hearing on the merits or further Order of Court.
Each party's request for an award of counsel fees is DENIED.
Edward E. Guido, J.
e~Xliles Benn, Esquire
103-107 East Market Street
P.O. Box 5185
York, Pa. 17045
~"Craig J. Staudenmaier, Esquire
200 North Third Street
P.O. Box 840
Han'isburg, Pa. 17108-0840
~Jack M. Stover, Esquire
Jayson R. Wolfgang, Esquire
213 Market Street
Harrisburg, Pa. 17101
LEE PUBLICATIONS, INC.,
Publisher of THE SENTINEL,
And P.J. BROWNING, Publisher of
THE SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
THE DICKINSON SCHOOL OF
LAW OF THE PENNSYLVANIA
STATE UNIVERSITY
ASSOCIATION and THE BOARD
OF GOVERNORS OF THE
DICKINSON SCHOOL OF LAW :
OF THE PENNSYLVANIA STATE:
UNIVERSITY ASSOCIATION, :
Defendants :
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
: NO. 2004-0312 EQUITY TERM
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION
BEFORE GUIDO, J.
OPINION AND ORDER OF COURT
Plaintiffs have brought this equity action under the Sunshine Act.~ They have
filed a complaint as well as a motion for preliminary injunction. Currently before us is
their motion for preliminary injunction. Plaintiffs have alleged that the Defendant Board
of Governors of the Dickinson School of Law of the Pennsylvania State University
Association (hereinafter "Board of Governors" or "Board") is an agency subject to the
provisions of the Sunshine Act. They have asked that we enjoin the Board from closing
its future meetings to the public in violation of the Act. A hearing on the motion was
held on January 29, 2004.
I 65 Pa. C.S.A. § 701 et seq.
NO. 2004-0312 EQUITY
The matter is now ready for disposition.
FINDINGS OF FACT
The Dickinson School of Law was founded by the Honorable John Reed in
Carlisle, Cumberland County in 1834.2 It is steeped in tradition. It is the oldest law
school in Pennsylvania and the fifth oldest in the nation? Prior to its affiliation with the
Pennsylvania State University on July 1, 1997, it Was the oldest independent law school
in the United States.4
On July 1, 1997, the Dickinson School of Law became "affiliated" with the
Pennsylvania State University (hereinafter "Penn State") pursuant to the terms of an
"Affiliation Agreement and Agreement and Plan of Merger" (hereinafter "Plan of
Merger" or "Plan").5 The Plan of Merger was approved by both the Board of Trustees of
the Dickinson School of Law and the Board of Trustees of Penn State.6
Pursuant to the Plan of Merger, several relevant occurrences took place. The
Dickinson School of Law became The Dickinson School of Law of the Pennsylvania
State University merging "with and into" Penn State and ceasing to exist as a separate
entity.7 The Pennsylvania State University and its Board of Trustees continued
unchanged.8 The Plan of Merger also called for the creation of both Defendants in the
instant action. Section 1.02(E) of the Plan provided, in relevant part, as follows:
2 See Defendant's Exhibit 4, Bylaws of the Board of Governors of the Dickinson School of Law of the
Pennsylvania State University.
3Id.
4Id.
~ Defendant's Exhibit 1, Affiliation ,~greement andAgreement andPlan of Merger. The Plan of Merger
called for an affiliation period followed by a merger of the Law School into the University. Since the
merger was accomplished in July 2000, only the terms of the Plan of Merger have relevance to this action.
6 Defendant's Exhibit 1. Paragraph C of the "Recitals" Section, p.1, and Exhibit C, "Articles of Merger"
attached thereto.
? Defendant's Exhibit 1. Section 1.02 (A), p. 3.
8 Id.
NO. 2004-0312 EQUITY
Effective as of the Merger Date, the Board of Trustees of Dickinson
shall cause to be formed a new non-stock, non-membership
Pennsylvania non-profit corporation to be named "The Dickinson
School of Law of The Pennsylvania State University Association" (the
"Association"). The term of its existence shall be perpetual. In
accordance with Section 4.13 (C), the Association shall be governed
by a self-perpetuating Board of Governors. Such Board of
Governors shall provide counsel and guidance to Penn State with
respect to the academic mission of the law school and have the
responsibilities and duties set forth in Section 4.13 (C) and Section
8.09 of this Plan.9
(Emphasis added).
The make-up of the Board of Governors was dictated by the terms of the Plan.
Section 4.13 (C) provided in relevant part as follows:
Effective as of the Merger Date, Dickinson's Board of Trustees will be
irrevocably appointed as a self-perpetuating Board of Governors of a
newly-created non-stock, non-membership, non profit corporation,
The Dickinson School of Law of The Pennsylvania State University
Association (the "Association").
The Dean shall serve as liaison between Penn State and the
Association. The Dean (or in his absence, the Chairperson of The
Board of Trustees of Penn State, the President of Penn State or any
Executive or Senior Vice President of Penn State) shall attend each
meeting of the Association's Board on an ex officio, nonvoting
basis,l°
(Emphasis added). Many of the Board of Governors' functions, duties, and
responsibilities are also outlined in Section 4.13 (C) of the Plan:
The Board of Governors shall provide counsel and guidance to
Penn State with respect to the operation and academic mission of
The Dickinson School of Law of The Pennsylvania State
University. More specifically, the Board of Governors will have the
following mission, responsibilities and authority:
(1) review and make recommendations on the mission of
Dickinson;
(2) review and make recommendations regarding the strategic
and long term capital plans for Dickinson;
Defendant's Exhibit 1, p. 4.
~o Defendant's Exhibit 1, pp. 30-31.
NO. 2004-0312 EQUITY
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(lO)
provide input and guidance on Dickinson's annual giving
and capital campaign efforts and endowment enhancement;
provide advice, based on their experience in the practice of
the law regarding the nature and scope of the law school
curriculum;
provide input regarding the means by which to maintain
and enhance Dickinson's reputation for academic
excellence including input on class size, tuition and
admissions criteria;
provide input into the selection of a successor Dean;
provide input into operating and capital budgets;
possess authority to confer honorary degrees, in
consultation with Penn State's President;
possess authority to enforce by specific performance in
accordance with Section 8.09 of this Plan, Penn State's
continuing covenants which survive the Merger; and
provide guidance on matters relating to the Loan
Repayment Fund referred to in Section 4.12 (B) of the
Plan.~ ~
(Emphasis added).
The Merger Plan also required Penn State to abide by certain covenants into
perpetuity, unless a majority of the Board of Governors would agree otherwise.~2 One
such covenant is contained in Section 4.06 (B) which provides:
The name of the unit of Penn State which offers Penn State's J.D. or
LL.M. programs, joint degree programs with a J.D. or LL.M.
components shall be "The Dickinson School of Law of the
Pennsylvania State University," and its primary location and campus
shall be Carlisle, Pennsylvania.~3
Consequently, the Law School cannot be moved fi.om Carlisle without a vote of the
majority of the Defendant Board of Governors.
In June and July of 2000, the Plan of Merger was carded out as contemplated.
The Association was created with its registered address being at the law school in
tt Defendant's Exhibit 1, pp. 30-31.
~2 Defendant's Exhibit 1, Section 4.06, pp. 22-23.
~ Defendant's Exhibit 1, p. 22.
4
NO. 2004-0312 EQUITY
Carlisle, Cumberland County, Pennsylvania. Articles of incorporation and articles of
merger were filed and by-laws were adopted, all in substantially the same form as
required by the Plan.TM Furthermore, the Defendant Board of Governors was created, and
the individual members assumed office, in accordance with the terms of the Plan.
Over the next few years the Defendant Board of Governors performed its
functions and duties with little notice being taken by anyone outside of the Penn State
community? All of this changed dramatically in the fall of last year.
In anticipation of the Board of Governors meeting to be held at the end of
November 2003, a memo proposing to move the law school's main campus from Carlisle
to State College was sent to all members. The memo was authored by Dean Philip
McConnaughay, Penn State's liaison to and ex officio, albeit non-voting, member of the
Defendant Board of Governors. When the memo became public, interest in the activities
of the Board quickly spread from the Penn State community to the Central Pennsylvania
community at large. The public, including members of the press, have attempted to gain
access to the Board's meetings, which has consistently been denied?
In response to the Dean's memo, the Defendant Board of Governors appointed
several ad hoc committees to study the issue of facilities expansion. Among those
committees is one assigned to explore the possibility of expanding the current site;
another is designated to look at alternate sites in the Carlisle area; and a third is to report
on the desirability of relocating the main campus to State College. The Board is
scheduled to meet on February 7, 2004, in Carlisle, to receive the committees' reports
~4 See Defendant's Exhibit 1, sub exhibits C, D, and E, and Defendant's Exhibits 2, 3, and 4.
~5 All living alumni of the former Dickinson School of Law became alumni of the Pennsylvania State
University under the terms of the Plan. They are, therefore, included in the term "Penn State community."
t6 The Plaintiffs in this action publish two prominent daily newspapers in Central Pennsylvania.
NO. 2004-0312 EQUITY
and to deliberate on which site will be chosen for the law school's much needed
expansion. In addition, a motion will be made to have the Board vote on whether to
authorize a move of the main campus to State College?
CONCLUSIONS OF LAW
1 .) This Court has jurisdiction.
2.) The Board of Trustees of the Pennsylvania State University is an "agency" as
that term is defined in Section 703 of the Sunshine Act?
3.) The Defendant Board of Governors is an "agency" as that term is defined in
Section 703 of the Sunshine Act.
4.) The Defendant Board of Governors is subject to the terms of the Sunshine
Act.
5.) The Defendant Board of Governors may he enjoined from holding meetings in
violation of the terms of the Sunshine Act.
6.) The meeting scheduled for February 7, 2004, and all future meetings, should
be enjoined from taking place other than in accordance with the terms of the
Sunshine Act.
DISCUSSION
The case at bar presents several issues, including whether this Court has
jurisdiction; whether the Sunshine Act applies to the Defendant Board of Governors;
whether the Act authorizes an injunction to prevent future meetings from taking place,
See Testimony of G. Thomas Miller, Esquire
65 Pa. C.S.A. § 703.
NO. 2004-0312 EQUITY
and finally; whether such power should be exercised in the instant case? We will
address each issue seriatim.
Jurisdiction
Defendants contend that this Court does not have jurisdiction. Jurisdiction under
the Sunshine Act is conferred by Section 715 which provides:
The Commonwealth Court shall have original jurisdiction of actions
involving State agencies and the courts of common pleas shall have
original jurisdiction of actions involving other agencies to render
declaratory judgments or to enforce this chapter by injunction or other
remedy deemed appropriate by the court. The action may be brought
by any person where the agency whose act is complained of is located
or where the act complained of occurred.
(65 Pa. C.S.A. § 715). The parties agree that the Sunshine Act can only apply to the
Defendant Board of Governors through its alleged affiliation with the Board of Trustees
of the Pennsylvania State University. The Defendant Board contends that since Penn
State is a state agency, original jurisdiction is vested in the Commonwealth Court.2°
However, for the reasons set forth below, we conclude that Penn State is not a state
agency for purposes of jurisdiction under the Sunshine Act.
Although it did not involve an interpretation of the Sunshine Act, the decision of
the Pennsylvania Supreme Court in Pennsylvania State University v. Derry Township
~9 We are not unaware of a similar action brought by Plaintiffs against the instant Defendants and the
Pennsylvania State University in connection with the November meetings held by the Defendant Board of
Governors. The Plaintiffs also sought a preliminary injunction in that action. The case was filed in
Commonwealth Court pursuant to the original jurisdiction granted that Court under Section 715 of the
Sunshine Act (65 Pa. C.S.A. § 715). The case was tried before the Honorable Renee Cohn sitting as
Chancellor. She denied the request for a preliminary injunction without opinion. However, she
specifically indicated that her decision left unresolved the merits of the issues involving jurisdiction,
applicability of the Sunshine Act, and the Court's power to enjoin future meetings under that Act. The
Plaintiffs have since discontinued that action.
20 We note that the Pennsylvania State University, which was a party to the previous action filed by
Plaintiffs, challenged the jmisdiction of the Commonwealth Court by contending that it was not a state
agency,
7
NO. 2004-0312 EQUITY
SchoolDistrict, 557 Pa. 91,731 A.2d 1272 (1999) is instructive. In that case the court
specifically held that Penn State "is not an agency of the Commonwealth" for purposes of
real estate taxation. 731 A.2d at 1273. The court recognized that the "mere funding of an
institution does not.., make it an agency or instrumentality of the state." 731 A.2d at
1274. It went on to state:
The difficulty in determining the status of PSU arises from the fact that
it is not merely funded by the Commonwealth, but in certain very
limited respects it has governmental characteristics, while in other
regards it is plainly non-governmental. This dichotomy is illustrated
by, for example, the fact that PSU employees are included within the
definition of "state employees" under the State Employees" retirement
Code, 71 Pa. C.S. § 5102, but, for purposes of what is commonly
referred to as the Right to Know Act, 65 P.S. §§ 66.1-66.4, which
provides that public records of state agencies shall be open to
examination by citizens of Pennsylvania, PSU has been held not to
be a state agency. See Roy v. Pennsylvania State University, 130
Pa. Cmwlth. 468, 568 A.2d 751 (1990). The courts below thoroughly
described this as well as other aspects of the divergent manner in
which PSU has, for various purposes, been classified as an agency or
non-agency of the Commonwealth. Other than to illustrate the
dichotomy, however, such an approach is not helpful to the analysis.
This is because an entity's status as an agency or instrumentality
varies, depending on the issue for which the determination is being
made.
Id. (emphasis added).
The analysis of the Supreme Court in Derry Township, as well as that of the
Commonwealth Court in Roy, cited therein, lead us to conclude that Penn State is not a
state agency for purposes of the Sunshine Act. The Act applies to "the board of trustees"
of"state aided" or "state related" universities.21 However, our appellate courts have
specifically held that the "Board of Trustees of PSU is not governmental in nature."
Derry Township, supra, 731 A.2d at 1275. This is because only a minority of the
2165 Pa. C.S.A. § 703.
8
NO. 2004-0312 EQUITY
members are public officials. Id. See also Roy, supra, 568 A.2d at 753. If the body to
which the provisions of the Sunshine Act are to be applied is "not governmental in
nature", it stands to reason that it cannot be a state agency. Therefore, original
jurisdiction of the alleged violation of the Sunshine Act by the Defendant Board of
Governors is vested in the court of common pleas. Further, since the registered office of
the Defendant Association and the complained of meeting of the Board, is, and will be, in
Cumberland County, the action was properly brought before this Court.
Applicability of the Sunshine Act
The Sunshine Act provides that "official action and deliberations by a quorum of
the members of an agency shall take place at a meeting open to the public" except in
certain specified circumstances.22 The Act defines the term "agency", in relevant part, as
follows:
The body, and all committees thereof authorized by the body to
take official action or render advice on matters of agency business
of all the following:.., the boards of trustees of all State-aided
colleges and universities ....the boards of trustees of all State-related
universities...23
(Emphasis added). The parties agree that the Sunshine Act applies to the Board of
Trustees of the Pennsylvania State University as "the body" within the above definition
of"agency". They also agree that the Defendant Board of Governors does not fall within
the definition of"the body". Therefore, the Defendant Board can only be an agency as a
"committee" of"the body", i.e. as a committee of the Board of Trustees of the
Pennsylvania State University.
22 65 Pa. C.S.A. § 704.
23 65 Pa, C.S.A. § 703.
NO. 2004-0312 EQUITY
The Defendant Board of Governors argues that it cannot be a "committee" of the
Penn State Trustees because it is totally independent of, and can at times be adversarial
to, that "body". The Defendant Board places great emphasis on the fact that the Plan
actually gives it the authority to sue the Penn State Trustees, if necessary, to enforce the
covenants that survived the merger.24 The Board contends that the plain meaning of
"committee" does not contemplate such an independent or adversarial role.
Plaintiffs, on the other hand, argue that the function and authority of the
Defendant Board of Governors places it squarely within the plain meaning of the term
"committee". As counsel suggested, "if it walks like a duck and quacks like a duck, it's a
duck." After a thorough review of the facts, the language of the act, and the accepted and
common definitions of the term "committee", we are satisfied that Plaintiffs' position is
the correct one.
Neither party produced, nor could we find, any statutory or case law defining the
term "committee". Black's Law Dictionary defines it as "(a) group of people appointed
or elected to consider, determine, or manage a matter".25 Webster's defines it as "(a)
group of people delegated to perform a particular function or task.''26 Of most
significance is the terminology of the Sunshine Act itself which refers to "committees" as
being "authorized by the body to take official action or render advice" in connection with
the body's bdsiness.
The stated functions of the Defendant Board fall within the definitions set forth
above. One of its primary functions is to render advice to the Board of Trustees of the
24 One such covenant would be the promise not to move the law school from Carlisle without the consent of
the Defendant Board of Governors.
Black s Law Dtcaonary 266, (7t~ ed. 1999).
ebster s II New College Dictionary (1995).
10
NO. 2004-0312 EQUITY
Pennsylvania State University with regard to its operation of the law school. Another
main function is to decide whether the law school will remain in its current location or
move elsewhere. These are functions which would have been within the exclusive realm
of the Penn State Board of Trustees had those Trustees not specifically delegated them to
the Board of Governors under the terms of the Merger Plan. As a result of that
delegation, the Board of Governors acts as a "committee" (as used in the Sunshine Act
and within the plain meaning of that word) of the Board of Trustees of the Pennsylvania
State University in the performance of the above functions. Therefore, the Board is an
agency under the terms of, and subject to the provisions of, the Sunshine Act.
Authority to Enjoin a Prospective Violation
Defendants contend that our equity powers in actions brought under the Sunshine
Act are limited to those specifically provided in the Act. We agree. They further argue
that we have no power to enjoin a prospective violation of the Act because the remedies
contained in Section 713 are exclusive.27 We do not agree.
Section 713 provides certain very specific remedies. It provides that a court may
invalidate "any or all official action taken" at a meeting that was held in violation of the
Act. It also grants authority to "enjoin any challenged action until a judicial
determination of the legality of the meeting" is made. Defendants argue that this latter
remedy is the only injunctive power a court may exercise under the Act. However, this is
contrary to both the purpose and express language of the Act as well as existing case law
by which we are bound.
27 65 Pa. C.S.A. § 713.
11
NO. 2004-0312 EQUITY
The purpose of the Sunshine Act can be gleaned from the legislative findings and
declarations contained therein. Section 702 provides:
(a) Findings.--The General Assembly finds that the right of the public
to be present at all meetings of agencies and to witness the
deliberation, policy formulation and decisionmaking of agencies is
vital to the enhancement and proper functioning of the democratic
process and that secrecy in public affairs undermines the faith of
the public in government and the public's effectiveness in
fulfilling its role in a democratic society.
(b) Declarations.--The General Assembly hereby declares it to be the
public policy of this Commonwealth to insure the right of its
citizens to have notice of and the right to attend all meetings of
agencies at which any agency business is discussed or acted upon
as provided in this chapter.
65 Pa. C.S.A. § 702 (a), (b). The purpose of the Act is clear, i.e. "to give citizens the
opportunity to observe the decision making process of public agencies." Press
Enterprise v. Benton SchoolDistrict, 146 Pa. Cmwlth. 203,604 A.2d 1221, 1225 (1992).
In light of the purpose of the Act, it is illogical to conclude that Section 713
provides the exclusive remedies thereunder. One could imagine a meeting in which
"deliberations" took place, yet for whatever reason, no official action occurred. Thus,
there would be a violation, but no remedy. Such a result would be contra to the clear
language of Section 715, quoted above, which provides authority "to enforce this chapter
by injunction or other remedy deemed appropriate by the court.''28
Finally, we note that a court's authority to preliminarily enjoin a prospective
violation of the Sunshine Act was confirmed by the Commonwealth Court in Patriot -
News Co. v. Empowerment Team, 763 A.2d 539 (Pa. Cmwlth 2000). In that case the
Commonwealth Court upheld a preliminary injunction issued by the Dauphin County
Court of Common Pleas which required, inter alia, that the Han'isburg School District
28 65 Pa. C.S.A. § 715.
12
NO. 2004-0312 EQUITY
Empowerment Team conduct all of its future meetings in accordance with the provisions
of the Sunshine Act. Therefore, we conclude that the Act provides us with the authority
to enjoin future meetings from being held in violation thereofi
Appropriateness of Preliminary Injunction
Having concluded that we have the authority to issue a preliminary injunction
under the Act, we must now determine whether its issuance is warranted in the case at
bar. Our courts have long recognized that "the grant ora preliminary injunction is a
harsh and extraordinary remedy". Pennsylvania AFL-CIO v. Commonwealth of
Pennsylvania, 683 A.2d 691,694 (Pa. Cmwlth. 1996). Therefore, it will be granted only
if certain specific criteria have been met. The Commonwealth Court discussed those
criteria in Patriot-News Co. v. Empowerment Team, supra:
As we explained many years ago in Committee of Seventy v. Albert, 33
Pa. Cmwlth. 44, 381 A.2d 188, 190 (1977) (citations omitted):
Three criteria have been established for the granting of a
preliminary injunction, which, as a harsh and extraordinary remedy,
is to be granted only when and if each criteria has been fully and
completely established .... They are: (1) the preliminary
injunction must be necessary to prevent immediate and irreparable
harm which could not be compensated for by damages; (2) greater
injury would result from the denial of the preliminary injunction
than from the granting of it; and (3) it would operate to restore the
parties to the status quo as it existed prior to the alleged wrongful
conduct. In addition to meeting all three criteria, the court must be
convinced that plaintiffs' right to a preliminary injunction is clear
·.. and general equity jurisdiction must be warranted.
See also T. ~ Phillips. Of course, the movants do not have to prove an
absolute right to relief in order to obtain a preliminary injunction;
instead, if the other elements necessary for a preliminary injunction
exist, and substantial legal questions are raised by the underlying legal
claim, their "right to reliefs clear." Id. at 780-781.
13
NO. 2004-0312 EQUITY
Applying the above standards to the case at bar, we are satisfied that a preliminary
injunction should be granted.
The injunction is necessary to prevent immediate and irreparable harm that cannot
be compensated for by damages. We have concluded that the Sunshine Act applies to the
Defendant Board of Governors in its capacity as a de facto committee of the Board of
Trustees of the Pennsylvania State University. Therefore, any meeting at which "official
action" or "deliberations" take place must be open to the public? Such a meeting is
planned for February 7, 2004. If that meeting is closed, the public will be harmed by the
denial of its right to witness the deliberations on a matter of importance to a publicly
funded institution and to the local community. The harm would be irreparable in that the
opportunity to witness the deliberations and the dynamics involved in the decision
making process is lost forever once the meeting has been adjourned. There are no
damages available to compensate for such harm, "since there is no price tag that can be
placed on the public's trust.., and on the public's evaluation of the decision making
process." Patriot-News Co. v. Empowerment Team, supra, 763 A.2d at 547.
The second criterion is also present in that greater injury will result in denying the
injunction than in granting it. As noted above, denying the injunction will result in
irreparable harm to the public's right to witness the decision making process of a de facto
committee of a publicly funded institution. Against this must be weighed the inability of
the Board to conduct its deliberations outside the glare of the media's watchful eye. We
2'~ 65 Pa. C.S.A. § 704.
14
NO. 2004-0312 EQUITY
have no hesitation in finding that the greater harm would be in denying the public its right
to witness the process.3°
As to the third criterion, the alleged wrongful conduct is the Defendant Board of
Governors' refusal to abide by the Sunshine Act, which we have concluded applies to it.
Therefore, there is no status quo to be restored. The identical issue was faced by the
Commonwealth Court in Patriot-News Co. v. Empowerment Team, supra, which
nevertheless held that a preliminary injunction had been properly granted. As that Court
stated:
Moreover, while we agree with Common Pleas that the grant of the
preliminary injunctions did not actually restore the status quo, since
there was no status quo to be restored, it at least gave Appellees, who
represent the public, a clearer view of the decision-making process of
these agencies, which access had been denied before the injunctions
were entered.
763 A.2d at 547. Under the identical circumstances in the instant case, we are satisfied
that a preliminary injunction should issue.3~
For the reasons set forth in the above opinion, we will enter the order that
follows?
20 In addressing this same issue in the Patriot-News Co. v. Empowerment Team, supra, the Commonwealth
Court stated:
Of course, any minor, alleged "injury" to the improvement plan process arising from the
subjective reactions of some members of the teams to a media presence must necessarily
bow to the greater injury to the public's interest in information that would have accrued
from a denial oftha preliminary injunctions.
763 A.2d at 547.
3~ Petitioners have also requested that the minutes of all prior meetings be made public. However, since we
perceive no "immediate and irreparable" harm that will result from our refusal to grant the request, it will
not be granted in these preliminary proceedings.
32 We note that all parties have asked for an award of counsel fees. This case involves complicated issues
of fact and law which have given rise to a legitimate dispute. Each counsel has done a commendable job in
representing the interests of his client. Under these circumstances, we have no hesitation in directing each
party to pay its own, and only its own, counsel fees.
15
NO. 2004-0312 EQUITY
ORDER OF COURT
AND NOW, this 2~° day of FEBRUARY, 2004, having determined that the
Defendant The Board of Governors of the Dickinson School of Law of the Pennsylvania
State University Association is an "Agency" as that term is defined in the Sunshine Act
(65 Pa. C.S.A. § 701, et seq) it is hereby ordered and directed as follows:
1.) Defendant The Board of Governors of the Dickinson School of Law of the
Pennsylvania State University Association is directed to comply with the
provision of the aforementioned Sunshine Act; and
2.) Defendant The Board of Governors of the Dickinson School of Law of the
Pennsylvania State University Association is enjoined from conducting any
future meetings except in accordance with the provisions of the Sunshine Act.
The above provisions shall become effective upon Plaintiffs posting bond or cash
in the amount of $1000 in accordance with Pa. R.C.P. 1531 (b) and shall remain in effect
until a full heating on the merits or further Order of Court.
Each party's request for an award of counsel fees is DENIED.
By the Court,
/s/Edward E. Guido
Edward E. Guido, J.
Niles Benn, Esquire
Craig J. Staudenmaier, Esquire
Jack M. Stover, Esquire
Jayson R. Wolfgang, Esquire
16
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and
P.J. BROWNING, Publisher of
THE SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
VS,
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION, and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
NO. 04-312 EQUITY TERM
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
NOTICE OF APPEAL
Notice is hereby given that The Dickinson School of Law of the Pennsylvania State
University Association and The Board of Governors of The Dickinson School of Law of the
Pennsylvania State University Association hereby appeal to the Commonwealth Court of
Pennsylvania pursuant to 42 Pa. C.S. § 762(a)(5) and Pa. R.A.P. 311(4) from the Opinion and
Order entered in this matter on February 2, 2004 granting Plaintiffs' Motion for Preliminary
Injunction. The Opinion and Order are attached hereto as Exhibit "A." This Order has been
entered in the docket as evidenced by the copy of the docket entry attached hereto as Exhibit
DATE: February 3, 2004
BUCHANAN INGERSOLL PC
BY(~X~ (-~)//~
Jack M. S~o~f~ ~ ....
Attorney I.D. #18051
Jayson R. Wolfgang
Attorney I.D. #62076
One South Market Square
213 Market Street - 3rd Flr.
Harrisburg, PA 17101
(717) 237-4800
Attorneys for The Dickinson School of
Law of the Pennsylvania State
University Association and The Board of
Govemors of The Dickinson School of
Law of the Pennsylvania State
University Association
2
LEE PUBLICATIONS, INC.,
Publisher of THE SENTINEL,
And P.J. BROWNING, Publisher of
THE SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
THE DICKINSON SCHOOL OF
LAW OF THE PENNSYLVANIA
STATE UNIVERSITY
ASSOCIATION and THE BOARD
OF GOVERNORS OF THE
DICKINSON SCHOOL OF LAW
OF THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
NO. 2004-0312 EQUITY TERM
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION
BEFORE GUIDO, J.
OPINION AND ORDER OF COURT
Plaintiffs have brought this equity action under the Sunshine Act.~ They have
flied a complaint as well as a motion for preliminary injunction. Currently before us is
their motion for preliminary injunction. Plaintiffs have alleged that the Defendant Board
of Governors of the Dickinson School of Law of the Pennsylvania State University
Association (hereinafter "Board of Governors" or "Board") is an agency subject to the
provisions of the Sunshine Act. They have asked that we enjoin the Board from closing
its future meetings to the public in violation of the Act. A hearing on the motion was
held on January 29, 2004.
t 65 Pa. C.S.A. § 701 et seq.
NO. 2004-0312 EQUITY
The matter is now ready for disposition.
FINDiNGS OF FACT
The Dickinson School of Law was founded by the Honorable John Reed in
Carlisle, Cumberland County in 1834.2 It is steeped in tradition. It is the oldest law
school in Pennsylvania and the fifth oldest in the nation) Prior to its affiliation with the
Pennsylvania State University on July 1, 1997, it was the oldest independent law school
in the United States.4
On July 1, 1997, the Dickinson School of Law became "affiliated" with the
Pennsylvania State University (hereinafter "Penn State") pursuant to the terms of an
"Affiliation Agreement and Agreement and Plan of Merger" (hereinafter "Plan of
Merger" or "Plan").5 The Plan of Merger was approved by both the Board of Trustees of
the Dickinson School of Law and the Board of Trustees of Penn Statefi
Pursuant to the Plan of Merger, several relevant occurrences took place. The
Dickinson School of Law became The Dickinson School of Law of the Pennsylvania
State University merging "with and into" Penn State and ceasing to exist as a separate
entity.? The Pennsylvania State University and its Board of Trustees continued
unchanged.8 The Plan of Merger also called for the creation of both Defendants in the
instant action. Section 1.02(E) of the Plan provided, in relevant part, as follows:
2 See Defendant's Exhibit 4, Bylaws of the Board of Governors of the Dickinson School of Law of the
Pennsylvania State University.
31d.
nld.
5 Defendant's Exhibit 1, Af/~liation Agreement andAgreement and Plan of Merger. The Plan of Merger
called for an affiliation period followed by a merger of the Law School into the University. Since the
merger was accomplished in July 2000, only the terms of the Plan of Merger have relevance to this action.
Defendant s Exhibit 1. Paragraph C of the Recitals Section, p.1, and Exhibit C, Articles of Merger
attached thereto.
7 Defendant's Exhibit 1. Section 1.02 (A), p. 3.
NO. 2004-0312 EQUITY
Effective as of the Merger Date, the Board of Trustees of Dickinson
shall cause to be formed a new non-stock, non-membership
Pennsylvania non-profit corporation to be named "The Dickinson
School of Law of The Pennsylvania State University Association" (the
"Association"). The term of its existence shall be perpetual. In
accordance with Section 4.13 (C), the Association shall be governed
by a self-perpetuating Board of Governors. Such Board of
Governors shall provide counsel and guidance to Penn State with
respect to the academic mission of the law school and have the
responsibilities and duties set forth in Section 4.13 (C) and Section
8.09 of this Plan.9
(Emphasis added).
The make-up of the Board of Governors was dictated by the terms of the Plan.
Section 4.13 (C) provided in relevant part as follows:
Effective as of the Merger Date, Dickinson's Board of Trustees will be
irrevocably appointed as a self-perpetuating Board of Governors of a
newly-created non-stock, non-membership, non profit corporation,
The Dickinson School of Law of The Pennsylvania State University
Association (the "Association").
The Dean shall serve as liaison between Penn State and the
Association. The Dean (or in his absence, the Chairperson of The
Board of Trustees of Penn State, the President of Penn State or any
Executive or Senior Vice President of Penn State) shall attend each
meeting of the Association's Board on an ex officio, nonvoting
basis?
(Emphasis added). Many of the Board of Govemors' functions, duties, and
responsibilities are also outlined in Section 4.13 (C) of the Plan:
The Board of Governors shall provide counsel and guidance to
Penn State with respect to the operation and academic mission of
The Dickinson School of Law of The Pennsylvania State
University. More specifically, the Board of Govemors will have the
following mission, responsibilities and authority:
(1) review and make recommendations on the mission of
Dickinson;
(2) review and make recommendations regarding the strategic
and long term capital plans for Dickinson;
Defendant's Exhibit 1, p. 4.
~o Defendant's Exhibit 1, pp. 30-31.
3
NO. 2004-0312 EQUITY
O)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
provide input and guidance on Dickinson's annual giving
and capital campaign efforts and endowment enhancement;
provide advice, based on their experience in the practice of
the law regarding the nature and scope of the law school
curriculum;
provide input regarding the means by which to maintain
and enhance Dickinson's reputation for academic
excellence including input on class size, tuition and
admissions criteria;
provide input into the selection of a successor Dean;
provide input into operating and capital budgets;
possess authority to confer honorary degrees, in
consultation with Penn State's President;
possess authority to enforce by specific performance in
accordance with Section 8.09 of this Plan, Penn State's
continuing covenants which survive the Merger; and
provide guidance on matters relating to the Loan
Repayment Fund referred to in Section 4.12 (B) of the
plan.TM
(Emphasis added).
The Merger Plan also required Penn State to abide by certain covenants into
perpetuity, unless a majority of the Board of Governors would agree otherwise? One
such covenant is contained in Section 4.06 (B) which provides:
The name of the unit of Penn State which offers Penn State's J.D. or
LL.M. programs, joint degree programs with a J.D. or LL.M.
components shall be "The Dickinson School of Law of the
Pennsylvania State University," and its primary location and campus
shall be Carlisle, Pennsylvania?
Consequently, the Law School cannot be moved from Carlisle without a vote of the
majority of the Defendant Board of Governors.
In June and July of 2000, the Plan of Merger was carried out as contemplated.
The Association was created with its registered address being at the law school in
n Defendant's Exhibit 1, pp. 30-31.
12 Defendant's Exhibit 1, Section 4.06, pp. 22-23.
~3 Defendant's Exhibit 1, p. 22.
4
NO. 2004-0312 EQUITY
Carlisle, Cumberland County, Pennsylvania. Articles of incorporation and articles of
merger were filed and by-laws were adopted, all in substantially the same form as
required by the Plan? Furthermore, the Defendant Board of Governors was created, and
the individual members assumed office, in accordance with the terms of the Plan.
Over the next few years the Defendant Board of Governors performed its
functions and duties with little notice being taken by anyone outside of the Penn State
community.~5 All of this changed dramatically in the fall of last year.
In anticipation of the Board of Governors meeting to be held at the end of
November 2003, a memo proposing to move the law school's main campus from Carlisle
to State College was sent to all members. The memo was authored by Dean Philip
McConnaughay, Perm State's liaison to and ex officio, albeit non-voting, member of the
Defendant Board of Governors. When the memo became public, interest in the activities
of the Board quickly spread from the Penn State community to the Central Pennsylvania
community at large. The public, including members of the press, have attempted to gain
access to the Board's meetings, which has consistently been denied?
In response to the Dean's memo, the Defendant Board of Govemors appointed
several adhoc committees to study the issue of facilities expansion. Among those
committees is one assigned to explore the possibility of expanding the current site;
another is designated to look at alternate sites in the Carlisle area; and a third is to report
on the desirability of relocating the main campus to State College. The Board is
scheduled to meet on February 7, 2004, in Carlisle, to receive the committees' ~:eports
~4 See Defendant's Exhibit 1, sub exhibits C, D, and E, and Defendant's Exhibits 2, 3, and 4.
~ All living alumni of the former Dickinson School of Law became alumni of the Pennsylvania State
University under the terms of the Plan. They are, therefore, included in the term "Penn State community."
~6 The Plaintiffs in this action publish two prominent daily newspapers in Central Pennsylvania.
NO. 2004-0312 EQUITY
and to deliberate on which site will be chosen for the law school's much needed
expansion. In addition, a motion will be made to have the Board vote on whether to
authorize a move of the main campus to State College?
CONCLUSIONS OF LAW
1 .) This Court has jurisdiction.
2.) The Board of Trustees of the Pennsylvania State University is an "agency" as
that term is defined in Section 703 of the Sunshine ActJ8
3.) The Defendant Board of Governors is an "agency" as that term is defined in
Section 703 of the Sunshine Act.
4.) The Defendant Board of Governors is subject to the terms of the Sunshine
Act.
5.) The Defendant Board of Governors may be enjoined from holding meetings in
violation of the terms of the Sunshine Act.
6.) The meeting scheduled for February 7, 2004, and all furore meetings, should
be enjoined from taking place other than in accordance with the terms of the
Sunshine Act.
DISCUSSION
The case at bar presents several issues, including whether this Court has
jurisdiction; whether the Sunshine Act applies to the Defendant Board of Governors;
whether the Act authorizes an injunction to prevent future meetings from taking place,
See Testimony of G. Thomas Miller, Esquire
65 Pa. C.S.A. § 703.
NO. 2004-0312 EQUITY
and finally; whether such power should be exercised in the instant case? We will
address each issue seriatim.
Jurisdiction
Defendants contend that this Court does not have jurisdiction. Jurisdiction under
the Sunshine Act is conferred by Section 715 which provides:
The Commonwealth Court shall have original jurisdiction of actions
involving State agencies and the courts of common pleas shall have
original jurisdiction of actions involving other agencies to render
declaratory judgments or to enforce this chapter by injunction or other
remedy deemed appropriate by the court. The action may be brought
by any person where the agency whose act is complained of is located
or where the act complained of occurred.
(65 Pa. C.S.A. § 715). The parties agree that the Sunshine Act can only apply to the
Defendant Board of Govemors through its alleged affiliation with the Board of Trustees
of the Pennsylvania State University. The Defendant Board contends that since Penn
State is a state agency, original jurisdiction is vested in the Commonwealth Court.2°
However, for the reasons set forth below, we conclude that Penn State is not a state
agency for purposes of jurisdiction under the Sunshine Act.
Although it did not involve an interpretation of the Sunshine Act, the decision of
the Pennsylvania Supreme Court in Pennsylvania State University v. Derry Township
~9 we are not unaware of a similar action brought by Plaintiffs against the instant Defendants and the
Pennsylvania State University in connection with the November meetings held by the Defendant Board of
Governors. The Plaintiffs also sought a preliminary injunction in that action. The case was filed in
Commonwealth Court pursuant to the original jurisdiction granted that Court under Section 715 of the
Sunshine Act (65 Pa. C.S.A. § 715). The case was tried before the Honorable Renee Cohn sitting as
Chancellor. She denied the request for a preliminary injunction without opinion. However, she
specifically indicated that her decision left unresolved the merits of the issues involving jurisdiction,
applicability of the Sunshine Act, and the Court's power to enjoin future meetings under that Act. The
Plaintiffs have since discontinued that action.
20 We note that the Pennsylvania State University, which was a party to the previous action filed by
Plaintiffs, challenged the jurisdiction of the Commonwealth Court by contending that it was not a state
agency.
NO. 2004-0312 EQUITY
School District, 557 Pa. 91,731 A.2d 1272 (1999) is instructive. In that case the court
specifically held that Penn State "is not an agency of the Commonwealth" for purposes of
real estate taxation. 731 A.2d at 1273. The court recognized that the "mere funding of an
institution does not.., make it an agency or instrumentality of the state." 731 A.2d at
1274. It went on to state:
The difficulty in determining the status of PSU arises from the fact that
it is not merely funded by the Commonwealth, but in certain very
limited respects it has governmental characteristics, while in other
regards it is plainly non-governmental. This dichotomy is illustrated
by, for example, the fact that PSU employees are included within the
definition of "state employees" under the State Employees" retirement
Code, 71 Pa. C.S. § 5102, but, for purposes of what is commonly
referred to as the Right to Know Act, 65 P.S. §§ 66.1-66.4, which
provides that public records of state agencies shall be open to
examination by citizens of Pennsylvania, PSU has been held not to
be a state agency. See Roy v. Pennsylvania State University, 130
Pa. Cmwlth. 468,568 A.2d 751 (1990). The courts below thoroughly
described this as well as other aspects of the divergent manner in
which PSU has, for various purposes, been classified as an agency or
non-agency of the Commonwealth. Other than to illustrate the
dichotomy, however, such an approach is not helpful to the analysis.
This is because an entity's status as an agency or instrumentality
varies, depending on the issue for which the determination is being
made.
Id. (emphasis added).
The analysis of the Supreme Court in Derry Township, as well as that of the
Commonwealth Court in Roy, cited therein, lead us to conclude that Penn State is not a
state agency for purposes of the Sunshine Act. The Act applies to "the board of trustees"
of"state aided" or state related universities. However, our appellate courts have
specifically held that the "Board of Trustees of PSU is not governmental in nature."
Derry Township, supra, 731 A.2d at 1275. This is because only a minority of the
2x 65 Pa. C.S.A. § 703.
NO. 2004-0312 EQUITY
members are public officials. Id. See also Roy, supra, 568 A.2d at 753. If the body to
which the provisions of the Sunshine Act are to be applied is "not governmental in
nature", it stands to reason that it cannot be a state agency. Therefore, original
jurisdiction of the alleged violation of the Sunshine Act by the Defendant Board of
Governors is vested in the court of common pleas. Further, since the registered office of
the Defendant Association and the complained of meeting of the Board, is, and will be, in
Cumberland County, the action was properly brought before this Court.
Applicability of the Sunshine Act
The Sunshine Act provides that "official action and deliberations by a quorum of
the members of an agency shall take place at a meeting open to the public" except in
certain specified circumstances? The Act defines the term "agency", in relevant part, as
follows:
The body, and all committees thereof authorized by the body to
take official action or render advice on matters of agency business
of all the following:.., the boards of trustees of all State-aided
colleges and universities,.., the boards of trustees of all State-related
universities...23
(Emphasis added). The parties agree that the Sunshine Act applies to the Board of
Trustees of the Pennsylvania State University as "the body" within the above definition
of"agency". They also agree that the Defendant Board of Governors does not fall within
the definition of"the body". Therefore, the Defendant Board can only be an agency as a
"committee" of"the body", i.e. as a committee of the Board of Trustees of the
Pennsylvania State University.
22 65 Pa. C.S.A. § 704.
23 65 Pa. C.S.A. § 703.
NO. 2004-0312 EQUITY
The Defendant Board of Governors argues that it cannot be a "committee" of the
Penn State Trustees because it is totally independent of, and can at times be adversarial
to, that "body". The Defendant Board places great emphasis on the fact that the Plan
actually gives it the authority to sue the Penn State Trustees, if necessary, to enforce the
covenants that survived the merger? The Board contends that the plain meaning of
"committee" does not contemplate such an independent or adversarial role.
Plaintiffs, on the other hand, argue that the function and authority of the
Defendant Board of Governors places it squarely within the plain meaning of the term
"committee". As counsel suggested, "if it walks like a duck and quacks like a duck, it's a
duck." After a thorough review of the facts, the language of the act, and the accepted and
common definitions of the term "committee", we are satisfied that Plaintiffs' position is
the correct one.
Neither party produced, nor could we find, any statutory or case law defining the
term "committee". Black's Law Dictionary defines it as "(a) group of people appointed
or elected to consider, determine, or manage a matter".25 Webster's defines it as "(a)
group of people delegated to perform a particular function or task.''26 Of most
significance is the terminology of the Sunshine Act itself which refers to "committees" as
being "authorized by the body to take official action or render advice" in connection with
the body's business.
The stated functions of the Defendant Board fall within the definitions set forth
above. One of its primary functions is to render advice to the Board of Trustees of the
24 One such covenant would be the promise not to move the law school from Carlisle without the consent of
the Defendant Board of Governors.
2s Black's Law Dictionary 266, (7th ed. 1999).
26 Webster's H New College Dictionary (1995).
I0
NO. 2004-0312 EQUITY
Pennsylvania State University with regard to its operation of the law school. Another
main function is to decide whether the law school will remain in its current location or
move elsewhere. These are functions which would have been within the exclusive realm
of the Penn State Board of Trustees had those Trustees not specifically delegated them to
the Board of Governors under the terms of the Merger Plan. As a result of that
delegation, the Board of Governors acts as a "committee" (as used in the Sunshine Act
and within the plain meaning of that word) of the Board of Trustees of the Pennsylvania
State University in the performance of the above functions. Therefore, the Board is an
agency under the terms of, and subject to the provisions of, the Sunshine Act.
Authority to Enjoin a Prospective Violation
Defendants contend that our equity powers in actions brought under the Sunshine
Act are limited to those specifically provided in the Act. We agree. They further argue
that we have no power to enjoin a prospective violation of the Act because the remedies
contained in Section 713 are exclusive? We do not agree.
Section 713 provides certain very specific remedies. It provides that a court may
invalidate "any or all official action taken" at a meeting that was held in violation of the
Act. It also grants authority to "enjoin any challenged action until a judicial
determination of the legality o£the meeting" is made. Defendants argue that this latter
remedy is the only injunctive power a court may exercise under the Act. However, this is
contrary to both the purpose and express language of the Act as well as existing case law
by which we are bound.
27 65 Pa. C.S.A. § 713.
11
NO. 2004-0312 EQUITY
The purpose of the Sunshine Act can be gleaned from the legislative findings and
declarations contained therein. Section 702 provides:
(a) Findings.--The General Assembly finds that the right of the public
to be present at all meetings of agencies and to witness the
deliberation, policy formulation and decisionmaking of agencies is
vital to the enhancement and proper functioning of the democratic
process and that secrecy in public affairs undermines the faith of
the public in government and the public's effectiveness in
fulfilling its role in a democratic society.
(b) Declarations.--The General Assembly hereby declares it to be the
public policy of this Commonwealth to insure the right of its
citizens to have notice of and the right to attend all meetings of
agencies at which any agency business is discussed or acted upon
as provided in this chapter.
65 Pa. C.S.A. § 702 (a), (b). The purpose of the Act is clear, i.e. "to give citizens the
opportunity to observe the decision making process of public agencies." Press
Enterprise v. Benton School District, 146 Pa. Cmwlth. 203,604 A.2d 1221, 1225 (1992).
In light of the purpose of the Act, it is illogical to conclude that Section 713
provides the exclusive remedies thereunder. One could imagine a meeting in which
"deliberations" took place, yet for whatever reason, no official action occurred. Thus,
there would be a violation, but no remedy. Such a result would be contra to the clear
language of Section 715, quoted above, which provides authority "to enforce this chapter
by injunction or other remedy deemed appropriate by the court.''28
Finally, we note that a court's authority to preliminarily enjoin a prospective
violation of the Sunshine Act was confirmed by the Commonwealth Court in Patriot -
News Co. v. Empowerment Team, 763 A.2d 539 (Pa. Cmwlth 2000). In that case the
Commonwealth Court upheld a preliminary injunction issued by the Dauphin County
Court of Common Pleas which required, inter alia, that the Harrisburg School District
2865 Pa. C.S.A. § 715.
12
NO. 2004-0312 EQUITY
Empowerment Team conduct all of its future meetings in accordance with the provisions
of the Sunshine Act. Therefore, we conclude that the Act provides us with the authority
to enjoin future meetings from being held in violation thereof.
Appropriateness of Preliminary Injunction
Having concluded that we have the authority to issue a preliminary injunction
under the Act, we must now determine whether its issuance is warranted in the case at
bar. Our courts have long recognized that "the grant of a preliminary injunction is a
harsh and extraordinary remedy". Pennsylvania AFL-CIO v. Commonwealth of
Pennsylvania, 683 A.2d 691,694 (Pa. Cmwlth. 1996). Therefore, it will be granted only
if certain specific criteria have been met. The Commonwealth Court discussed those
criteria in Patriot-News Co. v. Empowerment Team, supra:
As we explained many years ago in Committee of Seventy v. Albert, 33
Pa. Cmwlth. 44, 381 A.2d 188, 190 (1977) (citations omitted):
Three criteria have been established for the granting of a
preliminary injunction, which, as a harsh and extraordinary remedy,
is to be granted only when and if each criteria has been fully and
completely established .... They are: (1) the preliminary
injunction must be necessary to prevent immediate and irreparable
harm which could not be compensated for by damages; (2) greater
injury would result from the denial of the preliminary injunction
than from the granting of it; and (3) it would operate to restore the
parties to the status quo as it existed prior to the alleged wrongful
conduct· In addition to meeting all three criteria, the court must be
convinced that plaintiffs' right to a preliminary injunction is clear
·.. and general equity jurisdiction must be warranted.
See also T.W.. Phillips. Of course, the movants do not have to prove an
absolute right to relief in order to obtain a preliminary injunction;
instead, if the other elements necessary for a preliminary injunction
exist, and substantial legal questions are raised by the underlying legal
claim, their "fight to relief s clear." Id. at 780-781.
13
NO. 2004-0312 EQUITY
Applying the above standards to the case at bar, we are satisfied that a preliminary
injunction should be granted.
The injunction is necessary to prevent immediate and irreparable harm that cannot
be compensated for by damages. We have concluded that the Sunshine Act applies to the
Defendant Board of Governors in its capacity as a de facto committee of the Board of
Trustees of the Pennsylvania State University. Therefore, any meeting at which "official
action" or "deliberations" take place must be open to the public.29 Such a meeting is
planned for February 7, 2004. If that meeting is closed, the public will be harmed by the
denial of its right to witness the deliberations on a matter of importance to a publicly
funded institution and to the local community. The harm would be irreparable in that the
opportunity to witness the deliberations and the dynamics involved in the decision
making process is lost forever once the meeting has been adjourned. There are no
damages available to compensate for such harm, "since there is no price tag that can be
placed on the public's trust.., and on the public's evaluation of the decision making
process." Patriot-News Co. v. Empowerment Team, supra, 763 A.2d at 547.
The second criterion is also present in that greater injury will result in denying the
injunction than in granting it. As noted above, denying the injunction will result in
irreparable harm to the public's right to witness the decision making process of a de facto
committee of a publicly funded institution. Against this must be weighed the inability of
the Board to conduct its deliberations outside the glare of the media's watchful eye. We
29 65 Pa. C.S.A. § 704.
14
NO. 2004-0312 EQUITY
have no hesitation in finding that the greater harm would be in denying the public its right
to witness the process.3°
As to the third criterion, the alleged wrongful conduct is the Defendant Board of
Governors' refusal to abide by the Sunshine Act, which we have concluded applies to it.
Therefore, there is no status quo to be restored. The identical issue was faced by the
Commonwealth Court in Patriot-News Co. v. Empowerment Team, supra, which
nevertheless held that a preliminary injunction had been properly granted. As that Court
stated:
Moreover, while we agree with Common Pleas that the grant of the
preliminary injunctions did not actually restore the status quo, since
there was no status quo to be restored, it at least gave Appellees, who
represent the public, a clearer view of the decision-making process of
these agencies, which access had been denied before the injunctions
were entered.
763 A.2d at 547. Under the identical circumstances in the instant case, we are satisfied
that a preliminary injunction should issue?
For the reasons set forth in the above opinion, we will enter the order that
follows.32
3o In addressing this same issue in the Patriot-News Co. v. Empowerment Team, supra, the Commonwealth
Court stated:
Of course, any minor, alleged "injury" to the improvement plan process arising from the
subjective reactions of some members of the teams to a media presence must necessarily
bow to the greater injury to the public's interest in information that would have accrued
from a denial of the preliminary injunctions.
763 A.2d at 547.
3x Petitioners have also requested that the minutes of all prior meetings be made public. However, since we
perceive no "immediate and irreparable" harm that will result from our refusal to grant the request, it will
not be granted in these preliminary proceedings.
32 We note that all parties have asked for an award of counsel fees. This case involves complicated issues
of fact and law which have given rise to a legitimate dispute. Each counsel has done a commendable job in
representing the interests of his client. Under these circumstances, we have no hesitation in directing each
party to pay its own, and only its own, counsel fees.
15
NO. 2004-0312 EQUITY
ORDER OF COURT
AND NOW, this 2ND day of FEBRUARY, 2004, having determined that the
Defendant The Board of Governors of the Dickinson School of Law of the Pennsylvania
State University Association is an "Agency" as that term is defined in the Sunshine Act
(65 Pa. C.S.A. § 701, et seco it is hereby ordered and directed as follows:
1.) Defendant The Board of Governors of the Dickinson School of Law of the
Pennsylvania State University Association is directed to comply with the
provision of the aforementioned Sunshine Act; and
2.) Defendant The Board of Governors of the Dickinson School of Law of the
Pennsylvania State University Association is enjoined from conducting any
future meetings except in accordance with the provisions of the Sunshine Act.
The above provisions shall become effective upon Plaintiffs posting bond or cash
in the amount of $1000 in accordance with Pa. R.C.P. 1531 (b) and shall remain in effect
until a full hearing on the merits or further Order of Court.
Each party's request for an award of counsel fees is DENIED.
By the Court,
Niles Benn, Esquire
Craig J. Staudenmaier, Esquire
Jack M. Stover, Esquire
Jayson R. Wolfgang, Esquire
/s/Edward E._~_. Guido
Edward E. Guido, J.
16
FYS510
2004-00312 LEE PUBLICATIONS
Reference No..:
Cumberland County Prothonotary's Office Page 1
Civil Case Print
INC ET AL (rs) DICKINSON SCHOOL OF LAW ET AL
Filed ........ : 1/23/2004
Case Type ..... : COMPLAINT0 -0EQUITY Time ......... : 3:03
Judgmen% ....... Execution Date 0/00/0000
Judge Assigned: Jury Trial ....
Disposed Desc.: Disposed Date 0/00/0000
............ Case Comments ............. Higher Crt 1.:
Higher Crt 2.:
General Index Attorney Info
LEE PUBLICATIONS INC PLAINTIFF BARNA TERENCE J
457 EAST NORTH STREET
CARLISLE PA 17013
SENTINEL THE PLAINTIFF BARNA TERENCE J
457 EAST NORTH STREET
P 0 BOX 130
CARLISLE PA 17013
BROWNING P J PLAINTIFF BARNA TERENCE J
457 E NORTH STREET
P O BOX 130
CARLISLE PA 17013
PATRIOT-NEWS THE PLAINTIFF STAUDENMAIER CRAIG J
812 MARKET STREET
HARRISBURG PA 17101
BARRON CATE PLAINTIFF STAUDENMAIER CRAIG J
812 MARKET STREET
HARRISBURG PA 17101
DICKINSON SCHOOL OF LAW THE DEFENDANT STOVER JACK M
BOARD OF GOVERNORS THE OF DEFENDANT STOVER JACK M
THE DICKINSON SCHOOL OF LAW
PENNSYLVANIA STATE UNIVERSITY
ASSOCIATION 150 S COLLEGE ST
CARLISLE PA 17013
* Date Entries .
............. FIRST ENTRY ..............
1/23/2004 COMPLAINT - EQUITY
1/23/2004 MOTION FOR PRELIMINARY INJUNCTION
1/23/2004 ORDER 1/23/04 A HEARING SHALL BE HELD 29TH DAY OF JANUARY 2004 AT
2:00 PM IN COURTROOM #5 TO DETERMINE THE RIGHTS OF THE PARTIES
INVOLVED AND WHETHER PLAINTIFFS' APPLICATION FOR A PRELIMINARY
INJUNCTION SHALL BE GRANTED EDWARD E GUIDO JUDGE
COPIES GIVEN TO ATTY STAUDENMAIER
COPIES MAILED TO DEFTS.
1/27/2004 AFFIDAVIT OF SERVICE OF COMPLAINT IN EQUITY ON COUNSEL FOR THNE
DICKINSON SCHOOL OF LAW
1/27/2004 CERTIFICATE OF SERVICE OF MOTION FOR PRELIMINARY INJUNCTION ON
JACK M STOVER ESQ
1/27/2004 CERTIFICATE OF SERVICE OF COMPLAINT ON JACK M STOVER ESQ
.............. LAST ENTRY ..............
********************************************************************************
* Escrow Information *
Fees & Debits Be Bal P mts/Ad' End Bal *
********************************************************************************
PYS510
2004-00312 LEE PUBLICATIONS INC ET AL
Reference No..:
Case TvDe ..... : COMPI~AINT EQUITY
Ju~gmeh% ...... 60
Judge Assigned: '
Disposed Desc.:
............ Case Comments .............
Cumberland County Prothonotarv's Office
Civil Case Print ~
(rs) DICKINSON SCHOOL OF LAW
COMPLAINT 35.00 35.00
TAX ON CMPLT .50 .50
SETTLEMENT 5.00 5.00
AUTOMATION 5.00 5.00
JCP FEE 10.00 10.00
55 50
Filed ........ :
Time ......... :
Execution Date
Jury Trial ....
Disposed Date.
Higher Crt 1.:
Higher Crt 2.:
.00
.00
.00
.00
.00
.00
Page 2
ET AL
1/23/2004
3:03
o/oo/oooo
o/oo/oooo
* End of Case Information .
CERTIFICATE OF SERVICE
I, Nicole L. Borda, Esquire, hereby certify that I am this day serving a copy of the
foregoing document upon the individual and at the address set forth below which service satisfies
the requirements of the Pennsylvania Rules of Civil Procedure:
UNITED STATES MAIL, FIRST CLASS, POSTAGE PRE-PAID:
Niles S. Benn, Esquire
Terence J. Barna, Esquire
Peter R. Wilson, Esquire
BennLawFirm
103 East Market Street
York, PA 17405
Craig J. Staudeumaier, Esquire
Nauman, Smith, Shissler & Hall, LLP
200 North Third Street
Harrisburg, PA 17101
VIA HAND DELIVERY
The Honorable Edward Guido
Cumberland County Courthouse
Carlisle, PA 17013
BUCHANAN INGERSOLL PC
DATE: February 3, 2004
'dole L. Borda~s~i:[ir~
PYSL10 Cumberland County Prothonotary's Office Page 1
Civil Case Print
2004-00312 LEE PUBLICATIONS INC ET AL (rs) DICKINSON SCHOOL OF LAW ET AL
Reference No..: Filed ........ : 1/23/2004
Judgmen%Case Type ...... ..... : COMPLAINT 00- EQUITY Time ......... : 3:03
· Execution Date 0/00/0000
Judge Assigned:
Jury Trial ....
Disposed Desc.: Disposed Date. 0/00/0000
............ Case Comments ............. Higher Crt 1.:
Higher Crt 2.:
General Index Attorney Info
LEE PUBLICATIONS INC PLAINTIFF BARNA TERENCE J
457 EAST NORTH STREET
CARLISLE PA 17013
SENTINEL THE PLAINTIFF BARNA TERENCE j
457 EAST NORTH STREET
P 0 BOX 130
CARLISLE PA 17013
BROWNING P J PLAINTIFF BARNA TERENCE J
457 E NORTH STREET
P O BOX 130
CARLISLE PA 17013
PATRIOT-NEWS THE PLAINTIFF STAUDENMAIER CP~AIG J
812 MARKET STREET
HARRISBURG PA 17101
BARRON CATE PLAINTIFF STAUDENMAIER CRAIG J
812 MARKET STREET
HARRISBURG PA 17101
DICKINSON SCHOOL OF LAW THE DEFENDANT STOVER JACK M
BOARD OF GOVERNORS THE OF DEFENDANT STOVER JACK M
THE DICKINSON SCHOOL OF LAW
PENNSYLVANIA STATE UNIVERSITY
ASSOCIATION 150 S COLLEGE ST
CARLISLE PA 17013
* Date Entries
............. FIRST ENTRY
1/23/2004 COMPLAINT - EQUITY ..............
1/23/2004 MOTION FOR PREL~-~3~/~ ..................................
1/23/2004 ......................................
ORDER 1/23/04 A HEARING SHALL BE
2:00 PM IN COURTROOM #5 TO DETERMINE THE RIGHTS OF THE PARTIES
INVOLVED AND WHETHER PLAINTIFFS' APPLICATION FOR A PRELIMINARY
INJUNCTION SHALL BE GRANTED EDWARD E GUIDO JUDGE
COPIES GIVEN TO ATTY STAUDENMAIER
COPIES MAILED TO DEFTS.
1/27/2004 AFFIDAVIT OF S~ ~ ~&~£~ ~
DICKINSON SCHOOL OF LAW
...........................
1/27/2004 ...........................
CERTIFICATE OF SERVICE OF MOTION FOR PRELIMINARY INJUN~-~ .....
JACK M STOVER ESQ
1/27/2004 CERTIFICATE OF SERVICE OF COMPLAINT ON JACK M STOVER ESQ
1/27/2004 ....................................................
~IFICATE OF SERVICE OF MEMORANDUM OF LAW ON JACK-~ ~-~---
1/28/2004 ENTRY OF APPEARANCE FOR DEFENDANTS BY JACK M-ST~-~ ........
FOR PRELIMINARY INJUNCTION - BY THE COURT EDWARD E GUIDO J COPIES
MAILED 2/3/04
............................
2/03/2004 NOTICE OF APPEAL TO COMMONWEALTH COURT FRO~
PYS510
Cumberland County Prothonotarv's Office
Civil Case Print =
2004-00312 LEE PUBLICATIONS INC ET AL (vs)
Reference No..:
Case Tyme ..... : COMPLAINT - EQUITY
Judgmen% ....... 00
Judge Assigned:
Disposed Desc.:
............ Case Comments .............
BY NICOLE BORDA ESQ
DICKINSON SCHOOL OF LAW
Filed ........ :
Time ......... :
Execution Date
Jury Trial ....
Disposed Date.
Higher Crt 1.:
Higher Crt 2.:
Page 2
ET AL
1/23/2004
3:03
o/oo/oooo
o/oo/oooo
.............. LAST ENTRY ..............
* Escrow Information
* Fees & Debits Beg Bal Pymts/Adj End Bal ~
COMPLAINT 35.00 35.00 .00
TAX ON CMPLT .50 .50 .00
SETTLEMENT 5.00 5.00 .00
AUTOMATION 5.00 5.00 .00
JCP FEE 10.00 10.00 .00
APPEAL 30.00 30.00 .00
...... ~--- 85.50 .00
* End of Case Information .
TRUE C~''~ ...... .r'.ECO RD
~' ¥ h,' '.~ ::~setmy
In Testimony. ,,
and the seal o~ s:, ' ,.~wrt at ~ ~sle, Pa.
~is ...... ~ ..... d~y of ..~ ....... ,
................
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TRANSMISSION V£R~FI~ATI~N R£POR~
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TEL
SER~#
RRO~HONOTARY C L~N~
7172406573
BROH3J605361
DATE~TIME
FAX NO./NAME
DURATION
PAGE(S)
RESULT
MODE
02/04 09~36
9?679559
00:00:43
OK
STANDARD
ECM
OFFICE OF THE PROTHONOTARY
CUMBERLAND COUTNY COURTHOUSE
ONE COURTHOUSE SQUARE
CARLISLE, PA 17013 - 3387
(717) 240-6195
FAX (717) 240-6573
FROM: Cumberland County Prothonotary Office
MESSAGE:
No, of pages (including cover sheets)
TRANSMISSION VERIFICATION REPORT
TIM£
FAX
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02/04/2004 00~42
RROTMONOT~R¥ C LOMG
717240B573
DATE,TIME
FAX MO./NAME
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STAMDARD
OFFICE OF THE PROTHONOTARY
CUMBERLAND COUTNY COURTHOUSE
ONE COURTHOUSE SQUARE
CARLISLE, PA ~70~3 - 3387
(717) 240-6195
FAX (717) 240-6573
TO:
FAX #
FROM:
RE:
Cumberland County Prothonotary Office
MESSAGE:
~' No. of pages (including cover sheets)
LEE PUBLICATIONS, INC., :
Publisher of THE SENTINEL:
And P.J. BROWNING, :
Publisher of THE SENTINEL:
And THE PATRIOT-NEWS and :
CATE BARRON, :
Plaintiffs :
V.
THE DICKINSON SCHOOL OF
LAW OF THE PENNSYLVANIA
STATE UNIVERSITY :
ASSOCIATION AND THE BOARD:
OF GOVERNORS OF THE :
DICKINSON SCHOOL OF LAW :
OF THE PENNSYLVANIA :
STATE UNIVERSITY :
ASSOCIATION, :
Defendants :
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
NO. 2004-0312 EQUITY TERM
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
IN RE: TRANSCRIPT OF PROCEEDINGS
Proceedings held before the HONORABLE
EDWARD E. GUIDO, J., Cu~erland County
Courthouse, Carlisle, Pennsylvania, on January
29, 2004, in Courtroom Number Five.
APPEARANCES:
Craig J. Staudenmaier, Esquire
For P.J. Browning
Niles S. Benn, Esquire
For Lee Publications
Jack M. Stover, Esquire
Jayson R. Wolfgang, Esquire
For the Defendants
FOR LEE PUBLICATIONS
G. Thomas Miller
By Mr. Wolfgang
FOR P.J. BROWNING
Phillip McConnaughay, By Mr. Staudenmaier
By Mr. Benn
By MR. Wolfgang
INDEX TO WITNESSES
DIRECT CROSS
14
34
as on cross
REDIRECT
46
EX~J~INATION
49,77
72,73
73,74,79
RECROSS
47
FOR THE DEFENDANT
Joanne Judge
By Mr. Staudenmaier
Hubert X. Gilroy By Mr. Benn
By Mr. Staudenmaier
Steven McCarthy
By Mr. Benn
DIRECT CROSS REDIRECT RECROSS
102
112
114
117
118
122
133
138
INDEX TO EXHIBITS
FOR THE
Ex. No.
Ex. No.
Ex. No.
Ex. No.
Ex. No.
DEFENDANT MARKED
1 - merger agreement 30
2 articles of incorporation 106
3 articles of merger 106
4 - bylaws 115
5 - charter, bylaws &
Standing orders 124
ADMITTED
82
140
140
140
140
2
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
THE COURT: Good afternoon. This is the
time and place set for the hearing on 'the request for a
preliminary injunction filed by Lee Publications and P.J.
Browning. Plaintiffs ready to proceed?
MR. BENN:
THE COURT:
MR. STOVER:
THE COURT:
first witness?
MR. BENN:
testimony or some opening
THE COURT:
MR. BENN:
Yes, we are, Your Honor.
Defendant ready to proceed?
We are, Your Honor.
Okay. Do you want to call your
Your Honor, would you like to hear
statements first?
Either way.
There are several legal issues.
My name is Niles Benn, and I represent the publication.
THE COURT: Let me just start by saying that
I've read the memoranda provided by each side, which was
very helpful and very instructive. Whatever you want to
add to that, please feel free to do so.
MR. BENN: If you're satisfied with
understanding the background of this case in terms as to our
posture with respect to the agency relationship as between
the Association and the University --
THE COURT:
understand their defense.
MR. BENN:
I understand your theory. I
At least I think I do, but --
The only other thing that I would
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like to add, if I may, we,
Stover's Memorandum of Law,
if I may approach.
THE COURT:
MR. BENN:
only this afternoon, received Mr.
and in that Memorandum of Law,
Sure.
In that Memorandum of Law Mr.
Stover made a great deal of reference with respect to the
matter that was held before the Commonwealth Court.
THE COURT: Yeah. And I guess I have
questions for both of you on that. First Of all, as I
understand your position -- the Plaintiff's position with
regard to why the Sunshine Act applies, and correct me if
I'm wrong, it applies because the Law School Board would be
a committee of the body in the Pennsy].vania State
University; is that correct?
position
MR. BENN: That is correct. That is our
THE COURT:
So taking your position, how do
I have jurisdiction? Why wouldn't the Commonwealth Court
have jurisdiction over this matter?
MR. BENN: I wish you were with me about
three or four or five weeks ago when I argued that case
before the Commonwealth Court.
THE COURT: Well, Judge Cohn didn't dismiss
it because of lack of jurisdiction.
MR. BENN: Well, let me relate to you, if I
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could, in terms as to what happened because there is no
record of that case. We have a transcript, but she entered
an order without an opinion, and it's unrecorded. And
therefore I would tend to believe that our respective
interpretations may be a tad different in terms as to Mr.
Stover's and mine and Mr. Staudenmaier's.
We, in that case, named as a defendant
Pennsylvania State University, along with the parties that
are named in this particular action. We took the posture
that Pennsylvania State University, as a State related
university and as a university that, in fact, receives
better than 300 million dollars from the taxpayers of the
Commonwealth, and because of its vast campuses throughout
the Commonwealth, including the Dickinson School of Law and
Hershey Medical Center, clearly was an entity that was, in
fact, State -- how do I say it?
is it, Mr.
THE COURT:
MR. BENN:
THE COURT:
Stover?
MR. STOVER:
MR. BENN:
Related.
Related
I don't think that's
in dispute,
It is not.
It may have been defined as a
State related institution in a myriad of cases. The
question then became, in terms as to whether they had
jurisdiction, the Commonwealth Court, has original
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jurisdiction, or whether, in fact, jurisdiction should rest
within the Court of Common Pleas.
My understanding of what transpired in the
Commonwealth Court was that for purposes of that hearing on
that day, Judge Cohn determined that she could take
jurisdiction with respect to hearing the remainder of the
case. She ultimately determined, as I understand it, that
she did not believe that the Sunshine Act -- and I think
this is referred to in Mr. Stover's memorandum.
She did not believe that the Sunshine Act was
anything but a curative act that would take precedent when,
in fact, something has already occurred in the format of a
meeting where an official action had occurred, and
therefore, an injunctive order could be then entered with
respect to the nature of that act so as to prevent it from
then taking place.
When the matter was all resolved, the
statements made by the Court was -- is that she only took
jurisdiction of that case in terms of Penn State being
subject to the jurisdiction of the Commonwealth Court,
specifically for that particular matter, but that it was not
binding, and it wouldn't be binding in the future.
THE COURT: Well, but my question is if --
as I understand the act, matters involving State agencies,
the Commonwealth Court has jurisdiction. All other matters
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we have jurisdiction. If you are saying that the Dickinson
School of Law Board of Trustees is an agency, it is only an
agency by virtue of its relationship with the Pennsylvania
State University, which is a State related agency, and
therefore, it would seem to me under the act that I do not
have jurisdiction.
MR. BENN: Well, then there would be a
dichotomy in terms Ds to two courts because Judge Cohn, in
her mind, was very much stretching her interpretation of the
law with respect to whether, in fact, she could take
jurisdiction of that matter.
THE COURT: Well, but she took jurisdiction
because of Penn State, did she not?
MR. BENN: But there are a number of cases
wherein Penn State has been determined to be subject to the
jurisdiction of the Common Pleas Courts under the Sunshine
Act. As a matter of fact, within the transcripts
themselves, Penn State's counsel over and over and over
argued that they are only subject to Common Pleas
jurisdiction, not Commonwealth jurisdiction.
THE COURT: Okay. And maybe I'm barking up
the wrong tree. Mr. Stover, what's your position?
Because you didn't raise jurisdiction.
MR. BENN: Well, if I can just take this one
step further though. Our posture, therefore, then is, well,
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we didn't sue Penn State in this matter
University.
University,
the University,
jurisdiction.
in terms as to the
We sued a de facto committee of the
which we're taking the posture is an agency of
and it's that agency that is subject to your
And taking that one step further, if I just
may for just one moment
THE COURT:
MR. BENN:
course of that argument
Go ahead.
Penn State's counsel, during the
-- and we have the transcript which
I could allude to -- specifically said that even if the
Commonwealth Court decided that that hearing should not
occur, Penn State University did not have jurisdiction with
which to stop that meeting from occurring because they are a
separately incorporated body, and not subject to the
jurisdiction of Penn State University.
THE COURT: Okay.~
BENN: For lack of a better phrase, it
MR.
was a catch 22.
MR.
STAUDENMAIER: Excuse me, Your Honor.
Hopefully this will help, but I have the transcript of what
Judge Cohn said. It may help alleviate the question in your
mind. I'm reading from page 74 of the transcript
THE COURT: Well -- but hold on a second.
MR. STAUDENMAIER: Okay. Sure.
THE COURT: Whether it's a question in my
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mind or not, do you agree that this Court has jurisdiction?
MR. STOVER: No, Your Honor. At the time we
would file a response to the complaint, it was fully our
intention to file preliminary objections, that among them.
And the reason for that is fairly simple. The plaintiffs
here have hinged their entire premise of being in this Court
on a very faulty premise, and that's this committee theory.
THE COURT: Well, I don't want to get into
that. I am at jurisdiction right now, and the simple
question on jurisdiction is do Common Pleas Courts have
jurisdietion over Pennsylvania State University for purposes
of the Sunshine Act? Do you have any cases that tell me
they do or they don't? Because the only way I can have
jurisdiction, the agent -- the agency question aside, the
only way I have jurisdiction is -- the only way the School
of Law is an agency is by virtue of its relationship with
the Pennsylvania State University.
MR. STAUDENMAIER: Your Honor --
MR. BENN: We have a Dauphin County case,
Your Honor.
MR. STAUDENMAIER:
with this case. It's the tax assessment case, the
Township case in Dauphin County against Penn State.
THE COURT: Okay.
MR.
You're probably familiar
Derry
STAUDENMAIER: And the Dauphin County
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Court had jurisdiction of that. Now, that was not a
Sunshine Act case, but Penn State went to great pains in
this case about bringing up the fact that they are not a
State agency under definition of the law. Not talking
about the fact that they're a State related institution.
THE COURT: Well, but the definition in the
Sunshine Act is very specific, and it says body, and it says
agency, and it says what bodies are. And bodies are
included -- include State related universities, which would
be Penn State. So the only way you get the School of Law to
be an agency is if the legal argument works that it's an
agency by virtue of its relationship to Penn State, which
makes it State related. So the question I had is under the
Sunshine Act, do I have jurisdiction over a State related
agency or is that --
MR. STOVER: The answer is no, Your Honor,
under Section 715 of the act.
THE COURT: I know what the section is. I'm
looking for case law, guys.
MR. STOVER: I don't believe this particular
issue is the subject of case law at this time, Your Honor,
at least it is not, to my knowledge. But I think Section
715 is clear in terms of what that division of jurisdiction
is.
THE COURT: Ail right. Then that's
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something I'm going to have to address, and I'll look hard
at it. What's the case you had, Mr. Staudenmaier? I'm
sorry.
MR. STAUDENMAIER: Well, Your Honor, what I
was looking for -- the case I was citing to was Penn State
versus Derry Township School District, and that's 731 A.2d
1272.
case?
THE COURT:
But that was not a Sunshine Act
MR. STAUDENMAIER: Correct.
THE COURT: Do we have any cases under the
Sunshine Act that deal with Penn State?
MR. STAUDENMAIER: Not that I'm aware of.
MR. BENN: The answer to that question is no.
THE COURT: Okay. Then I'm going to have to
BENN: When we argued the case at the
The
MR.
Commonwealth Court it was a case of first impression.
issue was whether, in fact, it was a State related
institution, which everybody acquiesced it was, and whether
that made it, because of it's largesse, a State Agency.
And that's really what the question is. If it's a State
Agency, it's before the Commonwealth Court. If it's not a
State Agency, it's not before the Commonwealth Court
THE COURT: Okay. And so that's obviously
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the threshold decision I'm going to have to make.
MR. STOVER: It is, Your Honor, and at the
conclusion of their case we would have moved at that time to
dismiss on that and other grounds which we anticipate will
be offered here, but because the Court has offered -- has
raised this issue now, we would move to dismiss this action
for lack of jurisdiction at this juncture.
THE COURT: I'm not prepared to address that
shooting from the hip. I raised it because I thought I
might have a concrete definitive answer. Since I don't have
that, we'll go through the hearing, but that's certainly
something I'm going to have to address and look at. Okay.
MR. BENN:
Court seems to be somewhat
that we have all supplied --
THE COURT: Yeah,
MR. BENN: Then I
issue.
Miller.
THE COURT:
MR. BENN:
Go
having been duly
THE COURT:
In light of the fact that the
familiar with the memorandums
I read them. Trust me.
don't want to belabor the
Okay.
I'd like to call Mr. Thomas
Whereupon,
THOMAS MILLER
sworn, testified as follows:
I apologize. For my own
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edification, as I read at least the brief part of the
transcript that was attached to the defendant's memorandum,
it appeared to me that all Judge Cohn did was to deny the
preliminary injunction, but there's still a pending case on
the merits out there, is
MR. BENN:
Honor.
THE COURT:
MR. STOVER:
MR. BENN:
pending then you're correct,
Court.
THE COURT:
MR. WOLFGANG:
respect to Mr. Miller, which
there not?
No, we withdrew that.
Oh, you withdrew it. Okay.
They withdrew the case, Your
If, in fact, I still had that case
we would be in Commonwealth
Okay. Ail right. Mr. Miller.
Your Honor, with all due
is considerable, having been
down this road before, and having a transcript of testimony
from the Commonwealth Court proceeding in November of last
year, and not having heard anything relevant from this
witness with respect to whether the Association and its
Board of Governors, which are the defendants in this case,
are subject to the Sunshine Act, we would ask, if we could,
for an offer of proof from the plaintiffs as to what Mr.
Miller as has to say that is relevant to that.
THE COURT: It would have been much quicker
if you would have just said could we have an offer of proof?
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So let's proceed that way.
MR.
before Judge Cohn,
to me now?
BENN:
Judge Cohn took the position --
THE COURT: No, no. What's he going to
That's all I'm interested in.
MR. BENN:
Could we have an offer of proof?
You certainly may. When we were
fact that there were meetings held in November,
say
He's going to talk in terms to the
and what the
nature of those meetings were.
scheduled next week, and what
supposedly going to be about.
That there is a meeting
the nature of that meeting is
He's going to testify in
terms as to whether a vote was taken in November, and
whether a vote might be taken next week.
THE COURT:
Okay. You may proceed.
MR. BENN: Thank you.
MR. WOLFGANG:
object on relevancy grounds.
BY MR.
name?
BENN:
Q
Your Honor, then we would
THE COURT: Overruled.
MR. WOLFGANG: Thank you.
DIRECT EXAMINATION
Mr. Miller, would you please state your
A
G. Thomas Miller.
And where do you reside?
I reside in Monaghan Township,
York County.
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The street address is 108 Gilbert Road, Post Office
Dillsburg.
Q Are you employed?
A I'm self-employed.
Q What do you do?
A Practice law.
Q What is the name of the firm that you
practice with?
A Miller and Miller.
Q And where do you practice?
A Our office is at 401 South 32nd Street in the
Borough of Camp Hill, Cumberland County, Pennsylvania.
Q And how long have you been with that
practice?
A Since 1995.
Q Prior to that?
A For the two years prior to that, I was an
associate with the firm of Gilworth Paxton (phonetic).
Prior to that I was a partner in the Harrisburg firm of
Mcnees, Wallace & Nurick for a period of about 26 years.
Q What is your involvement with respect to the
Dickinson School of Law of Penn State University?
A It's been my privilege to have had various
connections with the law school. I was president of the --
well, first I'm a graduate of the school in 1948. I was
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president of the General Alumni Association for a couple of
years in the early '70s. I was elected to the Board of
Trustees of the Law School in 1972.
At that time if one was elected to the Board,
it became a position for life, and I was elected to that
position and served on the Board of Trustees until the
merger with Pennsylvania State University, at which time, as
I understand it, the Board of Trustees was disbanded and
ceased to exist as that kind of a body under the merger
agreement, and the supervision and management of the school
under the agents of the University was then reposed to the
Board of Governors, of which I'm a member. And the Board of
composed automatically of the former Board of
Governors was
Trustees.
Q
And you've been on the Board of Governor
since the merger became effective?
A I have.
And you currently serve on the Board of
Q
Governors?
A
Q
I do.
Do you have any official title
the Board of Governors?
A None. None other than as
member of one or two committees.
Q
as a member of
a member. A
What committees are you a member of with
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respect to the Board of Governors?
A Well, I didn't pull out my committee list.
I know that I'm a member of the Honorary Degree Committee.
I believe that's all. I'm also a member of an ad hoc
Committee having to do with alternative site selection of
the Law School in view of the proposal that the unit -- that
the school be moved to University Park.
Q Let's talk about the Honorary Degree
Committee first. Within the merger document there's
certain powers conferred upon the Association. Is that not
correct?
A True.
Q With regard to Honorary degrees, are there
any powers granted to the Board of Governors and
association with respect to the issuance of Honorary
degrees?
THE COURT: Before you answer that, you're
talking about the merger document. I know it was attached
to the pleadings, but are we satisfied that is a part of the
record, counsel?
MR. STOVER: It's part of the pleadings at
this time. We'll introduce it, if they don't.
THE COURT:
MR. BENN:
it then why don't we stipulate that it
Okay.
Well, if you're going to introduce
is, it's a part of
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the pleadings, and that it's an exhibit.
MR. STOVER: My only hesitancy is I didn't
have a chance to look at every page of that. I have a
document I know was verified by the Law School.
the record.
THE COURT:
I'm going to make that a part of
MR. STOVER: Yes.
MR. BENN: And just as an aside, the merger
document that we have used is a copy of the merger document
that was signed -- or excuse me, approved by Judge Hoffer
when the merger went into effect, and part of the court
record here in the Cumberland County Courthouse.
THE COURT: Well, the fact that it's
somewhere else in this courthouse doesn't make it a part of
the record of this proceeding.
MR. BENN: I understand
THE COURT: Okay. I'm sorry, Mr. Benn.
BY MR. BENN:
Q Very briefly,
the Honorary degree nature of the authority granted to the
Board of Governors and Association, are there any
restrictive powers granted to that body?
A
my question was in terms as to
Restrictive powers to the Board of Governors?
As it relates to the Honorary degrees?
Yes. And to answer it very briefly, it's a
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prerogative of the Board of Governors to recommend Honorary
degree recipients who would be so rewarded an Honorary
degree by the Law School, typically at its annual
commencement, but the Board of Governors does not have the
final determination as to the persons who shall be awarded
such degrees. The Board is required to transmit the
recommended awardees, recommended Honorary degree
recipients, to the University.
It's my understanding that either the
President of the University or the President and several
other members of the im~nediate staff, and I don't know the
-- I don't recall the precise language, but the Honorary --
the awarding of the Honorary degrees must be approved by the
President of the University, whether it requires action by
his Board of Trustees or by his Executive Committee or
whether that discretion is entirely to him I'm not sure, but
the Law School cannot award Honorary degrees without the
approval of the specific nominees by at least the President
of the University.
Q I'd like to read from -- we're going to
introduce this document -- what is referred to as 4.06,
section D, and the opening statement says degrees. The
Dickinson Board -- Dickinson's Board shall have continued
authority to confer Honorary degrees following consultation
with Penn State's President. Do you agree with that?
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A Well, I certainly do. That's the language.
And I think I've given the practical interpretation of that
language. Consultation means, as a practical matter,
obtaining the approval of the President.
Q And since the merger has occurred, have any
of those that you have submitted to him been denied?
A Not to my knowledge. I think that the
number of submissions has been less than when the school was
autonomous. I don't think the school has awarded as many
Honorary degrees as it did before the merger. I don't
think I'm telling any tales out of school when I say that
one of the proscriptions from the University was that it's
University policy not to award any Honorary -- or an
Honorary degree to any "political figure".
Now, in prior years the Law School had
awarded degrees to persons who did hold political office;
Judges, governors, and so on, but that type of role is no
longer permitted for an Honorary degree recipient under
University policy. So there is some proscription by the
University to the Law School as a result of -- that's
complied with. So obviously there haven't been any
rejections because the Law School follows that policy.
Q But you never received anything in writing as
a committee indicating to you that you couldn't give an
Honorary degree to any of those individuals?
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A I have no recollection of anything being
written, but we were certainly told that.
Q Now, with respect to the co~nittee that you
were appointed on recently, you said there was another
committee pertaining to the search of a site?
A As a result of Dean McConnaughay's
recommendation to the Board in his November 4th, 2003, memo
that the Law School be moved to University Park, the Board
decided to look into the matter with some thoroughness, and
four committees were appointed to consider various aspects
of a possible move or a possible decision not to move.
Q When were those committees appointed?
A They were appointed in early December of 2003
following our November 22nd and 23rd Board meeting.
Q And do you recall what the nature of those
four committees are?
A Well, one of the committees is to study the
Trickett Hall site. I'm not sure of the precise name of
the committee. That's headed by a member of the Cumberland
County Bar who was here in court -- oh, he still is, Hubert
Gilroy, Esquire. A Trickett Hall study committee. There
is also an alternative -- alternate site selection committee
headed by Robert Frey,
County Bar.
Q
Esquire, a member of this Cumberland
And is that the committee that you're on?
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A
A
scheduled for
Q
A
And that's the committee that I'm on.
Have you met as a committee as yet?
We have not met. We have our first meeting
February 6, 2004.
What are the other two committees?
The third committee is to study a University
Park site for the Law School, the various ramifications and
considerations of the Law School of being moved to and
occupying a site somewhere in the University Campus, I
assume to be designated by President Spanier or one of his
designees.
The fourth committee is a -- it's a financial
committee, a fund -- I don't think it's called a fund
raising committee, but it has to do with possible funding or
necessary funding for the Law School, wherever it's to be
located, because it's been determined that substantial
renovations of the present campus and buildings are required
or certainly if the move is to University Park, money will
Funds will be required to
erect a new school.
a funds committee, and I don't know it's precise
it's to study, as I understand it, the -- I guess
be required.
So that's
name, but
to assess
the needs, the specific needs and finances and the
sources for obtaining them.
Q If I told you it was called Funding and
Strategic Planning, would that refresh your recollection?
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A
memorandum,
November,
mind.
A Sounds good.
Q When was it that you first learned of the
thought process that was going to be presented to the Board
of Governors or the Association relative to a potential move
of the Law School?
When I received Dean McConnaughay's
I think it was about 28 pages, in early
and November 4, 2003, seems to be lodged in my
Q Now,
subsequent to that,
the meetings that were to occur in November?
Governors meetings?
A We were told that
when you received that memorandum,
did you receive any agenda referable to
The Board of
there would be meetings on,
if my calendar's right, Friday the 22nd, Saturday the 23rd.
That the meeting on the 22nd would be with University
officials, Dean Spanier, and two of his senior executives --
President Spanier, excuse me. I misspoke. And that did
occur. That was an evening meeting where President Spanier
and two of his top executives were there.
I can't offhand say their names or positions,
and then on Saturday, the following day, the Board met
pretty much, I'll call it, in camera. That meeting was
held under very strict security. We had guards there to
make sure no unauthorized persons came into the meeting.
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Q
meeting to be held on Friday and Saturday prior to the
meeting?
A
Q
Did you receive an agenda with respect to the
Not really, that I recall.
Is it the normal course of business in the
past when the Board of Governors would meet that there would
be an agenda provided prior to those meetings?
A There is item by item -- I do not recall
having received a specific item by item agenda for those
meetings. There was -- I recall -- and I don't have these
documents with me, there was a -- it was a memorandum or a
letter stating generally what would happen.
Q But my question was, in prior meetings of the
were there agendas provided before those
For quite a number of years that
Board of Governors,
meetings occurred?
A Yes.
occurred. There was a time when there were not agendas
provided, but I would say in the last ten years of the Board
of Trustees activities we've always had an agenda prior to a
board meeting, and the same with the Board of Governors.
Q And since the merger had occurred, up to the
time of these November meetings, did you receive agendas
with respect to those meetings?
A Yes.
Q So you did not receive an agenda for the
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November meetings, but you had received agendas for previous
meetings since the merger?
A That is my recollection. I do not recall a
specific agenda. There was a memorandum which told us what
was going to happen.
Q Now, with regard to the meetings that were
held in November, do you recall whether anybody from the
Board of Governors had asked for the vote relative to
whether a change of location of the Law School should occur?
You're talking about our November 23rd
A
meeting?
Q
A
Q
A
member Laddie Montague, Esquire,
That's correct.
As I recall, a member of the Board either
made a motion or stated an interest and desire to make a
motion that we decide at that time whether the Law School
should be moved to University Park.
Do you recall who that individual was?
As I remember, it was Board of Governor
who practices in
Philadelphia.
vote did,
Q
in fact, occur?
A No vote occurred,
Now, it's your recollection, however, that no
and I'm not positive that
Mr. Montague even made a formal motion because I think he
was instructed by the Chair that such a motion would not be
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in order at that time. And I think there was a general
view by Board members that they weren't prepared to vote at
that time. So no vote was taken.
Q And the Chair being whom?
A Former Attorney General Leroy Zirmmerman.
Q Now, with respect to the meeting that is to
occur, I believe next week or next weekend --
A Yes, sir.
Q -- have you received an agenda pertinent to
that meeting?
A I have not received an agenda. We were told
by memorandum that the meeting which had been scheduled for
January 24 would be postponed until February 7. I called
an official at the school this week to inquire about an
agenda for the February 7 meeting, and was advised by that
official that an agenda was in preparation. A draft agenda
was on General Zirmmerman's desk, and it was to be -- hoped
that it would be forthcoming for mailing to the Governors
very shortly.
Q
committees;
A
Q
in November?
A
NowI
is that
I have not yet received any agenda.
you had indicated that there are four
correct?
Exactly.
That were assigned subsequent to the meetings
Appointed by General Zimmerman.
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Q And
potential move to State College.
refurbishment of Trickett Hall.
some of those meetings relate to the
Some of them relate to the
Some of them relate to
moving within Cumberland County or Carlisle, Pennsylvania;
is that correct?
A Exactly.
Q You indicated that the committee that you're
on has not as yet met, but is supposed to meet, I believe,
the Friday before the Saturday meeting?
A The evening of February 6th, yes, sir.
Q Are you in a position to call for the vote
relative to whether the Law School should move or not?
A I would think I would have that prerogative,
that right as a member of the Board of Governors.
Q And is it your intention to do so at the
meeting in February?
A It is.
Q So you would
like the Board to vote at the
meeting in February as to whether, in fact, it's going to
move the Law School or stay where it is?
A I think it important that we proceed to a
decision on this matter as soon as possible. Some people
have said, well, we don't have enough facts, and my answer
to that is, well, let's assemble the facts that we need
based upon what our decision is. We've had plenty of time
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to think about this.
the alumni around the
the Board pretty well
to do.
In fact,
There have been meetings held with
State. I think that the members of
know in their own minds what they want
at our last meeting General
Zin~nerman said that he sensed that there was a consensus of
the Board. I don't think that he said what that consensus
was, but I think it's time we made a decision for several
reasons, if you wish to hear those reasons.
Q Go ahead.
THE COURT: Well, I'm not sure that that's
relevant to what's before me today.
relevant --
BY MR.
MR. BENN:
If the Court doesn't think it's
THE COURT: I don't. Let's move on.
MR. BENN: Ail right.
BENN:
Q Mr. Miller, when you met in November as a
committee, the Board of Governors, you indicated that on
Friday evening there was a presentation made by various
parties from Penn State University.
A Primarily President Spanier.
that the two gentlemen with him said more than a couple of
sentences.
Q Were you able --
I don't recall
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A
McConnaughay.
Q
of Governors,
University?
A
Q
He had the floor pretty much, as did Dean
They shared the floor.
Were you able, and other members of the Board
able to ask questions of the President of the
We did, and there were a good many questions.
Were you able to ask questions of the Dean of
the Law School?
A We were. I don't remember how many were
asked of the Dean. Our primary person to whom we had been
invited to address questions was President Spanier, but I
guess some questions were addressed to Dean McConnaughay.
Q On Saturday when the Board of Governors met
without President Spanier, was there dialogue amongst the
Board of Governors pertinent to the move?
A Absolutely.
Q And how long did that dialogue last?
A Well, in various forms it lasted from about 9
in the morning until about 1:30 in the afternoon. I think
we had a lunch break, but -- I think the meeting was -- it
was announced the meeting might go until at least 3, but it
was decided around 1:30 that we'd said all we could say at
that time, and we adjourned.
Q And would you recall whether there was a
quorum present at the time?
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A Oh, very much so. There was a
The great majority of the Board was present.
many absentees.
Q Now, I would like to go back to the merger
document, and just ask you a couple questions with respect
to that, and then, quite frankly, I'll be finished.
A Okay. But I don't have the document before
me, and I'll --
Q That's okay.
A I'll plead possible unfamiliarity.
Q That's fine
THE COURT:
document as somebody's exhibit,
of him.
MR. WOLFGANG: We have it right here, Your
Honor, and we're prepared to mark it as D-i, if you want.
MR. BENN: May I see it?
(Whereupon, Defendant's Exhibit No. 1 was
marked for identification.)
MR. BENN: Why don't we just mark this as
Defendant's Exhibit Number 1, and I'll make reference to
Defendant's Exhibit Number 1
THE COURT:
That's fine.
BY MR. BENN:
full quorum.
There were not
Actually why don't we mark that
and you can put it in front
I believe we have. Okay.
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Q
the document
Section 4.06.
Mr. Miller, I want to refer you to page 22
that you have before you. Specifically
A I have it.
Q 4.06 makes reference, in subparagraphs A, B,
D as to certain powers granted onto the Board of Governors
in perpetuity. Do you have any familiarity on your own
without reading that document in its entirety or notes with
respect to those particular sections as to those powers
granted to the Board of Governors in perpetuity?
MR. WOLFGANG: Objection, Your Honor. I'm
not sure
form.
I understand the
question. I'll object to the
THE COURT: Overruled.
THE WITNESS:
You're asking me what my
understanding is of those sections to which you've
referred?
itself,
Board?
of
MR. BENN: Yes
MR. WOLFGANG: The document speaks for
Your Honor.
THE COURT: Mr. Stover, do you represent the
MR. STOVER: We both do,
MR. WOLFGANG:
and the Board of Governors.
Your Honor.
We represent the Association
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THE COURT: Okay. I'm only going to deal
with one lawyer. So decide who it's going to be.
MR. STOVER: Your Honor, Mr. Wolfgang was
going to handle the cross examination of these witnesses,
and I was going to handle the other parts
THE COURT: Good. We'll
That's fine.
Your Honor,
BY MR. BENN:
Q
A
Go ahead, Mr. Wolfgang.
MR. WOLFGANG: Ail I was
the document, you know,
THE COURT: Okay.
of the case.
handle it that way.
going to say is,
speaks for itself.
Overruled.
You can answer my question, Mr. Miller.
Well, my understanding is that the Dickinson
School of Law takes the students through a certain
curriculum, and those who successfully complete that
curriculum are named as candidates for the degree of Juris
Doctor, and they are then -- those persons are recommended
to the University since the merger for the actual conferring
of the degree.
The Board of Governors approves the award of
the degree. So we're submitted a list of candidates, and
while it's pro forma, it all -- we always approve it, and
then, as I understand it, it goes to the University for a
similar approval, and then the University would have the
right, I guess, to veto any particular candidate. It
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D as in David?
in boy.
in boy.
Where it makes reference to name, location,
Can the name of the Law School be changed
hasn't occurred in our brief history, but the degree's
awarded then by the University.
Q Let me ask you this question. With respect
to the section that I alluded to, or sections, let's say
section 4.06 B.
A
Q B as
A B as
Q
and degrees.
without the approval of the Board of Governors?
As I understand it, no.
Can the location of the Law School be changed
A
without the approval of the Board of Governors?
A Definitely no.
Q The degrees issued by the Law School, can
they be changed without the approval of the Board of
Governors?
A You mean whether it's a Juris Doctor or a
Bachelor of Law?
Q That is correct.
No.
MR. BENN: That's all I have, Your Honor.
THE COURT: Mr. Staudenmaier, any questions?
MR. STAUDENMAIER: I have none, Your Honor.
A
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BY MR. WOLFGANG:
Q
several times
THE COURT: Okay. Mr. Wolfgang.
MR. WOLFGANG: Thank you, Your Honor.
CROSS EXAMINATION
Mr. Miller, you've used the term Law School
during your direct testimony, and I just want
to clarify something. The Law School, as it is presently
constituted, is an academic unit of Penn State University;
isn't that correct?
A I would think that's correct.
Q There was a time before this affiliation and
merger agreement was entered into between Penn State and the
former Dickinson School of Law when the Law School was a
stand alone educational institution; is that correct?
A True.
Q And then the affiliation and merger agreement
was entered into. There was an affiliation period, and
then there was a merger date, after which the Law School was
merged into Penn State University as an academic unit of the
University. You would agree with that as well, right?
A Yes. You use the term academic unit. I
have no reason to doubt the application of that term. I
don't know its precise meaning, and I don't know whether
there would be any synonymous terms, but I'll accept your
designation.
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Q
A
precisely as that "academic unit",
not.
Q Well,
And I'm not using that as --
Excuse me. I've never heard it referred to
but I can't say that it's
for example, if there was a college of
humanities or a college of science or something like that,
the Law School would be comparable to those as academic
units, and I'm not using that as a term of art of the
University. That's all.
A I would guess so. I'm not sure when you use
the term college -- I mean there's the Smeel School of
Business Administration, which confers a degree known as a
Masters of Business Administration. There's the Milton
Hershey Medical School of Penn State University, which
confers a Doctor of Medicine degree. I don't know about
colleges. There's a capital -- there are satellite campuses
like Capital College down in Middletown. I guess they would
be an academic unit. I'm not precisely sure of your
and I don't understand the significance of it.
It's not significant. In fact, that's my
terminology,
Q
point.
A
Q
Okay.
It's simply that after the merger, the Law
School is part of Penn State. We've agreed on that?
A Yes. That's the purpose of the merger
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agreement.
Q
section 4.06 of the merger agreement.
up, sir?
A I've got it.
which
has been marked
A Right.
additional covenants.
Q
And Mr. Benn asked you some questions about
Would you take that
Q If we go back to the heading at section IV,
is on page 19 of the merger agreement, which I think
page 19.
D-I; is that correct? Defendant 1,
And section Roman numeral 4,
Additional covenants.
It says Dickinson,
meaning the former Dickinson School of Law,
alone
State,
Dickinson that,
you see that?
A I do.
Q Covenant 4.06,
Berm was just asking you questions
to that page, please?
A
Q
other things,
a separate stand
entity, hereby covenants to and agrees with Penn
and Penn State hereby covenants to and degrees with
and then it lists a number of covenants. Do
A Page 22?
Q Yes, sir.
I'm there.
page 22, which is what Mr.
about. Would you turn
That convenant, Mr. Miller, says that, among
in section 4.06 B, that the name of the unit
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of Penn State, which offers Penn State's JD or LLM programs,
joint degree programs with a JD or LLM components shall be
"the Dickinson School of Law of the Pennsylvania State
University" and its primary location and campus shall be
Carlisle, Pennsylvania. Do you see that language?
A I do.
Q And so in that paragraph it was covented by
-- convented by Penn State that it would maintain its unit,
its Law School unit in Carlisle, Pennsylvania,
name would be as described in that provision,
a covenant agreed to by Penn State;
covenant was
correct?
A
Q
and that the
that that
isn't that
And by the Dickinson School of Law, yeah.
Which after the merger would no longer exist
as a stand alone entity?
A As an independent school,
Q Right. And, in fact, Mr.
why the nonprofit corporation called the
Law of the Pennsylvania State University Association was
created out of this contract -- this merger agreement, so
that there would be some stand alone separate entity that
would exist after the point of the merger. Isn't that also
correct?
A Well, you're asking me to give you a legal
conclusion.
that's correct.
Miller, that is
Dickinson School of
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that --
MR. BENN: Objection, Your Honor.
THE WITNESS: I'm really not prepared to do
MR. BENN: Tom. Tom. I object, Your Honor.
He's not testifying as an attorney in this case or as an
attorney of the Law School or
document. He's testifying as
Governors, and was not a part
as an attorney that wrote this
a member of the Board of
of that negotiation process.
THE COURT: If your answer is I don't know,
that's appropriate. I'm going to overrule the objection.
I'm not asking you to interpret the contract. The question
was are you a part of the merger agreement, and is that
discussion made --
THE WITNESS: I was certainly on a committee,
Your Honor, that hammered out the agreement. We had advice
of counsel that did the bulk of the work. I'd like to
stand on the answer already given. I think the question
calls for a legal conclusion, which I'm not prepared to
give.
THE COURT: Good enough. Next question.
BY MR. WOLFGANG:
Q You understand, Mr. Miller, that an entity
called the Association was created -- was incorporated
around the time of the merger. Do you understand that fact?
A Well, I learned that specifically at the
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hearing before Judge Cohn some months ago.
Q Well, you were on the Board of Trustees of
the Dickinson School of Law before the affiliation and
merger agreement was entered into, weren't you?
A I think we agreed on that.
MR. WOLFGANG: One moment, Your Honor,
please.
BY MR. WOLFGANG:
Q Mr. Miller,
page 30 of the merger
4.13 capital C where it
you see that?
A I do.
date,
could I direct your attention to
agreement? And specifically section
says Association Governments. Do
Q It says there effective as of the merger
which would be the date on which the Law School became
a part of Penn State, as we've already agreed, Dickinson's
Board of Trustees, of which you were a member, will be
irrevocably appointed as a self-perpetuating Board of
Governors of a newly created nonstock, non-membership,
nonprofit corporation, the Dickinson School of Law of the
Pennsylvania State University Association. Do you see that
language, sir?
A
Q
in this
I do.
And it's that Association that is
lawsuit. Do you understand that?
a defendant
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A I haven't seen the pleadings. I'll take
your word for it.
Q Well, let me represent to you that the
Association and its Board of Governors, of which you are a
member, are the defendants in this lawsuit?
A I'll accept that.
Q It says the Association will be governed by
then existing class one and class two trustees of Dickinson
as a self-perpetuating Board of Governors. Does that
comport with your understanding, Mr. Miller, of how the
Board of Trustees of the former Dickinson School of Law
became the Board of Governors of the newly created nonprofit
corporation called the Association?
A Yes.
Q And among the things that the Association was
intended to do are listed right there in that paragraph
about making recommendations on the mission of the Law
School, input with regard to capital campaign efforts and
endowments, input with regard to class size, tuition,
admissions. Do you see those various things enumerated
there in numbers 1 through 10 on page 317
A I do.
Q And that's all that the Board of Governors
can do with respect to those items, isn't it, Mr. Miller, is
to provide recommendation and input?
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A I don't know that without studying the
document in its entirety.
Q Okay. But the recommendation and input that
they would provide, they would provide to Penn State, right?
A Well, certainly that section talks about
recommendations, and the recommendations, I assume, are made
to Penn State University, but the recommendations might go
in another direction
Q
that says that
as well.
Certainly, but you're not aware of anything
any of the items listed there, that if the
Board of Governors makes a recommendation to Penn State that
it is somehow binding on Penn State, are you?
A
Q
these items.
A
hurriedly, no.
Q
capital B --
BY MR.
what it
Oh, no.
It's not binding on Penn State
These items listed on page 317
Oh, not on those items. As I
at all? On
read them
By contrast, if we go back to section 4.06,
MR. BENN:
WOLFGANG:
A
says.
Q
Q On page 22.
I know where
That's on page 22, Mr. Thomas.
it is. I pretty well recall
That provision requires that the location of
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the Law School not be changed without: the consent of the
Board of Governors. So if the Board of Governors decides
that they don't want the location of the Law School to
change,
A
it cannot be changed; isn't that correct?
Exactly.
But it would be Penn State who would change
the location of its Law School, wouldn't it?
A If the Board of Governors moved to change the
location, the actual implementation of the change would be
done by Penn State University acting through its academic
unit, the Dickinson School of Law.
Q But only Penn State can move the Law School?
In other words, even if the Board of Governors under that
section decides we want to relocate the Law School, the Law
School cannot be moved unless Penn State also agrees?
A You mean unless Penn State accepts the move?
Is that what you're saying?
Q Well, no. Accept or agree, you can choose
whatever word you want, but Penn State is the one that moves
the Law School. It's Penn State's Law School?
A Well, I'm not going to answer your question
the way it's phrased because I'm not sure that I understand
it. I understand what you're saying is that even though
the Board of Governors might vote to move the Law School to
University Park or elsewhere, the actual -- that couldn't
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occur unless the -- unless Penn State University, speaking
through whoever it speaks through, would approve that.
Q Okay. So the Board of Trustees of Penn
State would have to approve relocating the Law School?
A Providing the Law School express a desire to
do so in the first instance.
Q Or, sir, provided that if Penn State went to
the Board of Governors and said, we have an idea about
moving the Law School, and the Board of Governors agreed
with that idea. That would be another way it could work?
A Well, that's about what's happened now.
Yeah, that's true. But the bottom line is the Board of
Governors
have the first decision making prerogative.
It could be
Q Not necessarily first in order.
second, couldn't it?
A You mean if the University Board of Trustees
made a decision that they wanted -- they said that they
wanted the Law School to be moved, if you call that decision
making, it could occur in that fashion, I guess.
Q Mr. Benn also asked you some questions about
your participation on the Honorary Degree Committee.
Incidentally, the committees of the Board of Governors,
they're set -- they're created by the Chairman of the Board
of Governors? I think you said that on direct; is that
correct?
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A The Chairman appoints the -- the Chairman of
the Board appoints the committees, yeah.
Q Okay. The committees on the Board of
Governors of the Association are not created by anybody at
Penn State or its Board of Trustees, are they?
A Not in the first instance. I think the
Board of Governors decides what committees they would like
to have, and I think -- well, the Board of Governors did
promulgate its own bylaws after the merger, which was a
revision of the bylaws of the former Board of Trustees, and
that's one of the parts of the Governor's bylaws, that they
do appoint committees. Now, again, I would assume that
that -- that those bylaws were approved by the University.
Q But I guess the point that I was getting at
is that the committees of the Board of Governors are
appointed by the Chairman of the Board of Governors, and
that's what you've said?
A Yeah, that's what I said.
Q And same with the agenda for the meetings of
the Board of Governors. Those agendas are set forth by the
Chairman of the Board of Governors; isn't that correct?
A They are, but I would think that it would be
subject to -- that the University could request the
insertion of any agenda items.
Q Sure. And they would do that through the
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Dean, wouldn't they?
A I don't know through whom they would do it,
but it would happen.
Q Are you familiar with the provisions of the
merger agreement that say that the Dean is the liaison
between Penn State University and the Association's Board of
Governors?
A I'll take your word that it says that. I'm
not surprised if it does.
Q Okay. Lastly, Mr. Miller -- and you
testified to this a couple of months ago in the Commonwealth
Court proceeding -- one of the reasons the Association was
created was so that there would be an entity that could, if
necessary,
talked about,
A
It's covered.
Q
sue Penn State
such as the
That's in there somewhere.
to enforce the covenants that we
one in 4.06; isn't that correct?
Absolutely.
So part of the price for Penn State to get
this Law School was that Penn State had to agree to keep the
primary campus of this Law School in Carlisle,
and if Penn State somehow deviated from that,
Association, through its Board of Governors,
lawsuit against Penn State to enforce that
that correct?
A
I would certainly think so.
Pennsylvania,
the
could file a
covenant; isn't
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Q In fact, there's even a provision in here
that requires Penn State to set aside money to fund that
litigation if it ever becomes necessary, isn't there?
A If I recall, you're right.
MR. WOLFGANG: Thank you, Mr. Miller.
THE WITNESS: You're welcome
THE COURT: Any redirect, Mr. Benn?
MR. BENN: Yes. I think I just have
question, although I guess when a lawyer says he has
question it's kind of scary.
BY MR. BENN:
Q
believable.
BY MR. BENN:
one
one
I want to refer you to page 42, section 8.09.
THE COURT: It's not scary. It's just not
THE WITNESS: Forty-two?
Q Page 42.
A Oh, there's a couple of documents here.
There's a couple of page 42's. Just a minute.
Q The proper one has 8.09 at the top.
A Yeah, I got to the attachment, which also has
a page 42,
42. Which
Q
A
which was a signature page.
section?
8.09.
Ail right.
Okay. I'm at page
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Q
The one that's titled Specific Performance?
Exactly.
In light of the questions that were just
asked to you by counsel relative to the ability with which
to sue Penn State, is it not your understanding that the
purpose under which that section was created was just to
enforce the terms of this
A Exactly.
MR. BENN:
WOLFGANG:
Q
BY MR.
that.
agreement?
That's all.
RECROSS EXAMINATION
Of which covenant 4.06 B is a part?
MR. BENN: That's correct. We stipulate to
THE COURT:
you have any questions?
MR. STAUDENMAIER:
step down.
I'm sorry, Mr. Staudenmaier. Do
I have none.
Mr. Miller. You may
THE COURT: Thank you,
Any other witnesses?
MR. BENN: I don't.
THE COURT: Mr.
MR. STAUDENMAIER:
Mr. Staudenmaier does.
Staudenmaier.
Your Honor, we would call
Phillip McConnaughay as if on cross examination, Your Honor.
MR. WOLFGANG: Your Honor, offer of proof.
MR. STAUDENMAIER: Your Honor, Mr.
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McConnaughay is the Dean of the Law School. He is also an
employee of the Penn State University under the express
terms of the merger agreement. Mr. McConnaughay is going
to be asked questions concerning the meetings which took
place in November and the interplay between -- I should say
the connection between Penn State University and the Law
School in those meetings.
THE COURT: As far as the meetings, is he
going to testify to anything other than Mr. Miller just
testified to?
MR. STAUDENMAIER: I believe he will. I
will not ask him to repeat things that Mr. Miller said, and
he also -- I'm going to ask him questions about the
projected meeting coming up in February since it's our
understanding that he -- that this issue of moving the Law
School is at Dean McConnaughay's sort of insistence.
THE COURT: You may proceed.
MR. WOLFGANG: Your Honor, may we have a
continuing objection on relevancy so we don't have to
interrupt?
THE COURT: You've got it.
MR. WOLFGANG: Thank you very much.
Whereupon,
PHILLIP McCONNAUGHAY
called as on cross examination
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having been duly sworn, testified as follows:
THE COURT: And as before, if I think the
objection should be sustained,
MR. WOLFGANG:
feel compelled to interrupt,
I'll sua sponte sustain it.
I hope you'll forgive if we
nonetheless, Your Honor.
EXAMINATION
BY MR. STAUDENMAIER:
Q Good afternoon,
Dean. Would you just,
just state your full name for the record?
A Phillip McConnaughay.
please,
court
BY MR.
Q And with the
THE COURT:
reporter, please?
THE WITNESS:
STAUDENMAIER:
Q And with the
Court's indulgence --
Could you spell that for the
M-c-c-o-n-n-a-u-g-h-a-y.
Court's indulgence, and Mr.
Stover's, just to move things along a little bit,
the Dean of the Dickinson School of Law --
A
Q
employee of the
you are
Yes.
-- of Penn State University?
Yes, I am.
And you've
July 2002,
held that position since 2002?
July 1st.
And am I correct, sir, that you are an
Pennsylvania State University?
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A Yes.
Q And that you were hired by the Board of
Trustees of Pennsylvania State University?
A Yes, that's correct.
Q And am I also correct, Dean, that the
employees of the Law School, I'm going to use that shortened
form, are also employees of the Pennsylvania State
University?
A That's correct.
Q And they have been so since the affiliation
date, and then moving through the merger date to the
present, correct?
A That's my understanding.
Q And just so we're clear up front, Dean, the
document, which has been marked as Exhibit D-1 --
MR. STAUDENMAIER: And, Your Honor, if I may
just a minute, I know there's something else attached to
that besides the merger agreement. I don't have a copy.
Do you have an extra copy?
THE COURT: Where's the original?
MR. STAUDENMAIER: May I, Your Honor?
THE COURT: You may.
MR. STAUDENMAIER: Your Honor, attached to
this is the merger agreement and the amended bylaws and the
Articles of Incorporation. Those are the three documents.
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MR. WOLFGANG: What's attached are the
drafts of the exhibits as described in the merger agreement.
They are not necessarily the current documents. For
example, the bylaws.
MR. STAUDENMAIER: All right. I see.
Okay.
BY MR.
STAUDENMAIER:
Q Dean,
Number 1, which is a
the merger agreement
we're referring to.
this, but we're going to
we've been referring to Defense Exhibit
copy of the -- we've been calling it
just for your sake so you know what
There are other documents attached to
focus primarily on the first 42
I'm correct, am I not, that in
forth a memorandum, I believe it
pages.
A Okay.
Now, Dean,
November of 2003 you put
was dated November 4, 2003, suggesting that the Board of
Governors of the Law School consider relocating the campus
of the Law School to University Park?
A Yes, that's essentially correct.
Q Did you bring that memorandum with you today?
A I do have a copy.
Q May I see it, please? And as I understand
it, Dean, this was something that you were bringing to the
Board of Governors to consider. It was not a situation
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where the Board of Governors came up with the idea of
relocating the campus and brought that to you, correct?
A Right.
Q And we heard testimony today from Mr. Miller,
and you were present in the courtroom during his testimony,
were you not?
A I was present.
Q And you were able to hear his testimony?
A Yes, I was.
Q And Mr. Miller testified that at the meetings
which occurred on November 21 and 22, that President Spanier
of the University was present, and he made a presentation to
the Board of Governors coqcerning relocating the Law School
from Carlisle to University Park?
A President Spanier was present on the evening
of Friday, November 21st, not Saturday the 22nd, and yes, he
did make a presentation to the Board about the possibility
of the Law School relocating its principle campus to
University Park.
Q And as part of that presentation, was it
discussed that Penn State would fund that move by raising or
setting aside or bringing into being an amount of money that
would permit the construction of a Law School facility at
University Park?
A Well, I can't quote the president because I
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don't recall specifically, but in essence, yes, he did
convey that he would recommend to the Board of --
MR. WOLFGANG: Your Honor, objection. It's
hearsay. In addition, I renew the relevancy objection.
It's -- overruled?
THE COURT: If the Sunshine Act applies --
MR. WOLFGANG: Yeah
THE COURT: -- this is all incredibly
relevant. And so -- and if I have jurisdiction it's
relevant. So it's overruled.
MR. WOLFGANG: Okay. Thank you.
BY MR.
THE COURT:
STAUDENMAIER:
Q I'm sorry,
At least in my humble opinion.
Dean.
Would you continue, please?
A I believe I was saying he conveyed that he
would recommend to the Penn State University Board of
Trustees that they provide a building for the Law School
were the Law School's principle campus to relocate to
University Park.
Q And that would entail the expenditure of
moneys by the University?
A Yes.
Q And was that the major subject discussed on
the evening of November 21st? The idea of relocating the
Law School to State College and the types of facilities and
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funding that would be available to do such a move?
A I would say that the possibility of
relocation and the sources of funding were principle
subjects of discussion.
Q And would I also be correct that on the
following day -- and I'm sorry. Strike that question. I
should have asked you this earlier, and I apologize. I'm
correct, am I not, Dean, that you are an -- I believe the
term is ex officio member of the Board of Governors?
A I believe that I am an ex officio member of
the Board of Governors, non-voting.
Q And I'm correct that you, since you've come
to the Law School, have been present at the meetings of the
Board -- the meetings of the Board of Governors that have
taken place since you began your tenure?
A Ail of the meetings of which I'm aware, yes.
Q And you were present on November 21st and/or
the 22nd,
correct?
A Yes.
Q Would I
be correct then, that on November
22nd, that there were -- there was discussions,
deliberation, if you will, among the Board of Governors
about what they had heard the previous evening?
A You're correct that there was a discussion of
that, that's correct.
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Q And that they considered the issue -- or
excuse me. They considered the presentation made by
President Spanier and the, I'll call it the offer, of the
Law School with regard to the facility and funding for the
relocation of the Law School to State College?
A Well, my recollection is -- I don't know what
individual Board members considered.
Q I understand.
A But the discussion, of course, focused on
information the Board might desire in conjunction with, more
generally, the facility's needs of the Law School.
Q And so the answer would be yes, that there
were discussions concerning what President Spanier
discussed the evening before about the facilities and
funding available in State College if a move was made?
A That's correct.
Q Now, it's our understanding also, Dean, that
there is a meeting scheduled for February 7th of the Board
of Governors?
A
Q
That's correct.
And I'm correct, am I not, that the major,
maybe not the only, but one of the major topics of
discussion that's going to be addressed at that meeting is
the issue of whether or not the Law School will relocate or
whether some other ideas will be considered concerning the
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physical plan of the Law School?
A Well, my understanding is that the Board will
be hearing from the committees, the ad hoc committees that
were appointed in December, I believe, that Mr. Miller
referred to. And each of those coramittees will provide
information that they have gathered to the rest of the
Board.
Q
excuse me, three
type of physical
And is it your understanding that these
committees are basically looking at two alternatives or,
alternatives? One would be to make some
change or alteration to the current campus
of the Law School. Second, to relocate somewhere else
within, I'm going to say this area, and three, to relocate
to State College?
A
also looking at
School's facility's
make that --
Q
I think that's essentially correct. They're
available sources of funding to meet the Law
needs regardless of where we decide to
And with regard to the issue of funding, you
told us earlier that President Spanier had talked about
funding available from the University if the Law School
relocates to State College. I'm also correct, am I not,
that there is also University funding available if a
decision is made to stay in Carlisle or in an area near
Carlisle from the University to assist in the funding of
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such a move or renovations or alterations that might be
necessary?
A
Q
That is correct.
Now, with regard to the issue of funding that
you brought up -- or excuse me, that you mentioned with
regard to one of these committees, I want to talk for a
moment about the relationship between Penn State University
and the Law School with regard to your budgetary process,
and those types of things.
I'm correct, am I not, Dean, that since the
merger, because we talked about affiliation and we talked
about merger. I assume we're several years passed the
merger point. So let's talk about the merger. That with
regard to the Law School's budget, that you or your designee
draw up a budget for the Law School. And I understand you
work on a fiscal year?
A Correct.
Q And that you present that budget
of Governors, correct?
who?
THE COURT:
to the Board
Now, the Board of Governors of
MR. STAUDENMAIER: Oh, I'm sorry. Because
it's the Board of Governors and the Board of Trustees.
Board of Governors of the Law School
THE COURT: Okay. Ail right.
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MR. WOLFGANG: Objection, Your Honor.
THE WITNESS: That's not entirely correct.
THE COURT: Do you withdraw your objection?
MR. WOLFGANG: Well, only -- my only
objection was to the Board of Governors of the Law School.
I think there's already been testimony from their own
witness that it's the Board of Governors of the Association,
which is a nonprofit corporation. The Law School is a part
of Penn State. So I object to the terminology.
THE COURT: That's where I'm confused.
MR. STAUDENMAIER: Well, Your Honor --
THE COURT:
And for simplicity sake, you may
want to refer to the Association,
legal term.
MR.
to make it clear.
THE COURT:
STAUDENMAIER:
I apologize.
Well,
if that's the correct
Ail right. I will do that
but I wasn't sure what you
were talking about, whether you were talking about the
University's Board --
MR. STAUDENMAIER: And that's a good point.
THE COURT: Ail right.
BY MR. STAUDENMAIER:
Q Dean, just so you understand as I go forward,
and if I do it I'm sure someone will catch me on it, when I
refer to the Board of Governors, I'm speaking of the
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individuals that serve on the Board of Governors of the
Association. And then I'll try to speak in terms of the
Trustees of the Pennsylvania State University.
Now, going back to my question with regard to
the budget. The budget for the Law School is presented to
the Board of Governors of the Association, correct?
A No. That's not really correct. They don't
present the budget as we prepare it to the Board of
Governors. At least I didn't during my first year as dean.
What I did was provide information about -- there was a
rough outline of some financial information that I provided,
and really an explanation of where our expenditures were
increasing in relation to past history that they may have
been familiar with, and I would explain, for informational
purposes, you know, what was behind those increases and
received comments from the Board.
Q And then would you present the budget to the
Board of Trustees of the University?
THE COURT: Okay. Let me back up. So you
would present changes to the Board of Governors, and then
ask for input from them?
THE WITNESS: I didn't --
to describe what I actually did.
them.
I used changes only
THE COURT: You presented information to
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THE WITNESS:
THE COURT:
THE WITNESS:
THE COURT:
That's correct
And asked for input from them?
That's correct
Before you present the final
budget
Trustees?
THE WITNESS:
MR. STAUDENMAIER:
didn't hear how you phrased that
better than mine.
THE COURT:
to the Pennsylvania State University Board of
I believe that's how I will --
Your Honor, I'm sorry. I
question. It's probably
That he received input from the
Board of Governors before he presented the budget to the
Pennsylvania State University Board of Trustees.
MR. STAUDENMAIER: Okay. And, I'm sorry, the
answer was yes?
THE WITNESS:
I do provide information about
the budget to -- and about Law School
of Governors on an ongoing basis. I
Law School, and they --
MR. STAUDENMAIER: Oh,
THE WITNESS:
BY MR. STAUDENMAIER:
Q
A
time around,
finances to the Board
am their window to the
I'm sorry.
And they are free to comment.
And they do provide comments to you?
I don't recall that I received any the last
but they certainly are free to provide
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comments, yes.
Q And you would pass those along to the
University Trustees if they were relevant to the budgetary
process?
A No. I would say if I considered the
comments pertinent to the preparation of a budget, I might
incorporate them in the budget, but I haven't had that
occasion.
Q Fair enough. And you do that as the Dean
appointed by the Pennsylvania State University Trustees?
A With the budget that I prepared, then
recommended to the person to whom I report, the provost of
the University, and absent further changes there, to the
Board of Trustees.
Q And they go through it an approve it if they
have no objections or changes?
A I believe that the Board of Trustees approves
the separate budgets of different academic units of the
University.
Q And that -- and I'm sorry. Just so we're
clear, that's after the process that you've just described?
A Right.
Q Now, Dean, I guess before we leave this
subject entirely,
merger agreement.
if I could refer you to page 31 of the
That's Defendant's Exhibit, D-I, page
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31.
A
Q
some questions.
I'm looking at that page.
Okay. Mr. Wolfgang had asked Mr. Miller
I just want to point out number 7, and it
indicates that one of the areas of input or recommendation
that the Board of -- or that Penn State looks for from the
Association Board of Governors is "provide input into
operating and capital budgets", correct?
A That's correct.
Q Now, Dean, with regard to the meeting that's
coming up on February the 7th, have you prepared or are you
aware that there's been an agenda prepared for that meeting?
A I believe that someone in my office has
drafted an agenda.
Q And did you bring that with you?
A No, I didn't.
Q You'll recall on your subpoena that I asked
you to bring documents concerning the November meetings and
the upcoming February 7th meeting?
A Well, I don't actually approve that document.
It's a draft that was prepared. I'm sorry. I don't have
that particular draft. I haven't really reviewed it,
approved it,
Q
A
discussed it with the Chairman of the Board.
Have you looked at that document?
I think I did.
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Q
And would you tell us the items that are on
the agenda for that meeting, that you recall?
A Yeah, I can't recall specifically, but
it's
pretty much a standard agenda that is -- reflects the
template that's essentially used for most board meetings.
Opening comments by the Chair, approval of minutes, role
call, committee reports.
Q And, I'm sorry, when you refer to committee
reports, what committees are you referring to?
A Well, it depends on what the meeting is.
There are standing committees of the Board and now there are
ad hoc committees dealing with -- that Mr. Miller described.
Q And just to remind you, we're talking about
the February 7th meeting. So what are the committees that
you remember seeing listed on there?
A The ad hoc committees.
Q And the ad hoc committees are the ones Mr.
Miller described?
A Correct.
Q And those are committees that deal with these
issues of location of the campus of the Law School?
A
A
to report
They deal with our facilities, yes.
Anything else on the agenda?
I believe the Dean's report, which just tends
on developments at the Law School since the
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previous meeting, and I can't recall if there's anything
after that. There's probably an adjournment or something
listed on a piece of paper.
Q And as the Dean of the Law School and as --
is it your intention that the -- or your understanding,
excuse me, that the major issue to be considered at the
February 7th meeting here again deals with the question of
the location of the campus of the Law School being
considered by the Board of Governors?
A Well, I think fairly, the issues being
discussed at that meeting will be our facility's needs and
one component of that will be the possibility of a
principle campus. So that will be
relocation of the
discussed.
Q
and I'll clear
And perhaps I didn't make my question clear,
it up for you. I was also -- when I talked
about the location of the campus, I'm referring not only to
relocating to Penn -- excuse me, to State College, but also
alteration of the facility on College Street or locating
somewhere in this general area.
I'm sorry.
A
Q
November 21st and 22nd meetings that
meetings open to the public?
Just so we're clear, okay?
I accept what you said.
Okay. Now, Dean, with regard to the
took place, were those
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A
Q
provide notice of those meetings
fashion?
A
Q
7th, is
A
Q
No, they weren't.
Did the Law School -- did the Association
to the public in any
No, we did not.
The meeting that's scheduled for February the
that meeting going to be open to the public?
No, it is not.
And has there been any notification or
advertisement given to the public of that upcoming m~eting
so that they can attend?
A No, I believe there has not been notice.
Q Was the press present at the meetings on
21st or 22nd? I'm sorry. I'm talking about in the
November
meeting.
So the answer to my question about the press
A No, not in the meeting.
Q And am I correct then, Dean, that it's the
intention not to permit the press to be present at the
February 7th meeting?
A Well, it is the intention to adhere to the
Board's long standing policy of having meetings that are
solely attended -- attended solely by Board members and the
representatives of the Law School.
Q
would be no?
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A
that's correct.
Q
Yeah, they will not be invited to attend,
Thank you.
MR. STAUDENMAIER: Your Honor, I'm just about
finished, but I had asked the Dean to bring with him
documents that he had in his possession concerning the
November 21st and 22nd meeting and the upcoming February
meeting. He's provided me with a memo that he submitted
prior to the November meeting.
He's indicated he does not have the agenda
for the February 7 meeting. What I was going to ask him
was whether he has any other documents with him concerning
either one of those meetings.
a look at them --
THE COURT:
permission to ask questions,
At this point, so I can take
If you're going to ask for
this could go on for a long
time,
be happy to give that to you.
MR. STAUDENMAIER:
recess for ten minutes, please
but if you're asking for a recess of ten minutes I'll
Your Honor, I'd like a
THE COURT: Granted.
(Whereupon, a recess was taken at 3:19 p.m.,
and court resumed at 3:35 p.m.)
AFTER RECESS
(Whereupon, Dean McConnaughay resumed the
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stand.)
THE COURT:
MR. STAUDENMAIER:
THE COURT: Okay.
EXAMINATION
Anything else, Mr. Staudenmaier?
Yes, Your Honor.
(continued)
BY MR. STAUDENMAIER:
Q Dean, we had discussed the issue about
funding that Penn State was willing to provide under
different scenarios. With regard to relocating the
campus
of the Law School to State College, has Penn State proposed
an amount of money they would be willing to fund to
accomplish that goal?
MR. WOLFGANG: Objection, Your Honor.
THE COURT:
to relevancy as to what's before me today.
I will sustain the objection as
Next question.
BY MR. STAUDENMAIER:
Q Dean, with regard to the relationship between
Penn State and the Law -- and the Association of the Law
School, am I correct that under the merger agreement that
the University provides certain funding to the Law School in
the form of moneys paid towards overhead expenses?
A I would have to look at the merger agreement
and talk to my CFO, to tell you the truth.
Q If I can just quickly refer you to page 24 of
the agreement, and it's section 4.08, sub capital B. It
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says overhead charges direct cost reimbursement.
MR. WOLFGANG: Objection, Your Honor. This
is a moot provision of the merger agreement because it's for
the period between the affiliation date and the merger
agreement as it says in 4.08 in the preamble there. So I'm
not sure what relevance that has today.
THE COURT: Sustained. As I understand it,
Penn State pays the whole budget for the Law School because
the Law School's a part of Penn State. Isn't that true?
part of the --
independence.
it this way.
THE WITNESS:
THE COURT:
THE WITNESS:
I believe not. I believe that
Well, then I stand corrected.
There is financial
THE COURT: Okay.
MR. STAUDENMAIER: Well, maybe I can truncate
THE COURT: Go ahead.
BY MR. STAUDENMAIER:
Q Dean, I'm correct, am I not, that there are
certain aspects of funding with regard to the Law School
that Penn State either funds or helps contribute to. For
example, let me find the provision here. The endowment
fund that was once a part of Dickinson, that has now become
a part of Penn State, correct?
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A
I believe that
Penn State who manage endowments, but I believe that the
entire Dickinson endowment remained Dickinson's under the
remained the Law School's under the merger agreement. I
would have to look at it.
THE COURT: But who is the Law School?
Penn State is the Law School and this Board of Governors is
Well, I don't think that's really correct.
it is managed by Penn State and the people at
and I
just a separate association. You're confusing me.
THE WITNESS: Right. I believe,
believe there's probably better witnesses, Judge, to let you
know under the merger agreement what the financial
arrangements are, but there is a healthy degree of financial
independence, if not complete financial independence of the
Law School post merger from Penn State. Or at least it is
a self sustaining unit.
THE COURT: And who sustains that unit?
Is that the Board
no, no. I am the
but it's largely,
Who's responsible for sustaining that?
of Governors of the Association?
THE WITNESS: Well, no,
chief budget officer of the Law School,
for example, a budget that -- whose revenues are derived
from tuition, endowment income. So we don't -- they don't
take a portion of that, and we use it all.
THE COURT: But the Board of Trustees has the
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final say over what your budget is; is that correct?
THE wITNESS: I believe that the proVost and
the president ultimately submit it to the Board of Trustees
for approval, yes. The Penn state Board of Trustees-
THE COURT: Right- The Board of Trustees is
the University- The Board of Governors is the Association-
THE wITNESS: Right.
BY MR. sTAUDENMAIER:
Q Just to clarify a point, Dean, and if you
turn to page 26, section 4.10, the Dickinson endowment.
Now, here again, I will tell you up front this applies to
the time period between the affiliation and the merger
dates, and if you look at the first sentence, it talks about
during that time period Dickinson shall retain ownership of
its endowment and that penn State shall manage it. Do you
see that? I
MR. woLFGANG: Same objection, Your Honor.
mean if this is for the affiliation period before the merger
date, it has no relevance to today.
THE coURT: Well, I'm going to overrule it
for now because I think you're going to what happenS after
the merger date.
BY MR. STAUDENMAIER:
Q Correct. After the merger date -- Dean,
would you agree with me that after the merger date, the
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endowment becomes a part of funds controlled by the Penn
State University?
A I'll tell you, I can't really agree with your
summary without reading the merger agreement in detail, and
looking again at all provisions pertaining to the financial
relationship between the Law School and the University.
Q Okay.
merger date -- well,
asked, the endowment
and invested
There
With regard to the -- since the
since you've become Dean,
funds, as far as you know,
as the Judge
is managed
and overseen by Penn State University, correct?
A The management of the investments, yes.
is a portion of our endowment which remains managed by
private institutions apart from the unit of Penn State,
which manages its endowment, but it's a relatively small
portion of our endowment. The rest of it is managed by the
same Penn State unit that manages Penn State's endowment.
Q And isn't it true, Dean -- and this may be
the cause
of some of your confusion or where you're not
certain, I should say, that Penn State has agreed that after
the merger date it will not divert endowment funds of the
Law School to other University purposes, but that the
University overseas the Penn State endowment as it existed
on the merger date as it overseas other endowments and
controls as the University?
A That sounds like a correct rendering of
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what's
it.
in the merger agreement, but I would have to
Q
further questions
Right.
I have no reason to doubt what
MR. STAUDENMAIER: Your Honor,
of the Dean at this time.
THE COURT: Any questions,
MR. BENN: Thank you.
EXAMINATION
look at
BY MR. BENN:
Q
there has been an ongoing question
can't resolve.
this afternoon you
you have said.
I have no
Mr. Benn?
Since this case has come to my attention,
in my mind that I kind of
If, God forbid, when you get back to school
find that the roof at Trickett Hall
collapsed, and hypothetically if that were to incur costs of
$800,000.00 to correct, who do you go to -- what dialogue do
you have with whomever relative to that expenditure of funds
in an effort to repair that problem?
A Well, with an expense of that magnitude I
probably would go to the -- either the provost or the
executive vice president for the finance treasurer of the
University.
Q Is there a
expenditures that you have
A
limitation as to capital
under your authority?
None that I'm aware of, other than the
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practical
just said, if you wanted to, you could correct that
problem without going to anybody?
A I believe
limitation of available funds under my budget.
Q So that technically, based upon what you've
roof
MR. BENN:
so.
That's all.
EXAMINATION
Staudenmaier
4.10 -- 4.10
BY MR. WOLFGANG:
Q Dean, Mr.
questions about section
agreement.
A
just asked you some
of the merger
May I supplement my last answer, as to be
complete about it. I do think that there's probably a
mechanism whereby I would consult and invoke the University
in both the purchasing and repair process and effectively
get approval of the expenditure.
EXAMINATION
BY MR. BENN:
Q
Well, in light of that answer, do you feel
any obligation to go to the chairman of the governing body
of the Law School, the Board of Governors?
A For that kind of expenditure?
Q To a have a dialogue with that individual
relative to the occurrence?
A NO.
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MR. BENN: Okay. That's all.
THE COURT: Mr. Wolfgang.
EXAMINATION
BY MR. WOLFGANG:
Q Dean McConnaughay, as I said,
Staudenmaier was asking you questions about
the merger agreement. Do you have
that in
Mr.
section 4.10 of
front of you?
BY MR.
THE COURT:
MR. WOLFGANG:
THE WITNESS:
WOLFGANG:
Q Under that
Page 26.
Page 26.
Okay.
section 4.10, paragraph E, which
appears on page 28.
A
Q
Do you see that paragraph?
Yes, I do.
It says Penn State shall at all times manage
Dickinson's endowment for the sole exclusive benefit of
Dickinson and its educational mission and on the same basis
and with at least the same degree of care, et cetera, et
cetera. Is that perhaps where your understanding comes
from with respect to Penn State's obligation to maintain the
endowment for the Law School as dedicated funds for the sole
and exclusive benefit of the Law School?
A This is consistent with my understanding.
Q And if we look at, just to tie up the loose
end, at section 8.01 on page 39, paragraph B, 4.10, E ,
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survives the merger.
obligation of Penn State after the merger date;
correct?
A
Q
today, whether
So that would be an ongoing
is that
That's correct, I believe.
So Penn State, based on your testimony here
it's managed by some third party financial
manager or
funding with
School?
A
Q
Association?
Penn State itself, Penn State controls the
respect to the academic unit that is the Law
Correct.
And not the Board of Governors of the
A Correct.
Q The Board of Governors of the Association
does not control any aspect of the funding with respect to
the operations or physical plant or anything else that has
to do with the Law School?
A That's correct.
If I can just amplify,, to
explain, in several of my previous answers the relationship
between the Law School and the University, that financial
relationship doesn't necessarily implicate the Board of
Governors. I was just trying to explain that we remain as
a Law School as an academic unit with somewhat independently
funding. It's typical of academic units that have to pay
an administrative fee, and we are unlike other units in that
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regard.
Q
Law School,
So, Dean, as I understand your testimony,
as an academic unit, is part of the larger
budget of Penn State?
A Yes.
Q That is controlled by Penn State's Board of
Trustees?
A That's correct.
Q Okay. And Mr. Staudenmaier asked you
questions -- a question about section 4.13, which begins --
well, 4.13 C, which begins on page 30, and specifically
subparagraph 7 where it says that the Board of Governors --
and we're talking again about after the merger date, the
Board of Governors has the ability to provide input into
operating and capital budgets. Do you see that?
A Yes.
Q That is -- let me strike that. Is that
input in any way, to your knowledge, binding on Penn State
or its Board of Trustees?
To my knowledge it is not binding. It is
A
advisory.
Q
To your knowledge, has the Board of
Governors, since the merger date,
Board of Trustees of Penn State?
A
the
ever provided input to the
Not to my knowledge. They provide input if
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there is input to be provided to
Q To you?
A Yes.
Q
A
have.
BY MR.
not,
the Dean.
As an employee of Penn State?
Yes.
MR. WOLFGANG: Thank you, Dean.
That's all I
THE COURT: Mr. Staudenmaier.
EXAMINATION
STAUDENMAIER:
Q Dean, then you'd agree with me, would you
that the Board of Governors -- well, let me back up one
minute. In the paragraph that Mr. Wolfgang
to, 4.1 -- 4.13 C that goes from 30 to page
indicates that the Board of Governors
and guidance to the trustees.
As I understand it, the way that works,
practically or pragmatically, is they provide information to
you, and you, as the University employee, provide that
information to the Board of Trustees, correct? On things
like the mission and policies of the Law School, correct?
A
transmitted,
Q
the Law
just referred
31. It
shall provide counsel
I would be the vehicle by which it's
that's correct.
On issues like the mission and policies of
School, correct?
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A
the Board of Trustees
provost so --
Q
Correct. I mean I don't report directly to
in the sense that I report to the
Is it your understanding that he then reports
to the Board of Trustees?
A Or to the President,
Q Understood.
Board of Trustees, correct?
I don't know that.
A
and the President --
And the President sits on the
And the Board of Governors provides
recommendations about strategic planning and long term
planning for the Law School, and then I would direct your
attention to the standing committee that's been formed
called fund raising and strategic planning.
A That deals with our facility's needs, but it
is correct that the Board of Governors can review and make
recommendations regarding the strategic and long term
capital plans.
Q And they have done that to you, and you
anticipate they will continue to do so, correct?
A I do anticipate them continuing to advise us
I'm not going to go through the whole
on page 31 here, but of all of those
are there, the Board of Governors has provided
on those issues.
Q And
laundry list that's
things that
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their input, counsel, and guidance to you on some of
issues, perhaps all
appropriate, have
Board of Trustees
A
Your Honor.
BY MR.
these
of them, and you in turn, where
transmitted that to the provost or the
in the manner you described, correct?
Yes, that's correct.
MR. STAUDENMAIER: I have no other questions,
THE COURT:
MR. BENN:
THE COURT:
Mr. Benn.
I don't have any.
Mr. Wolfgang.
EXAMINATION
WOLFGANG:
Q Dean McConnaughay,
with respect to any of the
things that you've been asked about where in the merger
agreement it says that the Board of Governors may provide
recommendations or input or advice, is Penn State University
or its Board of Trustees in any way bound by any of those
recommendations, input or pieces of advice given by the
Board of Governors?
down.
one.
A No.
MR. WOLFGANG:
THE COURT:
Any other witnesses,
MR. STAUDENMAIER: Yes,
We would call Elizabeth Gibson.
Thank you.
Thank you, Dean.
Mr. Staudenmaier?
Your Honor.
You may step
We have
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proof?
THE COURT: Are you requesting an offer of
MR. WOLFGANG:
THE COURT: Mr.
MR. STAUDENMAIER:
a reporter from the Patriot News.
Yes, Your Honor, we are.
Staudenmaier.
Your Honor, Ms. Gibson is
She covers the Carlisle
area, and in particular issues dealing with the school
system, the Law School, et cetera. One of the areas I was
going to ask Ms. Gibson about I think we've already covered,
and that is the access of the press to the meetings. So I
won't go over that.
THE COURT: Okay.
MR. STAUDENMAIER: The other issue I was
going to ask her, Your Honor, was concerning, as a reporter,
based upon her experience, in terms of being able to
actually view and report on an agency that's ongoing
procedure as opposed to having to find out about it
afterwards through interviews or the like, and the reason
I'm doing that, Your Honor, is because at the previous
hearing before Judge Cohn, the Law School raised an
objection on the issue of proof of damage or of irreparable
harm. And in my opinion, quite frankly, Your Honor, I
think reparable harm is self evident in a situation like
this.
THE COURT:
I don't disagree with you on
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that. I think that if the -- I think the pivotal question
I have to answer here is, one, do I have jurisdiction, and
then whether or not the Law School is an agency, and then I
guess the third issue becomes whether I have the authority
to issue an injunction, and whether I should issue an
injunction, but obviously monetary damages wouldn't be
sufficient. And I understand what Judge Cohn decided. So
if you're objecting on relevancy --
MR. WOLFGANG: I am, Your Honor
THE COURT: I sustain it.
MR. WOLFGANG: Okay. Thank you.
THE COURT: You win.
MR. STAUDENMAIER:
I just want to make sure that we
THE COURT: Ail
MR. STAUDENMAIER:
merger agreement.
Thank you, Your Honor.
have the --
I have admitted is D-1.
Right. Which is the
THE COURT:
I'm presuming that Mr.
move for its admission.
And I haven't admitted it yet.
Stover or Mr. Wolfgang is going to
MR. WOLFGANG: In our case, if we have to do
STAUDENMAIER: Well, yeah, I guess we --
Your Honor, because there was an
of the complaint
it.
MR.
I'm just checking,
attachment to this that wasn't a part
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attachments.
and they were all
so...
Staudenmaier?
Honor,
dismiss,
record.
admitted.)
Your Honor.
admitted.
That's why I'm checking.
THE COURT: Well, there's 4 exhibits to D-i,
a part of the merger agreement itself
MR. STAUDENMAIER: Okay.
THE COURT: So are you resting, Mr.
MR. STAUDENMAIER: My only hesitation, Your
is that I assume we're going to hear a motion to
but I want to make sure that that is a part of the
THE COURT: Right. D-1 is admitted.
(Whereupon, Defendant's Exhibit No. 1 was
MR. STAUDENMAIER: Thank you. And we rest,
MR. WOLFGANG: Well, let's --
THE COURT: It's been referred to.
All right. You also rest?
MR. BENN: We rest.
THE COURT:
MR. STOVER:
would move for a dismissal
Okay.
At this time, Your Honor,
of the motion and a denial
It's
we
of the
motion for preliminary injunctive relief, and we're prepared
to speak to that if Your Honor would entertain our argument.
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THE COURT:
entertain your argument, Mr.
MR. STOVER:
you have read the rather
been made to the Court.
Okay. Well, I'll certainly
Stover.
Your Honor has indicated that
substantial submissions that have
So I'm not going to repeat all of
those, but I would like to touch on the three critical
points which we believe are at issue before the Court today.
The first of those is whether the Board of
Governors or the Association, the two named defendants in
this matter, can properly be classified as an agency under
the Sunshine Act. If they are not classified as an agency,
if they cannot meet the definition of an agency, there is no
case here.
THE COURT:
second issue that I have
jurisdiction.
MR. STOVER:
to jurisdiction at the end,
THE COURT:
I agree.
to look at,
Right.
if I may.
Well, but
That's the very
the issue of
I'm going to come back
let's -- I'm not
prepared -- if you're telling me jurisdiction is a question
of first impression, which I think you told me.
MR. STOVER: I believe that there are no
cases under the Sunshine Act that would define it in terms
of today, but I do --
THE COURT: Then you're not going to win on
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jurisdiction today.
look at it more thoroughly,
the hip. Anything else?
first, and then the second issue
the Sunshine Act applies, and if
You may win after I get a chance to
but I'm not going to shoot from
That's what I have to decide
I have to decide is whether
I read the law correctly, I
think both parties will agree for it to apply, the
Association, the Board of Governors, must be a committee
under the act because it's certainly not a body. A body is
MR. STOVER: That's the only basis they've
raised. They say it's a committee.
THE COURT: So I'll certainly hear your
arguments on that, but again, I'm not sure I am prepared to
make a decision of that magnitude without looking really
hard at it.
MR.
discretion to make that decision,
STOVER: And Your Honor obviously has the
but I would like to take
Sure.
To address that issue because we
just a few minutes.
THE COURT:
MR. STOVER:
now have the plaintiff's record before us, and it's a very
limited record, and I'd ask the Court to think through that
record as we've heard it here this afternoon, and to say
what in that record would sustain or could sustain a
determination that this Association or its Board of
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Governors could possibly fall within the definition of
committee.
THE COURT: Well, hold on a second. It's
conceded that the Pennsylvania State University is a body
under the terms of the Sunshine Act.
MR. STOVER: That's correct.
THE COURT: Okay. And as I'm reading the
agency definition, it says all committees authorized by the
body to take official action or render advice on matters of
agency business. Certainly the merger agreement gives the
Association a lot of authority to render advice on agency
business.
first. There
MR. STOVER:
are numerous,
But it has to be a committee
numerous sources from which an
entity the size of Penn State, as an agency, which no one
denies, can obtain advice. The mere fact that they render
advice does not make them a committee.
into the committee definition --
the Act,
THE COURT: Where
MR. STOVER: Well,
and committee is not defined in the
They have to fit
is committee defined?
committee isn't defined in
case law, but
THE COURT: So we're back to first
'impression again, are we not?
MR. STOVER: Not necessarily,
Your Honor.
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Not necessarily. Under the Pennsylvania Statutory
Construction Act, we're all bound to give the plain meaning
to the terms which appear in statutes, including the
Sunshine Act. And that's a very simple concept.
What is the plain meaning of the word
committee? A committee, by plain meaning, which would be a
layman's definition, is a body that would be appointed by
the agency in this case, the primary body.
THE COURT: They're appointed in the merger
agreement. The merger agreement, which the agency, the
primary body agreed to --
MR. STOVER: When that was set up, that was
the case, Your Honor. There was a transition, but it is no
longer the case. There is no evidence before this Court
that would suggest that Penn
the Board of Governors.
THE COURT:
State appoints any member of
Any longer, but the argument
could be that they appointed them in this document and set
up for the process to continue appointing it, and they're
bound by -- so if you're looking at plain language, it's not
as plain as you're trying to tell me.
MR. STOVER: Well, in the merger document --
let me go on because a further definition of membership in a
committee, the plain meaning of committee, would also be
that the agency -- in this case Penn State -- could remove
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or change the members of the committee.
THE COURT: Well, that's not the case. You
appoint someone -- if the Borough appoints someone to the
planning commission or a zoning hearing board and they're
not happy with the job that
them.
they're doing, they can't remove
MR. STOVER: Under the plain -- but that's
not a committee, Your Honor. That's a governmental agency.
That is not a committee. That is a separate statutorily
constructed situation, and there is a separate category here
for those bodies which are created under a special statute.
That's totally separate in the definition of agency from
committee.
And committee is the key term. And under
the plain meaning of committee, members would have to be
subject to removal or change, as any committee would be of a
major body. That is not the case here. And that argument
cannot be made on the face of that merger agreement. There
is nothing in there that suggests Penn State would have any
authority to make that kind of alteration.
Nor is there anything in the merger agreement
or any other evidence before the Court here that says that
Penn State can dictate or establish the agendas of the Board
of Governors of the Association. The Board of Governors
under the agreement is a separate nonprofit independent
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organization.
It sets its own agenda, and it sets its own
So it
agenda whether or not Penn State agrees with that.
cannot be a committee for that additional reason.
And lastly, a committee of a primary body, in
case if we argue Penn State was the agency, to make it
this
a committee of Penn State, Penn State would have to have the
ability to sunset or put it out of business. It can't do
that under this agreement.
THE COURT:
MR. STOVER:
It's set up in perpetuity.
Where does it say that?
It's set up under the agreement
that
THE COURT: No, no. Where is the authority
it would have to have the ability to sunset it?
MR. STOVER: A plain definition of committee
THE COURT:
plain definition?
MR. STOVER:
Well, where are you getting this
It's a layman's definition of
committee, and that's what the Statutory Construction Act
tells us to follow in terms of thinking about what applies
with regard to these words as they're used in the definition
of agency in the Sunshine Act. And a committee, to
anyone's cognizance, if you think about it, when a body says
we're going to establish a committee, it appoints the
members. It can change the members. It can set the
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agenda. It can change the agenda, and it can end the
committee's life or existence at its will. That's what a
committee is. It's a sub-body of the principle body.
Those factors simply are not present here,
and there's nothing on this record that suggests that you
can get within the definition of committee. If you can't
get within the definition of committee, that is the only
prong on which they have hung their argument in this case.
And consequently they can't get within the definition of
agency.
And that, to me, indicates that, if you can't
get within the agency, then this case cannot be brought
under the Sunshine Act. I'm just going to flip to my
second point because I know you've read the materials that
we've submitted to you.
We also have raised, and you've properly
identified, that another primary issue that's before the
Court is whether there's any authority to give injunctive
relief of the kind that's being sought here. The fact of
the matter is the Commonwealth Court in the AFLCIO case,
which we have cited --
THE COURT: That wasn't the Commonwealth
Court. That was Judge Craig sitting alone as a trial judge,
and we have a Commonwealth Court decision in the Empowerment
case.
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MR. STOVER:
different case.
THE COURT:
different in that there was
The Empowerment case is a very
Well, but no, it wasn't
an injunction issued under the
Sunshine Act,
injunction under the Sunshine Act.
did was sitting as a trial judge.
and the Commonwealth Court upheld that
And what Judge Craig
So if I've got to look at
what I'm bound by, I think you lose on that one, Mr. Stover.
MR. STOVER: If I may, Your Honor, Judge Cohn
this case was brought and presented before her
at the time
trial judge.
THE COURT: Again, she was sitting as a
MR. STOVER:
judge, that's correct
THE COURT:
think I can distinguish.
issue of the injunction.
MR. STOVER:
matter is --
THE COURT:
She was sitting as a trial
The Empowerment case, I don't
I think I'm bound by that on the
Your Honor, the fact of the
Now, this may be very different.
The Association may be very different than the Empowerment
committee.
MR. STOVER: The Association here couldn't be
more different.
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THE COURT: Well, but that doesn't go to the
issue of whether or not I have authority to issue an
injunction under the Sunshine Act. The Cormmonwealth Court
has ruled that the Sunshine Act can give injunctive relief.
MR. STOVER: Yet that is the only recorded
case where they did that, and it is an aberration. Judge
Colins, who is the President Judge of the Commonwealth Court
when the AFLCIO case was handed down, looked at and did the
analysis.
THE COURT:
It may be an aberration, but
there are a lot of aberrations I'm bound by.
MR. STOVER: They recognize the injunction in
the Empowerment case. The Empowerment case, as you
properly note, is totally distinguishable because in there
the Empowerment Teams were very different from what the
Association is. I recognize that's a different issue.
THE COURT: Distinguishable on your facts,
but it's not distinguishable on the issue that you're
arguing on whether or not I have the authority.
MR. STOVER: It's --
THE COURT: So for me to say that I don't
have the authority, I don't think I can do that under the
law. I believe I do have the authority. That decision I
can make today. You've got your arguments on jurisdiction
and cormmittee, and I want to hear what they have to say on
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that.
MR. STOVER: Ail right. Our submission to
you, Your Honor, is that we believe the Commonwealth Court
-- again, it's through the voice of one of its trial judges.
We don't deny that. Judge Cohn just two months ago looked
at this issue again, and she reiterated what the
Commonwealth Court's position appears to us to be --
THE COURT: And even if I agreed with her,
I'm bound to follow the decision of the on law court because
she doesn't have the authority to overturn that. And under
I've got to go along with the group of
the food chain,
judges.
MR. STOVER: I don't think the food chain is
quite as severe as that. I believe that you have the
discretion to look at Section 713 of the Act, which is the
provision that was relied on in the AFLCIO case. It's also
the section that Judge Cohn was clearly looking at.
There's not even a mention of Section 713 in the papers the
Plaintiffs filed with this Court. But that section, on its
face, says that the Courts authority is a statutory remedy
when it comes to injunction.
And the statutory remedy is to enjoin an
action that is improperly taken. Not to enjoin the holding
of the meeting or to enjoin the pre-meeting environment.
That's what that has -- that's what has been rejected on at
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least two occasions we
And the Commonwealth Court
when Judge Cohn --
THE COURT:
know of by the Commonwealth Court.
knew about the Empowerment Team
Well, in looking at 715 under
jurisdiction, it talks about enforcing this chapter by
injunction, and I think that gives a little broader power,
and I think that maybe that's what the Empowerment Team was
looking at, but in any event,
that particular issue.
MR. STOVER: Right.
there
and I
I understand your argument on
If I may,
is an additional issue, which we mention
just want to touch on it briefly because
Your Honor,
in our brief,
it goes to
this pre-hearing enforcement or pre-hearing injunction type
of issue. And that is that it all implicates the right of
assembly, the right of speech, and the right of privacy.
There are constitutional issues that lead to --
THE COURT: And I agree whole heartedly with
you that if this is not a committee under the Sunshine Act,
you've got all of those rights. If it is a cormmittee under
the Sunshine Act, I believe I'm bound to enforce that
without regard to those particular issues, and that's for a
higher --
MR. STOVER: Right. We would submit to you
that at this juncture there is an absence of information on
the record of this case that could lead to the conclusion
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that this is a committee of a Penn State Board or
Pennsylvania State University itself. That is the only
premise on which an argument is advanced that the agency
definition applies. If that fails, and if the Court can
make that determination now, then we submit that a motion to
dismiss or deny the motion for the preliminary injunction is
appropriate at this juncture. Thank you.
THE COURT: Okay. Well argued, Mr. Stover.
Which one of you two want to -- do you both want to address
it?
MR. STAUDENMAIER: You took my issue away
from me, Your Honor, on the injunction. So Mr. Benn's going
to address the jurisdiction and the agency issue.
THE COURT: Okay. Good.
MR. BENN: With regard to the issue of
jurisdiction, I want to bring this to the Court's attention,
and that is, I would like to cite -- because I think it will
just help you in your research, and certainly your law clerk
in his or her research. Pennsylvania State University
versus Derry Township
It's a 1999 case.
THE COURT:
MR. BENN:
THE COURT:
MR. BENN:
School District, and it's 557 PA 91.
Do you have the Atlantic cite?
Yes. 731 A.2d 1272.
Okay.
Just very briefly, in that case,
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Your Honor, it was an issue wherein Penn State University
took the posture that they were a State Agency, and as a
State Agency they would be subject to Commonwealth Court
jurisdiction, but also as a State Agency, they would not be
subject to taxation.
The Court determined in that case, and the
Supreme Court held in that case, that they were not a State
Agency. If they were not a State Agency, they were not
subject to the Commonwealth Court jurisdiction under the
Sunshine Act. It was under that premise that we argued the
case before Judge Cohn, for which she agreed that only for
limited purposes was she going to hear that case. And then
at the end, the conclusion of that case says that this is
not binding upon Penn State University for the future.
THE COURT: Okay.
MR. BENN: That raises an interesting point.
Both parties, we in our complaint, Mr. Stover and Mr.
Wolfgang in their memorandum, r~quested counsel fees. They
take the position that this, in a certain sense, is a
frivolous action because it was already heard once by the
Commonwealth Court. We take the position that we've had to
come into court unnecessarily because we believe that
they're under the jurisdiction of the Sunshine Act.
I think what you've heard here today, and I
think what you understand today in terms as to the
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difficulty of this case -- and I have to say to the Court I
do believe that this is an exceedingly difficult case
because you really do not have anything to look at in terms
of jurisdiction and with respect to the
as to the issue
issue of agency.
THE COURT:
Well, what about the common
sense layman's definition of committee?
MR. BENN: And that's where I was going to
go. Mr. Stover kept referring to the definition of
cou~nittee, and you kept coming back in terms as to where is
that definition, and at the end of the day I think that
definition is going to fall upon what you've just said.
Where is the common sense definition of a committee?
Where I was going with the subject of fees
was, while I have prayed for that, quite frankly, I don't
expect the Court to award it, and by the same token, while I
believe that they have prayed for it, should they be
successful in this matter, quite frankly, I don't think
they're entitled to it.
And the reason being is, is because we are
talking in terms as to something that this Court has to
decide based upon this Court's interpretation as to what it
reads in this merger document, what you heard testimony to
be by both the Dean of the Law School and one of the members
of the Board of Governors, and what your understanding is in
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terms as to what role this Board of Governors plays with
respect to the functioning of this academic institution.
To address that issue, when this matter first
came to me two days before we argued the case before Judge
Cohn, before I read the merger document, and as a graduate
of the Law School, my understanding of what was occurring
was that they were just merely, whoever they are, the
Association, the Governing Board,
advisory body.
And as such, quite
whatever, was merely an
frankly, in my humble
with
come
Governors.
belief, I thought, I don't know that I have a case here.
What is there to argue? The real decision making processes
regard to what happens to that Law School are going to
from State College, not come from that Board of
But then I read that merger document, and
that merger document is very, very clear with respect to at
least enunciating four specific, as I can recall, reserve
powers. One being the name of the institution. One being
the location of the institution. Another being the
conferring of degrees. Another being the conferring of
Honorary degrees, and then lastly, which runs out in 2005,
the number of students that are to be admitted as first year
students be limited to 180 because that was what was
contracted for, and it cannot exceed 180 unless the Board of
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Governors agrees to that.
I take that to mean that that Board of
Governors then is not advisory at all. It goes beyond
being advisory. It maintains some control.
THE COURT: Are you changing your theory
then that the Board of Governors may actually be a body or
are you still --
MR. BENN:
they're a committee.
THE COURT:
I still take the posture that
Then if they're a committee, it
doesn't matter whether they have power or not. As I read
the law, they can have the power to advise the subject of
the Sunshine Act.
MR. BENN:
argument away from me.
THE COURT:
MR. BENN:
want to set
job of it.
And unfortunately you're taking my
What's unfortunate about that?
Well, the point being is that I
forth my posture, and you're doing a very good
Thank you. When you get to the next section
that deals with those listed 7 or 8 items in terms as to
what input they have, how they can make recommendations,
that's merely what they can do. They can only provide
input with regard to 8 or 9 specific items. They can only
provide recommendations with regard to those particular
items, and that deals with, pretty much, the everyday
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functioning of the institution.
Now, in my mind, every committee of Penn
State University in terms as to those standing committees of
the University which, by the way, all of their meetings are
open to the public because that's what Penn State's counsel
said before Judge Cohn, as well as their Board of Trustees.
They're merely advisory in nature. They merely make
recommendations in nature.
And the long and short of it is, is that this
body, making recommendations to the Dean, who is acting as a
conduit to the President of the University, and ultimately
to the Board of Trustees, is, in fact, a committee of that
Board of Trustees. Otherwise, who runs the Law School?
Who, in fact, has any dialogue with respect to the
functioning of that institution?
To think otherwise would mean that the Dean,
with all due respect to himself, has such phenomenal control
over what happens at the Dickinson School of Law then what
do they need this Board of Governors for? Why do there
have to be any recommendations by anybody at all? And why
the reserve powers?
So it's our posture,
is a de facto committee of the body,
quite frankly, that this
which is the Board of
Trustees of Penn State University. To think otherwise is to
think that there is no agency at all that overseas the
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Dickinson School of Law of Penn State University, and I
think that that's an absurdity.
It's funny. I used this comment in the
Commonwealth Court. I'm going to use it again. It came
from the managing editor of my client, the Carlisle
Sentinal, if it walks like a duck and quacks like a duck
it's got to be a duck, and as mundane as that may be, that's
what I think it is.
So when we talk in terms of common sense,
common sense tells me that this has to be a committee,
albeit ad hoc, albeit de facto, of the University's Board of
Trustees. To think otherwise, I'm just not certain in
terms as to how it governors itself in terms as to the Law
School.
Thank you.
THE COURT:
Thank you, Mr. Benn. You're
right. It is a very difficult case, not one I'm prepared to
rule on from the bench right now without availing myself of
learning treatises, the Webster's dictionary, and some other
things. So I'm going to deny your motion right now. That
doesn't mean that it won't be granted at a later time. Do
you wish to supplement the record?
MR. STOVER: Yes, we do,
THE COURT: Okay.
MR.
Your Honor.
witness out of
STOVER: Your Honor, I'm going to call a
order. Mr. Gilroy was going to testify last.
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He has another municipal commitment. So I'll call him
first, if I can.
THE COURT: Well, I've only gotten until
5:30 tonight. I'm prepared to make myself available on
Saturday. I don't know how much time you're going to need.
I was told when I set this thing, from a scheduling
standpoint, that a couple of hours would be enough.
MR. STOVER:
believe will be very short,
important to put them on.
THE COURT:
I have three witnesses who I
Your Honor, but I do feel it's
Well, I just want to let you
know, I've only got to 5:30. So if that changes your need
to call Mr. Gilroy out of order, that's up to you.
MR. STOVER:
THE COURT:
municipal function
I'll call Joanne Judge first.
I presume, Mr. Gilroy, your
is not until after 5:30.
MR. GILROY:
THE COURT:
out of here for that.
able to squeeze it in,
get it done today.
MR. BENN:
would work for me if we
the country on Saturday.
THE
6:00, Judge.
I can guarantee you you'll be
Actually, get my calendar. We may be
as time allows, tomorrow, if we don't
Excuse me, Your Honor. Tomorrow
don't get done today. I'm out of
COURT: Ail right. Good. We'll talk
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about
that closer to 5:30. Let's see where we are.
Whereupon,
JOANNE JUDGE
having been duly sworn, testified as follows:
BY MR. STOVER:
Q
A
Q
A
Pennsylvania.
Q
A
Q
A
Q
A
Q
affiliation?
A
Q
DIRECT EXAMINATION
Could you state your full name, please?
Joanne Judge.
What is your current address, Ms. Judge?
150 Deer Ford Drive in Lancaster,
What is your profession?
I'm an attorney.
Are you admitted to the Pennsylvania bar?
Yes.
And what year were you admitted?
1996.
And what is your current law firm
I'm a shareholder with Stevens and Lee.
And how long have you been with the law firm
of Stevens and Lee?
A Since 1996.
Q Ms. Judge, during your tenure with Stevens
and Lee, did you perform professional legal services
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relating to the merger of Dickinson School of Law and to the
Pennsylvania State University?
A Yes, I did.
Q Who was your client?
A The Dickinson School of Law.
Q And what were the general nature of the
services you provided to the Dickinson School of Law at the
time of that affiliation and merger?
A We served as counsel to the Dickinson School
of Law for purposes of negotiating the affiliation and
merger.
Q Ail right. And were you personally involved
in the discussions and negotiations leading to the
affiliation and merger agreement?
A
objection.
negotiations
Yes.
MR. STAUDENMAIER: Your Honor, I raise an
Mr. Stover is asking about discussions and
concerning a document which is a contract
that's been in existence
relevance.
THE COURT:
Stover?
for several years. They have no
How about an offer of proof, Mr.
MR. STOVER:
to show through Ms. Judge,
put the documents together representing the
If I may, Your Honor, we intend
who was the party principally who
Dickinson School
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of Law, from that perspective, was the incorporator for the
new association understands perfectly why the association
was born and what its function was supposed to be. These
are the ambiguities the plaintiffs have raised. We're
certainly entitled to rebut that.
MR. STAUDENMAIER: Your Honor --
THE COURT: I'm not sure there's much
relevance here. It's not disputed that the Association is a
nonprofit corporation.
MR. STAUDENMAIER: That's correct.
THE COURT: And I think the documents speak
for themselves. I don't know how you can go outside the
documents.
MR. STOVER: We have some very specific
testimony.
THE COURT:
Well, tell me what it is.
MR.
what the concerns were
together.
THE COURT:
-- it speaks for itself.
MR. STOVER:
STOVER: The testimony is in terms of
at the time these documents were put
As I read the document, it said
There's a merger.
Your Honor, we also intend to
introduce through Ms. Judge the Articles of Incorporation
and the Articles of Merger, which are not a part of the
record here.
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THE COURT: Okay. That's fine. I'll let
you do that, but -- I certainly think that's relevant.
They're referred to in the document, but you're telling me
there's something different. So you can proceed.
MR. STOVER: Well, the ones that are there
samples that were attached to the agreement.
THE COURT: Right. You can certainly
introduce the originals of those documents through Ms.
Judge.
MR. STAUDENMAIER: Your Honor, if it would
help move things along, we would stipulate to the entry of
the Articles of Incorporation. I'm sorry. It was the
bylaws you said?
MR. STOVER: The Articles of Merger. But,
Your Honor, the whole issue here about -- in addition to
these documents, the whole issue which has been raised
before the Court is what is the reason? What is the role of
the Association? There was a very clear intent at the time
this was set up from the standpoint --
THE COURT:
set forth in the agreement,
not?
MR. STOVER:
The role of the Association is
in the merger agreement; is it
The rule of the -- but the
reasons for putting that role in there is not set forth in
the agreement. And that is extremely relevant --
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THE COURT:
those reasons are?
MR. STOVER:
Okay. What's she going to say
She's going to say that
basically, when you enter into a contract, such as the
agreement we have here, and you have long term provisions,
such as the covenants relating to name and location, that it
is always possible in the future that Pennsylvania State
University would attempt to either breach or change those
covenants. And you needed to have a body with standing.
You needed to have a body with funding. And you needed to
have a body that could go out and enforce the covenants.
THE COURT: Well, that's dealt with
specifically in the agreement. I'm not sure I need any
explanation on that.
MR. STOVER: We're trying to simply offer for
the record the reason these provisions were put in here
because arguments are being made that the Association in
some way is a committee at Penn State.
THE COURT: Well, the arguments are being
made that the other powers and provisions in there make them
a committee, as well as those. I'm not sure what the
concerns at the time were
sustain that objection.
other documents in through Ms. Judge.
(Whereupon, Defendant's Exhibits 2
are relevant. I'm going to
You can put the articles and the
and 3 were
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marked for identification.)
BY MR. STOVER:
Q Ms. Judge, I am handing to you a document
that we've marked as Defendant's Exhibit 2, and I'll ask if
you can identify that, please.
A Yeah. These are the original Articles of
Incorporation of the Dickinson School of Law of the
Pennsylvania State University Association.
Q Did you prepare this document?
A Yes, I did.
Did you serve as the incorporator for the
Q
Association?
A
Q
Yes, I did.
And is that your signature which appears on
the second page of these articles?
A Yes, it is.
Q And would you call the Court's attention to
where in these articles the Association is referenced as
having a purpose for the enforcement of the covenants
contained in the merger agreement and affiliation agreement?
A Yes. Article 3 of the Articles of
Incorporation specifically enumerates the purposes of the
Association, in addition to any and all other purposes for
which a Pennsylvania nonprofit corporation may be formed.
Including specific activities beginning with the sentence,
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these activities include reviewing and making
recommendations, and it goes on to talk about, in the final
subparagraph, enforcing sections of the provisions of the
affiliation agreement and agreement and plan of merger.
Q Thank you. I've also placed in front of you
-- or actually I guess I'm holding in my hand. I'm going to
place in front of you Defendant's Exhibit Number 3, and ask
if you would identify that for the record, please.
A Yes. This document is -- are the Articles
of Merger that were filed at the time that the Dickinson
School of Law did a statutory merger and became a part of
the Pennsylvania State University, and -- on July 1st of
2000.
Did you have a role in preparing this
Q
document ?
A
Q
Yes, I did.
Was there ever a discussion about a committee
to oversee covenants that were contained in the merger
agreement and the agreement of affiliation?
MR. STAUDENMAIER: Your Honor,
raise another objection.
THE COURT:
THE WITNESS:
discussion about a committee.
the then trustees of the Dickinson School
I'm going to
We're talking about --
Overruled.
No, there was never a
In fact, the discussion that
of Law had was
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the perpetual
long and hard negotiated into the
what body would be in place to enforce
covenants that had been
Agreement of Merger.
BY MR. STOVER:
Q What body was created for that purpose?
A It was decided that a new nonprofit
organization would be formed that would have both standing
and funding and be in a position to actually be adverse to
the Pennsylvania State University.
Q Was there ever -- was that the Association
that was formed?
A Yes, it was.
Q Is that the documents -- the documents in
front of you, are those the ones that formed the
Association?
A
Q
BY MR.
STOVER:
Q
Yes, they are.
And, Ms. Judge --
THE COURT: That's Exhibit Number 2?
MR. STOVER: In Number 2, Your Honor
THE COURT: Okay.
Ms. Judge,
was Penn State or its Board of
Trustees ever authorized to appoint members of the Board of
Governors of the Association?
A No. And, in fact, the Association itself
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was not appointed, even initially by Penn State University
or its trustees. It was formed by the then Dickinson
School of Law immediately prior to the merger.
Q The former trustees of the Dickinson School
of Law became the members of the Board of Governors of the
Association; is that correct?
A That's correct.
THE COURT: Well, that's handled in the
merger agreement; isn't that right?
THE WITNESS: Yes.
THE COURT: Okay.
BY MR. STOVER:
Q And was Penn State or its Board of Trustees
authorized in any way to remove or change mer~bers of the
Board of Governors?
A No, they cannot.
Q Was Penn State or its Board of Trustees
authorized in any way to set the agenda for the Board of
Governors?
A
Q
A
Q
authorized to end the existence
Governors or the Association?
No.
Or the Association?
No, they cannot.
And was Penn State or its Board of Trustees
or sunset the Board of
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A No, they cannot.
itself could make that decision.
Q And was it
as Board of Governors may
Only the Association
contemplated that the Association
in some instances be directly
adversarial even to the point of litigation against Penn
State and its Board of Trustees?
A Absolutely. In fact, practically speaking,
in a statutory merger like this where there are covenants
that exist past the point of the merger -- and in this case
for a very long period of time in perpetuity, the difficulty
with enforcing those covenants is that there is no one to
enforce those covenants, but for the Attorney General who
has standing with respect to all nonprofit corporations, and
so the Law School trustees thought long and hard about what
to do in order to make sure that those covenants were
enforced in perpetuity, and negotiated with Penn State as a
part of the merger agreement that they would form a separate
body, one of whose purposes would be to enforce the
covenants even to the point of having to sue Penn State in
order to enforce the covenants.
Q
that correct?
A
That separate body is the Association; is
That's correct.
MR. STOVER: I have no other questions, Your
Honor.
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BY MR.
Q
Article 3.
MR. BENN: None.
MR. STAUDENMAIER: Yes,
CROSS EXAMINATION
STAUDENMAIER:
Your Honor.
Ms. Judge, I'm referring to Exhibit 2,
You would agree with me that that article
provides that this entity that you've talked about, the
Association, starting with -- it says these activities
include reviewing and making recommendations to the
Pennsylvania State University on the mission, strategic
plan, curriculum, and budgets of the Dickinson School of Law
of the Pennsylvania State University, enhancing educational
opportunities for the students, awarding Honorary degrees,
managing the public interest and rural loan payment
programs, promoting support from an annual giving, capital
campaign giving, and enforcing sections of the agreement as
provided. Those were
the Association at the
A Well,
have no power.
all powers that were contemplated by
time of the creation of it, correct?
the items that you've just articulated
Q My question though, Ms. Judge, was those are
provided for in the Articles of Incorporation, are they not?
A Those are purposes for which the Association
was formed. They don't provide any power to the
Association.
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was
but
correct?
A
Q
Q Ail right. They are purposes for which it
formed. We'll use your terms if you like those better,
they are embodied within the documents you helped draft,
That's correct.
And these were -- these were duties and
responsibilities that the Board -- excuse me, the
Association had as drafted here, correct?
A The purpose describes the role of the
Association that it took on for itself, and the way that it
articulated it in its Articles of Incorporation. It's not
duties. I'm not sure what you mean by that word.
Q Well, let me -- and one of its purposes is to
make recommendations to the Penn State Board of Trustees,
correct? On things like curriculum, strategic planning,
Honorary degrees, correct?
A Yes, it can. It can make recommendations.
Q And those were expressly set forth in its
Articles of Incorporation?
A Yes, they are.
Q And that's the documents you said you helped
draft?
A Yes.
MR. STAUDENMAIER:
questions, Your Honor.
I have no further
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THE COURT:
MR. STOVER:
THE COURT:
MR. STOVER:
THE COURT:
MR. STOVER:
has a distance to travel.
Gilroy,
THE COURT:
MR. STOVER:
please.
THE COURT:
MR. STOVER:
Any redirect, Mr. Stover?
No redirect, Your Honor.
Thank you.
Thank you, Ms. Judge.
Next witness.
May Ms. Judge be excused?
She
having been duly sworn,
BY MR. STOVER:
Q
A
Q
A
in Carlisle.
Carlisle.
Q
A
She may.
Thank you. I would call Hubie
You mean Hubert?
Oh, I'm sorry.
Whereupon,
HUBERT X. GILROY
testified as follows:
DIRECT EXAMINATION
Will you state your full name, please?
Hubert X. Gilroy.
Mr. Gilroy, what is your current address?
My home address is 211 South College Street
My work address is 4 North Hanover Street in
What is your current profession?
I'm an attorney practicing law in Carlisle.
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Q
sir?
A
Q
Governors of
in this action?
A Yes,
alumni.
Q And,
And you're admitted to the Pennsylvania bar?
Since 1979.
And the name of your current firm is what,
Broujos and Gilroy, P.C.
Are you currently a member of the Board of
the Association which is named as a defendant
am. I was elected in 2001 by the
Mr. Gilroy, I'm going to ask if you
would identify for the record here the bylaws of the
Association as they currently exist. I'm going to put in
front of you an exhibit marked as Exhibit D-4.
marked for
BY MR. STOVER:
Q
please, Mr.
A
the Association.
Q And, Mr.
that
today?
(Whereupon, Defendant's Exhibit No. 4 was
identification.)
Would you identify that for the record,
Gilroy?
Exhibit 4 is a copy of the current bylaws for
the Association's an independent
Gilroy, is it your understanding
nonprofit corporation
A Yes, absolutely.
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Q Do you understand its current role as being
to ensure enforcement of the certain covenants made by Penn
State in the merger agreement?
A
Yes. I view that as its primary role.
Right. And do you understand that role --
as a member of the Board of Governors, do you understand
that role as being potentially adversarial to Penn State
University?
A
Q
Yes.
To your knowledge, has Penn State ever
appointed any voting member of the Board of Governors of the
Association?
A
To my knowledge, never, and I don't believe
from my knowledge of the documentation that Penn State has
the authority to do so.
Q Has Penn State or its Board of Trustees, to
your knowledge, ever removed any member of the Board of
Governors of the Association?
A To my knowledge, no, and to my understanding,
the articles of the bylaws of the Association do not
authorize Penn State to take any such action.
Q Has Penn State, to your knowledge, ever
dictated the agenda for the Board of Governors of the
Association?
A Never.
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MR.
Gilroy.
BY MR. BENN:
Q
correct?
A
Q
created?
STOVER: I have no other questions of Mr.
CROSS EXAMINATION
These are not the original bylaws; is that
I believe the -- original from when?
Well, when did the Association become
A The Association became created at
the merger in 2000. I believe the bylaws were amended
since then, and these are a copy of the current bylaws.
Q So these are not the original bylaws?
A Original from 2000, that's correct.
Q That's what I asked. Thank you. The
bylaws in Article One set forth various responsibilities of
the Association. Is that not right?
the time of
A
recommendations? Is that correct?
A That's correct.
Q You've been sitting on the
Yes.
Are they listed in terms as to reviewing and
making
A
how long?
Board of Governors
Since October of 2001.
Your understanding of the authority on your
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-- granted to the Board of Governors with respect to
litigation as it pertains to Penn State University is to
enforce the merger agreement?
A That's correct,
merger agreement.
Q Right.
and the covenants under the
Which we have alluded to in court
today, and
heard that;
A
I understand you've been here all day so you've
is that right?
That's right,
MR. BENN:
THE COURT:
That's all I have.
Mr. Staudenmaier.
CROSS EXAMINATION
BY MR. STAUDENMAIER:
Q Mr. Gilroy, you were asked a question about
whether Penn State has ever appointed anyone to the Board of
Governors or removed anyone from the Board of Governors, and
you gave us your answer. You would agree with me, would
you not, sir, though that when Penn State entered into this
agreement, the merger agreement as D-l, that Penn State
agreed to the formation of the Association as it was and how
the Board of Governors was to be constituted and
perpetuated, correct?
A I wouldn't agree because the bylaws of the
Board of Governors allows the Board of Governors themselves
to change their bylaws. So Penn State can't dictate how
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the Board of Governors is formed. So I can't imagine them
agreeing to the particular formation of a class of Board of
Governors when the Board of Governors themselves can change
it.
Q Mr. Gilroy, maybe you didn't understand my
question. So let me repeat it. You agree with me, sir, do
you not, that in entering into a merger agreement, D-l, that
Penn State agreed to the rules that govern how the Board of
Governors was to be formed and who was to be a member of
that Board,
perpetuated,
Would you like me to refer you to the
help?
A
Q
the class of governors, how they would be
because that's all contained in the agreement.
section? Would that
Of which agreement? The merger?
The merger. Here, let me refer you to --
THE COURT: Page 30 to 31.
BY MR.
MR. STAUDENMAIER: Thank you, Judge.
STAUDENMAIER:
Q Here again, this is D-i, pages 30 -- let me
just make sure I've got it right -- and 31, and I'll let you
look at it quickly, but just take a look at that quickly, if
you would. I'm sorry. It's paragraph 4.13 sub capital C
and the paragraphs that follow.
THE COURT: I'm not sure of your point, Mr.
Staudenmaier. You can ask him -- the agreement speaks for
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itself.
I'll move
BY MR.
Q
question about
MR. STAUDENMAIER:
forward.
THE COURT:
STAUDENMAIER:
And also, Mr.
Okay.
In that case, Your Honor,
Gilroy, you were asked a
Penn State setting the agenda for your
meetings. Would you agree with me that the agenda for the
November 21 and 22 meeting was, in deed, set by Penn State
as they were bringing a proposal to the Board of Governors
concerning relocation of the Law School?
A No, I don't agree with that.
the Dean's memorandum as a proposal from Penn State, and at
this point I don't understand it. The Board of Trustees of
Penn State has made a specific proposal. The Dean was
making a suggestion that he had certain information and he
wanted us to consider that. I did not view it as a specific
proposal from Penn State at that particular time.
Q You were here this afternoon when Dean
McConnaughay stated he is an employee of Penn State
University, correct?
A Absolutely. Yeah, I know that.
And you were here when he stated that he --
this was his proposal about relocating the Law School in the
memorandum that he sent to you and had a meeting, correct?
I did not view
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A That's correct.
but I don't know if that was necessarily the
Trustees saying here's what we want to do.
MR. STAUDENMAIER: I have no further
questions.
excused, Mr.
THE COURT:
MR. STOVER:
THE COURT:
Gilroy.
MR. STOVER:
It was the Dean's proposal,
Board of
Mr. Stover, any redirect?
No redirect.
Thank you, sir. You may be
Your Honor, at this time we
would call Steven MacCarthy, and with leave of the Court I'm
Mr. Wolfgang, for the direct
Your Honor, we're going to
Mr. Wolfgang.
Your Honor, Your Honor has
the definition of committee,
going to defer to my colleague,
examination.
MR. STAUDENMAIER:
ask for an offer of proof.
THE COURT:
MR. WOLFGANG:
expressed some concerns about
and Mr. MacCarthy, who is Vice President of the University
Relations for Penn State University, is going to testify
what the committees are that exist at Penn State, how
they're formed, how they're filled, how members on those
committees leave the committees, and what duties and
responsibilities those individuals have.
MR. STAUDENMAIER: Well, Your Honor, I would
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interpose a relevancy objection.
THE COURT: I tend to
is what the committee is under the Act.
for me to decide, using layman's terms,
agree. A committee
And I think that's
if it's not
otherwise decided judicially, but I will hear briefly what
he has to say, even though I don't think it's relevant.
I'll take it for what it's worth. So go ahead.
MR. WOLFGANG: Okay.
MR. STAUDENMAIER: And, Your Honor, we'll
have a continuing objection on that?
THE COURT: Just like he did.
MR. STAUDENMAIER: I wanted to get our's in
And just like he did, whenever I
relevant, I'll raise it.
too, Your Honor.
THE COURT:
think that the objection's
Whereupon,
STEVEN MACCARTHY
having been duly sworn, testified as follows:
DIRECT EXAMINATION
Would you state
It's Steven J.
your full name, please?
MacCarthy. MacCarthy is
where do you live?
In State College, Pennsylvania.
BY MR. WOLFGANG:
Q
A
spelled M-a-c-c-a-r-t-h-y.
Q Mr. MacCarthy,
A
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Q
A
Penn State.
Q
And what is your occupation?
I'm Vice President of University Relations of
In your capacity as Vice President for the
University Relations at Penn State, would you just briefly
describe for the Court what types of things fall under your
supervision?
A Broadly, I have responsibility for the
communication side of the University, which would be
advertising, marketing, public information, publications,
special events, that type of thing. I also manage the
office of the President and oversee the Board of Trustees.
Q Do you serve essentially in the role of Chief
of Staff for the President of the University?
A Yes, I do.
Q The position that you hold, Vice President of
the University Relations, were any duties and
responsibilities added to that position in recent years as a
result of the elimination of some other position?
A About two years ago there was a change where
the Vice President of Administration took another job and
they merged my area with her's. That's when I took over
the Board of Trustees Office and the President's office.
Q And under those responsibilities that --
well, I'm sorry. You said the Board of Trustees office?
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A Yes.
Q What types of things fall under your
supervision with regard to the Board of Trustees office?
A Well, it's management of all of the Board
activities, development of the agenda, management of the
meetings, making sure
out.
various
special
that the Board's actions are carried
Q And in that capacity, are you familiar with
committees that may be standing committees or
committees or ad hoc committees or subcommittees of
any of those?
A
Q
University?
A Yes,
MR.
witness, please?
THE COURT:
(Whereupon,
marked for identification.
BY MR. WOLFGANG:
Yes.
Of the Board of Trustees of Penn State
I am.
WOLFGANG: Your Honor, may I approach the
You may.
Defendant's Exhibit No.
)
5 was
Q Mr. MacCarthy, I'm showing you a packet of
materials that have been marked as D-5, and I would ask you
if you recognize those documents as the current charter
bylaws and standing orders of Pennsylvania State University?
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A Yes, I do.
Q Now, with respect to the Board of Trustees
itself, how is it that individuals come to be members of the
Board of Trustees of Penn State University?
A We have 32 members of the Board. Five are ex
officio. We have 9 who are elected by the Alumni
Association. Six who are elected by the Agricultural
societies. Six who are elected by the Board to represent
business and industry, and six who are appointed by the
Governor.
Q Does the Board of Governors of the
Association, and that is the Dickinson School of Law of the
Pennsylvania State University Association that we've been
talking about in the courtroom today, does that Board of
Governors or the Association have any input or control
whatsoever with respect to any positions on the Board of
Trustees of Penn State University?
A No, none whatsoever.
Q Does Penn State University or its Board of
Trustees, to your knowledge, have any control over the
membership of the Board of Governors of the Association?
A Not at all.
Q Are there any standing committees of the
Board of Trustees of Penn State?
A Yes, there are.
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Q Would you please identify what
A There's an Executive Committee,
there are three standing committees. There's the
on Finance and the Physical Plan, the Committee on
Educational
Q
to the bylaws
continuing over to page B-4.
you?
A
Q
the
A
Q
committees
those are?
and then
Committee
A
Board.
Q
A
Q
A
Q
A
Policy, and the Committee on Campus Environment.
Could I direct your attention, Mr. MacCarthy,
at page -- beginning on page B-3, and
Do you have that in front of
Yes.
Are the standing committees identified there
same as the ones that you've just testified to?
Yes.
And how is it that members of those standing
of the Board of Trustees come to be appointed?
They're appointed by the Chairman of the
The Chairman of the Board of Trustees?
Trustees of Penn State.
Of Penn State?
Right.
And what is the term for those individuals?
They're for one year appointments, but they
can continue to serve beyond that until they're reappointed.
Q Is that typically how it's done?
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Chairman of
decision?
A
Q
MacCarthy,
Trustees?
A
A Typically, yes.
Q And if any members of those committees,
whatever reason, needed to be removed, would it be the
the Board of Trustees who would make that
Yes.
In addition to standing committees, Mr.
are there any special
for
committees of the Board of
There are some -- are you referring to sub
committees or --
Q Well, I see right there on page B-4 the term
special cormnittee, and it says special committees shall be
appointed by the President of the Board after consultation
with the President of the University. Maybe you could just
tell the Court what special committees are.
A It refers to those ad hoe committees, and
yes, the Chair of the Board can appoint an ad hoc Committee
MacCarthy? Are
There are some standing subcommittees.
at any time.
Q
the Board of
A
Q
Are there currently any ad hoc committees of
Trustees that you know of?
Not that I'm aware of, no.
What about subcommittees, Mr.
there currently any existing subcommittees?
A
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They're in the standing orders on page S-1. It's the
Nominating Committee and the subcommittee on architect and
engineering selection.
Q Now, with respect to -- you've already
testified about standing committees, but with respect to
special committees, if there were any, or ad hoc committees,
I think was the term you used?
A Right.
Q Or with respect to subcommittees, who would
control the membership of those types of committees?
A The Chairman of the Board of Trustees.
Q And is that true both with respect to the
appointment, and if necessary, termination of those
memberships?
A Yes, that's correct.
Q And with respect to the existence of these
committees -- strike that. Is there any power in the Board
of Trustees, to your knowledge, to terminate the existence
of these committees?
A Yes. The committees exist within the
bylaws, and the Board can change the bylaws.
Q So if the Board amended its bylaws to
eliminate, for example, one of the standing committees, like
the committee on educational policy, that committee would no
longer exist?
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A That's correct.
Q And is that an attribute of all of the
standing special ad hoc and/or subcommittees of the Board of
Trustees?
A Yes, it is.
Q Now, you mentioned, at page S-1 of the
standing Orders of the Board of Trustees -- if I could
direct your attention to Roman Numeral 4 on page S-2,
approval of the Board of Trustees. Do you
matters requiring
see that, sir?
A Yes.
Q On the next page, S-3,
says physical plan. Do you see that?
A Yes, I do.
under heading 4, it
Q Are there any provisions under that
subheading that would pertain, for example, to the physical
location of the Law School that is now known as the
Dickinson School of Law, the Pennsylvania State University?
A Well, to the degree that the Board has the
responsibility for the location of any Penn State entities.
So the purchase of real estate, the construction of any
buildings, the location of our campuses all require the
approval of the Board of Trustees.
Q Does that mean that the Board would have to
vote up or down on a decision, for example, to relocate the
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Dickinson School of Law of the Penn State University?
A Absolutely.
Q Agendas of the various committees, if we can
just go back to committees just for a moment. Agendas of
standing committees, ad hoc committees, subcommittees, who
controls those agendas?
A They're developed collaboratively between the
trustees and the President of the University.
Q But for the powers of the Board of Governors
of the Association as set forth in the merger agreement that
we've heard a lot of testimony about here today, does the
Board of Governors of the Association have anything to do
with the ultimate decision in the Board of Trustees of Penn
State whether to relocate an academic unit like the Law
School?
A No. Other than they would have to waive the
covenant in the merger agreement.
Q In section 4.06?
A Correct.
Q Mr. MacCarthy, Dean McConnaughay testified
earlier about budgeting processes with respect to academic
units of Penn State.
A Right.
Q To your knowledge, since the merger, has the
Board of Governors of the Association ever been provided
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with a budget
that is the Law School prior to
Trustees at Penn State?
A
Governors
for the academic unit of Penn State University
its adoption by the Board of
Not to my knowledge, no.
Q To your knowledge, have the Board of
of the Association ever commented or provided
input to the Board of Trustees with respect to budgeting
decisions?
A No, there's never been any input from the
Association to the Board of Trustees.
Q I think this is the last point, Mr.
MacCarthy. Are there other -- we'll call them advisory
entities out there that give advice in different capacities
to Penn State's Board of Trustees, either directly or
indirectly?
A Well, to the --
MR. STAUDENMAIER: Your Honor, I'm going to
object to the question only because I'm not certain of the
nature of Mr. Wolfgang's question. He's using the word
advisory committee, I believe was the expression. I mean
he's asking Mr. MacCarthy for -- to make a legal conclusion
as to what
and that's
on that basis.
is or isn't under the Sunshine Act situations,
an improper question for him, and I would object
THE COURT: Overruled.
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BY MR. WOLFGANG:
Q Do you need me to restate the question, Mr.
MacCarthy?
A Well, I think I pretty much understand the
question. We literally -- Penn State literally has dozens.
I couldn't begin to tell you how many advisory committees
and boards. Just, you know, by way of example. We have an
extension office in every County of the Commonwealth. They
all have an advisory board. There are regional advisory
boards for extensions and statewide advisory boards. All of
our campuses have advisory boards, our colleges do. I
couldn't begin to count them all.
Q To your knowledge, do those types of advisory
entities that you've just described conduct open meetings in
accordance with the Pennsylvania Sunshine Act?
A No.
Q No, they do not?
A No, they do not.
Q And I assume, Mr. MacCarthy, that those
boards offer -- or those entities, if you will, offer advice
that is nonbinding, just like the advice that the Board of
Governors of the Association --
MR. STAUDENMAIER: Your Honor,
Now we're getting into
the answer before he
objection.
leading questions. He's giving him
finishes the question.
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THE COURT:
BY MR. WOLFGANG:
time,
BY MR.
you
Overruled.
Q
A
MR. WOLFGANG:
Your Honor.
THE COURT:
MR. BENN:
BENN:
Q Mr.
You can answer the question.
That's correct. You're correct.
I have nothing further at this
Mr. Benn.
Thank you.
CROSS EXAMINATION
MacCarthy, I missed it. How long did
say you were in the position that you currently hold?
A About two years.
Q Prior to that you were predominately involved
in public relations?
A Primarily, yes.
Q So the last two years you've been involved in
the governments of Penn State University?
A Well, I was Vice President for University
Relations. I kept the same title, but they merged
additional duties into that title. So I've been an officer
of the University --
Q But it's during those last two years that you
became involved with respect to the Board of Trustees?
A Correct.
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Q
dialogue, although it wasn't
but I'm using that word.
A Sure.
Q
You testified that you were not aware of any
dialogue when it was phrased,
A
through me.
Q
Communication, direction, as between the
Association with respect to the Law School and the Board of
Trustees and the University. Is that correct?
A That's correct.
Q Is it not true that if there were such
dialogue, communication or whatever you want to call it,
that would typically go through the Dean of the Law School?
Well, anything to the Board would come
You're not understanding the question. The
Dean testified that he was the conduit as between the Law
School and the University and directed to the Board of
Right.
Is that not correct?
Say that again. The Dean --
Does the Dean act as the conduit, the go
the middle man, between the Association and the
Trustees?
A
Q
A
Q
I can answer that. The
the Association, but how
between,
Board of Trustees?
A I don't know that
Dean is Penn State's liaison to
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that translates back and forth to the Trustees, the Dean
reports to the provost, I think. So it comes back to
through channel. So it's
Trustees.
Q
its thoughts,
A
Q
Trustees?
A
Q
A
Q
the provost,
not a direct link to the Board of
But in order for the Association to convey
its recommendations, its input?
Right.
Ultimately to the University's Board of
Right.
They do that through the Dean?
That would be correct, yes.
And who that goes to ultimately, in terms of
the President, those individuals take it to the
Board of Trustees?
A That's correct.
Q Just out of curiosity, you had indicated that
the committee members appointed to the various standing
committees that you made reference to have terms of one
year?
A
Q
using my words, not
to serve thereafter
A Well,
Correct.
And then you said,
I believe -- and I'm again
your's -- that typically they continue
for additional one year terms?
we've never had a standing practice
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that they only serve one year. So they can serve one year,
and then the term isn't -- they can continue to serve until
they're replaced by the board. Maybe I wasn't clear on
that.
Has anybody been replaced? Asked to be
Q
removed?
A
Q
Oh, we have turnover all the time, yes.
But I mean as a result of the Board's action
versus the individual saying I don't want to serve any
longer?
A Sure. You mean -- we have a new Chair
that's coming on right now who will realign all of the
committees, yes.
Q Who oversees the Law School at the
University?
A Well, the Dean reports to the provost.
Q So who's involved with the governments of the
Law School?
A Well, ultimately the governments of anything,
any entity of Penn State, flows to the President of the
Board of Trustees.
Q So are you suggesting to me that the Board of
Trustees overseas the Law School?
A Yes. It's an academic unit of Penn State.
Q What is your opinion in terms as to the
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purpose of this Board of Governors?
MR. WOLFGANG: Objection,
not sure that opinion testimony --
THE COURT:
MR. BENN:
THE COURT:
MR. BENN:
THE COURT:
THE WITNESS:
function of the Association?
BY MR. BENN:
Q
A
Your Honor. I'm
Overruled.
I think this gentleman has --
You've won.
Thank you very much.
You can't do better than win.
You want my definition of the
Yes.
Clearly it has no binding authority other
than to -- if we wanted to change the covenant
merger, we can agree to do that.
Q
in the
A
University.
Q
A
agreement.
Q
What covenant are you making reference to?
The primary one being the location of the
Anything else?
Yeah, I'm not an expert on the whole merger
Well, I just want to know what familiarity
you have with the merger document because you've been asked
to testify in terms --
A Well, I mean, I've read the document, and
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they -- you know, obviously they can provide input to the
Dean and guidance and counsel, and, you know, settle those
ten things that are on that page.
elaborate on that.
document,
and,
So I mean I couldn't
Q So you're not
are you?
A
you know,
really familiar with that
Well, I mean to the degree that I've read it
was -- I've been around since the -- I've
years. So I was there during the
been at Penn State for 8
time of the merger.
Q Were you ever asked to interpret the document
for the Board of Trustees?
A No, it's never come up.
MR. BENN: That's all I have.
THE COURT: Mr. Staudenmaier.
MR. STAUDENMAIER: No questions, Your Honor.
THE COURT: Any redirect?
MR. WOLFGANG: Just briefly, Your Honor.
REDIRECT EX~MINATION
BY MR. WOLFGANG:
Q Mr. MacCarthy, you testified that under the
standing order that you identified, that the Board of
Trustees ultimately would vote to change the location --
would have to approve of the change of location of an
academic unit such as the Law School, right?
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A Right. That's correct.
Q And that decision, Mr. MacCarthy, if and when
the Board of Trustees of Penn State ever decided to vote
that way, would that be
Sunshine Act?
A
one question.
reporter to read back Mr.
answer, just the question.
THE COURT:
done in an open meeting under the
Absolutely, yes. It would have to be.
MR. WOLFGANG: That's all I have, Your Honor.
THE COURT: Any recross?
MR. STAUDENMAIER: Your Honor, I just have
I'm sorry, Your Honor. Could I ask the
Wolfgang's question. Not the
Do you need the exact? The
question was if the Board of Trustees voted to
Law School would it have to be done in
Sunshine Act,
and he said absolutely.
into effect.
nothing further.
THE COURT:
MR. BENN:
THE COURT:
relocate the
accordance with the
Does that --
down.
MR. STAUDENMAIER: Here's my old age coming
I had a question that's popping up. I have
Mr. Benn.
Nothing.
Thank you,
sir. You may step
MR. STOVER: Your Honor, at this time we
would move -- I think you've already admitted Defendant's
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Exhibit 1
-- Exhibits 2,
THE COURT:
MR. BENN:
MR. STAUDENMAIER: No objection.
THE COURT: They are admitted.
5 are admitted.
3, 4, and 5, into the record.
Any objection to that?
No objections, Your Honor.
(Whereupon, Defendant's Exhibits 2,
5 were admitted into evidence.)
MR. STOVER: Your Honor, if I
additional comments to the Court which I feel
this point.
So 1 through
3, 4, and
First of all,
can make two
are germane at
in my earlier motion to deny the
motion for preliminary relief, you talked about being bound
by the Harrisburg Empowerment Team case.
I'd simply like to point out to the Court,
after reviewing that case subsequent to this hearing, it
should be noted that the Court very specifically -- the
Commonwealth Court very specifically itemized the issues
that it was looking at, what was at issue before the Court.
None of those issues -- there are three of them.
None of those issues, which were listed on
page 533 of the opinion, that's 763 A.2d 533., none of those
3 issues focused the Court on the issue of whether
injunctive relief was available. So I just point that out
in terms of whether this --
THE COURT: Okay. Although, in effect, if
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they affirm the order of the trial court granting the
injunctive relief forcing the meetings to be open
prospectively, that tells me that the Court --
MR. STOVER: That means that the Court
allowed that issue to pass through, but it did not
specifically address the issue, nor did it specifically so
hold, which means it is not binding precedent on this or any
other court, and that's why I think Judge Cohn didn't feel
she was bound by it.
THE COURT: All right. That's a good point.
I'll look at it from that standpoint. I'll listen to what
you have to say.
MR. STOVER: Right. I'd also just like to
call the Court's attention -- we cited this case in our
brief, the Restau, R-e-s-t-a-u, case at 647 A.2d 642. The
reason I call the Court's attention to that, there's been a
lot of testimony here today about advisory roles, and you
actually asked me a question about advisory rules. There
was a case in Restau, where the Commonwealth Court -- and it
is the entire court, not a panel of the court, not even a
single judge, the whole court, looked at a case, and at page
THE COURT: Give me the cite on that.
MR. STOVER: Yes. That's at 647 A.2d
and I believe this appears at 648. The Court says
642,
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similarly we note that the commission, which was the body
that was at issue there, presently at issue is an advisory
one established for a limited purpose and completely lacking
governmental authority. And they held that that was not --
even though there was advisory role, an advisory role, it
still did not fall within the definition of the agency.
It is not the advisory role which controls.
It is the question of that body's function and structure
that controls as to whether it's an agency or in this case
an alleged committee. And we submit that it is not.
Thank you very much.
THE COURT: Thank you. Any response to
that?
MR. STAUDENMAIER: Yes, Your Honor.
THE COURT: Although the act is pretty clear
there. I'll have to read that case. I didn't read all of
the cases in the brief, but it says, render advice on
matters of agency business. So if you want me to use the
clear reading of the act, of course, I'm bound by what the
Commonwealth Court says
Staudenmaier.
Honor.
also. All right. Mr.
MR. STAUDENMAIER:
THE COURT:
MR.
Good afternoon, Your
Good afternoon.
STAUDENMAIER: I will be brief because
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Your Honor's already indicated your deadline.
THE COURT: Well, actually it's -- my kids
are grown, but my court reporter has young kids.
MR. STAUDENMAIER: That's even more
important, Your Honor. Your Honor, as you may know, I
argued the Empowerment Team case for the Patriot News at the
trial court level and before the Co~nonwealth Court, and I
can tell you unequivocally that the issue of the meetings
going forward was precisely one of the issues that was at
stake at that time.
And what was ongoing, and I think what's
important in this context, Your Honor, based on the
testimony you've heard here today, is that in the
Empowerment Team case there was a finite window of time.
Under the statute the Empowerment Team, I believe, was 180
days to formulate a plan and submit it.
Several meetings took place before the
Patriot was able to get in the door of the courthouse and
move for an injunction, and when Judge Clark analyzed this
issue, and it's a reported decision in the Dauphin County
Reporter. I don't have the cite off the top of my head. If
you need it, I can get that to you, but Judge Clark issued a
very lengthy opinion.
And not only did he look backwards, if you
will, towards the meetings that had already occurred, but
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the precise remedy we were seeking at that point was for a
meeting that was scheduled by both teams to occur shortly
after we filed the motions.
The judge entered a preliminary injunction at
that point forbidding the holding of any future meeting
until he a chance to consider the merits of the case at a
further hearing so -- and when you look at the Commonwealth
Court opinion --
THE COURT: In this case is there any
further merits that are going to have to be considered? It
seems to me I've heard it all. The issue of the
jurisdiction, the issue of whether it's a committee, the
issue of can I issue an injunction, and then finally should
an injunction be issued? I mean is there any other record
that would need to be completed in the future?
MR. STOVER: I'm not sure I'm prepared to
commit to that, Your Honor. I've only looked at this from
the standpoint of the preliminary injunction in the last
several days.
THE COURT: And what are you asking me to
do? Are you asking me to enjoin the meeting from taking
place or are you asking me to issue an order requiring it to
be open to the public?
MR. STAUDENMAIER: Well, Your Honor, I think
I'm asking you to issue an order that would require the
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meeting to be open to the public based upon your finding, if
they're an agency under the Sunshine Act. However, I think
-- now, we have a little more time this time than we did the
last time because the meeting was that evening.
Certainly, as part and parcel of that, I
believe -- and I don't -- I believe Mr. Stover said before
-- I don't know if his position has changed since then, but
I believe his position at that time was that if Your Honor
found the Sunshine Act was applicable to the Association,
that they would want the opportunity to postpone the
meeting, give the requisite notices required under the Act,
and we haven't talked about those, but you're aware of them
as well as we are, and proceed in that manner.
THE COURT: So you're just asking me to rule
if the Sunshine Act applies?
MR. STAUDENMAIER: Correct, and then --
THE COURT:
have to do.
And then they do whatever they
MR. STAUDENMAIER: Correct. I can't speak
for them because they would have legal duties then. I mean
we just want to have access to the meetings. They would
have to decide what they would do going forward, and I
believe it's already too short a period of time to give the
required notice, but that's basically what we're asking,
Your Honor, and as part of that we would also ask that we be
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provided with copies of the minutes of the prior meetings
that dealt with these issues -- like the November meetings,
et cetera -- because we believe that was part of it, and
Your Honor, for whatever it's worth, when you're looking at
the Empowerment Team case, that is precisely a remedy which
the Common Pleas Court did in the Empowerment Team case, and
the Commonwealth Court upheld on appeal.
And let me just speak very briefly, Your
Honor. Mr. Stover raised the Restau case, and I'm going to
tell you about the FOP case too because they sort of go hand
in hand. Those are two decisions, Your Honor, and I believe
THE COURT: Is the FOP cited in your brief?
MR. STAUDENMAIER: It's in Mr. Stover's
brief, and basically, Your Honor, yes, there are decisions
that hold that a very particular type of entity was not
covered by the Sunshine Act, and you'll see that term
advisory used in there, and that's why I raised my objection
earlier.
But, Your Honor, I think if you look at those
cases -- if you take Restau for example, the Commonwealth
Court held, and it's on -- oh, boy. These double cites with
Lexus. It's in the decision, Your Honor. It's the forth
paragraph from the end of the majority opinion where the
Court specifically stated that in that situation the Restau
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case was where I believe it was Governor Casey had impaneled
a group to advise him about filling the judicial vacancy up
in the northern central counties.
And the Court there said that this was a
limited purpose, temporary, committee which was going to
crop up and die in a very short period of time. It was
going to give the governor a list of names, and then walk
away. And the governor could pick from those names or he
could not.
And on that basis they said this isn't the
kind of thing the Sunshine Act envisions. Under the FOP
case, I believe it was Mayor Good, who impaneled a special
investigation committee to look into the move situation
between the police and that situation, and here again, that
was a committee that was going to pop up, serve for a short
period of time, and then die out, and then the mayor was
going to look at whether any criminal charges should be
brought against any police officers, fireman, et cetera.
We've heard testimony here today that what
we're dealing with here is no such temporary pop up and go
away type situation, and I'm not going to get into any
further arguments, Your Honor, about the agency issue, but I
believe Your Honor understands the issue. You've read the
briefs. You understand our position with regard to what
you've heard here today, testimony about what the
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Association is, and more importantly what it really does as
a functioning body.
And what it really does, Your Honor, and what
you've heard here for about three and a half hours now, is
that it, as part of it's essential function, not only has
certain numerated powers with regard to location, name, et
cetera, but it also -- through the Dean's own mouth, Your
Honor, the employee of the University, that it does advise
on curriculum, mission statements, strategic planning, fund
raising, endowments, degrees, Honorary degrees. It makes
all of those things. It advises the Dean.
The Dean carries that to the provost. The
provost carries that to the Board of Trustees at the
University. And that's simply what you've heard today
boiled down to its essence. And on that basis, Your Honor,
we believe that what you're looking at here is, in deed, an
agency as defined under the Act, and should be subject to
the same provisions that all other agencies are. Thank
you.
wish to
THE COURT: Thank you.
say anything in response to Mr.
MR. BENN: I would just
Court to some language
very, very, pertinent,
Stover.
Mr. Benn, did you
Stover's --
like to refer the
in the Restau case, which I think is
and which was not addressed by Mr.
And I'm quoting the Court. It says in reaching our
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decision in FOP Lodge Number 5, this Court also quoted, with
approval, the following language of the Oklahoma Supreme
Court, "although different courts must construe different
statutory provisions, it appears that the majority of other
jurisdictions have generally held that ad hoc committees or
citizen advisory committees impaneled for the purpose of
furnishing information and recommendations to governing or
decision making entities are not subject to open meeting
laws unless they have actual or de facto decision making
authority.
The premise under which we have argued this
case is that this governing body does, in fact, have de
facto decision making authority, if not actual authority,
with regard to those four or five items that we alluded to,
and with respect to the recommendations that they can
address to the Dean, ultimately to
Thank you.
THE COURT: Thank you.
the Board of Trustees.
Gentlemen, well
presented. It was a pleasure to see a case this
complicated presented so well. I understand the meeting is
next Saturday, and I promise you I will work on this. It is
a complicated case, and frankly, I may have something
Monday. I'll use the weekend to do the research, and I have
tomorrow morning free. So thank you so much. Court's
adjourned.
149
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(Whereupon,
the proceedings
concluded at 5:18 p.m.)
150
CERTIFICATION
I hereby certify that the proceedings are
contained fully and accurately in the notes taken by me on
the above cause, and that this is a correct transcript of
same.
4~ihceLaelA~ouErl~n~epor t er
The foregoing record of the proceedings on
the hearing of the within matter is hereby approved and
directed to be filed.
Date
Edward E. Guido, J.
Ninth Judicial District
151
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and
P.J. BROWNING, Publisher of
THE SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
VS.
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION, and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
NO. 04-312 EQUITY TERM
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
REQUEST FOR TRANSCRIPT
A Notice of Appeal having been filed in this matter on February 3, 2004, the official
court reporter is hereby requested to produce, certify and file the transcript in this matter in
conformity with Rule 1922 of the Pennsylvania Rules of Appellate Pro,~edure.
BUC~~OLL/I PC
By:/ /]//,O'/~J~'~
A~0~mey i.DI~ve r
· #18051
Jayson R. Wolfgang
Attorney I.D. #62076
One South Market Square
213 Market Street - 3rd Flr.
Harrisburg, PA 17101
(717) 237-4800
DATE: February 5, 2004
Attorneys for The Dickinson School of
Law of the Pennsylvania State
University Association and The Board of
Governors of The Dickinson School of
Law of the Pennsylvania State
University Association
2
CERTIFICATE OF SERVICE
I, Jack M. Stover, hereby certify that I am this day serving a copy of the foregoing
Request for Transcript upon the individuals and at the address set forth below which service
satisfies the requirements of the Pennsylvania Rules of Civil Procedure:
UNITED STATES MAIL, FIRST CLASS, POSTAGE PRE-PAID:
Niles S. Benn, Esquire (717)-852-7020
Terence J. Barna, Esquire
Peter R. Wilson, Esquire
BennLawFirm
103 East Market Street
York, PA 17405
Craig J. Staudenmaier, Esquire (717)-236-3010
Nauman, Smith, Shissler & Hall, LLP
200 North Third Street
Harrisburg, PA 17101
The Honorable Edward Guido (717)-240-6200
Cumberland County Courthouse
Carlisle, PA 17013
Michele A. Eline, Court Reporter
335 Clover Lane
Hanover, PA 17331
DATE: February 5, 2004
BUCHANAN INGERSOLL PC
Jac
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
LEE PUBLICATIONS, INC., Publisher of
THE SENTINEL, and
p.J. BROWNING, Publisher of
THE SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
VS.
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION, and
THE BOARD OF GOVERNORS OF
THE DICKINSON SCHOOL OF LAW OF
THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION,
Defendants
NO. 04-312 EQUITY TERM
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
CERTIFICATE OF SERVICE
I, Jack M. Stover, hereby certify that I am this day serving a copy of the foregoing Notice
of Appeal filed with this Court on February 3, 2004, upon the individual and at the address set
forth below which service satisfies the requirements of the Pennsylvania Rules of Civil
Procedure:
UNITED STATES MAIL, FIRST CLASS, POSTAGE PRE-PAID:
Michele A. Eline, Court Reporter
335 Clover Lane
Hanover, PA 17331
DATE: February 5, 2004
BUCHANA/N~j GERSOLL PC
By'~t~~
{-~k I9~. St~'~er
CERTIFICATE OF SERVICE
I, Jack M. Stover, hereby certify that I am this day serving a copy of the foregoing
Certificate of Service upon the individuals and at the address set forth below which service
satisfies the requirements of the Pennsylvania Rules of Civil Procedure:
UNITED STATES MAIL, FIRST CLASS, POSTAGE PRE-PAID:
Niles S. Benn, Esquire (717)-852-7020
Terence J. Barna, Esquire
Peter R. Wilson, Esquire
BennLawFirm
103 East Market Street
York, PA 17405
Craig J. Staudenmaier, Esquire (717)-236-3010
Nauman, Smith, Shissler & Hall, LLP
200 North Third Street
Harrisburg, PA 17101
The Honorable Edward Guido (717)-240-6200
Cumberland County Courthouse
Carlisle, PA 17013
DATE: February 5, 2004
BUCHANAN iNGERSOLL PC
~h~l~ M."~tov~r
LEE PUBLICATIONS, INC.,
Publisher of THE SENTINEL,
And P.J. BROWNING, Publisher of
THE SENTINEL, and
THE PATRIOT-NEWS and
CATE BARRON,
Plaintiffs
THE DICKINSON SCHOOL OF
LAW OF THE PENNSYLVANIA
STATE UNIVERSITY
ASSOCIATION and THE BOARD
OF GOVERNORS OF THE
DICKINSON SCHOOL OF LAW
OF THE PENNSYLVANIA STATE
UNIVERSITY ASSOCIATION, :
Defendants :
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
: NO. 2004-0312 EQUITY TERM
COMPLAINT IN EQUITY
UNDER THE SUNSHINE ACT
IN RE: OPINION PURSUANT TO Pa. R.A.P. 1925
Guido, J., February ~ ~:~ ,2004
The reasons for our order of February 2, 2004, are fully set forth in the opinion
which accompanied it.
al,go'/
DATE
Edward E. Guido, J.
Niles Benn, Esquire
103-107 East Market Street
P.O. Box 5185
York, Pa. 17045
Craig J. Staudenmaier, Esquire
200 North Third Street
P.O. Box 840
Harrisburg, Pa. 17108-0840
Jack M. Stover, Esquire
Jayson R. Wolfgang, Esquire
213 Market Street
Harrisburg, Pa. 17101
:sld