Wednesday, August 13

August 13, 2014 Resolution Accepted by PSU BOT

8 Against (Brown, Doran, Lord, Lubrano, Jubelirer, Oldsey, Pope)
2 Abstain (Taliaferro, Goldstein)
17 For (Benson, Casey, Cotner, Dambly, Dandrea, Eckel, Frazier, Feretti, Greig, Harpster, Hintz, Huber, Masser, Peetz, Rucci, Shaffer, Silvis)  Not sure if Mead and Rakowich were present.

Resolution of the Board of Trustees of The Pennsylvania 
State University dated August 13, 2014 

1. Litigation was initiated in 2013 in the Commonwealth Court of Pennsylvania, Corman v.
National Collegiate Athletic Association (the “Litigation”), regarding the enforcement
and validity of the Pennsylvania Institution of Higher Education Monetary Penalty
Endowment Act (the “Act”). The Litigation seeks as a remedy that, under the terms of
the Act, the University should pay to the Commonwealth a $60 million fine imposed on
the University by the NCAA in the Consent Decree entered into between the NCAA and
the University in July, 2012. Since early in the Litigation, the University has urged the
parties to try to reach an amicable settlement. The University has recently been added as
a party to this Litigation.

2. A federal court action between the NCAA and certain Commonwealth parties also related
to the Act and the $60 million fine is pending in the United States District Court for the
Middle District of Pennsylvania. The University is not a party to this litigation.

3. The NCAA and the Commonwealth parties have expressed to the University their interest
in settling both the Commonwealth Court Litigation and the federal action. Although the
University is not a party in the federal action, the NCAA and the Commonwealth parties
have requested the University to participate in the settlement discussions.

4. The parties in the Litigation have had preliminary discussions through counsel but have
not reached agreement on any terms. The University understands that in all of the
possible settlement scenarios that have been discussed by counsel for the Commonwealth
parties, the NCAA and the University, the University would pay the $60 million fine to
the Commonwealth under the terms of the Act as requested in the Litigation by the
Commonwealth parties. As part of such a settlement, both lawsuits would be
dismissed. Pursuant to the terms of the Act and any such settlement, a central term is that
the monies would be spent in Pennsylvania to assist victims of child sexual abuse and
prevent future child sexual abuse.

5. The University believes such a settlement would advance and support the University’s
mission and be in the best interest of the University. It would also provide the
Commonwealth parties the relief they are requesting in the Litigation. No amendment to
the Consent Decree is necessary to achieve such a settlement. Perhaps most importantly,
such a settlement would allow the fine money to be put to the purpose for which it was
intended, protection of children in Pennsylvania. Such a settlement would be a win for
the Commonwealth, a win for the University and a win for the children of Pennsylvania.
The University urges the NCAA and the Commonwealth parties to join with it to pursue
a settlement on such terms.

6. The full Board of Trustees repeatedly has been briefed on and has discussed legal issues
related to the Consent Decree, the Act and the Litigation, including at the Board meetings
on May 8-9, 2014. These briefings were updated in a privileged executive session with the full Board earlier this morning. The University administration welcomes further
advice and counsel from the Trustees as to the terms of a possible settlement.

7. The Commonwealth parties have requested that the Board of Trustees consider and
express its position on a possible settlement. The Commonwealth parties and the NCAA
have also informed the University, through their counsel, of their desire to reach a
settlement, if one is possible, by the end of August, 2014. Although action by the Board
is not necessary for the University to agree to a settlement of the litigation, nevertheless,
to accommodate these requests, the Board has convened this special meeting and adopts
this Resolution as a statement of the Board’s position.

8. Specifically, the Board would support a settlement in which the University, acting
through its President, pursuant to his duly authorized and delegated authority under the
University’s governing documents, agrees that the $60 million fine would be paid to the
Commonwealth in compliance with the Act and with the Consent Decree for distribution
in Pennsylvania for the benefit of Pennsylvania children. For the past two years, the
University, with appropriate vigor, has complied with the terms of the Consent Decree,
and the University remains committed to full compliance with the Consent Decree as
amended from time to time. Any settlement should be consistent with this commitment.

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