Resolution proposed by the Alumni Trustees on August 13, 2014

WHEREAS, litigation was initiated in 2013 in the Commonwealth Court of Pennsylvania, Corman et al. v. National Collegiate Athletic Association (the “Litigation”) to determine that, under the terms of Higher Education Monetary Penalty Endowment Act (the “Act”), the $60 million fine imposed on the University by the NCAA pursuant to the July 2012 Consent Decree must be paid to the Commonwealth;

WHEREAS, after disputed issues of fact arose regarding the validity of the Consent Decree that underlies all of the other issues in the Litigation, the Court ordered the University to be added as a party to protect the University’s interests in that regard;

WHEREAS, the parties in the Litigation have had preliminary discussions through counsel but have not reached agreement on any terms;

WHEREAS, a federal court action between the NCAA and certain Commonwealth parties also related to the Act is pending in the United States District Court for the Middle District of Pennsylvania.  Although the University is not a party in the federal action, the NCAA and the Commonwealth parties have requested that the University participate in settlement discussions intended to achieve a global resolution of the Litigation and the federal action;

WHEREAS, the Commonwealth parties have requested that the Board of Trustees consider and express its position on a possible settlement;

WHEREAS, no meaningful discovery has yet occurred in the Litigation and the University has not yet fulfilled its obligation, and the mandate from the Pennsylvania Commonwealth Court of Appeals, to resolve disputed factual issues regarding the validity of the Consent Decree, including for example:

(a)          Was the Freeh Report discussed or accepted by the Board?  If yes, was it done in a public meeting or in executive session?  Was it discussed or accepted by the full Board or by the Executive Committee?

(b)         Who specifically crafted the Consent Decree?

(c)          Was the Consent Decree discussed or accepted by the Board?  If yes, was it done in a public meeting or in executive session?  Was it discussed or accepted by the full Board or by the Executive Committee?

(d)         Did the General Counsel advise the Board to accept the Consent Decree?

(e)          Did the General Counsel advise the Board to accept the Freeh Report?

(f)          What were the substance of the communications between and among Louis Freeh, Freeh Sporkin & Sullivan, and the NCAA?  Has the Board seen all such communications?  Did the Board see those communications prior to approving the Consent Decree?

WHEREAS, the Board would support a settlement in which the University agrees that, provided the Consent Decree is voided in its entirety and a new agreement is put in place that recognizes the legal and factual defects as the Consent Decree as set forth below, a $60 million fine would be paid to the Commonwealth in compliance with the Act.

IT IS THEREFORE RESOLVED THAT, the University should pursue a settlement of the Litigation that:

           

(a)                Acknowledges the insufficiency of the Freeh Report for purposes of the Consent Decree;

(b)               Revokes all remaining sanctions imposed on the University by the NCAA;

(c)                Returns penalty funds paid into escrow by the University and rescinds further obligation under that penalty;

(d)               Authorizes and requests that – consistent the University’s commitment to transparency – the NCAA release all of its communications between and among the University, Freeh Sporkin & Sullivan, The Freeh Group and/or Louis Freeh;

(e)                Acknowledges Gerry Sandusky’s sole responsibility for the heinous crimes he committed;

(f)                Acknowledges that the NCAA accepted and publicized the “University’s Acceptance” of the Consent Decree notwithstanding the fact that the NCAA knew that the University Board of Trustees had not yet conducted a vote regarding its validity;

(g)               Acknowledges and regrets crimes committed on University property;

(h)               Acknowledges settlements made with victims and the University’s compassion for those harmed by its former employee Gerry Sandusky;

(i)                 Agrees that the University will not pursue the NCAA for the tens of millions of dollars of foregone revenue caused by the sanctions imposed upon the University more than two years ago;

(j)                 Recommends that the Commonwealth acknowledge this agreement and further agree to forego any further litigation against the NCAA with respect to the question of the Consent Decree’s validity; and 

(k)               Recognizes that the parties forego further action against signors of the Consent Decree except as set forth in this agreement.

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