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AGREEMENT BETWEEN LINCOLN UNIVERSITY                                    AND THE BARNES FOUNDATION

WHEREAS, On September 24, 2002, the Barnes Foundation filed a Petition to Amend its Charter and Bylaws in the Orphans' Court Division of the Montgomery County Court of Common Pleas and filed an Amended Petition in June 2003; and

WHEREAS, Among the amendments sought by the Barnes Foundation were amendments to the governing structure of the Barnes Foundation, which amendments would affect Lincoln University's right to nominate Trustees of the Barnes Foundation Board of Trustees; and

WHEREAS, Lincoln University is a party to the litigation regarding the Barnes Foundation’s Petition and Amended Petition (hereinafter the “Barnes Litigation”) and filed an Answer to each Petition opposing certain changes in the governance provisions of the Barnes Foundation’s Bylaws; and

WHEREAS, The Executive Committee of the Board of Trustees met via teleconference on Friday, September 12, 2003 and at that meeting unanimously voted to recommend to the full Board of Trustees at its September 20, 2003 meeting “that Lincoln University accept five designated trustees to the Barnes Foundation Board that cannot be unreasonably denied;” and

WHEREAS, A settlement agreement regarding the Barnes Litigation, a copy of which is attached to this Resolution (hereinafter the “Agreement”), was presented to Board Chairman Frank Gihan and University President Ivory V. Nelson; and

WHEREAS, Pennsylvania Governor Ed Rendell and Attorney General Mike Fisher were involved in the negotiation of the Agreement and each of them gave their assurances to Board Chairman Frank Gihan and University President Ivory V. Nelson that they would ensure that the University’s interests in the Barnes Litigation would be protected by Attorney General Fisher in the event the University were to withdraw from the Barnes Litigation as required by the Agreement; and 

WHEREAS, Governor Rendell and Attorney General Fisher further assured Board Chairman Frank Gihan and University President Ivory V. Nelson that the language included in Paragraph 1 of the Agreement which states “The election of such persons nominated by Lincoln University shall not be unreasonably withheld” is intended to apply not only to the nomination of three additional Designated Trustees to be added to the Barnes Board immediately following Court approval of the Amended Petition, but to the nomination and election of all Trustees by Lincoln University pursuant to Sections 5.4 and 5.5 of the proposed Bylaws and to the removal of Trustees pursuant to Section 5.8 of such Bylaws; and

WHEREAS, In accordance with the spirit of the vote of the Executive Committee, on Friday, September 12, 2003, and based upon the assurances of Governor Rendell and Attorney General Fisher, Board Chairman Frank Gihan executed the Agreement; and 

WHEREAS, The Board of Trustees, based upon the continued assurances of Governor Rendell and Attorney General Fisher made to the Board at this meeting, desires to accept the recommendation of the Executive Committee and to approve the Agreement and settle the Barnes Litigation on the terms set forth in the Agreement on the condition that the proposed Bylaws as presented to the Court are amended (1) to provide in Section 5.3 of such Bylaws that Lincoln University shall designate three (3) Trustees for election to the Board as part of the process of increasing Board membership to fifteen (15) and that the election of the individuals designated by Lincoln shall not be unreasonably withheld without good cause; (2) to provide in Sections 5.4 and 5.5 of those Bylaws that nomination and election of individuals nominated by Lincoln University to serve as Trustees of the Barnes Foundation will not be unreasonably withheld by the Nominating Committee of the Barnes Board of Trustees or by the Barnes Board itself without good cause; and (3) to provide in Section 5.8 of those Bylaws that no Trustee shall be removed from office without good cause; and

WHEREAS, the Attorney General has proposed amendments to Sections 5.4, 5.5 and 5.8 of the Bylaws which incorporate the changes to those sections of the Bylaws upon which the Board of Trustees desires to condition its approval of the Agreement, a copy of which is attached to this Resolution; now, therefore it is hereby

RESOLVED, That the Agreement is approved on the condition that the proposed Bylaws as presented to the Court are amended (1) to provide in Section 5.3 of such Bylaws that Lincoln University shall designate three (3) Trustees for election to the Board as part of the process of increasing Board membership to fifteen (15) and that the election of the individuals designated by Lincoln shall not be unreasonably withheld without good cause; and (2) as set forth in the amendments to Sections 5.4, 5.5 and 5.8 of the Bylaws proposed by the Attorney General, which are attached hereto; and further

RESOLVED, That this Resolution shall be maintained as part of the permanent records of the University.
 
 

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