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 SETTLEMENT
AGREEMENT
This Settlement Agreement ("Agreement") is entered into
between plaintiffs David Busch, Al Byrne, Mary Lynn Mathre, Neil
Jacobs and Jeanne Lang and defendants National Organization for
the Reform of Marijuana Laws ("NORML") and Richard
Cowan, Keith Stroup, Lester Grinspoon, John P. Morgan, Ann
Druyan, David Boaz, Barbara Ehrenreich, Richard Evans, Dale
Gieringer, Ansley Hamid, Louis Lasagna, Kary Mullis, Dan Viets,
Lynn Zimmer, Jim Turney, Steve Dillon, Norman Kent, Wayne Davis,
and Gatewood Galbraith ("Individual Defendants").
WHEREAS, a dispute arose between plaintiffs and defendants
pertaining to a certain election of directors of NORML and other
matters;
WHEREAS, defendants deny any liability in connection with the
dispute;
WHEREAS, plaintiffs and defendants desire to settle this matter
thereby avoiding the burden and expense of litigation;
WHEREAS, Keith Stroup has received powers of attorney to
represent the defendants identified above, and David Busch has
received powers of attorney to represent the plaintiffs
identified above;
WHEREAS, the parties agreed in writing to a settlement of the
dispute on January 24, 1997, and agreed to further memorialize
the settlement by executing this document;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below, and without any admission of
wrongdoing or liability whatsoever, the plaintiffs and defendants
agree as follows:
1. There will be a special election of directors of NORML which
shall occur as soon as reasonably possible, supervised by the
American Arbitration Association ("AAA") or another
neutral organization acceptable to plaintiffs and defendants
("Supervisor") at a date to be later determined in
consultation with a representative of the Supervisor.
2. Those eligible to vote in the election of directors shall
include those persons who were members of NORML on January 24,
1997, and paid their dues in full by that date. In addition,
those individuals who were members of NORML on September 11, 1994
(or that date in September, 1994, closest to September 11, 1994,
in which the identity of the members of NORML can be more readily
determined by NORML's computer) and who were not members of NORML
as of January 24, 1997, but became members of NORML by payment in
full of dues on or before that date which is forty-five (45) days
prior to the date of the election, are eligible to vote. Such
individuals shall be notified of their eligibility to vote in the
special election of directors.
3. Any individual who is a member of NORML as of February 28,
1997, and who is current with their dues as of such date, is
eligible to run for one of the directorships of the organization.
In addition, those individuals who were members of NORML on
September 11, 1994 (or that date in September, 1994, closest to
September 11, 1994, in which the identity of the members of NORML
can be more readily determined by NORML's computer) and who was
not a member of NORML as of February 28, 1997, but became a
member of NORML by payment in full of dues on or before that date
which is forty-five (45) days from the date of the mailing of the
notice of the special election and the individual's right to run,
as provided above, shall be eligible to run in the special
election.
4. Richard Cowan has elected not to run in the special election
for directors, and therefore he will not run in the special
election.
5. 5. Each individual eligible to vote in the special election
shall be eligible to cast a total of seventeen (17) votes for
seventeen (17) candidates. Eligible voters may vote for fewer
than seventeen (17) candidates. Eligible voters may cast no more
than one (1) vote per any one (1) candidate.
6. Plaintiffs and NORML shall share equally the expenses of the
special election unless NORML is able, within ninety (90) days,
to secure funds to pay for the special election. Any amounts
which NORML raises which are specially designated for the
election will be deducted from the sum to be divided equally
between plaintiffs and NORML to pay outstanding election costs.
NORML will make a good faith effort to raise funds to pay for the
special election. NORML will pay a reasonable deposit to the
Supervisor to enable the Supervisor to go forward with the
special election. Any dispute as to whether plaintiffs or NORML
have fulfilled their obligations under this paragraph shall be
submitted to mediation and, if necessary, to arbitration by the
arbitrator selected by the parties to resolve disputes that arise
under this Agreement.
7. The Supervisor shall supervise and conduct the special
election.
8. The special election shall occur as soon as possible at a date
to be determined after consultation with the Supervisor.
9 a. Candidates shall be limited to providing a statement limited
to not more than three hundred (300) words. No defamatory
statements shall be included in the statement. Counsel for the
parties shall review the statements and attempt to agree as
necessary as to revisions to eliminate defamatory material, if
any. If counsel cannot so agree, the statements shall be referred
to an arbitrator selected by the parties from a list of proposed
arbitrators provided by the Superior Court of the District of
Columbia Multi-Door Dispute Resolution Division
("Multi-Door"). If the arbitrator determines that a
candidate's statement contains defamatory language, the
arbitrator shall strike such language from the statement. The
statement, with such defamatory language stricken, shall be sent
to those members eligible to vote in the election.
b. There will be two (2) mailings. The first mailing will
include: i) a notice of the special election; ii) notice of the
opportunity to become a candidate for the board of directors of
NORML; and iii) one position paper from the plaintiffs and one
position paper from the defendants, not to exceed three hundred
(300) words addressing the future orientation of NORML, without
using defamatory language. The second mailing shall contain the
ballot and the statements of the candidates to be mailed at a
date and in a form to be determined in consultation with the
Supervisor.
c. If there is a disagreement as to whether the position papers
contain defamatory material, the final decision on that issue
shall be made by an arbitrator from Multi-Door as selected above.
If, by a mutually agreed date certain, one of the parties has not
completed a non-defamatory position paper, the other party's
non-defamatory position paper will go out in the first mailing.
10. Of the seventeen directors of NORML who shall be elected
pursuant to the special election, six (6) shall serve for three
(3) year terms, six (6) shall serve for two (2) year terms and
five (5) shall serve for a one (1) year term. At the first
meeting of the directors of NORML to occur within sixty (60) days
after the announcement of the official results of the special
election, the newly elected directors shall attempt to agree as
to which of them shall serve the terms of office identified
above. To the extent the directors cannot agree as to which
directors will serve which terms, each director's term shall be
determined by lottery.
11. The first order of business at the first meeting of the
directors of NORML occurring after the special election shall be
the adoption of new bylaws.
12. NORML agrees to indemnify plaintiffs for legal expenses,
judgments, fines, and other penalties, if any, levied by the
Internal Revenue Service, or any civil court resulting from any
action taken by the executive director of NORML, or his agents,
acting in his or their official capacities, from June 1, 1992 to
September 11, 1994.
13. a. Plaintiffs and the Individual Defendants mutually release,
acquit and forever discharge each other and their respective
successors, affiliates, heirs, executors, personal
representatives, assigns, agents and employees from any and all
causes of action, claims for damages, costs, claims and liability
of any type whatsoever, whether known or unknown which each party
now has or which may hereafter accrue against any of the
aforementioned persons arising out of or relating to any fact,
matter or thing occurring from the beginning of the world to the
date of this agreement including, but limited to, all claims
which may have been asserted or could have been asserted in the
lawsuits styled David Busch, et al. v. NORML, et al., Civil
Action Nos. 1358-95 and 7905-95 ("Actions").
b. Except as provided in paragraph 12 above, Plaintiffs and NORML
mutually release, acquit and forever discharge each other and
their respective successors, affiliates, heirs, executors,
personal representatives, assigns, agents, officers, directors
and employees from any and all causes of action, claims for
damages, costs, claims and liability of any type whatsoever,
whether known or unknown which each party now has or which may
hereafter accrue against any of the aforementioned persons
arising out of or relating to any fact, matter or thing occurring
from the beginning of the world to the date of this agreement
including, but limited to, all claims which may have been
asserted or could have been asserted in the Actions.
14. This settlement shall not construed as an admission on the
part of any party or parties released of any liability whatsoever
in connection with the allegations made in the Actions.
15. Plaintiffs shall dismiss with prejudice as to all defendants,
the consolidated actions, Civil Action Nos. 1358-95 and 7905-95.
16. The undersigned hereby declare that the terms of this
Agreement have been carefully read and reviewed by them after
consultation with counsel and are fully understood and
voluntarily accepted for the purpose of making a full and final
settlement of any and all claims.
IN WITNESS THEREOF, the parties hereto have executed this
settlement agreement this 27 day of January, 1997.
David Busch [signature provided]
For above-name Plaintiffs
R. Keith Stroup [signature provided]
For above-named Defendants
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