EXHIBIT 6
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
BALTIMORE FIELD OFFICE
10 South Howard Street, 3RD Floor
Baltimore, MD
____________________________________
Walter Flournoy,
on behalf of himself
and all other persons
similarly situated,
v.
Sean O’Keefe,
Administrator
National Aeronautics
and
Space Administration,
Agency.
____________________________________
EEOC No. 120-A2-1267
This
Administrative Order is entered pursuant to the Settlement Agreement (the
“Agreement”) resolving Flournoy v. O’Keefe, EEOC No.
120-A2-1267X (the “Action”) to specify the purposes, terms,
funding, operation and disbursement of the Settlement Fund, as delineated in
the Agreement, to appoint the Trustees and Administrators of the Settlement
Fund (the “Administrators”), and to establish and define the
Trustees and Administrators’ duties, authority, responsibilities and
obligations.
I.
ESTABLISHMENT OF THE
FUND.
A.
Name, Status, and
Trustees and Administrators of the Fund.
1.
Name and Status as a
Trust. The common fund agreed to
by
the parties in the Agreement is hereby established and shall be known as the
NASA Goddard Settlement Fund (the “Fund”). The Fund shall be a trust under the
laws of the District of Columbia.
2.
Fund Portions. The Fund will consist of the following
three
portions:
a.
Claims Portion. One portion of the Fund shall be used
to make distributions of back pay,
prejudgment interest, and compensation for emotional distress to or on behalf
of Class Members and for taxes (the “Claims Portion”). The Class Members include the Class
Agent and all members of the Class as defined in Part II.D. of the Agreement. The Claims Portion shall consist of
$2,286,459.00, and any income earned by the Fund allocable to the Claims
Portion. The Claims Portion shall
be administered for the benefit of Class Members as a group and not for the
benefit of individual Class Members, except insofar as they receive awards from
the Fund.
b.
Contribution
Fund. One portion of the Fund
shall be
used to make distributions to or on
behalf of Mediation Representatives (the “Contribution
Portion”). The
Mediation Representatives, as defined in Part II.A of the Agreement, include
Walter Flournoy, William Weston, Pat McClain, William Reaves and Leroy
Brown. The Contribution Portion
shall consist of $500,000, and any income earned by the Fund allocable to the
Contribution Portion. The Contribution
Portion shall be administered for the benefit of the Mediation Representatives
as a group.
c.
Litigation Fund. The third portion of the Fund shall be
known
as the “Litigation Portion.” It shall consist of $928,819.00, and any income earned
by the Fund allocable to the Litigation Portion. The Litigation Portion shall be used to pay all
attorneys’ fees and expenses incurred by Class Counsel up through Final
Approval of the Agreement.
3.
Qualified Settlement
Fund. The Fund, including all
three
portions and the income thereon, shall
be a single qualified settlement fund within the meaning of Treas. Reg.
Sections 1.468B-1 et seq. The
division of the qualified settlement fund into three portions is for accounting
and bookkeeping purposes only.
NASA Goddard shall provide a statement to the Administrators that
complies with Treasury Regulation § 1.468B-3(e), no later than February 15
of the year following each calendar year in which it made a transfer to the
Fund. Such statement shall include
(a) the legend “§ 1.468B-3 Statement” at the top of the first
page, (b) NASA Goddard’s name, address, and EIN, (c) the Fund’s
name, address, and EIN, (d) the date of each transfer, (e) the amount
transferred, and (f) a description of any property transferred and its fair
market value on the date of the transfer.
4.
Trustees and
Administrators. The oversight of
the Fund shall
be the responsibility of the Trustees
who shall be Maia Caplan and Jessica Parks, who shall also serve as
Administrators. These Trustees and
Administrators are collectively referred to as
“Administrators.” The
status and powers of the Administrators shall be as defined by this Order and
the Settlement Agreement.
5.
Other Fund
Characteristics. The entire
amount paid by
NASA
Goddard into the Fund pursuant to the Agreement, and all income generated by
that amount, shall be in custodia legis and immune from attachment, execution,
assignment, hypothecation, transfer or similar process by any third party or
Claimant. Payments made to the
Fund irrevocably vest in the Administrators at the time of payment. Once the Fund vests in the
Administrators, it is irrevocable during its term and NASA Goddard has divested
itself of all right, title and interest, whether legal or equitable, in the
Fund. The Administrators may make
disbursements out of the Fund at any time and from time to time only in
accordance with this Order.
6.
Expiration of the
Fund. Subject to paragraph II.D of
this
Order,
the Fund, shall expire one year from the Effective Date, provided that the Fund
shall not terminate until its liability for any and all government fees, fines,
taxes, charges and excises of any kind, including income taxes, and any
interest, penalties or additions to such amounts, are, in the
Administrators’ sole discretion, finally determined and all such amounts
have been paid by the Fund.
7.
Alteration or
Amendment. The
Administrators may apply to
the
presiding Administrative Judge to alter or amend this Order at any time, or
from time to time; provided, however, that no such amendment or modification
shall in any way affect: (a) the
purposes of the Fund; (b) the powers, duties and liabilities of the
Administrators under this Order; (c) the total amount of money NASA Goddard is
required to pay into the Fund; (d) the qualification of the Fund as a
“qualified settlement fund” under Section 468B of the Internal
Revenue Code and regulations there under; or (e) the terms of the Agreement.
B.
Purpose and Funding
of the Fund.
1.
Purpose. The Fund is established exclusively for
the purpose
of:
(a) making distributions as compensation for lost wages, prejudgment
interest and emotional distress to Class Members and Mediation Representatives
who execute and submit (i) a signed release in the form of Exhibit 2 to the
Agreement (“NASA Goddard’s Release”), (ii) a signed release
in the form of Exhibit 3 to the Agreement (“Administrators’
Release”), (iii) an executed W-9; and (iv) a Certificate of Residency;
(b) making payments to Class Counsel and vendors that may have been engaged by
Class Counsel to assist with Class Counsel’s prosecution of the case; and
(c) paying related employment, withholding and other applicable taxes, in
accordance with the Agreement.
2.
Funding. The Fund consists of the amount of
three million
seven hundred fifteen thousand two hundred and
seventy-eight dollars ($3,715,278.00) plus any income earned on such amount and
additional taxes as provided for in the Agreement to pay the employer portion
of FICA and other taxes. Such
amount is to be wire transferred by NASA Goddard into an account in the name of
“NASA Goddard Settlement Fund” at Chevy Chase Bank within thirty
(30) days of the Final Approval of the Agreement. The Fund also consists of any and all interest that accrues
on the above-referenced deposits.
The Administrators shall furnish a copy of this Order to Chevy Chase
Bank.
II.
Administration of the
Fund.
A.
Awards to Class
Members.
All decisions concerning the awards from the Claims
and Contribution
Portions in settlement of the claims of the Class
Members are the sole responsibility of the Administrators, subject to the
Agreement and the provisions of this Order. All awards to Class Members and Mediation Representatives
are confidential, and shall not be disclosed except on order of the presiding
Administrative Judge other than to the Administrators, the presiding
Administrative Judge, the awardees, and such legal and accounting personnel and
other administration personnel, including at NASA Goddard, as are required by
the Administrators and by the awardee to know as part of the allocation and
distribution process.
1.
Award Elements. Each award from the Claims Portion
to a Claimant shall include back pay, compensation
for emotional distress, and prejudgment interest. The allocation shall be 33% back pay, 40% compensation for
emotional distress, and 27% prejudgment interest.
2.
Allocation
Formula(s). The Claims and
Contribution
Portions shall be allocated among all Class Members
and Mediation Representatives, respectively as provided for in the Agreement
and Exhibit 5.
3.
Distributions. The Administrators shall distribute
awards to Class Members in three separate checks: one for back pay/ wages; one for compensation for emotional
distress; and one for prejudgment interest.
4.
Releases and
Certificates of Residency. No
award shall be
paid to any Claimant prior to receipt by the
Administrators of four documents executed by such Claimant: NASA Goddard’s Release, the
Administrators’ Release, a completed IRS Form W-9, and a Certificate of
Residency. The Administrators
shall deliver a copy of each such Release to NASA Goddard after receipt by the
Administrators.
B.
Payments from the
Litigation Portion.
The Administrators shall disburse funds from the
Litigation Portion at such time
as the Administrators deem appropriate. The Administrators shall pay from this
Portion all income taxes attributable to interest earned on this Portion. The Administrators may disburse all
moneys in the Litigation Portion, without creating any reserves.
C.
Withholding, Payment
and Reporting of Taxes.
The Administrative Judge, the Administrators and
NASA Goddard recognize that there will be federal and state income tax and
employment tax withholding and reporting requirements in connection with
distributions to Class Members from the Fund. The Order sets out the responsibilities, liabilities and
obligations of the parties with respect to any such withholding, payment and
reporting requirements.
1.
Definitions. For purposes of this Order, the term
income taxes shall mean taxes imposed or measured by taxable income. Federal and state income tax
withholding will be required on the wage portion of each distribution. In addition, withholding will be
required on other portions of the distribution if backup withholding applies to
a particular Class Member. Federal
income tax will be withheld on the wage portion of each distribution at a rate
of 27%, and on the other portions of each distribution at a rate of 30% if
backup withholding applies. State
income tax will be withheld at the applicable rate based on the residence of
the Class Member. The term
employment taxes shall mean both the employee and employer portions of FICA
(Social Security and Medicare taxes), state unemployment taxes, and any other
federal or state taxes imposed on employees and employers on or with respect to
wages. The term state shall
include the District of Columbia and the political subdivisions of any state.
2.
Administrators’
Responsibilities. Class Members
shall have sole responsibility to federal and state taxing authorities for
payment of taxes owing on all awards received pursuant to the Settlement. Notwithstanding the foregoing ultimate
responsibility, the Administrators shall perform the following to withhold
appropriately: (a) promptly after
the award to each Class Member and Mediation Representative is determined,
forward to NASA Goddard a list of awards and the amount constituting wage
income, along with a computation of the employer’s share of any
employment taxes due on such awards;
(b) determine the income tax and employee share of FICA to be withheld
from each distribution to a Class Member or Mediation Representative and
withhold and pay over such amounts; (c) deposit the employer’s share of
FICA and any other employment taxes required by law following receipt of such
share from NASA Goddard; (d) make and file any reports or returns due with
respect to such distributions to a Claimant or Mediation Representative,
including distribution of IRS forms W-2 and 1099. The Administrators shall have the sole responsibility to
determine and pay any income taxes owing with respect to the income earned by
the Fund, and to allocate such payments appropriately between the Claims,
Contribution and Litigation Portions.
Additionally, the Administrators shall file returns and reports with the
appropriate government agencies of the federal, state and local government with
respect to such income and distribution to the Class Members.
3.
NASA Goddard’s
Responsibility. NASA Goddard
shall, following receipt of the allocation of awards to Class Members and
computation of the employers’ share in accordance with federal, state and
local requirements, pay to the Fund the total amount of the employer portion of
the employment taxes so calculated within forty-five (45) days after receiving
such information from the Administrators.
Such payment shall be in addition to the $3,715.278.00 paid to the
Fund.
a.
Tax Reserves. The Administrators, if they deem
appropriate, may request expedited review and decision by the IRS and/or the
applicable state or local taxing authorities, with regard to the
appropriateness of the returns filed for the Fund and may establish tax
reserves to assure the availability of sufficient funds to meet the obligations
of the Fund itself and the Administrators as fiduciaries of the Fund. Such reserve shall include 50% of
the earnings of the Fund or such lesser amount that the Administrators
determine to be sufficient. The tax reserves, including any
income earned thereon, shall be used to meet the
obligations of the Fund and to hold harmless the Administrators and NASA
Goddard from any government fees, taxes, fine, charges and excise taxes of any
sort, provided, however, that the tax reserves shall not be used to hold NASA
Goddard harmless from failure to pay the employer portion of employment
taxes. The tax reserve may be used
to pay income taxes of the Fund as they are incurred. The creation of the tax reserve does not limit the amount of
taxes that the Administrators may pay from the Fund or from any income earned thereon.
5.
Cooperation of the
Parties. The Administrators and
NASA Goddard shall provide to and exchange with
each other such information as shall be reasonably necessary to file notices,
reports and returns and to make timely determinations of withholding
obligations.
D.
Termination of Fund.
1.
Unexpended
Money. If any unexpended balance
exists in
the Fund after all payments to eligible Class
Members, Mediation Representatives, and Class Counsel, and of all tax and other
obligations under the Settlement and this Order, then such balance shall be (1)
distributed to Class Members pro-rata if feasible, (2) used to offset expenses
and fees of Class Counsel and others that NASA Goddard is required to pay under the Agreement, or (3) contribute to the U.S. Treasury as
unclaimed property.
2.
Termination of
Fund. Subject to paragraph I.A.6
of this
Order, the Administrators shall, in their
discretion, determine when their liability, and the liability of the Fund, for
tax and other obligations described above has been fully satisfied, at which
time the Fund may be terminated.
Any balance remaining in the Fund at the time of such termination,
including any amount remaining in the tax reserves established pursuant to
paragraph D.2 above, when all obligations are satisfied, shall be distributed
as provided in II.D.1.
III. Powers,
Replacement and Indemnification of the Administrators.
1. Processing
Claims. The Administrators shall have all the necessary powers, and take all
necessary ministerial steps, to effectuate the settlement terms, including the
satisfaction of all of the Class Members' claims. Such powers include but are not limited to developing a
formula for the allocation of the Claims Portion in accordance with the
Agreement, receiving and processing information from Class Members pertaining
to their claims and allocations, investing, allocating and distributing the
Fund, and in general supervising the administration of the Agreement in
accordance with its terms and this Order.
The entirety of the Administrators' powers over the Fund are as
expressly stated in this Order or future order.
2. Investment of Fund.
Pending payment of awards to the Class Members and Class Counsel, the
Administrators shall invest the Fund in United States Treasury securities
and/or securities of United States agencies backed by the full faith and credit
of the United States Treasury (collectively "U.S. or U.S.-backed
securities"), in repurchase agreements collateralized by U.S. or U.S.-backed
securities, or in other interest-bearing instruments or accounts. The Administrators shall invest any
cash in the Fund in the foregoing investments as soon as practicable.
3. Reporting
and Record Keeping. The Administrators shall keep detailed and accurate accounts of all
investments, receipts, disbursements and other transactions of the Fund.
a. Inspection. All accounts, books and records
relating to the Fund shall be open for reasonable inspection by the
Administrators and by counsel for NASA Goddard. Included in the Administrators'
records shall be complete information regarding actions taken with respect to
the award of any payments to any Claimant; the nature and status of any payment
from the Fund and other information which the Administrators consider relevant
to showing that the Fund is being administered, and awards are being made, in
accordance with the purposes of the Agreement, this Order and any future order.
b. Disclosure
Limitations. The Administrators
may establish protective conditions concerning the disclosure of information
maintained by the Administrators if publication of such information would
violate any law, including rights to privacy. Any person entitled to such information who is denied access
to the Fund's records may submit a request to the presiding Administrative
Judge for such information.
However, the Administrators shall supply such information to any
Claimant as may be reasonably necessary to allow him or her to accurately
determine his or her federal, state and local tax liabilities. Such information shall be supplied in
the form and manner prescribed by relevant law.
c. Notice. Any notices or other information to be provided
to NASA Goddard hereunder shall be provided at the following address: Chief Counsel, NASA Goddard, Goddard
Space Flight Center, Code 140,
Greenbelt, MD 20771, unless
and until NASA Goddard notifies the Administrators of a different address.
B. Replacement
of Trustees and Administrators.
An
Administrator may resign by sixty (60) days written notice to the presiding
Administrative Judge, subject to approval. In the event of resignation of an Administrator, the Judge
may by order appoint a successor Administrator. Upon executing a written
acceptance of an executed copy of this Order, and on the settlement of the
accounts and discharge of the prior Administrator, the successor Administrator
shall have, without further act on the part of anyone, all the duties, powers,
functions, immunities, and discretion granted to the original
Administrators. Any Administrator
who is replaced (by reason other than death) shall execute all instruments, and
do all acts, that may be necessary or that may be ordered or requested in
writing by the presiding Administrative Judge or by any successor
Administrator, to transfer administrative powers over the Fund to the successor
Administrator. The appointment of
a successor Administrator, if any, shall not under any circumstances require
NASA Goddard to make any further payment of any nature into the Fund or
otherwise. All notices hereunder, including notices of resignation or removal
of any Administrator, must be in writing and directed to the presiding
Administrative Judge, the Administrators and, where relevant, NASA Goddard.
C. Liability and Indemnification
of Administrators.
Subject
to compliance with the Agreement terms and this Order, the Administrators shall
be free from any and all liability to the Fund in connection with the
administration of the Fund and the settlement of Class Members' claims from the
Fund, except for any loss arising out of their gross negligence and/or willful
misconduct.
1. The Fund shall indemnify
and hold harmless the Administrators as to any third-party claims against them
arising from their status as Administrators for all expenses, including,
attorneys' fees, judgments, fines, and amounts paid in settlement of any
action, which amounts are ordinarily and reasonably paid by them in connection
with such action, suit, or proceeding, but only if the Administrators acted in
good faith and in a manner they reasonably believed to be in the best interest
of the Fund and the Class Members.
IV. SEVERABILITY
If
any term or provision of this Order, or the application thereof to any person
or circumstances, is held to any extent to be invalid or unenforceable, the
remainder of this Order, or the application of such term or provision to
persons or circumstances other than those as to which it is held to be invalid
or unenforceable, shall not be affected thereby, and each term and provision of
this Order shall be valid and enforceable to the fullest extent permitted by
law. If there is any conflict
between the terms of this Order and the Agreement, the Agreement shall take
precedence. However, in the event
any of the settlement terms incorporated in this Order is held invalid, the
effect shall be to invalidate the whole Order. Any capitalized terms not defined herein have the meaning
ascribed to them in the Agreement.
IT
IS SO ORDERED.
Dated: July ___, 2002 _________________________________
Linda
A. Kincaid
EEOC
Administrative Judge