California Institute of Technology 1969 Financial Report

CALIFORNIA INSTITUTE OF TECHNOLOGY 1969 Financial Report TEACHING AND RESEARCH - A FINANCIAL PREDICAMENT Student fees ... Endowment and investment income earned... Gifts received .. Instruction and departmental research....... Sponsored programs, direct costs............. Jet Propulsion Laboratory, direct costs....... Endowment funds, at market value... Number of faculty members. Number of students.... $ HIGHLIGHTS Year ended June 30 1969 1968 3,067,000 $ 2,674,000 6,086,000 6,158,000 12,289,000 15,194,000 9,116,000 8,150,000 11,935,000 12,156,000 143,626,000 214,329,000 120,825,000 123,500,000 618 627 1482 1520 California Institute of Technology 1201 East California Boulevard Pasadena, California 91109 CALIFORNIA INSTITUTE OF TECHNOLOGY TEACHING AND RESEARCH - A FINANCIAL PREDICAMENT ROBERT B. GILMORE, Vice President for Business and Finance The California Institute of Technology, like nearly all educational institutions, faced a basic financial problem in the fiscal year 1969: Costs are rising faster than revenues. Machines have been developed to increase the productivity of workers in other fields. But in education, increased productivity is limited by the needs of the students for individual attention. Mass production techniques have not proven very effective in producing creative, intelligent, socially conscious human beings. The two dominant costs in education - salaries and facilities - have risen far more rapidly than other costs in our economy. Thus the cost per unit of output in education has been rising much faster than the national rate of inflation. The result is a financial strain on all colleges and universities. Caltech's receipts from both private gifts and federal programs declined in 1969, and government agencies have indicated that their support of students and research will be even less in the coming years. A growing emergency is faced by independent and state-supported universities alike. One conclusion is emerging. Federal programs for higher education must be increased sharply if public and private universities are to meet the demands placed on them by our society. This report concentrates on Caltech's four major problems in the fiscal year 1969, and on the actions taken by the Institute to meet these problems: (1) Federal Sponsorship, (2) Gifts, (3) Management of Endowment, and (4) Tuition. 2 FEDERAL SPONSORSHIP In response to a Congressional and Executive directive, the National Science Foundation imposed a ceiling upon the use of grant money at each grantee institution. This ceiling, announced two months after the beginning of the 1968-69 year, caused severe problems since many purchase commitments and annual predoctoral and postdoctoral appointments had already been made. The ceiling affected 72 faculty research administrators, who faced up to the emergency. The rate of research expenditures under NSF grants dropped appreciably. However, Caltech felt obliged in many cases to subsidize projects rather than disband a research team immediately, and thereby deny graduate students employment and research experience. The general mood of the American public today seems to reflect less interest in research of a basic nature and more desire for immediate applications of scientific advances. Congressional attitudes are shown in the recent requirement that all future Defense Department projects have "a direct and apparent relationship to a specific military function or operation." The National Science Foundation is to assume more responsibility for nonmilitary research and development as well as almost all basic research. This Defense Department mandate affected Caltech when the Office of Naval Research transferred many of its projects to NSF without the funds to carry them out. Fortunately, NSF announced partial restoration of its cuts in spending after three months. The year as a whole showed a 2% decrease in research activity. CALIFORNIA INSTITUTE OF TECHNOLOGY CAMPUS FEDERAL RESEARCH EXPENDITURES (DIRECT) By Division and By Agency Years ended June 30 Biology Chemistry and Chemical Engineering .. Engineering and Applied Science Geological Sciences Humanities and Social Sciences Library .. Palomar Observatory Physics, Mathematics and Astronomy 1967 1968 1969 $ 1,766,290 $ 1,894,691 $ 1,757,423 1,616,725 1,665,739 1,662,638 2,120,605 1,251,701 2,044,120 1,381,206 2,206,726 1,195,347 3,074 399,287 808 12,327 395,511 6,465 11,072 402,603 4,064,949 $11,222,631 3,535,765 $10.930.167 3,434,437 $10.676.711 Public Health Service. National Science Foundation Atomic Energy Commission Department of Defense Air Force Army Navy National Aeronautics and Space Administration Department of Transportation Department of Interior.... Department of Agriculture Office of Education.. Other $ 2,671,772 1,674,957 2,106,649 992,630 287,097 1,602,376 1,817,591 46,182 23,377 $11,222,631 $ 2,534,830 2,096,113 2,056,120 770.841 238,188 1,609,497 1,435,465 83,802 69,021 13,135 23,155 $10,930,167 $ 2,558,210 2,254,863 1,940,883 736,865 219,729 918,570 1,674,439 145,328 121,280 57,838 11,072 37,634 $10,676,711 3 At Caltech there are parallel changes in the research objectives of some faculty members who are turning more to the crucial problems of environment and behavior. Expansion of the division of humanities and social sciences is progressing, and the divisions of biology and engineering are becoming more involved in research on environmental control and behavioral biology. But these new efforts are small compared with the established programs of basic research in the physical sciences and will require additional new revenues from private sources. The sponsorship of basic scientific research is now being reexamined at the federal level. Without this sponsorship, sorely needed new basic knowledge will not be forthcoming. Society will then be less equipped to grapple with the greater challenges of the decades ahead. Past experience proves that the progress of society depends upon continuous advances in fundamental new knowledge. Prolonged and severe cuts in university basic research endeavors would prove to be shortsighted indeed Students — First Term Registration Graduates Undergraduates Faculty Members 1500 1000 500 1965 1966 1967 1968 Years ended June 30 STUDENT ENROLLMENT-FACULTY MEMBERS 1969 CALIFORNIA INSTITUTE OF TECHNOLOGY Student aid from United States Government funds decreased 7%, and in only a few cases was it possible to substitute Institute funds. This direct aid, along with employment on research projects, helps outstanding students to come to Caltech regardless of their financial resources. The Institute expects a more severe drop in federal support for students in the future. During the next two years, both NSF and the National Aeronautics and Space Administration will completely phase out their programs of graduate student assistance, and the Office of Education is materially reducing the number of its fellowships. Student loans from private and federal funds have increased and continue to assist needy students. However, Caltech student aid funds will be insufficient to maintain present graduate enrollment levels unless new student aid revenues are found. The Jet Propulsion Laboratory, which is operated by the Institute for the National Aeronautics and Space Administration, also experienced severe contract cutbacks. Direct costs decreased one-third, as compared with the previous year. Although the reduced support for JPL did not hurt the academic program, it was felt heavily at the laboratory in reduced industrial subcontracts. Since World War II days JPL has been operated by Caltech as a public service which benefits faculty and students through exposure to JPL engineering and systems work. JPL is now seeking new ways to apply the capabilities it has developed in unmanned planetary exploration to the needs of society. Some of the applications include medical x-rays enhanced through computer techniques, systems analysis of mass transportation problems, and new uses for space program materials and techniques. Millions of Dollars 250г 200 150 100 50 1959 60 61 62 63 64 65 66 67 68 69 Years ended June 30 JET PROPULSION LABORATORY DIRECT EXPENDITURES 5 GIFTS Percent 60 40 20 1965 66 67 68 Years ended June 30 FEDERAL SPONSORSHIP 69 Percent 60 Caltech received a total of $12,289,000 in gifts from foundations, corporations, and individual donors during the year, compared with $15,194,000 in 1968 and $14,971,000 in 1967. The graph on page 8 shows gifts according to the intended purpose. Funds unspecified as to purpose amounted to $3,432,000 or 28% of the total. These unrestricted gifts are especially valuable because the Trustees have wide latitude in assigning them for capital uses or to make up deficits in operating costs. During 1968-69 major bequests of $3,800,000 were withdrawn from endowment investment for essential facility projects for which new gifts could not be found. These projects included steam and refrigeration system improvements, parking lots, offices for administration, alteration and modernizing of older buildings. Percent 60 Percent 60 40 40 40 20 1965 66 67 68 Years ended June 30 69 STUDENT FEES 20 20 0 1965 66 67 Years ended June 30 68 ENDOWMENT INCOME 69 1965 66 67 68 Years ended June 30 GIFTS APPLIED 69 MAJOR SOURCES OF REVENUE As a percent of total educational expenditures (auxiliaries excluded) 7 8 Current Purposes Restricted Unspecified Millions of Dollars 10 9 8 7 Other Plant Fund •Endowment Fund 5 4 0 1967 1968 Year ended June 30 GIFTS RECEIVED 1969 This meant that future income had to be sacrificed in order to finance today's plant needs. In addition, it was necessary to withdraw $4,384,000 from unexpended gift balances for support of operations, compared with $3,879,000 the previous year. In this period of financial crisis, Caltech more than ever needs increased gift support from foundations, corporations, alumni, and other individual donors. The only alternative is an erosion of endowment and ultimately a reduction in programs of education and research. Caltech must convey the message that investment of funds in its teaching and research is vital to our nation and indeed to the free world. The Institute's faculty and the students it educates to become the creative, scientific leaders of tomorrow constitute a national resource of inestimable value. MANAGEMENT OF ENDOWMENT To help meet the challenge of increased financial pressure and price inflation, Caltech is taking steps to increase the total return on its endowment investments. In January 1967 Caltech granted broad latitude to an outside manager for investment of the readily marketable equities and the fixed income portions of its Consolidated Endowment Pool. On July 1, 1969, the equity portfolio was divided equally between two managers to put greater emphasis upon investment performance. The operating agreements are designed to encourage aggressive and attentive management. Investment objectives are a maximum total return (interest and dividend yield plus capital appreciation) within risks CALIFORNIA INSTITUTE OF TECHNOLOGY appropriate for the Institute. Holdings are mainly in common stocks of companies considered to have growth potential. Included also in the Consolidated Pool (shown below as Other investments) are some common stocks, real estate, and mineral rights which cannot be sold as yet or which have limited markets. As these internally managed special investments are liquidated, the proceeds are added to the equity portfolio. ENDOWMENT INVESTMENTS Market Value at June 30 1969 1968* Consolidated Endowment Pool: Equity portfolio Fixed income portfolio Other investments Total pooled investments Less current and trust funds included Endowment funds pooled Specific investments related to individual endowment funds Total endowment invested $ 85,568,000 19,563,000 19,772,000 124,903,000 $ 86,535,000 21,006,000 20,497,000 128,038,000 8,100,000 116,803,000 7,919,000 120,119,000 4,022,000 $120,825,000 *Certain transfers made during 1968-69 are shown retroactively for purposes of comparability. 3,381,000 $123,500,000 The Institute also manages the investment of various trust funds, most of which are invested separately to produce income for life beneficiaries, as well as to experience moderate growth. Preparations are now under way to establish a trust investment pool to make available to donors the advantages of diversification and to facilitate intensive management, provided government tax regulations now being revised will permit such pools. Millions of Dollars 150 125 100 Market Value 75 Book Value (Including realized capital gains) 50 25 1965 1966 1967 at June 30 ENDOWMENT FUND 1968 150 125 100 75 50 25 1969 10 TUITION Together with gifts and endowment income, student fees provide the revenues for support of instructional activities, both for direct teaching costs and for related, supporting services. This year the annual tuition was raised after three years at $1,800 to $2,100, an average increase of 5½2% per year. Previously, students faced an increase only once during four years. Now annual adjustments are planned, a pattern followed by many universities. As educational costs rise, gifts, endowment income, and tuition must all be increased to maintain Caltech's standards of education. LOOKING AHEAD Caltech's financial problems in the year 1969 were a reflection of the major economic trends of the nation and the resulting effects on higher education. The fight against inflation brought curtailment of government research and tight money. Business uncertainty has meant fewer gifts. Caltech's responses are new efforts to increase gifts and endowment growth, and a policy of annual tuition increases. For the future, Caltech intends to continue in the direction charted by its founders: to teach in small classes; to maintain an atmosphere of freedom and research; and to concentrate on a select number of fields, seeking preeminence in each field and insisting on excellence as a minimum. The Institute will face the challenge of severe financial pressures with determination not to compromise its traditional standards of quality and selectivity. To secure the Institute's financial position, President Harold Brown has called upon academic and administrative officers, working together, to forecast financial resources and to propose allocations consistent with Caltech's academic and social objectives. These proposals will be presented periodically to the Trustees for discussion and approval. By such planning Caltech will insure that all funds are used to strengthen and expand work in its chosen areas. Other programs must necessarily expand at a slower rate, or be reduced, when total funds are inadequate. CALIFORNIA INSTITUTE OF TECHNOLOGY 11 12 FINANCIAL EXHIBITS Not all of the Institute's assets can be shown on financial reports. Even more valuable than buildings and endowment is Caltech's 618-member faculty, once described by Fortune magazine as "probably America's richest concentration of talents in fundamental sciences." In 1969 Sweden's Royal Academy of Science awarded the Nobel Prize to two more Caltech faculty members: Max Delbruck, professor of biology, shared the prize in physiology and medicine; and Murray Gell-Mann, who is the Robert Andrews Millikan Professor of Theoretical Physics, received the prize in physics. The awards brought to 14 the number of Nobel Prizes presented to Caltech faculty and alumni. What financial statements can tell is the story of the stewardship of the funds entrusted to Caltech. The financial condition of Caltech at June 30, 1969 is reported, with comparable figures for the previous year-end, on the Balance Sheet on pages 14 and 15. The Statement of Changes in Fund Balances on pages 16 and 17 reports the major items that affected the fund accounts, and relates the information on the Statement of Current Revenues and Expenditures (page 18) with the beginning and ending fund balances from the Balance Sheet. The financial affairs of educational institutions, for financial report purposes, are reported by major fund groups. Here is a brief explanation of the traditional terminology used: Current Funds include the accounts involved in the day-to-day operations of the Institute and the unexpended funds held to meet future operating requirements. Loan Funds have been established by gifts over many years, and by government grants, for use as revolving funds for student loans. CALIFORNIA INSTITUTE OF TECHNOLOGY Endowment and Similar Funds report the carrying value of the various assets comprising the principal of endowment funds entrusted to the Institute in perpetuity, and quasi-endowment funds which, although expendable, have been designated by the Trustees to be held for investment to produce income. Annuity and Life Income Funds are those gifts which are received subject to living trust agreements. Plant Funds are a combination of unexpended funds to be used for plant renovation or construction, and the cost of plant assets in use. 13 BALANCE SHEET (in thousands) 14 ASSETS CURRENT FUNDS Cash Investments (note B) . Accounts receivable— United States Government (note A). Other Prepaid expenses and other assets.... Investment in and advances to other funds (note B). LOAN FUNDS Cash Investments (note B) Notes receivable Investment in assets of other funds. ENDOWMENT AND SIMILAR FUNDS Cash Investments (notes B and D). Advances to other funds.. ANNUITY AND LIFE INCOME FUNDS Cash Investments (note B) Investment in endowment and similar fund assets. PLANT FUNDS Cash Accounts receivable-United States Government Investments r...... Investment in assets of other funds. Investment in campus properties at cost— Land Buildings Equipment $ $ June 30 1969 1,081 13,888 24,991 974 1,143 11,072 53,149 11 23 1,603 278 1,915 1968 $ 1,464 332 26,458 904 1,134 15,677 $ 45,969 25 22 1,368 311 1,726 $ 488 113,665 $114,153 $ 113 119,551 4,612 $124,276 $ 72 11,134 711 $ 11,917 $ $ 58 9,114 641 9,813 $ 191 294 9,953 3,516 47,744 32,992 $ 94,690 $ $ 541 238 2,276 6,567 3,385 43,755 30,346 87,108 CALIFORNIA INSTITUTE OF TECHNOLOGY (a nonprofit California corporation) 1969 June 30 1968 $ 25,486 992 400 10,231 $ 1,176 14,864 53,149 $ $ 1,218 697 1,915 $ 344 8,324 78,386 27,099 $114,153 $ 71 393 11,453 $ 11,917 360 3,066 9,525 892 80,847 $ 94,690 $ 27,749 983 373 1,676 15,188 $ 45,969 $ $ 1,030 696 1,726 $ 324 23,196 74,231 26,525 $124,276 $ $ 58 552 9,203 9,813 671 4,060 8,637 717 73,023 $ 87,108 15 LIABILITIES AND FUND BALANCES CURRENT FUNDS Accounts payable and accrued expenses (note A). Advances from United States Government to finance research agreements... Deposits and advance collections........ Share of other Institute funds in investments. Fund balances (Exhibit 2) (note C) - Unrestricted-allocated Restricted LOAN FUNDS Returnable to donors Fund balances (Exhibit 2). ENDOWMENT AND SIMILAR FUNDS Funds held in custody for others... Share of other Institute funds in investments.. Fund balances (Exhibit 2) - Endowments Quasi endowments ANNUITY AND LIFE INCOME FUNDS Undistributed income Interest bearing advances payable to other funds. Fund balances (Exhibit 2). PLANT FUNDS Accounts payable Interest bearing advances payable to other funds.. Fund balances (Exhibit 2) - Unexpended: For plant additions For renewals Invested in plant Exhibit 1 16 SUMMARY OF CHANGES IN FUND BALANCES Year Ended June 30, 1969 (in thousands) Current Funds Gifts, grants and bequests received .. Endowment and investment income (note D) .. Applied to current revenues (note C).. Expenditures for campus land, buildings and equipment: Current funds... Unexpended plant funds. Allowances under sponsored research and other programs for use of facilities and renewal of plant.... Retirements and disposal of plant facilities.... Net gain on disposal of investments.. Transfer from (to) other funds: Current year gifts and bequests. Other transfers Other additions (deductions) Unrestricted Gifts Other Total $3,432 $3,432 32 $1,181 1,213 (3,348) (1,212) (4,560) Balance June 30, 1968 (Exhibit 1).. Balance June 30, 1969 (Exhibit 1). $ (886) 670 (69) (169) 522 353 (300) (331) 1,154 $ 823 (886) 370 (69) (500) 1,676 $1,176 CALIFORNIA INSTITUTE OF TECHNOLOGY Loan Funds Endowment and Similar Funds Annuity and Life Income Funds Restricted $ 3,381 4,334 (5,233) $ 6 32 $ 182 $ 2,948 247 (1,132) (1,731) (190) (324) 15,188 $14,864 (7) (30) 1 696 $697 4,338 2,018 (1,870) 61 4,729 100,756 $105,485 62 (762) 2 2,250 9,203 $11,453 Exhibit 2 Plant Funds Unexpended $ 1,894 507 Invested in Plant $ 446 2,056 6,099 (6,099) 941 8 3,939 (127) 1,063 9,354 $10,417 (782) 5 7,824 73,023 $80,847 |17 18 STATEMENT OF CURRENT FUNDS REVENUES AND EXPENDITURES (in thousands) REVENUES Educational and general: Student fees Endowment income Gifts applied Sponsored programs, principally research agreements - United States Government Other Recovery of indirect costs. Other sources Total educational and general Student aid Auxiliary enterprises Reimbursement by United States Government for direct costs and management allowance of organized research at Jet Propulsion Laboratory. Total revenues EXPENDITURES Educational and general: Instructional and departmental research. Sponsored programs, principally research agreements. Libraries •...... Student services Operation and maintenance General administration General institutional expense Total educational and general Student aid Auxiliary enterprises Direct costs of organized research at Jet Propulsion Laboratory. Total expenditures Exhibit 3 Year ended June 30 1969 1968 3,067 3,167 4,384 10,677 1,367 3,613 204 26,479 2,330 1,676 30,485 $ 2,674 3,628 3,879 10,930 1,309 3,372 221 26,013 2,443 1,519 29,975 145,773 $176,258 215,995 $245,970 $ 9,116 $ 8,150 11,935 12,156 641 586 616 560 2,671 2,418 1,841 1,836 1,721 1,872 28,541 27,578 2,340 2,450 1,751 1,613 32,632 31,641 143,626 214,329 $176,258 $245,970 CALIFORNIA INSTITUTE OF TECHNOLOGY 19 NOTES TO FINANCIAL STATEMENTS (Tune 30, 1969) Note A-Accounts payable include $22,500,000 representing costs incurred prior to June 30, 1969 (a substantial portion of which had not been billed to the Institute as of that date) under contracts providing for reimbursement by the United States Government and accordingly such costs are also recorded as accounts receivable from the United States Government. Note B-Institute investment at June 30, 1969 comprised the following: Current funds Loan funds (in thousands) Endowment and similar funds $105,053 Annuity and life income funds Marketable securities Savings accounts and short term commercial obligations ... Real estate, etc. less amortization and accumulated depreciation Mortgages, notes, etc. $ 5,345 $11,376 $23 614 1,101 2,512 $13,888 $23 7,481 517 $113,665 4,480 208 $11,134 Investments are stated at their approximate market or appraised value at date of gift, or at cost if purchased by the Institute, less applicable amortization and depreciation on real estate investments. Quoted market value of marketable securities of the endowment and similar funds and annuity and life income funds at June 30, 1969 was $117,130,000 and $6,021,000 respectively. Accumulated amortization and depreciation of real estate carried in the same funds was $1,406,000 and $569,000 respectively. Note C-In accordance with generally accepted accounting principles for colleges and universities, gifts and investment income are recorded as income for the period in which they are expended or applied. Note D-The Institute is the income beneficiary of certain funds, recorded at a nominal value, held in trust by others. The income derived from these funds amounted to $353,000 for the current year and has been included as endowment and investment income in the Summary of Changes in Fund Balances. OPINION OF INDEPENDENT ACCOUNTANTS October 10, 1969 To the Board of Trustees of California Institute of Technology In our opinion, the accompanying balance sheet and the related statements of current funds revenues and expenditures and changes in fund balances (Exhibits 1 to 3) present fairly the financial position of California Institute of Technology at June 30, 1969 and the results of its operations for the year, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Our examination of these statements was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. Pric Watihue do. Price Waterhouse & Co. 20 OFFICERS ADMINISTRATIVE OFFICERS HAROLD BROWN, President ROBERT F. BACHER, Vice President and Provost ROBERT B. GILMORE, Vice President for Business and Finance WILLIAM H. CORCORAN, Vice President for Institute Relations THEODORE C. COMBS, Secretary to the Board of Trustees LYMAN G. BONNER, Director of Student Relations HARDY C. MARTEL, Executive Assistant to the President CHAIRMEN OF DIVISIONS CARL D. ANDERSON, Physics, Mathematics and Astronomy FRANCIS H. CLAUSER, Engineering and Applied Science GEORGE S. HAMMOND, Chemistry and Chemical Engineering EUGENE M. SHOEMAKER, Geological Sciences ROBERT L. SINSHEIMER, Biology HALLETT D. SMITH, Humanities and Social Sciences JET PROPULSION LABORATORY WILLIAM H. PICKERING, Director JOHN E. CLARK, Deputy Director DEANS AND STUDENT AFFAIRS H. FREDERIC BOHNENBLUST, Dean of Graduate Studies ROBERT A. HUTTENBACK, Dean of Students PETER M. MILLER, Director of Admissions and Director of Undergraduate Scholarships JOHN B. WELDON, Registrar BUSINESS AND FINANCIAL OFFICERS J. MAcL. HUNT, Assistant to the Vice President and Staff Counsel DONALD R. FOWLER, Deputy Staff Counsel IVAN F. BETTS, Treasurer DAVID W. MORRISROE, Director of Financial Services ROBERT T. BAKER, Controller RICHARD L. MULLIGAN, Director of Business Services L. TERRY SUBER, Director of Physical Plant ROYAL H. TYSON, Campus Architect KERMIT A. JACOBSON, Director of Property Management and Assistant Treasurer W. J. HARMEYER, Director of Internal Auditing and Consulting Staff ALLAN J. LINDSTROM, Sponsored Research Administrator T. L. STAM, Patent Officer CALIFORNIA INSTITUTE OF TECHNOLOGY BOARD OF TRUSTEES July 1, 1968-June 30, 1969 ROBERT O. ANDERSON ROY L. ASH LLOYD L. AUSTIN* STEPHEN D. BECHTEL, JR. ARNOLD O. BECKMAN J. G. BOSWELL I JOHN G. BRAUN HAROLD BROWN CHESTER F. CARLSON* NORMAN CHANDLER WILLIAM CLAYTON HENRY DREYFUSS J. S. FLUOR JOHN S. GRIFFITH HERBERT L. HAHN STANTON G. HALE ROBERT V. HANSBERGER FRED L. HARTLEY WILLIAM A. HEWITT REED O. HUNT ROBERT S. INGERSOLL DEANE F. JOHNSON CHARLES S. JONES THOMAS V. JONES EARLE M. JORGENSEN WILLIAM M. KECK, JR. AUGUSTUS B. KINZEL FREDERICK G. LARKIN, JR. L. F. McCOLLUM LOUIS E. NOHL RUDOLPH A. PETERSON SIMON RAMO HENRY E. SINGLETON HOWARD G. VESPER HARRY J. VOLK RICHARD R. VON HAGEN THOMAS J. WATSON, JR. LAWRENCE A. WILLIAMS ARTHUR M. WOOD WILLIAM E. ZISCH TRUSTEES EMERITI JOHN E. BARBER LEE A. DuBRIDGE JOHN O'MELVENY ALBERT B. RUDDOCK ELBRIDGE H. STUART *Deceased