Chairman STENNIS. All right. Now also as a part of the record I assume you wish to include at this point attachment No. 1 to which you have referred? Mr. PACKARD. Yes; attachment No. 1 is the list of directorships from which I would resign, and I might say that if any others should come to my attention later, I would propose to resign from those. I consider this job is going to take my full time, energy, and attention, if I undertake it. Chairman STENNIS. That material will be inserted in the record at this point. (The document referred to follows:) ATTACHMENT No. 1 Director, Crocker-Citizens National Bank. Member of Advisory Cmte.-Chase Manhattan National Bank. Trustee of Colorado College. Director, California State Chamber of Commerce. Director of Cmte. for Economic Development. Director, San Francisco Bay Area Council. Director, Universities Research Association. Director, National Merit Scholarship Corporation. Chairman STENNIS. I direct your attention now to attachment No. 2 which is headed "Stocks Held by David Packard (Except for HP Stock)." Do you wish to put those in the record? Mr. PACKARD. Yes; I think that should be put in the record. Chairman STENNIS. Without objection it will be admitted in the record at this point. (The document referred to follows:) ATTACHMENT No. 2 STOCKS HELD BY DAVID PACKARD (EXCEPT FOR HP STOCK) American Home Products Corp. Crocker-Citizens Natl. Bank Federated Dept. Stores, Inc. Fluke, John Mfg. Co. General Dynamics Corp. Gimbel Brothers, Inc. International Business Machines Magnavox Co. Melville Shoe Corp. Minnesota Mining & Mfg. Co. National Can Corp. Pacific Gas & Electric Co. Palo Alto Mutual Svgs. & Loan Assn. Royco Instruments, Inc. Standards Brands, Inc. United States Freight Co. Union Oil Co. of California United States Steel Corp. Chairman STENNIS. I believe every member of the committee has a copy of this letter with its attachments. Mr. PACKARD. That was my understanding. Senator BYRD, Jr., of Virginia. Mr. Chairman. Senator BYRD, Jr., of Virginia. Mr. Packard mentioned attachment No. 5. Some of the members of the committee do not have attachment No. 5. Chairman STENNIS. May we come to that in is order? The next attachment, No. 3, is "Securities To Be Disposed Of," the names of the companies. Do you wish to offer that for the record as an exhibit? Mr. PACKARD. Yes; I would like to offer that for the record, Mr. Chairman, and I would like also to add that if any stocks that I hold should in the future appear on this list of the Defense Department, they would also be sold." Chairman STENNIS. That is very good, and we will note that. (The document entitled "Securities To Be Disposed Of," attachment No. 3, for inclusion in the record, follows:) Chairman STENNIS. You also have a list of securities marked 3-A, "Secutities To Be Retained.” Do you offer those in evidence? Mr. PACKARD. Yes. That is to make the list complete. You will have a duplication in the first list. Chairman STENNIS. Without objection that will be received. (Attachment No. 3-A follows:) Chairman STENNIS. The proposed trust agreement is attachment No. 4, and it consists of three typewritten pages. Do you wish to offer that as an exhibit to your testimony? (Attachment No. 4 follows:) TRUST AGREEMENT made ATTACHMENT No. 4 TRUST AGREEMENT 1969, between DAVID PACKARD and LUCILE S. PACKARD, his wife, as Trustors, and WILLIAM R. HEWLETT, ROBERT MINGE BROWN and ERNEST C. ARBUCKLE, as Trustees. 1. The Trustors desire to create a charitable trust for the benefit of the charitable institutions hereafter set forth and the Trustors do hereby assign and transfer to the Trustees* shares of stock of Hewlett-Packard "Approximately 3,600,000 shares. Company, a California corporation, In Trust, for the purposes and uses hereafter set forth. 2. The Trustees shall hold the trust property and collect and receive the income thereof and after deducting all necessary expenses incident to the administration of the trust shall semi-annually pay the net income from the trust to the educational and charitable organizations listed in Schedule "A" attached hereto in the proportions therein set forth. 3. This trust shall terminate 1971, or upon the receipt by The Trustees of written notice from the Trustors (or in the case of death or incapacity of a Trustor, his or her legal representative) of the termination of the service of David Packard as an official of the United States Government, whichever last occurs. 4. Upon the termination of the trust any undistributed income shall be paid to the charities designated in the proportions set forth in Exhibit "A". 5. Upon the termination of the trust the Trustees shall value the trust assets as of the date of commencement of the trust and as of the date of termination of the trust by using the average of the closing quotations of the stock of Hewlett-Packard Company on the New York Stock Exchange for the last five previous days in which such stock was traded on such exchange. If the value of the stock in the trust estate on the date of termination of the trust shall exceed the value of the stock transferred to the trust on the date of commencement, the Trustees shall, as agents and on behalf of the Trustors, transfer to the charitable beneficiary or beneficiaries designated as hereafter set forth so many shares of stock of Hewlett-Packard Company as will on the date of termination of the trust be equal in value to the excess, if any, of the value of the trust estate at termination of the trust over the value of the trust estate at the date of commencement. The charitable beneficiaries to which such stock shall be transferred shall be an organization or organizations qualifying for income tax deduction for charitable contributions as set forth in Section 170(c) (2) of the Internal Revenue Code of 1954, such organization or organizations to be selected by the Trustors, or the survivor of them, by written notice to the Trustees prior to the date of termination of the trust, or in the event that no such notice is given to the Trustees, then to the educational and charitable organizations listed in Schedule "A" in the proportions therein set forth. 6. The property hereby transferred to the Trustees is the community property of the Trustors and upon termination of the trust the principal remaining after the distribution under paragraph 5 shall be returned to the Trustors as their community property. 7. The Trustees shall retain the Hewlett-Packard Company stock hereby transferred to them and shall not sell or otherwise dispose of it except pursuant to a corporate reorganization, consolidation or merger. 8. The Trustees shall have power: (a) To vote all securities belonging to the trust; (b) To consent to corporate reorganization, consolidation or merger; and (c) To incur and pay the ordinary and necessary expenses of administration of the trust estate. 9. No power enumerated herein or accorded to trustees generally pursuant to law shall be construed to enable the Trustors, or either of them, to purchase, exchange or otherwise deal with the assets of the trust or borrow any principal or income of the trust, directly or indirectly, to vote or direct the voting of any stock or other securities of the trust or to control the investment or reinvestment or to veto proposed investments of any property of the trust estate. 10. This trust shall be irrevocable and the Trustors shall have no power to alter, amend, revoke or terminate the trust or any of the terms of this Trust Agreement, in whole or in part. 11. The Trustees shall serve without compensation. 12. Should any of the Trustees herein named die, resign, become incapacitated, or cease to act as a Trustee the Trustors, or the survivor, shall have the power to appoint a successor (who shall not be a member of the family of either Trustor) by written notice within thirty (30) days to the remaining Trustees. If no such appointment is made by the Trustors the remaining Trustees shall appoint a successor from those persons who are at that time members of the Board of Directors of Hewlett-Packard Company. 13. The Trustees shall render at least annually an account of their receipts and disbursements to the income beneficiaries and Trustors and a valuation statement to the Trustors. IN WITNESS WHEREOF, the Trustors and Trustees have executed this instrument this day of 1969. Trustors, - Trustees. SCHEDULE "A" TO TRUST AGREEMENT BETWEEN DAVID PACKARD AND LUCILE S. PACKARD, AS TRUSTORS, AND WILLIAM R. HEWLETT, ROBERT MINGE BROWN AND ERNEST C. ARBUCKLE, AS TRUSTEES The following organizations are hereby designated as income beneficiaries under paragraph 2 of said trust in the proportions set forth opposite their names, subject to the condition that each of said beneficiaries shall be of the type described in Section 170(b)(1)(A)(i)(ii) or (iii) of the Internal Revenue Code of 1954: Name California Institute of Technology, Pasadena, Calif Castilleja School, Palo Alto, Calif. Colorado College, Colorado Springs, Colo. Concord Academy, Concord, Mass. Hampton Institute, Hampton, Va. Massachusetts Institute of Technology, Cambridge, Mass Menlo School and College, Menlo Park, Calif _ Phillips Exeter Academy, Exeter, N.H.. Stanford Children's Convalescent Hospital, Palo Alto, Calif. Stanford University, Palo Alto, Calif Tuskegee Institute, Tuskegee, Ala- University of Santa Clara, Santa Clara, Calif University of Southern California, Los Angeles, Calif. Fisk University, Nashville, Tenn. Percent age of income Moorehouse College, Atlanta, Ga.. Trustors. Trustees. Chairman STENNIS. I call the members' attention to this. I am going to come to Senator Byrd's question in due time. Mr. Packard, you present as an exhibit to your letter the names of certain institutions that you propose to be beneficiaries of the trust, if it is agreed to. The exhibit does not carry with it a percentage of the total amount that each of these is to receive. I understand that you want to put this list in the record as an exhibit to your testimony. Mr. PACKARD. Yes, Mr. Chairman. Chairman STENNIS. The committee already has the percentages of income, members of the committee, that each of these institutions are to receive. It is in our files for committee members. You do wish to put in the record the names only of these proposed beneficiaries? Mr. PACKARD. Yes the names should be included, and I would like to have it understood that any member of the committee should be able to see the percentages which I propose. Chairman STENNIS. It is in the files of the committee, which means that all members have access to it. On the point that Senator Byrd mentioned about attachment No. 5, the committee has a list of these contracts in its files, six large pages, some of them quite small, but they are headed "Military Prime Contract Awards of $10,000 or More to Hewlett-Packard Co., fiscal year ending June 30, 1968." Do I understand now that those were direct contracts with the Department of Defense or some branch of it, and the Hewlett-Packard Co.? Mr. PACKARD. Yes, that attachment contains that list. Chairman STENNIS. And the total amount of those you gave in your letter, I believe? Mr. PACKARD. Mr. Chairman, the total amount in that attachment is considerably less than the total amount which I gave you. There are two reasons for the difference. One, the fiscal years do not coincide, and the list which you have does not include contracts under $10,000, of which there are a great many. Chairman STENNIS. This exhibit 5 does not have a total on it. That will be readily obtained, and we will total it for the committee. This refers only to the ones of $10,000 or more, and that is really policy that I mentioned in the beginning. I am going into this in detail now so it will be fully before the committee. I have seen this before, of course, and I will ask you a question about it. I see here, for instance, and I am going to pass this around, of course, Army Strategic Communications Command, Fort Huachuca. That is in Arizona, as I recall. Sixteen is the number of contracts. What I am coming to is tell us now how those kinds of contracts come into being. Do they come to the Pentagon? Explain how that happens. Mr. PACKARD. Mr. Chairman, I will be pleased to explain that. On this attachment you will see listed vertically the names of various agencies of the armed services and the Defense Department. Horizontally across the top you will see a number of names that look like names of various locations. Those names across the top are the desig nations of various sales and service offices of the Hewlett-Packard Co. They are located in various areas throughout the country. In the case where a particular figure appears in a column, such as under Fort Huachuca that is because there is a Hewlett-Packard sales office at Fort Huachuca which has negotiated the contract with the local service activity in that area. And you will see from this document, if you wish to go over it carefully, that there are a large |