2015-08-03T13:17:44-05:00 2014-09-30 861065772 DELOITTE TAX LLP 655 WEST BROADWAY SUITE 700 SAN DIEGO CA 921018590 990 2013-10-01 330435954 THE SCRIPPS RESEARCH INSTITUTE SCRI 8587841000 10550 NORTH TORREY PINES ROAD LA JOLLA CA 92037 DONNA WESTON SENIOR VP, CFO 8587841000 2015-07-29 1 DIANA J MCCUTCHEN P00545657 6192326500 2013 2016-03-07 17:11:31Z 10550 NORTH TORREY PINES ROAD LA JOLLA CA 92037 602236031 0 X WWW.SCRIPPS.EDU X 1924 CA TSRI CONDUCTS BIOMEDICAL AND BIOCHEMICAL RESEARCH AND POSTGRADUATE TRAINING PROGRAMS. 21 20 2775 27 -835072 -864481 334268986 321259868 4768760 4443967 18149216 48324376 8660622 5702828 365847584 379731039 6890395 8745844 0 0 171810363 187814675 174309 184484 3626477 200090850 192581386 378965917 389326389 -13118333 -9595350 883112215 846527407 155638584 149873471 727473631 696653936 X THE SCRIPPS RESEARCH INSTITUTE ("TSRI") PERFORMS HIGH IMPACT BASIC BIOMEDICAL RESEARCH, IMPROVES THE HUMAN CONDITION BY FOSTERING TRANSLATION OF ITS DISCOVERIES INTO USEFUL PRODUCTS AND ENGAGES IN THE HIGHEST QUALITY GRADUATE SCIENTIFIC EDUCATION AND POST GRADUATE SCIENTIFIC TRAINING. TSRI IS KNOWN FOR ITS ENTREPRENEURIAL ENVIRONMENT AND ITS EMPHASIS IN RESEARCH RELATING TO SYNTHETIC CHEMISTRY, THE RELATIONSHIP BETWEEN MOLECULAR STRUCTURE AND ACTIVITY AND CHEMICAL BIOLOGY. 0 0 347183827 4443967 RESEARCH IS CONDUCTED IN LA JOLLA, CALIFORNIA AND JUPITER, FLORIDA WITH GRANTS, CONTRACTS AND FELLOWSHIPS THAT ARE RECEIVED FROM PUBLIC AND PRIVATE INSTITUTIONS AND INDIVIDUALS. THESE AWARDS FUND BIOMEDICAL RESEARCH AND THE DEVELOPMENT OF ANSWERS TO FUNDAMENTAL AND IMPORTANT QUESTIONS. WE BELIEVE THAT THE PURSUIT OF BASIC KNOWLEDGE IN CHEMISTRY AND BIOLOGY WILL INEVITABLY LEAD TO BENEFICIAL RESULTS APPLICABLE TO THE HUMAN CONDITION AND TREATMENT OF DISEASE. 22214104 8745844 TSRI RECOGNIZES THAT A ROBUST EDUCATION PROGRAM IS KEY TO THE SUCCESS OF ITS LABORATORY-BASED INVESTIGATIONS, AND OFFERS BOTH GRADUATE AND POST-GRADUATE EDUCATION PROGRAMS. POST-DOCTORAL EDUCATION PROGRAMS INCLUDE FELLOWSHIPS FOR FOCUSED AND SUPERVISED TRAINING ON PROBLEMS THAT WILL BECOME CENTRAL TO SUBSEQUENT INVESTIGATIONS AS THESE YOUNG SCIENTISTS BEGIN THEIR SCIENTIFIC CAREERS. TSRI'S GRADUATE PROGRAM SEEKS TO CREATE AN INDIVIDUALIZED CURRICULUM FOR STUDENTS STUDYING AT THE INTERFACE OF BIOLOGY AND CHEMISTRY - AREAS OF SCIENTIFIC INQUIRY FOR WHICH THE SCRIPPS RESEARCH INSTITUTE HAS EARNED ITS REPUTATION FOR EXCELLENCE. COURSES CAN BE CHOSEN FOR EITHER FOCUSED OR INTERDISCIPLINARY STUDIES. OPPORTUNITIES TO CRAFT A RESEARCH PROJECT AND AREA OF STUDY THAT ENCOMPASSES SEVERAL LABORATORIES OUTSIDE OF THE STUDENT'S MENTOR ARE NOT ONLY AVAILABLE BUT ENCOURAGED. ACCOMMODATIONS ARE MADE TO SUIT THE STUDENT'S SENSIBILITIES AND OBSTACLES ARE ROUTINELY OVERCOME TO KEEP THE BEST INTERESTS OF THE STUDENTS AT THE FOREFRONT OF THE PROGRAM. 369397931 1 1 0 1 0 0 0 0 0 1 1 1 0 0 1 0 1 0 0 0 1 1 0 1 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 0 0 0 0 1 256 0 1 2775 1 1 1 0 0 0 0 0 0 0 0 0 0 X 21 20 1 0 1 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 CA CT FL MD NJ NY PA IL X DONNA WESTON 8587848300 3301 NORTH TORREY PINES COURT LA JOLLA CA 92037 X JAMES PAULSON PHD ACTING PRES, TRUSTEE 40.00 X X 284283 0 65724 MARSHALL M CRISER III TRUSTEE 1.00 X 0 0 0 JOHN DAVIS TRUSTEE 1.00 X 0 0 0 THOMAS E DEWEY JR TRUSTEE 1.00 X 0 0 0 ALEXANDER W DREYFOOS TRUSTEE 1.00 X 0 0 0 RICHARD J ELKUS JR TRUSTEE 1.00 X 0 0 0 PETER C FARRELL PHD DSC TRUSTEE 1.00 X 0 0 0 DENNIS M FENTON PHD TRUSTEE 1.00 X 0 0 0 MARJORIE FINK TRUSTEE 1.00 X 0 0 0 RICHARD A GEPHARDT TRUSTEE 1.00 X 0 0 0 THOMAS H INSLEY TRUSTEE 1.00 X 0 0 0 AMIN KHOURY TRUSTEE THROUGH 8/13/14 1.00 X 0 0 0 JAMES E LABELLE MD TRUSTEE 1.00 X 0 0 0 CLAUDIA S LUTTRELL TRUSTEE 1.00 X 0 0 0 ALAN C MENDELSON TRUSTEE 1.00 X 0 0 0 WILLIAM H MOLLOIE TRUSTEE 1.00 X 0 0 0 MARK PEARSON TRUSTEE 1.00 X 0 0 0 BERNARD SAINT-DONAT TRUSTEE 1.00 X 0 0 0 LYNN SCHENK TRUSTEE 1.00 X 0 0 0 MARK S SKAGGS TRUSTEE 1.00 X 0 0 0 RICHARD SLOANE TRUSTEE 1.00 X 0 0 0 HORACIO VALEIRAS TRUSTEE 1.00 X 0 0 0 MICHAEL A MARLETTA PAST PRESIDENT 40.00 X 810702 0 66257 DONNA WESTON SR. VP, CFO, TREASURER 40.00 X 368958 0 62486 THOMAS NORTHRUP CHF BUS. CNSL, ASST. SEC 40.00 X 255980 0 53051 PETER K VOGT EXEC VP & CHIEF SCI OFF 40.00 X 315770 0 63648 CARY THOMAS SR. VP. 40.00 X 359906 0 67785 KAYE I WYNNE VP. OSP 40.00 X 291156 0 64587 RICHARD A LERNER INSTITUTE PROFESSOR 40.00 X 606435 0 63473 GERALD J JOYCE DEAN OF FACULTY 40.00 X 418308 0 67911 WILLIAM R ROUSH PROFESSOR 40.00 X 415955 0 65317 ROY G SMITH CHAIRMAN, METABOLISM 40.00 X 394997 0 69534 PETER E WRIGHT PROFESSOR 40.00 X 375230 0 64578 DOUGLAS A BINGHAM FORMER EXEC VP, COO, SEC. 40.00 X 2832526 0 18106 7730206 0 792457 293 1 1 0 OLSON & CEPURITIS LTD 20 NORTH WACKER DRIVE 36TH FLOOR CHICAGO IL 60606 LAWYER 697538 SCHWEGMAN LUNDBERG WOESSNER PA 1600 TCF TOWER 121 S 8TH ST MINNEAPOLIS MN 55402 LAWYER 681574 QUINE INTELLECTUAL 2033 CLEMENT AVENUE ALEMEDA CA 94501 LAWYER 495990 DELOITTE & TOUCHE LLP 655 W BROADWAY SUITE 700 SAN DIEGO CA 921018590 AUDIT & TAX 271360 KILPATRICK TOWNSEND & STO DEPT 34542 PO BOX 39000 SAN FRANCISCO CA 94139 LAWYER 210560 13 454608 266349372 54455888 162329 321259868 PATENT OFFICE 900099 4443967 4443967 4443967 9851866 9851866 5331092 5331092 686496 819278 -132782 -132782 -132782 190027357 69951687 164942405 56564129 25084952 13387558 38472510 38472510 179180 454608 179180 0 SHARED SERVICES - SCRIPPS HEALTH 900099 504518 504518 K-1 INCOME 531390 -835072 -835072 835072 835072 504518 379731039 4443967 -835072 54862276 X 8236672 8236672 509172 509172 3082293 1327613 1754680 136696769 129710677 5053059 1933033 10848130 10150750 542406 154974 30298126 29147124 927264 223738 6889357 6458546 335536 95275 93773 93773 184484 184484 63609295 59944522 3244560 420213 2741753 2516515 77618 147620 24081867 22775824 1216324 89719 3511310 3340048 57871 113391 2177208 2177208 33119506 33005293 114213 3687517 3693881 -7334 970 LAB SUPPLIES 37025133 35123561 1602662 298910 UTILITIES 14828666 14391112 437554 PROFESSIONAL SERVICES 9632333 7903337 1497335 231661 RENTAL EXPENSES -1926975 -1107697 -819278 389326389 369397931 16301981 3626477 17618334 17930440 55884172 45674994 152427 1011584 495192 3680055 2753883 12637 12249 3314509 3696877 730919110 381876381 359347038 349042729 285455902 280638668 151935041 140593000 5216908 5172983 883112215 846527407 39940298 36241955 41373162 29011692 36714973 36520524 8150000 8150000 29460151 39949300 155638584 149873471 X 462607572 448954462 223046942 205954419 41819116 41745054 727473631 696653936 883112215 846527407 X -9595350 -21224340 -5 X 0 1 X 1 1 1 X SCRIPPS HEALTH LA JOLLA CA RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 93773 93773 0 PART II-B, LINE 1: TSRI PAYS ANNUAL DUES TO THE ASSOCIATION OF INDEPENDENT RESEARCH INSTITUTES (AIRI), CALIFORNIA HEALTHCARE INSTITUTE (CHI), THE CALIFORNIA BIOMEDICAL RESEARCH ASSOCIATION, BIOFLORIDA, CALIFORNIA ASSOCIATION OF CERTIFIED PUBLIC ACCOUNTANTS, AND FLORIDA RESEARCH CONSORTIUM, A PORTION OF WHICH IS USED FOR LOBBYING ACTIVITIES. TSRI ALSO USES THE SERVICES OF SOUTHERN STRATEGY GROUP FOR GOVERNMENTAL RELATIONS NEEDS. 65149149 323271 1679735 1509074 65643081 63414527 252501 2154224 672103 65149149 60599628 370091 3094947 650139 63414527 61045904 681736 484627 1612639 60599628 57023972 2763384 2641687 1383139 61045904 0.36000 0.64000 0 0 42645590 42645590 405363564 163701066 241662498 20731666 17094307 3637359 257725616 199560297 58165319 4452674 1520711 2931963 349042729 INVESTMENT IN LIMITED PARTNERSHIPS 140593000 F 140593000 PENSION LIABILITY 31368869 LEASES SCHEDULED RENT AND UNITRUSTS 8580431 39949300 X 360433673 -21224340 1926975 -19297365 379731038 1 1 379731039 391253364 1926975 1926975 389326389 0 389326389 PART V, LINE 4: INVESTMENT RETURN FROM THE ENDOWMENTS SUPPORTS SCIENTIFIC PROJECTS CONSISTENT WITH THE MISSION AND PRINCIPLES OF THE SCRIPPS RESEARCH INSTITUTE. PART X, LINE 2: TSRI ADOPTED FIN 48 DURING THE YEAR ENDED 9/30/08. NO LIABILITY FOR UNCERTAIN TAX POSITIONS HAS BEEN RECORDED ON THE FINANCIAL STATEMENTS FOR THE CURRENT YEAR. PART XI, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES NETTED AGAINST RENT REVENUE 819,278. LOSS ON DISPOSAL OF EQUIPMENT 1,107,697. PART XI, LINE 4B - OTHER ADJUSTMENTS: ROUNDING 1. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES NETTED AGAINST RENT REVENUE 819,278. LOSS ON DISPOSAL OF EQUIPMENT 1,107,697. 1 EUROPE (INCLUDING ICELAND & GREENLAND) 0 0 PROGRAM SERVICES LAB FOR TSRI SCIENTISTS & STUDENTS 509172 CENTRAL AMERICA & THE CARIBBEAN 0 0 INVESTMENTS 48649807 SEE PART V 0 0 0 0 0 0 49158979 0 49158979 EUROPE (INCLUDING ICELAND & GREENLAND) LABORATORY FOR TSRI SCIENTIST & STUDENT RESEARCH 509172 ELECTRONIC FUND/WIRE 0 N/A N/A 1 0 0 0 1 0 0 0 PART I, LINE 2: TSRI MONITORS THE AMOUNTS PROVIDED TO THE FOREIGN ORGANIZATION BY ADHERENCE TO A GRANT CONTRACT FOR THE LAB PROVIDED FOR USE OF THE TSRI RESEARCHER AND MONITORS DETAILED BILLING STATEMENTS FOR STUDENT RESEARCH EXPENDITURES. TSRI HAS MANY SCIENTISTS THAT TRAVEL AROUND THE WORLD. GLOBAL TRAVEL IS REQUIRED BY THE SCIENTISTS TO ATTEND VARIOUS MEETINGS AND SPEAK ON THEIR AREAS OF SPECIALTY. IT IS NOT FEASIBLE TO GATHER THE DETAILED INFORMATION REGARDING EXPENDITURES FOR PART I. THERE ARE NO OFFICES OUTSIDE OF THE U.S. OR EMPLOYEES WHO RESIDE OUTSIDE OF THE U.S. SCHEDULE F, PART IV TSRI HAS LESS THAN 10% OWNERSHIP IN A FOREIGN CORPORATION DURING THE TAX YEAR AND THEREFORE WAS NOT REQUIRED TO FILE FORM 5471. X X X X X X 1 SANKY COMMUNICATIONS INC 599 11TH AVENUE 6TH FLOOR NEW YORK NY 10036 E-PHILANTHROPY 0 161788 88763 73025 SANKY COMMUNICATIONS INC 599 11TH AVENUE 6TH FLOOR NEW YORK NY 10036 DIRECT MAIL DONOR ACQUISITION 0 31869 95721 -63852 193657 184484 9173 CA FL CT IL MI MA NJ NY PA DC WOMEN FOR CANCER RESEARCH 179719 173475 6244 628 5616 PGA WOMENS CANCER AWARENESS DAYS 178308 132459 45849 12688 23102 10060 3 275761 148674 127087 38738 500 87848 633788 454608 179180 52054 23602 103524 179180 0 SCHEDULE G, PART I, LINE 2B, COLUMN (V) THE SANKY DIRECT MAIL DONOR ACQUISITION PROGRAM IS AN OVERALL BUDGET, WHICH INCLUDES THE SANKY AGENCY FEE AND THE UPFRONT COSTS OF ALL PROJECT FEES WITH THIRD-PARTY VENDORS. ALL DIRECT EXPENSES SUCH AS LIST RENTALS, POSTAGE, ETC. ARE SUBSEQUENTLY PAID DIRECTLY TO THE VENDOR FOR EXPENSE REIMBURSEMENTS. THE SANKY E-PHILANTHROPY PROGRAM IS A FLATE RATE, WHICH INCLUDES THE SANKY AGENCY FEE AND ALL PROJECT FEES. THIS INCLUDES ALL DIRECT THIRD-PARTY VENDOR FEES SUCH AS THE MERCHANT ACCOUNT FOR PROCESSING ONLINE CONTRIBUTIONS. 1 0 0 SCHOLARSHIPS, STIPENDS FOR KELLOGG GRADUATE SCHOOL 248 8236672 PART I, LINE 2: GRADUATE STUDENT STIPENDS ARE PROCESSED VIA PERSONNEL ACTION FORMS WHICH ARE APPROVED BY THE GRADUATE OFFICE AND HUMAN RESOURCES PRIOR TO BEING SENT TO THE PAYROLL OFFICE. ONCE APPROVED,GRADUATE STUDENTS ARE SET UP IN TSRI'S PAYROLL SYSTEM AND ARE DISPERSED ON THE 1ST AND 15TH OF EACH MONTH. MONITORING IS DONE VIA THE INTERACTION BETWEEN THE STUDENT AND FACULTY ADVISOR. AS LONG AS THE STUDENT IS PROGRESSING, S/HE WOULD CONTINUE TO BE PAID. X X 1 1 X X X X X 1 1 0 0 0 0 0 0 0 JAMES PAULSON PHD ACTING PRES, TRUSTEE 260347 0 0 0 23936 0 51000 0 14724 0 350007 0 0 0 MICHAEL A MARLETTA PAST PRESIDENT 677954 0 0 0 132748 0 51000 0 15257 0 876959 0 0 0 DONNA WESTON SR. VP, CFO, TREASURER 352658 0 0 0 16300 0 51000 0 11486 0 431444 0 0 0 THOMAS NORTHRUP CHF BUS. CNSL, ASST. SEC 247603 0 0 0 8377 0 38061 0 14990 0 309031 0 0 0 PETER K VOGT EXEC VP & CHIEF SCI OFF 293057 0 0 0 22713 0 51000 0 12648 0 379418 0 0 0 CARY THOMAS SR. VP. 324958 0 0 0 34948 0 51000 0 16785 0 427691 0 0 0 KAYE I WYNNE VP. OSP 258770 0 0 0 32386 0 51000 0 13587 0 355743 0 0 0 RICHARD A LERNER INSTITUTE PROFESSOR 590967 0 0 0 15468 0 51000 0 12473 0 669908 0 0 0 GERALD J JOYCE DEAN OF FACULTY 412945 0 0 0 5363 0 51000 0 16911 0 486219 0 0 0 WILLIAM R ROUSH PROFESSOR 408249 0 0 0 7706 0 51000 0 14317 0 481272 0 0 0 ROY G SMITH CHAIRMAN, METABOLISM 383129 0 0 0 11868 0 51000 0 18534 0 464531 0 0 0 PETER E WRIGHT PROFESSOR 367408 0 0 0 7822 0 51000 0 13578 0 439808 0 0 0 DOUGLAS A BINGHAM FORMER EXEC VP, COO, SEC. 74629 0 0 0 2757897 0 15186 0 2920 0 2850632 0 380334 0 PART I, LINE 1A THE SCRIPPS RESEARCH INSTITUTE TRAVEL POLICIES PERMIT BUSINESS CLASS TRAVEL ON FLIGHTS OF MORE THAN 3 HOURS. FIRST CLASS TRAVEL IS PERMITTED ON SMALLER AIRCRAFT IF BUSINESS CLASS TRAVEL IS NOT OFFERED ON THESE LONG HAUL FLIGHTS. ALSO, A HOUSING ALLOWANCE WAS PROVIDED TO THE PRESIDENT DURING HIS RELOCATION. THE ALLOWANCE CEASED UPON THE PURCHASE OF HIS RESIDENCE IN SAN DIEGO. PART I, LINES 4A-B IN CONJUNCTION WITH HIM NO LONGER BEING PRESIDENT IN 2014, BEGINNING WITH THE LAST PAYROLL IN SEPTEMBER, MICHAEL MARLETTA, WILL RECEIVE $1,400,000 IN SEVERANCE OVER TWO YEARS, WHICH WILL BE REPORTED ON HIS 2014 AND 2015 FORMS W-2. ADDITIONALLY, DOUGLAS BINGHAM RECEIVED A SEVERANCE PAYMENT IN 2013 OF $1,247,438. PART I, LINES 4A-B RICHARD LERNER, M.D. PARTICIPATED IN A DEFERRED COMPENSATION PLAN. NO PAYMENTS WERE MADE DURING THE YEAR. TOTAL TSRI LIABILITY AT 9/30/2014 WAS $6,215,000. MICHAEL MARLETTA, PH.D. PARTICIPATED IN A DEFERRED COMPENSATION PLAN UNTIL HE WAS NO LONGER PRESIDENT IN 2014. $598,604 OF DEFERRED COMPENSATION WAS PAID TO HIM DURING THE YEAR. ADDITIONALLY, DOUGLAS BINGHAM RECEIVED A PAYMENT OF $1,429,289 FROM HIS DEFERRED COMPENSATION PLAN WHICH WAS REPORTED ON HIS 2013 FORM W-2. A CALIFORNIA INFRASTRUCTUREECONOMIC DEVELOPMENT BANK 630304653 13033WRC9 2005-02-23 39547350 SEE PART VI 0 0 0 A 39547350 22905721 641629 16000000 2005 1 0 1 1 A 0 0 0 1 1 0.00000 0.00000 0.00000 1 0 1 A 0 0 1 0 0 0 0 0 0 A 0 SCHEDULE K, PART I, LINE A (F) DESCRIPTION OF PURPOSE: PURCHASE IMM BLDG & REFINANCE OS 1994 BONDS 1. TO ACQUIRE THE IMMUNOLOGY BUILDING AND TO REFINANCE THE 1994 ARNOLD AND MURIEL BECKMAN CHEMISTRY BUILDING CONSTRUCTION BONDS 2. TO PAY FOR A PORTION OF THE ISSUANCE COST OF BOTH ISSUES 3. TO PAY FOR CAPITALIZED INTEREST ON THE BONDS DURING THE CONSTRUCTION PERIOD X 9 162329 COST/SELLING PRICE 0 0 1 1 PART I, COLUMN (B): TSRI IS REPORTING THE NUMBER OF CONTRIBUTORS. PART I, LINE 32B: SHARES OF STOCK GIFTED TO TSRI ARE TRANSFERRED INTO OUR BROKERAGE ACCOUNT AT SALOMON SMITH BARNEY AND THEY IN TURN SELL THE SHARES AND WIRE THE STOCK PROCEEDS TO TSRI. PART I, LINE 33: ADDITIONALLY, STOCK GIFTS FOR A TOTAL OF $158,394 WERE GIVEN TO BE APPLIED AGAINST PLEDGES. THEY WERE APPLIED AGAINST A PLEDGE RECEIVABLE RATHER THAN REVENUE. FORM 990, PART VI, SECTION A, LINE 2 TSRI BOARD OF TRUSTEE MEMBERS CLAUDIA S. LUTTRELL AND MARK S. SKAGGS HAVE A FAMILY RELATIONSHIP. FORM 990, PART VI, SECTION A, LINE 4 IN THE EVENT OF A VACANCY IN OFFICE OF THE PRESIDENT/CHIEF EXECUTIVE OFFICER, THE BYLAWS WERE AMENDED TO FACILITATE THE NAMING OF AN INTERIM PRESIDENT/CHIEF EXECUTIVE OFFICER. FORM 990, PART VI, SECTION B, LINE 11 ON MAY 18, 2015, THE AUDIT COMMITTEE REVIEWED A DRAFT OF THE FORM 990 (INCLUDING ALL SUPPLEMENTAL SCHEDULES.) THIS REVIEW INCLUDED A PRESENTATION OF THE STATEMENTS BY THE CHIEF FINANCIAL OFFICER WITH PARTICULAR EMPHASIS ON DISCLOSURES ABOUT GOVERNANCE AND ABOUT TRANSACTIONS WITH INTERESTED PERSONS. THE 990 WILL BE PROVIDED TO THE FULL BOARD OF TRUSTEES PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C TSRI'S CONFLICT OF INTEREST AND COMMITMENT POLICY COVERS ALL EMPLOYEES AND OFFICERS. THE CONFLICT OF INTEREST POLICY COMPLIES WITH THE REQUIREMENTS OF OTHER OVERSIGHT BODIES SUCH AS THE NIH, AND IS ADMINISTERED BY RESEARCH SERVICES. TSRI'S BOARD OF TRUSTEES CONFLICT OF INTEREST POLICY GOVERNING TRUSTEES IS ADMINISTERED BY THE PROFESSIONAL AFFAIRS COMMITTEE OF THE BOARD OF TRUSTEES. ALL TRANSACTIONS INVOLVING POTENTIAL OR ACTUAL CONFLICTED PERSONS ARE BROUGHT BEFORE THE PROFESSIONAL AFFAIRS COMMITTEE WHICH, AFTER EXAMINATION OF ALL RELEVANT INFORMATION, MAY DO ONE OF THE FOLLOWING: 1. APPROVE THE TRANSACTION SUBJECT TO A CONFLICT MITIGATION PLAN 2. DISAPPROVE THE TRANSACTION 3. REQUEST ADDITIONAL INFORMATION FURTHER, THERE IS AN ANONYMOUS "HOT LINE" WHERE ALL EMPLOYEES ARE INVITED TO DISCLOSE INFORMATION OF A BROAD NATURE, INCLUDING POTENTIAL OR PERCEIVED CONFLICTS OF INTEREST. ONCE APPROVED BY THE PROFESSIONAL AFFAIRS COMMITTEE, TRANSACTIONS INVOLVING OFFICERS ARE BROUGHT TO THE BOARD OF TRUSTEES FOR FINAL REVIEW AND APPROVAL. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF TRUSTEES ANNUALLY APPROVES THE COMPENSATION FOR THE PRESIDENT; AND, IF CHANGES OCCUR, AS NEEDED FOR OTHER EXECUTIVES. THE BOARD'S EXECUTIVE COMMITTEE (EC), FORMERLY KNOWN AS THE COMPENSATION COMMITTEE, SELECTS AND ENGAGES AN OUTSIDE COMPENSATION CONSULTANT. THIS WOULD BE DONE LESS THAN BI-ANNUALLY ONLY IF THERE HAVE BEEN MATERIAL CHANGES IN THE INSTITUTE OR THE PRESIDENT'S RESPONSIBILITIES. THE CONSULTANT MEETS WITH THE VP OF HR TO ENSURE IT HAS COMPLETE AND ACCURATE INFORMATION REGARDING THE INSTITUTE AND SCOPE OF EXECUTIVE RESPONSIBILITY. THE CONSULTANT DETERMINES PEER INSTITUTIONS FOR INCLUSION IN A COMPENSATION SURVEY. THE CONSULTANT CONDUCTS A COMPENSATION REVIEW USING SPECIALIZED AND PUBLISHED SURVEYS, AND SUBMITS A WRITTEN OPINION TO THE EC IN ACCORDANCE WITH THE PROVISIONS OF SECTION 53.4958-6(C)(2) AND SATISFIES THE PROFESSIONAL ADVICE REQUIREMENTS OF SECTION 53.4958-1(D)(III) OF THE INCOME TAX REGULATIONS. THE EC REVIEWS EXECUTIVE TRAVEL, BUSINESS EXPENSES, AND CONFLICTS OF INTEREST AND COMMITMENT DISCLOSURES. THE EC THEN MAKES AN INDEPENDENT RECOMMENDATION TO THE BOARD OF TRUSTEES ON EXECUTIVE COMPENSATION, WHICH MUST BE APPROVED BY THE BOARD OF TRUSTEES. AFFECTED TRUSTEES ABSTAIN FROM PARTICIPATION IN THIS PROCESS. IN 2014 MICHAEL MARLETTA STEPPED DOWN FROM TSRI'S POSITION AS CEO AND PRESIDENT. HIS SEVERANCE AND DEFERRED COMPENSATION PACKAGE WAS REVIEWED BY AND DISCUSSED WITH THE EXTERNAL EXECUTIVE COMPENSATION CONSULTANTS, EXTERNAL TAX, AND EMPLOYMENT COUNSEL, AND APPROVED BY THE BOARD OF TRUSTEES. SUBSEQUENTLY JAMES PAULSON WAS APPOINTED ACTING PRESIDENT AND CEO BY THE EC. HIS COMPENSATION PACKAGE WAS ALSO REVIEWED BY AND DISCUSSED WITH THE EXTERNAL EXECUTIVE COMPENSATION CONSULTANTS, AND EMPLOYMENT COUNSEL, AND APPROVED BY THE BOARD OF TRUSTEES. FORM 990, PART VI, SECTION C, LINE 19 GOVERNING DOCUMENTS, WITH THE EXCEPTION OF THE EMPLOYEE CONFLICT OF INTEREST POLICY, ARE NOT AVAILABLE TO THE PUBLIC AT THIS TIME. THE FINANCIAL STATEMENTS ARE AVAILABLE ON THE TSRI WEB-SITE AND ARE FILED WITH THE STATE OF FLORIDA BY THE SCRIPPS FLORIDA FUNDING CORPORATION. THE STATEMENTS ARE PROVIDED TO BOND HOLDERS THROUGH TSRI'S DISSEMINATION AGENT. THE ANNUAL INFORMATION RETURN IS PROVIDED UPON REQUEST. FORM 990, PART VII, SECTION B: TSRI PATENTS MANY OF ITS DISCOVERIES. FOR MOST OF THOSE DISCOVERIES, THE COST OF THESE PATENTS IS RECOVERED FROM THIRD PARTIES PURSUANT TO THE TERMS OF THE UNDERLYING LICENSE. FORM 990, PART IX, LINE 11G SUBCONTRACTS: PROGRAM SERVICE EXPENSES 49,578,982. MANAGEMENT AND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 49,578,982. PURCHASED SERVICES AND MAINTENANCE: PROGRAM SERVICE EXPENSES 10,365,540. MANAGEMENT AND GENERAL EXPENSES 3,244,560. FUNDRAISING EXPENSES 420,213. TOTAL EXPENSES 14,030,313. FORM 990, PART XI, LINE 9: ROUNDING -5. FORM 990, TRANSACTIONS WITH INTERESTED PERSONS RICHARD A. LERNER, M.D. TERM AS PRESIDENT AND CEO OF TSRI EXPIRED ON DECEMBER 31, 2011. DR. LERNER SERVES ON THE BOARD OF DIRECTORS AND IS THE CHAIR OF THE COMPENSATION COMMITTEE OF OPKO HEALTH, INC. ("OPKO"). OPKO IS A HEALTH CARE COMPANY FOCUSED ON THE DEVELOPMENT OF PHARMACEUTICALS, HAS A USE LICENSE WITH TSRI, AND MAY BE INVOLVED IN BUSINESS TRANSACTIONS WITH TSRI IN THE FUTURE. TSRI HAS LICENSES WITH SORRENTO THERAPEUTICS, AND OPKO IS AN INVESTOR IN SORRENTO THERAPEUTICS. SCRIPPS ADVANCE LLC 130 SCRIPPS WAY 4B2 JUPITER FL 33458 FUNDING VEHICLE FOR BIOMEDICAL RESEARCH DE 0 0 THE SCRIPPS RESEARCH INSTITUTE