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      P.    Approval of Lease (FCR 2)

      Mr. Hardymon said FCR 2 is the approval of a lease with a value of
$30,000 or more per year. This particular lease involves office/classroom
space for Somerset Community College, and the annual rate is $35,000. He
moved approval of FCR 2. His motion, seconded by Mr. Shoop, carried. (See
FCR 2 at the end of the Minutes.)

      Q.    Capital Construction Report (FCR 3)

      Mr. Hardymon moved that the quarterly Capital Construction Report
for the three months ending June 30, 1997 be accepted. He said that this report
represents the tracking of capital construction projects and consultant projects
that are in some form of completion. The Finance Committee reviewed and
approved the report. Mr. Guthrie seconded the motion, and it passed. (See
FCR 3 at the end of the Minutes.)

      R.    1997-98 Budget Revisions (FCR 4)

      Mr. Hardymon said that FCR 4 is a quarterly report on revisions for the
budget. This report normally shows the stream of income and the Finance
Committee discusses the expenditures made in conjunction with the income.
He noted that FCR 4 is different and asked President Wethington to comment
on it.

      President Wethington said he would like to comment on the $1.4
million which is an increase in the state appropriation that came to the
University very late in the 1996-97 fiscal year. He reminded the Board that
the administration was to come back to Board and ask for a recommendation
concerning the expenditure of $1.4 million for 97-98. It has been determined
that the best use of these monies for 97-98 would be the support of graduate
and research initiatives which get underway during 97-98 and signal that the
administration and the Board are very serious about the work this University
is doing to become a better research university moving toward top 20 status
among public universities.

      He said FCR 4 proposes that the $1.4 million be expended during 1997-
98 in support of research and graduate initiatives. Specifically, those
initiatives are designed to recruit and retain the best and brightest graduate
students and, second, that these initiatives are those which will assist the
faculty to improve their research competitiveness in seeking external
contracts and grant support. Thirdly, that these monies be used for initiatives
to enhance the research environment, such as expansion and renovation of
our laboratories, assisting faculty teams as they work together to put together