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       M.    Report of Leases (FCR 2)

       Mr. Chellgren said that FCR 2 is a recurring report on lease agreements in
accordance with the Board policy. The leases are less than $30,000 in value. They do
not require Board approval; however, they must be reported to the Board. He moved
acceptance of FCR 2. His motion, seconded by Mr. Williams, carried. (See FCR 2 at the
end of the Minutes.)

       N.    Capital Construction Report (FCR 3)

       Mr. Chellgren said that FCR 3 is a quarterly Capital Construction Report that is
quite extensive. The report details all the major construction activities within the purview
of the university. There are a number of major projects underway, including the
engineering building, the allied health building, the heart institute building, the football
stadium expansion, and various other projects. He stated that the Finance Committee
reviewed the report and noted that there are no material cost or schedule problems for any
specific projects. He moved the adoption of FCR 3. Mr. Welenken seconded his motion,
and it passed. (See FCR 3 at the end of the Minutes.)

       0.     1998-99 Budget Revisions (FCR 4)

       Mr. Chellgren said FCR 4 is a recurring item to revise the current fiscal year
budget as the year advances. The revisions represent changes in both revenues and
expenditures. He reported that a number of revenue items changed since the last Board
meeting. The enrollment at Lexington Community College was up significantly for the
fall semester which increased student fees by approximately $500,000. Also, there was
some additional county appropriation for the agricultural extension services, and the
single largest item was almost $2.2 million additional revenue which is coming from the
endowment fund. This item is offset with almost $2.1 million additional expenditures for
the university's Development and Public Relations offices to fund the expansion of fund
raising efforts in preparation and as part of the multi-year endowment drive that the
university is undertaking. That is the single largest item of change in both revenue and
expenditure in the budget. He said that the remainder of the revisions are straightforward
with a number of relatively small items. He moved adoption of FCR 4. His motion,
seconded by Mr. Guthrie, carried. (See FCR 4 at the end of the Minutes.)

      P.    Ephraim McDowell Cancer Research Foundation Endowed Chair Gift
(FCR 5)

       Mr. Chellgren said that there were 17 gifts to the University which he believes is
the most that has ever been presented to the Board at a single meeting since he has been
on the Board. This is certainly a tribute to the development efforts as well as a tribute to
year-end tax planning in certain instances. The first gift is an acceptance of an additional
$2 million from the Ephraim McDowell Cancer Research Foundation to create two
endowed chairs to benefit the Markey Cancer Center. He moved the adoption of FCR 5.
Mr. Shoop seconded the motion, and it passed. (See FCR 5 at the end of the Minutes.)