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       D.           President's Report

       President Todd called attention to the Kaleidoscope publication in the Board packets. He
said that the publication contains some interesting material. It focuses on UK's top students and
undergraduate scholarships. He noted that the publication has grown and said that he is very proud
of it. He encouraged the Board to review it.

       President Todd mentioned the following items in PR 1:

       UK has awarded Host Communications Inc. and Gray Television Inc. the university's
       expanded athletic multimedia marketing rights. It is an $80.5 million contract. The
       Athletics Department and Purchasing Department were very effective in negotiating the
       contract and did a tremendous job. He said, in his opinion, they maximized the benefit for
       the University.

       Mitch Barnhart has been willing to help invest in five new Singletary scholarships. The
       Singletary Scholarships have not increased in approximately 20 years. This money, in
       addition to the $1 million a year Athletics has already pledged for scholarships, will help the
       scholarship program.

       The UK College of Dentistry has been awarded a Center of Biomedical Research Excellence
       (COBRE) grant totaling more than $10.9 million for research in oral health. He noted that
       this is the University's second $10 million COBRE grant in the past month.

       The National Science Foundation has renewed the Appalachian Mathematics and Science
       Grant for $5.7 million to continue the University's program. This is part of the $22 million
       grant received a few years ago. It is the biggest in the University's history.

       The University recently announced 8 new initiatives to improve the safety of women on
       campus.

       A National Science Foundation grant of nearly $2 million will enable UK to evaluate the
       science skills of more than 10,000 seventh and eighth grade Appalachian students during the
       next five years. He noted that this will be $2 million well spent.

       The National Science Foundation has chosen UK to lead a $3 million project to facilitate
       improved computational research in chemistry. This is $3 million for a multi-university
       project with the University of Illinois, Louisiana State University, Ohio State University,
       and the University of Texas. This is impressive because it has to do with UK's Hewlett-
       Packard SuperDome computer which is capable of more than a trillion calculations per
       second. UK has already chosen the contract. The UK proposal was one of only 14
       proposals funded out of 141 submitted. UK's Computational Science group continues to
       bring in money to make the University look good.