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[7]

Part of Minutes of the University of Kentucky Board of Trustees

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- 7 - V. Mining of Coal Reserves in Breathitt. Knott and Perry Counties (FCR 12) Mr. Ockerman stated that the administrative staff and others had been working on FCR 12 and 13 for a considerable period of time. He recognized Mr. Carter and asked him to comment on the items. Mr. Carter reported that FCR 12 is the culmination of a lengthy process that began by action of the Board in September 1990 when the Board authorized the administration to solicit proposals and plans to mine the coal reserves in the outlying tracts of Robinson Forest. He noted that the Purchasing Department had issued the Request for Proposal to mine the tracts. The process consisted of competitive negotiations and required a review committee. Mr. Carter stated that the review committee was present and asked the following individuals to stand and be recognized: Mr. Jim Cobb, Kentucky Geological Survey Dr. Francis Derbyshire, Center of Applied Energy Research Mr. Jim Lawson, College of Agriculture Dr. Robert Muller, Department of Forestry Dr. Len Peters. Office of Vice President for Research and Graduate Studies Dr. Lee Saperstein, College of Engineering Mr. Carter noted that he chaired the committee, and they were greatly assisted by Mr. Darsie and Mr. Paul Van Booven, Legal Counsel Office, and Mr. Milton Skeen, Purchasing Department. Following a review of the background information, hie stated that the committee determined that Addington, Inc., a subsidiary of Addington Resources, Inc., had submitted the best offer. Addington, Inc. was the only company that proposed to lease all tracts. Their proposal will produce the most royalty income for the University as well as the highest minimum annual royalties. Through a series of slides, he showed Addington, Inc.'s operation and cited the reasons for recommending them to the Board. President Wethington praised Mr. Carter, Mr. Darsie, Mr. Van Booven and the members of the committee for their work and effort in obtaining, in his opinion, the best offer for leasing the coal. The University has protected the large block of Robinson Forest and at the same time utilized some of the University's assets and resources to address some of the needs of the Forest and the people of East Kentucky. He noted that the outlying tracts are not a part of the main block of Robinson Forest. He assured the Board that any income will be used consistent with the purposes outlined in the E. 0. Robinson Trust. The President's Office will be actively involved in the determination of the uses of the funds. Mr. Ockerman complimented those involved in the process, particularly Mr. Rose and Mr. Sturgill. These trustees contributed materially with their expertise in assisting the administrative staff in developing the Request for Proposal and assisting in pertinent provisions that should be inserted in the lease. He noted that the credit goes to a number of people who have done an outstanding job for the University.