xt7b8g8ffr9s https://nyx.uky.edu/dips/xt7b8g8ffr9s/data/mets.xml Lexington, Kentucky University of Kentucky 19970716 minutes English University of Kentucky This digital resource may be freely searched and displayed.  Permission must be received for subsequent distribution in print or electronically.  Physical rights are retained by the owning repository.  Copyright is retained in accordance with U. S. copyright laws.  For information about permissions to reproduce or publish, contact the Special Collections Research Center. Minutes of the University of Kentucky Board of Trustees Minutes of the University of Kentucky Board of Trustees, 1997-07-sep16. text Minutes of the University of Kentucky Board of Trustees, 1997-07-sep16. 1997 2011 true xt7b8g8ffr9s section xt7b8g8ffr9s 





                                            AGENDA

                                 Meeting of the Board of Trustees
                                      University of Kentucky
                                            1:00 P.M.
                                        September 16, 1997
Invocation

Roll Call

Approval of Minutes

Nomination of Officers and Executive Committee

President's Report and Action Items

PR 1   President's Report to the Trustees

PR 2    Personnel Actions

PR 3    Central Administration
        A.  Appointment of Search Committee for the President of the Kentucky
                 Community and Technical College System
        B.  Proposed Amendments to the Governing Regulations and Changes in
                 Administrative Regulations

PR 4    Community College System (No items to report)

PR 5   Lexington Campus (No items to report)

PR 6   Medical Center
       A.  Behavioral Standards in Patient Care
       B.  Bylaws of the Medical Staff, University Hospital, Chandler Medical Center

Finance Committee

1.    Acceptance of Audit Report for the University of Kentucky for 1996-97
2.    Report of Leases
3.    University of Kentucky Capital Request 1998-2000 (University System, University
            Hospital and Community College System)
4.    Philip Morris, Inc., Contribution
5.    Estate of Margaret W. Peal
6.    G. D. Searle & Company
7.    Establishment of Stites & Harbison Professorship of Law and Quasi-Endowment




 








       Minutes of the Meeting of the Board of Trustees of the University of Kentucky,
Tuesday, September 16, 1997.

      The Board of Trustees of the University of Kentucky met at 1:00 p.m. (Lexington
time) on Tuesday, September 16, 1997 in the Board Room on the 18th floor of Patterson
Office Tower.

      A.    Meeting Opened

      Governor Edward T. Breathitt, Chairperson, called the meeting to order at 1:00
p.m., and the invocation was pronounced by Professor Loys Mather.

      B.    Roll Call

      The following members of the Board of Trustees answered the call of the roll:
Mr. Ted Bates, Mrs. Kay Shropshire Bell, Governor Edward T. Breathitt (Chairperson),
Mr. Paul W. Chellgren, Ms. Melanie Cruz, Mr. Merwin Grayson, Jr., Mr. John "Jack"
Guthrie, Mr. James F. Hardymon, Professor Loys L. Mather, Dr. Robert P. Meriwether,
Dr. Elissa Plattner, Mr. Steven S. Reed, Professor Daniel R. Reedy, Mr. C. Frank Shoop,
Dr. W. Grady Stumbo, Mr. Martin Welenken, Ms. JoEtta Y. Wickliffe, and Mr. Billy B.
Wilcoxson. Absent from the meeting was Mr. Billy Joe Miles. The University
administration was represented by President Charles T. Wethington, Jr.; Chancellors Ben
W. Carr, James W. Holsinger, and Elisabeth Zinser; Vice Presidents Joseph T. Burch,
Fitzgerald Bramwell, Edward A. Carter, George DeBin and Eugene Williams; Dr. Juanita
Fleming, Special Assistant for Academic Affairs; Mr. C. M. Newton, Director of
Athletics, and Mr. Richard E. Plymale, General Counsel.

      Members of the various news media were also in attendance. A quorum being
present, the Chairperson declared the meeting officially open for the conduct of business
at 1:04 p.m.

      C.    Approval of Minutes

      Governor Breathitt said that the Minutes of the Board meeting on August 19,
1997 had been distributed and asked for any additions or corrections. Mr. Guthrie moved
that the Minutes be approved as distributed. Mrs. Bell seconded the motion, and it
carried.

      D.    Nomination of Officers and Executive Committee

      Under the Governing Regulations, officers of the Board and the Executive
Committee are elected annually at the September meeting. Governor Breathitt called
upon Mrs. Bell to preside and receive the report of the Nominating Committee. Mr.




 





2



Wilcoxson, Chairperson of the Nominating Committee, placed the following slate of
officers for 1997-98 in nomination:

              Edward T. Breathitt, Chairperson
              Robert P. Meriwether, Vice Chairperson
              Merwin Grayson, Jr., Secretary
              Richard E. Plymale, Assistant Secretary

       Mr. Wilcoxson moved that these officers be approved for 1997-98. The motion,
seconded by Mr. Bates, carried unanimously.

       Mr. Wilcoxson placed the following slate of Executive Committee members for
1997-98 in nomination:

              Edward T. Breathitt, Chairperson
              Robert P. Meriwether, Vice Chairperson
              Paul W. Chellgren
              James F. Hardymon
              Billy B. Wilcoxson
              Merwin Grayson, Jr., cx officio

       On behalf of the Nominating Committee, Mr. Wilcoxson moved that these
individuals be approved as the Executive Committee for 1997-98. His motion, seconded
by Mr. Shoop, passed. Governor Breathitt presided for the remainder of the meeting as
Chairperson.

       Governor Breathitt thanked the Board and said he would do his best in working
with this excellent Board. He noted that the Executive Committee did not function except
in rare cases.

       He urged the Board members to attend the committee meetings whenever possible.
The committee meetings provide the members an opportunity to have the benefit of the
discussions and be better inforned at the Board meetings.

       President Wethington added his comments of appreciation concerning the efforts
of Governor Breathitt and the other officers of the Board in support of the University.
He expressed congratulations from the administration to Governor Breathitt for having
been re-elected to lead the Board. He assured the Board that he and every member of his
staff would make every effort to cooperate and provide the kind of administrative
leadership that the Board needs to move the University forward in 1997-98.




 





- 3 -



       E.    President's Report to the Board of Trustees (PR 1)

       President Wethington called attention to the following items in PR 1:

       1. Total student enrollment for the fall 1997 semester increased slightly over last
          year. Preliminary figures show that the total enrollment in the University
          System is 24,100. The Community College System will likely decrease by
          approximately 5%.

       2. Twelve students are enrolled in the first year of the joint UK/University of
          Louisville doctoral program in social work. There are six students from each
          university enrolled in this program.

       3. The Medical School class of 1999 scored a 100% pass rate. The College's 100
          percent pass rate exceeded the national pass rate of 95 percent.

       4. Two mathematicians have received National Science Fellowships and have
          chosen to study at UK in an area of pure mathematics called spectral
          geometry.

       5. The Agricultural Economics Academic Team has won the 1997 National
          Agricultural Economics Academic Bowl held at the American Agricultural
          Economics Association's annual meeting in Toronto. The team not only won
          for the second consecutive year, but repeated their 1996 victory over the same
          Texas A&M team in the final match.

       6. On August 21, Mary and David Adams of Stanford, Kentucky became the
          parents of three daughters and a son born at the UK Hospital's Birthing
          Center. It was a "one in a million" experience since no fertility drugs were
          involved. Four sets of quadruplets have been born at UK Hospital in the past
          10 years.

       7. Ashland Community College has received a $1,723,401 Title 11 grant to
          upgrade technology and keep students in school. The grant also calls for hiring
          a student success coordinator to focus on at-risk students,.

      President Wethington asked the members to peruse the other items in the report at
their leisure.




 





- 4 -



       F.    Personnel Actions (PR 2)

       President Wethington recommended that approval be given to the appointments,
actions and/or other staff changes which require Board action; and that the report relative
to appointments and/or changes already approved by the administration be accepted.
Mr. Chellgren moved approval. The motion, seconded by Mr. Guthrie, carried. (See PR
2 at the end of the Minutes.)

       President Wethington called attention to the retirement of Constance Wilson,
Professor (with tenure) in the College of Social Work, in PR 2. He noted that she has
been employed at the University for 43.5 consecutive years and has served as a faculty
representative on the Board of Trustees in past years. Mr. Bates and Mr. Wilcoxson said
that she was a great asset to the Board.

       G. Appointment of Search Committee for the President of the Kentucky
Community and Technical College System (PR 3A)

       President Wethington recommended that the Board authorize the Chairman of the
Board to appoint the Search Committee for the President of the Kentucky Community
and Technical College System. He reported that Governor Brcathitt had received a letter
from James Ramsey of the transition team reminding Governor Breathitt of the Board's
role in the appointment of the search committee.

      President Wethington reported that the Kentucky Community and Technical
College System Board was not yet complete. The appointed members have been chosen;
however, all of the elected members have not been elected. The anticipation is that they
will be elected by or before the first of October. He said the next meeting of the UK
Board of Trustees is not until later in October, and Chairman Ramsey's letter encouraged
the UK Board to move as quickly as possible to get the search committee appointed and
underway. He noted that the appointment of the search committee is the only role the
UK Board plays in the selection of the President.

      Mr. Wilcoxson moved approval of PR 3A. Mr. Shoop seconded the motion, and
it passed. (See PR 3A at the end of the Minutes.)

      H.    Proposed Amendments to the Governing Regulations and Changes in
Administrative Regulations (PR 3B)

      President Wethington recommended that the proposed amendments to the
Governing Regulations of the University of Kentucky and the proposed changes to the
Administrative Regulations which require Board approval be received for preliminary
consideration. He said that these amendments and any changes will be included on the




 





5-



agenda for action at the next Board meeting. He reminded the Board that changes in the
Governing Regulations must remain on the table for consideration for at least one month.
This is an effort by the staff to propose changes in the Governing and Administrative
Regulations to reflect the statutory change in the Community College System. Dr.
Meriwether moved approval. His motion, seconded by Mr. Chellgren, carried. (See PR
3B at the end of the Minutes.)

       I.    Behavioral Standards in Patient Care (PR 6A)

       President Wethington said that PR 6A and 6B are action items from the Medical
Center. He asked Chancellor Holsinger to give a brief justification and rationale for these
action items.

       Chancellor Holsinger said that the behavioral standards for patient care were first
adopted by the Board in 1980 to conform with the Joint Commission on the
Accreditation of Health Care Organizations' requirements for a policy concerning patient
rights. This action item is an amendment and restatement of that document which has
been in place for nearly twenty years. Upon the Board's approval, it will be applicable
throughout the Medical Center and to all Medical Center students, staff and faculty even
while they may be visiting sites in training. This will also include all sites that comprise
the clinical operation across the Commonwealth. The vast bulk of the work done on this
is editorial changes, an updating of titles of University personnel, and subsequent changes
in guidelines over the last twenty years.

       Chancellor Holsinger said PR 6B comprises the Medical Staff Bylaws of the
University Hospital of the Chandler Medical Center. These Bylaws were first adopted
by the Board in 1978 and have gone through a number of revisions since then. This
particular revision includes a great deal of editorial changes throughout the document to
reflect title changes and also to bring the document into conformity with the current Joint
Commission on Accreditation of Health Care Organizations' standards. It reflects the
current joint commission accreditation standards as well as any changes in federal law that
have occurred subsequent to the last time that they were brought before the Board for
amendment.

       President Wethington recommended that the Board adopt the Behavioral
Standards in Patient Care to be applicable to all visiting and University students, faculty,
staff and volunteers while providing patient care at the Medical Center and to be
applicable to all University students, faculty, staff and volunteers engaged in University
work or study in off campus sites. This action item comes to the Board after having been
considered and recommended by the Clinical Board of the University Hospital and by the
Board of Directors of the University Hospital chaired by Dr. Meriwether.




 





- 6 -



       On motion made by Dr. Meriwether, seconded by Mr. Grayson and carried, PR
6A was approved. (See PR 6A at the end of the Minutes.)

       J.    Bylaws of the Medical Staff University of Kentucky Chandler Medical
Center (PR 6B)

       President Wethington said PR 6B is a companion document. He recommended
that the Board adopt the Bylaws of the Medical Staff, University Hospital, Chandler
Medical Center attached to PR 6B. These Bylaws were approved by the Board first in
1978 and have been amended on four occasions since that time. They need to be updated
and brought into compliance with the rules and regulations that have changed since that
time. He said they also need to be updated for purposes of the Joint Commission on
Accreditation of Health Care Organizations. These Bylaws are being recommended to the
Board after having been approved by the Clinical Board of the University Hospital and
the Board of Directors of the University Hospital which is chaired by Dr. Meriwether
and comprised of five members of the Board of Trustees. Dr. Meriwether moved
approval. Mr. Shoop seconded the motion, and it passed. (See PR 6B at the end of the
Minutes.)

       Dr. Plattner said that the Bylaws were collectively, generically, humanitarian in
their approach. She congratulated Chancellor Holsinger, Dr. Meriwether and others
involved in the composition of the Bylaws.

       President Wethington said that he appreciated Dr. Plattner's comments. He said
it always helps to put some humanitarian face on some of the actions that the Board takes
and certainly that is what these Bylaws and guidelines are designed to do. He thanked Dr.
Plattner for pointing that out to everyone.

       Governor Breathitt said that Dr. Meriwether, Chairman of the University
Hospital Board of Directors, reported in the Finance Committee that the Chandler
Medical Center is in excellent financial condition while a number of other medical centers
around the country arc facing financial problems. The University Hospital's financial
status is a great credit to Chancellor Holsinger as well as to President Wethington and the
overall administration of the University. He said that the citizens in the Commonwealth
love the facility, and they know it is there for them.

      K.    Acceptance of Audit Report for the University of Kentucky for 1996-97
(FCR 1)

      Mr. Hardymon, Chairperson of the Finance Committee, said that FCR I is the
acceptance of the audit report for 1996-97. He recommended that the Board accept the
University of Kentucky financial statements for the year ended June 30, 1997, consisting




 





7 -



of the consolidated financial statement audited by Deloitte & Touche LLP, Certified
Public Accountants, and includes the statements of the University of Kentucky and the
affiliated corporations. He reviewed some of the items in the report and noted that for
the first time state appropriations were less than 30% of the total revenue realized. He
said that this is a clean report with no deficiencies, and the Finance Committee
recommends approval. He complimented the financial staff for this fine report. On
motion made by Mr. Hardymon, seconded by Mr. Chellgren and carried, FCR I was
approved. (See FCR 1 at the end of the Minutes.)

       L.    Report of Leases (FCR 2)

       Mr. Hardymon said that FCR 2 is the Report of Leases that the Board must
accept. He noted that these leases do not exceed $30,000 in value and reviewed the
specifics about each lease. He moved approval of FCR 2. His motion, seconded by Mr.
Shoop, passed. (See FCR 2 at the end of the Minutes.)

       M .   University of Kentucky Capital Request 1998-2000 (FCR 3)

       Mr. Hardymon said that FCR 3 recommends that the 1998-2000 Capital Request
for the University System, the University Hospital, and the Community College System
be approved for submission to the Council on Postsecondary Education.

       President Wethington said that Mr. Carter would give a full report that
summarizes the biennial Capital Request for 1998-2000. Normally, there would be a
complete biennial budget request to the Board at this time that would be capital and
operating. As a result of the recent changes in higher education in the Commonwealth, the
operating budget portion of the Capital Request will not be coming before the Board since
there will not be a request sent forward for the next two years. The Capital Request does
proceed as usual. The document distributed to the Board does summarize and delineate
the capital construction requests for the University for this next year. It has a separate
portion for the University System, the University Hospital and the Community College
System. He asked Mr. Carter to review the Capital Request and give the particulars of
the priorities for the University for the next two years for projects requesting funding and
those projects for which the University is requesting authority.

      Mr. Carter began his report by stating that the Capital Request results from a
comprehensive planning process that actually began in the fall, 1996. That year long
planning actually results in not only this request but an administrative process in a six-
year plan that is developed internally and then forwarded to the Capital Planning
Advisory Committee in Frankfort. That Capital Planning Advisory Committee advises
the legislature generally in terms of capital construction.




 





- 8 -



       He explained that the capital plan is guided by the Strategic Plan that comes to the
Board and is approved by the Board. Two of the priorities set forth in the Strategic Plan
are insuring that the University's land, buildings and equipment are utilized effectively,
that they are well maintained, improved, and managed in an environmentally-conscious
manner and that quality library and information technology support, equipment and
facilities appropriate to a leading public university be provided.

       Through a series of slides, Mr. Carter provided a summary of the Capital Request,
reviewing each item and cost. In conclusion, he explained that the Capital Request would
go forward, if it is approved by the Board, to the Council on Postsecondary Education.
The Council on Postsecondary Education will then pass their recommendation and action
to the governor and the legislature.

       President Wethington reminded the Board that this request is roughly the size of
the scope of the request two years ago. The increase in the amount of the request is
largely due to inflation and the cost of the prevailing wage requirements that are now
placed on all public university projects in the Commonwealth. He said they would be
pleased to respond to any questions.

       Professor Mather had a question pertaining to the portion of the budget for new
programs and initiatives. He asked, "What is going to happen to this new initiatives
phase now with this new type of budgeting?"

       President Wethington said that the approach is going to be somewhat different
but, in certain respects, it is the approach that has been followed, through either
reallocation or the attraction of resources from sources other than state support. He
believes that through the University's own generation of resources, through the
reallocation process, and through the incentive pool, the University will be able to pursue
new initiatives in 1997-98, 1998-99, and beyond.

       Professor Mather clarified that a new initiative, not necessarily research and
graduate education, will be funded through internal reallocation rather than new money to
the base, and President Wethington stated that it was a fair assessment based on the
information the University currently has.

       Mr. Hardymon moved that the 1998-2000 Capital Request for the University
System, the University Hospital, and the Community College System be approved for
submission to the Council on Postsecondary Education. The motion, seconded by Mrs.
Bell, carried.




 






-9-



      N.    Philip Morris, Inc., Contribution (FCR 4)

      Mr. Hardymon said that FCR 4 recommends that the Board accept a gift of
$314,000 from Philip Morris, Inc., of Richmond. Virginia, to the College of Agriculture.
Philip Morris has been a major supporter of the College of Agriculture for many years
and has contributed to the success of the college's research, instruction and service
programs. He moved approval of FCR 4. Mr. Guthrie seconded the motion, and it
carried. (See FCR 4 at the end of the Minutes.)

      0.    Estate of Margaret W. Peal (FCR 5)

      Mr. Hardymon said that FCR 5 recommends that the Board accept a bequest of
$200,000 from the Estate of Margaret W. Peal for the W. Hugh Peal Book Endowment.
Margaret Peal was a resident of Leesburg, Virginia and the widow of University of
Kentucky graduate and library benefactor, W. Hugh Peal. In 1985 they donated a
substantial portion of his private library of rare manuscripts and publication, valued at $5
million to the University of Kentucky Libraries. This bequest will be added to the W.
Hugh Peal Book Endowment to enhance the Peal Book Collection. He moved approval of
FCR 5. The motion, seconded by Mr. Chellgren, passed. (See FCR 5 at the end of the
Minutes.)

      P.    G. D. Searle & Company (FCR 6)

      Mr. Hardymon moved that the Board accept a gift of $100,000 from G. D. Searle
& Company, Chicago, Illinois, for the College of Medicine. He said that G. D. Searle &
Company made the gift in recognition of the work and international reputation of James
E. Muller, M.D., Vice Chairman of the Department of Internal Medicine and Division
Chief of Cardiology. This contribution is to support the College of Medicine's
cardiovascular program and the Kentucky Heart Institute. Dr. Meriwether seconded the
motion, and it carried. (See FCR 6 at the end of the Minutes.)

      Q.    Establishment of Stites & Harbison Professorship of Law and Quasi-
Endowment (FCR 7)

      Mr. Hardymon moved that the Board establish the Stites & Harbison
Professorship of Law to be funded by gifts from Stites & Harbison, a Lexington,
Kentucky, law firm, and establish a quasi-endowment fund with matching contributions
from the College of Law. He reported that Stites & Harbison, a long-time supporter of
the College of Law, has pledged $48,000 for the professorship payable in four annual
installments of $12,000 through 2000. The law firm's total commitment to the
professorship is $85,000, which includes $37,000 in previous gifts. When fully funded,
the Stites & Harbison Professorship will provide a $10,000 annual salary supplement to a




 





- 10-



senior faculty member with special distinction. Professor Reedy seconded the motion,
and it passed. (See FCR 7 at the end of the Minutes.)

       R.    Governor Breathitt's Comments

       Governor Breathitt said that Mr. Chellgren had a very fine meeting prior to the
Board meeting. He informed the new members of the Board that he had appointed an ad
hoc transition committee, comprised of members of the Board and chaired by Mr.
Chellgren, to work with the Governor's task force in the coordination of transition of the
university's community colleges to the management under the new system. He expressed
his appreciation to the committee, President Wethington, Chancellor Carr, and the entire
administrative staff of the University for their very affirmative, proactive effort to
coordinate and work with the Governor and the transition task force to accomplish the
transition to reach the objectives of HB 1. He said, in his opinion, the university's
administration should be commended. He called on Mr. Chellgren to give a report and be
available for any questions.

       S.    Ad Hoc Committee on Transition of Community Colleges Report

       Mr. Chellgren, Chairperson of the Ad Hoc Committee on the Transition of
Community Colleges, said that the Committee has two broad missions: (1) to oversee the
university's actions regarding this transition and (2) to ensure that the interest of the
Board and the University are well understood and protected. He reported that the
Committee had two extensive meetings before the August and September Board meetings
and has been briefed thoroughly by the staff of the University in a number of particularly
complex transition areas.

       The first relates to bonds issued by the University for the Community College
System in the amount of $101.850 million. The University will still own the real estate
and the improvements that were constructed with those bonds. The Board of Trustees
remains responsible for those bonds. The trust indenture between the bond trustee and
the University pledges community college student fees for payment of the bonds. Bond
counsel has drafted a memorandum of understanding relating to the relationship between
the University of Kentucky and the Kentucky Community and Technical College System
regarding the respective roles of the two boards on these bond issues. He said it is also
important for this Board to know that for existing bonds and for bonds which may be
issued in the future, the bonding authority for the Community College System remains
with the University of Kentucky Board of Trustees.

       Mr. Chellgren said that another area of some complexity in this transition is the
area of private gifts and donations. All parties to the transition need to respect the
endowment agreements with the donors regarding these private gifts. These community




 





11 -



college endowments are currently being managed by the University pursuant to its
standard investment practices. The endowment funds for the community colleges amount
to approximately $7 million, and there is an additional $4 million held by the University
in restricted accounts. Mr. Chellgren stated that there are many issues regarding past and
future private gifts to the Community College System, and the transition team and
administration will be paying close attention to those issues.

       Mr. Chellgren said a third major issue for the ad hoc committee relates to the
budget. In terms of the Operating Budget, the University needs to carve out Lexington
Community College from the balance of the Community College System budget and add it
back to the university's budget. Another area of concern relates to capital projects on
community college campuses. The Board of Trustees will have responsibility to review
and approve future capital requests similar to the action on the 1998-2000 Capital
Request budget. For the Biennial Budget request for the Community College System, the
Board, however, acts more as a conduit.

       Mr. Chellgren then stated that another important issue is accreditation for the
community colleges. On September 18, a Prospectus was sent by the University and the
community colleges to the Southern Association of Colleges and Schools. The Southern
Association will review the Prospectus to determine whether the community colleges still
meet accreditation guidelines under the new management arrangement provided for by
HB 1. The Ad Hoc Committee hopes that accreditation application moves smoothly.
Although there are many issues relating to the accreditation process, it is the Committee's
hope that those issues are resolved easily because of their overriding importance to
students.

       Mr. Chellgren stated that another important area relates to those services which
will continue to be provided to the Community College System by the University of
Kentucky. It is anticipated that the University and the Kentucky Community and
Technical College System Board will establish a written agreement to identify the services
which the University will provide and the respective roles and responsibilities, legal and
otherwise, of the two boards. He noted that the Kentucky Community and Technical
College System Board is in the process of hiring a search firm for the president's position.

       In conclusion, Mr. Chellgren stated that he had the strong impression that
although this is an enormously complex, multifaceted transition, the University's staff is
taking a very positive, proactive, constructive attitude and is trying to make this as
positive experience as possible, given the complexity and various facets of it.




 





- 12 -



       T.    Investment Committee Report

       Mr. Wilcoxson, Chairperson of the Investment Committee, reported for the fiscal
year ended June 30, 1997 the University's endowment returned 22.8%. The median
return for colleges and universities for that period was 19.1%, according to the
University's consultants, Cambridge Associates. The UK endowment out performed the
median return by 3.7%, which represents an outstanding result.

       Mr. Wilcoxson provided a summary of the endowment growth from 1992 to
1997. Beginning July 1, 1992, the endowment had a market value of $95 million. During
the five-year period, $42 million was received as gifts, current income amounted to $28
million, distributions for spending was $32 million, and market appreciation amounted to
$60 million. The $60 million in market appreciation is basically attributable to changes
implemented in 1992, including the hiring of investment managers with contrasting styles,
choosing common stocks as the dominant asset class, establishing a target asset allocation
of 60% equity and 40% fixed income investments, and establishing a spending rule of 5%
asset market value. It should be noted that this growth was achieved during the five-year
transition period.

       Mr. Wilcoxson reported that the endowment market value at June 30, 1997 was
$195 million, compared to the $95 million in July 1992, and during the month of August
1997, the endowment exceeded the $200 million mark.

       In conclusion, Mr. Wilcoxson said he believed the Investment Committee was
strong and, in his opinion, the University is fortunate to have Mr. Henry Clay Owen and
his staff to administer the day-to-day operation in accordance with the policies
established by the Investment Committee. They have experience and capability and, in
his opinion, there is no one better than Mr. Owen and his staff.

      Mr. Wilcoxson and the Investment Committee received a round of applause from
the Board.

      U.    Meeting Adjourned

      There being no further business to come before the Board, the Chairperson
adjourned the meeting at 2:14 p.m.

                                                Respectfully submitted,

                                                Merwin Grayson, Jr.
                                                Secretary