xt7ghx15n43v https://nyx.uky.edu/dips/xt7ghx15n43v/data/mets.xml Lexington, Kentucky University of Kentucky 2003109 minutes English University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. Minutes of the University of Kentucky Board of Trustees Minutes of the University of Kentucky Board of Trustees, 2003-10-dec9. text Minutes of the University of Kentucky Board of Trustees, 2003-10-dec9. 2003 2011 true xt7ghx15n43v section xt7ghx15n43v 








MINUTES



                                  Meeting of the Board of Trustees
                                     University of Kentucky
                                          10:30 A.M.
                                        December 9, 2003
                                 18th Floor Patterson Office Tower

Minutes

Accompanying items:

President's Report and Action Items

              President' s Report to the Trustees
      PR 2    Personnel Actions
              Amendment to the Governing Regulations Regarding Staff Trustee
              Election
              Amend the Statute Which Mandates When the Board Shall Meet

Academic Affairs Committee Report


      AACR 1 Candidates for Degrees

Finance Committee Report

      FCR 1   Capital Construction Report
      FCR 2   Patent Assignment Report
      FCR 3   Report of Leases
      FCR 4   Acquisition of Real Property Referred to as Silver Lake Farm in Harrison County
               Kentucky
      FCR 5   Intercollegiate Athletics Quasi-Endowment Withdrawal
      FCR 6   2003-04 Budget Revisions
      FCR 7   University of Kentucky Employer-Assisted Housing Program
      FCR 8   Approval of Amendments to University Section 125 Plan
      FCR 9   Gift and Pledges to UK Opera Theatre
      FCR 10 Gifts to the Dorothy Luther Nursing Fellowship
      FCR 11 Gifts and Pledges to the Earl Platt Slone Endowed Professorship in Pharmacy Practice
               and Science
      FCR 12 The Amerman Family Foundation Gift and Pledge




 







        A Resolution of the Board of Trustees of the University of Kentucky Approving the
FCR 13 Action of the Board of Regents of the Kentucky Community and Technical College
        System (KCTCS) Directing the University of Kentucky to Call the Remaining
        University of Kentucky Community College Educational Buildings Revenue Bonds
        Series A, C, F, and H (Second) and Further Authorizing the Treasurer of the University
        to Execute a Call of Said Bonds
        A Resolution of the Board of Trustees of the University of Kentucky Approving the
FCR 14 Action of the Board of Regents of the Kentucky Community and Technical College
        System (KCTCS) Directing the University of Kentucky to Call University of Kentucky
        Community College Educational Buildings Revenue Bonds Series B and Further
        Authorizing the Treasurer of the University to Execute a Call of Said Bonds
        A Resolution of the Board of Trustees of the University of Kentucky Authorizing the
FCR 15 Issuance of Approximately $23,780,000 of University of Kentucky Consolidated
        Educational Buildings Refunding Revenue Bonds, Series E, J and L (Third Series), to
        be Dated the First Day of the Month in Which the Bonds are Sold




 







      Minutes of the Meeting of the Board of Trustees of the University of Kentucky, Tuesday,
December 9, 2003.

      The Board of Trustees of the University of Kentucky met at 10:30 a.m. (Lexington time)
on Tuesday, December 9, 2003 in the Board Room on the 18th Floor of Patterson Office Tower.

      A.    Meeting Opened

      Mr. Steven S. Reed, Chair, called the meeting to order at 10:35 a.m., and Ms. Marian
Sims gave the invocation.

      B.    Roll Call

        The following members of the Board of Trustees answered the call of the roll: James F.
Hardymon, Marianne Smith Edge, Davy Jones, Michael Kennedy, Pamela R. May, Billy Joe
Miles, Phillip Patton, Elissa Plattner, Steven S. Reed (Chair), Frank Shoop, Marian Moore Sims,
Alice Stevens Sparks, Myra Leigh Tobin, Rachel Watts, JoEtta Y. Wickliffe, Billy B.
Wilcoxson, Russ Williams, Elaine A. Wilson, and Barbara S. Young. Absent from the meeting
was Robert P. Meriwether. The University administration was represented by President Lee T.
Todd, Jr., Provost Michael Nietzel, Executive Vice President for Finance and Administration
Dick Siemer, Executive Vice President of Health Affairs Michael Karpf and Associate General
Counsel Barbara Jones.

        Members of the various news media were also in attendance. A quorum being present,
the Chair declared the meeting officially open for the conduct of business at 10:38 p.m.

      C.    Consent Agenda

      Mr. Reed said that there were three items on the consent agenda: Minutes, PR 2 and
AACR 1. He asked if anyone wanted any of the items removed from the consent agenda. Mr.
Shoop moved that the items be approved. Ms. Smith Edge seconded the motion, and the consent
agenda was approved without dissent.
             Minutes - October 29, 2003
             PR 2 - Personnel Actions
             AACR 1 - Candidates for Degrees

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

      President Todd said that he was going to be very brief with his report given the timeline
for the meeting. He did not go through the items in PR 1 in detail but encouraged the Board to
read the good things in the report.

      President Todd said that PR 2 was on the consent agenda; however, he would like to
mention one item to the Board that was recently reported in the news. Dr. James Holsinger, who
retired as Chancellor of the Medical Center, has been named Secretary of the Kentucky Cabinet
for Health Services in the administration of Governor Ernie Fletcher. Dr. Holsinger will be




 




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working in Frankfort for the Commonwealth but will remain a tenured professor at UK. The
Commonwealth will pay all of his salary and benefits while he is working for the state. Dr.
Holsinger is just finishing his first six months of leave of absence that was previously approved
by the Board. The other six months of his leave of absence will be delayed until he completes
his duty in Frankfort. President Todd said that he is very pleased for Dr. Holsinger. He asked
Associate General Counsel Barbara Jones if the Board needed to take action on this or was this
just for the Board's information. Ms. Jones replied that this was just information for the Board.
President Todd said that he looked forward to Dr. Holsinger serving in this new capacity.

       E.    Amendment to the Governing Regulations Regarding Staff Trustee Election (PR


       President Todd said that PR 3 is a recommendation that the responsibility of the election
of the Staff Trustee be transferred from the Executive Vice President for Finance and
Administration to the Staff Senate. When the Governing Regulations were amended in the
summer of 2001, the election of the Staff Trustee was delegated to the Vice President level
because the Staff Senate had not been established at that time. Now that the University has a
Staff Senate, the responsibility needs to be transferred to that Senate. He asked that the
recommendation be approved. Mr. Williams so moved. Ms. Sims seconded the motion, and it
carried without dissent.

       F.    Amend the Statute Which Mandated When the Board Shall Meet (PR 4)

       President Todd said that PR 4 is a recommendation to change the mandatory Board dates.
He noted that this was discussed at the last Board meeting. He said that this meeting is a perfect
example of the need to change the dates. It is a mandatory meeting, and the Governor's
inauguration is also taking place. When the Board discussed this amendment to the statute
previously, it included doing away with transcriptions of meetings. The transcription piece is no
longer in the recommendation. Basically, the recommendation is asking for the Board's
approval of a legislative initiative to amend KRS 164.170 during the next legislative session.
This would authorize the Board of Trustees to meet at least quarterly each year rather than
meeting on specific times as provided in the current statute. He explained that the
recommendation is not intended to reduce the Board meetings but to allow flexibility with the
meetings. He reminded the Board of having two meetings during one month because of the way
the Board is mandated. He said that he did not believe that any other university had specific
dates. This is not a major request, but the administration does need the Board's approval to take
that action. Ms. Sparks moved approval. Ms. Smith Edge seconded the motion.

       Mr. Reed said that he wanted to make it abundantly clear to the public that this is not an
effort to meet less than the Board normally would meet. He wants it to be very clear that it is
cumbersome because of days like this when the Board statutorily has to meet. It takes the Board
away from having flexibility. It is important that the public know that the Board understands the
importance of conveying information to the public, and it does so at the Board meetings. He
reiterated that in no way does the Board intend to meet less, and quarterly is just the minimum
that is being recommended for the statutes because the Board understands the importance of




 




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getting information to the public. On the motion previously made by Ms. Sparks and seconded
by Ms. Smith Edge, PR 4 carried without dissent. (See PR 4 at the end of the Minutes.)

      G.    Academic Affairs Committee Announcement

      Mr. Reed announced that the Academic Affairs Committee would meet immediately
following the Board meeting. He asked Ms. Sparks, Chair of the Committee, if she had any
comments that she wanted to make at this time. Ms. Sparks replied that she did not have any
comments at this time.

      H.    Capital Construction Report (FCR 1)

      Mr. Hardymon, Chair of the Finance Committee, reported that the Committee met
December 8th with a quorum present and has 15 items to bring to the Board. The Committee
spent a great deal of time on the first two items thoroughly discussing them; however, he would
try to cut that down for the Board's report.

      Mr. Hardymon said that FCR 1 is the Capital Construction Report. This is one of his
favorite items because, in his opinion, these are the big dollars and something the Finance
Committee should have some oversight on.

      Mr. Hardymon explained that the Committee's responsibility is to look at the projects to
see how they are progressing from a budget and timing standpoint and also to note the change
notices that are over $25,000. The Committee then brings it to the Board as a quarterly report.
This quarterly report is for the three months ending September 30th.

      Mr. Hardymon called attention to the Major Project Summary Report. The paragraphs in
this report concern the Coldstream Research Park, the biological sciences building, the Gill Heart
Institute building, the parking structure, the UK Center for Rural Health, the Main Building, and
some repair work on pharmacy fume hoods. All of these projects appear to be on a completion
date that was scheduled either in 2004 or 2005, and they seem to be working towards the budget.
He said that he was pleased to report there were only five change notices: one for the Aging
Allied Health building, two for biological sciences building, one for the Gill Heart Institute, and
one for the Main Building. These were pretty explainable.

      This is a thorough report, well done, and very simple to understand. The Committee
recommends the report to the Board for approval. On motion made by Mr. Hardymon and
seconded by Ms. Wilson, FCR 1 carried without dissent. (See FCR 1 at the end of the Minutes.)

      I.    Patent Assignment Report (FCR 2)

      Mr. Hardymon reported that the Committee had its usual discussion about the Patent
Assignment Report. He said that there is an interesting fine line between honoring the people,
supporting what they are doing, talking about their capabilities, and then trying to understand
what they are doing. The Committee has very good people. They are all specialists in some




 




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things, but they cannot cover all ten of the patents. The Committee had long discussions about
the patents.

      Mr. Hardymon said that he would tell the Board what he got out of the ten patents and
put them in simpler language. He pointed out that the Committee did honor and recognize these
people and talked to them by name during the meeting. He then reviewed the patents.

   * The first one is about splicing plant genes. There are certain fine chemicals, expensive
      chemicals that come from plants. This project is to attempt to get these to come from the
      plants faster and more efficiently.

   *  The second one is process monitoring, and this process will make a deficiency or an error
       show up quicker.

   *  The third one is to make better cheese.

   *  The fourth one is in research and development now. It involves compounds that would
      enlarge the blood vessels and lower blood pressure. Obviously, this is something that
      would be tremendous if it can go from research and development into an everyday use.

   *  The fifth one is to put inhibitors in destructive items, such as pesticides, so they will not
      hurt animals.

   *  The sixth one is to prevent growth of harmful diseases in plants. They are using tobacco
      blue mold in the research and development project, but there could be other plants as
      well.

   *  The seventh one involves very small delivery systems to put vaccines in the body. This
      would avoid shots.

   *  The eighth one is a linear actuator. This is to be sure a person gets the right amount of
      medication.

   *  The ninth one involves certain eye degenerations that come with age. This is to test
      drugs and to find drugs to prevent this degeneration.

   *  The tenth one is to prevent large compounds of solid from dissolving into liquids.

      Mr. Hardymon said that the Committee looked at what patents are doing for the
University. He reminded the Board that an application is made for a patent, and sometimes it
takes two or three years to get the patent. He said that it is hard to compare one quarter against
another, but in 2003, the University had nine patent applications. Seven patents have been
issued, and the patent income, which probably came from something that was approved
sometime ago, was about $168,000. He apologized for the length of the report but moved
approval FCR 2. Ms. Sims seconded the motion, and it carried without dissent. (See FCR 2 at
the end of the Minutes.)




 




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      J.    Report of Leases (FCR 3)

      Mr. Hardymon said that the Committee read the Report of Leases. He reminded the
Board that the President is authorized to enter into leases not exceeding $30,000 in value, and
neither of the leases in FCR 3 are $30,000. There is a lease in Glasgow and a lease in Berea. He
reported that the dollars per square footage was competitive, and he moved approval of FCR 3.
Ms. Smith Edge seconded the motion, and it carried without dissent. (See FCR 3 at the end of
the Minutes.)

      K.    Acquisition of Real Property Referred to as Silver Lake Farm in Harrison County,
Kentucky (FCR 4)

      Mr. Hardymon said that FCR 4 is the acquisition of 400 acres of property known as the
Silver Lake Farm in Harrison County, Kentucky. The University has a grant that would cover
this acquisition of $1,120,000. The recommendation is to give the Executive Vice President for
Finance and Administration authority to negotiate the acquisition of this real property. The
objective is to take this property that has some very valuable old plants and trees and do research.
He moved approval of FCR 4. Professor Kennedy seconded the motion, and it carried without
dissent. (See FCR 4 at the end of the Minutes.)

      L.    Intercollegiate Athletics Quasi-endowment Withdrawal (FCR 5)

      Mr. Hardymon said that FCR 5 is a follow-up on what was presented at the last Board
meeting. The Board previously approved the design work to start the expansion to Memorial
Coliseum and the construction of a multi-purpose facility that would be an addition to the Nutter
Field House. He said that the University has pledges, and these projects are to be fully funded by
private gifts and pledges. He explained that the University would have to take some money out
of the athletic endowment as it incurs expenses toward the project. The recommendation is to
approve a withdrawal up to the full amount of $6,500,000 for these two projects. This action
will keep the projects on schedule. He moved the approval of FCR 5. Mr. Shoop seconded the
motion, and it carried without dissent. (See FCR 5 at the end of the Minutes.)

      M.    2003-04 Budget Revisions (FCR 6)

      Mr. Hardymon said that you have to put FCR 6 in perspective. It involves about $4M of
a budget revision. That is less than 12 of 1 percent of the total budget; therefore, the
modification/change is only a small amount. He said that each item is fully explained, and in his
opinion, the write up is excellent. He then reviewed the items.

      The first item listed under tuition is $435,700. Lexington Community College drew more
students into its system than budgeted; therefore, that money is going to be turned around to do
what is necessary because of the additional students.

      The next item is $1,013,500 for the county appropriations increase. That is for a sports
field and home economics programs in the Agricultural Extension Service.




 




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      There is $1,600,000 which is another big number under the "other" category. This is a
one-time deal with the tobacco funds that the University is getting from the settlement from the
Kentucky Agricultural Development Board. Again, that will be used as some field extension
work.

      Restricted funds increased to approximately $700,000 for various items. That is being
used in the auxiliary fund for expenditures to serve support units and for the Provost area.

      Again, Mr. Hardymon said the report was well explained with each item listed. The
revisions illustrate where the money is going, and the Board gets this report periodically. He
moved approval of FCR 6. Ms. Wilson seconded the motion, and it carried without dissent.
(See FCR 6 at the end of the Minutes.)

      N.    University of Kentucky Employer-Assisted Housing Program (FCR 7)

      Mr. Hardymon said that FCR 7 is the University of Kentucky Employer-Assisted
Housing Program. This program will give loans up to $15,000 to help employees with down
payment, closing costs, etc. Loans will be secured by a lien against the property. He explained
that the employee must agree to live in the house five years, and then the funding of the program
is from private funds. This item has been discussed previously; however, the Board's action at
this meeting will make the program official because the University needs to increase the staff
and retain people to work on this program. Mr. Hardymon moved approval of FCR 7. Ms.
Sparks seconded the motion, and it carried without dissent. (See FCR 7 at the end of the
Minutes.)

      0.    Approval of Amendments to University Section 125 Plan (FCR 8)

      Mr. Hardymon said that FCR 8 includes a group of amendments to bring the Section 125
Plan up-to-date. There are certain codes that change in these type plans. This is a plan that
allows employees to set aside pre-taxed dollars for health care and childcare. The first change is
to open enrollment of a spouse as a qualifying event for plan changes. Another change is to
increase the maximum amount for the Health Care Account from $3,000 to $4,000. A section
would be added to grant the President of the University of Kentucky the authority to amend the
Plan as needed in order to keep it up-to-date. This would also add the privacy provisions. He
repeated that this is an administrative detail that needs to be brought up-to-date. He moved
approval of FCR 8. Ms. Smith Edge seconded the motion.

      Ms. May said that she reads things much differently than most people. She pointed out
that this is not a plan that comes back up for review or reconsideration very often. It was
adopted in 1987, revised once in 1994, and not again until now. She said that as you look at the
changes that are being proposed, and this Board certainly has the right to change them, she
would recommend that on the third page the names of the individuals who are listed be deleted
because it is the position rather than an individual that should be listed in the document. She
said, in her opinion, the Board is setting itself up, and she provided an example. If somebody
forgets to bring a person's change in position to the President, then suddenly there is an




 




7



individual who is not authorized to handle Personal Health Information. This is something that
the Board can clean up very easily at this meeting rather than hoping that somebody brings it to
President's desk every time there is a change in one of these positions. She emphasized that she
is not saying nor predicting that there is going to be a change in anybody in any of these
positions. It is cleaner if that change is made now.

      Ms. May said that she understands very much why the Board needs to give the President
the option to amend this Plan, and it really should be looked at more frequently than every nine
years to make sure it is in compliance. But, the piece, as a Board member, that causes her
concern is the amendment in section 13.2.1 that permits the President not to just amend the Plan
but to terminate the Plan without Board involvement. She said that she thinks that is probably a
little broader than is probably necessary because this obviously will be a significant issue for the
employees of the University, given the fact that it does let them set aside pre-taxed dollars for
health care. And, certainly it is something that should be a Board level issue considering how
many people are impacted.

      Ms. May said that those are the two items that she would suggest that the Board consider
as amendments to the motion made. She moved that FCR 8 be amended. Professor Kennedy
seconded her motion to amend FCR 8.

      Mr. Reed asked if there were any other questions on the amended motion or any other
comments.

      Mr. Hardymon said that as Chairman of the Committee, the amendments are o.k.;
however, the other Committee members should speak up if they do not agree with them.

      Ms. Tobin asked why the names were put in the document.

      Ms. Jones said that she thought it was just an oversight, and Ms. May's point is well
taken.

      Mr. Hardymon said that the Committee discussed this in their meeting, and the
administration did not seem to have the reason.

      Mr. Reed asked that the record note the comment of Counselor Jones that is was an
oversight. He said that there was an amended motion, a second on the amended motion and
asked for any questions. A vote was taken to approve FCR 8 as amended, and the motion carried
without dissent. (See FCR 8 at the end of the Minutes.)

      Mr. Williams asked if the Board just eliminated the part about termination of the Plan by
the President.

      Ms. May said her amendment was to have the Board be delegated to terminate the Plan.



Ms. Williams clarified the deletion of names in the last section, also.




 




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      Ms. Wickliffe asked for clarification as to whether the President still has the right to
amend the Plan.

      Mr. Williams said that the President has the right to amend the Plan but not terminate it.

      P.    Gifts and Pledges (FCR 9 through FCR 12

      Mr. Hardymon said that FCR 9 through 12 involves gifts and pledges. With the Chair's
permission, he asked to have them as one report with one motion.

      FCR 9 - accept a gift of $10,000 and a pledge of $25,000 from Louise Shouse of
Lexington, Kentucky and a pledge of $15,000 from the Lexington Opera Society to create and
endow the Lexington Opera Society Community Endowment for Vocal Studies in the College of
Fine Arts. This would fund visits by vocal artists and master teachers for master classes. Mr.
Hardymon pointed out that the pledge from the Lexington Opera Society was made in honor of
former mayor Pam Miller. This gift and pledge is to be matched by the Research Challenge
Fund. (RCTF)

      FCR 10 - accept gifts for the Dorothy Luther Nursing Fellowship. Dr. Dorothy Luther
was a respected faculty member for many years in the College of Nursing adult nursing program.
She died in 1999 and left $47,184 to the College of Nursing. Friends and faculty of the College
made additional gifts to bring the total to $50,759 to create a fellowship for graduate students in
her memory.

      FCR 11 - accept gifts and pledges to the Earl Platt Slone Endowed Professorship in
Pharmacy Practice and Science. Dr. Slone was very responsible for the transition of this
Pharmacy College into the University of Kentucky. The members of the Class of 1952 chose to
establish the professorship honoring Dr. Slone, who was a former dean of the College, during
their fiftieth anniversary class reunion. Other graduates of the College also made gifts. The gifts
and pledges total $62,232 and are eligible to be matched by RCTF.

      FCR 12 - accept a gift and pledge from the Amerman Family Foundation. Mrs.
Amerman is involved with the Gluck Equine Research Foundation Board. Her husband was the
former Chief Executive Officer of Mattel. Mr. and Mrs. Amerman own Amerman Racing
Stables in California. They are interested in the rehabilitation of horses injured at race tracks or
show rings. This is a $500,000 commitment and is to be matched by RCTF. It is a $100,000 gift
and $400,000 pledge.

      Mr. Hardymon said that in no way did he want to cut short or say anything but nice
things about these gifts. They are pretty straightforward. He moved approval of FCR 9 through
12. Ms. Wilson seconded the motion, and FCR 9 through 12 inclusive carried without dissent.

      Q.    A Resolution of the Board of Trustees of the University of Kentucky Approving
the Action of the Board of Regents of the Kentucky Community and Technical College System
(KCTCS) Directing the University of Kentucky to Call the Remaining University of Kentucky




 




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Community College Educational Buildings Revenue Bonds Series A, C, F, and H (Second) and
Further Authorizing the Treasurer of the University to Execute a Call of Said Bonds (FCR 13)

                                          and

             A Resolution of the Board of Trustees of the University of Kentucky Approving
the Action of the Board of Regents of the Kentucky Community and Technical College System
(KCTCS) Directing the University of Kentucky to Call University of Kentucky Community
College Educational Buildings Revenue Bonds Series B and Further Authorizing the Treasurer
of the University to Execute a Call of Said Bonds (FCR 14)

      Mr. Hardymon said that he would like to present FCR 13 and FCR 14 together. They
both involve bonds that were in use with the Community College System. When the Community
College System was removed from the University of Kentucky, the properties and the bonds
stayed with the University. The University has been periodically working those off as the
regulations of the bonds would allow them to be changed. Now, these two are being changed
from the University to the Commonwealth of Kentucky. The state will manage them and assume
the debt. They will be coming off the university's books. When these are finished, the
University will only have about $1M left of this type of bond, an item that the University does
not manage. The reason the University still has these bonds is because they are not ready to be
redone according to the regulations. He recommended approval of FCR 13 and FCR 14. Ms.
Smith Edge seconded the motion, and it carried without dissent.

      R.    A Resolution of the Board of Trustees of the University of Kentucky Authorizing
the Issuance of Approximately $23,780,000 of University of Kentucky Consolidated Educational
Buildings Refunding Revenue Bonds, Series E, J and L (Third Series), to be Dated the First Day
of the Month in Which the Bonds are Sold (FCR 15)

      Mr. Hardymon said that FCR 15 is a movement to lower the interest the University is
paying to support bonds. These bonds are involved with the Biological Sciences Building, a
patient care addition to the University Medical Center and a Family Practice Facility Building,
Robotics Facility, etc. By calling these bonds in and reissuing them at a lower rate will save
$80,000 a year in payments. This has been an ongoing thing during this time of low interest
rates in the country. It is commonly done and very well done. He recommended approval of
FCR 15. Ms. Wickliffe seconded the motion, and it carried without dissent.

      Mr. Hardymon asked the Committee members for any comments.

      Mr. Shoop said that he is particularly excited about the Employer-assisted Housing
Program that was approved, and he is really excited that the University participating in it. The
$15,000 could be the difference in a member of the faculty or staff being able to purchase a
home. He is glad to see the University do that type program.

      Ms. Sparks said that the Town and Gown Committee worked on this for a long time, and
they are very happy about it, also.




 




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       S.    Investment Committee Report

       Mr. Wilcoxson, Chair of the Investment Committee, reported that the Committee met in a
special all day session on Monday, December 8th. Before reporting on the special session, Mr.
Wilcoxson brought the Board up-to-date on how the University's endowment has done. He
reported that in June of 2003, the University had a market value of $424.6M and as of September
30th, it had a value of $441.9M. There was an increase of about $17.3M which is basically due
to investment appreciation. Recently, the endowment investments had a return of about 4.5% for
the quarter that ended September 30th. If you compare that to the blended market index and the
endowment foundation index, they both returned 3.3%. That is pretty relative as to how the
University performed, and again, the strong performance is primarily due to the favorable results
that the University had with its equity managers.

      Mr. Wilcoxson then reported on the special session. One of the items to cover was the
infusion of more monies into venture capital. He reported that RFP documents were sent to 13
firms, and there were eight responses. The Investment Committee had a preliminary evaluation
performed by the University consultants, Ennis Knupp, and the university's RFP Evaluation
Committee. From the preliminary evaluations, three finalists were brought back to the
Investment Committee.

      Mr. Wilcoxson explained that one of the purposes of the special session was to interview
and pick a manager or managers to manage additional venture capital money. The Investment
Committee interviewed three venture capital firms, and it selected Fort Washington Capital of
Cincinnati for a $2M investment and Vital Venture Capital of Louisville for a $500,000
investment. The Purchasing Department will initiate the contracts with these firms. With these
two additional investments and the $1M that have already been set aside to Chrysalis, that gives
a total of $3.5M invested in venture capital which is a very small percentage over the total
endowment.

      During the afternoon session, the Investment Committee had a long discussion about the
university's asset allocation and spending policies. Basically, due to the expected lower return
on stocks and bonds over the next 10 to 15 years, we are going to have to consider some
modifications on asset allocation for more diversification in the university's portfolio in order to
possibly increase the returns. The Committee is not going to move swiftly. It is going to move
slowly and do its due diligence. Any changes that the Committee makes will be carefully
considered relative to risk and return. The Committee is going to work with the consultants and
the University staff and review the possible changes. Whatever the Committee does will be
reported back to the Board, and hopefully, the Committee will have the Board's blessing. Mr.
Wilcoxson said that he would be happy to answer any questions.

      T.    Other Business

      President Todd mentioned a nice occur