REPORT OF THE AUDIT COMMITTEE


The  following  Report of the Audit  Committee  does not  constitute  soliciting
material and should not be deemed filed or  incorporated  by reference  into any
other Company  filing under the  Securities  Act of 1933 or the  Securities  and
Exchange  Act of  1934,  except  to the  extent  that the  Company  specifically
requests that the information be treated as soliciting  material or specifically
incorporates this report by reference therein.

During 2000,  the Audit  Committee of the Board of Directors  developed an Audit
Committee  Charter for (the "Charter"),  which was approved by the full Board on
March 27, 2000. During 2002, the Board of Directors  re-examined the Charter, as
well as the composition of the Audit  Committee,  in light of applicable law and
the adoption by the New York Stock Exchange  ("NYSE") of rules  governing  audit
committees.  Based upon this  examination,  the Board confirmed that the Charter
met all  requirements  of applicable laws and the NYSE rules and that members of
the Audit Committee are  "independent"  and  "financially  literate"  within the
meaning of the NYSE's rules as  interpreted  by the Board and within the meaning
of the Company's Audit Committee  Charter.  In addition,  the required number of
Audit Committee members have accounting and financial management experience,  as
the Board  interprets those terms in its business  judgment.  In accordance with
its Charter, the Audit Committee reports as follows:

          (i)  Management has reviewed the audited financial statements with the
               Audit  Committee,  including a  discussion  of the quality of the
               accounting principles applied and significant judgments affecting
               the Company's financial statements;

          (ii) the  independent  outside  auditors  have  discussed  the matters
               required by SAS-61 with the Audit Committee including the outside
               auditor's  judgment of the quality of those principles as applied
               and judgments referenced in (i) above under the circumstances;

          (iii)the  members  of  the  Audit  Committee  have  discussed  amongst
               themselves,  without  management or the outside auditor  present,
               the information disclosed to the Audit Committee and described in
               (i) and (ii) above; and

          (iv) the Audit  Committee,  in reliance on the review and  discussions
               conducted with management and the outside auditor pursuant to (i)
               and (ii) above,  believe that the Company's financial  statements
               are  fairly  presented  in  conformity  with  generally  accepted
               accounting principles in all material respects.

Audit Committee Members

         Peter J. Tanous (Chairman)
         T. Wayne Davis
         John R. Kennedy
         William M. Isaac