Code, which provides a limit on the deductibility of compensation for certain
executive officers in excess of $1,000,000 per year. The Committee believes that
no named officer in the Summary Compensation Table had taxable compensation for
the fiscal year ended December 31, 2002 in excess of the deduction limit. The
Committee intends to continue to evaluate the impact of this Code provision.
The Committee believes that the policies and programs described above
have supported the Company's business objectives and have contributed to the
Company's performance.
COMPENSATION COMMITTEE
Timothy M. Murray
James F. Reilly
REPORT OF THE AUDIT COMMITTEE FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
The Audit Committee of the Company's Board of Directors is comprised of
three independent directors. The Audit Committee meets at least twice a year.
The current members of the Audit Committee are Messrs. Reilly, Beatson and
Jacobs.
Management is responsible for the Company's internal controls and the
financial reporting process. The independent accountants ("auditors") are
responsible for performing an independent audit of the Company's consolidated
financial statements in accordance with generally accepted auditing standards
and issuing a report thereon. The Audit Committee's responsibility is to monitor
these processes. The Audit Committee meets with the auditors at least twice a
year. In addition, the Audit Committee has approved the appointment of the
Company's auditors, KPMG, LLP.
The Audit Committee discussed with the Company's auditors the overall
scope and plans for the independent audit. Management represented to the Audit
Committee that the Company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles. The Audit Committee
has reviewed and discussed with management and the auditors the Company's
audited financial statements, including the auditor's judgments about the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments and the clarity of disclosures in the
financial statements. The Audit Committee also discussed with the auditors the
other matters required by Statement on Auditing Standards No. 61 "Communication
with Audit Committees" as amended by Statement on Auditing Standards No. 90
"Audit Committee Communications".
The Company's auditors provided to the Audit Committee the written
disclosures required by Independence Standards Board Standard No. 1
"Independence Discussions with Audit Committees," and the Audit Committee
discussed with the auditors their independence from the Company and its
management.
Based on the Audit Committee's discussion with management and the
auditors and the Audit Committee's review of the representations of management
and the report of the auditors to the Audit Committee, the Audit Committee
recommended to the Board that the audited consolidated financial statements be
included in the Annual Report on Form 10-K for the fiscal year ended December
31, 2002, which was filed with the Securities and Exchange Commission.
James F. Reilly
David I. Beatson
Dr. Neil W. Jacobs
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