The Audit Committee (the Committee) is composed of independent directors and operates under a written charter adopted by the Committee and the Board. A copy of the Committee’s charter is attached to this Proxy Statement as Exhibit I. The members of the Committee are Paul E. Gray (Chairman), Martha Layne Collins and Laura D’Andrea Tyson. Paul O’Neill, who was also a member of this Committee during 2000, resigned from the Board effective December 31, 2000, in anticipation of his appointment as United States Secretary of the Treasury.

Management has the primary responsibility for the Company’s financial statements and the reporting process, including the system of internal controls. PricewaterhouseCoopers LLP, the independent accountants for the Company, are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Committee’s responsibility is to monitor these processes.

In this context, the Committee has met and held discussions with management and the independent accountants. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States, and the Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Committee discussed with the independent accountants matters required to be discussed by Statement on Auditing Standards No. 61 “Communication With Audit Committees”.

The independent accountants provided to the Committee the written disclosures required by the Independence Standards Board Standard No.1 “Independence Discussion With Audit Committees”. The Committee discussed with the accountants the accountants’ independence.