Description of Stock Option Exchange Program

Grant of New Options. Under the Stock Option Exchange Program, our eligible employees may make a one-time election to cancel all of their existing stock options and exchange them for new options. These new options will be issued on August 26, 2002, or thereafter, on the first business day that is at least six months and one day after the cancellation of the old options. Participation in the program is voluntary. To participate in the program, however, an employee must elect to cancel all of his or her options. In other words, an employee may not elect to exchange some of his or her current options and retain others.

Eligibility. The program is open to all of our employees and the employees of our participating subsidiaries. Our six most senior executive officers are not, however, eligible to participate in the program. The program is also not available to our directors or any former employees or retirees.

Exchange Ratio. The exchange ratio for the program, i.e., how many current options an employee must surrender in order to receive one new option, is based on the Black-Scholes option valuation model. This model is a recognized and accepted method to determine the value of an option. We choose this approach in order to make the exchange program value neutral to you, our shareholders. In other words, we wanted to avoid the dilution in ownership that normally results when all options are exchanged on a one-for-one basis.

Using the Black-Scholes valuation model, the value of each option was determined both before and after the exchange. For purposes of determining current value, we used 90% of an option's current Black-Scholes value. These values were then compared to determine an appropriate exchange ratio based on the current option's existing exercise price. While some options will be exchanged on a one-for-one basis, in the vast majority of cases, an employee will exchange two or three existing options for a single new one. We have set the exchange ratio for both the 1998 and 2000 all employee grants at 1.5 to one. The following table shows the specific exchange ratios that will be used in the program for all other options.