Report of the Audit Committee

The role of the Audit Committee is to assist the Board of Directors in its oversight of the Company's financial reporting process. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. The independent auditors are responsible for auditing the Company's financial statements and expressing an opinion as to their conformity to accounting principles generally accepted in the United States.

In the performance of its oversight function, the Audit Committee has reviewed and discussed with management and the independent auditors the Company's audited financial statements. The Audit Committee also has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 relating to communication with audit committees. In addition, the Audit Committee has received from the independent auditors the written disclosures and letter required by Independence Standards Board Standard No. 1 relating to independence discussions with audit committees, has discussed with the independent auditors their independence from the Company and its management, and has considered whether the independent auditor's provision of non-audit services to the Company is compatible with maintaining the auditor's independence.

The Audit Committee discussed with the Company's internal and independent auditors the overall scope and plans for their respective audits. The Audit Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company's internal controls and the overall quality of the Company's financial reporting. These meetings without management present are held at least once each year, but generally more frequently.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the Company's audited financial statements be included in the Company's 2000 Annual Report to Shareholders and Annual Report on Form 10-K for the year ended December 31, 2000 for filing with the Securities and Exchange Commission.

AUDIT COMMITTEE Daniel F. Akerson, Chairman Edwin L. Artzt William G. Bowen F. Ross Johnson

Compensation and Benefits Committee. The Compensation and Benefits Committee has overall responsibility for our executive officer and other compensation and benefit programs. The Committee may hire and consult with independent advisors. The Committee also:

• approves the compensation of certain key employees and makes recommendations to the Board as required;
  
• evaluates the performance of the Chief Executive Officer;
  
• reviews senior management development programs and appraises senior management performance;
  
• approves material changes to our incentive compensation and benefit plans and policies; and
  
• carries out the Board's responsibilities under our pension, savings and welfare benefit plans and appoints management employees to serve on the committees that are responsible for the administration of these plans and the management of plan assets.

Committee on Directors. The Committee on Directors considers and makes recommendations to the Board concerning board composition and performance. The Committee:

• recommends individuals for election to the Board and the duties and membership of Board committees;
  
• advises the Board on the factors it should consider in selecting Directors;
  
• advises the Board on compensation we pay to our outside Directors and retirement policies we apply to Board members;
  
• recommends ways for the Board to evaluate its performance and approves procedures for training and orientation of new Board members; and
  
• considers candidates for election to the Board that shareholders recommend in accordance with the requirements we provide on pages 42-43.

Executive Committee. The Executive Committee may meet instead of the full Board if the Board needs to take action on a significant matter but is unable to convene a full meeting on short notice.

Finance Committee. The Finance Committee oversees our investment programs and reviews our capital needs. The Committee:

• considers our investment strategies in light of dynamic economic and market conditions;
  
• reviews with management our need for capital and how we allocate it;
  
• reviews our dividend policies with management; and
  
• consults with management when we consider important transactions, such as acquiring other businesses, obtaining loans or issuing securities.

Public Responsibility Committee. The Public Responsibility Committee reviews our practices that affect the communities we work in or the public interest in general. For example, the Committee considers our consumer policies, our charitable giving programs, the ways we create employment opportunities for minorities and women, and how we safeguard confidential information about our customers.

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