Food Technology Service Inc · DEF 14C · For 5/22/01 · EX-17

Filed On 5/4/01 2:37pm ET   ·   SEC File 0-19047   ·   Accession Number 868267-1-500003

Definitive Proxy Information Statement   ·   Schedule 14C
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14C     Schedule 14c-101                                       1      5K 
 2: EX-17       Notice of Annual Meeting                              12     59K 

EX-17   ·   Notice of Annual Meeting
Exhibit Table of Contents

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         FOOD TECHNOLOGY SERVICE, INC.
       502 Prairie Mine Road
       Mulberry, Florida 33860

                                        April 16, 2001

Dear Shareholder:                                                               

On behalf of the Board of Directors, you are cordially invited to attend the    
2001 Annual Meeting of the Shareholders of Food Technology Service, Inc.,       
to be held on May 22, 2001, in Lakeland, Florida. At the meeting, you will      
hear a report on our operations and have an opportunity to meet your            
directors and executives.                                                       

This booklet includes the formal notice of the meeting and the information      
statement. The information statement provides more information concerning       
the agenda and procedures for the meeting. It also describes how the Board      
operates and gives personal information about our director candidates.          

Your vote is important and the Company's management team would greatly          
appreciate your attendance at the Annual Meeting. However, we are not           
asking you for a proxy, and you are requested not to send us a proxy.           

I look forward to seeing you at the 2001 Annual Meeting of Shareholders,        
and I sincerely hope you will be able to attend.                                

                 Very truly yours,

                  E. W. (Pete) Ellis
         President

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         FOOD TECHNOLOGY SERVICE, INC.
       502 Prairie Mine Road
       Mulberry, Florida 33860

            NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
     To Be Held May 22, 2001

TO THE SHAREHOLDERS OF FOOD TECHNOLOGY SERVICE, INC.:                           

NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of the Shareholders of      
Food Technology Service, Inc., a Florida corporation (the "Company"), will be   
held at The Club at Eaglebrooke, 1300 Eaglebrooke Blvd, Lakeland, Florida       
33813, on May 22, 2001, at 1:00 p.m., local time, to act on the following       
matters:                                                                        

To elect five (5) persons to serve as directors of the Company until the
 2002 Annual Meeting of Shareholders and until their respective successors
shall be duly elected and qualified;                                    

To transact such other business as may properly come before the meeting 
or any adjournment thereof.                                             

Only Shareholders of record at 5:00 p.m., Eastern Standard Time, on April 3,    
2001, are entitled to receive notice of, and to vote at, the Annual Meeting.    

                                      By Order of the Board of Directors

                      E. W. (Pete) Ellis
             President

April 16, 2001                                                                  
Mulberry, Florida                                                               

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         FOOD TECHNOLOGY SERVICE, INC.
       502 Prairie Mine Road
       Mulberry, Florida 33860

       INFORMATION STATEMENT
         2001 ANNUAL MEETING OF SHAREHOLDERS
       To Be Held May 22, 2001

       GENERAL INFORMATION

This Information Statement is being furnished to the holders            
("Shareholders") of the common shares, par value $.01 per share (the            
"Common Shares"), of Food Technology Service, Inc., a Florida corporation       
(the "Company"), in connection with the 2001 Annual Meeting of Shareholders     
to be held on May 22, 2001, at 1:00 p.m. (the "Annual Meeting"), and at any     
adjournment thereof. The Annual Meeting will be held at the The Club at         
Eaglebrooke, 1300 Eaglebrooke, Lakeland, Florida 33813. This Information        
Statement is first being sent to Shareholders, together with the Notice of      
Annual Meeting, on or about April 16, 2001.                                     

 At the Annual Meeting, Shareholders will be asked to consider and vote on
the election of five (5) persons to serve as directors on the Board. The        
shareholders will also be asked to transact such other business as may          
properly come before the meeting or any adjournment thereof.                    

A copy of the Company's Annual Report for 2000 is enclosed.             

VOTING SECURITIES                                                               

The Board of Directors has fixed 5:00 p.m., Eastern Standard Time, on   
April 3, 2001, as the record date (the "Record Date") for the determination     
of the Shareholders of record entitled to receive notice of, and to vote at,    
the Annual Meeting or any adjournment thereof. On April 3, 2001, there were     
10,333,201 issued and outstanding Common Shares of the Company, constituting    
the only class of stock outstanding. The presence of a majority of the          
outstanding Common Shares as of the Record Date, in person or represented       
by proxy, will constitute a quorum at the Annual Meeting. The affirmative       
vote of a majority of those shares represented at the meeting is necessary      
for the election of the nominees as directors.                                  

  MDS Nordion ("Nordion"), the owner of approximately 53% of the outstanding
shares of Common Stock of the Company, has indicated its intent to vote in      
favor of the election of the proposed slate of directors and for the amendment  
to the Company's Option Plan. The vote represented by this shareholder is       
sufficient to approve such election THEREFORE, WE ARE NOT ASKING YOU FOR A      
PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. Shareholders are invited    
to attend the Annual Meeting and can vote in person at that time.               

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ELECTION OF DIRECTORS       

  The Company currently has five (5) Directors, each of whose term of office
will expire at the Annual Meeting. The Board of Directors has nominated five    
(5) persons (each, a "Nominee"), all of whom are currently Directors, to stand  
for election as a Director, to serve until the 2002 Annual Meeting of           
Shareholders and until his successor has been duly elected and qualified.       

Nominees for Director                                                           

Each Director of the Company serves as a Director for a term of one (1) 
year and until his successor is duly elected and qualified. The following sets  
forth for each Nominee, his name and age, positions and/or offices held with    
the Company, the period during which each Nominee served in such positions      
and/or offices, a description of his business experience during the past        
five (5) years or more, and other biographical information.                     

Thomas J. Daw has served as a Director since July 19, 2000 and currently
acts as Chairman. He brings over 40 years of sales and marketing experience     
with ConAgra and Rath Packaging Company. He designed and implemented ConAgra's  
successful "Country Pride" brand of fresh prepackaged poultry. He served as     
Vice President of Sales of the ConAgra Butterball Division. Prior to retirement 
after 22 years with the company, was Vice President of ConAgra's Western        
Retail Division.                                                                

   E. W. (Pete) Ellis has been President, Chief Executive Officer and Director
since December 1996. He has been in the food business for the past 33 years,    
ten years of which were spent with Oscar Mayer & Co., and fifteen years with    
ConAgra. He was employed in sales and marketing with both companies. He was     
President and owner of Ellis, Harris, and Associates, Inc., a food brokerage    
company, from 1986 to 1988.                                                     

 Frank M. Fraser served as a director of the Company from May 1992 through
September 1993. He was reelected as a director in July 1996. He is presently    
retired. He was Vice President of Market Development at Nordion. In June 1964,  
Mr. Fraser joined Atomic Energy of Canada Limited (now MDS Nordion) as a        
project engineer. He is a Director of the Canadian Irradiation Centre Laval,    
Quebec. He is also the Canadian delegate to the International Consultative      
Group on Food Irradiation and has Chaired the International Meeting on          
Radiation Processing.                                                           

R. Craig Hunter has served as a director of the Company since September 
1998. He is Vice President of Business Development of MDS Nordion's Industrial  
Irradiation Business Unit. Previously he was Vice President International       
at Kolmar Laboratories Inc.                                                     

David Nicholds has served as a director of the Company since September  
1998. He is the Vice President, General Counsel and Corporate Secretary of MDS  
Nordion. He joined MDS Nordion in 1989.                                         

 Except with respect to Messrs. Nicholds and Hunter, who are appointees of
Nordion (See, "Certain Relationships and Related Transactions"), there are      
no arrangements between any Director and any person pursuant to which he was,   
or will be, selected as a Director in the past, or as a Nominee for Director    
for the current year.                                                           

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Director Meetings and Committees                                                

During the year ended December 31, 2000, the Board of Directors of the  
Company held a total of five (5) meetings. Each of the Directors attended at    
least 75% of the total number of meetings of the Board of Directors.            

The Board of Directors has a standing Audit Committee, which is the only
committee of the Board. The Audit Committee of the Board of Directors,          
currently comprised of Tom Daw and Frank Fraser, held one meeting during        
2000. The Board of Directors has adopted a written charter for the Audit        
Committee, a copy of which is attached as "Appendix A" to this proxy.           

The Audit Committee has reviewed and discussed the audited financial    
statements with management. In addition, the audit committee has discussed      
with the independent auditors the matters required to be discussed by           
SAS 61, and received the written disclosures and the letter from the            
independent accountants required by Independence Standards Board Standard       
No. 1 (Independence Standards Board Standard No. 1, Independence Discussions    
with Audit Committees), and has discussed with the independent accountant       
the independent accountant's independence. Based on the review and discussions  
referred to above, the Audit Committee recommended to the Board of Directors    
that the audited financial statements be included in the Company's Annual       
Report on Form 10-K for the year 2000 for filing with the Commission.           

Compensation of Directors                                                       

On February 9, 1999 the Board of Directors approved an option plan for  
non-employee Directors. Under the plan, non-employee Directors receive          
options to purchase 3,000 shares per year plus 1,000 shares per meeting         
attended. Such options are granted in January of each year at the quoted        
market price at the beginning of the previous year and must be exercised on     
or before five years from the date of grant. The options are granted pro        
rata if a Director terminates during the year. Such plan was amended on         
May 18, 2000 to grant such options on the date a Director is elected rather     
than January at the average quoted market price for the five days preceding     
the date of grant.  Also such options may be exercised after one year. No       
more than 10,000 shares may be granted to each Director per year. During 2000   
options to purchase 25,356 shares at $3.38 per share were granted to four       
directors.                                                                      

Non-employee Directors are also reimbursed for out-of-pocket expenses.  

Executive Officers' Compensation                                                

The following table is a summary of the cash and non-cash compensation  
paid to or accrued for the past two fiscal years for the Company's Chief        
Executive Officer. There are no other Officers or individuals whose             
compensation exceeded $100,000 for the year ended December 31, 2000.            

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Summary Compensation Table      

                                        Long-Term Compensation
       Annual Compensation              Awards
       -------------------              ------

                                          Securities
Name and            Fiscal                      Underlying      
Principal Position      Year       Salary          Options (#)        
------------------     ------      ------          -----------        
E.W. Ellis             2000       $70,000              -              
President & Chief      1999       $70,000              -              
Executive Officer (1)  1998       $70,000          10,000 shs         

(1)   On December 9, 1996 the Company entered into a five-year employment       
 agreement with Mr. Ellis which provides for an annual compensation of
$70,000. In addition, Mr. Ellis was granted a five year option to   
purchase 100,000 shares of the Company's common stock. The option   
vests 20% per year commencing December 9, 1997 and is exercisable at
$1.00 per share, the fair market value on the date of grant.        

Aggregated Option Exercises in 2000                                             

The following table presents information regarding individual exercises 
of options to purchase the Company's common stock made during 2000 by the       
Company's Chief Executive Officer.                                              

Aggregated Option Exercises In The Last Year  
and Year End Option Values    

         Number of Unexercised
                                  Securities            Value of Unexercised
         Shares                   Underlying             In-the-Money Option
Acquired    Value          Options                   At year
on      Realized         At Year                     End
Name   Exercise    (1)             End                       (1)(3)       
------------------------------------------------------------------------------- 
                          Exercised  Unexercisable  Exercisable  Unexercisable
                          ---------  -------------  -----------  -------------
------------------------------------------------------------------------------- 
E.W.                                                                        
Ellis   10,000   $900(2)  20,000       24,000        1,800        $2,160    

(1) Value calculated by determining the difference between the fair market  
  value of the Common Shares underlying options and the exercise or base
price of the options at exercise or at the fiscal year end, as      
appropriate.                                                        

(2) The exercise price for 10,000 shares is $1.00. The fair market value    
was $1.09 at December 31, 2000.                                     

(3) The exercise price for 44,000 shares is $1.00. The fair market value    
was $1.09 at December 31, 2000.                                     

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  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Agreements with Nordion                                                         

The Company, in September 1990, entered into an agreement with MDS      
Nordion, the principal shareholder, ("Nordion"), providing for the purchase     
and sale of irradiation equipment and cobalt-60 necessary to operate its        
irradiation facility. In order to secure payment of the purchase price,         
additional loans and future advances by MDS Nordion to the Company, the         
Company and MDS Nordion executed a Convertible Debenture and Mortgage and       
Security Agreement, both dated January 15, 1992. The balance of the debt        
at February 4, 2000 was $963,194 US (the "Debt"), plus interest accruing to     
December 31, 2000 in the amount of $91,970 accruing at the rate of Bank of      
America's prime rate in effect from time to time plus 1%, resulted in a total   
amount owing of $1,055,164 at December 31, 2000.                                

  On October 22, 1991 the Company entered into a Reimbursement and Indemnity
Agreement with Nordion whereby Nordion assisted the Company in obtaining a      
surety bond in the sum of $600,000 in order to meet State of Florida facility   
permit bonding requirements. In connection therewith the Company agreed to      
reimburse Nordion for any liability and expense which Nordion may sustain as    
a result of its commitments to the bond issuer and secured such obligation      
under a Mortgage and Security Agreement dated October 22, 1991. The bond        
continues to be in effect.                                                      

By agreements dated March 6, 2000, April 17, 2000, May 18, 2000 and     
November 20,2000, the Company and MDS Nordion agreed and further confirmed      
that the Debt, and any future advances, including payment of guarantees or      
indemnities to third parties made by MDS Nordion to the Company's benefit,      
shall be convertible at MDS Nordion's option, at any time, into common stock    
of the Company. The applicable conversion rate is determined based on 70% of    
the closing price of the Company's shares listed on NASDAQ, on the last trade   
date prior to the exercise of the conversion right. Further, MDS Nordion's      
right of conversion of interest accruing on the Debt from February 5, 2000 to   
January 1, 2002, into shares of the Company, have been waived by MDS Nordion.   

On February 4, 2000, in order to simplify and consolidate the existing  
security interests securing repayment of the (i) Debt and interest, (ii)        
indemnity and reimbursement obligations arising from guarantees or indemnities  
provided by MDS Nordion to third parties for the Company's benefit, and (iii)   
future loans or advances, the Company and MDS Nordion, entered into a new       
Mortgage and Security Agreement.  Substantially all of the assets of the        
Company continue to be pledged as collateral against the obligations of the     
Company to MDS Nordion.                                                         

In addition to cobalt-60 purchased from MDS Nordion, MDS Nordion has    
stored an additional amount of cobalt-60 at the Company's facility in           
anticipation of the company's future needs. At the end of 2000, there           
were approximately 680,900 curies of cobalt-60 both owned and stored at         
the Company's facility.  Title in and to 373,200 curies of cobalt-60 located    
at the facility remains the property of MDS Nordion and may be removed by       
MDS Nordion at any time.                                                        

In the past, under the terms of its agreement with Nordion, the Company 
was under some circumstances be prohibited from processing any product other    
than food and related products. In 2001, MDS Nordion removed this restriction.  

In 1999, Nordion agreed to guarantee a line of credit of $500,000 from a
bank. On December 31, 2000, $400,000 of this amount was available to fund 2001  
operations.                                                                     

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    SECURITY OWNERSHIP OF MANAGEMENT AND
 CERTAIN BENEFICIAL OWNERS

The following table sets forth as of April 3, 2001, the ownership of    
Common Stock of the Company of (i) all persons known by the Company to own      
beneficially 5% or more of such Common Stock, (ii) each current director and    
officer of the Company and (iii) all current directors and officers as a        
group, together with their percentage holdings at such date. The addresses      
of all holders of 5% or more of the Common Stock are included in the table.     

------------------------------------------------------------------------------  
  Name and Address                  Amount and Nature of      Percentage
of Beneficial Owner                 Beneficially Owned        of Class
------------------------------------------------------------------------------  

MDS Nordion                                 5,455,444 <F1>           52.8       
447 March Road-Kanata Ontario                                               
Canada K2K 1X8                                                              

Thomas J. Daw                                   4,356 <F2>           (*)        

E. W. (Pete) Ellis                             35,200 <F3>           (*)        

Frank M. Fraser                                16,000 <F4>           (*)        

Craig Hunter                                5,455,444 <F1>           52.8       

David Nicholds                              5,455,444 <F1>           52.8       

All Directors and Officers                  5,491,000 <F5>           53.1       
as a group (5 persons)                                                      

* Less than 1%                                                                  

[FN]                                                                            
<F1>                                                                            
(1) Includes 801,923 shares of Common Stock which are issuable upon             
conversion of $1,055,163 of indebtedness owed Nordion by the Company.   
 See "Business - Agreements with MDS Nordion." Messrs. Hunter and Nicholds
are designees of Nordion to serve on the Company's Board of Directors.  
 Messrs. Hunter and Nicholds own less than 1% each of the Capital Stock of
 Nordion and they disclaim beneficial ownership of the Common Stock of the
  Company which Nordion owns or has the right to acquire. Approximately 100%
of the outstanding shares of Nordion's common stock is owned by MDS Inc.
a Canadian Corporation, whose shares are traded on the Toronto Stock    
Exchange and MDS Laboratories Inc, a subsidiary of MDS Inc.             
<F2>                                                                            
(2) Includes 4,356 shares underlying options which are currently exercisable or 
exercisable within the next sixty (60) days.                            
<F3>                                                                            
(3) Includes 20,000 shares underlying options which are currently exercisable   
or exercisable within the next sixty (60) days.                         
<F4>                                                                            
(4) Includes 16,000 shares underlying options which are currently exercisable   
or exercisable within the next sixty (60) days                          
<F5>                                                                            
(5) Includes shares underlying options which are currently exercisable or       
exercisable within the next sixty (60) days and shares underlying       
convertible debt.                                                       

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Section 16(a) Beneficial Ownership Reporting Compliance                         

 The Company believes that the reporting requirements, under Section 16(a)
of the Exchange Act, for all its executive officers, directors, and each person 
who is the beneficial owner of more than 10% of the common stock of a company   
were satisfied except as follows: Nordion, owner in excess of 10% of the        
Company's outstanding shares of Common Stock, filed one Form 4 report one       
month late, covering an aggregate of 18 transactions.                           

SOLICITATION COSTS

The Company will bear the costs of preparing, assembling and mailing the
Information Statement and the 2000 Annual Report in connection with the         
Annual Meeting.                                                                 

   SHAREHOLDER PROPOSALS

Eligible Shareholders who wish to present proposals for action at the   
2001 Annual Meeting of Shareholders should submit their proposals in writing    
to the President of the Company at the address of the Company set forth on the  
first page of this Information Statement. Proposals must be received by the     
President no later than January 2, 2002 for inclusion in next year's Proxy      
Statement and proxy card. A Shareholder is eligible to present proposals if,    
at the time he or she submits a proposal or proposals, the Shareholder owns at  
least 1% or $1,000 in market value of Common Shares and has held such shares    
for at least one year, and the Shareholder continues to own such shares         
through the date of the 2002 Annual Meeting.                                    

 OTHER MATTERS

  At the time of the preparation of this Information Statement, the Board of
Directors of the Company had not been informed of any matters which would be    
presented for action at the Annual Meeting, other than the proposals            
specifically set forth in the Notice of Annual Meeting of Shareholders and      
referred to herein.                                                             

                            By Order of the Board of Directors
             /s/Pete Ellis
            E. W. (Pete) Ellis
   President

April 16, 2001                                                                  
Mulberry, Florida                                                               

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 EXHIBIT A

 AUDIT COMMITTEE CHARTER

The Audit Committee ("the Committee"), of the Board of Directors        
("the Board") of Company ("the Company"), will have the oversight               
responsibility, authority and specific duties as described below.               

COMPOSITION                                                                     

The Committee will be comprised of three or more directors as determined
by the Board. The members of the Committee will meet the independence and       
experience requirements of the New York Stock Exchange (NYSE). The members of   
the Committee will be elected annually at the organizational meeting of the     
full Board held in May and will be listed in the annual report to               
shareholders. One of the members of the Committee will be elected Committee     
Chair by the Board.                                                             

RESPONSIBILITY                                                                  

The Committee is a part of the Board. It's primary function is to assist
the Board in fulfilling its oversight responsibilities with respect to (i) the  
annual financial information to be provided to shareholders and the Securities  
and Exchange Commission (SEC); (ii) the system of internal controls that        
management has established; and (iii) the internal and external audit           
process. In addition, the Committee provides an avenue for communication        
between internal audit, the independent accountants, financial management and   
the Board. The Committee should have a clear understanding with the independent 
accountants that they must maintain an open and transparent relationship with   
the Committee, and that the ultimate accountability of the independent          
accountants is to the Board and the Committee. The Committee will make regular  
reports to the Board concerning its activities.                                 

  While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct      
audits or to determine that the Company's financial statements are complete     
and accurate and are in accordance with generally accepted accounting           
principles. This is the responsibility of management and the independent        
auditor. Nor is it the duty of the Audit Committee to conduct investigations,   
to resolve disagreements, if any, between management and the independent        
audit or to assure compliance with laws and regulations and the Company's       
business conduct guidelines.                                                    

AUTHORITY                                                                       

Subject to the prior approval of the Board, the Committee is granted the
authority to investigate any matter or activity involving financial accounting  
and financial reporting, as well as the internal controls of the Company. In    
that regard, the Committee will have the authority to approve the retention of  
external professionals to render advice and counsel in such matters. All        
employees will be directed to cooperate with respect thereto as requested       
by members of the Committee.                                                    

MEETINGS                                                                        

  The Committee is to meet at least one time annually and as many additional
times as the Committee deems necessary. Content of the agenda for each meeting  
should be cleared by the Committee Chair. The Committee is to meet in separate  
executive sessions with the chief financial officer, independent accountants    
and internal audit at least once each year and at other times when considered   
appropriate.                                                                    

ATTENDANCE                                                                      

 Committee members will strive to be present at all meetings. As necessary
or desirable, the Committee Chair may request that members of management and    
representatives of the independent accountants and internal audit be present    
at Committee meetings.                                                          

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SPECIFIC DUTIES                                                                 

In carrying out its oversight responsibilities, the Committee will:             

1.  Review and reassess the adequacy of this charter annually and recommend any 
proposed changes to the Board for approval. This should be done in      
compliance with applicable NYSE Audit Committee Requirements.           

2.  Review with the Company's management, internal audit and independent        
accountants the Company's accounting and financial reporting controls.  
Obtain annually in writing from the independent accountants their letter
as to the adequacy of such controls.                                    

3.  Review with the Company's management, internal audit and independent        
  accountants significant accounting and reporting principles, practices and
procedures applied by the Company in preparing its financial statements.
   Discuss with the independent accountants their judgments about the quality,
  not just the acceptability, of the Company's accounting principles used in
financial reporting.                                                    

4.  Review the scope of internal audit's work plan for the year and receive a   
 summary report of major findings by internal audits and how management is
addressing the conditions reported.                                     

5.  Review the scope and general extent of the independent accountants' annual  
audit. The Committee's review should include an explanation from the    
independent accountants of the factors considered by the accountants in 
determining the audit scope, including the major risk factors. The      
independent accountants should confirm to the Committee that no         
limitations have been placed on the scope or nature of their audit      
procedures. The Committee will review annually with management the fee  
arrangement with the independent accountants.                           

6.  Inquire as to the independence of the independent accountants and obtain    
from the independent accountants, at least annually, a formal written   
statement delineating all relationships between the independent         
accountants and the Company as contemplated by Independence Standards   
Board Standard No. 1, Independence Discussions with Audit Committees.   

7.  Have a predetermined arrangement with the independent accountants that      
they will advise the Committee through its Chair and management of the  
 Company of any matters identified through procedures followed for interim
quarterly financial statements, and that such notification as required  
under standards for communication with Audit Committees is to be made   
prior to the related press release or, if not practicable, prior to     
filing Forms 10-Q. Also receive a written confirmation provided by the  
 independent accountants at the end of each of the first three quarters of
the year that they have nothing to report to the Committee, if that is  
the case, or the written enumeration of required reporting issues.      

8.  At the completion of the annual audit, review with management, internal     
audit and the independent accountants the following:                    

 The annual financial statements and related footnotes and financial
information to be included in the Company's annual report to      
shareholders and on Form 10-K.                                    

Results of the audit of the financial s statements and the related
report thereon and, if applicable, a report on changes during the 
year in accounting principles and their application.              
Significant changes to the audit plan, if any, and any serious    
    disputes or difficulties with management encountered during the audit.
   Inquire about the cooperation received by the independent accountants
     during their audit, including access to all requested records, data and
    information. Inquire of the independent accountants whether there have
 been any disagreements with management which, if not satisfactorily
   resolved, would have caused them to issue a nonstandard report on the
Company's financial statements.                                   

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    Other communications as required to be communicated by the independent
   accountants by Statement of Auditing Standards (SAS) 61 as amended by
     SAS 90 relating to the conduct of the audit. Further, receive a written
    communication provided by the independent accountants concerning their
   judgment about the quality of the Company's accounting principles, as
outlined in SAS 61 as amended by SAS 90, and that they concur with
management's representation concerning audit adjustments.         

  If deemed appropriate after such review and discussion, recommend to the
 Board that the financial statements be included in the Company's annual
report on Form 10-K.                                                  

9.   After preparation by management and review by internal audit and           
 independent accountants, approve the report required under SEC rules to
   be included in the Company's annual proxy statement. The charter is to be
published as an appendix to the proxy statement every three years.    

10.  Discuss with the independent accountants the quality of the Company's      
financial and accounting personnel. Also, elicit the comments of      
   management regarding the responsiveness of the independent accountants to
the Company's needs.                                                  

11.  Meet with management, internal audit and the independent accountants to    
discuss any relevant significant recommendations that the independent 
 accountants may have, particularly those characterized as 'material' or
'serious'. Typically, such recommendations will be presented by the   
independent accountants in the form of a Letter of Comments and       
 Recommendations to the Committee. The Committee should review responses
of management to the Letter of Comments and Recommendations from the  
independent accountants and receive follow-up reports on action taken 
concerning the aforementioned recommendations.                        

12.  Recommend to the Board the selection, retention or termination of the      
Company's independent accountants.                                    

13.  Review the appointment and replacement of the senior internal audit        
executive.                                                            

14.  Review with management, internal audit and the independent accountants     
the methods used to establish and monitor the Company's policies with 
  respect to unethical or illegal activities by Company employees that may
have a material impact on the financial statements.                   

15.  Generally as part of the review of the annual financial statements,        
  receive an oral report(s), at least annually, from the Company's general
  counsel concerning legal and regulatory matters that may have a material
impact on the financial statements.                                   

16.  As the Committee may deem appropriate, obtain, weigh and consider expert   
advice as to Audit Committee related rules of the NYSE, Statements on 
   Auditing Standards and other accounting, legal and regulatory provisions.

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This DEF 14C Filing		Date		First		Last			Other Filings
		1/15/92		7
		12/9/96		6
		12/9/97		6
		2/9/99		5
		2/4/00		7
		2/5/00		7
		3/6/00		7
		4/17/00		7
		5/18/00		5		7
		7/19/00		4
		12/31/00		5		7			10KSB
		4/3/01		2		8
		4/16/01		1		9
Filed On / Filed As Of		5/4/01
For The Period Ended		5/22/01		1		3
		1/1/02		7
		1/2/02		9
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