Corporate Governance Comments:

This company earns our corporate governance rating of "C+" What it terms an election of directors is, in reality, a ratification of a single slate. The slate is chosen by incumbent directors and management. Such a voting process fails to provide shareholders with meaningful choices, when true elections have been found throughout the non-corporate world (e.g., Federal, state and local governments, and educational institutions) to produce successful results.

Proposals:

• Proposal 1 - "Adoption of the Merger Agreement": To adopt a merger agreement between J.P. Morgan Chase & Co. and Bank One Corporation pursuant to which Bank One will merge into JPMorgan Chase.
• Proposal 2 - "Election of Directors": To elect ten directors for the ensuing year. One slate, 10 nominees.
• Proposal 3 - "Appointment of External Auditor": To ratify the appointment of PricewaterhouseCoopers LLP as external auditor for 2004.
• Proposal 4 - "Re-approval of Key Executive Performance Plan (KEPP)": To re-approve the Company's key executive performance plan.
• Proposal 5 - "Adjournment of Annual Meeting": To approve the adjournment of the annual meeting, if necessary or appropriate, to solicit additional proxies.
• Proposal 6 - "Shareholder Proposal - Adoption of an Arbitrary Limit on a Director's Term of Office": That the stockholders of the Company recommend that the Board take the necessary steps so that future outside directors shall not serve for more than six years.
• Proposal 7 - "Shareholder Proposal - Charitable Contributions": That shareholders request that the Company cease making charitable contributions.
• Proposal 8 - "Shareholder Proposal - Political Contributions": That the shareholders of the Company hereby request that the Company prepare and submit to the shareholders of the Company a separate report, updated annually.
• Proposal 9 - "Shareholder Proposal - Separation of CEO & Chairman": Stockholders hereby request that the Board of Directors adopt promptly a resolution requiring that the Chairman of the Board serve in that capacity only, and have no management duties, titles or responsibilities.
• Proposal 10 - "Shareholder Proposal - Disclosure of the Collateral for Over-the-Counter Derivatives": That the Board of Directors develop policies to provide shareholders with adequate disclosure of the collateral for over-the-counter derivatives, via the corporate website and a report to shareholders.
• Proposal 11 - "Shareholder Proposal - Policy Regarding Public Accounting Firm Performing Audit and Audit-Related Work Only": That the shareholders of the Company request that the Board of Directors and its Audit Committee adopt a policy stating that the public accounting firm retained by the Company to audit the Company’s financial statements will perform only “audit” and “audit-related” work for the Company and not perform services generating “tax fees” and “all other fees” as categorized under U.S. Securities and Exchange Commission regulations.
• Proposal 12 - "Shareholder Proposal - Stockholder Approval for the Proposed Plan of Compensation of Non-employee Directors for the Upcoming Year": That the stockholders recommend that the Board present each year for stockholder approval the Board’s proposed plan of compensation of non-employee directors for the upcoming year.
• Proposal 13 - "Shareholder Proposal - Report on a Review of the Company's Executive Compensation Policies": Shareholders request the Board’s Compensation Committee to initiate a review of our company’s executive compensation policies and to make available, upon request, a report of that review by January 1, 2005.

Recommendations:

We recommend that clients holdings shares of J P MORGAN CHASE & CO vote:

Proposal	Egan-Jones Recommendation	Management Recommendation
Proposal 1 - "Adoption of the Merger Agreement":	FOR	FOR
Proposal 2 - "Election of Directors":	FOR, WITH EXCEPTION OF William Harrison Jr. and William Gray III	FOR
Proposal 3 - "Appointment of External Auditor":	FOR	FOR
Proposal 4 - "Re-approval of Key Executive Performance Plan (KEPP)":	FOR	FOR
Proposal 5 - "Adjournment of Annual Meeting":	FOR	FOR
Proposal 6 - "Shareholder Proposal - Adoption of an Arbitrary Limit on a Director's Term of Office":	AGAINST	AGAINST
Proposal 7 - "Shareholder Proposal - Charitable Contributions":	AGAINST	AGAINST
Proposal 8 - "Shareholder Proposal - Political Contributions":	FOR	AGAINST
Proposal 9 - "Shareholder Proposal - Separation of CEO & Chairman":	FOR	AGAINST
Proposal 10 - "Shareholder Proposal - Disclosure of the Collateral for Over-the-Counter Derivatives":	AGAINST	AGAINST
Proposal 11 - "Shareholder Proposal - Policy Regarding Public Accounting Firm Performing Audit and Audit-Related Work Only":	FOR	AGAINST
Proposal 12 - "Shareholder Proposal - Stockholder Approval for the Proposed Plan of Compensation of Non-employee Directors for the Upcoming Year":	AGAINST	AGAINST
Proposal 13 - "Shareholder Proposal - Report on a Review of the Company's Executive Compensation Policies":	AGAINST	AGAINST

Considerations and Recommendations:

Egan-Jones' review centered on the Proposals in the context of maximizing shareholder value, based on publicly available information.

• Proposal 1 - "Adoption of the Merger Agreement":

  Company Profile:

  J.P. Morgan Chase & Co. is a financial holding company incorporated under Delaware law in 1968. JPMorgan Chase is one of the largest banking institutions in the United States, with approximately $771 billion in assets and approximately $46 billion in stockholders’ equity as of December 31, 2003. JPMorgan Chase is a leading global financial services firm with operations in more than 50 countries and more than 30 million retail customers nationwide as of December 31, 2003. Its principal bank subsidiaries are JPMorgan Chase Bank, a New York banking corporation headquartered in New York City, and Chase Manhattan Bank USA, National Association, headquartered in Delaware. JPMorgan Chase’s principal nonbank subsidiary is its investment banking subsidiary, JPMorgan Securities. The bank and nonbank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, representative offices and affiliated banks. JPMorgan Chase’s activities are internally organized, for management reporting purposes, into five major business segments: Investment Bank; Treasury & Securities Services; Investment Management & Private Banking; JPMorgan Partners; and Chase Financial Services.

  Bank One Corporation is a financial holding company and a multibank bank holding company registered under the Bank Holding Company Act of 1956, and is headquartered in Chicago, Illinois. Bank One was incorporated in Delaware in 1998 to effect the merger of Banc One Corporation and First Chicago NBD Corporation. Bank One provides domestic retail banking, finance and credit card services; worldwide commercial banking services; and trust and investment management services. Bank One operates banking offices in Arizona, Colorado, Florida, Illinois, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Texas, Utah, West Virginia and Wisconsin and in selected international markets. Bank One also engages in other businesses related to banking and finance, including credit card and merchant processing, consumer and education finance, real estate-secured lending and servicing, insurance, venture capital, investment and merchant banking, trust, brokerage, investment management, leasing, community development and data processing.

  Structure of the Merger

  Upon completion of the merger, Bank One will merge with and into JPMorgan Chase, with JPMorgan Chase as the surviving corporation in the merger. In the merger, each outstanding share of Bank One common stock will be converted into 1.32 shares of common stock of JPMorgan Chase. No fractional shares will be issued, and cash will be paid instead of fractional shares. The exchange ratio is fixed and will not be adjusted to reflect stock price changes prior to the date of the merger. The combined company, which will retain the J.P. Morgan Chase & Co. name, will have assets of $1.1 trillion, a strong capital base, 2,300 branches in 17 states and top-tier positions in retail banking and lending, credit cards, investment banking, asset management, private banking, treasury and securities services, middle-market and private equity.

  As part of the merger, JPMorgan Chase’s authorized common stock will be increased from 4,500,000,000 to 9,000,000,000 shares. This increase will be automatically reflected in an amendment to JPMorgan Chase’s certificate of incorporation to be adopted as part of the certificate of merger only if and when the merger is completed. Without an increase, JPMorgan Chase would not have sufficient unissued and unreserved shares to issue and reserve for issuance the shares of common stock required to be issued and reserved for issuance under the merger agreement, the stock option agreement issued by JPMorgan Chase to Bank One, and under JPMorgan Chase’s and Bank One’s equity plans.

  Background of the Merger

  The board of directors and senior management of the Company have regularly discussed its business and strategic direction in the context of competitive developments, including the long-term trend of consolidation in the financial services industry, and have considered ways to enhance the Company’s competitive position. Over the past decade, the Company has, through a combination of strategic acquisitions and internal growth, significantly expanded its domestic and global presence and client base.

  The Company's management and board have discussed possible ways of reducing the volatility of JPMorgan Chase’s earnings by increasing revenues from retail financial services and broadening its retail client base wherein it considered acquisitions and strategic combinations with a variety of financial institutions and the potential benefits and risks of those transactions. A potential business combination with Bank One appeared to offer a superior strategic fit, complementary business strengths, competitive positions and prospects and compatible senior management strengths.

  William B. Harrison, Jr., Chairman and Chief Executive Officer of JPMorgan Chase, and James Dimon, Chairman and Chief Executive Officer of Bank One,  from time to time, have had informal discussions about their respective institutions and trends in the financial services industry, including the increasing need for scale and diverse revenue bases. During November 2003, Mr. Harrison and Mr. Dimon had several discussions concerning the possibility of more seriously considering the merits of a business combination between JPMorgan Chase and Bank One.

  Discussions between Messrs. Harrison and Dimon continued in late November and into December, the parties began considering in more detail the potential financial and other terms and conditions of such a transaction, and concluded that the contemplated merger would be for stock consideration based on a fixed exchange ratio. In connection with the ongoing discussions, Bank One and JPMorgan Chase entered into a confidentiality agreement on December 23, 2003.

  In early January 2004, senior management of JPMorgan Chase and Bank One authorized their respective legal and financial advisors to discuss possible timeframes for a transaction and arrangements to facilitate broader mutual due diligence and negotiations between the parties regarding a possible transaction. The parties and their legal and financial advisors met in New York City beginning on January 8, 2004, to undertake mutual confidential due diligence and management discussions and to organize a broader series of due diligence sessions, while counsel for the parties commenced discussions regarding the legal documentation for the transaction.

  During the January 11 and January 14 meetings, the JPMorgan Chase board discussed the proposed transaction and related agreements and asked questions of JPMorgan Chase’s senior management and JPMorgan Chase’s legal and financial advisors. Following deliberations, the JPMorgan Chase board of directors, by unanimous vote of all directors, approved the merger agreement and the related agreements and the transactions contemplated by those agreements, and resolved to recommend that its stockholders vote to adopt the merger agreement.

  On January 14, 2004, the Bank One board of directors held a special meeting to consider the proposed transaction, which was also attended by members of Bank One’s senior management and Bank One’s outside legal and financial advisors. Following further review and discussion among the members of the Bank One board of directors, the board of directors voted unanimously to approve the merger and merger agreement with JPMorgan Chase and the related agreements and the transactions contemplated by those agreements, and resolved to recommend that its stockholders vote to adopt the merger agreement.

  Shortly following approval of each board of directors, the parties executed the merger agreement and related agreements. The parties announced the transaction via a joint press release issued in the early evening of January 14, 2004.

  Analysis and Considerations:
  Egan-Jones' review centered on the strategic and financial aspects of the proposed transaction in the context of maximizing shareholder value. In doing so, we view the following as significant factors in evaluating the proposed transactions:

  Key Positive Components

  1. On a pro forma basis, the combined company will rank second in the United States in terms of total assets as of September 30, 2003, fourth in terms of number of branches as of June 30, 2003 and will have the highest market share position in some of the most important U.S. banking markets, including New York, Chicago, Houston and Dallas. In addition, the merger will strengthen JPMorgan Chase’s leadership positions in a number of national consumer credit businesses. The combined company will be the second largest U.S. credit card issuer based on amounts outstanding as of June 30, 2003, the largest non-captive provider of auto financing, the fourth largest originator and servicer of mortgage loans and the second largest provider of home equity lines of credit.
  2. The businesses of the combined company following the merger will be more evenly balanced between retail and institutional financial services which will reduce the volatility of the combined company’s earnings compared to JPMorgan Chase on its own.
  3. The merger will also result in greater geographic diversity of the retail customer base. The combined company will have approximately 2,300 branches in 17 states compared to JPMorgan Chase’s existing network of 514 branches in 4 states.
  4. JPMorgan Chase’s board also noted that the combined company will have strong investment management and private banking operations, with over $700 billion in assets under active management, a mutual fund family with over $200 billion in assets under management, $300 billion of assets in the private bank, and the leading position in U.S. private banking.
  5. The merger will create opportunities for incremental revenues from, among other things, cross-marketing of an expanded range of products and services.
  6. The financial analyses and presentations of JPMorgan Chase’s financial advisor and its opinion that the exchange ratio was fair, from a financial point of view, to JPMorgan Chase.
  7. The terms and conditions of the merger agreement and the stock option agreements, including the fact that the merger agreement is not subject to termination, regardless of any change in the trading prices of either company’s stock between signing of the merger agreement and closing.
  8. The fact that the exchange ratio represented a premium of 8% based on the average closing prices of JPMorgan Chase and Bank One common stock during the one month prior to announcement of the merger and a premium of 14% over the closing price of Bank One common stock on the date of announcement of the merger.
  9. The corporate governance provisions established for the transaction, including the post-merger board composition, the Chief Executive Officer succession arrangements, the employment agreement with Mr. Dimon and the designation of key senior management of the combined company, which the JPMorgan Chase board considered to be of significant importance in assuring certainty with respect to Chief Executive Officer succession, continuity of senior management and an effective and timely integration of the two companies’ operations.

  Key Negative Components

  1. The challenges of combining the operations of two major financial services businesses.
  2. The possible disruptions from anticipated workforce reductions to be implemented as part of the merger integration plan; the JPMorgan Chase board believed, however, that such disruptions would be mitigated by the fact that they would impact only a relatively small percentage of the total combined workforce (6% according to preliminary management estimates) and would be implemented in part through normal attrition.
  3. The risk that anticipated cost savings will not be achieved.
  4. The estimated $3 billion (pre-tax) in costs expected to be incurred to combine the operations of JPMorgan Chase and Bank One.
  5. The potential dilution to JPMorgan Chase’s stockholders, if the forecast annual cost savings of $2.2 billion pre-tax are not achieved or the anticipated levels of excess capital expected to support the planned post-merger share repurchases.
  6. The potential conflicts of interest of JPMorgan Chase officers and directors in connection with the merger.
  7. The risk of diverting management’s attention from other strategic priorities to implement merger integration efforts.

  We also considered the JPMorgan Securities Analysis, as described in the proxy:

  Implied Value and Multiple Analysis. Based upon the exchange ratio of 1.32 and the $38.79 closing market price of JPMorgan Chase common stock on January 12, 2004 (the last practicable date when presentation materials were prepared and distributed to the JPMorgan Chase board), JPMorgan Securities calculated that the implied value of the merger consideration was $51.20 per share of Bank One common stock. This implied value represents approximately a 15% premium to $44.56 (the prior trading day’s closing price per share of Bank One common stock on January 9, 2004) and approximately a 14% premium to $44.73 (the one-week average closing price per share of Bank One common stock). JPMorgan Securities also calculated that based on the exchange ratio of 1.32 and on JPMorgan Chase’s number of fully diluted shares of common stock, Bank One stockholders would own on a pro forma basis approximately 42.2% of the combined company.

  JPMorgan Securities also determined the multiple of the implied offer price to I/B/E/S median estimated 2004 earnings per share of Bank One common stock as of January 12, 2004 and the stated and tangible book values per share of Bank One common stock as of September 30, 2003. I/ B/ E/ S is a database owned and operated by Thompson Financial, which contains estimated and actual earnings, cash flows, dividends and other data for U.S. and foreign markets. The results of this analysis are summarized as follows:

  	Multiples
  2004E EPS	15.3 x
  Book value per share	2.6
  Tangible book value per share	2.9

  Conclusion:

  Based on our reviews of publicly available information on strategic, corporate governance and financial aspects of the proposed transaction, Egan-Jones views the proposed stock-for-stock merger to be a desirable approach in maximizing shareholder value and recommends that clients holding common shares of J.P. Morgan Chase & Co. vote "FOR" this Proposal.

• Proposal 2 - "Election of Directors":

  There is a single slate of nominees, the nominees appear qualified, but we recommend that clients "WITHHOLD" votes from Insider William Harrison Jr., Chairman of the Board and CEO of the Company, and Independent outside director William Gray III who serves on 5 other directorships. We believe that there is an inherent potential conflict in having the CEO or former CEO serves as the Chairman of the Board. Consequently, we prefer that companies separate the roles of the Chairman and CEO and that the Chairman be independent to further ensure board independence and accountability. Moreover, we prefer that director’s serve only at most 3 other directorships to ensure the effective and prudent exercise of their fiduciary duties as directors. Also, see our corporate governance comments above. We believe that in the future, a shareholder proposal should be put forward which provides for a meaningful election of directors (e.g. multiple nominees for each seat).

  We note, however, the independence of the key Board committees of the Board comprised solely of Independent outside directors. Also, all directors attended at least 75% of all the meetings of the Board and of the committees during fiscal year 2003.

• Proposal 3 - "Appointment of External Auditor":

  PricewaterhouseCoopers LLP has served as external auditors for J P Morgan Chase & Co., and we have seen no evidence that its integrity, independence or professionalism is in question. We recommend a vote "FOR" this Proposal.

• Proposal 4 - "Re-approval of Key Executive Performance Plan (KEPP)":

  The shareholders are being asked to re-approve the Company's key executive performance plan. KEEP was initially approved by shareholders in 1994 and in 1999 and therefore, the Company is seeking re-approval of KEPP in accordance with Section 162(m) of the Internal Revenue Code of 1986, as amended, and implementing regulations (the Code). One requirement for compensation to be performance-based is that the compensation is paid or distributed pursuant to a plan that has been approved by the stockholders — in this case, every five years. The purpose of the KEPP is to (1) recruit, motivate and retain senior officers through compensation and benefits that are competitive with those of the Company's peer institutions and (2) enhance stockholder value by aligning the compensation of senior officers with corporate performance and, to the extent possible, by preserving the tax-deductibility of senior officer compensation.

  KEPP is administered by the Compensation & Management Development Committee of the board of directors. KEPP provides that the bonus pool for each year is (1) a percentage of the Company's income before provision for income tax expense for that year less (2) an amount equal to a percentage of total stockholders’ equity as of the beginning of that year. Each year, the Committee establishes the percentages applicable for that year. Coincident with the establishment of the bonus pool, the Committee will allocate to each participant a share of the bonus pool; however, no participant may receive an award under KEPP in excess of .002 of the Company's income before income tax expense, extraordinary items and the effect of accounting changes for the relevant calendar year plus $1,000,000. This maximum is a limitation and does not represent a target bonus. The bonuses provided under KEPP will be payable in the form of (i) cash awards under KEPP and (ii) stock-based awards under the Company’s Long-Term Incentive Plan, in the Committee’s discretion. We recommend a vote "FOR" this Proposal.

• Proposal 5 - "Adjournment of Annual Meeting":

  The shareholders are being asked to approve the adjournment of the annual meeting, if necessary or appropriate, to solicit additional proxies. We recommend a vote "FOR" this Proposal.

• Proposal 6 - "Shareholder Proposal - Adoption of an Arbitrary Limit on a Director's Term of Office":

  The shareholders are being asked to act upon a proposal recommending that the Board take the necessary steps so that future outside directors shall not serve for more than six years.

  We believe that it is not appropriate to institute fixed limits on the tenure of directors because the firm and the board would thereby be deprived of experience and knowledge. The Company is a large and complex financial services company. As such, in order to perform their responsibilities effectively, directors must develop familiarity with the Company's management and products, as well as the business and regulatory environment in which the Company operates. We firmly believe that a director’s years of service enhance his or her experience by adding to the director’s knowledge of the Company, its business and management, and its performance in different phases of the economic cycle. Accordingly, we believe that adoption of an arbitrary limit on a director's term of office would not serve the best interests of the Company's shareholders. We recommend a vote "AGAINST" this Proposal. 

• Proposal 7 - "Shareholder Proposal - Charitable Contributions":

  The shareholders are being asked to act upon a proposal requesting that the Company cease making charitable contributions.

  This proposal was then submitted in the 2003 Annual General Meeting. However, as noted last year, the Company is proud of its long history of charitable giving. In fact, the J.P. Morgan Chase Foundation, which is funded by JPMorgan Chase, concentrates its contributions in three areas — Community Development & Human Services; Pre-collegiate Public Education; and Arts & Culture. This emphasis reflects the Company's conviction that, by enhancing the lives of its customers and employees and improving the communities in which they live, we are strengthening the Company’s business franchise and thereby adding stockholder value. The Company has a vital business interest in ensuring and improving the vitality of the markets in which it serves. Accordingly, in the U.S., financial institutions such as JPMorgan Chase are required to meet community development standards, including grants made in low-and moderate-income communities that might be deemed precluded by the proposal. As such, we believe that corporate giving strengthens the Company's role as a good citizen and a good neighbor, thus, reflects the Company's dedication not only to its business but also to its community. We recommend a vote "AGAINST" this Proposal.

• Proposal 8 - "Shareholder Proposal - Political Contributions":

  The shareholders are being asked to act upon a proposal requesting the Company prepare and submit to the shareholders of the Company a separate report, updated annually, disclosing its policies for political contributions (both direct and indirect) made with corporate funds.

  Although the Company, based on its stated policy, does not make any political contributions in connection with federal elections, we prefer that applying transparency and accountability to corporate political giving is a must for a sound corporate governance practice. Without full transparency, we believe Company executives may be able to inappropriately direct corporate resources for political purposes and make decisions unilaterally without a stated business rationale for such donations. We believe that proper disclosure is consistent with public policy in regard to public company disclosure. Some companies may have had substantial contributions that are not generally known to the public to political committees, which in return, use the company's money in ways that could pose reputational problems and legal risks for the company, and its shareholders. Furthermore, there is currently no single source of information providing proper disclosure to the Company's shareholders on this issue. We recommend a vote "FOR" this Proposal.

• Proposal 9 - "Shareholder Proposal - Separation of CEO & Chairman":

  The shareholders are being asked to act upon a proposal requesting that the Board of Directors adopt promptly a resolution requiring that the Chairman of the Board serve in that capacity only, and have no management duties, titles or responsibilities.

  We believe that to have an effective Board of Directors, they must be led by a Chairman who is independent of management which ensures a sound corporate governance practice. We believe that there is an inherent potential conflict in having the CEO or former CEO serves as the Chairman of the Board. Consequently, we prefer that companies separate the roles of the Chairman and CEO and that the Chairman be independent to further ensure board independence and accountability. We recommend a vote "FOR" this Proposal.

• Proposal 10 - "Shareholder Proposal - Disclosure of the Collateral for Over-the-Counter Derivatives":

  The shareholders are being asked to act upon a proposal requesting that the Board of Directors develop policies to provide shareholders with adequate disclosure of the collateral for over-the-counter derivatives, via the corporate website and a report to shareholders.

  The Company is fully committed to being the market leader in disclosure of credit risk of all forms. In the Company's 2003 Annual Report, the Company has enhanced the disclosure regarding derivatives transactions, in the interest of providing full information on the firm’s credit risk management practices. Information on derivatives risk that is relevant to the key risk management practices of the firm goes well beyond the items listed in the resolution and is fully disclosed. We believe that the information requested by the sponsors of this proposal is not relevant to an assessment of  the Company’s overall risk profile, is not made by the Company's competitors, and would be detrimental to the Company's competitive position. We recommend a vote "AGAINST" this Proposal.

• Proposal 11 - "Shareholder Proposal - Policy Regarding Public Accounting Firm Performing Audit and Audit-Related Work Only":

  The shareholders are being asked to act upon a proposal requesting the Board of Directors and its Audit Committee adopt a policy stating that the public accounting firm retained by the Company to audit the Company’s financial statements will perform only “audit” and “audit-related” work for the Company and not perform services generating “tax fees” and “all other fees” as categorized under U.S. Securities and Exchange Commission regulations.

  The issue of auditor independence has been a major concern for investors and the markets. The Sarbanes-Oxley Act was a strong effort to deal with various aspects of the auditor independence issue. Sarbanes-Oxley enhanced the role of board audit committees in retaining and monitoring audit firms, while limiting the types of non-audit services that audit firms are permitted to perform for audit clients. The SEC followed-up with enhanced reporting requirements (Release No. 33-8183, May 6, 2003) that provide investors better insight into the range of services beyond audit services for which an audit firm is being utilized. As such, we believe it is important that shareholders use the enhanced disclosure to protect the integrity of the financial reporting system. We believe that limiting the auditor to providing only audit and audit-related services would be another positive step in protecting auditor independence. We recommend a vote "FOR" this Proposal.

• Proposal 12 - "Shareholder Proposal - Stockholder Approval for the Proposed Plan of Compensation of Non-employee Directors for the Upcoming Year":

  The shareholders are being asked to act upon a proposal recommending that the Board present each year for stockholder approval the Board’s proposed plan of compensation of non-employee directors for the upcoming year.

  It is essential for the Company to be able to attract and retain talented and highly qualified board members to serve as directors. Accordingly, director compensation is an integral part of the Company’s ability to achieve this goal. As part of the Company's Corporate Governance Practices, the Company's Governance Committee makes periodic recommendations to the board regarding executive compensation based on a comparison with relevant peer groups and advice from independent consultants. The Company's board has also recognized that a significant portion of director compensation should be linked to common stock, so it has formulated its compensation package to consist of approximately one-third cash and two-thirds stock based compensation. The stock-based compensation is in the form of common stock equivalents, which must remain indexed to common stock until a director’s termination of service. As such, we believe that this proposal would be detrimental to the Company in attracting and retaining highly qualified directors, thus, would not be in the best interests of the Company and its shareholders. We recommend a vote "AGAINST" this Proposal.

• Proposal 13 - "Shareholder Proposal - Report on a Review of the Company's Executive Compensation Policies":

  The shareholders are being asked to act upon a proposal requesting the Board’s Compensation Committee to initiate a review of our company’s executive compensation policies and to make available, upon request, a report of that review by January 1, 2005.

  We believe that the proposed report would not be informative not important and therefore would not justify the expense of its preparation. The report of the Compensation & Management Development Committee on its proxy statement addresses the Company's compensation policy for its executive officers. Compensation at all levels is intended to be competitive with that of other employers in the Company’s market so as to attract and retain talented employees. The Company seek to offer compensation packages that are competitive with those of other top companies in the market since competitive pay is essential in attracting and retaining qualified and enthusiastic personnel at all levels, and in turn, are essential to the success of the Company's business endeavors. Accordingly, we recommend a vote "AGAINST" this Proposal.