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As required by Paragraph 57 of the Memorandum of Agreement, the Company and Union along with our respective Actuaries have concluded the review and revision of the Medical Plans.

Although earlier this year the Company had projected an 18% increase in medical costs for the Bargaining Unit in 2004, the Actuaries through extensive cost analysis managed to lower that projection to 11%. During these discussions, the Committee and our Actuary explored proposals the Company had offered to see if we could lower the projection even more. The proposals that were offered included adjustments to co-pays and deductibles which were ruled out after determining they would be far more costly to the employees than an across the board increase.

As a result of these discussions and research, and in order to keep the Plans solvent to prevent them from falling below the 2.75 monthly reserve ratio next year; at which time even greater increases would be necessary to recover the fund, the parties have agreed to the rates listed below which will become effective January 1, 2004.

As previously communicated, the cost of medical and prescription drugs continue to skyrocket nationwide with no solution in sight at this time. The medical industry, prescription drug and insurance companies are completely out of control. Currently there are more than forty-one million Americans without medical coverage simply because they cannot afford to buy insurance for themselves or their family as the industry continues to reap huge record-breaking profits. All this is occurring because the industry has been operating completely unchecked with little or no interest by the White House or Congress to create and pass legislation to correct this nationwide disaster.

 It is interesting to note that even though a National Health Care System proposal failed to pass Congress in the early 1990’s, the mere threat resulted in holding medical cost inflation anywhere from 1% to 3%. However since 2000, with no threat present and a White House and Congress that favors big business, the inflation rate continues to rise anywhere from 14% to 19% annually. We as Union Members must take a hard look at the Candidates who are and will be running for Congress and for President of the United States next year. We must only elect those candidates who are willing to take on not only this issue but who will support the working men and women of this country and our issues.