2004 Committee Charter : KSE

Purpose and Authority
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The purpose of the Audit Committee is to:

A. Provide assistance to the Board of Directors in fulfilling its oversight
responsibilities to the Corporation's shareholders and to the investing
public. The Committee's primary duties are to monitor, review and initiate
changes, as the Committee deems appropriate, with respect to:

(i) The quality and integrity of the Corporation's financial statements;

(ii) The Corporation's compliance with legal and regulatory requirements;

(iii) The independent auditor's qualifications and independence;

(iv) The performance of the Corporation's internal audit function and
independent auditors;

(v) The business practices of the Corporation; and

(vi) Risk assessment and risk management.

B. Prepare the audit committee report that the rules of the Securities and
Exchange Commission require be included in the Corporation's annual Proxy
Statement.

The Committee is designated by the Board of Directors and receives its authority
from the Board of Directors to whom it reports. The Board has vested in the
Committee the authority to carry out the responsibilities as noted in this
Charter, and any other duties which the Committee deems necessary to fulfill its
obligations to the Board of Directors and the shareholders of the Corporation.
To such end, the Committee is authorized to select, retain and/or replace, as
needed, advisors, consultants and legal counsel to provide independent advice to
the Committee. In that connection, in the event the Committee retains any such
advisor, consultant or legal counsel, the Committee shall have the sole
authority to approve such consultant's fees and other retention terms.

Membership
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The Committee shall be comprised of three or more members of the Board of
Directors. In the event of the absence of any member or members from a meeting,
alternate members may be designated by the Chairman and Chief Executive Officer.
All members, including alternate members are required to meet the following
criteria:

o Independence

All members of the Committee are required to be "independent" under
the rules of the New York Stock Exchange and the Sarbanes-Oxley Act of
2002. No member of the Committee may serve on the audit committee of
more than three public companies, including the Corporation, unless
the Board of Directors (i) determines that such simultaneous service
would not impair the ability of such member to effectively serve on
the Committee and (ii) discloses such determination in the annual
proxy statement.
o Financial Literacy and Expertise

All members of the Committee shall have a working familiarity with
basic finance and accounting practices (or acquire such familiarity
within a reasonable period after his or her appointment). At least one
member of the committee shall have accounting or related financial
management experience, as required by the New York Stock Exchange and
determined by the Board in its business judgment. The Board and the
Corporation shall use diligent efforts to have at least one committee
member who meets the criteria of an "audit committee financial expert"
as prescribed by Securities and Exchange Commission rules.

Chairman
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Unless a Chairman is elected by the full Board of Directors, the members of the
Committee shall designate a Chairman by majority vote of the full Committee
membership. The Chairman shall be entitled to cast a vote to resolve any ties.
The Chairman will chair all regular sessions of the Committee and set the
agendas for Committee meetings.

Independent Auditor
-------------------

General
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The Committee shall retain and terminate the independent auditor, oversee their
work and approve all audit engagement fees and terms. The independent auditor
shall be informed that it reports directly to the Audit Committee.

With respect to the work of the independent auditor, the Committee is
responsible for (i) reviewing the scope of the audit, (ii) approving the nature
and cost of all audit and non-audit services (non-audit services must be
approved prior to commencement of the services), (iii) monitoring the auditor's
performance, (iv) assuring that the auditor is independent, and (v) resolving
any disagreement between management and the auditor regarding financial
reporting, for the purpose of preparing or issuing an audit report or related
work.

The Committee shall inquire regularly of the independent auditor to ascertain
that it is receiving the full cooperation of management, that all information
desired is provided freely, that there are no material weaknesses in the
internal control structure, that no material fraud was uncovered in the course
of its work and that management is diligent in conducting its business in
accordance with the Corporation's ethical standards.

The Committee shall periodically meet separately with the independent auditors
and in the absence of management to discuss any matters that the Committee or
the independent auditors believe would be appropriate to discuss privately. In
addition, the Committee shall meet with the independent auditors and management
quarterly to review the Corporation's financial statements, and annual and
quarterly reports required to be filed with the Securities and Exchange
Commission.

Fees and Compensation
---------------------

The Committee shall have the exclusive authority within the Corporation to
approve in advance any audit or non-audit engagement or relationship between the
Corporation and the independent auditors, other than "prohibited non-auditing
services" (as defined below) which shall not be approved by the Committee. The
Committee hereby delegates to the Chairman of the Committee the authority to
approve in advance all audit or non-audit services to be provided by the
independent auditor so long as it is presented to the full Committee at a later
time.

The following shall be "prohibited non-auditing services:" (i) bookkeeping or
other services related to the accounting records or financial statements of the
Corporation; (ii) financial information systems design and implementation; (iii)
appraisal or valuation services, providing fairness opinions or preparing
contribution-in-kind reports; (iv) actuarial services; (v) internal audit
outsourcing services; (vi) management functions or human resource functions ;
(vii) broker or dealer, investment adviser or investment banking services;
(viii) legal services and expert services unrelated to the audit; and (ix) any
other service that the Public Company Accounting Oversight Board prohibits
through regulation.

Although it is the intent of the Committee to pre-approve all non-audit services
to be provided by the independent auditor, any inadvertent failure to do so will
not be deemed a breach of any provision of this Charter if: (i) the aggregate
amount of all such non-audit services provided to the Corporation constitutes
not more than five percent of the total amount of revenues paid by the
Corporation to its auditor during the fiscal year in which the non-audit
services are provided; (ii) such services were not recognized by the Corporation
at the time of the engagement to be non-audit services; and (iii) such services
are promptly brought to the attention of the Committee and approved by the
Committee (or its Chairman pursuant to delegated authority) prior to the
completion of the annual audit of the Corporation.

Review of Independent Auditor
-----------------------------

The Committee shall review, at least annually, the qualifications, performance
and independence of the independent auditor. In conducting its review and
evaluation, the Committee shall:

(a) Obtain and review a report by the Corporation's independent auditor
describing: (i) the auditing firm's internal quality-control
procedures; (ii) any material issues raised by the most recent
internal quality-control review, peer review, or a review by the
Public Company Accounting Oversight Board, of the auditing firm, or by
any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more
independent audits carried out by the auditing firm, and any steps
taken to deal with any such issues; and (iii) to assess the auditor's
independence, all relationships between the independent auditor and
the Corporation;

(b) Ensure the rotation of the lead audit partner at least every five
years, and consider whether there should be regular rotation of the
audit firm itself;

(c) Confirm with any independent auditor retained to provide audit
services for any fiscal year that the lead (or coordinating) audit
partner (having primary responsibility for the audit), or the audit
partner responsible for reviewing the audit, has not performed audit
services for the Corporation in each of the five previous fiscal years
of that corporation; and

(d) Take into account the opinions of management and the Corporation's
internal auditors (or other personnel responsible for the internal
audit function).

Internal Auditing Division
--------------------------

The Vice President & General Auditor is in charge of the Internal Auditing
Division and reports directly to the Board of Directors, functionally to the
Audit Committee and administratively to the President and Chief Operating
Officer.

Each year, the General Auditor will submit an Audit Plan to the Committee for
approval. Thereafter, the General Auditor will keep the Committee informed on
the progress of the Plan's implementation, and twice a year will submit written
reports on such progress and on the results of his reviews and management's
response to any problems or weaknesses in controls noted.

The Committee shall review the Charter of the Internal Auditing Division and
approve any changes thereto. It shall also ascertain that the resources
allocated to the Internal Auditing function are sufficient to ensure that
adequate internal audit review is being performed in the Corporation. The
Committee will periodically review and discuss with the independent auditor the
responsibilities, budget, and staffing of the Internal Auditing Division.
The Committee may meet privately with the General Auditor at each of its
meetings and at any other time at the General Auditor's request without prior
communication with management. Periodically, the Committee will meet in
executive session with the General Auditor.

The General Auditor shall not be appointed or removed by management without the
concurrence of the Committee. The General Auditor's performance will be reviewed
periodically by the Committee.

The Committee may provide special assignments to the General Auditor to perform
reviews in selected areas of its interest or concern.

Financial Statements and Internal Accounting Control
----------------------------------------------------

The Committee shall review with management and the independent auditor prior to
public dissemination the Corporation's annual audited financial statements and
quarterly financial statements, including the Corporation's disclosures under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." The review should include discussions with management and the
independent public accountants of significant issues regarding accounting
principles, practices and judgements, including those matters set forth in SAS
No. 61.

As part of its quarterly review, the independent auditor will discuss with
management any judgment areas, adjustments, disclosures and all material changes
in accounting principles. Management will report to the Committee any material
items or discussions resulting from such review. Management will also provide
the Committee copies of the reports filed with the Securities and Exchange
Commission. In addition, the Committee, or at the minimum its Chairman, should
communicate with management and the independent auditor on a quarterly basis
(prior to the filing of the Corporation's 10-Q), to review the Corporation's
financial statements and significant findings based upon the independent
auditor's review procedures. Any significant changes to the Corporation's
accounting principles and any items required to be communicated by the
independent public accountants, in accordance with SAS No. 61, should also be
discussed.

The Committee shall also review and discuss with management and the independent
auditor as appropriate the Corporation's earnings press releases, as well as
financial information and earnings guidance provided to analysts and rating
agencies. The Committee's discussion in this regard may be general in nature
(i.e., discussion of the types of information to be disclosed and the type of
presentation to be made) and need not take place in advance of each earnings
release or each instance in which the Corporation may provide earnings guidance.

The Committee shall discuss with management and the independent auditor: (i) the
adequacy of the Corporation's internal controls over financial reporting and the
financial reporting process, (ii) the status of internal control recommendations
made by the independent auditor and the General Auditor, (iii) the adequacy of
the process employed for the certification by the Corporation's Chief Executive
Officer and Chief Financial Officer of reports or financial statements filed
with the Securities and Exchange Commission.

The Committee shall also perform any functions required to be performed by it or
otherwise appropriate under applicable law, rules or regulations, the
Corporation's by-laws and the resolutions or directives of the Board, including
review of any certification required to be reviewed in accordance with
applicable law or regulations of the Securities and Exchange Commission.

Financial Reporting Process
---------------------------

In consultation with the independent auditor, management and the internal
auditors, the Committee shall review the integrity of the Corporation's
financial reporting processes, both internal and external. In this connection,
the Committee should obtain and discuss with management and the independent
auditor reports from management and the independent auditor regarding: (i) all
critical accounting policies and practices to be used by the Corporation; (ii)
analyses prepared by management and/or the independent auditor setting forth
significant financial reporting issues and judgments made in connection with the
preparation of the financial statements, including all alternative treatments of
financial information within generally accepted accounting principles that have
been discussed with the Corporation's management, the ramifications of the use
of alternative disclosures and treatments, and the treatment preferred by the
independent auditor; (iii) major issues regarding accounting principles and
financial statement presentations, including any significant changes in the
Corporation's selection or application of accounting principles; (iv) major
issues as to the adequacy of the Corporation's internal controls and any
specific audit steps adopted in light of material control deficiencies; and (v)
any other material written communications between the independent auditor and
the Corporation's management.

The Committee shall review periodically the effect of regulatory and accounting
initiatives, as well as off-balance sheet structures, on the financial
statements of the Corporation.

The Committee shall also review with the independent auditor (i) any audit
problems or other difficulties encountered by the auditor in the course of the
audit process, including any restrictions on the scope of the independent
auditor's activities or on access to requested information, and any significant
disagreements with management and (ii) management's response to such matters.
Without excluding other possibilities, the Committee shall review with the
independent auditor (i) any accounting adjustments that were noted or proposed
by the auditor but were "passed" (as immaterial or otherwise), (ii) any
communications between the audit team and the audit firm's national office
respecting auditing or accounting issues presented by the engagement and (iii)
any "management" or "internal control" letter issued, or proposed to be issued,
by the independent auditor to the Corporation.

Other Duties
------------

The Committee shall review with management and the independent auditor the
Corporation's guidelines and policies with respect to risk assessment and risk
management. The Committee should review the Corporation's major financial and
operational risk exposures and the steps management has taken to monitor and
control such exposures, and evaluate the Corporation's compliance with its
Corporate Risk Policy and with the risk control practices established by its
Risk Management Committee. The Committee may also approve changes to the
Corporation's Corporate Risk Policy as part of its continual reevaluation of the
overall framework for evaluation, management and control of risk.

The Committee shall establish hiring policies for employees or former employees
of the independent auditor. At a minimum, these policies shall provide that any
registered public accounting firm may not provide audit services to the
Corporation if the Chief Executive Officer, Controller, Chief Financial Officer,
Chief Accounting Officer or any person serving in an equivalent capacity for the
Corporation was employed by the registered public accounting firm and
participated in the audit of the Corporation within one year of the initiation
of the current audit.

The Committee shall establish procedures for (i) the receipt, retention and
treatment of complaints received by the Corporation regarding accounting,
internal accounting controls, or auditing matters; and (ii) the confidential,
anonymous submission by employees of the Corporation of concerns regarding
questionable accounting or auditing matters.

The Committee shall maintain continuing vigilance for any procedures or
practices which might impair the Corporation's financial and business integrity.
Annually, the Committee will receive from the General Auditor a written report
on compliance with ethical business conduct and shall make inquiries, as
necessary, to assure itself that the Corporation conducts its business in a
lawful and ethical manner.

Periodically, the Committee shall meet separately with management.

At least once a year, the Committee shall review with management policies
respecting expenses and perquisites.

At least once a year, the Committee shall review and assess the adequacy of the
Audit Committee Charter. In addition, the Committee shall submit the charter to
be published in the proxy statement at least once every three years.
At least once a year, the Office of the General Counsel will update the
Committee on all litigation involving the Corporation that could have a
significant impact on the Corporation's financial statements.

The Committee shall make appropriate amendments to the Code of Ethics for Chief
Executive Officer and Senior Financial Officers ("the Code") and shall be
empowered to grant waivers thereto under circumstances it deems appropriate.

Administrative Procedures
-------------------------

The Committee shall meet as frequently as deemed necessary by the Chairman to
fulfill its responsibilities, but no less than four times during the year. A
quorum shall consist of a majority of the members. Minutes of the meetings shall
be kept. The regular attendance of non-members is permitted at the invitation of
the Chairman. The Committee Chairman shall report the Committee's activities to
the Board of Directors, including any issues that arise with respect to the
quality and integrity of the Corporation's financial statements, the
Corporation's compliance with legal or regulatory requirements, the performance
and independence of the Corporation's independent auditor or the performance of
the internal audit function.

Limitations of Responsibilities
-------------------------------

In fulfilling their responsibilities hereunder, it is recognized that members of
the Committee are not full-time employees of the Corporation and are not, and do
not represent themselves to be, accountants or auditors by profession, or
experts in the field of accounting or auditing. As such, it is not the duty or
responsibility of the Committee or its members to conduct "field work" or other
types of auditing or accounting reviews or procedures, and each member of the
Committee shall be entitled to rely on (a) the integrity of those persons and
organizations within and outside the Corporation that it receives information
from and (b) the accuracy of the financial and other information provided to the
Committee by such persons or organizations absent actual knowledge to the
contrary (which shall be promptly reported to the Board of Directors).

Annual Performance Evaluation
-----------------------------

The Committee shall perform an annual review and evaluation of the performance
of the Committee.

Compensation
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No member of the Committee shall receive compensation other than director's fees
for service as a director of the Corporation, including reasonable compensation
for serving on the Committee and regular benefits that other directors receive.