NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) It is the Company’s investment policy to maintain 66 percent to 79 percent of the plan’s assets in equity securities and 21 percent to 31 percent of its assets in debt securities with the balance invested in a money market account to meet liquidity requirements for distributions. The asset allocation at December 31, 2003 represents the targeted asset allocation at that time. Based upon the plan’s current over-funded position, the Company expects to make no contributions to its pension plan in 2004. The Company also sponsors a defined contribution plan for all employees. Each participant may contribute certain amounts of eligible compensation. The Company makes a matching contribution to the plan. The Company’s contribution under this plan was $202,000 in 2003, $302,000 in 2002 and $258,000 in 2001.  The Company is subject to legal proceedings, third-party claims and other contingencies related to product liability, regulatory, employee and other matters that arise in the ordinary course of business. In the opinion of management, the amount of potential liability with respect to these actions will not materially affect the Company’s financial position, results of operations or liquidity.  The Company has arrangements with its executive officers (the “Executives”) pursuant to which the termination of their employment under certain circumstances would result in lump sum payments to the Executives. Termination under such circumstances in 2004 could result in payments aggregating $2.0 million, excluding any excise tax that may be reimbursable by the Company. In May 1996, Halkey-Roberts began leasing the land, building and building improvements in St. Petersburg, Florida, which serve as Halkey-Roberts’ headquarters and manufacturing facility, under a 10-year lease. The lease provides for monthly payments, including certain lease payment escalators, and provides for certain sublease and assignment rights. The lease also provides the right of either the landlord or Halkey-Roberts to terminate the lease on 12 months notice effective at any time after May 21, 2003. The Company has guaranteed Halkey-Roberts’ payment and performance obligations under the lease. The lease is being accounted for as an operating lease, and the rental expense for the years ended December 31, 2003, 2002 and 2001 was $396,000, $384,000 and $372,000, respectively. Future minimum rental commitments under this lease are $409,000, $422,000 and $166,000 in 2004, 2005 and 2006, respectively.  (a) Includes a $1.6 million after-tax charge ($ .96 per share) from goodwill impairment (see Note 2) 22 QUARTERLY FINANCIAL DATA (UNAUDITED) 13 12 COMMITMENTS AND CONTINGENCIES (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) QUARTER OPERATING OPERATING NET INCOME/(LOSS) ENDED REVENUE INCOME INCOME/(LOSS) PER BASIC SHARE 03/31/03 $ 15,721 $ 1,724 $ 1,150 $ .65 06/30/03 16,175 1,705 1,313 .77 09/30/03 16,117 1,855 1,330 .79 12/31/03 14,790 1,639 1,264 .74 03/31/02 $ 14,825 $ 1,554 $ (634) (a) $ (.37) (a) 06/30/02 14,775 1,401 1,095 .64 09/30/02 14,662 1,385 1,097 .64 12/31/02 15,271 1,442 1,031 .60 Quarterly financial data for 2003 and 2002 are as follows: